The proposed legislation calls for formation of a Department of Homeland Security, at cabinet level, to plan, coordinate, and integrate U.S. government activities relating to homeland security, including border security, critical infrastructure protection, emergency preparedness and response, intelligence, and science and technology. The legislation also creates a White House Office for Combating Terrorism to craft and oversee a National Strategy to Combat Terrorism and exercise budget certification authority over spending to combat terrorism. The act shall take effect 30 days after the date of enactment, or January 1, 2003, whichever comes first.

Secretary of Homeland Security shall be appointed by the President and confirmed by the Senate and shall be a member of the National Security Council. The Secretary is responsible for developing policies, priorities and plans for homeland security, including the development of a national strategy with the Director of the National Office for Combating Terrorism, and advising the Director on the development of a comprehensive budget for programs under the strategy. The Secretary is also responsible for including, as appropriate, State and local governments and other entities into the full range of homeland security activities; and consulting with the Secretary of Defense and State governors to integrate the United States military, including the National Guard, into all aspects of the strategy.

Directorate of Border and Transportation Protection shall be headed by an Under Secretary appointed by the President and confirmed by the Senate. The Directorate shall be responsible for securing borders, territorial waters, ports, waterways, air, land, and sea transportation systems, including coordinating governmental activities at ports of entry; and administering the duties of the entities transferred to the Directorate. Those entities are the Customs Service and the Coast Guard, both of which shall be maintained as distinct entities; that portion of the Animal Plant and Health Inspection Service that governs agricultural quarantine inspections at points of entry; and the Transportation Security Administration.

Directorate of Intelligence shall be headed by an Under Secretary appointed by the President and confirmed by the Senate. The Directorate shall serve as a national-level focal point for the analysis of all information available to the United States Government for the purpose of preventing, protecting against, preparing for, and responding to threats of terrorism and other threats to homeland security. The Directorate shall be responsible for receiving and analyzing law enforcement, intelligence and other information to detect and identify specific threats of terrorism; working with the Director of Central Intelligence and the intelligence community to establish overall intelligence priorities; and directing agencies, on behalf of the Secretary and subject to disapproval by the President, to provide additional information. The Directorate shall be staffed in part by analysts via reimbursable detail from agencies of the intelligence community.

Directorate of Critical Infrastructure Protection shall be headed by an Under Secretary appointed by the President and confirmed by the Senate. The Directorate shall be responsible for receiving information from the Directorate of Intelligence, law enforcement and other information to assess the vulnerabilities of key resources and critical infrastructures; developing a comprehensive national plan for securing key resources and critical infrastructure; enhancing and sharing information regarding cyber-security and physical security, tracking vulnerabilities, and delineating the roles of various governmental agencies in preventing, defending, and recovering from attacks.

The following offices are transferred to the Department: the Critical Infrastructure Assurance Office of the Department of Commerce, the National Infrastructure Protection Center of the Federal Bureau of Investigation (other than the Computer Investigations and Operations Section), the National Communications System of the Department of Defense, the Computer Security Division of the National Institute of Standards and Technology of the Department of Commerce, the National Infrastructure Simulation and Analysis Center of the Department of Energy, The Federal Computer Incident Response Center of the General Service Administration, The Energy Security and Assurance Program of the Department of Energy, and the Federal Protective Service of the General Services Administration.

Directorate of Emergency Preparedness and Response shall be headed by an Under Secretary appointed by the President and confirmed by the Senate. The Directorate shall be responsible for carrying out federal emergency preparedness and response activities, providing state and local authorities with equipment for detection, protection, and decontamination in an emergency involving weapons of mass destruction; overseeing federal, state and local emergency preparedness training and exercise programs; and providing assistance for any emergency, including natural disasters or disease.

The following offices are transferred to the Department: The Federal Emergency Management Agency; the National Office of Domestic Preparedness of the FBI of the Department of Justice; the Office of Domestic Preparedness of the Department of Justice; the Office of Emergency Preparedness within the Office of the Assistant Secretary for Public Health Emergency Preparedness of the Department of Health and Human Services; the Strategic National Stockpile of the Department of Health and Human Services; the functions of the Select Agent Registration Program (HHS) and the USDA, and the Federal Law Enforcement Training Center of the Department of the Treasury.

Directorate of Immigration Affairs shall be headed by a Under Secretary who will be appointed by the President and confirmed by the Senate, and who would serve as principal advisor to the Secretary in developing and implementing U.S. immigration policy. The Immigration and Naturalization Service would be terminated, and two divisions would be created in its place: A Bureau of Enforcement and Border Affairs with responsibility for visa petitions, applications for adjustment of status and change of status, naturalization applications, asylum and refugee applications, and determinations regarding the custody and parole of asylum seekers; and a Bureau of Enforcement and Border Affairs with responsibility for border patrol, detention, removal, intelligence, and investigations.

An Office of Children’s Services would be created to recognize the special needs and circumstances of unaccompanied alien children. An Agency for Immigration Hearings and Appeals is created within the Department of Justice, headed by a Director appointed by the Senate and confirmed by the Senate. This agency - consisting of the immigration courts and the board of appeals - replaces the Executive Office of Immigration Review.

Directorate of Science and Technology shall be headed by an Under Secretary appointed by the President and confirmed by the Senate, and shall be responsible for managing and supporting research and development to meet national homeland security needs; articulating national research and development goals, priorities, and strategies; coordinating with entities within and outside the government to advance the research and development agenda of the Department; advising the Secretary on all scientific and technical matters; and facilitating the transfer and deployment of technologies crucial to homeland security needs.

The internal R&D functions of the Directorate shall be managed by an Office of Laboratory Research. Since the bulk of homeland security R&D will continue to occur outside the Department, the Secretary shall be able to tap into the expertise in any of the Department of Energy National Laboratories. Security Advanced Research Projects Agency (SARPA) funded at $200 million will be able to initiate and support innovative research relevant to homeland security anywhere in the nation. 

An interagency Science and Technology Council made up of senior R&D officials shall advise the Under Secretary. A Center for Technology Evaluation and Transition will serve as a clearinghouse and national point-of-contact for companies or other entities that already possess technologies to promote homeland security. To ensure that the Directorate has access to important sources of talent or technical advice, the Secretary shall be provided with flexible authorities to hire top flight scientists, enter into important research contracts or projects, and work with or establish federally funded research and development centers. 

Office for State and Local Government Coordination: Establishes within the Office of the Secretary an office to oversee and coordinate developmental programs for and relationships with State and local governments.

United States Secret Service: Transfers the authorities, functions, personnel and assets of the United States Secret Service, which shall be maintained as a distinct entity.

Civil Service Protections: The administration is not given the authority to waive civil service protections.

National Office for Combating Terrorism.

Director of National Office for Combating Terrorism will be appointed by the President and confirmed by the Senate. Responsibilities include developing national objectives and policies for combating terrorism; directing the development of a national assessment of terrorist threats and vulnerabilities, developing, with the Secretary of Homeland Security, a national strategy for combating terrorism; coordinating, overseeing, and evaluating the strategy; coordinating an annual budget for programs and activities under the strategy, including the budgets of the military departments and agencies with the National Foreign Intelligence Program relating to international terrorism, but excluding military programs, projects, or activities relating to force protection; serving as an adviser to the National Security Council; working with the FBI Director to get relevant information related to terrorism from the FBI.

The Secretary and Director shall develop the national strategy for combating terrorism and homeland security response for the detection, prevention, protection, response and recovery necessary to counter terrorist threats. The Secretary has responsibility for portions of the strategy addressing border security, critical infrastructure protection, emergency preparation and response, and integrating state and local efforts with activities of the federal government. The Director has overall responsibility for the development of the strategy, and particularly for those portions addressing intelligence, military assets, law enforcement and diplomacy. The strategy will include: policies to maximize the collection, translation, analysis, exploitation and dissemination of information related to combating terrorism throughout the federal government and with state and local authorities; plans for countering chemical, biological, radiological, nuclear and explosives, and cyber threats; plans for improving the resources of, coordination among, and effectiveness of health and medical sectors for detecting and responding to terrorist attacks on homeland; specific measures to enhance cooperative efforts between the public and private sectors in protecting against terrorist attacks; a review of measures needed to enhance transportation security with respect potential terrorist attacks.

The National Combating Terrorism and Homeland Security Response Council will assist with preparation and implementation of the strategy. Members of the Council will be the heads of federal terrorism prevention and response agencies or their designees. The Secretary and Director will co-chair the Council.