This report provides an overview of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) budget and operations. The report chronicles congressional action on the FY2011 Commerce, Justice, Science (CJS), and Related Agencies Appropriations bills, as well as an FY2010 supplemental appropriations bill, that have included funding for ATF. On April 14, 2011, Congress passed the Department of Defense and Full-Year Continuing Appropriations Act, 2011 ( H.R. 1473 ; P.L. 112-10 ). Under this act, for FY2011 Congress has funded the ATF salaries and expenses account at slightly below its FY2010 enacted level of funding (reduced by two-tenths of a percent). Hence, ATF's FY2011 appropriation is $1.113 billion. In addition, during consideration of a Full-Year Continuing Appropriations Act, 2011 ( H.R. 1 ) on February 19, 2011, the House adopted an amendment that would have prohibited funds provided under that act from being used to require federally licensed gun dealers in the four Southwest border states to submit multiple rifle or shotgun sales reports. The House went on to pass H.R. 1 , but the Senate rejected this bill on March 9, 2011, for budgetary considerations that went well beyond concerns about this policy rider. Nevertheless, Congress did not include a similar rider as part of P.L. 112-10 . Besides ATF's multiple rifle sales reporting proposal, another emerging issue related to the ATF budget and operations includes the agency's conduct of a Phoenix, AZ-based investigation known as "Operation Fast and Furious." Located in DOJ, the ATF is the lead federal law enforcement agency charged with administering and enforcing federal laws related to the manufacture, importation, and distribution of firearms and explosives. As part of the Homeland Security Act, Congress transferred ATF's enforcement and regulatory functions for firearms and explosives to DOJ from the Department of the Treasury (Treasury), adding "explosives" to ATF's title. ATF is also responsible for investigating arson cases with a federal nexus, as well as criminal violations of federal laws governing the manufacture, importation, and distribution of alcohol and tobacco. The regulatory aspects of those alcohol and tobacco laws are the domain of the Tax and Trade Bureau (TTB), which was established at Treasury following ATF's transfer to DOJ. As a law enforcement agency within DOJ, ATF's first priority is preventing terrorist attacks within the United States. ATF is responsible for countering the illegal use and trafficking of firearms and explosives, and the criminal diversion of alcohol and tobacco products as an illegal source of funding for terrorist activities. In criminal investigations, ATF agents have reportedly uncovered foreign terrorists and their supporters bootlegging cigarettes as part of larger terrorist-financing operations in the United States. With those responsibilities, ATF special agents are partners on DOJ's Joint Terrorism Task Forces. As shown below, however, the lion's share of ATF's resources are allocated to its firearms compliance and investigations program. While the ATF periodically checks the records of federally licensed gun dealers, the major focus of the firearms program is the reduction of firearms-related violence. In the 10-year period from FY2001 through FY2010, Congress increased direct appropriations for the ATF by 50.2%, from $771.0 million to $1.158 billion. Moreover, over three fiscal years, FY2008 through FY2010, Congress provided ATF with about $86.5 million in program increases to address firearms trafficking, or the diversion of firearms from legal to illegal markets. Most of this funding has been dedicated to ATF efforts to reduce firearms trafficking from the United States to Mexico. To these ends, under the Mérida Initiative ATF released a Spanish-language version of its firearms trace request software (e-Trace 4.0) to Mexico, Guatemala, and Costa Rica and established a U.S.-Mexico ballistic evidence exchange capability under the National Integrated Ballistic Imaging Network (NIBIN) program. For FY2010, Congress also provided ATF with nearly $30 million for the construction of a National Center for Explosives Training and Research (NCETR). In the 110 th Congress, the House passed a bill ( H.R. 6028 ) that would have authorized increasing ATF appropriations over three years, for FY2008 through FY2010, by nearly $74 million to address Southwest border gun trafficking. As a DOJ bureau, the ATF authorization of appropriations expired for FY2010. Previously, Congress provided annual appropriations authorizations, for FY2006 through FY2009, in the Department of Justice Authorization Act of 2005 ( P.L. 109-162 ) (see Appendix ). In the 111 th Congress, no action was taken on bills to reauthorize or increase ATF appropriations. However, the 111 th Congress granted ATF greater authority to inspect the businesses and records of "cigarette deliverers" in the Prevent All Cigarette Trafficking Act ( P.L. 111-154 ). For oversight purposes, it is also notable that in the fall of 2009 the DOJ Office of Inspector General (OIG) released three reports on ATF operations. The first examined Project Gunrunner, an ATF initiative to reduce illegal gun trafficking from the United States to Mexico. The second examined ATF's efforts to investigate contraband cigarette trafficking. The third examined ATF's concurrent jurisdiction with the Federal Bureau of Investigation (FBI) for explosives-related investigations. In November 2010, moreover, the OIG released another review of Project Gunrunner, recommending among other things that ATF ought to work with DOJ to explore options to require reporting of multiple long gun sales from federally licensed gun dealers in the four Southwest border states. Congress appropriates funding annually for ATF in a salaries and expenses account and, for some, but not all years, in a construction account. Both accounts are given a line item in the CJS appropriations bill. With regard to salaries and expenses, the ATF subdivides this account into three budget decision units: firearms compliance and investigations, arson and explosives investigations, and alcohol and tobacco diversion. Although Congress does not appropriate monies for the ATF (or any other DOJ agency) by decision unit, the appropriators often address whether program increases requested specifically by the Administration are to be provided in report language and more rarely in bill language for the salaries and expenses account itself. As a consequence, the amounts requested for decision units are binding in the sense that the appropriators are aware of the increases that were provided in the annual bureau appropriation and how those increases would affect the decision unit totals. If funding is shifted from one decision unit to another, statutory budget reprogramming requirements are usually triggered, under which DOJ and its agencies are required to notify the appropriations committees about such shifts. ATF budget decision units are described in greater detail below. In February 2010, DOJ released the ATF Congressional Budget Submission, Fiscal Year 2011 . The FY2011 budget request included $1.163 billion for ATF. At the time of the budget request, this amount represented an increase of $42.2 million, or 3.8%, compared to the FY2010-enacted appropriation of $1.121 billion. Figure 1 shows proposed budget decision unit allocations accompanying the FY2011 budget request. Of these programs, the firearms compliance and investigations decision unit was to be allocated the lion's share, 72%, of appropriated funding. The arson and explosives investigations decision unit and the alcohol and tobacco diversion decision unit were to be allocated 26% and 2%, respectively, of the requested appropriation. As Table 1 shows, the FY2010 appropriation of $1.121 billion included $1.115 billion for salaries and expenses and $6 million for construction. The Administration, however, requested no funding for ATF construction for FY2011. Compared to the $1.115 billion Congress initially appropriated for ATF salaries and expenses for FY2010, the Administration's FY2011 budget request proposed a net increase of $48.2 million and 86 full-time equivalent (FTE) positions for ATF. This amount included $35.2 million in base adjustments (less certain offsets and other reductions) and 46 FTE positions; $11.8 million and 37 FTE positions for Project Gunrunner; and and $1.2 million and 3 FTE positions for Emergency Support Function #13. The $13.0 million in proposed program increases are broken out by budget decision unit in Table 1 in the "FY2011 Increases" column. The $1.2 million for Emergency Support Function #13 is spread across all three budget decision units: $854,000 for firearms, $320,000 for arson and explosives, and $24,000 for alcohol and tobacco. The $35.2 million in base adjustments and other offsets is the difference between the "FY2010 Enacted" and "FY2011 Base" columns. In March 2010, the House CJS subcommittee held a hearing on the ATF FY2011 budget submission. Members of the subcommittee raised questions about gun trafficking on the Southwest border, regulatory backlogs, violent crime impact teams, and inter-agency coordination on gang violence. On July 22, 2010, the Senate Appropriations Committee reported its FY2011 CJS appropriations bill ( S. 3636 ; S.Rept. 111-229 ). This measure would have provided ATF with $1.163 billion for FY2011, matching the Administration's request. However, no further action was taken on this measure. Also, on June 22, 2010, the Administration requested an FY2010 supplemental appropriation of $39.1 million for ATF to increase Southwest border gun trafficking investigations.