On October 4, 2006, P.L. 109-295 was signed into law. Both the House and Senate approved the conference report ( H.Rept. 109-699 ) on September 29, 2006; the House by a vote of 412-6, and the Senate by a voice vote. P.L. 109-295 provides gross total budget authority of $41.4 billion for the Department of Homeland Security (DHS) for FY2007. This amounts includes $1.8 billion in emergency funding that was added to the bill during conference. P.L. 109-699 provides net budget authority of $34.8 billion, including the emergency funding. Excluding the emergency funding, P.L. 109-295 provides nearly $33.0 billion in net budget authority for DHS for FY2007. On July 13, 2006, the Senate passed H.R. 5441 . The bill contains a total of $32.8 billion in net budget authority for DHS for FY2007. This is $900 million more than the $31.9 billion net appropriation requested by the Administration for FY2007. The Senate-passed H.R. 5441 represents a $.9 billion, or 3% increase, from the FY2006 enacted net budget authority of $31.9 billion. Senate-passed H.R. 5441 also includes a $648 supplemental appropriation for FY2006; for more information on this supplemental appropriation please refer to Appendix A . On May 22, 2006, the House passed H.R. 5441 . The bill contains a total of $33.2 billion in net budget authority for DHS for FY2007. This is $1.2 billion more than the $31.9 billion net appropriation requested by the Administration for FY2007. However, this difference is almost entirely ($1.2 billion) due to the aviation security fee increase requested by the Administration, but which would be denied by the House bill. The House-passed H.R. 5441 amount of $33.2 billion is $1.2 or a 4% increase compared with the FY2006 enacted net budget authority of $31.9 billion. The President's budget request for DHS for FY2007 was submitted to Congress on February 6, 2006. The Administration requested $42.7 billion in gross budget authority for FY2007 (including mandatories, fees, and funds). The Administration's request includes gross appropriations of $39.8 billion, and a net appropriation of $32.0 billion in budget authority for FY2007, of which $31.0 billion is discretionary budget authority, and $1 billion is mandatory budget authority. The FY2006 enacted net appropriated budget authority for DHS was $32.0 billion. Data used in this report are from the President's Budget Documents; the FY2007 DHS Congressional Budget Justifications; the FY2007 DHS Budget in Brief; the House Appropriations Committee tables of April 19, 2006; the House Committee Report to H.R. 5441 , H.Rept. 109-476 ; the Senate Committee Report to H.R. 5441 , S.Rept. 109-273 ; the Conference Committee report to H.R. 5441 , H.Rept. 109-699 ; and P.L. 109-295 . Data used in Table B -1 are taken from the Analytical Perspectives volume of the FY2007 President's Budget. These amounts do not correspond to amounts presented in Tables 4-11 , which are based on data from tables supplied by the Appropriations Subcommittees and from the FY2006 DHS Congressional Budget Justifications in order to best reflect the amounts that will be used throughout the congressional appropriations process. Most dollar amounts presented in this report are reported in millions of dollars. Where lesser amounts are presented, these amounts will be shown in italics. For example: $545,000 . This report describes the President's FY2007 request for funding for DHS programs and activities, as submitted to Congress on February 6, 2006. It compares the enacted FY2006 amounts to the request for FY2007. This report also tracks legislative action and congressional issues related to the FY2007 DHS appropriations bill, with particular attention paid to discretionary funding amounts. However, this report does not follow specific funding issues related to mandatory funding—such as retirement pay—nor does the report systematically follow any legislation related to the authorization or amendment of DHS programs. The Homeland Security Act of 2002 ( P.L. 107-296 ) transferred the functions, relevant funding, and most of the personnel of 22 agencies and offices to the new Department of Homeland Security created by the act. Appropriations measures for DHS have been organized into four titles: Title I Departmental Management and Operations; Title II Security, Enforcement, and Investigations; Title III Preparedness and Recovery; and Title IV Research and Development, Training, Assessments, and Services. Title I contains appropriations for the Office of Management, the Office of the Secretary, the Office of the Chief Financial Officer (CFO), Analysis and Operations (A&O), the Office of the Chief Information Officer (CIO), and the Office of the Inspector General (OIG). Title II contains appropriations for the U.S. Visitor and Immigrant Status Indicator Technology (US-VISIT) program, Customs and Border Protection (CBP), Immigration and Customs Enforcement (ICE), the Transportation Security Administration (TSA), the Coast Guard, and the Secret Service. Title III contains appropriations for the Preparedness Directorate, the Federal Emergency Management Agency (FEMA), Infrastructure Protection and Information Security (IPIS), and the state and local grants programs. Title IV contains appropriations for U.S. Citizenship and Immigration Services (USCIS), the Science and Technology Directorate (S&T), and the Federal Law Enforcement Training Center (FLETC). On July 13, 2005, the Secretary of DHS, Michael Chertoff, announced the results of the months-long Second Stage Review (2SR) that he undertook upon being confirmed as DHS Secretary. The proposed changes affect many aspects of the department. The Secretary has designed a six-point agenda based upon the results of the 2SR: increase overall preparedness, particularly for catastrophic events; create better transportation security systems to move people and cargo more securely and efficiently; strengthen border security and interior enforcement and reform immigration processes; enhance information sharing with our partners; improve DHS financial management, human resources development, procurement, and information technology; and realign the DHS organization to maximize mission performance. On July 22, 2005, the Administration also submitted a revised budget request for DHS to reflect the organizational and policy changes recommended by the 2SR. The Administration submitted its requested amendments to the FY2006 budget request for DHS after both the House and Senate had passed their versions of H.R. 2360 . Therefore, any proposed changes were addressed during the conference on H.R. 2360 . The conferees noted that, for the most part, they have complied with the Administration's request to restructure DHS, and P.L. 109-90 adopted the following changes: abolished the Office of the Undersecretary for Border and Transportation Security, redistributing its functions to other locations within DHS; split the Directorate of Information Analysis and Infrastructure Protection into two new operational components: Analysis and Operations, and the Preparedness Directorate; moved all state and local grants within DHS to the Preparedness Directorate; transferred the Federal Air Marshals program from ICE to TSA; and included and expanded the role of the Office of Policy. The DHS Congressional Budget Justifications for FY2007 also reflect these changes. The maximum budget authority for annual appropriations (including DHS) is determined through a two-stage congressional budget process. In the first stage, Congress sets overall spending totals in the annual concurrent resolution on the budget. Subsequently, these amounts are allocated among the appropriations committees, usually through the statement of managers for the conference report on the budget resolution. These amounts are known as the 302(a) allocations. They include discretionary totals available to the House and Senate Committees on Appropriations for enactment in annual appropriations bills through the subcommittees responsible for the development of the bills. In the second stage of the process, the appropriations committees allocate the 302(a) discretionary funds among their subcommittees for each of the appropriations bills. These amounts are known as the 302(b) allocations. These allocations must add up to no more than the 302(a) discretionary allocation and form the basis for enforcing budget discipline, since any bill reported with a total above the ceiling is subject to a point of order. 302(b) allocations may be adjusted during the year as the various appropriations bills progress towards final enactment. The annual concurrent resolution on the budget sets forth the congressional budget. The Senate budget resolution, S.Con.Res. 83 was introduced on March 10, 2006, and passed the Senate on March 16, 2006. S.Con.Res. 83 , would provide $873 billion in discretionary budget authority for FY2007. H.Con.Res. 376 was introduced and reported on March 31, 2006, and passed the House on May 18, 2006. H.Con.Res. 376 would provide $873 billion in discretionary budget authority for FY2007. The anticipated difficulties in resolving the substantial differences between the House- and Senate-passed versions of the budget resolution led to both the House and the Senate adopting deeming resolutions. These deeming resolutions set the discretionary spending levels for FY2007 at $873 billion. Federal government spending involves a multi-step process that begins with the enactment of a budget authority by Congress in an appropriations act. Federal agencies then obligate funds from the enacted budget authority to pay for their activities. Finally, payments are made to liquidate those obligations; the actual payment amounts are reflected in the budget as outlays.