[House Report 108-381]
[From the U.S. Government Printing Office]
108th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 108-381
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INTELLIGENCE AUTHORIZATION ACT FOR FISCAL YEAR 2004
_______
November 19, 2003.--Ordered to be printed
_______
Mr. Goss, from the committee of conference, submitted the following
CONFERENCE REPORT
[To accompany H.R. 2417]
The committee of conference on the disagreeing votes of
the two Houses on the amendment of the Senate to the bill (H.R.
2417), to authorize appropriations for fiscal year 2004 for
intelligence and intelligence-related activities of the United
States Government, the Community Management Account, and the
Central Intelligence Agency Retirement and Disability System,
and for other purposes, having met, after full and free
conference, have agreed to recommend and do recommend to their
respective Houses as follows:
That the House recede from its disagreement to the
amendment of the Senate and agree to the same with an amendment
as follows:
In lieu of the matter proposed to be inserted by the
Senate amendment, insert the following:
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the
``Intelligence Authorization Act for Fiscal Year 2004''.
(b) Table of Contents.--The table of contents for this Act
is as follows:
Sec. 1. Short title; table of contents.
TITLE I--INTELLIGENCE ACTIVITIES
Sec. 101. Authorization of appropriations.
Sec. 102. Classified schedule of authorizations.
Sec. 103. Personnel ceiling adjustments.
Sec. 104. Intelligence Community Management Account.
Sec. 105. Office of Intelligence and Analysis of the Department of the
Treasury.
Sec. 106. Incorporation of reporting requirements.
Sec. 107. Preparation and submittal of reports, reviews, studies, and
plans relating to intelligence activities of Department of
Defense or Department of Energy.
TITLE II--CENTRAL INTELLIGENCE AGENCY RETIREMENT AND DISABILITY SYSTEM
Sec. 201. Authorization of appropriations.
TITLE III--GENERAL PROVISIONS
Subtitle A--Recurring General Provisions
Sec. 301. Increase in employee compensation and benefits authorized by
law.
Sec. 302. Restriction on conduct of intelligence activities.
Subtitle B--Intelligence
Sec. 311. Authority of Federal Bureau of Investigation to award personal
services contracts.
Sec. 312. Budget treatment of costs of acquisition of major systems by
the intelligence community.
Sec. 313. Modification of sunset of application of sanctions laws to
intelligence activities.
Sec. 314. Modification of notice and wait requirements on projects to
construct or improve intelligence community facilities.
Sec. 315. Extension of deadline for final report of the National
Commission for the Review of the Research and Development
Programs of the United States Intelligence Community.
Sec. 316. Improvement of information sharing among Federal, State, and
local government officials.
Sec. 317. Pilot program on analysis of signals and other intelligence by
intelligence analysts of various elements of the intelligence
community.
Sec. 318. Pilot program on recruitment and training of intelligence
analysts.
Sec. 319. Improvement of equality of employment opportunities in the
intelligence community.
Sec. 320. Sense of Congress on recruitment as intelligence community
personnel of members of the Armed Forces on their discharge or
release from duty.
Sec. 321. External Collection Capabilities and Requirements Review
Panel.
Subtitle C--Counterintelligence
Sec. 341. Counterintelligence initiatives for the intelligence
community.
Subtitle D--Reports
Sec. 351. Report on cleared insider threat to classified computer
networks.
Sec. 352. Report on security background investigations and security
clearance procedures of the Federal Government.
Sec. 353. Report on detail of civilian intelligence personnel among
elements of the intelligence community and the Department of
Defense.
Sec. 354. Report on modifications of policy and law on classified
information to facilitate sharing of information for national
security purposes.
Sec. 355. Report on strategic planning.
Sec. 356. Report on United States dependence on computer hardware and
software manufactured overseas.
Sec. 357. Report on lessons learned from military operations in Iraq.
Sec. 358. Reports on conventional weapons and ammunition obtained by
Iraq in violation of certain United Nations Security Council
resolutions.
Sec. 359. Report on operations of Directorate of Information Analysis
and Infrastructure Protection and Terrorist Threat Integration
Center.
Sec. 360. Report on Terrorist Screening Center.
Sec. 361. Repeal and modification of report requirements relating to
intelligence activities.
Subtitle E--Other Matters
Sec. 371. Extension of suspension of reorganization of Diplomatic
Telecommunications Service Program Office.
Sec. 372. Modifications of authorities on explosive materials.
Sec. 373. Modification of prohibition on the naturalization of certain
persons.
Sec. 374. Modification to definition of financial institution in Right
to Financial Privacy Act.
Sec. 375. Coordination of Federal Government research on security
evaluations.
Sec. 376. Treatment of classified information in money laundering cases.
Sec. 377. Technical amendments.
TITLE IV--CENTRAL INTELLIGENCE AGENCY
Sec. 401. Amendment to certain Central Intelligence Agency Act of 1949
notification requirements.
Sec. 402. Protection of certain Central Intelligence Agency personnel
from tort liability.
Sec. 403. Repeal of obsolete limitation on use of funds in central
services working capital fund.
Sec. 404. Purchases by Central Intelligence Agency of products of
Federal Prison Industries.
Sec. 405. Postponement of Central Intelligence Agency compensation
reform and other matters.
TITLE V--DEPARTMENT OF DEFENSE INTELLIGENCE MATTERS
Sec. 501. Protection of certain National Security Agency personnel from
tort liability.
Sec. 502. Use of funds for counterdrug and counterterrorism activities
for Colombia.
Sec. 503. Scene visualization technologies.
Sec. 504. Measurement and signatures intelligence research program.
Sec. 505. Availability of funds of National Security Agency for national
security scholarships.
TITLE I--INTELLIGENCE ACTIVITIES
SEC. 101. AUTHORIZATION OF APPROPRIATIONS.
Funds are hereby authorized to be appropriated for fiscal
year 2004 for the conduct of the intelligence and intelligence-
related activities of the following elements of the United
States Government:
(1) The Central Intelligence Agency.
(2) The Department of Defense.
(3) The Defense Intelligence Agency.
(4) The National Security Agency.
(5) The Department of the Army, the Department of
the Navy, and the Department of the Air Force.
(6) The Department of State.
(7) The Department of the Treasury.
(8) The Department of Energy.
(9) The Department of Justice.
(10) The Federal Bureau of Investigation.
(11) The National Reconnaissance Office.
(12) The National Geospatial-Intelligence Agency.
(13) The Coast Guard.
(14) The Department of Homeland Security.
SEC. 102. CLASSIFIED SCHEDULE OF AUTHORIZATIONS.
(a) Specifications of Amounts and Personnel Ceilings.--The
amounts authorized to be appropriated under section 101, and
the authorized personnel ceilings as of September 30, 2004, for
the conduct of the intelligence and intelligence-related
activities of the elements listed in such section, are those
specified in the classified Schedule of Authorizations prepared
to accompany the conference report on the bill H.R. 2417 of the
One Hundred Eighth Congress.
(b) Availability of Classified Schedule of
Authorizations.--The Schedule of Authorizations shall be made
available to the Committees on Appropriations of the Senate and
House of Representatives and to the President. The President
shall provide for suitable distribution of the Schedule, or of
appropriate portions of the Schedule, within the executive
branch.
SEC. 103. PERSONNEL CEILING ADJUSTMENTS.
(a) Authority for Adjustments.--With the approval of the
Director of the Office of Management and Budget, the Director
of Central Intelligence may authorize employment of civilian
personnel in excess of the number authorized for fiscal year
2004 under section 102 when the Director of Central
Intelligence determines that such action is necessary to the
performance of important intelligence functions, except that
the number of personnel employed in excess of the number
authorized under such section may not, for any element of the
intelligence community, exceed 2 percent of the number of
civilian personnel authorized under such section for such
element.
(b) Notice to Intelligence Committees.--The Director of
Central Intelligence shall promptly notify the Select Committee
on Intelligence of the Senate and the Permanent Select
Committee on Intelligence of the House of Representatives
whenever the Director exercises the authority granted by this
section.
SEC. 104. INTELLIGENCE COMMUNITY MANAGEMENT ACCOUNT.
(a) Authorization of Appropriations.--There is authorized
to be appropriated for the Intelligence Community Management
Account of the Director of Central Intelligence for fiscal year
2004 the sum of $221,513,000. Within such amount, funds
identified in the classified Schedule of Authorizations
referred to in section 102(a) for advanced research and
development shall remain available until September 30, 2005.
(b) Authorized Personnel Levels.--The elements within the
Intelligence Community Management Account of the Director of
Central Intelligence are authorized 310 full-time personnel as
of September 30, 2004. Personnel serving in such elements may
be permanent employees of the Intelligence Community Management
Account or personnel detailed from other elements of the United
States Government.
(c) Classified Authorizations.--
(1) Authorization of appropriations.--In addition
to amounts authorized to be appropriated for the
Intelligence Community Management Account by subsection
(a), there are also authorized to be appropriated for
the Intelligence Community Management Account for
fiscal year 2004 such additional amounts as are
specified in the classified Schedule of Authorizations
referred to in section 102(a). Such additional amounts
for research and development shall remain available
until September 30, 2005.
(2) Authorization of personnel.--In addition to the
personnel authorized by subsection (b) for elements of
the Intelligence Community Management Account as of
September 30, 2004, there are also authorized such
additional personnel for such elements as of that date
as are specified in the classified Schedule of
Authorizations.
(d) Reimbursement.--Except as provided in section 113 of
the National Security Act of 1947 (50 U.S.C. 404h), during
fiscal year 2004 any officer or employee of the United States
or a member of the Armed Forces who is detailed to the staff of
the Intelligence Community Management Account from another
element of the United States Government shall be detailed on a
reimbursable basis, except that any such officer, employee, or
member may be detailed on a nonreimbursable basis for a period
of less than one year for the performance of temporary
functions as required by the Director of Central Intelligence.
(e) National Drug Intelligence Center.--
(1) In general.--Of the amount authorized to be
appropriated in subsection (a), $47,142,000 shall be
available for the National Drug Intelligence Center.
Within such amount, funds provided for research,
development, testing, and evaluation purposes shall
remain available until September 30, 2005, and funds
provided for procurement purposes shall remain
available until September 30, 2006.
(2) Transfer of funds.--The Director of Central
Intelligence shall transfer to the Attorney General
funds available for the National Drug Intelligence
Center under paragraph (1). The Attorney General shall
utilize funds so transferred for the activities of the
National Drug Intelligence Center.
(3) Limitation.--Amounts available for the National
Drug Intelligence Center may not be used in
contravention of the provisions of section 103(d)(1) of
the National Security Act of 1947 (50 U.S.C. 403-
3(d)(1)).
(4) Authority.--Notwithstanding any other provision
of law, the Attorney General shall retain full
authority over the operations of the National Drug
Intelligence Center.
SEC. 105. OFFICE OF INTELLIGENCE AND ANALYSIS OF THE DEPARTMENT OF THE
TREASURY.
(a) Establishment of Office.--(1) Chapter 3 of subtitle I
of title 31, United States Code, is amended--
(A) by redesignating section 311 as section 312;
and
(B) by inserting after section 310 the following:
``Sec. 311. Office of Intelligence and Analysis
``(a) Establishment.--There is established within the
Department of the Treasury, the Office of Intelligence and
Analysis (in this section referred to as the `Office'), which
shall--
``(1) be responsible for the receipt, analysis,
collation, and dissemination of foreign intelligence
and foreign counterintelligence information (within the
meaning of section 3 of the National Security Act of
1947 (50 U.S.C. 401a)) related to the operation and
responsibilities of the Department of the Treasury; and
``(2) have such other related duties and
authorities as may be assigned to it by the Secretary,
subject to the authority, direction, and control of the
Secretary.
``(b) Assistant Secretary for Intelligence and Analysis.--
The Office shall be headed by an Assistant Secretary, who shall
be appointed by the President, by and with the advice and
consent of the Senate. The Assistant Secretary shall report
directly to the Undersecretary of the Treasury for
Enforcement.''.
(2) The table of sections at the beginning of chapter 3 of
such title is amended by striking the item relating to section
311 and inserting the following new items:
``311. Office of Intelligence and Analysis.
``312. Continuing in office.''.
(b) Construction of Authority.--Nothing in section 311 of
title 31, United States Code (as amended by subsection (a)),
shall be construed to alter the authorities and
responsibilities of the Director of Central Intelligence with
respect to the Office of Intelligence and Analysis of the
Department of the Treasury as an element of the intelligence
community.
(c) Consultation with DCI in Appointment of Assistant
Secretary.--Section 106(b)(2) of the National Security Act of
1947 (50 U.S.C. 403-6(b)(2)) is amended by adding at the end
the following:
``(E) The Assistant Secretary for
Intelligence and Analysis of the Department of
the Treasury.''.
(d) Conforming Amendments.--
(1) National security act.--Section 3(4) of the
National Security Act of 1947 (50 U.S.C. 401a(4)) is
amended--
(A) in subparagraph (H), by striking ``the
Department of the Treasury,'';
(B) by redesignating subparagraphs (J) and
(K) as subparagraphs (K) and (L), respectively;
and
(C) by inserting after subparagraph (I) the
following new subparagraph (J):
``(J) the Office of Intelligence and
Analysis of the Department of the Treasury;''.
(2) Title 31.--Section 301(e) of title 31, United
States Code, is amended by striking ``7'' and inserting
``8''.
(3) Title 5.--Section 5315 of title 5, United
States Code, is amended in the item relating to
Assistant Secretaries of the Treasury by striking
``(7)'' and inserting ``(8)''.
SEC. 106. INCORPORATION OF REPORTING REQUIREMENTS.
(a) In General.--Each requirement to submit a report to the
congressional intelligence committees that is included in the
joint explanatory statement to accompany the conference report
on the bill H.R. 2417 of the One Hundred Eighth Congress, or in
the classified annex to this Act, is hereby incorporated into
this Act, and is hereby made a requirement in law.
(b) Congressional Intelligence Committees Defined.--In this
section, the term ``congressional intelligence committees''
means--
(1) the Select Committee on Intelligence of the
Senate; and
(2) the Permanent Select Committee on Intelligence
of the House of Representatives.
SEC. 107. PREPARATION AND SUBMITTAL OF REPORTS, REVIEWS, STUDIES, AND
PLANS RELATING TO INTELLIGENCE ACTIVITIES OF
DEPARTMENT OF DEFENSE OR DEPARTMENT OF ENERGY.
(a) Consultation in Preparation.--(1) The Director of
Central Intelligence shall ensure that any report, review,
study, or plan required to be prepared or conducted by a
provision of this Act, including a provision of the classified
Schedule of Authorizations referred to in section 102(a) or the
classified annex to this Act, that involves the intelligence or
intelligence-related activities of the Department of Defense or
the Department of Energy is prepared or conducted in
consultation with the Secretary of Defense or the Secretary of
Energy, as appropriate.
(2) The Secretary of Defense or the Secretary of Energy may
carry out any consultation required by this subsection through
an official of the Department of Defense or the Department of
Energy, as the case may be, designated by such Secretary for
that purpose.
(b) Submittal.--Any report, review, study, or plan referred
to in subsection (a) shall be submitted, in addition to any
other committee of Congress specified for submittal in the
provision concerned, to the following committees of Congress:
(1) The Committees on Armed Services and
Appropriations and the Select Committee on Intelligence
of the Senate.
(2) The Committees on Armed Services and
Appropriations and the Permanent Select Committee on
Intelligence of the House of Representatives.
TITLE II--CENTRAL INTELLIGENCE AGENCY RETIREMENT AND DISABILITY SYSTEM
SEC. 201. AUTHORIZATION OF APPROPRIATIONS.
There is authorized to be appropriated for the Central
Intelligence Agency Retirement and Disability Fund for fiscal
year 2004 the sum of $226,400,000.
TITLE III--GENERAL PROVISIONS
Subtitle A--Recurring General Provisions
SEC. 301. INCREASE IN EMPLOYEE COMPENSATION AND BENEFITS AUTHORIZED BY
LAW.
Appropriations authorized by this Act for salary, pay,
retirement, and other benefits for Federal employees may be
increased by such additional or supplemental amounts as may be
necessary for increases in such compensation or benefits
authorized by law.
SEC. 302. RESTRICTION ON CONDUCT OF INTELLIGENCE ACTIVITIES.
The authorization of appropriations by this Act shall not
be deemed to constitute authority for the conduct of any
intelligence activity which is not otherwise authorized by the
Constitution or the laws of the United States.
Subtitle B--Intelligence
SEC. 311. AUTHORITY OF FEDERAL BUREAU OF INVESTIGATION TO AWARD
PERSONAL SERVICES CONTRACTS.
(a) Authority.--(1) Title III of the National Security Act
of 1947 is amended by inserting after section 301 (50 U.S.C.
409a) the following new section:
``AUTHORITY OF FEDERAL BUREAU OF INVESTIGATION TO AWARD PERSONAL
SERVICES CONTRACTS
``Sec. 302. (a) In General.--The Director of the Federal
Bureau of Investigation may enter into personal services
contracts if the personal services to be provided under such
contracts directly support the intelligence or
counterintelligence missions of the Federal Bureau of
Investigation.
``(b) Inapplicability of Certain Requirements.--Contracts
under subsection (a) shall not be subject to the annuity offset
requirements of sections 8344 and 8468 of title 5, United
States Code, the requirements of section 3109 of title 5,
United States Code, or any law or regulation requiring
competitive contracting.
``(c) Contract To Be Appropriate Means of Securing
Services.--The Chief Contracting Officer of the Federal Bureau
of Investigation shall ensure that each personal services
contract entered into by the Director under this section is the
appropriate means of securing the services to be provided under
such contract.''.
(2) The table of contents for that Act is amended by
inserting after the item relating to section 301 the following
new item:
``Sec. 302. Authority of Federal Bureau of Investigation to award
personal services contracts.''.
(b) Reports on Exercise of Authority.--(1) Not later than
one year after the date of the enactment of this Act, and
annually thereafter, the Director of the Federal Bureau of
Investigation shall submit to the appropriate committees of
Congress a report on the exercise of the authority in section
302 of the National Security Act of 1947, as added by
subsection (a).
(2) Each report under this subsection shall include, for
the one-year period ending on the date of such report, the
following:
(A) The number of contracts entered into during the
period.
(B) The cost of each such contract.
(C) The length of each such contract.
(D) The types of services to be provided under each
such contract.
(E) The availability, if any, of United States
Government personnel to perform functions similar to
the services to be provided under each such contract.
(F) The efforts of the Federal Bureau of
Investigation to fill available personnel vacancies, or
request additional personnel positions, in areas
relating to the intelligence or counterintelligence
mission of the Bureau.
(3) Each report under this subsection shall be submitted in
unclassified form, but may include a classified annex.
(4) In this subsection--
(A) for purposes of the submittal of the classified
annex to any report under this subsection, the term
``appropriate committees of Congress'' means--
(i) the Select Committee on Intelligence of
the Senate; and
(ii) the Permanent Select Committee on
Intelligence of the House of Representatives;
and
(B) for purposes of the submittal of the
unclassified portion of any report under this
subsection, the term ``appropriate committees of
Congress'' means--
(i) the committees specified in
subparagraph (A);
(ii) the Committees on Appropriations,
Governmental Affairs, and the Judiciary of the
Senate; and
(iii) the Committees on Appropriations,
Government Reform and Oversight, and the
Judiciary of the House of Representatives.
SEC. 312. BUDGET TREATMENT OF COSTS OF ACQUISITION OF MAJOR SYSTEMS BY
THE INTELLIGENCE COMMUNITY.
(a) Findings.--Congress makes the following findings:
(1) Funds within the National Foreign Intelligence
Program often must be shifted from program to program
and from fiscal year to fiscal year to address funding
shortfalls caused by significant increases in the costs
of acquisition of major systems by the intelligence
community.
(2) While some increases in the costs of
acquisition of major systems by the intelligence
community are unavoidable, the magnitude of growth in
the costs of acquisition of many major systems
indicates a systemic bias within the intelligence
community to underestimate the costs of such
acquisition, particularly in the preliminary stages of
development and production.
(3) Decisions by Congress to fund the acquisition
of major systems by the intelligence community rely
significantly upon initial estimates of the
affordability of acquiring such major systems and occur
within a context in which funds can be allocated for a
variety of alternative programs. Thus, substantial
increases in costs of acquisition of major systems
place significant burdens on the availability of funds
for other programs and new proposals within the
National Foreign Intelligence Program.
(4) Independent cost estimates, prepared by
independent offices, have historically represented a
more accurate projection of the costs of acquisition of
major systems.
(5) Recognizing the benefits associated with
independent cost estimates for the acquisition of major
systems, the Secretary of Defense has built upon the
statutory requirement in section 2434 of title 10,
United States Code, to develop and consider independent
cost estimates for the acquisition of such systems by
mandating the use of such estimates in budget requests
of the Department of Defense.
(6) The mandatory use throughout the intelligence
community of independent cost estimates for the
acquisition of major systems will assist the President
and Congress in the development and funding of budgets
which more accurately reflect the requirements and
priorities of the United States Government for
intelligence and intelligence-related activities.
(b) Budget Treatment of Costs of Acquisition of Major
Systems.--(1) Title V of the National Security Act of 1947 (50
U.S.C. 413 et seq.) is amended by inserting after section 506
the following new section:
``BUDGET TREATMENT OF COSTS OF ACQUISITION OF MAJOR SYSTEMS BY THE
INTELLIGENCE COMMUNITY
``Sec. 506A. (a) Independent Cost Estimates.--(1) The
Director of Central Intelligence shall, in consultation with
the head of each element of the intelligence community
concerned, prepare an independent cost estimate of the full
life-cycle cost of development, procurement, and operation of
each major system to be acquired by the intelligence community.
``(2) Each independent cost estimate for a major system
shall, to the maximum extent practicable, specify the amount
required to be appropriated and obligated to develop, procure,
and operate the major system in each fiscal year of the
proposed period of development, procurement, and operation of
the major system.
``(3)(A) In the case of a program of the intelligence
community that qualifies as a major system, an independent cost
estimate shall be prepared before the submission to Congress of
the budget of the President for the first fiscal year in which
appropriated funds are anticipated to be obligated for the
development or procurement of such major system.
``(B) In the case of a program of the intelligence
community for which an independent cost estimate was not
previously required to be prepared under this section,
including a program for which development or procurement
commenced before the date of the enactment of the Intelligence
Authorization Act for Fiscal Year 2004, if the aggregate future
costs of development or procurement (or any combination of such
activities) of the program will exceed $500,000,000 (in current
fiscal year dollars), the program shall qualify as a major
system for purposes of this section, and an independent cost
estimate for such major system shall be prepared before the
submission to Congress of the budget of the President for the
first fiscal year thereafter in which appropriated funds are
anticipated to be obligated for such major system.
``(4) The independent cost estimate for a major system
shall be updated upon--
``(A) the completion of any preliminary design
review associated with the major system;
``(B) any significant modification to the
anticipated design of the major system; or
``(C) any change in circumstances that renders the
current independent cost estimate for the major system
inaccurate.
``(5) Any update of an independent cost estimate for a
major system under paragraph (4) shall meet all requirements
for independent cost estimates under this section, and shall be
treated as the most current independent cost estimate for the
major system until further updated under that paragraph.
``(b) Preparation of Independent Cost Estimates.--(1) The
Director shall establish within the Office of the Deputy
Director of Central Intelligence for Community Management an
office which shall be responsible for preparing independent
cost estimates, and any updates thereof, under subsection (a),
unless a designation is made under paragraph (2).
``(2) In the case of the acquisition of a major system for
an element of the intelligence community within the Department
of Defense, the Director and the Secretary of Defense shall
provide that the independent cost estimate, and any updates
thereof, under subsection (a) be prepared by an entity jointly
designated by the Director and the Secretary in accordance with
section 2434(b)(1)(A) of title 10, United States Code.
``(c) Utilization in Budgets of President.--(1) If the
budget of the President requests appropriations for any fiscal
year for the development or procurement of a major system by
the intelligence community, the President shall, subject to
paragraph (2), request in such budget an amount of
appropriations for the development or procurement, as the case
may be, of the major system that is equivalent to the amount of
appropriations identified in the most current independent cost
estimate for the major system for obligation for each fiscal
year for which appropriations are requested for the major
system in such budget.
``(2) If the amount of appropriations requested in the
budget of the President for the development or procurement of a
major system is less than the amount of appropriations
identified in the most current independent cost estimate for
the major system for obligation for each fiscal year for which
appropriations are requested for the major system in such
budget, the President shall include in the budget justification
materials submitted to Congress in support of such budget--
``(A) an explanation for the difference between the
amount of appropriations requested and the amount of
appropriations identified in the most current
independent cost estimate;
``(B) a description of the importance of the major
system to the national security;
``(C) an assessment of the consequences for the
funding of all programs of the National Foreign
Intelligence Program in future fiscal years if the most
current independent cost estimate for the major system
is accurate and additional appropriations are required
in future fiscal years to ensure the continued
development or procurement of the major system,
including the consequences of such funding shortfalls
on the major system and all other programs of the
National Foreign Intelligence Program; and
``(D) such other information on the funding of the
major system as the President considers appropriate.
``(d) Inclusion of Estimates in Budget Justification
Materials.--The budget justification materials submitted to
Congress in support of the budget of the President shall
include the most current independent cost estimate under this
section for each major system for which appropriations are
requested in such budget for any fiscal year.
``(e) Definitions.--In this section:
``(1) The term `budget of the President' means the
budget of the President for a fiscal year as submitted
to Congress under section 1105(a) of title 31, United
States Code.
``(2) The term `independent cost estimate' means a
pragmatic and neutral analysis, assessment, and
quantification of all costs and risks associated with
the acquisition of a major system, which shall be based
on programmatic and technical specifications provided
by the office within the element of the intelligence
community with primary responsibility for the
development, procurement, or operation of the major
system.
``(3) The term `major system' means any significant
program of an element of the intelligence community
with projected total development and procurement costs
exceeding $500,000,000 (in current fiscal year
dollars), which costs shall include all end-to-end
program costs, including costs associated with the
development and procurement of the program and any
other costs associated with the development and
procurement of systems required to support or utilize
the program.''.
(2) The table of contents for the National Security Act of
1947 is amended by inserting after the item relating to section
506 the following new item:
``Sec. 506A. Budget treatment of costs of acquisition of major systems
by the intelligence community.''.
(c) Effective Date.--The amendments made by subsection (b)
shall take effect on the date of the enactment of this Act.
(d) Limitations.--(1)(A) For each major system for which
funds have been authorized for a fiscal year before fiscal year
2005, or for which funds are sought in the budget of the
President for fiscal year 2005, as submitted to Congress
pursuant to section 1105(a) of title 31, United States Code,
and for which no independent cost estimate has been provided to
Congress, no contract, or option to contract, for the
procurement or acquisition of such major system may be entered
into, or option to contract be exercised, before the date of
the enactment of an Act to authorize appropriations for fiscal
year 2005 for intelligence and intelligence-related activities
of the United States Government.
(B) Subparagraph (A) shall not affect any contract for
procurement or acquisition that was entered into before the
date of the enactment of this Act.
(2) Commencing as of the date of the submittal to Congress
of the budget of the President for fiscal year 2006 pursuant to
section 1105(a) of title 31, United States Code, no funds may
be obligated or expended for the development or procurement of
a major system until the President has complied with the
requirements of section 506A of the National Security Act of
1947 (as added by subsection (b)) with respect to such major
system.
(3) In this subsection, the terms ``independent cost
estimate'' and ``major system'' have the meaning given such
terms in subsection (e) of section 506A of the National
Security Act of 1947 (as so added).
SEC. 313. MODIFICATION OF SUNSET OF APPLICATION OF SANCTIONS LAWS TO
INTELLIGENCE ACTIVITIES.
(a) Modification.--Section 905 of the National Security Act
of 1947 (50 U.S.C. 441d) is repealed.
(b) Clerical Amendment.--The table of contents for that Act
is amended by striking the item relating to section 905.
SEC. 314. MODIFICATION OF NOTICE AND WAIT REQUIREMENTS ON PROJECTS TO
CONSTRUCT OR IMPROVE INTELLIGENCE COMMUNITY
FACILITIES.
(a) Increase of Thresholds for Notice.--Subsection (a) of
section 602 of the Intelligence Authorization Act for Fiscal
Year 1995 (Public Law 103-359; 108 Stat. 3432; 50 U.S.C. 403-
2b(a)) is amended--
(1) by striking ``$750,000'' each place it appears
and inserting ``$5,000,000''; and
(2) by striking ``$500,000'' each place it appears
and inserting ``$1,000,000''.
(b) Notice and Wait Requirements for Emergency Projects.--
Subsection (b)(2) of that section is amended--
(1) by redesignating subparagraphs (A), (B), and
(C) as clauses (i), (ii), and (iii), respectively;
(2) by inserting ``(A)'' after ``(2) Report.--'';
(3) by striking ``21-day period'' and inserting
``7-day period''; and
(4) by adding at the end the following new
subparagraph:
``(B) Notwithstanding subparagraph (A), a project
referred to in paragraph (1) may begin on the date the
notification is received by the appropriate committees
of Congress under that paragraph if the Director of
Central Intelligence and the Secretary of Defense
jointly determine that--
``(i) an emergency exists with respect to
the national security or the protection of
health, safety, or environmental quality; and
``(ii) any delay in the commencement of the
project would harm any or all of those
interests.''.
SEC. 315. EXTENSION OF DEADLINE FOR FINAL REPORT OF THE NATIONAL
COMMISSION FOR THE REVIEW OF THE RESEARCH AND
DEVELOPMENT PROGRAMS OF THE UNITED STATES
INTELLIGENCE COMMUNITY.
(a) In General.--Subsection (a) of section 1007 of the
Intelligence Authorization Act for Fiscal Year 2003 (Public Law
107-306; 50 U.S.C. 401 note; 116 Stat. 2442) is amended by
striking ``September 1, 2003'' and inserting ``September 1,
2004''.
(b) Effective Date.--The amendment made by subsection (a)
shall take effect as if included in the enactment of section
1007 of the Intelligence Authorization Act for Fiscal Year
2003.
SEC. 316. IMPROVEMENT OF INFORMATION SHARING AMONG FEDERAL, STATE, AND
LOCAL GOVERNMENT OFFICIALS.
(a) Training Program for State and Local Officials.--
Section 892(c) of the Homeland Security Act of 2002 (Public Law
107-296; 6 U.S.C. 482) is amended by adding at the end the
following new paragraph:
``(3)(A) The Secretary shall establish a program to
provide appropriate training to officials described in
subparagraph (B) in order to assist such officials in--
``(i) identifying sources of potential
terrorist threats through such methods as the
Secretary determines appropriate;
``(ii) reporting information relating to
such potential terrorist threats to the
appropriate Federal agencies in the appropriate
form and manner;
``(iii) assuring that all reported
information is systematically submitted to and
passed on by the Department for use by
appropriate Federal agencies; and
``(iv) understanding the mission and roles
of the intelligence community to promote more
effective information sharing among Federal,
State, and local officials and representatives
of the private sector to prevent terrorist
attacks against the United States.
``(B) The officials referred to in subparagraph (A)
are officials of State and local government agencies
and representatives of private sector entities with
responsibilities relating to the oversight and
management of first responders, counterterrorism
activities, or critical infrastructure.
``(C) The Secretary shall consult with the Attorney
General to ensure that the training program established
in subparagraph (A) does not duplicate the training
program established in section 908 of the USA PATRIOT
Act (Public Law 107-56; 28 U.S.C. 509 note).
``(D) The Secretary shall carry out this paragraph
in consultation with the Director of Central
Intelligence and the Attorney General.''.
(b) Report.--Not later than 60 days after the date of the
enactment of this Act, the Secretary of Homeland Security shall
submit to Congress a report that describes the Secretary's plan
for implementing section 892 of the Homeland Security Act of
2002 and includes an estimated date of completion of the
implementation.
SEC. 317. PILOT PROGRAM ON ANALYSIS OF SIGNALS AND OTHER INTELLIGENCE
BY INTELLIGENCE ANALYSTS OF VARIOUS ELEMENTS OF THE
INTELLIGENCE COMMUNITY.
(a) In General.--The Director of Central Intelligence
shall, in coordination with the Secretary of Defense, carry out
a pilot program to assess the feasibility and advisability of
permitting intelligence analysts of various elements of the
intelligence community to access and analyze intelligence from
the databases of other elements of the intelligence community
in order to achieve the objectives set forth in subsection (c).
(b) Covered Intelligence.--The intelligence to be analyzed
under the pilot program under subsection (a) shall include the
following:
(1) Signals intelligence of the National Security
Agency.
(2) Such intelligence of other elements of the
intelligence community as the Director shall select for
purposes of the pilot program.
(c) Objectives.--The objectives set forth in this
subsection are as follows:
(1) To enhance the capacity of the intelligence
community to undertake ``all source fusion'' analysis
in support of the intelligence and intelligence-related
missions of the intelligence community.
(2) To reduce, to the extent possible, the amount
of intelligence collected by the intelligence community
that is not assessed, or reviewed, by intelligence
analysts.
(3) To reduce the burdens imposed on analytical
personnel of the elements of the intelligence community
by current practices regarding the sharing of
intelligence among elements of the intelligence
community.
(d) Commencement.--The Director shall commence the pilot
program under subsection (a) not later than December 31, 2003.
(e) Various Mechanisms Required.--In carrying out the pilot
program under subsection (a), the Director shall develop and
utilize various mechanisms to facilitate the access to, and the
analysis of, intelligence in the databases of the intelligence
community by intelligence analysts of other elements of the
intelligence community, including the use of so-called
``detailees in place''.
(f) Security.--(1) In carrying out the pilot program under
subsection (a), the Director shall take appropriate actions to
protect against the disclosure and unauthorized use of
intelligence in the databases of the elements of the
intelligence community which may endanger sources and methods
which (as determined by the Director) warrant protection.
(2) The actions taken under paragraph (1) shall include the
provision of training on the accessing and handling of
information in the databases of various elements of the
intelligence community and the establishment of limitations on
access to information in such databases regarding United States
persons.
(g) Assessment.--Not later than February 1, 2004, after the
commencement under subsection (d) of the pilot program under
subsection (a), the Under Secretary of Defense for Intelligence
and the Assistant Director of Central Intelligence for Analysis
and Production shall jointly carry out an assessment of the
progress of the pilot program in meeting the objectives set
forth in subsection (c).
(h) Report.--(1) The Director of Central Intelligence
shall, in coordination with the Secretary of Defense, submit to
the appropriate committees of Congress a report on the
assessment carried out under subsection (g).
(2) The report shall include--
(A) a description of the pilot program under
subsection (a);
(B) the findings of the Under Secretary and
Assistant Director as a result of the assessment;
(C) any recommendations regarding the pilot program
that the Under Secretary and the Assistant Director
jointly consider appropriate in light of the
assessment; and
(D) any recommendations that the Director and
Secretary consider appropriate for purposes of the
report.
(i) Appropriate Committees of Congress Defined.--In this
section, the term ``appropriate committees of Congress''
means--
(1) the Select Committee on Intelligence, the
Committee on Armed Services, and the Committee on
Appropriations of the Senate; and
(2) the Permanent Select Committee on Intelligence,
the Committee on Armed Services, and the Committee on
Appropriations of the House of Representatives.
SEC. 318. PILOT PROGRAM ON RECRUITMENT AND TRAINING OF INTELLIGENCE
ANALYSTS.
(a) Pilot Program.--(1) The Director of Central
Intelligence shall carry out a pilot program to ensure that
selected students or former students are provided funds to
continue academic training, or are reimbursed for academic
training previously obtained, in areas of specialization that
the Director, in consultation with the other heads of the
elements of the intelligence community, identifies as areas in
which the current analytic capabilities of the intelligence
community are deficient or in which future analytic
capabilities of the intelligence community are likely to be
deficient.
(2) A student or former student selected for participation
in the pilot program shall commit to employment with an element
of the intelligence community, following completion of
appropriate academic training, under such terms and conditions
as the Director considers appropriate.
(3) The pilot program shall be known as the Pat Roberts
Intelligence Scholars Program.
(b) Elements.--In carrying out the pilot program under
subsection (a), the Director shall--
(1) establish such requirements relating to the
academic training of participants as the Director
considers appropriate to ensure that participants are
prepared for employment as intelligence analysts; and
(2) periodically review the areas of specialization
of the elements of the intelligence community to
determine the areas in which such elements are, or are
likely to be, deficient in analytic capabilities.
(c) Duration.--The Director shall carry out the pilot
program under subsection (a) during fiscal years 2004 through
2006.
(d) Limitation on Number of Members During Fiscal Year
2004.--The total number of individuals participating in the
pilot program under subsection (a) during fiscal year 2004 may
not exceed 150 students.
(e) Responsibility.--The Director shall carry out the pilot
program under subsection (a) through the Assistant Director of
Central Intelligence for Analysis and Production.
(f) Reports.--(1) Not later than 120 days after the date of
the enactment of this Act, the Director shall submit to
Congress a preliminary report on the pilot program under
subsection (a), including a description of the pilot program
and the authorities to be utilized in carrying out the pilot
program.
(2) Not later than one year after the commencement of the
pilot program, the Director shall submit to Congress a report
on the pilot program. The report shall include--
(A) a description of the activities under the pilot
program, including the number of individuals who
participated in the pilot program and the training
provided such individuals under the pilot program;
(B) an assessment of the effectiveness of the pilot
program in meeting the purpose of the pilot program;
and
(C) any recommendations for additional legislative
or administrative action that the Director considers
appropriate in light of the pilot program.
(g) Funding.--Of the amounts authorized to be appropriated
by this Act, $4,000,000 shall be available until expended to
carry out this section.
SEC. 319. IMPROVEMENT OF EQUALITY OF EMPLOYMENT OPPORTUNITIES IN THE
INTELLIGENCE COMMUNITY.
(a) Findings.--Congress makes the following findings:
(1) It is the recommendation of the Joint Inquiry
of the Senate Select Committee on Intelligence and the
House Permanent Select Committee on Intelligence into
Intelligence Community Activities Before and After the
Terrorist Attacks of September 11, 2001, that the
Intelligence Community should enhance recruitment of a
more ethnically and culturally diverse workforce and
devise a strategy to capitalize upon the unique
cultural and linguistic capabilities of first
generation Americans.
(2) The Intelligence Community could greatly
benefit from an increased number of employees who are
proficient in foreign languages and knowledgeable of
world cultures, especially in foreign languages that
are critical to the national security interests of the
United States. Particular emphasis should be given to
the recruitment of United States citizens whose
linguistic capabilities are acutely required for the
improvement of the overall intelligence collection and
analysis effort of the United States Government.
(3) The Intelligence Community has a significantly
lower percentage of women and minorities than the total
workforce of the Federal government and the total
civilian labor force.
(4) Women and minorities continue to be under-
represented in senior grade levels, and in core mission
areas, of the intelligence community.
(b) Pilot Project To Promote Equality of Employment
Opportunities for Women and Minorities Throughout the
Intelligence Community Using Innovative Methodologies.--The
Director of Central Intelligence shall carry out a pilot
project under this section to test and evaluate alternative,
innovative methods to promote equality of employment
opportunities in the intelligence community for women,
minorities, and individuals with diverse ethnic and cultural
backgrounds, skills, language proficiency, and expertise.
(c) Methods.--In carrying out the pilot project, the
Director shall employ methods to increase diversity of officers
and employees in the intelligence community.
(d) Duration of Project.--The Director shall carry out the
project under this section for a 3-year period.
(e) Report.--Not later than 2 years after the date the
Director implements the pilot project under this section, the
Director shall submit to Congress a report on the project. The
report shall include--
(1) an assessment of the effectiveness of the
project; and
(2) recommendations on the continuation of the
project, as well as recommendations for improving the
effectiveness of the project in meeting the goals of
promoting equality of employment opportunities in the
intelligence community for women, minorities, and
individuals with diverse ethnic and cultural
backgrounds, skills, language proficiency, and
expertise.
(f) Diversity Plan.--(1) Not later than February 15, 2004,
the Director of Central Intelligence shall submit to Congress a
report which describes the plan of the Director, entitled the
``DCI Diversity Strategic Plan'', and any subsequent revision
to that plan, to increase diversity of officers and employees
in the intelligence community, including the short- and long-
term goals of the plan. The report shall also provide a
detailed description of the progress that has been made by each
element of the intelligence community in implementing the plan.
(2) In implementing the plan, the Director shall
incorporate innovative methods for recruitment and hiring that
the Director has determined to be effective from the pilot
project carried out under this section.
(g) Intelligence Community Defined.--In this section, the
term ``intelligence community'' has the meaning given that term
in section 3(4) of the National Security Act of 1947 (50 U.S.C.
401(4)).
SEC. 320. SENSE OF CONGRESS ON RECRUITMENT AS INTELLIGENCE COMMUNITY
PERSONNEL OF MEMBERS OF THE ARMED FORCES ON THEIR
DISCHARGE OR RELEASE FROM DUTY.
It is the sense of Congress that the elements of the
intelligence community should, in the course of their civilian
recruitment efforts in the United States, endeavor to recruit
as personnel of the intelligence community citizens and, as
appropriate, nationals of the United States who are members of
the Armed Forces who participated in Operation Enduring
Freedom, Operation Iraqi Freedom, and other campaigns
undertaken abroad upon the separation, discharge, or release of
such individuals from the Armed Forces.
SEC. 321. EXTERNAL COLLECTION CAPABILITIES AND REQUIREMENTS REVIEW
PANEL.
The President may establish an External Collection
Capabilities and Requirements Review Panel as specified in the
classified annex to this Act.
Subtitle C--Counterintelligence
SEC. 341. COUNTERINTELLIGENCE INITIATIVES FOR THE INTELLIGENCE
COMMUNITY.
(a) In General.--(1) Title XI of the National Security Act
of 1947 (50 U.S.C. 401 et seq.) is amended by adding at the end
the following new section:
``COUNTERINTELLIGENCE INITIATIVES
``Sec. 1102. (a) Inspection Process.--(1) In order to
protect intelligence sources and methods from unauthorized
disclosure, the Director of Central Intelligence shall
establish and implement an inspection process for all agencies
and departments of the United States that handle classified
information relating to the national security of the United
States intended to assure that those agencies and departments
maintain effective operational security practices and programs
directed against counterintelligence activities.
``(2) The Director shall carry out the process through the
Office of the National Counterintelligence Executive.
``(b) Annual Review of Dissemination Lists.--(1) The
Director of Central Intelligence shall establish and implement
a process for all elements of the intelligence community to
review, on an annual basis, individuals included on
distribution lists for access to classified information. Such
process shall ensure that only individuals who have a
particularized `need to know' (as determined by the Director)
are continued on such distribution lists.
``(2) Not later than October 15 of each year, the Director
shall certify to the congressional intelligence committees that
the review required under paragraph (1) has been conducted in
all elements of the intelligence community during the preceding
fiscal year.
``(c) Completion of Financial Disclosure Statements
Required for Access to Certain Classified Information.--(1) The
Director of Central Intelligence shall establish and implement
a process by which each head of an element of the intelligence
community directs that all employees of that element, in order
to be granted access to classified information referred to in
subsection (a) of section 1.3 of Executive Order No. 12968
(August 2, 1995; 60 F.R. 40245; 50 U.S.C. 435 note), submit
financial disclosure forms as required under subsection (b) of
such section.
``(2) The Director shall carry out paragraph (1) through
the Office of the National Counterintelligence Executive.
``(d) Arrangements To Handle Sensitive Information.--The
Director of Central Intelligence shall establish, for all
elements of the intelligence community, programs and procedures
by which sensitive classified information relating to human
intelligence is safeguarded against unauthorized disclosure by
employees of those elements.''.
(2) The table of contents contained in the first section of
such Act is amended in the items relating to title XI by adding
at the end the following new item:
``Sec. 1102. Counterintelligence initiatives.''.
(b) Intelligence and National Security Aspects of Espionage
Prosecutions.--The Attorney General, acting through the Office
of Intelligence Policy and Review of the Department of Justice,
and in consultation with the Director of Central Intelligence,
acting through the Office of the National Counterintelligence
Executive, shall establish policies and procedures to assist
the Attorney General in the consideration of intelligence and
national security-related equities in the development of
charging documents and related pleadings in espionage
prosecutions.
Subtitle D--Reports
SEC. 351. REPORT ON CLEARED INSIDER THREAT TO CLASSIFIED COMPUTER
NETWORKS.
(a) Report Required.--The Director of Central Intelligence
and the Secretary of Defense shall jointly submit to the
appropriate committees of Congress a report on the risks to the
national security of the United States of the current computer
security practices of the elements of the intelligence
community and of the Department of Defense.
(b) Assessments.--The report under subsection (a) shall
include an assessment of the following:
(1) The vulnerability of the computers and computer
systems of the elements of the intelligence community,
and of the Department of Defense, to various threats
from foreign governments, international terrorist
organizations, and organized crime, including
information warfare (IW), Information Operations (IO),
Computer Network Exploitation (CNE), and Computer
Network Attack (CNA).
(2) The risks of providing users of local area
networks (LANs) or wide-area networks (WANs) of
computers that include classified information with
capabilities for electronic mail, upload and download,
or removable storage media without also deploying
comprehensive computer firewalls, accountability
procedures, or other appropriate security controls.
(3) Any other matters that the Director and the
Secretary jointly consider appropriate for purposes of
the report.
(c) Information on Access to Networks.--The report under
subsection (a) shall also include information as follows:
(1) An estimate of the number of access points on
each classified computer or computer system of an
element of the intelligence community or the Department
of Defense that permit unsupervised uploading or
downloading of classified information, set forth by
level of classification.
(2) An estimate of the number of individuals
utilizing such computers or computer systems who have
access to input-output devices on such computers or
computer systems.
(3) A description of the policies and procedures
governing the security of the access points referred to
in paragraph (1), and an assessment of the adequacy of
such policies and procedures.
(4) An assessment of the viability of utilizing
other technologies (including so-called ``thin client
servers'') to achieve enhanced security of such
computers and computer systems through more rigorous
control of access to such computers and computer
systems.
(d) Recommendations.--The report under subsection (a) shall
also include such recommendations for modifications or
improvements of the current computer security practices of the
elements of the intelligence community, and of the Department
of Defense, as the Director and the Secretary jointly consider
appropriate as a result of the assessments under subsection (b)
and the information under subsection (c).
(e) Submittal Date.--The report under subsection (a) shall
be submitted not later than February 15, 2004.
(f) Form.--The report under subsection (a) may be submitted
in classified or unclassified form, at the election of the
Director.
(g) Definitions.--In this section:
(1) The term ``appropriate committees of Congress''
means--
(A) the Select Committee on Intelligence
and the Committee on Armed Services of the
Senate; and
(B) the Permanent Select Committee on
Intelligence and the Committee on Armed
Services of the House of Representatives.
(2) The term ``elements of the intelligence
community'' means the elements of the intelligence
community set forth in or designated under section 3(4)
of the National Security Act of 1947 (50 U.S.C.
401a(4)).
SEC. 352. REPORT ON SECURITY BACKGROUND INVESTIGATIONS AND SECURITY
CLEARANCE PROCEDURES OF THE FEDERAL GOVERNMENT.
(a) Report Required.--The Director of Central Intelligence,
the Secretary of Defense, the Attorney General, the Director of
the Office of Personnel Management, and the heads of other
appropriate Federal departments and agencies (as determined by
the President) shall jointly submit to the appropriate
committees of Congress a report on the utility and
effectiveness of the current security background investigations
and security clearance procedures of the Federal Government in
meeting the purposes of such investigations and procedures.
(b) Particular Report Matters.--The report shall address in
particular the following:
(1) A comparison of the costs and benefits of
conducting background investigations for Secret
clearance with the costs and benefits of conducting
full field background investigations.
(2) The standards governing the revocation of
security clearances.
(c) Recommendations.--The report under subsection (a) shall
include such recommendations for modifications or improvements
of the current security background investigations or security
clearance procedures of the Federal Government as are
considered appropriate as a result of the preparation of the
report under that subsection.
(d) Submittal Date.--The report under subsection (a) shall
be submitted not later than February 15, 2004.
(e) Appropriate Committees of Congress Defined.--In this
section, the term ``appropriate committees of Congress''
means--
(1) the Select Committee on Intelligence and the
Committees on Armed Services and the Judiciary of the
Senate; and
(2) the Permanent Select Committee on Intelligence
and the Committees on Armed Services and the Judiciary
of the House of Representatives.
SEC. 353. REPORT ON DETAIL OF CIVILIAN INTELLIGENCE PERSONNEL AMONG
ELEMENTS OF THE INTELLIGENCE COMMUNITY AND THE
DEPARTMENT OF DEFENSE.
(a) Report Required.--The Director of Central Intelligence
shall, in consultation with the heads of the elements of the
intelligence community, submit to the appropriate committees of
Congress a report on means of improving the detail or transfer
of civilian intelligence personnel between and among the
various elements of the intelligence community for the purpose
of enhancing the flexibility and effectiveness of the
intelligence community in responding to changes in requirements
for the collection, analysis, and dissemination of
intelligence.
(b) Report Elements.--The report under subsection (a)
shall--
(1) set forth a variety of proposals on means of
improving the detail or transfer of civilian
intelligence personnel as described in that subsection;
(2) identify the proposal or proposals determined
by the heads of the elements of the intelligence
community most likely to meet the purpose described in
that subsection; and
(3) include such recommendations for such
legislative or administrative action as the heads of
the elements of the intelligence community consider
appropriate to implement the proposal or proposals
identified under paragraph (2).
(c) Submittal Date.--The report under subsection (a) shall
be submitted not later than February 15, 2004.
(d) Definitions.--In this section:
(1) The term ``appropriate committees of Congress''
means--
(A) the Select Committee on Intelligence
and the Committees on Armed Services,
Governmental Affairs, and the Judiciary of the
Senate; and
(B) the Permanent Select Committee on
Intelligence and the Committees on Armed
Services, Government Reform, and the Judiciary
of the House of Representatives.
(2) The term ``elements of the intelligence
community'' means the elements of the intelligence
community set forth in or designated under section 3(4)
of the National Security Act of 1947 (50 U.S.C.
401a(4)).
(3) The term ``heads of the elements of the
intelligence community'' includes the Secretary of
Defense with respect to each element of the
intelligence community within the Department of Defense
or the military departments.
SEC. 354. REPORT ON MODIFICATIONS OF POLICY AND LAW ON CLASSIFIED
INFORMATION TO FACILITATE SHARING OF INFORMATION
FOR NATIONAL SECURITY PURPOSES.
(a) Report.--Not later than four months after the date of
the enactment of this Act, the President shall submit to the
appropriate committees of Congress a report that--
(1) identifies impediments in current policy and
regulations to the sharing of classified information
horizontally across and among Federal departments and
agencies, and vertically between the Federal Government
and agencies of State and local governments and the
private sector, for national security purposes,
including homeland security; and
(2) proposes appropriate modifications of policy,
law, and regulations to eliminate such impediments in
order to facilitate such sharing of classified
information for national security purposes, including
homeland security.
(b) Considerations.--In preparing the report under
subsection (a), the President shall--
(1) consider the extent to which the reliance on a
document-based approach to the protection of classified
information impedes the sharing of classified
information; and
(2) consider the extent to which the utilization of
a database-based approach, or other electronic
approach, to the protection of classified information
might facilitate the sharing of classified information.
(c) Coordination With Other Information Sharing
Activities.--In preparing the report under subsection (a), the
President shall, to the maximum extent practicable, take into
account actions being undertaken under the Homeland Security
Information Sharing Act (subtitle I of title VIII of Public Law
107-296; 116 Stat. 2252; 6 U.S.C. 481 et seq.).
(d) Appropriate Committees of Congress Defined.--In this
section, the term ``appropriate committees of Congress''
means--
(1) the Select Committee on Intelligence and the
Committees on Armed Services, Governmental Affairs, and
the Judiciary of the Senate; and
(2) the Permanent Select Committee on Intelligence,
the Select Committee on Homeland Security, and the
Committees on Armed Services and the Judiciary of the
House of Representatives.
SEC. 355. REPORT ON STRATEGIC PLANNING.
(a) Report.--Not later than February 15, 2004, the
Secretary of Defense and the Director of Central Intelligence
shall jointly submit to the appropriate committees of Congress
a report that assesses progress in the following:
(1) The development by the Department of Defense
and the intelligence community of a comprehensive and
uniform analytical capability to assess the utility and
advisability of various sensor and platform
architectures and capabilities for the collection of
intelligence.
(2) The improvement of coordination between the
Department and the intelligence community on strategic
and budgetary planning.
(b) Form.--The report under subsection (a) may be submitted
in classified form.
(c) Appropriate Committees of Congress Defined.--In this
section, the term ``appropriate committees of Congress''
means--
(1) the Select Committee on Intelligence and the
Committee on Armed Services of the Senate; and
(2) the Permanent Select Committee on Intelligence
and the Committee on Armed Services of the House of
Representatives.
SEC. 356. REPORT ON UNITED STATES DEPENDENCE ON COMPUTER HARDWARE AND
SOFTWARE MANUFACTURED OVERSEAS.
(a) Report.--Not later than February 15, 2004, the Director
of Central Intelligence shall submit to the appropriate
committees of Congress a report on the extent of United States
dependence on computer hardware or software that is
manufactured overseas.
(b) Elements.--The report under subsection (a) shall
address the following:
(1) The extent to which the United States currently
depends on computer hardware or software that is
manufactured overseas.
(2) The extent to which United States dependence,
if any, on such computer hardware or software is
increasing.
(3) The vulnerabilities of the national security
and economy of the United States as a result of United
States dependence, if any, on such computer hardware or
software.
(4) Any other matters relating to United States
dependence, if any, on such computer hardware or
software that the Director considers appropriate.
(c) Consultation With Private Sector.--(1) In preparing the
report under subsection (a), the Director may consult, and is
encouraged to consult, with appropriate persons and entities in
the computer hardware or software industry and with other
appropriate persons and entities in the private sector.
(2) Consultations of the Director with persons or entities
under paragraph (1) shall not be treated as the activities of
an advisory committee for purposes of the Federal Advisory
Committee Act (5 U.S.C. App.).
(d) Form.--(1) The report under subsection (a) shall be
submitted in unclassified form, but may include a classified
annex.
(2) The report may be in the form of a National
Intelligence Estimate.
(e) Appropriate Committees of Congress Defined.--In this
section, the term ``appropriate committees of Congress''
means--
(1) the Select Committee on Intelligence and the
Committee on Armed Services of the Senate; and
(2) the Permanent Select Committee on Intelligence
and the Committee on Armed Services of the House of
Representatives.
SEC. 357. REPORT ON LESSONS LEARNED FROM MILITARY OPERATIONS IN IRAQ.
(a) Report.--As soon as possible, but not later than one
year after the date of the enactment of this Act, the Director
of Central Intelligence shall submit to the appropriate
committees of Congress a report on the intelligence lessons
learned as a result of Operation Iraqi Freedom, including
lessons relating to the following:
(1) The tasking, collection, processing,
exploitation, analysis, and dissemination of
intelligence.
(2) The accuracy, timeliness, and objectivity of
intelligence analysis.
(3) The intelligence support available to
policymakers and members of the Armed Forces in combat.
(4) The coordination of intelligence activities and
operations with military operations.
(5) The strengths and limitations of intelligence
systems and equipment.
(6) Such other matters as the Director considers
appropriate.
(b) Recommendations.--The report under subsection (a) shall
include such recommendations on improvement in the matters
described in subsection (a) as the Director considers
appropriate.
(c) Appropriate Committees of Congress Defined.--In this
section, the term ``appropriate committees of Congress''
means--
(1) the Permanent Select Committee on Intelligence
and the Committee on Armed Services of the House of
Representatives; and
(2) the Select Committee on Intelligence and the
Committee on Armed Services of the Senate.
SEC. 358. REPORTS ON CONVENTIONAL WEAPONS AND AMMUNITION OBTAINED BY
IRAQ IN VIOLATION OF CERTAIN UNITED NATIONS
SECURITY COUNCIL RESOLUTIONS.
(a) Preliminary Report.--Not later than 90 days after the
date of the enactment of this Act, the Director of the Defense
Intelligence Agency shall, after such consultation with the
Secretary of State and the Attorney General as the Director
considers appropriate, submit to the appropriate committees of
Congress a preliminary report on all information obtained by
the Department of Defense and the intelligence community on the
conventional weapons and ammunition obtained by Iraq in
violation of applicable resolutions of the United Nations
Security Council adopted since the invasion of Kuwait by Iraq
in August 1990.
(b) Final Report.--(1) Not later than one year after the
date of the enactment of this Act, the Director shall submit to
the appropriate committees of Congress a final report on the
information described in subsection (a).
(2) The final report under paragraph (1) shall include such
updates of the preliminary report under subsection (a) as the
Director considers appropriate.
(c) Elements.--Each report under this section shall set
forth, to the extent practicable, with respect to each shipment
of weapons or ammunition addressed in such report the
following:
(1) The country of origin.
(2) Any country of transshipment.
(d) Form.--Each report under this section shall be
submitted in unclassified form, but may include a classified
annex.
(e) Appropriate Committees of Congress Defined.--In this
section, the term ``appropriate committees of Congress''
means--
(1) the Select Committee on Intelligence and the
Committees on Armed Services and Foreign Relations of
the Senate; and
(2) the Permanent Select Committee on Intelligence
and the Committees on Armed Services and International
Relations of the House of Representatives.
SEC. 359. REPORT ON OPERATIONS OF DIRECTORATE OF INFORMATION ANALYSIS
AND INFRASTRUCTURE PROTECTION AND TERRORIST THREAT
INTEGRATION CENTER.
(a) Report Required.--The President shall submit to the
appropriate committees of Congress a report on the operations
of the Directorate of Information Analysis and Infrastructure
Protection of the Department of Homeland Security and the
Terrorist Threat Integration Center. The report shall include
the following:
(1) An assessment of the operations of the
Directorate and the Center, including the capabilities
of each--
(A) to meet personnel requirements,
including requirements to employ qualified
analysts, and the status of efforts to employ
qualified analysts;
(B) to share intelligence information with
the other elements of the intelligence
community, including the sharing of
intelligence information through secure
information technology connections between the
Directorate, the Center, and the other elements
of the intelligence community;
(C) to disseminate intelligence
information, or analyses of intelligence
information, to other departments and agencies
of the Federal Government and, as appropriate,
to State and local governments;
(D) to coordinate with State and local
counterterrorism and law enforcement officials;
(E) to receive information from Federal,
State, and local officials, and private sector
entities, relating to the respective
responsibilities and authorities of the
Directorate and the Center; and
(F) to access information, including
intelligence and law enforcement information,
from the departments and agencies of the
Federal Government, including the ability of
the Directorate to access, in a timely and
efficient manner, all information authorized by
section 202 of the Homeland Security Act of
2002 (Public Law 107-296; 6 U.S.C. 122).
(2) An assessment of the ability of the Center to
fulfill the responsibilities assigned to it by the
President given its structure, authorities, current
assets, and capabilities.
(3) An assessment of the ability of the Directorate
to fulfill the responsibilities set forth in section
201 of the Homeland Security Act of 2002 (6 U.S.C. 121)
given its current assets and capabilities.
(4) A plan of action (including appropriate
milestones, funding, and sources of funding) for
bringing the Center to its full operational capacity as
called for in the Information on the State of the Union
given by the President to Congress under section 3 of
Article II of the Constitution of the United States in
2003.
(5) A delineation of the responsibilities and
duties of the Directorate and of the responsibilities
and duties of the Center.
(6) A delineation and summary of the areas in which
the responsibilities and duties of the Directorate, the
Center, and other elements of the Federal Government
overlap.
(7) An assessment of whether the areas of overlap,
if any, delineated under paragraph (6) represent an
inefficient utilization of resources.
(8) A description of the policies and procedures to
ensure that the Directorate and the Center comply with
the Constitution and applicable statutes, Executive
orders, and regulations of the United States.
(9) The practical impact, if any, of the operations
of the Center on individual liberties and privacy.
(10) Such information as the President considers
appropriate to explain the basis for the establishment
and operation of the Center as a ``joint venture'' of
participating agencies rather than as an element of the
Directorate reporting directly to the Secretary of
Homeland Security through the Under Secretary of
Homeland Security for Information Analysis and
Infrastructure Protection.
(b) Submittal Date.--The report required by this section
shall be submitted not later than May 1, 2004.
(c) Form.--The report required by this section shall be
submitted in unclassified form, but may include a classified
annex.
(d) Appropriate Committees of Congress Defined.--In this
section, the term ``appropriate committees of Congress''
means--
(1) the Select Committee on Intelligence and the
Committees on Governmental Affairs, the Judiciary, and
Appropriations of the Senate; and
(2) the Permanent Select Committee on Intelligence,
the Select Committee on Homeland Security, and the
Committees on the Judiciary and Appropriations of the
House of Representatives.
SEC. 360. REPORT ON TERRORIST SCREENING CENTER.
(a) Report.--Not later than September 16, 2004, the
President shall submit to Congress a report on the
establishment and operation of the Terrorist Screening Center,
established on September 16, 2003, by Homeland Security
Presidential Directive 6, including the matters described in
subsection (b).
(b) Covered Matters.--The matters referred to in subsection
(a) are the following:
(1) An analysis of the operations of the Terrorist
Screening Center to ensure that the Terrorist Screening
Center does not violate the Constitution, or any
statute, Executive Order, or regulation of the United
States.
(2) A description of the architecture of the
database system of the Terrorist Screening Center,
including the number of databases maintained, operated,
or administered by the Terrorist Screening Center, and
the extent to which these databases have been
integrated.
(3) A determination of whether data from all watch
lists detailed in the April 2003 report of the
Comptroller General of the United States, entitled
``Information Technology: Terrorist Watch Lists should
be Consolidated to promote Better Integration and
Sharing,'' have been incorporated into the Terrorist
Screening Center database system.
(4) A determination of whether there remain any
relevant databases that are not yet part of the
Terrorist Screening Center database system.
(5) A schedule that specifies the dates on which
each Federal watch list database identified in the
report referred to in paragraph (3), or determined
under paragraph (4) to be not yet part of the Terrorist
Screening Center database system, were, or will be,
integrated into the Terrorist Screening Center database
system.
(6) A description of the protocols in effect to
ensure the protection of classified and sensitive
information contained in the Terrorist Screening Center
database system.
(7) A description of--
(A) the process by which databases in the
Terrorist Screening Center database system are
reviewed for accuracy and timeliness of data
and the frequency of updates of such reviews;
and
(B) the mechanism used to ensure that data
within a particular database is synchronized
and replicated throughout the database system
of the Terrorist Screening Center.
(8) A description of the extent to which the
Terrorist Screening Center makes information available
to the private sector and critical infrastructure
components, and the criteria for determining which
private sector and critical infrastructure components
receive that information.
(9) The number of individuals listed in the
Terrorist Screening Center database system.
(10) The estimated operating budget of, and sources
of funding for, the Terrorist Screening Center for each
of fiscal years 2004, 2005, and 2006.
(11) An assessment of the impact of the Terrorist
Screening Center on current law enforcement systems.
(12) The practical impact, if any, of the
operations of the Terrorist Screening Center on
individual liberties and privacy.
(13) Such recommendations as the President
considers appropriate for modifications of law or
policy to ensure the continuing operation of the
Terrorist Screening Center.
(c) Form of Report.--The report required by subsection (a)
shall be submitted in unclassified form, but may include a
classified annex.
SEC. 361. REPEAL AND MODIFICATION OF REPORT REQUIREMENTS RELATING TO
INTELLIGENCE ACTIVITIES.
(a) Annual Evaluation of Performance and Responsiveness of
Intelligence Community.--Section 105 of the National Security
Act of 1947 (50 U.S.C. 403-5) is amended by striking subsection
(d).
(b) Periodic Reports on Disclosure of Intelligence
Information to United Nations.--Section 112(b) of the National
Security Act of 1947 (50 U.S.C. 404g(b)(1)) is amended--
(1) in the subsection caption, by striking
``Periodic'' and inserting ``Annual'';
(2) in paragraph (1), by striking ``semiannually''
and inserting ``annually''; and
(3) in paragraph (3), by striking ``periodic'' and
inserting ``the annual''.
(c) Annual Report on Intelligence Community Cooperation
With Counterdrug Activities.--Section 114 of the National
Security Act of 1947 (50 U.S.C. 404i) is amended--
(1) by striking subsection (a); and
(2) by redesignating subsections (b) through (f) as
subsections (a) through (e), respectively.
(d) Annual Report on Covert Leases.--Section 114 of the
National Security Act of 1947, as amended by this section, is
further amended--
(1) by striking subsection (d); and
(2) by redesignating subsection (e) as subsection
(d).
(e) Annual Report on Certain Foreign Companies Involved in
Proliferation of Weapons of Mass Destruction.--Section 827 of
the Intelligence Authorization Act for Fiscal Year 2003 (Public
Law 107-306; 116 Stat. 2430; 50 U.S.C. 404n-3) is repealed.
(f) Annual Report on Intelligence Activities of People's
Republic of China.--Section 308 of the Intelligence
Authorization Act for Fiscal Year 1998 (Public Law 105-107; 111
Stat. 2253; 50 U.S.C. 402a note) is repealed.
(g) Annual Report on Coordination of Counterintelligence
Matters With FBI.--Section 811(c) of the Counterintelligence
and Security Enhancements Act of 1994 (title VIII of Public Law
103-359; 50 U.S.C. 402a(c)) is amended--
(1) by striking paragraph (6); and
(2) by redesignating paragraphs (7) and (8) as
paragraphs (6) and (7), respectively.
(h) Annual Report on Postemployment Assistance for
Terminated Intelligence Employees.--Section 1611 of title 10,
United States Code, is amended by striking subsection (e).
(i) Annual Report on Activities of FBI Personnel Outside
the United States.--Section 540C of title 28, United States
Code, is repealed.
(j) Annual Report on Exceptions to Consumer Disclosure
Requirements for National Security Investigations.--Section
604(b)(4) of the Fair Credit Reporting Act (15 U.S.C.
1681b(b)(4)) is amended--
(1) by striking subparagraphs (D) and (E); and
(2) by redesignating subparagraph (F) as
subparagraph (D).
(k) Reports on Acquisition of Technology Relating to
Weapons of Mass Destruction and Advanced Conventional
Munitions.--Subsection (b)(1) of section 721 of the
Intelligence Authorization Act for Fiscal Year 1997 (Public Law
104-293; 50 U.S.C. 2366) is amended by striking ``a
semiannual'' and inserting ``an annual''.
(l) Conforming Amendments.--Section 507 of the National
Security Act of 1947 (50 U.S.C. 415b) is amended--
(1) in subsection (a)--
(A) in paragraph (1)--
(i) by striking subparagraphs (A),
(C), (G), (I), (J), and (L);
(ii) by redesignating subparagraphs
(B), (D), (E), (H), (K), (M), and (N)
as subparagraphs (A), (C), (D), (G),
(H), and (I), respectively;
(iii) by inserting after
subparagraph (A), as so redesignated,
the following new subparagraph (B):
``(B) The annual report on intelligence provided to
the United Nations required by section 112(b)(1).'';
and
(iv) by inserting after
subparagraph (D), as so redesignated,
the following new subparagraph (E):
``(E) The annual report on the acquisition of
technology relating to weapons of mass destruction and
advanced conventional munitions required by section 721
of the Intelligence Authorization Act for Fiscal Year
1997 (Public Law 104-293; 50 U.S.C. 2366).''; and
(B) in paragraph (2)--
(i) in subparagraph (A), by
striking ``section 114(b)'' and
inserting ``section 114(a)'';
(ii) in subparagraph (B), by
striking ``section 114(d)'' and
inserting ``section 114(c)'';
(iii) by striking subparagraphs
(C), (E), and (F); and
(iv) by redesignating subparagraphs
(D) and (G) as subparagraphs (C) and
(D), respectively; and
(2) in subsection (b)--
(A) by striking paragraphs (1) and (4); and
(B) by redesignating paragraphs (2), (3),
(5), (6), (7), and (8) as paragraphs (1), (2),
(3), (4), (5), and (6), respectively.
(m) Clerical Amendments.--
(1) National security act of 1947.--The table of
contents for the National Security Act of 1947 is
amended by striking the item relating to section 603.
(2) Title 28, united states code.--The table of
sections at the beginning of chapter 33 of title 28,
United States Code, is amended by striking the item
relating to section 540C.
(n) Effective Date.--The amendments made by this section
shall take effect on December 31, 2003.
Subtitle E--Other Matters
SEC. 371. EXTENSION OF SUSPENSION OF REORGANIZATION OF DIPLOMATIC
TELECOMMUNICATIONS SERVICE PROGRAM OFFICE.
Section 311 of the Intelligence Authorization Act for
Fiscal Year 2002 (Public Law 107-108; 22 U.S.C. 7301 note) is
amended--
(1) in the heading, by striking ``TWO-YEAR'' before
``SUSPENSION OF REORGANIZATION''; and
(2) in the text, by striking ``ending on October 1,
2003'' and inserting ``ending on the date that is 60
days after the appropriate congressional committees of
jurisdiction (as defined in section 324(d) of that Act
(22 U.S.C. 7304(d)) are notified jointly by the
Secretary of State (or the Secretary's designee) and
the Director of the Office of Management and Budget (or
the Director's designee) that the operational framework
for the office has been terminated''.
SEC. 372. MODIFICATIONS OF AUTHORITIES ON EXPLOSIVE MATERIALS.
(a) Clarification of Aliens Authorized To Distribute
Explosive Materials.--Section 842(d)(7) of title 18, United
States Code, is amended--
(1) in subparagraph (A), by striking ``or'' at the
end;
(2) in subparagraph (B)--
(A) by inserting ``or'' at the end of
clause (i); and
(B) by striking clauses (iii) and (iv); and
(3) by adding the following new subparagraphs:
``(C) is a member of a North Atlantic
Treaty Organization (NATO) or other friendly
foreign military force, as determined by the
Attorney General in consultation with the
Secretary of Defense, who is present in the
United States under military orders for
training or other military purpose authorized
by the United States and the shipping,
transporting, possession, or receipt of
explosive materials is in furtherance of the
authorized military purpose; or
``(D) is lawfully present in the United
States in cooperation with the Director of
Central Intelligence, and the shipment,
transportation, receipt, or possession of the
explosive materials is in furtherance of such
cooperation;''.
(b) Clarification of Aliens Authorized To Possess or
Receive Explosive Materials.--Section 842(i)(5) of title 18,
United States Code, is amended--
(1) in subparagraph (A), by striking ``or'' at the
end;
(2) in subparagraph (B)--
(A) by inserting ``or'' at the end of
clause (i); and
(B) by striking clauses (iii) and (iv); and
(3) by adding the following new subparagraphs:
``(C) is a member of a North Atlantic
Treaty Organization (NATO) or other friendly
foreign military force, as determined by the
Attorney General in consultation with the
Secretary of Defense, who is present in the
United States under military orders for
training or other military purpose authorized
by the United States and the shipping,
transporting, possession, or receipt of
explosive materials is in furtherance of the
authorized military purpose; or
``(D) is lawfully present in the United
States in cooperation with the Director of
Central Intelligence, and the shipment,
transportation, receipt, or possession of the
explosive materials is in furtherance of such
cooperation;''.
SEC. 373. MODIFICATION OF PROHIBITION ON THE NATURALIZATION OF CERTAIN
PERSONS.
Section 313(e)(4) of the Immigration and Nationality Act (8
U.S.C. 1424(e)(4)) is amended--
(1) by inserting ``when Department of Defense
activities are relevant to the determination'' after
``Secretary of Defense''; and
(2) by inserting ``and the Secretary of Homeland
Security'' after ``Attorney General''.
SEC. 374. MODIFICATION TO DEFINITION OF FINANCIAL INSTITUTION IN RIGHT
TO FINANCIAL PRIVACY ACT.
(a) Modification of Definition.--Section 1114 of the Right
to Financial Privacy Act of 1978 (12 U.S.C. 3414) is amended by
adding at the end the following:
``(d) For purposes of this section, and sections 1115 and
1117 insofar as they relate to the operation of this section,
the term `financial institution' has the same meaning as in
subsections (a)(2) and (c)(1) of section 5312 of title 31,
United States Code, except that, for purposes of this section,
such term shall include only such a financial institution any
part of which is located inside any State or territory of the
United States, the District of Columbia, Puerto Rico, Guam,
American Samoa, the Commonwealth of the Northern Mariana
Islands, or the United States Virgin Islands.''.
(b) Cross Reference Modification.--Section 1101(1) of such
Act (12 U.S.C. 3401(1)) is amended by inserting ``, except as
provided in section 1114,'' before ``means any office''.
SEC. 375. COORDINATION OF FEDERAL GOVERNMENT RESEARCH ON SECURITY
EVALUATIONS.
(a) Workshops for Coordination of Research.--The National
Science Foundation and the Office of Science and Technology
Policy shall jointly sponsor not less than two workshops on the
coordination of Federal Government research on the use of
behavioral, psychological, and physiological assessments of
individuals in the conduct of security evaluations.
(b) Deadline for Completion of Activities.--The activities
of the workshops sponsored under subsection (a) shall be
completed not later than March 1, 2004.
(c) Purposes.--The purposes of the workshops sponsored
under subsection (a) are as follows:
(1) To provide a forum for cataloging and
coordinating federally funded research activities
relating to the development of new techniques in the
behavioral, psychological, or physiological assessment
of individuals to be used in security evaluations.
(2) To develop a research agenda for the Federal
Government on behavioral, psychological, and
physiological assessments of individuals, including an
identification of the research most likely to advance
the understanding of the use of such assessments of
individuals in security evaluations.
(3) To distinguish between short-term and long-term
areas of research on behavioral, psychological, and
physiological assessments of individuals in order to
maximize the utility of short-term and long-term
research on such assessments.
(4) To identify the Federal agencies best suited to
support research on behavioral, psychological, and
physiological assessments of individuals.
(5) To develop recommendations for coordinating
future federally funded research for the development,
improvement, or enhancement of security evaluations.
(d) Advisory Group.--(1) In order to assist the National
Science Foundation and the Office of Science and Technology
Policy in carrying out the activities of the workshops
sponsored under subsection (a), there is hereby established an
interagency advisory group with respect to such workshops.
(2) The advisory group shall be composed of the following:
(A) A representative of the Social, Behavioral, and
Economic Directorate of the National Science
Foundation.
(B) A representative of the Office of Science and
Technology Policy.
(C) The Secretary of Defense, or a designee of the
Secretary.
(D) The Secretary of State, or a designee of the
Secretary.
(E) The Attorney General, or a designee of the
Attorney General.
(F) The Secretary of Energy, or a designee of the
Secretary.
(G) The Secretary of Homeland Security, or a
designee of the Secretary.
(H) The Director of Central Intelligence, or a
designee of the Director.
(I) The Director of the Federal Bureau of
Investigation, or a designee of the Director.
(J) The National Counterintelligence Executive, or
a designee of the National Counterintelligence
Executive.
(K) Any other official assigned to the advisory
group by the President for purposes of this section.
(3) The members of the advisory group under subparagraphs
(A) and (B) of paragraph (2) shall jointly head the advisory
group.
(4) The advisory group shall provide the Foundation and the
Office such information, advice, and assistance with respect to
the workshops sponsored under subsection (a) as the advisory
group considers appropriate.
(5) The advisory group shall not be treated as an advisory
committee for purposes of the Federal Advisory Committee Act (5
U.S.C. App.).
(e) FOIA Exemption.--All files of the National Science
Foundation and the Office of Science and Technology Policy for
purposes of administering this section, including any files of
a Federal, State, or local department or agency or of a private
sector entity provided to or utilized by a workshop or advisory
group under this section, shall be exempt from the provisions
of section 552 of title 5, United States Code, that require
publication, disclosure, search, or review in connection
therewith.
(f) Report.--Not later than March 1, 2004, the National
Science Foundation and the Office of Science and Technology
Policy shall jointly submit to Congress a report on the results
of activities of the workshops sponsored under subsection (a),
including the findings and recommendations of the Foundation
and the Office as a result of such activities.
(g) Funding.--(1) Of the amount authorized to be
appropriated for the Intelligence Community Management Account
by section 104(a), $500,000 shall be available to the National
Science Foundation and the Office of Science and Technology
Policy to carry out this section.
(2) The amount authorized to be appropriated by paragraph
(1) shall remain available until expended.
SEC. 376. TREATMENT OF CLASSIFIED INFORMATION IN MONEY LAUNDERING
CASES.
Section 5318A of title 31, United States Code, is amended
by adding at the end the following:
``(f) Classified Information.--In any judicial review of a
finding of the existence of a primary money laundering concern,
or of the requirement for 1 or more special measures with
respect to a primary money laundering concern, made under this
section, if the designation or imposition, or both, were based
on classified information (as defined in section 1(a) of the
Classified Information Procedures Act (18 U.S.C. App.), such
information may be submitted by the Secretary to the reviewing
court ex parte and in camera. This subsection does not confer
or imply any right to judicial review of any finding made or
any requirement imposed under this section.''.
SEC. 377. TECHNICAL AMENDMENTS.
(a) National Security Act of 1947.--Section 112(d)(1) of
the National Security Act of 1947 (50 U.S.C. 404g(d)(1)) is
amended by striking ``section 103(c)(6)'' and inserting
``section 103(c)(7)''.
(b) Central Intelligence Agency Act of 1949.--(1) Section
5(a)(1) of the Central Intelligence Agency Act of 1949 (50
U.S.C. 403f(a)(1)) is amended by striking ``(c)(6)'' each place
it appears and inserting ``(c)(7)''.
(2) Section 6 of that Act (50 U.S.C. 403g) is amended by
striking ``section 103(c)(6) of the National Security Act of
1947 (50 U.S.C. 403-3(c)(6))'' and inserting ``section
103(c)(7) of the National Security Act of 1947 (50 U.S.C. 403-
3(c)(7))''.
(3) Section 15 of that Act (50 U.S.C. 403o) is amended--
(A) in subsection (a)(1), by striking ``special
policemen of the General Services Administration
perform under the first section of the Act entitled `An
Act to authorize the Federal Works Administrator or
officials of the Federal Works Agency duly authorized
by him to appoint special policemen for duty upon
Federal property under the jurisdiction of the Federal
Works Agency, and for other purposes' (40 U.S.C.
318),'' and inserting ``officers and agents of the
Department of Homeland Security, as provided in section
1315(b)(2) of title 40, United States Code,''; and
(B) in subsection (b), by striking ``the fourth
section of the Act referred to in subsection (a) of
this section (40 U.S.C. 318c)'' and inserting ``section
1315(c)(2) of title 40, United States Code''.
(c) National Security Agency Act of 1959.--Section 11 of
the National Security Agency Act of 1959 (50 U.S.C. 402 note)
is amended--
(1) in subsection (a)(1), by striking ``special
policemen of the General Services Administration
perform under the first section of the Act entitled `An
Act to authorize the Federal Works Administrator or
officials of the Federal Works Agency duly authorized
by him to appoint special policeman for duty upon
Federal property under the jurisdiction of the Federal
Works Agency, and for other purposes' (40 U.S.C. 318)''
and inserting ``officers and agents of the Department
of Homeland Security, as provided in section 1315(b)(2)
of title 40, United States Code,''; and
(2) in subsection (b), by striking ``the fourth
section of the Act referred to in subsection (a) (40
U.S.C. 318c)'' and inserting ``section 1315(c)(2) of
title 40, United States Code''.
(d) Intelligence Authorization Act for Fiscal Year 2003.--
Section 343 of the Intelligence Authorization Act for Fiscal
Year 2003 (Public Law 107-306; 116 Stat. 2399; 50 U.S.C. 404n-
2) is amended--
(1) in subsection (c), by striking ``section
103(c)(6) of the National Security Act of 1947 (50
U.S.C. 403-3(c)(6))'' and inserting ``section 103(c)(7)
of the National Security Act of 1947 (50 U.S.C. 403-
3(c)(7))''; and
(2) in subsection (e)(2), by striking ``section
103(c)(6)'' and inserting ``section 103(c)(7)''.
(e) Federal Information Security Management Act of 2002.--
Section 3535(b)(1) of title 44, United States Code, as added by
section 1001(b)(1) of the Homeland Security Act of 2002 (Public
Law 107-296), and section 3545(b)(1) of title 44, United States
Code, as added by section 301(b)(1) of the E-Government Act of
2002 (Public Law 107-347), are each amended by inserting ``or
any other law'' after ``1978''.
(f) Public Law 107-173.--Section 201(c)(3)(F) of the
Enhanced Border Security and Visa Entry Reform Act of 2002
(Public Law 107-173; 116 Stat. 548; 8 U.S.C. 1721(c)(3)(F)) is
amended by striking ``section 103(c)(6) of the National
Security Act of 1947 (50 U.S.C. 403-3(c)(6))'' and inserting
``section 103(c)(7) of the National Security Act of 1947 (50
U.S.C. 403-3(c)(7))''.
TITLE IV--CENTRAL INTELLIGENCE AGENCY
SEC. 401. AMENDMENT TO CERTAIN CENTRAL INTELLIGENCE AGENCY ACT OF 1949
NOTIFICATION REQUIREMENTS.
Section 4(b)(5) of the Central Intelligence Agency Act of
1949 (50 U.S.C. 403e(b)(5)) is amended by inserting ``, other
than regulations under paragraph (1),'' after ``Regulations''.
SEC. 402. PROTECTION OF CERTAIN CENTRAL INTELLIGENCE AGENCY PERSONNEL
FROM TORT LIABILITY.
Section 15 of the Central Intelligence Agency Act of 1949
(50 U.S.C. 403o) is amended by adding at the end the following
new subsection:
``(d)(1) Notwithstanding any other provision of law, any
Agency personnel designated by the Director under subsection
(a), or designated by the Director under section 5(a)(4) to
carry firearms for the protection of current or former Agency
personnel and their immediate families, defectors and their
immediate families, and other persons in the United States
under Agency auspices, shall be considered for purposes of
chapter 171 of title 28, United States Code, or any other
provision of law relating to tort liability, to be acting
within the scope of their office or employment when such Agency
personnel take reasonable action, which may include the use of
force, to--
``(A) protect an individual in the presence of such
Agency personnel from a crime of violence;
``(B) provide immediate assistance to an individual
who has suffered or who is threatened with bodily harm;
or
``(C) prevent the escape of any individual whom
such Agency personnel reasonably believe to have
committed a crime of violence in the presence of such
Agency personnel.
``(2) Paragraph (1) shall not affect the authorities of the
Attorney General under section 2679 of title 28, United States
Code.
``(3) In this subsection, the term `crime of violence' has
the meaning given that term in section 16 of title 18, United
States Code.''.
SEC. 403. REPEAL OF OBSOLETE LIMITATION ON USE OF FUNDS IN CENTRAL
SERVICES WORKING CAPITAL FUND.
Section 21(f)(2) of the Central Intelligence Agency Act of
1949 (50 U.S.C. 403u(f)(2)) is amended--
(1) in subparagraph (A), by striking ``(A) Subject
to subparagraph (B), the Director'' and inserting ``The
Director''; and
(2) by striking subparagraph (B).
SEC. 404. PURCHASES BY CENTRAL INTELLIGENCE AGENCY OF PRODUCTS OF
FEDERAL PRISON INDUSTRIES.
Notwithstanding section 4124 of title 18, United States
Code, purchases by the Central Intelligence Agency from Federal
Prison Industries shall be made only if the Director of Central
Intelligence determines that the product or service to be
purchased from Federal Prison Industries best meets the needs
of the Agency.
SEC. 405. POSTPONEMENT OF CENTRAL INTELLIGENCE AGENCY COMPENSATION
REFORM AND OTHER MATTERS.
(a) Postponement of Compensation Reform Plan.--Section
402(a)(2) of the Intelligence Authorization Act for Fiscal Year
2003 (Public Law 107-306; 116 Stat. 2403; 50 U.S.C. 403-4 note)
is amended by striking ``February 1, 2004,'' and all that
follows through the end and inserting ``the date of the
enactment of the Intelligence Authorization Act for Fiscal Year
2005.''.
(b) Contribution by CIA Employees of Certain Bonus Pay to
Thrift Savings Plan.--
(1) Civil service retirement system participants.--
Section 8351(d) of title 5, United States Code, is
amended--
(A) by inserting ``(1)'' after ``(d)''; and
(B) by adding at the end the following new
paragraph:
``(2)(A) Only those employees of the Central Intelligence
Agency participating in the pilot project required by section
402(b) of the Intelligence Authorization Act for Fiscal Year
2003 (Public Law 107-306; 50 U.S.C. 403-4 note) and making
contributions to the Thrift Savings Fund out of basic pay may
also contribute (by direct transfer to the Fund) any part of
bonus pay received by the employee as part of the pilot
project.
``(B) Contributions under this paragraph are subject to
section 8432(d) of this title.''.
(2) Federal employees' retirement system
participants.--Section 8432 of title 5, United States
Code, is amended by adding at the end the following new
subsection:
``(k)(1) Only those employees of the Central Intelligence
Agency participating in the pilot project required by section
402(b) of the Intelligence Authorization Act for Fiscal Year
2003 (Public Law 107-306; 50 U.S.C. 403-4 note) and making
contributions to the Thrift Savings Fund out of basic pay may
also contribute (by direct transfer to the Fund) any part of
bonus pay received by the employee as part of the pilot
project.
``(2) Contributions under this subsection are subject to
subsection (d).
``(3) For purposes of subsection (c), basic pay of an
employee of the Central Intelligence Agency participating in
the pilot project referred to in paragraph (1) shall include
bonus pay received by the employee as part of the pilot
project.''.
(c) Report.--(1) The Director of Central Intelligence shall
submit to the congressional intelligence committees a report on
the amount of compensation (including basic pay, bonuses, and
employer contributions to the Thrift Savings Plan) of each
employee of the Central Intelligence Agency participating in
the pilot project required by section 402(b) of the
Intelligence Authorization Act for Fiscal Year 2003 (Public Law
107-306; 116 Stat. 2403; 50 U.S.C. 403-4 note), and on the
amount that each such employee would have received had such
employee received compensation under the existing system of
compensation used by the Agency.
(2) The report required by paragraph (1) shall be submitted
together with the report required by paragraph (3) of such
section 402(b).
(3) In this subsection, the term ``congressional
intelligence committees'' has the meaning given that term in
section 402(d) of the Intelligence Authorization Act for Fiscal
Year 2003.
TITLE V--DEPARTMENT OF DEFENSE INTELLIGENCE MATTERS
SEC. 501. PROTECTION OF CERTAIN NATIONAL SECURITY AGENCY PERSONNEL FROM
TORT LIABILITY.
Section 11 of the National Security Agency Act of 1959 (50
U.S.C. 402 note) is amended by adding at the end the following
new subsection:
``(d)(1) Notwithstanding any other provision of law, agency
personnel designated by the Director of the National Security
Agency under subsection (a) shall be considered for purposes of
chapter 171 of title 28, United States Code, or any other
provision of law relating to tort liability, to be acting
within the scope of their office or employment when such agency
personnel take reasonable action, which may include the use of
force, to--
``(A) protect an individual in the presence of such
agency personnel from a crime of violence;
``(B) provide immediate assistance to an individual
who has suffered or who is threatened with bodily harm;
or
``(C) prevent the escape of any individual whom
such agency personnel reasonably believe to have
committed a crime of violence in the presence of such
agency personnel.
``(2) Paragraph (1) shall not affect the authorities of the
Attorney General under section 2679 of title 28, United States
Code.
``(3) In this subsection, the term `crime of violence' has
the meaning given that term in section 16 of title 18, United
States Code.''.
SEC. 502. USE OF FUNDS FOR COUNTERDRUG AND COUNTERTERRORISM ACTIVITIES
FOR COLOMBIA.
(a) Authority.--Funds designated for intelligence or
intelligence-related purposes for assistance to the Government
of Colombia for counterdrug activities for fiscal year 2004,
and any unobligated funds available to any element of the
intelligence community for such activities for a prior fiscal
year, shall be available--
(1) to support a unified campaign by the Government
of Colombia against narcotics trafficking and against
activities by organizations designated as terrorist
organizations (such as the Revolutionary Armed Forces
of Colombia (FARC), the National Liberation Army (ELN),
and the United Self-Defense Forces of Colombia (AUC));
and
(2) to take actions to protect human health and
welfare in emergency circumstances, including
undertaking rescue operations.
(b) Applicability of Certain Laws and Limitations.--The use
of funds pursuant to the authority in subsection (a) shall be
subject to the following:
(1) Sections 556, 567, and 568 of the Foreign
Operations, Export Financing, and Related Programs
Appropriations Act, 2002 (Public Law 107-115; 115 Stat.
2160, 2165, and 2166).
(2) Section 8077 of the Department of Defense
Appropriations Act, 2004 (Public Law 108-87; 117 Stat.
1090).
(3) The numerical limitations on the number of
United States military personnel and United States
individual civilian contractors in section 3204(b)(1)
of the Emergency Supplemental Act, 2000 (division B of
Public Law 106-246; 114 Stat. 575), as amended by the
Foreign Operations, Export Financing, and Related
Programs Appropriations Act, 2002 (115 Stat. 2131).
(c) Limitation on Participation of United States
Personnel.--No United States Armed Forces personnel or United
States civilian contractor employed by the United States Armed
Forces will participate in any combat operation in connection
with assistance made available under this section, except for
the purpose of acting in self defense or during the course of
search and rescue operations for United States citizens.
SEC. 503. SCENE VISUALIZATION TECHNOLOGIES.
Of the amount authorized to be appropriated by this Act,
$2,500,000 shall be available for the National Geospatial-
Intelligence Agency (NGA) for scene visualization technologies.
SEC. 504. MEASUREMENT AND SIGNATURES INTELLIGENCE RESEARCH PROGRAM.
(a) Research Program.--(1) The Secretary of Defense and the
Director of Central Intelligence shall jointly carry out a
program to incorporate the results of basic research on sensors
into the measurement and signatures intelligence systems of the
United States, to the extent the results of such research are
applicable to such systems.
(2) In carrying out paragraph (1), the Secretary of Defense
and the Director of Central Intelligence shall act through the
Director of the Defense Intelligence Agency's Directorate for
MASINT and Technical Collection (hereinafter in this section
referred to as the ``Director'').
(b) Program Components.--The program under subsection (a)
shall review and assess basic research on sensors and
technologies conducted both by the United States Government and
by non-governmental entities. In carrying out the program, the
Director shall protect intellectual property rights, maintain
organizational flexibility, and establish research projects,
funding levels, and potential benefits in an equitable manner
through the Directorate.
(c) Advisory Panel.--(1) The Director shall establish an
advisory panel to assist the Director in carrying out the
program under subsection (a).
(2) The advisory panel shall be headed by the Director who
shall determine the selection, review, and assessment of the
research projects under the program.
(3)(A) The Director shall appoint as members of the
advisory panel representatives of each entity of the MASINT
community, and may appoint as such members representatives of
national laboratories, universities, and private sector
entities.
(B) For purposes of this subsection the term ``MASINT
community'' means academic, professional, industrial, and
government entities that are committed towards the advancement
of the sciences in measurement and signatures intelligence.
(C) The term for a member of the advisory panel shall be
established by the Director, but may not exceed a period of 5
consecutive years.
(D) Members of the advisory panel may not receive
additional pay, allowances, or benefits by reason of their
service on the advisory panel, but may receive per diem in lieu
of subsistence, in accordance with applicable provisions under
subchapter I of chapter 57 of title 5, United States Code.
(4) The Director may accept contributions from non-
governmental participants on the advisory panel to defray the
expenses of the advisory panel.
(5) The Federal Advisory Committee Act (5 U.S.C. App.)
shall not apply to the activities of the advisory panel
established under this subsection.
(d) FOIA Exemption.--All files in the possession of the
Defense Intelligence Agency for purposes of administering the
program under this section, including any files of a Federal,
State, or local department or agency or of a private sector
entity provided to or utilized by the program, shall be exempt
from the provisions of section 552 of title 5, United States
Code, that require publication, disclosure, search, or review
in connection therewith.
SEC. 505. AVAILABILITY OF FUNDS OF NATIONAL SECURITY AGENCY FOR
NATIONAL SECURITY SCHOLARSHIPS.
(a) Availability of Funds.--Any funds authorized to be
appropriated for the National Security Agency for a fiscal year
after fiscal year 2003 may be made available to the Independent
College Fund of Maryland (also known as the ``I-Fund'') for the
purpose of the establishment and provision of national security
scholarships to the extent such funds are specifically
authorized for that purpose.
(b) Mechanisms of Availability.--Funds may be made
available to the Independent College Fund of Maryland under
subsection (a) by grant, contract, cooperative agreement, or
such other appropriate mechanisms as the Director of the
National Security Agency considers appropriate.
And the Senate agree to the same.
From the Permanent Select Committee on Intelligence, for
consideration of the House bill and the Senate amendment, and
modifications committed to conference:
Porter J. Goss,
Doug Bereuter,
Sherwood Boehlert,
Jim Gibbons,
Ray LaHood,
Randy ``Duke'' Cunningham,
Pete Hoekstra,
Richard Burr,
Terry Everett,
Elton Gallegly,
Mac Collins,
Jane Harman,
Alcee L. Hastings,
Silvestre Reyes,
Leonard L. Boswell,
Collin C. Peterson,
Bud Cramer,
Anna G. Eshoo,
Rush Holt,
C.A. Dutch Ruppersberger.
From the Committee on Armed Services, for
consideration of defense tactical intelligence
and related activities:
Duncan Hunter,
Curt Weldon,
Managers on the Part of the House.
From the Select Committee on Intelligence:
Pat Roberts,
Orrin Hatch,
Mike DeWine,
Christopher S. Bond,
Trent Lott,
Olympia Snowe,
Chuck Hagel,
Saxby Chambliss,
John Warner,
Jay Rockefeller,
Carl Levin,
Dianne Feinstein,
Ron Wyden,
Dick Durbin,
Evan Bayh,
John Edwards,
Barbara A. Mikulski.
From the Committee on Armed Services:
Wayne Allard,
Bill Nelson.
Managers on the Part of the Senate.
JOINT EXPLANATORY STATEMENT OF THE COMMITTEE OF CONFERENCE
The managers on the part of the Senate and House at the
conference on the disagreeing votes of the two Houses on the
amendment of the Senate to the bill (H.R. 2417), to authorize
appropriations for fiscal year 2004 for intelligence and
intelligence-related activities of the United States
Government, the Community Management Account, and the Central
Intelligence Agency Retirement and Disability System, and for
other purposes, submit the following joint statement to the
Senate and House in explanation of the effect of the action
agreed upon by the managers and recommended in the accompanying
conference report.
The managers agree that the congressionally directed
actions described in the House bill, the Senate amendment, the
respective committee reports, and classified annexes
accompanying H.R. 2417 and S. 1025, should be undertaken to the
extent that such congressionally directed actions are not
amended, altered, substituted, or otherwise specifically
addressed in either this joint Explanatory Statement or in the
classified annex to the conference report on the bill H.R.
2417.
The Senate amendment struck all of the House bill after
the enacting clause and inserted a substitute text.
The House recedes from its disagreement to the amendment
of the Senate with an amendment that is a substitute for the
House bill and the Senate amendment. The differences between
the House bill, the Senate amendment, and the substitute agreed
to in conference are noted below, except for clerical
corrections, conforming changes made necessary by agreements
reached by the Conferees, and minor drafting and clarifying
changes.
TITLE I--INTELLIGENCE ACTIVITIES
Sec. 101. Authorization of appropriations
Section 101 of the conference report lists the
departments, agencies, and other elements of the United States
Government for whose intelligence and intelligence-related
activities the Act authorizes appropriations for fiscal year
2004. The list illustrates the oversight and legislative
jurisdiction exercised by the Intelligence Committees in both
Houses. It also reflects the primary jurisdiction of the Senate
Select Committee on Intelligence over all presidential
nominations within the intelligence elements of all
departments, agencies, and other entities of the United States
Government. The managers note that this conference report marks
the first appearance of the Department of Homeland Security in
an intelligence authorization bill. This reflects the
jurisdiction of the Intelligence Committees in both Houses over
the intelligence activities and components of that Department
as established by Congress in the ``Homeland Security Act of
2002'' (P.L. 107-296), and as designated by the President in
Executive Order 13284 (January 23, 2003). The Conferees have
also included the Department of Justice (DoJ) in this section
to better reflect the fact that Intelligence Committee
jurisdiction of both Houses extends to the intelligence
activities and components of DoJ, including, particularly, the
Office of Intelligence Policy and Review, which directly
supports numerous National Foreign Intelligence Program (NFIP)
activities across the Intelligence Community. Section 101 is
identical to Section 101 of the House bill.
Sec. 102. Classified schedule of authorizations
Section 102 of the conference report makes clear that the
details of the amounts authorized to be appropriated for
intelligence and intelligence-related activities and applicable
personnel ceilings covered under this Title for fiscal year
2004 are contained in a classified Schedule of Authorizations.
The classified Schedule of Authorizations is incorporated into
the Act by this section. The Schedule of Authorizations shall
be made available to the Committees on Appropriations of the
Senate and House of Representatives and to the President. The
classified annex provides details of the Schedule. Section 102
is identical to Section 102 of the House bill.
Sec. 103. Personnel ceiling adjustments
Section 103 of the conference report authorizes the
Director of Central Intelligence (DCI), with the approval of
the Director of the Office of Management and Budget, in fiscal
year 2004, to authorize employment of civilian personnel in
excess of the personnel ceilings applicable to the components
of the Intelligence Community under Section 102 by an amount
not to exceed two percent of the total of the ceilings
applicable under Section 102. The DCI may exercise this
authority only if necessary to the performance of important
intelligence functions. Any exercise of this authority must be
reported to the Intelligence Committees of the Congress.
The Conferees emphasize that the authority conferred by
Section 103 is not intended to permit wholesale increases in
personnel strength in any intelligence component. Rather, the
section provides the DCI with flexibility to adjust personnel
levels temporarily for contingencies and for overages caused by
an imbalance between hiring new employees and attrition of
current employees. The Conferees do not expect the DCI to allow
heads of intelligence components to plan to exceed levels set
in the Schedule of Authorizations except for the satisfaction
of clearly identified hiring needs that are consistent with the
authorization of personnel strengths in this bill. In no case
is this authority to be used to provide for positions denied by
this bill. Section 103 of the House bill and Section 103 of the
Senate amendment are identical.
Sec. 104. Intelligence Community Management Account
Section 104 of the conference report authorizes
appropriations for the Intelligence Community Management
Account (CMA) of the DCI and sets the personnel end-strength
for the Intelligence Community Management Staff for fiscal year
2004.
Subsection (a) authorizes appropriations of $221,513,000
for fiscal year 2004 for the activities of the CMA of the DCI.
Subsection (b) authorizes 310 full-time personnel for the
Intelligence Community Management Staff for fiscal year 2004
and provides that such personnel may be permanent employees of
the Staff or detailed from various elements of the United
States Government.
Subsection (c) authorizes additional appropriations and
personnel for the CMA as specified in the classified Schedule
of Authorizations and permits additional amounts to remain
available for research and development through September 30,
2005. Subsection (c) of the House bill provided only for one-
year research and development funds. The House recedes to the
Senate.
Subsection (d) requires that, except as provided in
Section 113 of the National Security Act of 1947, during fiscal
year 2004, personnel from another element of the United States
Government be detailed to an element of the CMA on a
reimbursable basis, or for temporary situations of less than
one year on a non-reimbursable basis.
Subsection (e) authorizes $47,142,000 of the amount
authorized in subsection (a) to be made available for the
National Drug Intelligence Center (NDIC). Subsection (e)
requires the DCI to transfer these funds to the Attorney
General to be used for NDIC activities under the authority of
the Attorney General and subject to Section 103(d)(1) of the
National Security Act.
Although a DoJ organization, the NDIC is authorized and
funded entirely through NFIP funds. The Conferees expect NDIC
to be better integrated into the Intelligence Community,
particularly with respect to counter-narcotics activities and
strategic planning.
Sec. 105. Office of Intelligence and Analysis of the Department of the
Treasury
Section 105 is similar to Section 105 of the House bill.
The Senate amendment had no similar provision. The Senate
recedes with slight modifications. Section 105 authorizes the
establishment of an Office of Intelligence and Analysis within
the Department of the Treasury (Treasury) to be headed by a
presidentially appointed and Senate-confirmed Assistant
Secretary. Subsection (c) requires that the Secretary of the
Treasury consult with the DCI before recommending to the
President an individual to be nominated to the position.
As a result of the findings of the ``Joint Inquiry into
Intelligence Community Activities Before and After the
Terrorist Attacks of September 11, 2001'' (Joint Inquiry), the
Conferees seek to ensure that there is full, appropriate, and
timely sharing of information and analysis within the U.S.
Government concerning financial networks associated with
international terrorism. Since the September 11, 2001,
terrorist attacks, the U.S. Government has blocked the assets
of over 260 individuals and groups supporting terrorist causes.
It has also frozen approximately $120 million in terrorist-
related assets.
Currently, there is no single Executive Branch office
tasked by statute with ensuring that all elements of the
intelligence and law enforcement communities cooperate and
coordinate in the identification and the targeting of terrorist
financial assets. Moreover, coordination on terrorist financing
issues within Treasury, and between Treasury and the
Intelligence Community, while improving, is currently uneven
and disjointed. The Conferees are convinced that Treasury must
be more effective in articulating the counterterrorist
financing mission. Treasury must also implement the mission
requirements from an intelligence sharing and operational
perspective more effectively.
The managers recognize that the staffs of the Office of
Foreign Assets Control (OFAC) and the Financial Crimes
Enforcement Network (FinCEN) possess unique analytical
capabilities regarding terrorist financial targets and that
this resource should be leveraged across the Intelligence
Community. Treasury's access to Intelligence Community
information, however, must be enhanced if it is to fulfill this
mission. Treasury's analytical products need to be more
effectively coordinated with, and disseminated throughout, the
Intelligence Community. The Conferees note that the Chairman of
the House Committee on Financial Services has provided valuable
input on the language of Section 105.
The Conferees seek to establish a new office to
accomplish this requirement within Treasury. The Conferees are
hopeful that the creation of this new office will streamline
and centralize the U.S. Government's capabilities to track
terrorist financing networks across the globe. The Conferees
further expect that the new office will be treated as a full
partner in the Intelligence Community, receiving all
intelligence, law enforcement, and other information necessary
for it to carry out its important task.
The Conferees also insist that the requirements of the
``Intelligence Authorization Act for Fiscal Year 2003'' (FY 03
Act) (P.L. 107-306) are met. Section 341 of the FY 03 Act
requires that the DCI establish a Foreign Terrorist Asset
Tracking Center (FTAT-C) within the Central Intelligence Agency
(CIA). Establishment of a Treasury Bureau of Intelligence and
Analysis should markedly strengthen FTAT-C's analytic capacity.
Section 342 of the FY 03 Act also directed that the Secretary
of the Treasury submit semiannual reports concerning U.S.
Government operations against terrorist financial networks. The
first Section 342 report was due on February 1, 2003, but was
not completed until May 12, 2003. The Conferees expect that the
establishment of the Office of Intelligence and Analysis within
Treasury will make future Section 342 reports more timely and
informative with respect to U.S. Government progress against
terrorist-related financial targets.
Sec. 106. Incorporation of reporting requirements
Section 106 is similar to Section 105 of the Senate
amendment. The House bill had no similar provision. The House
recedes to the Senate position. Section 106 incorporates into
the Act by reference each requirement to submit a report
contained in the joint explanatory statement to accompany the
conference report or in the associated classified annex to this
Conference Report.
Sec. 107. Preparation and submittal of reports, reviews, studies, and
plans relating to intelligence activities of Department of
Defense or Department of Energy
Section 107 is identical to Section 106 of the Senate
amendment. The House bill had no similar provision. The House
recedes.
TITLE II--CENTRAL INTELLIGENCE AGENCY RETIREMENT AND DISABILITY SYSTEM
Sec. 201. Authorization of appropriations
Section 201 authorizes appropriations of $226,400,000 for
the Central Intelligence Agency Retirement and Disability Fund.
Section 201 of the House bill and Section 201 of the Senate
amendment are identical.
TITLE III--GENERAL PROVISIONS
Subtitle A--Recurring General Provisions
Sec. 301. Increase in employee compensation and benefits authorized by
law
Section 301 is identical to Section 301 of the Senate
amendment and Section 301 of the House bill.
Sec. 302. Restriction on conduct of intelligence activities
Section 302 is identical to Section 302 of the Senate
amendment and Section 302 of the House bill.
Subtitle B--Intelligence
Sec. 311. Authority of Federal Bureau of Investigation to award
personal services contracts
Section 311 would grant the Federal Bureau of
Investigation (FBI) specific statutory authority to enter into
personal services contracts for the procurement of services
that are only in direct support of an intelligence or
counterintelligence mission. The Conferees expect that such
services will be used, among other things, to provide the FBI
with needed expertise in asset validation, counterterrorism
investigations, counterespionage activities,
counterintelligence damage assessments, counterintelligence
training, and related technical support. The Conferees
anticipate that this authority will be used as a contracting
mechanism when other contracting mechanisms are insufficient to
meet the national security requirements of the FBI. The
Conferees also note that this provision does not modify
existing restrictions on the use of contractors to perform
``inherently governmental functions.'' This authority should
not be used by the FBI to avoid or forestall the currently
aggressive efforts to recruit and hire qualified staff
employees to fill personnel vacancies.
The Conferees believe that this authority is consistent
with the public's desire that the FBI operate with greater
flexibility with respect to its national security mission
following the September 11th attacks. The Conferees believe,
however, that the FBI should use the increased flexibility
afforded under this section carefully. The FBI should implement
this section in a manner that strictly reflects the unique
nature of the authorization. The Conferees require that before
a contract can be entered into, the Chief Contracting Officer
must determine that a personal service contract is ``the
appropriate means of securing'' the needed services.
Additionally, the Conferees expect that the Director of the FBI
will ensure that the authority granted by this section is
exercised in a prudent manner and with appropriate oversight.
Neither the House bill nor the Senate amendment contained
a similar provision. This provision is similar to the authority
afforded to certain Department of Defense elements in Section
841 of the Conference Report accompanying the ``Defense
Authorization Act for Fiscal Year 2004.'' The Conferees agreed
to include this section, however, after learning that the
increased pace and amount of work in the post-September 11th
environment has created a need for this authority for the FBI.
The Conferees believe there exists an operational imperative
for the FBI to enter into personal services contracts to
support its counterterrorism, counterespionage, and
counterintelligence missions.
The Conferees note that the Chairman of the House
Committee on the Judiciary has indicated that although he would
prefer that this provision be carried in the ``Department of
Justice Appropriations Authorization Act, Fiscal Years 2004-
2006'' (H.R. 3036), he has ``no substantive objection'' to the
provision. Additionally, the Chairman of the House Committee on
Government Reform has submitted a letter in support of
including this provision in this Conference Report.
Congress, through the statutory annual reporting
requirement contained in this section, and through its general
oversight authority, will monitor the FBI's use of this
authority closely and will not hesitate to revise the authority
if exercised irresponsibly or otherwise abused.
The Conferees expect that the unclassified report to all
specified congressional committees will be substantially the
same, except that intelligence source and methods information
should be included only in a classified annex provided to the
Intelligence Committees.
Sec. 312. Budget treatment of costs of acquisition of major systems by
the intelligence community
Section 312 was added to the Senate amendment on the
Senate floor. As amended by the Conferees, the House recedes to
this provision.
The Conferees are concerned about the cost growth of
major Intelligence Community acquisitions, which result in a
reshuffling of the NFIP on an almost annual basis to address
consequential budget shortfalls.
Funding requests submitted in the President's budget
generally reflect an estimate that has been prepared by the
same Intelligence Community component that is responsible for
the acquisition and operation of the system. The magnitude and
consistency of the growth of recent acquisitions indicates a
systemic bias on the part of Intelligence Community components
to underestimate the funding required for major acquisitions.
Because of ``perceived affordability,'' more acquisitions are
started, and as a result, the NFIP is burdened with more
content than available resources can support.
In contrast, the Secretary of Defense has implemented a
successful program requiring the development of independent
cost estimates for major acquisitions. The Secretary has
mandated the use of such estimates in the Department of Defense
budget requests. Section 2434 of Title 10, United States Code,
provides that ``The Secretary of Defense may not approve the
system development and demonstration, or production and
deployment, of a major defense acquisition program unless an
independent estimate of the full life-cycle cost of the program
and a manpower estimate for the program [has] been considered
by the Secretary.'' Further, Title 10 requires that the
independent estimate be prepared ``by an office or other entity
that is not under the supervision, direction, or control of the
military department, Defense Agency, or other component of the
Department of Defense that is directly responsible for carrying
out the development or acquisition of the program. * * *''
The Conferees note, with approval, that the DCI has
already established an organization within the Office of the
Deputy Director of Central Intelligence for Community
Management to provide an independent cost analysis capability.
This is a significant development because, historically,
independent cost estimates have represented a much more
accurate projection of the costs of major acquisitions. The
budget submitted to Congress, however, has typically reflected
the Intelligence Community operational component's cost
estimate, which in general has been significantly lower than a
corresponding independent estimate.
Section 312 formalizes the process for developing
independent cost estimates for major Intelligence Community
acquisitions.
The Conferees have included at subsection (d) a
restriction on the use of appropriated funds with respect to
major acquisitions for which independent cost estimates have
not been prepared, or for which the requirements of Section 312
have not been followed.
DoJ raised an objection to a subsection in the Senate-
passed bill requiring that the President's budget request for
the development or procurement of a major intelligence system
must be an amount equivalent to the most current independent
cost estimate. DoJ noted that such a requirement would violate
the Recommendations Clause of the Constitution (Article II,
Section 3), which provides that the President shall recommend
to Congress such legislative measures as he deems necessary.
To address DoJ's Recommendations Clause objection, the
Conferees modified the provision. The provision included in
this Conference Report now only requires that the President
provide additional information to the Congress if the budget
request is less than the amount set forth in the most current
independent cost estimate for the program. This additional
information, which is required to be included in the budget
justification materials submitted to Congress, would (1)
explain the difference between the amount requested and the
independent cost estimate; (2) describe the importance of the
system to national security; (3) provide an assessment of the
impact on funding intelligence programs if the independent cost
estimate is accurate; and (4) provide any other information the
President considers appropriate.
The Intelligence Committees received a DoJ letter
regarding the modified provision on the eve of conference. The
letter expresses DoJ's judgment that, as modified, the
provision does not present any Recommendations Clause concern.
DoJ, however, maintains a reservation with respect to the
requirement in the modified provision that the budget
justification explain the difference between the President's
budget request and the independent cost estimate. The Conferees
have considered DoJ's position and are satisfied that Section
312, as modified, represents an appropriate accommodation of
the interests at stake. The provision respects the President's
authority given by the Recommendations Clause and is consistent
with Congress's powers and authority under Article I of the
Constitution to obtain information from the Executive Branch
necessary for the consideration of legislation, particularly
legislation regarding budgetary matters.
Sec. 313. Modification of sunset of application of sanctions laws to
intelligence activities
Neither the House bill nor the Senate amendment included
a similar provision. The Conferees have included, at Section
313, a provision to strike Section 905 of the National Security
Act of 1947 (50 U.S.C. 441d). This action revives Title IX of
the National Security Act, which has been dormant since January
6, 2000.
Sec. 314. Modification of notice and wait requirements on projects to
construct or improve intelligence community facilities
Section 314 was similar to versions passed as House
Section 311 and Senate amendment Section 312. The House recedes
with minor amendments.
Section 314 amends congressional notification
requirements for certain unprogrammed construction and
improvement projects based on the cost of the project. These
adjustments take into account higher construction costs.
Section 314 would also allow the DCI and the Secretary of
Defense together, or the DCI alone with respect to a project
primarily for the CIA, to initiate certain unprogrammed
construction and improvement projects seven days after
notifying Congress. Currently there is a 21-day notification
period. In emergencies, these projects can be commenced without
prior notice. Use of this emergency authority is expected to be
rare.
Sec. 315. Extension of deadline for final report of the National
Commission for the Review of the Research and Development
Programs of the United States Intelligence Community
The House bill and the Senate amendment contained similar
provisions. The House recedes with minor amendments.
Sec. 316. Improvement of information sharing among Federal, State, and
local government officials
The House bill contained a similar provision. The Senate
amendment had no such provision. The Senate recedes with
amendments.
Section 316 authorizes the Secretary of Homeland
Security, in consultation with the DCI and the Attorney
General, to implement a program to improve the sharing of
intelligence collected by the Federal government with State and
local officials. This program is intended to complement
implementation of the ``Homeland Security Information Sharing
Act'' (P.L. 107-296, Title VIII, Subtitle I).
The program should be designed to encourage State and
local officials, and certain private sector representatives, to
share with each other and with appropriate Federal officials
lawfully collected information vital to the prevention of
terrorist attacks against the United States. The training
provided to officials and representatives should help these
individuals to identify sources of potential threats, to report
information related to potential threats to the appropriate
agencies in the appropriate form and manner, and to assure that
reported information is systematically submitted to the
Department of Homeland Security and disseminated to all
appropriate Federal departments and agencies. A report on the
status of implementation of Section 892 of the ``Homeland
Security Act of 2002'' (Public Law 107-296) is also required
under this section. The project grants no new authorities to
any department or agency for the collection of information.
Sec. 317. Pilot program on analysis of signals and other intelligence
by intelligence analysts of various elements of the
intelligence community
This Section is similar to Section 313 of the Senate
amendment. The House bill had no such provision. The House
recedes with minor amendments.
Sec. 318. Pilot program on recruitment and training of intelligence
analysts
This section is similar to Section 314 of the Senate
amendment. The House recedes with amendments. Upon enactment,
the pilot program will be known as the Pat Roberts Intelligence
Scholars Program.
Sec. 319. Improvement of equality of employment opportunities in the
intelligence community
Section 319 is similar to Section 337 of the House bill.
The Senate amendment had no similar provision. The Senate
recedes with minor amendments. The provision is intended to
develop programs that will enhance ethnic and cultural
diversity throughout the Intelligence Community through the
recruitment of individuals with diverse ethnic and cultural
backgrounds, skill sets, and language proficiency.
Sec. 320. Sense of Congress on recruitment as intelligence community
personnel of members of the Armed Forces on their discharge or
release from duty
Section 320 was added by the Conferees. Neither the House
bill nor the Senate amendment contained a similar provision.
With Section 320, the Conferees encourage the Intelligence
Community to recruit among American armed forces veterans of
Operation Enduring Freedom, Operation Iraqi Freedom, and other
military service to take advantage of the unique national
security, military, and technical experience of such personnel,
and to try to keep the experience from being lost to the U.S.
Government upon their discharge or release from active duty.
Sec. 321. External Collection Capabilities and Requirements Review
Panel
Section 321 was added by the Conferees. The provision
permits the President to establish an External Capabilities and
Requirements Review Panel as specified in the Classified Annex.
Subtitle C--Counterintelligence
Sec. 341. Counterintelligence initiatives for the intelligence
community
Section 341 contains several counterintelligence reforms
included in Section 321 of the House-passed bill. The Senate
amendment contained no such provision. The Senate recedes with
amendments.
In addition to the statutory requirements added by
Section 341, the Conferees direct the National
Counterintelligence Executive (NCIX) to consult with all
components of the Intelligence Community on the status of
current policies and procedures for conducting investigative
reviews of production, marking, handling, storage, and
communication of classified information, as well as training on
related security matters to protect intelligence sources and
methods. Not later than April 1, 2004, NCIX shall provide a
written report to the intelligence committees with an
assessment of the adequacy of Intelligence Community
components' investigation of their handling of classified
information and the adequacy of training on related security
matters. In this report, NCIX shall include proposed uniform
policies and procedures for all Intelligence Community
components to conduct annual inspections of each agency's
handling of classified information, to include, as appropriate,
prohibitions on employees' bringing items such as cameras,
document scanners, and personal electronic devices into
Intelligence Community facilities. After NCIX has reported to
Congress uniform policies and procedures for the conduct of
annual inspections of the handling of classified information,
NCIX may carry out its responsibility to implement an
inspection process by delegating to Intelligence Community
components the task of carrying out the inspections. NCIX shall
closely monitor, and report to the intelligence committees on,
the performance of those inspections.
As passed by the House, the counterintelligence reforms
required by this section would have required the Attorney
General, acting through the FBI Director, to establish an FBI
Office of Counterintelligence to investigate potential
espionage activities within the FBI. The Conferees understand
that the FBI has recently established such an office. Because
of this development, the Conferees agreed to drop the statutory
requirement for such an office. The Conferees reaffirm their
commitment to a fully empowered Office of Counterintelligence
and expect to be provided periodic reports on the resource
needs and operations of the office.
Subsection (b) of Section 341 of the conference report
would require the Attorney General, acting through DoJ's Office
of Intelligence Policy and Review, in consultation with the
DCI, acting through the Office of the NCIX, to establish
written policies and procedures to assist the Attorney
General's consideration of intelligence and national security
equities in the development of indictments and related
pleadings in espionage prosecutions. The Conferees note,
however, that DoJ should and does consult closely with the
Intelligence Community on all aspects of espionage
investigations, not just in the development of indictments and
related pleadings.
The Conferees also note that although the decision as to
whether and whom to prosecute is ultimately and properly left
to the discretion of the Attorney General there are significant
and strategic intelligence equities at stake in these types of
cases. The Conferees believe it is unwise for operational and
prosecutorial decisions to proceed without close consultation
at every stage. The Conferees are cognizant of the coordination
that already occurs with respect to the disclosure of
classified information in the presentation of such cases. DoJ
and the other elements of the Intelligence Community are
commended for this.
The Conferees believe, however, that the Attorney General
should have the benefit of the perspective of
counterintelligence professionals before making his decision on
how much previously classified or sensitive information should
be included in a charging document or in other pleadings. The
Conferees note that the United States could lose its ability to
learn more about the extent to which a spy has given away our
national security secrets because so much information is
contained in these types of documents. The Conferees highlight
the Robert Hanssen case as an example. The Conferees recognize
that there may be tactical or legal requirements for including
some such information. The Conferees are concerned that some
charging documents or pleadings include information that goes
beyond that required by either criteria. The Conferees do not
seek to vitiate any prerogatives of the Attorney General in
determining whom to charge criminally, or how a matter should
be charged. The NCIX is not required to concur in the Attorney
General's decisions in these matters. The Conferees simply seek
to improve the process by which the Attorney General makes
these decisions when it involves a counterintelligence or an
espionage matter. When the Attorney General makes a decision to
include information beyond that meeting the minimum
requirements of the Constitution for purposes of charging an
individual, the Conferees merely seek to provide the Attorney
General with as much insight as possible on the effects of
those decisions on national security.
In addition to the statutory modifications in Section
341, the Conferees recommend that the Executive Branch move
expeditiously to implement further counterintelligence reforms.
In particular, the Conferees have serious concerns with several
aspects of the handling of the Hanssen espionage case and other
investigations.
The NCIX damage assessment in the Hanssen matter also
included a reference to the effect of Section 8318 of Title 5,
United States Code, with respect to a spy's cooperation with
the U.S. Government. The Conferees are interested whether an
amendment to this section should be made so that both the
spouse and the individual whose action caused the forfeiture of
an annuity, or retired pay, under 5 U.S.C. 8312 and 8313 must
cooperate fully with the U.S. Government in any lawful
investigation or damage assessment in order to maintain the
spouse's eligibility for benefits. The Conferees direct the DCI
and the Attorney General, jointly, to provide to the House and
Senate Intelligence Committees, no later than February 1, 2004,
a written assessment of their views on this particular question
and how such an amendment would assist their respective
organizations.
Subtitle D--Reports
Sec. 351. Report on cleared insider threat to classified computer
networks
Section 351 is similar to Section 331 of the Senate
amendment. The House bill had no similar provision. The House
recedes, with minor amendments.
Sec. 352. Report on security background investigations and security
clearance procedures of the Federal Government
Section 352 is similar to Section 332 of the Senate
amendment. The House bill had no similar provision. The House
recedes with amendments.
Sec. 353. Report on detail of civilian intelligence personnel among
elements of the intelligence community and the Department of
Defense
Section 353 is similar to Section 333 of the Senate
amendment. The House bill had no similar provision. The House
recedes.
Sec. 354. Report on modifications of policy and law on classified
information to facilitate sharing of information for national
security purposes
Section 354 is similar to Section 334 of the Senate
amendment. The House bill had no similar provision. The House
recedes with minor amendments.
Sec. 355. Report on strategic planning
Section 355 is similar to Section 335 of the Senate
amendment. The House bill had no similar provision. The House
recedes with minor amendments.
Sec. 356. Report on United States dependence on computer hardware and
software manufactured overseas
Section 356 is similar to Section 336 of the Senate
amendment. The House bill had no similar provision. The House
recedes with minor amendments.
Sec. 357. Report on lessons learned from military operations in Iraq
Section 357 represents a combination of Section 337 of
the Senate amendment and Section 344 of the House bill. The
Senate recedes with minor amendments. The Conferees also expect
that the House and Senate Intelligence Committees will receive
in writing from the DCI in a timely fashion any and all status
reports and updates concerning the activities of the Iraq
Survey Group on a regular, periodic basis.
Sec. 358. Reports on conventional weapons and ammunition obtained by
Iraq in violation of certain United Nations Security Council
resolutions
Section 358 is similar to Section 338 of the Senate
amendment. The House had no similar provision. The House
recedes with minor amendments.
Sec. 359. Report on operations of Directorate of Information Analysis
and Infrastructure Protection and Terrorist Threat Integration
Center
Section 359 is similar to Section 340 of the Senate
amendment. The House bill had no similar provision. The House
recedes with amendments.
Sec. 360. Report on Terrorist Screening Center
Section 360 is similar to Section 345 of the House bill.
The Senate amendment had no similar provision. The Senate
recedes with amendments.
Sec. 361. Repeal and modification of report requirements relating to
intelligence activities
Section 361 is similar to both Section 339 of the Senate
amendment and Section 342 of the House bill. Each House recedes
in part, with minor amendments.
Subtitle E--Other Matters
Sec. 371. Extension of suspension of reorganization of Diplomatic
Telecommunications Service Program Office
Section 371 is identical to Section 351 of the Senate
amendment and Section 331 of the House bill.
Sec. 372. Modifications of authorities on explosive materials
Section 372 is identical to Section 352 of the Senate
amendment. It is similar to Section 332 of the House bill. The
House recedes.
Sec. 373. Modification of prohibition of the naturalization of certain
persons
Section 373 is identical to Section 353 of the Senate
amendment and to Section 333 of the House bill.
Sec. 374. Modification to definition of financial institution in Right
to Financial Privacy Act
Section 374 is similar to both Section 354 of the Senate
amendment and to Section 334 of the House bill. Section 374 of
the Conference Report expands the definition of ``financial
institution'' for purposes of section 1114 of the Right to
Financial Privacy Act (12 U.S.C. 3414 (RFPA)). It provides
enhanced authority for authorized Intelligence Community
collection activities designed to prevent, deter, and disrupt
terrorism and espionage directed against the U.S. and to
enhance foreign intelligence efforts.
The Conferees believe this new definition is necessary
for effective counterintelligence, foreign intelligence, and
international terrorism operations of the United States.
Section 1114 currently permits U.S. Government authorities
engaged in counterintelligence or foreign intelligence
activities to use ``National Security Letters,'' approved by a
senior government official, to obtain certain financial records
from defined ``financial institutions.'' The definition of
``financial institution'' in the RFPA has been essentially
unmodified since the RFPA became law in 1978. This amendment
updates the definition to include those entities that today
provide financial services to individuals, but would not be
covered by the current definition. Financial records maintained
by these entities are not currently covered by the RFPA and,
thus, are not accessible by intelligence elements of the United
States Government using this authority. In order to expand the
definition of ``financial institution'' for purposes only of
section 1114, this subsection adopts, in part, the definition
of ``financial institution'' found in section 5312(a)(2) of
Title 31, United States Code. It is important to highlight that
this definition also is consistent with the definition used in
section 804(5) of the Counterintelligence and Security
Enhancements Act of 1994 (50 U.S.C. 438).
The Conferees intend that this authority be used for
accessing records and information from financial institutions
for counterintelligence, foreign intelligence, and
international terrorism investigations. The Conferees note,
with approval, the significant actions of the U.S. Government
in tracking terrorist finances. The Conferees believe that the
authority granted by this section will enhance the Government's
efforts in this regard. This provision allows the U.S.
Government to have, through use of ``National Security
Letters,'' greater access to a larger universe of information
that goes beyond traditional financial records, but is
nonetheless crucial in tracking terrorist finances or espionage
activities. The Conferees understand that this authority should
be used for accessing records and information for the purposes
of identifying an individual's financial relationship with the
specified financial institutions.
Section 3414(a)(5)(C) of the RFPA requires the Attorney
General to ``fully inform'' the Congressional Intelligence
Committees semiannually concerning all requests made pursuant
to the provision. To date, the Attorney General has limited
these reports to statistical information. The Conferees
accordingly request that the Attorney General, pursuant to his
responsibility to ``fully inform'' the House and Senate
Intelligence Committees, include in his next semiannual report
to these particular committees information about the process
and standards for approving National Security Letters. The
Conferees also request that the next semiannual report include
a description of issues (if any) concerning the scope of such
letters, or financial institution compliance with such letters,
that have arisen in Federal and State judicial, administrative,
and regulatory settings, or otherwise.
The Conferees have amended the provision that appeared in
both the House bill and Senate amendment to ensure that all
financial institutions covered by the amended National Security
Letters provision are also protected by the cost reimbursement
and immunity provisions of the Act (12 U.S.C. 3415, 3417). With
those amendments, the House recedes.
Sec. 375. Coordination of Federal Government research on security
evaluations
Section 375 is similar to Section 355 of the Senate
amendment. The House bill had no similar provision. The House
recedes with amendments to ensure that classified information
considered during the research initiative is protected from
unauthorized disclosure.
Sec. 376. Treatment of classified information in money laundering cases
Section 376 is identical to Section 357 of the Senate
amendment. The House bill had no similar provision. The House
recedes.
Section 376 amends section 5318A of title 31, United
States Code. That section, which was added in Section 311 of
P.L. 107-56 (Oct. 26, 2001), permits the Secretary of the
Treasury to take targeted action against countries,
institutions, transactions, or types of accounts the Secretary
of the Treasury finds to be of ``primary money-laundering
concern.'' The new amendment will permit the Secretary of the
Treasury, in a judicial review proceeding, to submit any
classified information on which such a finding, or related
action, is based to the court ex parte and in camera. This
permission parallels the authority granted to the Secretary to
submit classified information to a reviewing court in
connection with any proceedings under the International
Emergency Economic Powers Act. In administering a proceeding in
which classified information is submitted to a court under this
provision, the Conferees intend that a court will fashion
procedures, necessary to assure a moving party due process of
law, that resemble those already required in similar situations
in which the government, or another party, seeks to base a
claim or defense on classified information.
Sec. 377. Technical amendments
Section 377 is similar to Section 356 of the Senate
amendment and to Section 343 of the House bill. The Senate
recedes with amendments, including the addition of a technical
amendment to the ``Federal Information Security Management Act
of 2002'' (P.L. 107-296 and P.L. 107-347) which was included in
the Senate amendment as Section 404.
TITLE IV--CENTRAL INTELLIGENCE AGENCY
Sec. 401. Amendment to certain Central Intelligence Agency Act of 1949
notification requirements
Section 401 is identical to Section 401 of the Senate
amendment. The House had no similar provision. The House
recedes.
Sec. 402. Protection of certain Central Intelligence Agency personnel
from tort liability
Section 402 is similar to Section 402 of the Senate
amendment and Section 401 of the House bill. The House recedes
with minor amendments. The Conferees note that this protection
against tort liability extends only to officials of the Central
Intelligence Agency who are Agency personnel designated by the
Director under Section 15(a) of the ``Central Intelligence
Agency Act of 1949'' (CIA Act) (50 U.S.C. 403o), or designated
by the Director under Section 5(a)(4) of the CIA Act (50 U.S.C.
403f) to carry firearms for the protection of current or former
Agency personnel and their immediate families, defectors, and
their immediate families, and other persons in the United
States under Agency auspices.
Sec. 403. Repeal of obsolete limitation on use of funds in central
services working capital fund
Section 403 is identical to Section 403 of the Senate
amendment and to Section 402 of the House bill.
Sec. 404. Purchases by the Central Intelligence Agency of products of
Federal Prison Industries
Section 404 is an amended version of Section 335
contained in the House bill. The Conferees modified the
provision to better reflect actual Central Intelligence Agency
procurement practices, which already conform to the goals
envisioned by Section 335 of the House bill. The Senate
amendment had no similar provision. The Senate recedes, with
amendments as noted.
Sec. 405. Postponement of Central Intelligence Agency compensation
reform and other matters
Section 405 contains language that is similar to Section
405 of the Senate amendment. The House bill had no similar
provision. Section 405 includes certain statutory limitations
and reporting requirements designed to address misgivings
regarding the Central Intelligence Agency Compensation Reform
program. The Conferees have concerns regarding the efforts of
the DCI to revise and reform the compensation structure of the
Central Intelligence Agency. The DCI's Compensation Reform
program also has engendered anxiety among employees due to the
perceived impact the system may have on retirement benefits and
compensation, in general.
Subsection (b) of Section 405 addresses the potential for
decreases in employee retirement benefits. The provision
permits those CIA employees designated by the DCI for
participation in the congressionally-directed Compensation
Reform pilot program to contribute to Thrift Savings Plan
accounts any part of their pay which they receive from bonus
monies under the program.
Generally, under current law, Federal employees can only
contribute ``basic pay'' to their Thrift Savings Plans, not
bonus monies. As a result, the Conferees note that pilot
program participants have not been contributing bonus monies to
their Thrift Savings Plans. Under the CIA's Compensation Reform
pilot program, however, participating employees will likely
receive a higher percentage of their yearly compensation as
performance bonuses. Treating these performance bonuses as
``basic pay'' will permit these employees to take full
advantage of their ability to contribute to their Thrift
Savings Plans, consistent with existing limitations on the
amount of contributions to certain retirement accounts. The
Conferees acknowledge that while this provision will not
compensate employees for the potential reduction in their
Federal annuities due to possible decreases in basic pay under
the Compensation Reform pilot program, it will encourage
increased utilization of Thrift Savings Plans and, thus,
partially offset any retirement annuity reductions.
The Conferees are cognizant of, and generally supportive
of, the desire of the Administration to move to a compensation
structure across government that rewards top performers (i.e.,
``pay-for-performance''). The Conferees are encouraged by the
fact that the CIA has sought input and guidance from the Office
of Personnel Management and Office of Management and Budget
with respect to any restructuring of CIA's compensation system.
Prior to any Agency-wide implementation of Compensation Reform,
the pilot program must first be completed, and the Conferees
direct that the results of the pilot be provided to the
Intelligence Committees in a written report within 45 days of
the conclusion of the pilot program, as required by Section
402(b)(3) of the FY 03 Act. The House and Senate Intelligence
Committees will scrutinize closely the written report on the
pilot program. The Committees must have an opportunity to weigh
fully the costs and benefits associated with this particular
Compensation Reform plan.
To ensure that the Intelligence Committees have a full
opportunity to conduct this important review and carefully
consider the results of the pilot program, the Conferees have
included a provision that delays implementation of Compensation
Reform across the Agency until after enactment of the
``Intelligence Authorization Act for Fiscal Year 2005.''
Implementation of the program before the Intelligence
Committees have rigorously reviewed the results of the pilot,
would frustrate the intent of Congress in establishing the
pilot program and requiring a report on its results. The
Conferees note that this provision restricts implementation of
the program across the CIA until the specified date. This is
anticipated to be a delay of a little less than a year, at the
most.
The Conferees note, however, that ultimate acceptance (or
specific statutory restrictions on implementation) of this
Compensation Reform proposal certainly remains an open
question. The answer to this question will very much depend on
the information provided to the Intelligence Committees during
the interim period, as well as the willingness of the DCI and
Senior CIA managers to constructively and cooperatively engage
in discussions with the Intelligence Committees on this
Compensation Reform proposal. The Conferees note with approval
the DCI's continued expression of his willingness to consult
and cooperate with Congress in its ongoing review of this
proposal. The Conferees take him at his word. As noted, the
Conferees support generally the concept that the CIA
compensation system needs to be reformed. The question is
whether this is the right system to be adopted.
The Conferees also have added two additional reporting
requirements to ensure the House and Senate Intelligence
Committees are fully advised of the effects that Compensation
Reform will have on employees.
The first report will compare amounts that each employee
participating in the pilot program would have earned under the
pre-existing compensation structure at the CIA with amounts
actually earned under the pilot program.
Second, the Conferees direct the DCI to conduct a blind
survey utilizing an independent, external human resource or
personnel consulting organization. This survey shall be
completed not later than March 31, 2004. The purpose for the
survey is (1) to gauge the level of concern among all CIA
employees (both within the pilot program and throughout the
CIA) with the Compensation Reform program as currently proposed
and (2) to ascertain how many employees currently under the
pilot program, having the benefit of their participation in
such program, would choose to ``opt out'' of the program if
they were to be given that option. The Conferees direct that
all of the questions to be presented in the survey shall be
provided in full, and in writing, to the Committees before the
survey is taken. Moreover, the Conferees direct that the
results of the survey shall be provided in full, and in
writing, to the Intelligence Committees within 30 days of the
survey's completion.
The Conferees further note that the DCI has indicated his
intention to keep employees currently assigned to the pilot
program within that program until such time as Compensation
Reform is permitted to be implemented across the CIA or its
implementation Agency-wide is otherwise restricted by Congress.
The Conferees believe that it would be appropriate for
the DCI to permit employees who have been compensated under the
pilot program to ``opt out'' of the system at the end of the
pilot program's first year, if they desire to do so.
Additionally, the Conferees believe that it would be
appropriate for the DCI to provide supplemental compensation or
benefits necessary to ensure that those employees who might
``opt out'' of the pilot program and who actually lost
compensation, or experienced a reduction in other benefits
because of their directed participation in the pilot program,
are ``made whole'' by receiving an amount of compensation and
benefits equivalent to what they would have received under
CIA's pre-existing compensation structure.
The Conferees have not directed by statute or otherwise
that the DCI provide the ``opt out'' or ``make whole'' options
to those affected employees. The Conferees do, however, believe
these options would be a fair method of reimbursing those
employees who may have been subjected to adverse financial
circumstances based on their directed participation in the
pilot program. The Conferees commit the decision to institute
such measures solely to the DCI's discretion.
TITLE V--DEPARTMENT OF DEFENSE INTELLIGENCE MATTERS
Sec. 501. Protection of certain National Security Agency personnel from
tort liability
Section 501 is similar to Section 502 of the Senate
amendment and to Section 504 of the House bill. The House
recedes with amendments.
Sec. 502. Use of funds for counterdrug and counterterrorism activities
for Colombia
Section 502 is similar to both Section 503 of the Senate
amendment and to Section 501 of the House bill. The House
recedes with amendments.
The Conferees believe that Colombian President Alvaro
Uribe's approach to ending Colombia's long running terrorist
insurgency and reducing narcotics production and trafficking is
the best chance for that country to overcome the legacy of
violence it has endured for decades. President Uribe's
steadfastness in pursuing these goals takes on even greater
significance when observed in the light of the sheer brutality
of terrorist attacks perpetrated on innocent Colombians by
narco-terrorists. Terrorist attacks on his inauguration
ceremonies in Bogota make manifest the fact that Uribe himself
remains a target of terrorist violence.
Section 502 allows funds available for intelligence and
intelligence-related activities to be used to support a unified
campaign against drug traffickers and terrorist organizations.
The Administration has chosen to pursue a policy in Colombia
that recognizes the inseparable nature of these two threats.
The Conferees endorse this approach. This section is an
indication of the confidence the Conferees place in President's
Uribe's aggressive pursuit of the twin goals of ending the
insurgency and battling drug trafficking.
Sec. 503. Scene visualization technologies
Section 503 is identical to Section 504 of the Senate
amendment. There was no similar provision in the House bill.
The House recedes.
Sec. 504. Measurement and signatures intelligence research program
Section 504 is similar to Section 505 of the House bill.
There is no similar provision in the Senate amendment. The
Senate recedes with amendments, including amendments to ensure
that classified information considered during the research
initiative is protected from unauthorized disclosure.
Sec. 505. Availability of funds of National Security Agency for
national security scholarships
Section 505 has no counterpart in the Senate amendment or
in the House bill. It is a provision adopted by the Managers
during the conference.
OTHER MATTERS
Reaffirming the functional definition of covert action
The Conferees have taken note of the text on covert
action contained in the classified annex to S. 1025, as
reported on May 8, 2003, by the Senate Select Committee on
Intelligence (annex text). The Conferees intend the following
language to substitute for the annex text:
The Conferees attach critical importance to the
requirements for covert action approval and
notification in the National Security Act of 1947
(Act). In addition to the information and oversight
value of mandatory notification, fulfilling these
notification requirements fosters great confidence in
Executive Branch covert action programs.
The Administration has amply and repeatedly
demonstrated its commitment to adhere to the approval
and notification requirements of the National Security
Act. Neither the Administration nor the Conferees have
sought or agreed to modify, amend, or reinterpret the
scope of the Act, or approval and notification
requirements under the Act. The Conferees expect all
departments and agencies of the U.S. Government to
continue to comply fully with the Act and its
legislative history.
Manned airborne reconnaissance aircraft replacement
Recent military operations in Iraq and Afghanistan, along
with broader requirements to support the global war on
terrorism, and standing global reconnaissance requirements have
placed enormous operational tempo demands on manned airborne
reconnaissance platforms operated by the U.S. Army, Navy, and
Air Force. The limited number of these assets and the large
number of requirements placed on them have led to their
designation as ``high demand/low density'' assets that have to
be intensively managed by the Department of Defense (DOD) to
ensure their most productive, efficient use. While many of
these airborne reconnaissance platforms were initially
developed for service-specific reconnaissance requirements,
they have evolved over time into a patchwork airborne
reconnaissance architecture that is not optimized to support
national and combatant commanders' intelligence requirements.
Congress established the position of Under Secretary of
Defense for Intelligence (USD(I)) in the National Defense
Authorization Act for Fiscal Year 2003 (P.L. 107-314). A clear
intent of that action was to create a position and an
organization in DOD that would better assess service and
Defense-wide intelligence requirements and better develop,
coordinate and integrate current and projected DOD intelligence
capabilities in support of service, joint, and national
intelligence collection requirements. The Conferees expect the
USD(I) to move expeditiously to establish requirements for the
development of a fully integrated manned and unmanned airborne
reconnaissance architecture for the future, with adequate
capabilities and availability to meet projected requirements,
minimize unnecessary duplication of effort, and maximize
operational efficiency.
Some of these platforms, such as the Navy's EP-3E and the
Army's RC-12 Guardrail, are nearing the end of their expected
service lives and are in urgent need of replacement. The
Conferees are concerned that while the need to recapitalize
manned airborne reconnaissance platforms in a coordinated,
integrated fashion is well known within the DOD, only the Army
has established a formal program for replacing its legacy
manned airborne signals intelligence reconnaissance platforms
by the competitive development and production of the Aerial
Common Sensor (ACS).
The Conferees are aware that the Navy is interested in
taking advantage of the work done by the Army on ACS, and is
considering the adoption of an ACS-based solution for
replacement of the EP-3E. The Conferees applaud the Navy
efforts to establish a joint program with the Army, but are
concerned that a thorough analysis of options has not yet been
conducted. While the Navy did commission an initial analysis of
options, the Conferees feel a more rigorous, thorough analysis
is warranted for such an important program.
The Conferees direct the Secretary of Defense to conduct
a thorough analysis of options to replace the EP-3E mission
capability. The analysis should be conducted as expeditiously
as possible in order to avoid delaying an EP-3E replacement.
The Conferees expect that the analysis should evaluate: (1) all
reasonable alternatives, including all manned and unmanned
replacement alternatives, such as the RC-135 Rivet Joint,
Global Hawk unmanned aerial vehicle, and the ACS; (2) the
consistency of the cost methodology; and, (3) a solution that
maximizes signals intelligence capability, low life-cycle
costs, and increases interoperability. In order to ensure the
Navy makes a well-founded acquisition decision, the Conferees
direct the Secretary of the Navy not to proceed with the
acquisition of an EP-3E replacement until this analysis is
complete and the Defense Acquisition Board approval has been
granted. The Navy should use additional funding that may be
available to expedite the study, analysis, and decision making
processes.
The Conferees are also concerned that the Air Force has
not moved more aggressively to analyze program alternatives for
replacing or modernizing the RC-135, which will also be
required in future years. The Conferees believe that, when it
is time to replace the RC-135 platform, DOD could avail itself
of more modern platforms that use state of the art technology
in aircraft and intelligence collection systems, emphasize
lower operating costs, and take full advantage of robust
communications capabilities to reduce platform size, weight,
and operational costs.
The Conferees direct the Secretary of Defense to conduct
a formal Analysis of Alternatives (AOA) for replacement or
modernization of the RC-135 mission. The AOA shall consider all
manned and unmanned replacement alternatives, including high
altitude, long endurance unmanned aerial vehicles, an ACS-based
option, and more cutting edge technologies such as high
altitude aero-bodies. The AOA should also specifically address
the option of forming a joint program with Army, Navy, and Air
Force participation.
The Conferees expect these analyses will be coordinated
with the Under Secretary of Defense for Acquisition, Technology
and Logistics and the USD(I), and will be a consistent part of
the comprehensive effort by the USD(I), in consultation, as
appropriate, with the DCI, to establish requirements for the
development of a fully integrated manned and unmanned airborne
reconnaissance architecture that makes appropriate use of
reach-back technology.
Development of sophisticated analytic tools
Following the terrorist attacks of September 11, 2001,
the Intelligence Committees have repeatedly emphasized the
importance of developing sophisticated new analytic tools to
ensure the rapid processing and analysis of foreign
intelligence information, as well as increased collaboration
among the diverse national security elements of the Federal
government. The potential value of such tools for ``connecting
the dots'' is clear. The Conferees recognize, however, that
advanced analytic tools, if misused, could impact the privacy
of U.S. persons. Efforts by the Defense Department and other
agencies to develop these tools have come under intense
scrutiny for this reason. To address reservations concerning
possible encroachments on individual liberties, the Fiscal Year
2003 and Fiscal Year 2004 Department of Defense Appropriations
Acts (P.L. 108-7 (Division M) and P.L. 108-87, respectively)
contained limitations on the development and use of certain
``data-mining'' activities.
In Section 8131 of the Department of Defense
Appropriations Act for Fiscal Year 2004, and in its
accompanying classified annex, the Defense Advanced Research
Projects Agency's Terrorist Information Awareness program was
terminated and requested funds were expressly provided to the
National Foreign Intelligence Program (NFIP) to develop
``[p]rocessing, analysis, and collaboration tools for
counterterrorism foreign intelligence.'' Section 8131
prohibited ``deployment and implementation'' of these tools
except for
(1) Lawful military operations of the United States
conducted outside the United States; or
(2) Lawful foreign intelligence activities
conducted wholly overseas, or wholly against nonUnited
States citizens.
The Conferees do not interpret the restriction contained
in Section 8131 as a restriction on the development of analytic
tools for ``processing, analysis, and collaboration tools for
counterterrorism foreign intelligence.'' Instead, the Conferees
recognize this language as a restriction on ``deployment and
implementation.''
In the Classified Annex accompanying this Act, the
Conferees have specifically authorized the use of the funds
appropriated to the NFIP to continue development of advanced
processing, analysis, and collaboration tools. The Conferees
direct that any experiments or efforts to test these tools
should be conducted only against U.S. Government databases
containing foreign intelligence information lawfully collected,
analyzed, retained, or disseminated under existing statutes,
regulations, Executive orders, or Attorney General guidelines
governing such activities, including all applicable
restrictions concerning the collection, analysis, retention, or
dissemination of U.S. person information. The Conferees
encourage active participation in these developmental efforts
by all elements of the Intelligence Community.
The Conferees are convinced, however, that an analysis of
the policies and procedures necessary to safeguard individual
liberties and privacy should occur concurrently with the
development of these analytic tools, not as an afterthought.
The Conferees recognize that current restrictions on the
conduct of intelligence and law enforcement activities, as well
as the protections afforded U.S. persons under applicable laws,
regulations, and Executive orders, can be applied to these new
tools. The Administration should also consider whether new
policies and procedures are necessary to ensure privacy
protections when these advanced information technology tools
are utilized in intelligence and law enforcement activities.
This examination should include diverse opinion and expertise
and should be conducted with as much transparency as possible,
recognizing the importance of protecting intelligence sources
and methods.
The Conferees direct that the Attorney General and the
DCI jointly provide an unclassified report, with a classified
annex, as necessary, to the Intelligence Committees regarding
the application of the Constitution, laws, regulations,
Executive orders, and guidelines of the United States to the
use of these advanced analytic tools by the Intelligence
Community. This report should specifically address existing
protections for the collection, analysis, retention, and
dissemination of U.S. person information. Although the
Conferees have not authorized the development, testing, or
deployment of these advanced analytic tools against databases
which contain information other than foreign intelligence
information, including private sector databases, the report
should address the application of existing laws or policies to
searches of such databases, whether publicly or privately held,
as well as any proposed modifications to laws or policies that
may be necessary in the future to ensure appropriate
protections for U.S. persons. The report should include an
analysis of law, regulation, and policy that takes into account
potential technological advances that will protect privacy
interests, such as selective revelation technologies, enhanced
access controls and audit trails, and techniques to
``anonymize'' U.S. person information. The Conferees believe
that the Attorney General and DCI should seek input from
experts in law, technology, public policy, and national
security when drafting this report. This report should be
provided to the Intelligence Committees no later than one year
after enactment of this Act.
From the Permanent Select Committee on Intelligence, for
consideration of the House bill and the Senate amendment, and
modifications committed to conference:
Porter J. Goss,
Doug Bereuter,
Sherwood Boehlert,
Jim Gibbons,
Ray LaHood,
Randy ``Duke'' Cunningham,
Pete Hoekstra,
Richard Burr,
Terry Everett,
Elton Gallegly,
Mac Collins,
Jane Harman,
Alcee L. Hastings,
Silvestre Reyes,
Leonard L. Boswell,
Collin C. Peterson,
Bud Cramer,
Anna G. Eshoo,
Rush Holt,
C.A. Dutch Ruppersberger,
From the Committee on Armed Services, for
consideration of defense tactical intelligence
and related activities:
Duncan Hunter,
Curt Weldon,
Managers on the Part of the House.
From the Select Committee on Intelligence:
Pat Roberts,
Orrin Hatch,
Mike DeWine,
Christopher S. Bond,
Trent Lott,
Olympia Snowe,
Chuck Hagel,
Saxby Chambliss,
John Warner,
Jay Rockefeller,
Carl Levin,
Dianne Feinstein,
Ron Wyden,
Dick Durbin,
Evan Bayh,
John Edwards,
Barbara A. Mikulski,
From the Committee on Armed Services:
Wayne Allard,
Bill Nelson,
Managers on the Part of the Senate.
