[House Report 106-620]
[From the U.S. Government Publishing Office]



106th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     106-620

======================================================================



 
          INTELLIGENCE AUTHORIZATION ACT FOR FISCAL YEAR 2001

                                _______
                                

  May 16, 2000.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

    Mr. Goss, from the Permanent Select Committee on Intelligence, 
                        submitted the following

                              R E P O R T

                        [To accompany H.R. 4392]

      [Including cost estimate of the Congressional Budget Office]

  The Permanent Select Committee on Intelligence, to whom was 
referred the bill (H.R. 4392) to authorize appropriations for 
fiscal year 2001 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 considered the same, report favorably thereon with an 
amendment and recommend that the bill as amended do pass.

                                CONTENTS

                                                                   Page
The bill as reported.............................................     2
Purpose..........................................................     6
Overall perspective on the intelligence budget and committee 
  intent.........................................................     7
Scope of committee review........................................     7
Committee findings and recommendations...........................     8
Areas of Special Interest........................................    10
    State Department Security Concerns...........................    10
    Analyst Collocation..........................................    14
    Oversight of NSA Modernization...............................    15
    Collaboration................................................    17
    Tasking, Processing, Exploitation, and Dissemination.........    18
    IC Communications Architect/Architecture.....................    19
    State of Defense Human Intelligence..........................    22
    Military Pay and Civilian Pay................................    23
    NFIP Congressional Budget Justification Books (CBJBs)........    24
    Reprogramming and Transfers Within CIA.......................    25
    Defense Advanced Research Projects Agency (DARPA)............    27
Joint Military Intelligence Program..............................    27
Tactical Intelligence and Related Activities.....................    35
Section-by-Section Analysis of the Bill as Reported..............    40
    Title I--Intelligence Activities.............................    40
        Section 101--Authorization of Appropriations.............    40
        Section 102--Classified Schedule of Authorizations.......    40
        Section 103--Personnel Ceiling Adjustments...............    40
        Section 104--Community Management Account................    40
        Section 105--Transfer Authority of the Director of 
          Central Intelligence...................................    41
    Title II--Central Intelligence Agency Retirement and 
      Disability System..........................................    42
        Section 201--Authorization of Appropriations.............    42
    Title III--General Provisions................................    42
        Section 301--Increase in Employee Compensation and 
          Benefits Authorized by Law.............................    42
        Section 302--Restriction on Conduct of Intelligence 
          Activities.............................................    42
        Section 303--Sense of Congress on Intelligence Community 
          Contracting............................................    42
        Section 304--Authorization for Travel on any Common 
          Carrier for Certain Intelligence Collection Personnel..    42
        Section 305--Reports on Acquisition of Technology 
          Relating to Weapons of Mass Destruction and Advanced 
          Conventional Munitions.................................    43
    Title IV--Central Intelligence Agency........................    43
        Section 401--Modifications to Central Intelligence 
          Agency's Central Services Program......................    43
        Section 402--Technical Corrections.......................    43
    Title V--Department of Defense...............................    43
        Section 501--Three-year Extension of Authority to Engage 
          in Commercial Activities as Security for Intelligence 
          Activities.............................................    43
        Section 502--Contracting Authority for the National 
          Reconnaissance Office..................................    44
Committee Position and Record Votes Taken........................    44
Findings and Recommendations of the Committee on Government 
  Reform.........................................................    45
Oversight Findings...............................................    45
Fiscal Year Cost Projections.....................................    45
Congressional Budget Office Estimates............................    45
Committee Cost Estimates.........................................    48
Specific Constitutional Authority for Congressional Enactment of 
  this Legislation...............................................    48
Changes to Existing Law..........................................    48

    The amendment is as follows:
    Strike out all after the enacting clause and insert in lieu 
thereof 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 2001''.
  (b) Table of Contents.--The table of contents of 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. Transfer authority of the Director of Central Intelligence.

 TITLE II--CENTRAL INTELLIGENCE AGENCY RETIREMENT AND DISABILITY SYSTEM

Sec. 201. Authorization of appropriations.

                     TITLE III--GENERAL PROVISIONS

Sec. 301. Increase in employee compensation and benefits authorized by 
law.
Sec. 302. Restriction on conduct of intelligence activities.
Sec. 303. Sense of the Congress on intelligence community contracting.
Sec. 304. Authorization for travel on any common carrier for certain 
intelligence collection personnel.
Sec. 305. Reports on acquisition of technology relating to weapons of 
mass destruction and advanced conventional munitions.

                 TITLE IV--CENTRAL INTELLIGENCE AGENCY

Sec. 401. Modifications to Central Intelligence Agency's central 
services program.
Sec. 402. Technical corrections.

         TITLE V--DEPARTMENT OF DEFENSE INTELLIGENCE ACTIVITIES

Sec. 501. Three-year extension of authority to engage in commercial 
activities as security for intelligence collection activities.
Sec. 502. Contracting authority for the National Reconnaissance Office.

                    TITLE I--INTELLIGENCE ACTIVITIES

SEC. 101. AUTHORIZATION OF APPROPRIATIONS.

  Funds are hereby authorized to be appropriated for fiscal year 2001 
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 Federal Bureau of Investigation.
          (10) The National Reconnaissance Office.
          (11) The National Imagery and Mapping Agency.

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, 2001, 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 bill H.R. 4392 of the One 
Hundred Sixth 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 2001 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 two 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 Permanent Select Committee on 
Intelligence of the House of Representatives and the Select Committee 
on Intelligence of the Senate 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 2001 the sum of 
$144,231,000. Within such amount, funds identified in the classified 
Schedule of Authorizations referred to in section 102(a) for the 
Advanced Research and Development Committee shall remain available 
until September 30, 2002.
  (b) Authorized Personnel Levels.--The elements within the 
Intelligence Community Management Account of the Director of Central 
Intelligence are authorized 356 full-time personnel as of September 30, 
2001. 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 2001 such additional amounts as are 
        specified in the classified Schedule of Authorizations referred 
        to in section 102(a). Such additional amounts shall remain 
        available until September 30, 2002.
          (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, 2001, there 
        are hereby 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 2001, 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), $28,000,000 shall be available for the 
        National Drug Intelligence Center. Within such amount, funds 
        provided for research, development, test, and evaluation 
        purposes shall remain available until September 30, 2002, and 
        funds provided for procurement purposes shall remain available 
        until September 30, 2003.
          (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. TRANSFER AUTHORITY OF THE DIRECTOR OF CENTRAL INTELLIGENCE.

  (a) Limitation on Delegation of Authority of Departments To Object to 
Transfers.--Section 104(d)(2) of the National Security Act of 1947 (50 
U.S.C. 403-4(d)(2)) is amended--
          (1) by inserting ``(A)'' after ``(2)'';
          (2) by redesignating subparagraphs (A), (B), (C), (D), and 
        (E) as clauses (i), (ii), (iii), (iv), and (v), respectively;
          (3) in clause (v), as so redesignated, by striking ``the 
        Secretary or head'' and inserting ``subject to subparagraph 
        (B), the Secretary or head''; and
          (4) by adding at the end the following new subparagraph:
  ``(B)(i) Except as provided in clause (ii), the authority to object 
to a transfer under subparagraph (A)(v) may not be delegated by the 
Secretary or head of the department involved.
  ``(ii) With respect to the Department of Defense, the authority to 
object to such a transfer may be delegated by the Secretary of Defense, 
but only to the Deputy Secretary of Defense.
  ``(iii) An objection to a transfer under subparagraph (A)(v) shall 
have no effect unless submitted to the Director of Central Intelligence 
in writing.''.
  (b) Limitation on Delegation of Duties of Director of Central 
Intelligence.--Section 104(d)(1) of such Act (50 U.S.C. 403-4(d)(1)) is 
amended--
          (1) by inserting ``(A)'' after ``(1)''; and
          (2) by adding at the end the following new subparagraph:
  ``(B) The Director may only delegate any duty or authority given the 
Director under this subsection to the Deputy Director of Central 
Intelligence for Community Management.''.

 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 2001 the sum of 
$216,000,000.

                     TITLE III--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.

SEC. 303. SENSE OF THE CONGRESS ON INTELLIGENCE COMMUNITY CONTRACTING.

  It is the sense of the Congress that the Director of Central 
Intelligence should continue to direct that elements of the 
intelligence community, whenever compatible with the national security 
interests of the United States and consistent with operational and 
security concerns related to the conduct of intelligence activities, 
and where fiscally sound, should competitively award contracts in a 
manner that maximizes the procurement of products properly designated 
as having been made in the United States.

SEC. 304. AUTHORIZATION FOR TRAVEL ON ANY COMMON CARRIER FOR CERTAIN 
                    INTELLIGENCE COLLECTION PERSONNEL.

  (a) In General.--Title I of the National Security Act of 1947 (50 
U.S.C. 402 et seq.) is amended by adding at the end the following new 
section:
  ``travel on any common carrier for certain intelligence collection 
                               personnel
  ``Sec. 116. (a) In General.--Notwithstanding any other provision of 
law, the Director of Central Intelligence may authorize travel on any 
common carrier that, in the discretion of the Director, would by its 
use maintain or enhance the protection of sources or methods of 
intelligence collection or maintain or enhance the security of 
personnel of the intelligence community carrying out intelligence 
collection activities.
  ``(b) Authorized Delegation of Duty.--The Director may only delegate 
the authority granted by this section to the Deputy Director of Central 
Intelligence, or with respect to employees of the Central Intelligence 
Agency the Director may delegate such authority to the Deputy Director 
for Operations.''.
  (b) Clerical Amendment.--The table of contents for the National 
Security Act of 1947 is amended by inserting after the item relating to 
section 115 the following new item:

``Sec. 116. Travel on any common carrier for certain intelligence 
collection personnel.''.

SEC. 305. REPORTS ON ACQUISITION OF TECHNOLOGY RELATING TO WEAPONS OF 
                    MASS DESTRUCTION AND ADVANCED CONVENTIONAL 
                    MUNITIONS.

  Section 721(a) of the Intelligence Authorization Act for Fiscal Year 
1997 (50 U.S.C. 2366) (Public Law 104-293, 110 Stat. 3474) is amended--
          (1) by striking ``Not later than 6 months after the date of 
        the enactment of this Act, and every 6 months thereafter,'' and 
        inserting ``Not later than March 1, 2001, and every March 1 
        thereafter,''; and
          (2) in paragraph (1), by striking ``6 months'' and inserting 
        ``year''.

                 TITLE IV--CENTRAL INTELLIGENCE AGENCY

SEC. 401. MODIFICATIONS TO CENTRAL INTELLIGENCE AGENCY'S CENTRAL 
                    SERVICES PROGRAM.

  Section 21(c)(2) of the Central Intelligence Agency Act of 1949 (50 
U.S.C. 403u(c)(2)) is amended--
          (1) by redesignating subparagraph (F) as subparagraph (G); 
        and
          (2) by inserting after subparagraph (E) the following new 
        subparagraph:
          ``(F) Receipts from miscellaneous reimbursements from 
        individuals and receipts from the rental of property and 
        equipment to employees and detailees.''.

SEC. 402. TECHNICAL CORRECTIONS.

  (a) Reporting Requirement.--Section 17(d)(1) of the Central 
Intelligence Agency Act of 1949 (50 U.S.C. 403q(d)(1)) is amended--
          (1) by adding ``and'' at the end of subparagraph (D);
          (2) by striking subparagraph (E); and
          (3) by redesignating subparagraph (F) as subparagraph (E).
  (b) Terminology with respect to Government Agencies.--Section 
17(e)(8) of the Central Intelligence Agency Act of 1949 (50 U.S.C. 
403q(e)(8)) is amended by striking ``Federal'' each place it appears 
and inserting ``Government''.

         TITLE V--DEPARTMENT OF DEFENSE INTELLIGENCE ACTIVITIES

SEC. 501. THREE-YEAR EXTENSION OF AUTHORITY TO ENGAGE IN COMMERCIAL 
                    ACTIVITIES AS SECURITY FOR INTELLIGENCE COLLECTION 
                    ACTIVITIES.

  Section 431(a) of title 10, United States Code, is amended by 
striking ``December 31, 2000'' and inserting ``December 31, 2003''.

SEC. 502. CONTRACTING AUTHORITY FOR THE NATIONAL RECONNAISSANCE OFFICE.

  (a) In General.--The National Reconnaissance Office (``NRO'') shall 
negotiate, write, and manage vehicle acquisition or launch contracts 
that affect or bind the NRO and to which the United States is a party.
  (b) Effective Date.--This section shall apply to any contract for NRO 
vehicle acquisition or launch, as described in subsection (a), that is 
negotiated, written, or executed after the date of the enactment of 
this Act.
  (c) Retroactivity.--This section shall not apply to any contracts, as 
described in subsection (a), in effect as of the date of the enactment 
of this Act.

                                Purpose

    The bill would:
          (1) Authorize appropriations for fiscal year 2001 for 
        (a) the intelligence and intelligence-related 
        activities of the U.S. Government, (b) the Community 
        Management Account, and (c) the Central Intelligence 
        Agency Retirement and Disability System;
          (2) Authorize the personnel ceilings on September 30, 
        2001 for the intelligence and intelligence-related 
        activities of the U.S. Government and permit the 
        Director of Central Intelligence to authorize personnel 
        ceilings in Fiscal Year 2001 for any intelligence 
        element up to two percent above the authorized levels, 
        with the approval of the Director of the Office of 
        Management and Budget;
          (3) Authorize $28 million for the National Drug 
        Intelligence Center in Johnstown, Pennsylvania;
          (4) Authorize intelligence collection personnel of 
        the Intelligence Community to use any common carrier 
        for travel during the course of their intelligence 
        collection activities;
          (5) Permit deposit of certain miscellaneous receipts 
        into the Central Intelligence Agency's Working Capital 
        Fund of the Central Services Program;
          (6) Extend the Department of Defense's authority to 
        engage in commercial activities as security for 
        intelligence collection activities;
          (7) Limit the authority of the National 
        Reconnaissance Office to use external contracting 
        offices to negotiate, write, and manage launch vehicle 
        acquisition and launch services contracts.

  Overall Perspective on the Intelligence Budget and Committee Intent

          The classified Annex to this public report includes 
        the classified Schedule of Authorizations and its 
        associated language. The committee views the classified 
        Annex as an integral part of this legislation. The 
        classified Annex contains a thorough discussion of all 
        budget issues considered by the committee, which 
        underlies the funding authorization found in the 
        Schedule of Authorizations. The committee intends that 
        all intelligence programs and intelligence-related 
        activities discussed in the classified Annex to this 
        report be conducted in accord with the guidance and 
        limitations set forth as associate language therein. 
        The classified Schedule is incorporated directly into 
        this legislation by virtue of section 102 of the bill. 
        The classified Annex is available for review by all 
        Members of the House of Representatives, subject to the 
        requirements of clause 13 of Rule XXIV of the House.

                       Scope of Committee Review

    U.S. intelligence and intelligence-related activities under 
the jurisdiction of the committee include the National Foreign 
Intelligence Program (NFIP), and the Tactical Intelligence and 
Related Activities (TIARA) and the Joint Military Intelligence 
Program (JMIP) of the Department of Defense.
    The NFIP consists of all programs of the Central 
Intelligence Agency, as well as those national foreign 
intelligence and/or counterintelligence programs conducted by: 
(1) the Department of Defense; (2) the Defense Intelligence 
Agency; (3) the National Security Agency; (4) the Departments 
of the Army, Navy, and Air Force; (5) the Department of State; 
(6) the Department of the Treasury; (7) the Department of 
Energy; (8) the Federal Bureau of Investigation; (9) the 
National Reconnaissance Office; and (10) the National Imagery 
and Mapping Agency.
    The Department of Defense TIARA is a diverse array of 
reconnaissance and target acquisition programs that are a 
functional part of the basic military force structure and 
provide direct information support to military operations. 
TIARA, as defined by the Joint Chiefs of Staff and the 
Secretary of Defense, include those military intelligence 
activities outside the General Defense Intelligence Program 
that respond to the needs of military commanders for 
operational support information, as well as to national 
command, control, and intelligence requirements. The Armed 
Services Committee in the House of Representatives has joint 
oversight and authorizing jurisdiction of the programs 
comprising TIARA.
    The JMIP was established in 1995 to provide integrated 
program management of defense intelligence elements that 
support defense-wide or theater-level consumers. Included 
within JMIP are aggregations created for management efficiency 
and characterized by similarity, either in intelligence 
discipline (e.g., Signals Intelligence (SIGINT), Imagery 
Intelligence (IMINT)), or function (e.g., satellite support, 
aerial reconnaissance). The following aggregations are included 
in the JMIP: (1) the Defense Cryptologic Program (DCP); (2) the 
Defense Imagery and Mapping Program (DIMAP); (3) the Defense 
General Intelligence Applications Program (DGIAP), which itself 
includes (a) the Defense Airborne Reconnaissance Program 
(DARP), (b) the Defense Intelligence Tactical Program (DITP), 
(c) the Defense Intelligence Special Technologies Program 
(DISTP), (d) the Defense Intelligence Counterdrug Program 
(DICP), and (e) the Defense Space Reconnaissance Program 
(DSRP). As with TIARA programs, the Armed Services Committee in 
the House of Representatives has joint oversight and 
authorizing jurisdiction of the programs comprising the JMIP.

                 Committee Findings and Recommendations

    The Committee completed its review of the President's 
fiscal year 2001 intelligence budget, carrying out its annual 
responsibility to prepare an authorization based on close 
examination of intelligence programs and proposed expenditures. 
The review reflected the Committee's continuing belief that 
intelligence activities must be examined by program, as well as 
by function. The committee held eleven committee budget-related 
hearings, principally on a program level, including Covert 
Action. A separate hearing was on support to military 
operations. Likewise, a hearing was held addressing the 
Director of Central Intelligence's (DCI) overall budget 
submission, the state of health of the Intelligence Community, 
and to examine the DCI's views and plans for the future of 
intelligence and the Intelligence Community. There were, in 
addition, numerous individual briefings of Members and over 200 
staff briefings on programs, specific activities, and budget 
requests.
    In the schedule of authorizations and the accompanying 
explanatory language, the Committee has discussed numerous 
specific matters related to the fiscal year 2001 budget. In the 
following section, the Committee addresses several issues that 
it believes are particularly important where it has been no 
direct budgetary action.
    Taken as a whole, the Committee's budgetary actions and 
general provisions reflect the Committee's concern that the 
United States is placing undue risks on its armed forces and 
its national security interests by not redressing the many 
crucial problems facing the Intelligence Community.
     In the Human Intelligence (HUMINT) arena, poor 
planning, infrastructure problems, extended requirements for 
military force protection, and unexpected contingency 
operations have all worked to take money from the ``front 
line'' field officers, thus limiting our efforts to rebuild our 
``eyes and ears'' around the globe.
     In the area of imagery intelligence (IMINT), 
despite the oversight committees' exhortations, we are still 
faced with totally inadequate systems planning and investment 
for the tasking, processing, exploitation, and dissemination 
(TPED) of the imagery collection capabilities we are building, 
let alone the capabilities of other future collectors.
     In the area of space-based collection, 
unanticipated technical problems with some satellite programs 
in development will likely cause scheduling delays and cost 
increases. Moreover, an insufficient priority on developing 
cutting-edge technologies ensures that the core mission of 
space intelligence--to collect secrets--will continue to 
languish and become increasing limited.
     In the area of Intelligence, Surveillance and 
Reconnaissance (ISR) assets, we continue to see extensive over-
utilization of very limited, but critical airborne assets, with 
little relief in sight. While planning for deployment of new 
ISR airborne capabilities into the theaters, the Department of 
Defense has taken money from existing, supposedly 
complementary, platforms to pay for future capabilities. The 
result: our overall ISR capabilities and resources are 
decreasing at a time when our military forces are relying on 
them more and more.
     The most serious, immediate problem is with 
signals intelligence (SIGINT) resources. The January ``crash'' 
of National Security Agency (NSA) computers was not the result 
of a terrorist attack or hacker gamesmanship. The problem 
resulted from NSA's lack of resources for new infrastructure 
needs, the mismanagement of outdated Information Technology 
(IT) resources, and the lack of sufficient acquisition 
processes and expertise. This should have come as a surprise to 
no one. Indeed, the Committee has, for at least three years, 
warned NSA and the Intelligence Community of concerns in these 
areas. The Director of NSA has begun efforts to address these 
issues, and his efforts have the Committee's support. Likewise, 
the Committee has taken specific actions within this bill to 
begin to address these issues.
    The Committee's review of this year's budget request has 
included testimony from the Director of Central Intelligence 
(DCI), his senior leadership and the managers of individual 
programs and agencies, as well as leaders from the Department 
of Defense and the military services who use and rely on 
intelligence systems and information on a daily basis. Their 
message has been unanimous and crystal clear: there are not 
enough intelligence resources to meet the immediate needs of 
national security, let alone future needs.
    For the past five years, the Committee and Congress have 
sought to increase the ``top line,'' or overall funding level 
for the Intelligence Community. These increases have ranged 
from significant, to more modest amounts, such as that found in 
this year's recommended authorization. Although Congress has 
acted, it is the Administration's responsibility to build each 
year a healthy intelligence budget that meets national security 
needs. With this in mind, the Committee has also attempted to 
prod the President, the Director of Central Intelligence and 
the Secretary of Defense to re-examine the basic process used 
to put the yearly budget request together.
    The United States cannot continue to use the same processes 
to build the intelligence budgets of the 21st century that were 
used in the Cold War. American interests have changed, new 
threats have evolved and the priority placed on intelligence 
and the role of the Intelligence Community has grown. For the 
President and senior policymakers, intelligence often forms the 
basis for key foreign policy strategies and decisions, and can 
provide insights as to the effect of such decisions. At its 
best, intelligence provides key indications and warning (I&W) 
information that can direct attention to issues and areas 
before crises occur, to allow for appropriate actions to 
provide stability and, hopefully, deter or avoid conflict. Yet, 
despite the need to supply this information, our intelligence 
resources are primarily directed toward the most important 
issues, leaving fewer resources for the critical I&W function, 
especially in areas of the world that could erupt overnight.
    For the military, intelligence is now the basis for and 
organic to everything it does. HUMINT and SIGINT, in 
particular, provide direct and immediate threat data to 
personnel engaged in activities that risk their lives on a 
daily basis: our ground forces in Kosovo, our pilots conducting 
Northern and Southern Watch missions in Iraq, our troops on the 
border between North and South Korea, our forces engaged in 
counternarcotics operations in Latin America, and our Special 
Operations personnel who must enter an area unannounced and 
undetected, and require the friendly face of an intelligence 
officer to give them ``ground truth.''
    As these critical requirements have grown at a rapid pace, 
the intelligence budget has become more and more inadequate, 
with existing resources increasingly drawn off to meet day- to-
day tactical requirements. Global coverage and predictive, 
strategic intelligence have, as a result, suffered. This 
translates into the lack of warning of nuclear tests in India, 
our inability to monitor key facilities suspected of producing 
weapons of mass destruction because assets are focused on 
crisis areas, the bombing of the Chinese Embassy in Belgrade, 
the extreme shortage of ISR assets in key areas of the world.
    Intelligence should be the first line of defense, yet, it 
is not treated as such. Remedying this situation, however, is 
not a task that Congress can, or should, take on alone. Along 
with a new approach to budgeting by the Administration, there 
also must be a Community-wide effort actually to work as a 
``community.''

                       Areas of Special Interest


                   state department security concerns

    The Committee is deeply disturbed over the loss of a laptop 
computer from the allegedly secure workspace of the Office of 
Strategic Proliferation and Military Affairs of the Bureau of 
Intelligence and Research of the Department of State (INR). The 
laptop contained highly classified compartmented information.
    The State Department failed to notify the FBI about the 
loss of the computer until March 22, 2000. On April 17, 2000, 
an article appeared in the Washington Post detailing the 
disappearance of the laptop. Prior to the news story, neither 
the House, nor the Senate, intelligence committees were 
notified of the loss and the potential compromise of highly 
classified intelligence information, as required by Sec. 502(1) 
of the National Security Act of 1947, as amended. The delayed 
notice (up to two months) to the FBI hindered the Bureau's 
investigation. The Committee does not believe that the failure 
by the Department of State and the Central Intelligence Agency 
to provide the required notification was justified.
    The Committee is also troubled by a pattern of problems at 
the Department of State regarding matters of security.
    In February 1998, an unknown man in a tweed sport coat was 
watched as he entered the ``secure'' area of the office of the 
Executive Secretary, which is physically located within the 
Secretary of State's office suite, and walked away with more 
than a few documents containing Sensitive Compartmented 
Information (SCI) material. Although the FBI was advised in a 
timely manner of that theft, the intelligence oversight 
committees were notified by INR of the matter only after news 
stories concerning the incident were published by Time magazine 
and the Washington Post.
    In September 1998, the State Department's Inspector General 
documented a failure of the State Department to protect 
classified intelligence information. State Department officials 
have not responded fully to the Inspector General's 
recommendations. In the Intelligence Authorization Act for 
fiscal year 1999, Congress directed the Inspector General to 
perform a review of the Department's procedures for protecting 
intelligence information within headquarters. The Inspector 
General was also asked to make recommendations based on her 
findings to enhance security.
    In September 1999, the intelligence committees received 
that report. The Inspector General concluded that ``the 
Department of State is substantially not in compliance with the 
DCIDs (Director of Central Intelligence Directives) that govern 
the handling of SCI.'' The Inspector General described a 
situation where unescorted foreign visitors are permitted 
access to the Department. Uncleared maintenance, repair, and 
char force personnel were permitted unescorted access to areas 
where classified intelligence information is handled, 
processed, stored, and discussed.
    Substantial security enhancements were recommended by the 
Inspector General. Most significantly, the Inspector General 
urged the implementation of a visitor escort policy. It was 
noted in the September 1999 audit that although the Bureau of 
Diplomatic Security published visitor escort requirements on 
November 17, 1998, these were rescinded on November 23, 1998, 
on the direct order of the Undersecretary of State for 
Political Affairs. By the time of the publication of the 
Inspector General report, a new escort policy was in effect, 
but the Committee has continuing concerns about its scope and 
enforcement. Additionally, the Inspector General called for 
better control mechanisms for intelligence information, noting 
that the State Department was not in full compliance with the 
applicable DCIDs regarding SCI material.
    In December 1999, a Russian diplomat was arrested outside 
the State Department in connection with the discovery of a 
Russian bugging device in the chairrail of a seventh floor 
conference room in the Main State building.
    Were intelligence information not so important for the 
State Department for the conduct of informed foreign policy, 
the Committee would likely be advocating drastic measures 
cutting off access to highly classified materials. After all, 
the unauthorized disclosure of intelligence information 
jeopardizes lives of intelligence officers and assets and 
compromise multi-billion dollar secret intelligence 
capabilities. Nevertheless, the Committee is hopeful that 
measured responses can accomplish the objective of improving 
security practices at Main State and throughout the Department. 
Serious and meaningful action, however, must be taken and 
compliance with DCID procedures by State Department employees 
and officials must be verified. Moreover, accountability for 
security failures must be real.
    In this regard, the Committee notes that on April 24, 2000, 
Secretary Albright transferred responsibility for protection of 
SCI material from INR to the Diplomatic Security Bureau, which 
was suggested by the State Inspector General in September 1999. 
This step, and others announced by the Secretary, may need to 
be reviewed, but they are at least a recognition that a serious 
situation exists at the State Department with respect to its 
cavalier attitude toward security generally and particularly 
toward intelligence information. It is unconscionable that, as 
the Inspector General found, security of intelligence 
information within INR was not a priority.
    Although ample criticism can be directed toward State 
Department officials, the Committee also notes that the DCI has 
not exercised his authorities in this regard to his utmost. The 
Committee finds it necessary to emphasize again that the DCI is 
obligated under law to protect intelligence sources and methods 
from unauthorized disclosure (50 U.S.C. Sec. 403-3(c)(6)) and, 
further, is responsible for ensuring the establishment of 
security and access standards for managing and handling foreign 
intelligence systems, information, and products (Exec. Order 
12333 Part 1.5(g) and (h), respectively). In this regard, the 
Committee appreciates the DCI's recent commitment to form ``an 
Agency task force to conduct a prompt and thorough inventory, 
review, and risk-assessment of the information resident on the 
missing laptop's hard-drive.'' (DCI letter to the Secretary of 
State, 2 May 2000). Additionally, the Committee looks forward 
tothe DCI's evaluation of ``the need for additional 
improvements in the handling and accountability for classified 
information, particularly Sensitive Compartmented Information, in the 
Intelligence Community.'' The Committee fully expects the DCI to focus 
considerable attention on the State Department, in this regard.
    The Committee also expects the DCI, as part of this 
evaluation, to review and make recommendations about the number 
of positions at the State Department that require SCI-level 
clearances and the appropriate number of SCI facilities (SCIF) 
within the State Department. The Committee requests that the 
DCI submit these recommendations to the Committee prior to 
conference on this bill.
    The Committee also requests that the DCI certify to the 
Committee, in writing, that the State Department is in full 
compliance with all of the DCIDs concerning information 
security, counterintelligence measures, and personnel security, 
as well as any executive orders, regulations, or policy 
directives affecting the protection and handling of classified 
intelligence information.
    Pending the receipt of the DCI's report, including the 
results of his review and recommendations, and receipt of the 
certification of compliance with the DCIDs, the Committee 
recommends a fence of a portion of those funds authorized to be 
appropriated for INR's activities in this bill, and a fence of 
a portion of those funds authorized to be appropriated by this 
bill to the Office of the DCI. The Committee, likewise, 
recommends that additional funding be transferred to the CIA to 
help fund infrastructure needs associated with the detailing of 
INR analysts to the Directorate of Intelligence of the CIA, and 
to reimburse the Department of State for such analysts who will 
be co-located at the CIA. For further elucidation of the issues 
relating to the detailing and colocation of INR analysts, see 
the budget language relating to the CIAP and the general 
provisions section, supra. Finally, because of the attitudes 
related to security procedures and awareness, as previously 
described, and based on several Committee inquiries while 
visiting diplomatic posts throughout the world, the Committee 
is also taking steps to reorganize the management, operations 
and security of diplomatic telecommunications. A discussion of 
these steps can be found within the classified annex.
    It should be noted that the Committee will be conducting an 
investigation of security of classified intelligence 
information at the Department of State. Indeed, the Committee 
has engaged the services of a security and counter-intelligence 
expert to assist in this investigation. The consultant and 
other participants in the investigation will:
          1. Undertake field inspection visits on behalf of the 
        Committee to those State Department components 
        responsible for counterintelligence, protection of 
        intelligence sources and methods, and related security 
        issues;
          2. Review compliance by the State Department with 
        applicable laws, regulations, executive orders, and 
        policy guidance pertaining to counterintelligence, 
        protection of intelligence sources and methods, and 
        related security issues;
          3. Interview personnel from the State Department and 
        other intelligence community elements concerning the 
        effectiveness of counterintelligence, protection of 
        intelligence sources and methods, and related security 
        issue reforms being implemented by the Department of 
        State;
          4. Provide a written report on the materials, 
        measures, and capabilities currently available, and 
        planned to be made available, to the State Department 
        concerning counterintelligence, protection of 
        intelligence sources and methods, and related security 
        issues;
          5. Provide a written report on the status of and 
        implementation of reforms concerning 
        counterintelligence, protection of intelligence sources 
        and methods, and related security issues at the 
        Department of State; and
          6. Recommend to the Committee, in writing, any 
        additional measures that would improve 
        counterintelligence, protection of intelligence sources 
        and methods, and related security issues at the State 
        Department.
    The Committee expects that the report of the investigation 
will consider whether an intelligence information security 
office (IISO) should be established within INR to manage 
intelligence information security practices. Such an office 
could perform the following functions: ensure compliance with 
the DCIDs and all other laws, regulations, and executive orders 
relating to the protection of intelligence information; 
implement and enforce necessary control mechanisms relating to 
access to classified intelligence information; undertake 
counterintelligence measures that enhance the protection of the 
intelligence information and the sources and methods of 
intelligence collection, such as the implementation of 
counterintelligence polygraph examinations; report in a timely 
fashion to the appropriate government entities, including the 
intelligence oversight committees, of any violation of security 
measures that are designed to protect SCI material and sources 
and methods. The office could report to the Secretary and the 
DCI through the Assistant Secretary for INR and be comprised of 
officers detailed from CIA, NSA, and the FBI, who are 
experienced professionals with significant backgrounds in 
security and counterintelligence matters.
    The Committee looks forward to the conclusion in the report 
on whether the creation of an IISO is useful or wise, and 
whether, if created, it would be effective at improving what 
has been characterized by the DCI and Secretary of State as a 
``cultural attitude'' of disinterest in security within the 
Department of State. Such an attitude has over time minimized 
the importance of security, which is ``an inherent, 
inextricable, and indispensable component of all jobs'' at the 
Department of State (Secretary Albright at DoS, 3 May 2000).
    The Secretary of State declared to the employees of the 
Department of State on May 3, 2000, ``If you are not a 
professional about security, you are a failure.'' The Committee 
could not agree more strongly. Actions, however, will be the 
true test of the Department's commitment to improve security, a 
commitment to which the Secretary has personally associated 
herself.

                          Analyst Collocation

    All-source analysis is the sine qua non of intelligence 
production. This category includes intelligence products that 
have been written by analysts who have access to all available 
intelligence information collected on a particular issue or 
area, including human intelligence, imagery, signals 
intelligence, open-source information, and any other data 
collected through other specific technical programs or special 
platforms. All-source intelligence can provide the highest 
quality, most complete assessment of a situation for the 
military commanders and policy makers who face critical 
decisions.
    Within the NFIP, all-source analysis is concentrated within 
the Defense Intelligence Agency and the Central Intelligence 
Agency, although the National Intelligence Council, the 
National Drug Intelligence Center, the State Department's 
Bureau of Intelligence and Research, and the Department of 
Energy all maintain all-source analysis capabilities. In 
addition, many analysts at the so-called ``stovepipe'' 
agencies--such as the National Security Agency and the National 
Imagery and Mapping Agency--perform many all-source analytical 
functions, even if they are not classified specifically as 
``all source analysts.''
    The Committee has for many years promoted the concept of 
Intelligence Community ``corporateness.'' In the 1996 study 
IC21: Intelligence Community in the 21st Century, the Committee 
recommended a more corporate, consolidated approach to 
intelligence, and the reinforcement of the CIA's role as the 
premier all-source analytical agency.
    In order to foster a more corporate approach to all-source 
analysis and to support the DCI's goals for developing new 
analytic methods and investing in people and knowledge, the 
Committee has transferred funds into the Central Intelligence 
Agency Program for the collocation of analysts from State/INR 
at CIA. These analysts are to be located within the CIA's DI on 
a reimbursable basis.
    The Committee also believes that the Community's all-source 
capabilities and expertise may also be enhanced with the 
collocation of NSA SIGINT analysts within the CIA's DI, in a 
similar fashion to NIMA imagery analysts who are deployed there 
today. Therefore, the Committee directs the DCI and the 
Director, NSA, to study the concept of moving some NSA analysts 
to the CIA's DI and to report to the Committee, prior to the 
submission of the fiscal year 2002 budget request, on steps 
that can be taken to effect this. The Committee would prefer 
that such a program be implemented no later than in fiscal year 
2002.
    The Committee believes that all parties will benefit from 
this collocation. The CIA's DI will benefit from the expertise 
in SIGINT and diplomatic collection that the NSA and INR 
analysts will bring with them. Likewise, the NSA and INR 
analysts and analysis can draw upon the knowledge and resources 
of the DI.

                     Oversight of NSA Modernization

    As the Committee's own investigations clearly indicate, and 
as the analyses of the DCI's Senior Acquisition Executive 
(SAE), outside experts, and the new NSA Director confirm, NSA 
is in very serious need of acquisition reform. Acquisition 
problems, in fact, may prevent NSA from developing a good 
modernization plan, implementing, properly estimating the cost 
of modernization, and determining whether more money than 
currently programmed is needed for the Agency and, if so, how 
much.
    NSA was obviously extremely successful for many decades 
against Cold War foes. The telecommunications sectors of these 
adversaries, however, tended to evolve relatively slowly, and 
older forms of communication were rarely, if ever, discarded 
altogether. The U.S. SIGINT enterprise successfully attacked 
these threats with a decentralized resource management and 
allocation process; decentralized, distributed tasking and 
processing; and sometimes with large development programs 
involving industry. During the 1980's budget increases, NSA 
decided to build up its in-house government scientists and 
engineers and the Agency now seems to believe that in-house 
talent can address the rapidly evolving signals environment 
better than outsiders can. Budget problems and processes also 
contributed to the proliferation of small independent 
activities, and this evolution accentuated the traditional high 
degree of local program autonomy, with virtually no effort to 
integrate systems across the SIGINT architecture. The culture 
demanded compartmentation, valued hands-on technical work, and 
encouraged in-house prototyping. It placed little value on 
program management, contracting development work to industry, 
and the associated systems engineering skills.
    Today, an entirely new orientation is required. NSA now 
faces new, more robust challenges, thanks to the explosion of 
the technology and telecommunications industries. Each type of 
communication--radio, satellite, microwave, cellular, cable--is 
becoming connected to all the others. Each new type of traffic 
shows up on every type of communication. Unfortunately, as the 
global network has become more integrated, NSA's culture has 
evolved so that it is seemingly incapable of responding in an 
integrated fashion.
    To tackle this target, NSA cannot remain split into 
multiple, separate collection ``stovepipes.'' It cannot afford 
to allow multiple subcomponents to decide what capabilities to 
build, because the result today can be wasteful duplication and 
crippling gaps in capability. NSA must be organized and 
operated as a single, cohesive enterprise, within a common 
tasking, processing, exploitation, and dissemination framework. 
Building this new system is, by definition, a major undertaking 
that requires careful preparation. NSA must overcome its 
instinct to try to solve all its problems at once, by launching 
out with a series of development efforts without first doing 
the laborious work of defining requirements and developing an 
architecture, end-to-end program planning, life-cycle costing, 
and developing an acquisition strategy. NSA's modernization 
must result in a highly integrated system, and will require a 
very sophisticated systems engineering and program management 
capability--the like of which NSA has not experienced in a very 
long time, if ever. The acquisition model used by NSA must 
include spiral development to manage risk and keep up with the 
rapidly changing signals environment. NSA must also take a hard 
look at the extent to which a relatively small number of 
governmentengineers, however talented, can be expected to keep 
up with the massive and dynamic commercial industry.
    In summary, it seems clear to the Committee that NSA must 
prepare itself for complex, prioritized, carefully timed and 
integrated systems acquisitions that, in aggregate, rival the 
complexity of programs commonly managed by the NRO, the Defense 
Department, and commercial industry. NSA must quickly and 
effectively position itself to make ruthlessly honest 
assessments about in-house development versus contracting out. 
This effort will require a very well thought out acquisition 
plan, so that capabilities can be developed, delivered, and 
integrated as quickly and effectively as possible. The Agency 
must rapidly enhance its program management and systems 
engineering skills and heed the dictates of these disciplines, 
including looking at options to contract out for these skills.
    The Committee believes that the NSA Director and other 
elements of the Agency grasp these imperatives. General Hayden 
has already taken some initial but important steps to implement 
them. The Committee does not underestimate the complexity and 
sheer magnitude of the problems involved in remaking an insular 
institution that has always prided itself, with reason, on its 
ability to get the job done its own way.
    Due to the formidable nature of this problem and the 
potential costs required, and given the stakes involved for the 
nation's security, the Committee believes that a structure of 
competent external oversight must be brought to bear on NSA's 
modernization program. The Committee requests that the DCI's 
SAE prepare and report to the congressional intelligence and 
defense committees, a plan for review, approval and continued 
monitoring of NSA's integrated modernization program. This plan 
should incorporate the views and recommendations of the 
Independent Architecture Panel, which should advise on the 
appropriate acquisition model, and the SAE should participate 
in relevant panel deliberations. The Committee expects this 
oversight to include review of requirements definition, 
architecture, cost estimates, acquisition strategy (including 
the role of industry), and program milestones. The Committee 
believes that such standing oversight should be tailored to 
NSA's needs and should be streamlined to a degree commensurate 
with NSA's demonstrated competence and internal controls. The 
acquisition model selected should enable rapid, perhaps 
sequential, fielding of the integrated architecture, bearing in 
mind the shortcomings in NSA's current development methodology. 
Given the fast turnover in technology, the Committee believes 
that proven commercial model could provide the basis for NSA's 
approach. This report is requested by November 1, 2000.
    This external oversight serves two major purposes. One, it 
can help to force NSA to come to grips with its challenges and 
actually make the reforms that most agree are necessary.
    And two, with such an oversight structure in place, 
Congress and the Executive Branch leadership can allocate 
scarce resources to NSA with more confidence that funds will be 
expended effectively.

                             collaboration

    The Committee is frustrated with the Intelligence 
Community's funereal pace in the area of electronic 
collaboration. In startling testimony, the DCI stated flatly 
that collaboration, which is one of the major thrusts of his 
strategic intent, is being stymied by the parochial interests 
of the intelligence agencies.
    The Committee understands that there are real security 
issues that must be resolved before the DCI's goal of 
unfettered collaboration across the Intelligence Community can 
be achieved. However, the Committee agrees with the DCI and his 
senior advisor for intelligence production, that these security 
issues are being used as an excuse for inaction. In fact, the 
agencies' torpor seems to be due more to fears about sharing 
information and the possibility of relinquishing some 
bureaucratic control over the intelligence production process. 
In all probability, another factor is the disregard 
organizations habitually display for techniques and systems 
that were invented or sponsored by others.
    The Committee notes that DIA has a very successful and 
capable collaboration system embedded in the Joint Intelligence 
Virtual Architecture (JIVA) that is being fielded within the 
defense intelligence community. A National Intelligence Council 
study from two years ago all but endorsed this system as a 
Community standard, and all analyses since clearly indicate 
that JIVA is the best of breed and mature and affordable enough 
for proliferation across the rest of the Intelligence 
Community. JIVA is based on COTS tools, and is structured to 
ensure that the government can always shift to the best 
commercial product and reap the benefits of commercial 
investment and competition.
    The Committee does not have confidence that the current 
approach of attempting to engineer ``interoperability'' between 
disparate systems will produce more than minimal capabilities. 
In fact, the Community's current concept of waiting and working 
towards a ``standard-based interoperability,'' in the 
Committee's view, ignores the realities of commercial 
technology and its pace of development. As a result of these 
attitudes, the Committee doubts that universal standards can be 
developed using the current approach.
    The Committee is even less impressed with arguments 
promoting long-term operational use of the CVW system built 
upon tools developed by the Mitre Corporation. Its president 
has indicated clearly that Mitre's product is not suitable for 
an operational capability, certainly not on an enterprise-wide 
basis.
    Based on these factors, the Committee has taken specific 
actions that can be found in the classified annex. The JIVA 
program manager is encouraged to pursue all reasonable means to 
meet the special needs of each customer, based on these 
actions, and to explore all avenues for incorporating all the 
best commercial tools within the JIVA suite, to provide 
customers, on a cost-effective basis, with as many choices as 
possible for collaboration tools to meet their needs, and to 
seek every possible means to reduce the cost of virtual 
collaboration. The JIVA program manager also needs to explore 
with industry ideas to overcome legitimate security issues and 
to enable management to retain appropriate control over the 
activities of subordinates and thequality of products. In this 
regard, the Committee notes that new business models, such as so- 
called application service provider schemes, might indeed provide means 
to allow users to use multiple tools, as they see fit, while at the 
same time greatly reducing enterprise-wide costs, security risks, and 
the erosion of management controls over analyst interactions.

          tasking, processing, exploitation, and dissemination

    The Intelligence Authorization Act for Fiscal Year 2000 
directed the DCI and the Secretary of Defense to restructure 
the Future Imagery Architecture (FIA) satellite program by 
reducing the number of satellites in the planned constellation. 
Congress directed this action because ample testimony, 
briefings, and reports showed that current plans for improving 
imagery tasking, processing, exploitation, and dissemination 
(TPED) fell far short of the planned expansion of collection 
capacity, from both aircraft and satellites. The report 
accompanying the Act pointed out that it would be a waste of 
the taxpayers' money to buy expensive satellites whose product 
could not be fully utilized. The report indicated that the 
intelligence committees would reconsider the requirement to 
restructure the FIA program based on the administration's 
budget planning for TPED as reflected in the fiscal year 2001 
amendment to the fiscal year 2000 Future Years Defense Program 
(FYDP), and in preliminary plans for the new fiscal year 2002 
FYDP.
    The administration has, indeed, added funding to the 
current FYDP in the fiscal year 2001 budget request. The 
Committee agrees that this figure represents a substantial 
investment. However, it is well short of the range of necessary 
investment reported to Congress by the administration both last 
year and in testimony this year. Moreover, the Deputy Secretary 
of Defense testified that, despite general acknowledgment of 
the need for greater TPED investment, it will be difficult for 
the administration to come up with the money, owing to 
competing priorities within the military services and the 
Intelligence Community. In addition, the Deputy Secretary noted 
that the last budget of an outgoing administration can be 
expected to lack some rigor, and that in the last analysis it 
will be up to the new President and his team to resolve 
difficult issues. A final complicating factor is the DCI's 
reticence about additional major investment in imagery TPED. 
The DCI and his senior staff have expressed concern about 
competing priorities, NIMA's ability to manage a large and 
complex systems acquisition, the share of the TPED funding 
burden that should be assigned to the intelligence community 
vice the rest of the defense budget, and whether the TPED 
requirements are, as yet, adequately defined.
    With respect to NIMA's acquisition management capabilities, 
the DCI's Senior Acquisition Executive, in conjunction with 
staff from the Office of the Assistant Secretary of Defense for 
Command, Control, Communications, and Intelligence, have 
concluded that NIMA has a solid plan and foundation in place to 
remedy its weaknesses, and that, if this plan is faithfully 
executed, NIMA should be able to manage the TPED modernization 
program effectively. Executing such a plan, however, is no 
small task as NIMA does not now have the expertise required, 
and hiring this expertise will require significant effort and 
some changes to legislation.
    The Committee expects that the DCI and the Secretary of 
Defense will ensure that imagery TPED funding requirements will 
be a priority issue for their joint review in the IPRG and EDRB 
processes. The Committee expects also to be informed of the 
administration's intentions with respect to TPED funding in the 
fiscal year 2002 FYDP prior to conference. Finally, the 
Committee hopes that the new administration will take note of 
the seriousness of the TPED issue, and will place a priority on 
increased investments in this, and other, areas.

                IC communications architect/architecture

    The Committee continues to be frustrated by the lack of a 
coherent, cohesive, and productive approach to solving the 
Intelligence Community's (IC) systems interoperability and 
communications problems. It is clear that the IC's office of 
Chief Information Officer has not been able to force the 
disparate IC organizations to work together to develop a 
communications architecture plan that provides for a truly 
integrated communications network that relies on commercial 
industry infrastructure, protocols and enforced standards.
    The Committee believes the importance of a networked and 
interoperable IC cannot be overstated. Every function of 
intelligence tasking, processing, exploitation and 
dissemination (TPED) relies on communications. The IC must have 
a communications architecture that provides the basis for 
inter-IC collaboration and the framework from which 
intelligence consumers, such as the Department of Defense, can 
seamlessly ``reach into'' the community for intelligence 
support to their missions. The Committee believes that the IC 
must rapidly adopt commercial systems and technologies to 
create a common interoperable wide-area information transport 
network to meet all Community needs.
    Clearly, before the Community can bring together the 
various IC organizations into such a network, a professional 
communications architect must be designated and assigned. This 
architect must be provided with the necessary resources and 
authorities to design, construct and enforce the standards of 
an IC communications network. Such an architect's 
responsibilities should include providing the Community with a 
detailed communications architecture plan, complete with 
transmission and interoperability standards, within which each 
IC organization must operate.
    The Committee believes that the resulting network must 
integrate all IC organizations and provide the physical and 
virtual framework for the IC to conduct its various 
intelligence missions and interface with its external 
customers. The Committee further believes that the architect 
should determine whether the existing Advanced 
Telecommunications Network (ATN) is compatible with the future 
network architecture and whether it should be established 
quickly as a common initial communications baseline for all 
National Foreign Intelligence Program (NFIP) agencies. However, 
the Committee believes that the Intelligence Community 
Communications Architect (ICCA) should devise the most cost and 
performance effective communicationsnetwork possible, using 
commercial telecommunications infrastructures where possible and 
logical. In this regard, the Committee urges the ICCA to examine 
outsourcing the ATN network.
    The Committee's recommendations are based on the impressive 
work done by the Defense Science Board task force on DoD 
communications. Their report of February 2000, concludes that 
existing and future military communications will be incapable 
of meeting DoD customer needs and makes a case that the 
government should rapidly and competitively outsource its 
communications to commercial service providers, laying the 
foundation for full interoperability and improving capabilities 
enormously. The task force report contends that the commercial 
sector is rapidly converging to a fully integrated, 
interoperable, multi-media (voice, data, video, etc.) network 
based on Internet Protocols (IP). The implication is that 
packet-switching technology and protocols will soon enable 
high-quality real-time services (such as voice and video) and 
thereby eliminate the need for any vestiges of point-to-point 
circuit- switched technology. In the words of the task force, 
``the shift from a point-to-point to a common-user 
infrastructure has become more aggressive. As the Internet 
provides services to support both real-time and non-real-time 
applications, the convergence of our national and international 
telecommunications infrastructure to a common-user, packet-
switched, dynamically shared network of networks will 
accelerate.''
    The task force argues that this single dominant internet is 
robust and redundant, and that adequate security can be 
achieved through the application of modern information security 
technology and the use of virtual private networks.
    Therefore, the Committee directs the DCI to create and 
staff the position of IC Communications Architect (ICCA), 
providing this individual direction to determine whether and 
how the IC should implement the DSB's commercial communications 
recommendations. The DCI is to provide the necessary formal 
governance authorities to the ICCA to plan the IC 
communications network and its associated commercially based 
standards and protocols. The ICCA is authorized to create a 
professional communications team.
    No later than six months after the enactment of this act, 
no funds for wide area communications shall be obligated or 
expended by any program manager without the approval of the 
ICCA. A formal IC network design and plan to achieve such will 
be provided to the Congress not later than February 1, 2002.
    Although the Committee is not prepared, at this time, to 
direct the DCI to empower the ICCA with specific 
responsibilities and authorities, it requests the DCI to 
provide the Committee with his recommendations for such, prior 
to conference on the fiscal year 2001 bill. The Committee 
believes the ICCA, at a minimum, should:
    1. Have complete authority and control over expenditures 
for any and all NFIP communications infrastructures to ensure 
the coordinated development and maintenance of an integrated IC 
communications network. The ICCA should, to the maximum extent 
possible, work with and include all tactical intelligence 
entities in the development of the IC communications 
infrastructure.
    2. Have complete authority and control over policies for 
any and all Intelligence Community information management 
policies, relating to the wide area network.
    3. Maintain and update the IC's communications 
architectural plan. The Architect should direct the commercial 
teams to develop the initial architecture in close coordination 
with the NIMA TPED Pre-Acquisition activities and with the CIA 
(see related text in the classified annex), but should ensure 
the network solution satisfies the broader SIGINT, MASINT, and 
other intelligence related communications requirements.
    4. Address the Information Management requirements for the 
community and include a plan for implementation.
    5. Develop and implement central control authorities, 
management structures, processes, and mechanisms that ensure 
authorities and control can be effectively maintained. This 
should include execution of commercial communications contracts 
for the common good of the community.
    6. Develop governing policies, promulgate guidance, and 
ensure compliance with an IC Information Management System. The 
Architect should have the requisite authorities to carry out 
these duties for all aspects of Information Management for the 
network and should ensure information can be efficiently 
exchanged and that collaboration is enabled, etc.
    7. Establish a senior advisory board that includes 
representatives of ASD/C3I, CMS, CIO Executive Council, NSSA, 
NRO, NIMA, NSA, DIA, and CIA to ensure all communications 
network requirements are considered.
    8. Establish a team to review expenditures for 
communications between and among all intelligence community 
facilities. These funds will be identified for consolidation 
and centralized execution.
    9. Develop a centralized process for requirements 
development and programmatic planning for the community.
    The Committee believes this issue is a critical one and 
will monitor efforts in this area closely. Additional details 
related to this issue can be found in the classified annex.

                  State of Defense Human Intelligence

    The Defense HUMINT Service was established in 1995, 
consolidating almost all Department of Defense human 
intelligence activities--both clandestine and overt--into a 
single service. Five years later, DHS has progressed beyond the 
``growing pains'' stage and can be considered an established, 
if not yet mature, organization.
    Overall, the Committee finds that the state of defense 
HUMINT is ``acceptable'' and improving. The Committee agrees 
with the authors of the recently released ``Clapper Study''* 
that DHS has overcome many organizational and resource-related 
hurdles to become greater than the sum of its parts--although 
there are still many problems and challenges facing defense 
HUMINT that the Intelligence Community must address.
---------------------------------------------------------------------------
    *Office of the Secretary of Defense, Command, Control, 
Communications and Intelligence (OSD/C31) Review of Defense Human 
Intellligence, March 2000. Lt. Gen. James R. Clapper (USAF, Ret.) led 
the study team.
---------------------------------------------------------------------------
    On the positive side, DHS has provided a single point of 
planning and coordination for almost all clandestine defense 
HUMINT. Several years ago, the Committee issued a study (IC21: 
Intelligence Community in the 21st Century) that included a 
recommendation to consolidate all U.S. clandestine human 
intelligence--including clandestine defense HUMINT--into a 
single Clandestine Service. Neither CIA nor DoD has taken the 
initiative to create such an organization, but the Committee 
has noticed a gradually improving level of cooperation between 
the operational elements of CIA and DHS--particularly among 
officers in the field.
    The Committee believes, however, that in order to maintain 
a viable defense human intelligence collection activity (not to 
mention improve its performance), a host of current and future 
problems must be resolved. Included in this list are issues 
specific to DHS and DoD that were addressed in the Clapper 
Study--the Committee believes that these are currently being 
addressed by the appropriate elements within DoD--and the 
Committee will continue to follow the progress made on the 75 
individual recommendations.
    Further, the Committee believes there are several issues 
falling outside the sole jurisdiction of DHS and DoD that the 
Intelligence Community must address in order to ensure defense 
HUMINT viability.
    The first of these is the level of support defense HUMINT 
provides to the military. As the testimony of the unified 
command J-2's before the Committee earlier this year indicates, 
human intelligence is highly valued, but HUMINT coverage is 
nonexistent or in short supply in many areas of the world where 
the United States may find it necessary to deploy troops.
    Efforts to enhance HUMINT coverage are steps in the right 
direction, but, as testimony demonstrates, it's just a start. 
The Committee believes that the need for additional DHS 
resources can be better articulated and defended. At a time 
when some in Congress are questioning the need for new DAOs and 
the coverage they will provide, the Director of Central 
Intelligence, the Secretary of Defense, and other seniors in 
the Intelligence Community must provide the leadership that has 
been lacking to this point.
    Finally, the Committee believes that there needs to be a 
long-term strategic plan for defense human intelligence, and 
that this must be part of the overall Intelligence Community 
strategic plan for HUMINT. On one level, this involves DHS and 
DIA working with the Secretary of Defense, the unified 
commands, and the Joint Chiefs of Staff. But the Director of 
Central Intelligence and the CIA's Deputy Director for 
Operations must fulfill their own responsibilities for 
leadership of the Intelligence Community and U.S. HUMINT, 
respectively, and working with the Director of DHS develop a 
strategic plan for HUMINT that fully incorporates the 
requirements and collection capabilities of defense human 
intelligence.

                     Military Pay and Civilian Pay

    The fiscal year 2001 budget request for the NFIP includes 
requests for military and civilian pay that are grossly 
misleading.
    Military pay costs are based on a specific authorized 
strength. However, the actual fill rate of these billets has 
reached unacceptable levels, and the forecast is for continued 
decline. The Committee has examined in detail the fill rates in 
two accounts: the General Defense Intelligence Program (GDIP), 
and the Consolidated Cryptographic Program (CCP). In the GDIP, 
the March 2000 reported fill rate was 85.6 percent--a 
significant decline from the 1998 level (94.2 percent). In the 
CCP, the March 2000 reported fill rate was 88 percent, and the 
actual assigned rate was 81 percent. The costs to the programs 
of these empty billets--which must still be paid for--is 
significant.
    In both accounts, the percentage of filled billets will 
continue to decline due to decisions by the services to fill 
joint billets at substantially the same level as regular 
service positions. National-level intelligence agencies draw a 
significant portion of their military support from joint 
billets--billets the services had previously filled at a higher 
level. The Committee is under no illusions that the 
intelligence community is alone in bearing the impact of hollow 
personnel authorizations--finding the Army, Navy, Marine Corps 
and Air Force personnel to staff authorized positions is a 
serious problem for the services themselves and all of the 
defense-related organizations they support.
    The Committee can accept--has accepted in the past--that 
authorized military positions within the NFIP will always 
outnumber the actual personnel that fill them. An average fill 
rate of 90 percent or above is a risk that can be managed. The 
Committee will not accept fill rates that are moving to the 75 
percent level, or lower, across the Intelligence Community.
    In response to the current problem (and the future trend) 
in this area, the Director of Central Intelligence has directed 
those intelligence programs with large numbers of military 
personnel to look at converting military billets into civilian 
billets where that is feasible. Although this action may be 
necessary to address the immediate crisis, the Committee is 
concerned about its long-term impact on the Intelligence 
Community.
    One problem associated with lowering the percentage of 
military positions within the NFIP is the resulting loss of 
military knowledge and lines of communication (both official 
and unofficial). Any erosion in these areas will only lead to 
intelligence gaps and future failures.
    A second problem with the proposed remedy is the civilian 
system itself. The Department of Defense and the Intelligence 
Community are finding it increasingly difficult to recruit and 
retain civilian personnel--especially in this economy. Add to 
this the fact that the existing intelligence workforce is now 
crowded at the top of the government grade scale, the rising 
costs of the Federal Employee Retirement System (FERS) and 
health insurance--and the result is a bill for civilian pay 
that is approaching (or in some cases, exceeding) 50 percent of 
the total budget. This trend in civilian pay is not 
sustainable.
    The Committee believes that a long-term effort is required 
to address this problem. Therefore, in order to assist its 
oversight in this area the Committee has requested a report 
from the Deputy Director of Central Intelligence for Community 
Management on: (1) the scope of the current problems in the 
NFIP associated with military and civilian personnel 
structures; (2) the future trends for both; (3) all possible 
remedies; and (4) the pros and cons of each. This report is due 
no later than 1 January 2001.

         nfip congressional budget justification books (cbjb s)

    The Committee has become increasingly frustrated with the 
lack of detail provided in the project descriptions in the 
National Foreign Intelligence Program (NFIP) CBJBs. Further, 
the Committee believes that the financial management practices 
at some NFIP agencies are so inadequate that specific project-
level financial information is not even well known corporately. 
For example, in preparation for the budget authorization, the 
Committee had to, once again ask representatives from CIA and 
NSA to provide additional programmatic information on their 
systems development activities--basic information that 
apparently was not readily available.
    If NFIP agencies are unable to provide detailed financial 
data for the congressional oversight process, the Committee 
questions whether they have the detail necessary to make sound 
investment decisions. Clearly, the NFIP agencies need greater 
insight into their financial obligations and the capabilities 
that they are developing. NSA's baseline activity, for example, 
identified many areas of duplicative development, as well as 
lack of investment in key strategic areas. Yet, due to the lack 
of detail, the CBJB did not provide this information. The 
Committee notes that, at least at some agencies, internal 
financial management practices seriously complicate this 
process (see item on Reprogramming and Transfers). Yearly 
submission of a more detailed description of systems 
development activities and their associated budget will benefit 
congressional oversight, the DCI budget management process, and 
internal agency investment processes. The Committee believes 
the NFIP CBJBs should more closely mirror the level of detail 
provided in the Joint Military Intelligence Program 
Congressional Justification Books and in the Department of 
Defense Justification of Estimates documents.
    The Committee, therefore, expects a change to the format 
and content of the NFIP budget submission. Specifically, the 
Committee wants all future NFIP CBJBs to provide the following 
information on each project valued at $1.0 million or more 
(including systems developed by government personnel):
           project mission description and budget item 
        justification;
           key performance characteristics and 
        requirements;
           organizations providing management 
        oversight;
           customers and products associated with the 
        project;
           contract information;
           budget breakout by program element number 
        (RDT&E, Procurement, O&M) for the two proceeding fiscal 
        years, the budget year, the FYDP, and cost to complete;
           civilian and military manpower numbers and 
        costs;
           program highlights/planned program by type 
        of funding (RDT&E, Procurement, O&M) for the two 
        preceding years, the budget year, and one year beyond 
        the budget year;
           project budgetary change summary and 
        explanation;
           related program funding summary; and,
           the project milestone schedule.

                 reprogramming and transfers within cia

    This year, during the course of the Committee's oversight 
of CIA stations and bases overseas, significant and deleterious 
movements of money from activities at stations and bases for 
initiatives at CIA headquarters were discovered. The cumulative 
impact of these actions substantially changed the intent and 
the effect of the budget for fiscal year 2000 as enacted.
    The National Security Act of 1947 (50 U.S.C. 401 et seq.), 
which created CIA, imposed restrictions upon the movement of 
appropriated funds within and between intelligence accounts. 
The Committee is concerned that the practices of CIA may not 
comply with the letter or the spiritof the Act. The Committee 
notes that similar problems also are evident in other NFIP programs; 
however, the impact seems to be most pervasive within the CIA, 
especially in terms of the effect on ``core'' mission.

Reprogramming

    For movement of funds from one intelligence activity to 
another within an account, section 504(a)(3) (50 U.S.C. 
414(a)(3)) of the National Security Act requires that:
          (A) the activity to be funded is a higher priority 
        intelligence or intelligence-related activity;
          (B) the need for funds for such activity is based on 
        unforeseen requirements; and
          (C) the Director of Central Intelligence, the 
        Secretary of Defense, or the Attorney General, as 
        appropriate, has notified the appropriate congressional 
        committees of the intent to make such funds available 
        for such activity.
    The movement of money from one activity to another within 
an intelligence account has been made subject to some 
accommodation between the agencies and Congress. Heretofore, 
for example, Congress has allowed the reprogramming of money 
below a certain dollar threshold to proceed without formal 
notification to Congress. The agencies, in turn, have solicited 
the approval of Congress for certain reprogrammings that 
involve matters of specific congressional interest. On 
occasion, furthermore, Congress has exercised its discretion to 
approve the reprogramming of funds under circumstances that do 
not meet the strict requirements of section 504. Unlike the 
agencies, which are bound by the terms of that section, 
Congress has constitutional authority for exercising such 
discretion.
    This year, unfortunately, various CIA officials have 
attempted to assert that the substantive requirements of 
section 504 may not apply to reprogrammings below the monetary 
threshold for notification to Congress; that the exercise of 
congressional discretion in certain reprogrammings has somehow 
excused CIA from compliance with section 504 in its own 
movements of money; and that the plain meaning of the terms 
``unforeseen requirements'' and ``higher priority'' is beyond 
the ken of those in CIA charged with moving money. These 
assertions threaten to disrupt the system for compliance with 
section 504 that, until recently, had appeared to work easily 
and well. These assertions also challenge the ability of 
Congress to oversee the execution of an intelligence budget as 
enacted. They invite a strong, corrective response.
    The Committee has asked CIA's Inspector General to 
investigate whether CIA has complied with section 504 in its 
reprogramming practices and procedures. In the meantime, to 
provide additional clarification in this matter, the Committee 
notes that (a) at no time has Congress authorized the CIA or 
any other intelligence agency to ignore the requirements of 
section 504 that a reprogramming be for a higher priority 
activity and that it be based upon unforeseen requirements; (b) 
at no time has Congress designated the movement of money within 
the agencies as an ``internal'' matter beyond congressional 
oversight authority; and (c) Congress remains responsible for 
ensuring that appropriated funds are executed by the 
intelligence agencies in a manner that is effective and lawful.

Transfers

    The National Security Act also restricts the movement of 
appropriated funds between intelligence accounts. To transfer 
funds between accounts within the National Foreign Intelligence 
Program, section 104(d) of that Act requires, among other 
things, that
          (A) the funds * * * are being transferred to an 
        activity that is a higher priority intelligence 
        activity; and
          (B) the need for funds * * * for such activity is 
        based on unforeseen requirements * * *.
    Like reprogramming under section 504, transfers also 
require notice to Congress. The requirements for transfers, 
like those for reprogramming, provide some check on the 
movement of money and some means of ensuring that Congress is 
aware of what movements take place. The procedures for 
transfers under section 104(d) have, until recently, worked 
easily and well.
    This year, the Intelligence Community attempted to transfer 
funds to CIA and to another agency under standards other than 
those of section 104(d). The Committee received first notice of 
the proposed transfer as a part of the general budget request 
for fiscal year 2001. In a subsequent letter, the Community 
Management Staff described the transfers as necessary for 
various ``high priority'' activities and requested that the 
Committee ``formally endorse'' the transfer in its report on 
the authorization bill for fiscal year 2001. Nowhere in these 
communications, or in briefings on the transfer, was there a 
basis provided for concluding, as required under section 
104(d), that these transfers are in response to unforeseen 
requirements. There was also no evidence provided that the 
additional, procedural requirements of section 104(d) have been 
satisfied.
    The circumstances of this particular transfer are 
complicated and unique. Some of this movement of money, for 
example, may actually be a reprogramming under section 504 and 
not a transfer. As already noted, however, the National 
Security Act provides standards for the movement of funds 
within and between intelligence accounts. The standards for 
transfer, like those for reprogramming, facilitate 
congressional oversight. Their abrogation in this case is 
unjustified. For these reasons, and on substantive grounds, the 
Committee has not approved this movement of money.

           defense advanced research projects agency (darpa)

    In response to a question from the Committee, the 
Department of Defense stated ``it may be appropriate to 
reexamine the reporting of selected DARPA projects under JMIP 
or TIARA, so as to gain a better understanding of impending 
technologies and their possible impacts on current programs. We 
would need to do an evaluation to see what has changed and 
whether this would be beneficial to all users.''
    The Committee agrees with this position and requests the 
Assistant Secretary of Defense (Command, Control, 
Communications and Intelligence) to conduct such an evaluation 
and report back to the defense and intelligence committees no 
later than December 1, 2000. If the Department decides that it 
is appropriate to report DARPA intelligence-related projects 
within the JMIP or TIARA accounts, the Committee asks these be 
appropriately identified in the fiscal year 2002 intelligence 
budget request.

                  Joint Military Intelligence Program


RC-135 and U-2 operations and maintenance: No budgetary change

    The budget request contained a total of $373.1 million for 
operations and maintenance of the RC-135 and U-2 aircraft 
fleets.
    The committee is concerned that funding for many 
Intelligence Community programs, including intelligence 
surveillance and reconnaissance (ISR) aircraft are regularly 
transferred from the programs for which funds were authorized 
and appropriated to fund shortfalls in other programs, often 
not related to ISR requirements. The committee understands the 
theater and functional Commanders in Chief have stated that 
their number one shortfall is in ISR aircraft and systems. The 
committee is concerned that transferring funding, particularly 
O&M funding, from ISR aircraft to fund non-intelligence 
programs exacerbates the CINCs' ISR shortfalls.
    Therefore the committee designates the RC-135 and U-2 
programs as congressional interest items.

Commercial off-the-shelf-receiver development: +$1.0 million

    The budget request included $95.7 million in PE 35885G for 
development of tactical cryptologic systems.
    The committee is concerned by the lack of a true commercial 
off-the-shelf (COTS) signals intelligence (SIGINT) receiver 
that is based on open-architecture standards established by the 
American National Standards Institute (ANSI) and the 6U Versa 
Module Europa (VME) backplane. The Department of Defense has 
stated that all future signals intelligence systems will be 
COTS based. However, most SIGINT developments the Department is 
pursuing are based wholly, or in part, on custom approaches 
that are not interchangeable at the board level. The committee 
is further concerned that use of these customized approaches 
discourages competition, minimizes the impetus to utilize the 
COTS marketplace, reduces the industrial base and forces more 
expensive solutions.
    The committee is aware of a small business development that 
has produced a true COTS receiver solution for several Defense 
Cryptologic Program needs. The committee notes that this 
solution is cost-effective and based completely on ANSI and VME 
standards, thereby allowing for true ``plug and play'' use 
between systems. The committee also notes that the Joint SIGINT 
Avionics Program Office has sought to use this technology as a 
commercial replacement for one of its custom applications. 
However, there is no funding in the budget request to pursue or 
procure this commercial solution.
    The committee is aware of another innovative small business 
development using emerging commercial silicon germanium 
technology and supports rapid application of this leading-edge 
commercial technology for defense applications.
    Therefore, the committee recommends an authorization of 
$97.7 million in PE 35885G, an increase of $1.0 million for 
development of the COTS VME receiver technology for SIGINT 
applications, and an increase of $1.0 million for development 
of commercial silicon germanium integrated circuits for defense 
and intelligence applications.

Eagle vision commercial imagery: +$6.0 million

    The budget request contained $10.0 million in operations 
and maintenance, defense-wide, for the National Imagery and 
Mapping Agency (NIMA) to purchase commercial data.
    The committee notes the successful Air Force operation of 
the Eagle Vision commercial imagery ground station, which has 
resulted in timely, unclassified imagery support to the theater 
commanders-in-chief (CINCs). Much of this imagery has been 
unique and could not be provided by other technical means due 
to higher priorities. The committee believes that there are 
insufficient funds to meet the CINCs' commercial image and 
mapping needs and, therefore, recommends $16.0 million in 
operations and maintenance, defense-wide, an increase of $6.0 
million, for purchasing Eagle Vision commercial imagery.

Defense airborne reconnaissance program (DARP), line 56: +$78.1 million

    The budget request contained $165.5 million for various RC-
135 and U-2 aircraft modifications but included no funds for 
RC-135 trainer aircraft, an updated C-135 operational flight 
trainer, RC-135 global air traffic management (GATM) upgrades, 
or the theater airborne warning system (TAWS) for the RC-135 
Rivet Joint (RJ).
    The committee notes that the theater and functional 
commanders-in-chief (CINCs) have repeatedly testified that 
their intelligence, surveillance and reconnaissance (ISR) 
requirements, particularly those met by ISR aircraft such as 
the RC-135 and U-2, are not being satisfied due to the limited 
number of these aircraft. The committee understands that the 
Air Force does not havea dedicated RC-135 aircrew training 
aircraft and that this deficiency contributes to the limited number of 
aircraft available to meet CINC requirements. To increase the 
availability of RC-135 mission aircraft to the CINCs, the committee 
recommends an increase of $44.0 million to modify two C-135 aircraft 
into an RC-135 trainer aircraft configuration.
    The current C-135 operational flight trainer (OFT I) is the 
aircraft simulation training device for the RC-, OC-, WC-, and 
TC-135 pilots at Offutt Air Force Base. The committee 
understands that OFT I is obsolete due to its outdated engine 
and aircraft avionics configurations, and that an OFT II would 
provide training for aircrews to operate the re-engined and 
updated avionics C-135 model aircraft. The committee notes that 
the Air Force Chief of Staff has included the procurement of 
OFT II among his top five unfunded requirements for fiscal year 
2001. Therefore, the committee recommends an increase of $6.5 
million for OFT II and $2.5 million to equip OFT II with motion 
simulation thereby improving aircrew training and readiness on 
the various C-135 aircraft models.
    RC-135 GATM upgrades include: interference resistant 
navigational receivers, global positioning system upgrades, a 
traffic collision and avoidance system, radios to permit 
reduced vertical separation between aircraft during Atlantic 
Ocean transit, cockpit voice recorders, and flight management 
system upgrades. The committee understands that, without these 
upgrades, RC-135 aircraft will be restricted from flying the 
most direct and fuel-efficient ocean routes and altitudes, will 
be subject to critical landing-phase navigational radio 
interference, and will not be equipped with the Secretary of 
Defense-directed safety modifications until after fiscal year 
2005. To meet these vital needs, the committee notes that the 
Air Force Chief of Staff has included RC-135 GATM upgrades 
among his unfunded requirements for fiscal year 2001, and 
consequently, recommends an increase of $28.4 million for this 
purpose.
    The TAWS significantly improves the accuracy of ballistic 
missile warning on RC-135 RJ, a tactical reconnaissance 
aircraft. In its report on H.R. 1401 (H. Rept. 106-162) for 
fiscal year 2000, the committee recommended an increase of 
$17.3 million for the RC-135 RJ TAWS and believes that 
continued integration of these suites is critical to tactical 
missile defense warning. Therefore, the committee recommends an 
increase of $10.0 million for continued procurement and 
installation of TAWS suites on the RC-135 RJ aircraft.
    To consolidate RC-135 modifications in DARP, line 56, and 
U-2 modifications in DARP, line 80, the committee recommends a 
transfer of the $5.1 million budgeted for RC-135 aircraft 
modifications in DARP, line 80 into this budget line; and a 
transfer of the $18.3 million budgeted for U-2 aircraft 
modifications in this line into DARP, line 80. This transfer 
results in a $13.2 million decrease to this line and an 
increase of $13.2 million in DARP, line 80.
    In total, the committee recommends $243.7 million for DARP, 
line 56, an increase of $78.1 million for RC-135 modifications.
    Finally, the committee is concerned about the Department of 
the Air Force's budget plan for the RC-135's joint signals 
intelligence avionics family (JSAF) upgrades and notes that the 
request would budget for a single JSAF suite for the RC-135 but 
that additional suites are not planned until fiscal year 2005. 
Without full and continuous funding for this upgrade, the 
committee understands the first system, if installed onto the 
RC-135, would result in a unique RC-135 aircraft configuration 
which would increase unit support costs for that aircraft. 
Accordingly, the committee believes the new JSAF system should 
continue development and testing in the RC-135 systems 
integration laboratory and on the U-2 aircraft until the 
Department of the Air Force budgets to upgrade all 16 RC-135 
aircraft.

Rivet joint mission trainer: +$15.5 million

    The budget request contained $12.8 million for RC-135 
equipment procurement but included no funds to provide an 
enhanced field exportable training system (EFETS). The 
committee understands that the procurement of an EFETS would 
improve training and readiness by allowing RC-135 crews at 
forward operating bases to use existing post-mission ground 
data processing system equipment to function as a Rivet Joint 
Missions Trainer (RJMT). Since procurement of an additional 
RJMT for these forward locations would not be required, the 
committee notes that EFETS would save the Air Force $27.4 
million. The committee notes that the Air Force Chief of Staff 
has included $15.5 million for the EFETS among his top five 
unfunded requirements for fiscal year 2001.
    Consequently, the committee recommends $28.3 million, an 
increase of $15.5 million for procurement of an EFETS.

Army tactical unmanned aerial vehicles: +$4.0 million

    The budget request contained $29.4 million in PE 35204A for 
tactical unmanned aerial vehicles (TUAV).
    The committee notes that the Army just completed a 
successful competitive selection for an off-the-shelf TUAV. The 
committee notes that the Army will place increasing reliance on 
its TUAV and needs to field the best possible system including 
sensors.
    The committee recommends authorization of $33.4 million in 
PE 35204A, an increase of $4.0 million for preplanned product 
improvements and sensor development.

Marine corps dragon warrior unmanned aerial vehicle: +$5.0 million

    The budget request contained no funding in PE 35204M for 
Marine Corps close range tactical unmanned aerial vehicles 
(UAV).
    The committee notes that the Marine Corps Warfighting 
Laboratory (MCWL) is developing the Dragon Warrior, a low cost, 
small UAV that combines the speed of a fixed-wing UAV with some 
operational characteristics of a rotary wing UAV. The committee 
is aware that Dragon Warrior is being developed to carry a 
variety of payloads that are currently being examined by the 
MCWL to provide the Marine Corps with a highly flexible, close 
range reconnaissance capability that will enlarge the area of 
influence of a small expeditionary force.
    The committee recommends authorization of $5.0 million in 
PE 35204M, an increase of $5.0 million, for Dragon Warrior.

Manned reconnaissance systems: +$8.0 million

    The budget request contained $27.5 million in PE 35207N for 
manned reconnaissance systems, including $25.3 million for the 
development of the Shared airborne reconnaissance pod (SHARP) 
electro-optic system and technologies.
    The committee has fully supported the SHARP program to 
dramatically increase real-time tactical reconnaissance 
capabilities. The committee is aware of commercial developments 
in large focal length optics that will increase standoff ranges 
for tactical reconnaissance systems and developments in EO 
framing processing techniques that will provide for real-time 
precision strike targeting. The committee is also aware that 
emerging solid-state shutter technology can replace existing 
mechanical focal plane shutters to increase further existing 
and future EO camera performance and reliability while reducing 
operations and maintenance costs. The committee believes this 
technology should be incorporated into all SHARP camera 
applications.
    Therefore, the committee recommends $35.5 million in PE 
35207N, an increase of $5.0 million for long-range optical 
sensor technology and precision strike improvements, and $3.0 
million for development of a solid-state shutter mechanism that 
can be retrofitted on current and built into future framing 
array cameras.

F-18 Shared airborne reconnaissance pod: +$18.0 million

    The budget request contained $248.1 million in PE 24136N 
for continued development of capabilities for the F/A-18 
aircraft.
    The committee has supported the Shared Airborne 
Reconnaissance Pod (SHARP) efforts to provide the F/A-18 
aircraft with an enhanced tactical reconnaissance capability 
that will also be applicable to other combat aircraft. The 
committee notes the recent successful demonstration of the 
SHARP risk-mitigation project for the F-14 Tactical Airborne 
Reconnaissance Podded System (TARPS) Completely Digital (CD) 
system that was employed by the battle group U.S.S. John F. 
Kennedy. This demonstration clearly indicated the force 
multiplying capability provided by real-time imagery system and 
the committee supports continuation of this effort.
    The committee is concerned, however, that the funding 
requested for SHARP is insufficient to support completion of 
sensors for the fiscal year 2003 initial operational capability 
(IOC). The committee notes that this shortfall in funding 
results in an increase in cost of tactical reconnaissance 
support by extending use of the less capable F-14 TARPS.
    Therefore, the committee recommends authorization of $266.1 
million in PE 24136N, an increase of $18.0 million for the 
development of the SHARP F-18 tactical reconnaissance 
capability to maintain the current IOC.

Global hawk: $12.0 million tuck

    The budget request contained $109.2 million in PE 35205F 
for endurance unmanned aerial vehicles (UAV), including $103.2 
for continued development of the Global Hawk UAV.
    The committee supports the Global Hawk development and 
believes that this air vehicle has the potential for providing 
intelligence, surveillance and reconnaissance support to 
military customers, complementing the current U-2 operations.
    The committee notes that due to a crash of one air vehicle, 
and a runway accident of another, there are no electro-optic/
infra-red (EO/IR) sensors to continue test and evaluation of 
the UAV. The committee believes it is important to procure 
sensor sets to replace those lost to the accidents. Further, 
the committee is aware of unobligated and unexpended funding 
from prior year endurance UAV appropriations that can be used 
to purchase replacement sensors and continue the Global Hawk 
engineering and development in fiscal year 2001.
    Further, the committee is aware of new generation radar 
technologies that could vastly increase Global Hawk synthetic 
aperture radar (SAR) imaging and moving target indicator (MTI) 
capabilities at comparable costs to the current sensors. The 
committee is also aware of digital recording devices that offer 
superior performance and reliability over current devices. With 
respect to SAR and MTI capabilities, current state-of-the-art 
active electronically steered array (AESA) antenna developments 
offer a two-fold increase in range, resolution, and revisit 
performance over the current Global Hawk radar. Further, the 
cost of these new radars appears to be comparable to the 
current phased array radars. In terms of recording systems for 
high volume imagery sensors such as those on the Global Hawk, 
solid state devices have a major reliability advantage over 
current tape recording devices. They have no moving parts, nor 
do they require a tape that must be threaded around capstans. 
The cost of solid state recording devices is dramatically 
decreasing while the data recording rates and density are 
increasing. The committee believes that such devices should be 
integrated into the Global Hawk at the earliest opportunity.
    Therefore, the committee recommends authorization of $109.2 
million in PE 35205F for endurance UAVs. Of the amount 
authorized, the committee directs the $12.0 million be used 
specifically for purchasing two EO/IR replacement sensors for 
the Global Hawk aircraft. Further, the committee directs that 
the Assistant Secretary of Defense for Command, Control, 
Communications and Intelligence provide a report to the defense 
and intelligence committees assessing the utility of developing 
and integrating modular AESA radars and solid state recording 
devices on the Global Hawk. This report should be provided no 
later than 1 February 2001.

Multifunction self-aligned gate active array antenna: +$7.0 million

    The budget request contained $113.1 million in PE 35204N 
for tactical unmanned aerial vehicles, but included no funding 
to continue development of the multi-function self-aligned gate 
(MSAG).
    The committee is aware that the MSAG technology 
successfully demonstrated ability to transmit and receive full-
motion video and communication. This new form of antenna, with 
no moving parts, offers reduced life-cycle costs and enables 
production of light, conformal, multi-beam antennas for 
tactical unmanned aerial vehicles (TUAV) and associated 
systems.
    The committee recommends authorization of $126.1 million, 
an increase of $7.0 million to construct and test a line-of-
sight array for the tactical control system.

Multi-link antenna system: +$2.0 million

    The budget request contained no funding in PE 35207F for 
manned reconnaissance systems, including exploitation 
technologies for RC-135 aircraft.
    In the ``National Defense Authorization Act for Fiscal Year 
2000,'' Congress provided funding for development and 
evaluation of the multi-function, self-aligned gate (MSAG) 
active array antenna technology on the RC-135 aircraft. The 
conferees were convinced that an MSAG application, called 
Multi-link Active System (MLAS), has the potential for 
satisfying several RC-135 antenna deficiencies, and also has 
the potential for reducing the size and number of antennas for 
many other applications. In fact, the committee is aware that 
the Department of Defense has determined that the potential for 
this technology has merited funding through an advanced concept 
technology demonstration.
    The committee is aware that the fiscal year 2000 funding 
was insufficient to complete the fabrication, installation and 
evaluation of an MLAS antenna on an RC-135. Therefore, the 
committee recommends an authorization of $2.0 million in PE 
35207F for this purpose.

Defense airborne reconnaissance program (DARP), line 80: +$34.2 million

    The budget request contained $98.4 million in DARP, line 
80, for various U-2 and RC-135 aircraft modifications, 
including $1.8 million for Senior Year Electro-optic 
Reconnaissance System (SYERS) spares and $17.0 million for a 
Joint Signals Intelligence Avionics Family (JSAF) suite for the 
U-2. The request did not include any funds for additional U-2ST 
trainer aircraft.
    SYERS is an electro-optic camera system that provides real-
time imagery to national decision-makers and tactical forces. 
The committee understands that initial deployment spares for 
the SYERS upgrade are underfunded in the budget request by $3.0 
million, and recommends an increase of this amount.
    The JSAF provides an upgraded collection capability for the 
U-2S. The committee understands that the budget request is 
insufficient to procure an entire JSAF suite and required 
spares and cabling. Accordingly, the committee recommends an 
increase of $8.0 million for this purpose.
    The U-2ST is a two-seat trainer version of the single-seat 
U-2S reconnaissance aircraft. The committee understands that 
there are only four U-2STs, and that without an additional U-
2ST, the U-2S pilot production rate does not meet requirements 
to solve an existing U-2S pilot shortage. The committee notes 
that the Air Force Chief of Staff has included an additional U-
2ST among his top five unfunded requirements in fiscal year 
2001, and accordingly, recommends an increase of $10.0 million 
to convert a U-2S into a U-2ST aircraft.
    Including transfers between DARP lines 56 and 80 for the 
RC-135 and U-2 respectively, the committee recommends $132.6 
million, an increase of $34.2 million, for U-2 modifications.

Predator: +$12.0 million

    The budget request contained $22.1 million for procurement 
of the Predator unmanned aerial vehicle (UAV) system.
    The committee understands that the Air Force is 
experiencing vanishing vendor problems with some of the current 
hardware in the Predator ground station and that there is a 
requirement to control multiple Predator aircraft 
simultaneously from a single ground station. The committee is 
also aware that there are required air vehicle reliability and 
maintainability upgrades that have not been funded.
    Consequently, the committee recommends $32.1 million for 
the Predator, an increase of $12.0 million for upgrading the 
current ground stations with commercial hardware, for 
integrating the capability to control multiple UAVs 
simultaneously and for improving air vehicle reliability and 
maintainability.
    Finally, the committee is aware that a jointly funded 
effort between the contractor and NASA has developed a turbo-
prop variant of the Predator, to be followed by a jet-powered 
variant. Both of these Predator-B variants use the current 
Predator ground station, avionics, datalink, and control 
software, but provide major performance improvements over the 
current aircraft, including a maximum speed in excess of 200 
knots, and a service ceiling to 45,000 feet. While the current 
Predator has clearly proven its military worth, given these 
performance factors, a Predator-B would appear to satisfy many 
niche missions for which the current vehicle is not well-
suited. The committee believes that a Predator-B would be a 
valuable addition to the Predator fleet, and that a mix of 
Predator-A and -B aircraft would cost effectively satisfy all 
Predator mission requirements. Therefore, the committee 
requests the Secretary of the Air Force to conduct an 
assessment of the utility of a Predator-B aircraft, including 
the benefits or problems of operating a mixed Predator fleet. 
The committee requests the Secretary report his findings to the 
defense and intelligence committees before the submission of 
the fiscal year 2002 budget request.

Defense space reconnaissance program: -$7.1 million

    The budget requested contained $45.1 million in PE 35159F 
for various projects within the Defense Space Reconnaissance 
program (DSRP).
    The committee recommends an authorization of $38.0 million, 
a decrease of $7.1 million. This reduction is taken without 
prejudice.

              Tactical Intelligence and Related Activities


Cryptologic skills training: +$4.0 million

    The budget request contained $1.3 million in operations and 
maintenance, Army, for conducting cryptologic and language 
skills training at the U.S. Army Intelligence Center (USAIC).
    The committee is aware of a unique Korean language training 
program developed in-house at the USAIC. The committee believes 
this computer-based tool has the potential of providing 
critical language maintenance training for many language 
specialists, and it believes this effort should be expanded to 
other languages.
    Consequently, the committee recommends $5.3 million in 
operations and maintenance, Army, an increase of $4.0 million, 
for continued development of this language training program 
into the service's seven core language requirements. The 
committee also recommends that this program be provided to the 
other services for language training maintenance.

Common ground station: -$7.9 million

    The budget request contained $17.9 million in PE 64770A for 
continued development of the Army's Joint Surveillance and 
Target Attack Radar System (JSTARS) Common Ground Station, 
including $2.0 million to develop the Army's Distributed Common 
Ground Station (DCGS-A) and $5.9 million to develop a next 
generation wide-band datalink to provide connectivity to the 
JSTARS.
    The committee notes that the DCGS-A development effort 
duplicates a similar effort being conducted within the Army's 
Tactical Exploitation of National Systems program, a funded 
program. Further, the committee notes the Air Force has not yet 
determined the next generation JSTARS datalink and will not do 
so until at least fiscal year 2002, thus making the Army's 
development activities for such communications connectivity 
premature.
    For these reasons, the committee recommends $10.0 million 
in PE 64770A, a decrease of $7.9 million, to the common ground 
station program.

Guardrail common sensor: +$2.0 million

    The budget request contained $11.3 million in PE 23744A for 
continued development and modification of the Army's Guardrail 
Common Sensor aircraft and ground stations.
    The committee notes that the Guardrail System 2 was 
recently delivered to the Army after nearly ten years of 
modification. Unfortunately, this system was returned without 
being upgraded with the ability to disseminate tactical 
intelligence information via the Tactical Information Broadcast 
Service (TIBS). TIBS is the baseline for the Integrated 
Broadcast Service that is the DoD-mandated world-wide tactical 
intelligence dissemination service.
    The committee recommends $13.3 million in PE 23744A, an 
increase of $2.0 million to install the TIBS capability in this 
Guardrail system.

Semi-automated imagery processor: +$4.0 million

    The budget request contained $57.4 million in PE 64766A, 
including funding for development of the Semi-automated imagery 
processor (SAIP).
    The SAIP will provide imagery analysts with an automated 
target recognition assistance capability, providing critical 
relief for a low-density imagery analyst resources.
    The committee recommends authorization of $61.4 million in 
PE 64766A, an increase of $4.0 million for continued 
development and fielding of the SAIP.

Defense foreign language program: +$3.0 million

    The budget request contained $61.9 million in operations 
and maintenance, Army, for the Defense Language Institute 
(DLI).
    The committee is very supportive of the DLI training 
efforts to provide high quality linguists for the growing 
requirement of many agencies and services but believes that its 
language laboratories are in need of technical upgrades, to 
include new equipment and access to the internet. The committee 
is aware of local area Marine Corps self-help efforts that have 
done similar upgrades very cost effectively. The committee 
believes the Army should call on this USMC self-help assistance 
to upgrade the DLI language laboratories.
    Further, the committee is aware of an unfunded DLI 
initiative to provide better language training by issuing 
laptop computers to students. These computers would be used to 
provide language laboratory access to on-line language training 
materials, allow ``after hours'' accessfrom the institute's 
dormitories, and access to ``live'' world-wide foreign training 
materials. The committee believes this is a worthwhile effort that 
should be properly funded.
    Therefore, the committee recommends $64.9 million in 
operations and maintenance, Army, an increase of $3.0 million, 
for the Defense Foreign Language Program. Of this amount, $1.0 
million is for self-help upgrade of the language laboratories 
and $2.0 million is for the laptop computer initiative.

Naval space surveillance: -$600 thousand

    The budget request included $2.0 million in PE 35972N for 
the Navy Space Surveillance network life extension activities.
    The committee is aware of an accounting error that resulted 
in a request for design concept activities that were actually 
funded in fiscal year 2000. Therefore the committee recommends 
1.4 million in PE 35972N, a decrement of $600,000.

Joint tactical terminal: +$ 6.0 million

    The budget request contained $32 thousand for the Joint 
Tactical Terminal (JTT).
    The committee is fully supportive of the Navy's efforts to 
field the JTT but is aware that the Navy has a shortfall in 
purchasing the required number of terminals.
    Accordingly, the committee recommends $6.0 million, an 
increase of $6.0 million, to correct this deficiency.

F/A-18 reconnaissance capable: -$23.8 million

    The budget request contained $212.6 million for F-18 series 
aircraft, including $24.5 million for the procurement of the 
Advanced Tactical Air Reconnaissance System (ATARS).
    The committee is aware that 14 of the currently planned 18-
19 ATARS systems were purchased under low rate initial 
production and that the remaining systems were to be purchased 
with fiscal year 2000 funds after the completion of the 
operational evaluation and milestone III decision. The 
committee is also aware that ATARS did not pass its operational 
evaluation and understands that this will preclude a 
procurement of the final ATARS systems. This frees up the 
unobligated and unexpended FY2000 funding.
    Therefore, the committee recommends $185.1 million, a 
decrease of $23.8 million, to be taken only from ATARS 
procurement.

Tactical air reconnaissance podded system: +$7.0 million

    The budget request contained $37.1 million in other 
production charges, including $2.6 million for continuation of 
the F-14 Tactical Air Reconnaissance Podded System (TARPS) 
camera system.
    The committee is aware of the recent successful deployment 
of the TARPS Completely Digital (CD) system with the U.S.S. 
John F. Kennedy battle group. TARPS CD is being employed as a 
risk mitigation effort for the Shared Airborne Reconnaissance 
Pod (SHARP) development. SHARP is the future non-dedicated 
reconnaissance system for naval tactical reconnaissance. The 
committee commends the Navy for its successful integration of 
TARPS CD and the demonstration of the force enhancement 
capabilities of this a real-time tactical system.
    The committee believes the Navy's successful risk-
mitigation efforts for electro-optical sensors provides a 
sufficient confidence level to take the next step and move 
toward integration of a commercial off-the-shelf synthetic 
aperture radar (SAR) sensor to provide all-weather 
reconnaissance. The committee is aware that several, small, 
very high resolution SAR sensors are available to do non-
developmental test on TARPS CD. Since an all-weather 
reconnaissance is a requirement for SHARP, the committee 
believes completing risk mitigation on the TARPS CD is 
appropriate and will not affect the current schedule for 
fielding SHARP with an EO-only capability.
    Therefore, the committee recommends $44.1 million, an 
increase of $7.0 million for integrating and demonstrating 
commercial SAR solutions into the TARPS CD.

Mobile electronic warfare support system: +$8.5 million

    The budget request contained $96.2 million in PE 26313M, 
including $449 thousand for improvements to the Marine Corps' 
mobile electronic warfare support system (MEWSS).
    The committee notes that the Marine Corps' MEWSS tactical 
reconnaissance system was a cooperative effort with the U.S. 
Army's ground based common sensor (GBCS) program. GBCS was 
terminated for lack of performance and all residual equipment 
was transferred to the Marine Corps for use in the MEWSS. 
However, no funding was provided to cross-deck and integrate 
GBCS components into the MEWSS vehicles or to maintain the 
limited rate initial procurement items.
    Therefore, the committee recommends authorization of $104.7 
million in PE 26313, an addition of $8.5 million specifically 
for the purposes of transferring, integrating and maintaining 
the equipment gained from GBCS.

Hyper-spectral imagery system: +$4.0 million

    The budget request contained $9.8 million in PE 27247F for 
Air Force tactical exploitation of national capabilities 
(TENCAP) projects.
    Congress provides additional funding in fiscal year 2000 
for continuing development of a hyper-spectral sensor for 
application on Navy P-3 and Air Force unmanned aerial vehicles 
(UAV). The committee is aware that this initiative has resulted 
in a joint effort to integrate and demonstrate a real-time 
hyper-spectral sensor on a Predator UAV. The committee notes 
that no funding was provided in the budget request to continue 
this effort through demonstration. The committee believes that 
a hyper-spectral sensor will drastically mitigate the problems 
of detecting and targeting camouflaged targets that hampered 
aerial targeting in past operations.
    Therefore, the committee recommends an authorization of 
$13.8 million in PE 27247F, an addition of $4.0 million to 
continue this demonstration with the goal of producing an 
operational real-time hyper-spectral sensing system on UAVs and 
other intelligence, surveillance and reconnaissance aircraft.

Senior scout: +$8.2 million

    The budget request contained $5.5 million for procurement 
of intelligence communications equipment, including $2.0 
million for procurement of spares and replacement equipment for 
the Senior Scout tactical reconnaissance aircraft.
    The committee is pleased that the Air Force has decided to 
retain the Senior Scout reconnaissance capability to augment 
the high demand/low density airborne intelligence, 
surveillance, and reconnaissance (ISR) fleets in the reserve 
component. However, the committee is disturbed that the Air 
Force has not added funding to upgrade the Senior Scout to more 
effectively interoperate with other ISR aircraft and, more 
importantly, the combat aircraft it supports.
    Therefore, the committee recommends $13.7 million for 
intelligence communications equipment, an increase of $8.2 
million for Senior Scout collection and dissemination upgrades 
and for the addition of a deployable ground data reduction 
system.

Air force/national reconnaissance office (NRO) partnership: -$2.0 
        million

    The budget request contained $3.4 million in PE 63856F for 
the Air Force/NRO partnership.
    The committee understands that $2.0 million of the funding 
requested would be used for studies and analysis of synergies 
between the Air Force and the NRO. The committee notes that the 
Assistant Secretary of the Air Force, Space, also serves as the 
director of the NRO. The committee believes that coordination 
between the two organizations is inherently institutionalized, 
and should be a matter of routine.
    The committee recommends $1.4 million in PE 63856F, a 
reduction of $2.0 million.

Eagle vision: +$9.5 million

    The budget request included no funds for procuring the 
processing hardware necessary to complete the Eagle Vision 4 
imagery system or to improve the Eagle Vision imagery ground 
station's capability to receive and process new commercial 
imagery sources.
    Eagle Vision is a ground station that receives and 
processes imagery from commercial remote sensing satellites. 
The committee fully supports the Eagle Vision commercial 
imagery initiative, which has provided unique, unclassified 
imagery support to meet theater and service requirements that, 
due to higher priorities, cannot be met by other technical 
means. The committee believes that this initiative needs to be 
fully funded to continue such support. Further, the committee 
notes the recent successful launch and initial operations of 
Ikonos II, the first high-resolution U.S. commercial imagery 
satellite, and that two other U.S. firms are soon to launch 
their own high-resolution imagery satellites. The committee 
understands that the Eagle Vision ground station is currently 
capable of receiving and processing relatively low-resolution 
imagery from Canadian and French commercial satellites. It is, 
however, not able to process imagery from the higher-resolution 
U.S. systems in, or soon to be in orbit.
    Therefore, the committee recommends an increase of $5.0 
million in other procurement, Air Force, line 39A, for 
completing the Eagle Vision 4 processor installation and an 
increase of $4.5 million in PE 27277F to integrate into the 
Eagle Vision ground stations a receive and processing 
capability necessary to exploit current and future U.S. 
commercial satellite imaging systems.

Special operations tactical video system: +$2.0 million

    The budget request contained $3.0 million in PE 116405BB 
for Special Operations Forces (SOF) intelligence system 
developments, including $100,000 for continued development of 
the Special Operations Tactical Video System (SOTVS).
    SOTVS is a congressional interest item funded in the fiscal 
year 2000 budget. The committee notes that no commercial 
solution to the SOF underwater camera requirements exists, and 
that a dedicated research and development program is necessary 
to satisfy this critical mission requirement. Therefore, the 
committee is dismayed that the budget request is insufficient 
to develop and procure a replacement to the aging cameras 
currently in the inventory.
    The committee recommends an authorization of $5.0 million 
in this PE, an increase of $2.0 million to expedite the 
development of the SOTVS camera.

                     Section-by-Section of the Bill


                   TITLE I.--INTELLIGENCE ACTIVITIES


Section 101--authorization of appropriations

    Section 101 lists those elements of the United States 
Government for whose intelligence and intelligence-related 
activities the Act authorizes appropriations for fiscal year 
2001.

Section 102--classified schedule of authorizations

    Section 102 incorporates by reference the classified 
Schedule of Authorizations. That schedule sets forth the 
specific amounts authorized to be appropriated for specific 
intelligence and intelligence-related activities and personnel 
ceilings for fiscal year 2001 for those United States 
government elements listed in section 101. The details of the 
Schedule are explained in the classified annex to this report. 
The Schedule of Authorizations correlates to the President's 
budget request, which was submitted to Congress in classified 
form.

Section 103--personnel ceiling adjustments

    Section 103 authorizes the Director of Central 
Intelligence, with the approval of the Director of the Office 
of Management and Budget, in fiscal year 2001, to exceed 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 otherwise 
applicable under section 102. The Director may exercise this 
authority only when necessary to the performance of important 
intelligence functions. Any exercise of this authority must be 
reported to the two intelligence committees of the Congress.
    The committee emphasizes that the authority conferred by 
section 103 is not intended to permit the wholesale raising of 
personnel strength in any intelligence component. Rather, the 
section provides the Director of Central Intelligence with 
flexibility to adjust personnel levels temporarily for 
contingencies, and for overages caused by an imbalance between 
hiring of new employees and attrition of current employees. The 
committee does not expect the Director of Central Intelligence 
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 legislation. In no case is this authority to be used to 
provide for positions otherwise denied by Congress.

Section 104--intelligence community management account

    Section 104 details the amount and composition of the 
Community Management Account (``CMA'') of the Director of 
Central Intelligence.
    Subsection (a) of section 104 authorizes appropriations in 
the amount of $144,231,000 for fiscal year 2001 for the 
staffing and administration of various components under the 
CMA. Subsection (a) also authorizes funds identified for the 
Advanced Research and Development Committee and the 
Environmental Intelligence and Applications Program to remain 
available for two years.
    Subsection (b) authorizes 356 full-time personnel for 
elements within the CMA for fiscal year 2001 and provides that 
such personnel may be permanent employees of the CMA element or 
detailed from other elements of the United States Government.
    Subsection (c) explicitly authorizes the classified portion 
of the CMA.
    Subsection (d) requires that personnel be detailed on a 
reimbursable basis, with certain exceptions.
    Subsection (e) authorizes $28,000,000 of the amount 
authorized for the CMA under subsection (a) to be made 
available to the Attorney General through the DCI for the 
National Drug Intelligence Center (``NDIC'') in Johnstown, 
Pennsylvania. Subsection (e) requires the Director of Central 
Intelligence to transfer the $28,000,000 to the Department of 
Justice 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. The NDIC is authorized $1,000,000 more 
than the amount authorized for the funding of the NDIC for FY 
2000. The Committee of Conference on the Intelligence 
Authorization Act for Fiscal Year 2000 directed that $1,000,000 
of the funds authorized to be appropriated to the Attorney 
General by the Act be made available to the Judicial Review 
Commission on Foreign Asset Control, which was established in 
section 810 of that Act. (P.L. 106-120). The additional 
$1,000,000 authorized for Fiscal Year 2001 is intended to 
replenish NDIC funding made available to the Commission.

Section 105--transfer authority of the Director of Central Intelligence

    Section 105 amends section 104(d)(1) of the National 
Security Act of 1947 to authorize the Director of Central 
Intelligence (DCI) to transfer funds appropriated for a program 
within the National Foreign Intelligence Program (NFIP) to 
another such program within the NFIP, with the approval of the 
Director of the Office of Management and Budget, unless the 
Secretary of Defense, or other cabinet Secretary who has an 
affected Intelligence Community element within his or her 
department, submits a written objection to the transfer. The 
Secretary of Defense may only delegate responsibility under 
this provision to the Deputy Secretary of Defense. The other 
department heads are not authorized under this provision to 
delegate the authority to object to any such transfer sought by 
the DCI.
    The current section 104(d)(1) limits the DCI's authority to 
transfer funds and personnel to transfers where the Secretary 
or head of the affected department does not object to such 
transfer.The committee understands that in practice Defense 
Department officials below the level of Secretary have taken action to 
block transfers within the NFIP sought by the DCI. The committee 
intends to end this practice and require higher-level involvement in 
decisions that countermand the DCI's judgment on funding requirements 
of NFIP programs. Just as the Secretary of Defense is limited in 
delegating any authority to object to these transfers to the Deputy 
Secretary of Defense, the DCI is limited in his authority to delegate 
the transfer request authority only to the Deputy Director of Central 
Intelligence for Community Management.

 TITLE II--CENTRAL INTELLIGENCE AGENCY RETIREMENT AND DISABILITY SYSTEM


Section 201--authorization of appropriations

    Section 201 authorizes appropriations in the amount of 
$216,000,000 for fiscal year 2001 for the Central Intelligence 
Agency Retirement and Disability Fund.

                     TITLE III--GENERAL PROVISIONS


Section 301--increase in employee compensation and benefits authorized 
        by law

    Section 301 provides that 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.

Section 302--restriction on conduct of intelligence activities

    Section 302 provides that the authorization of 
appropriations within the Act does not constitute authority for 
the conduct of any intelligence activity that is precluded by 
the Constitution or other laws of the United States.

Section 303--Sense of the Congress regarding intelligence community 
        contracting

    Section 303 expresses the sense of Congress that the DCI 
should continue to direct elements of the intelligence 
community to award contracts in a manner that would maximize 
the procurement of products produced in the United States, when 
such action is compatible with the national security interests 
of the United States, consistent with operational and security 
concerns, and fiscally sound.

Section 304--authorization for travel on any common carrier for certain 
        intelligence collection personnel

    Section 304 authorizes the DCI to permit intelligence 
community employees, officers, or agents, carrying out 
intelligence collection activities to utilize any common 
carrier, either foreign or domestically owned or operated, in 
limited circumstances, when flying directly to or from the 
United States on official business. The federal government 
currently requires, to the extent practicable, government 
employees, officers, or agents, travelling directly to or from 
the United States to utilize U.S. owned or operated common 
carriers for such travel. The committee has found, however, 
that from time to time it would reduce the risk of disclosure 
of sources and methods of intelligence collection if the DCI 
were authorized some flexibility with respect to this otherwise 
well-founded requirement. The committee notes that situations 
arise where the current requirement, and its inflexible 
application, create unnecessary risks for intelligence 
collection activities, including the risk of compromise of 
sources and methods. The committee believes that the DCI should 
be given some latitude to maintain or enhance the security of 
intelligence collection operations and of the intelligence 
collectors by waiving the requirement, on an as needed basis. 
The committee expects that such a waiver will not be routine, 
but that this provision will be invoked from time to time with 
positive results.

Section 305--reports on acquisition of technology relating to weapons 
        of mass destruction and advanced conventional munitions

    Section 305 amends section 721(a) of the Intelligence 
Authorization Act for Fiscal Year 1997 (P.L. 104-293, 110 Stat. 
3474). Section 721(a) required that an unclassified report on 
the acquisition of technology relating to weapons of mass 
destruction and advanced conventional munitions be submitted to 
Congress every 6 months. This section would require a report to 
be submitted on an annual basis. This will give the public the 
benefit of a full year of substantive reporting, rather than a 
half year, which sometimes can result in an incomplete view of 
the activity. The committee will continue to receive classified 
briefings and intelligence reporting on an on-going basis.

                 TITLE IV--CENTRAL INTELLIGENCE AGENCY


Section 401--modifications to Central Intelligence Agency's Central 
        Services Program

    Section 401 permits the deposit into the Central Service 
Program's Working Capital Fund of the receipts from the 
miscellaneous reimbursements of individuals and the rental of 
property and equipment to employees and detailees.

Section 402--technical corrections

    Section 402 makes technical amendments to section 17 of the 
Central Intelligence Agency Act of 1949. Section 402(a) strikes 
subparagraph (E) of section 17(d)(1), which directs the CIA 
Inspector General to report to the intelligence committees 
those occasions where his office was constrained from obtaining 
documentary evidence during the course of a CIA IG 
investigation due to the lack of subpoena authority. The CIA IG 
was granted subpoena authority to obtain documentary evidence 
in the Intelligence Authorization Act for Fiscal Year 1998 
(P.L.105-107). Thus, the reporting requirement in subparagraph 
(E) has been superceded by subsequent legislation.

         TITLE V--DEPARTMENT OF DEFENSE INTELLIGENCE ACTIVITIES


Section 501--three year extension of authority to engage in commercial 
        activities as security for intelligence collection activities

    This section amends section 431(a) of title 10, United 
States Code, which expire on December 31, 2000. Section 431(a) 
permits the Department of Defense to engage in commercial 
activities as security for intelligence collection activities. 
This section extends this authority until December 31, 2003.

Section 502--contracting authority for the National Reconnaissance 
        Office

    Section 502 directs the National Reconnaissance Office 
(NRO) to negotiate, write, and manage all future vehicle 
acquisition or launch contracts that affect or bind the NRO and 
to which the United States is a party.
    The committee has been very frustrated with aspects of the 
NRO's launch program, particularly with Titan IV production. 
Consistently, this program has been excessively over-funded and 
has resulted in large amounts of funds available for 
reprogramming. The committee has had considerable difficulty 
holding the organization accountable for better program 
planning because the NRO has had launch vehicle and launch 
services contracts written and managed by non-NRO contracting 
offices. As a result, the NRO does not have sufficient 
management responsibility for those contracts to be responsive 
to congressional concerns, or to take necessary corrective 
actions.
    The NRO IG recently completed an investigation that 
identified the vehicle acquisition and launch services type of 
contract, and the relationship between the external contracting 
office and the NRO, as the main factors contributing to the 
over-funding problem. The committee notes that a re-negotiation 
of the contract structure is being considered that would remove 
a penalty for future launch failures, despite the NRO IG's 
recommendation.
    Section 502 will require that the NRO contract for vehicle 
acquisition and launch services directly with launch service 
providers. The committee recognizes the need for the NRO to 
work closely with outside contracting offices in many areas, 
for example, to develop standard interfaces and quality control 
process procedures. The committee believes that NRO's use of 
external contracting offices to negotiate, write, and manage 
vehicle acquisition and launch contracts does not provide the 
NRO, nor the committee sufficient insight into the contracting 
process. Additionally, more direct control by the NRO over its 
vehicle acquisition and launch contracts is expected to 
increase the accountability for such projects within the NRO.

               Committee Position and Record Votes Taken

    On May 10, 2000, in open session, a quorum being present, 
the Permanent Select Committee on Intelligence, by a recorded 
vote of 12 ayes to 0 noes, approved the bill, H.R. 4392, as 
amended by an amendment in the nature of a substitute offered 
by Chairman Goss. By that vote, the committee ordered the bill 
reported favorably to the House, with an amendment. On that 
vote, the Members present recorded their votes as follows: Mr. 
Goss (Chairman)--aye; Mr. McCollum--aye; Mr. Castle--aye; Mr. 
Boehlert--aye; Mr. Bass--aye; Mr. Gibbons--aye; Mr. LaHood--
aye; Ms. Wilson--aye; Mr. Dixon--aye; Ms. Pelosi--aye; Mr. 
Condit--aye; Mr. Roemer--aye.
    During consideration of the bill, Mr. Roemer offered an 
amendment to the legislative provisions. The amendment would 
have directed the President to disclose annually the aggregate 
appropriation for the Intelligence Community for the previous 
fiscal year. The Permanent Select Committee on Intelligence 
rejected Mr. Roemer's amendment by a vote of 5 ayes to 11 noes, 
a quorum being present. On that vote, the Members present 
recorded their votes as follows: Mr. Goss (Chairman)--no; Mr. 
Lewis--no; McCollum--no; Mr. Castle--no; Mr. Boehlert--no; Mr. 
Bass--no; Mr. Gibbons--no; Mr. LaHood--no; Ms. Wilson--no; Mr. 
Dixon--aye; Ms. Pelosi--aye; Mr. Bishop--no; Mr. Sisisky--no; 
Mr. Condit--aye; Mr. Roemer--aye; Mr. Hastings--aye.

   Findings and Recommendations of the Committee on Government Reform

    With respect to clause 3(c)(4) of rule XIII of the House of 
Representatives, the committee is not subject to this 
requirement; therefore, the committee has not received a report 
from the Committee on Government Reform and Oversight 
pertaining to the subject of this bill.

                           Oversight Findings

    With respect to clause 3(c)(1) of rule XIII of the Rules of 
the House of Representatives, the committee held eleven 
hearings on the classified budgetary issues raised by H.R. 
4392. Testimony was taken from the Director of Central 
Intelligence; the Deputy Director of Central Intelligence for 
Community Management; the Director of the National Security 
Agency; the Director of the Federal Bureau of Investigation; 
the Director of the Defense Intelligence Agency; the Executive 
Director, and the Deputy Directors of the Operations, 
Intelligence, Administration, Science and Technology 
Directorates of the Central Intelligence Agency; the Director 
of the National Reconnaissance Office; and the Director of the 
National Imagery and Mapping Agency; and various other 
knowledgeable witnesses from the Department of Defense, the 
Department of Justice, and the Department of State regarding 
the activities and plans of the intelligence community covered 
by the provisions and authorizations, both classified and 
unclassified, of the Intelligence Authorization Act for Fiscal 
Year 2001. The bill, as reported by the committee, reflects 
conclusions reached by the committee in light of this oversight 
activity.

                      Fiscal Year Cost Projections

    The committee has attempted, pursuant to clause 3(d)(2) of 
rule XIII of the Rules of the House of Representatives, to 
ascertain the outlays that will occur in fiscal year 2001 and 
the five years following, if the amounts authorized are 
appropriated. These estimates are contained in the classified 
annex and are in accordance with those of the executive branch.

                 Congressional Budget Office Estimates

    In compliance with clause 3(c)(2) and (3) of rule XIII of 
the Rules of the House of Representatives, and pursuant to 
sections 308 and 402 of the Congressional Budget Act of 1974, 
the committee submits the following estimate prepared by the 
Congressional Budget Office:

                     U.S. House of Representatives,
                Permanent Select Committee on Intelligence,
                                      Washington, DC, May 11, 2000.
Mr. Dan L. Crippen,
Director Congressional Budget Office,
Ford House Office Building, Washington, DC.
    Dear Mr. Crippen: In compliance with the Rules of the House 
of Representatives, I am writing to request a cost estimate of 
H.R. 4392, the ``Intelligence Authorization Act for Fiscal Year 
2001,'' pursuant to sections 308 and 403 of the Congressional 
Budget Act of 1974. I have attached a copy of the bill as 
approved by the House Permanent Select Committee on 
Intelligence on May 10, 2000.
    As I hope to bring this legislation to the House floor in 
the very near term, I would very much appreciate an expedited 
response to this request by the CBO's staff. Should you have 
any questions related to this request, please contact Patrick 
B. Murray, the Committee's Chief Counsel. Thank you in advance 
for your assistance with this request.
            Sincerely,
                                          Porter J. Goss, Chairman.
    Attachment.
                                ------                                

                                     U.S. Congress,
                               Congressional Budget Office,
                                      Washington, DC, May 12, 2000.
Hon. Porter J. Goss,
Chairman, Permanent Select Committee on Intelligence, House of 
        Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 4392, the 
Intelligence Authorization Act for Fiscal Year 2001.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Suinta 
D'Monte.
            Sincerely,
                                          Barry B. Anderson
                                    (For Dan L. Crippen, Director).
    Enclosure.

H.R. 4392--Intelligence Authorization Act for Fiscal Year 2001

    Summary: H.R. 4392 would authorize appropriations for 
fiscal year 2001 for intelligence activities of the United 
States government, the Intelligence Community Management 
Account, and the Central Intelligence Agency Retirement and 
Disability System (CIARDS).
    This estimate addresses only the unclassified portion of 
the bill. On that limited basis, CBO estimates that 
implementing the bill would cost $144 million over the 2001-
2005 period, assuming appropriation of the authorized amounts. 
The bill would affect direct spending by insignificant amounts; 
thus, pay-as-you-go procedures would apply. H.R. 4392 contains 
no intergovernmental or private-sector mandates as defined in 
the Unfunded Mandates Reform Act (UMRA) and would not affect 
the budgets of state, local, or tribal governments.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of the unclassified portions of H.R. 4392 is 
shown in the following table. CBO cannot obtain the necessary 
information to estimate the costs for the entire bill because 
parts are classified as a level above clearances held by CBO 
employees. For purposes of this estimate, CBO assumes that the 
bill will be enacted by October 1, 2000, and that the 
authorized amounts will be appropriated for fiscal year 2001. 
Estimated outlays are based on historical spending patterns. 
The costs of this legislation fall within budget function 050 
(national defense).

----------------------------------------------------------------------------------------------------------------
                                                                     By fiscal year, in millions of dollars--
                                                                 -----------------------------------------------
                                                                   2000    2001    2002    2003    2004    2005
----------------------------------------------------------------------------------------------------------------
                                        SPENDING SUBJECT TO APPROPRIATION

Spending Under Current Law for Intelligence Community
 Management:
    Budget Authority \1\........................................     157       0       0       0       0       0
    Estimated Outlays...........................................     135      47       9       3       0       0
Proposed Changes:
    Authorization Level.........................................       0     144       0       0       0       0
    Estimated Outlays...........................................       0      89      43       9       3       0
Spending Under H.R. 4392 for Intelligence Community Management:
    Authorization Level \1\.....................................     157     144       0       0       0       0
    Estimated Outlays...........................................     135     136      53      12       3       0
----------------------------------------------------------------------------------------------------------------
\1\ The 2000 level is the amount appropriated for that year.

Spending subject to appropriation

    The bill would authorize appropriations of $144 million for 
the Intelligence Community Management Account, which funds the 
coordination of programs, budget oversight, and management of 
the intelligence agencies. Section 501 would extend through 
December 31, 2003, a program that allows the Central 
Intelligence Agency (CIA) to engage in commercial activities as 
security for intelligence collection. CBO does not have the 
necessary information to estimate the budgetary impact of this 
provision.

Direct spending

    The bill would authorize $216 million for CIARDS to cover 
retirement costs attributable to military service and various 
unfunded liabilities. The payment to CIARDS is considered 
mandatory, and the authorization under this bill would be the 
same as assumed in the CBO baseline. Section 401 would expand a 
program that authorizes the CIA to provide goods and services 
on a reimbursable basis by allowing the agency to rent property 
and equipment to its employees and those on detail from other 
agencies. CBO estimates that the costs of providing those 
services would be offset by the reimbursement and that this 
provision would have an insignificant net impact each year and 
no net budgetary impact over the long run.
    Pay-as-you-go considerations: The Balanced Budget and 
Emergency Deficit Control Act sets up pay-as-you-go procedures 
for legislation affecting direct spending or receipts. CBO 
estimates that the net change in outlays that are subject to 
pay-as-you-go procedures would be insignificant for each year.
    Intergovernmental and private-sector impact: H.R. 4392 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would not affect the budgets of state, 
local, or tribal governments.
    Estimate prepared by: Federal Costs: Sunita D'Monte; Impact 
on State, Local, and Tribal Governments: Leo Lex; and Impact on 
the Private Sector: Eric Labs.
    Estimate approved by: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

                        Committee Cost Estimates

    The committee agrees with the estimate of the Congressional 
Budget Office.

 Specific Constitutional Authority for Congressional Enactment of This 
                              Legislation

    The intelligence and intelligence-related activities of the 
United States government are carried out to support the 
national security interests of the United States, to support 
and assist the armed forces of the United States, and to 
support the President in the execution of the foreign policy of 
the United States. Article I, section 8, of the Constitution of 
the United States provides, in pertinent part, that ``Congress 
shall have power * * * to pay the debts and provide for the 
common defence and general welfare of the United States; * * 
*''; ``to raise and support Armies, * * *'' ``to provide and 
maintain a Navy; * * *'' and ``to make all laws which shall be 
necessary and proper for carrying into execution * * * all 
other powers vested by this Constitution in the Government of 
the United States, or in any Department or Officer thereof.'' 
Therefore, pursuant to such authority, Congress is empowered to 
enact this legislation.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

                     NATIONAL SECURITY ACT OF 1947


                            TABLE OF CONTENTS

Sec. 2. Declaration of policy.
     * * * * * * *

               Title I--Coordination for National Security

Sec. 101. National Security Council.
     * * * * * * *
Sec. 116. Travel on any common carrier for certain intelligence 
          collection personnel.

           *       *       *       *       *       *       *


              TITLE I--COORDINATION FOR NATIONAL SECURITY

           *       *       *       *       *       *       *


          AUTHORITIES OF THE DIRECTOR OF CENTRAL INTELLIGENCE

  Sec. 104. (a) * * *

           *       *       *       *       *       *       *

  (d) Transfer of Funds or Personnel Within the National 
Foreign Intelligence Program.--(1)(A) In addition to any other 
authorities available under law for such purposes, the Director 
of Central Intelligence, with the approval of the Director of 
the Office of Management and Budget, may transfer funds 
appropriated for a program within the National Foreign 
Intelligence Program to another such program and, in accordance 
with procedures to be developed by the Director and the heads 
of affected departments and agencies, may transfer personnel 
authorized for an element of the intelligence community to 
another such element for periods up to a year.
  (B) The Director may only delegate any duty or authority 
given the Director under this subsection to the Deputy Director 
of Central Intelligence for Community Management.
  (2)(A) A transfer of funds or personnel may be made under 
this subsection only if--
          [(A)] (i) the funds or personnel are being 
        transferred to an activity that is a higher priority 
        intelligence activity;
          [(B)] (ii) the need for funds or personnel for such 
        activity is based on unforeseen requirements;
          [(C)] (iii) the transfer does not involve a transfer 
        of funds to the Reserve for Contingencies of the 
        Central Intelligence Agency;
          [(D)] (iv) the transfer does not involve a transfer 
        of funds or personnel from the Federal Bureau of 
        Investigation; and
          [(E)] (v) [the Secretary or head] subject to 
        subparagraph (B), the Secretary or head of the 
        department which contains the affected element or 
        elements of the intelligence community does not object 
        to such transfer.
  (B)(i) Except as provided in clause (ii), the authority to 
object to a transfer under subparagraph (A)(v) may not be 
delegated by the Secretary or head of the department involved.
  (ii) With respect to the Department of Defense, the authority 
to object to such a transfer may be delegated by the Secretary 
of Defense, but only to the Deputy Secretary of Defense.
  (iii) An objection to a transfer under subparagraph (A)(v) 
shall have no effect unless submitted to the Director of 
Central Intelligence in writing.

           *       *       *       *       *       *       *



   travel on any common carrier for certain intelligence collection 
                               personnel


  Sec. 116. (a) In General.--Notwithstanding any other 
provision of law, the Director of Central Intelligence may 
authorize travel on any common carrier that, in the discretion 
of the Director, would by its use maintain or enhance the 
protection of sources or methods of intelligence collection or 
maintain or enhance the security of personnel of the 
intelligence community carrying out intelligence collection 
activities.
  (b) Authorized Delegation of Duty.--The Director may only 
delegate the authority granted by this section to the Deputy 
Director of Central Intelligence, or with respect to employees 
of the Central Intelligence Agency the Director may delegate 
such authority to the Deputy Director for Operations.

           *       *       *       *       *       *       *

                              ----------                              


 SECTION 721 OF THE INTELLIGENCE AUTHORIZATION ACT FOR FISCAL YEAR 1997

SEC. 721. REPORTS ON ACQUISITION OF TECHNOLOGY RELATING TO WEAPONS OF 
                    MASS DESTRUCTION AND ADVANCED CONVENTIONAL 
                    MUNITIONS.

  (a) Reports.--[Not later than 6 months after the date of the 
enactment of this Act, and every 6 months thereafter,] Not 
later than March 1, 2001, and every March 1 thereafter, the 
Director of Central Intelligence shall submit to Congress a 
report on--
          (1) the acquisition by foreign countries during the 
        preceding [6 months] year of dual-use and other 
        technology useful for the development or production of 
        weapons of mass destruction (including nuclear weapons, 
        chemical weapons, and biological weapons) and advanced 
        conventional munitions; and
          (2) trends in the acquisition of such technology by 
        such countries.

           *       *       *       *       *       *       *

                              ----------                              


                CENTRAL INTELLIGENCE AGENCY ACT OF 1949

           *       *       *       *       *       *       *


SEC. 17. INSPECTOR GENERAL FOR THE AGENCY.

  (a) * * *

           *       *       *       *       *       *       *

  (d) Semiannual Reports; Immediate Reports of Serious or 
Flagrant Problems; Reports of Functional Problems; Reports to 
Congress on Urgent Concerns.--(1) The Inspector General shall, 
not later than January 31 and July 31 of each year, prepare and 
submit to the Director of Central Intelligence a classified 
semiannual report summarizing the activities of the Office 
during the immediately preceding six-month periods ending 
December 31 (of the preceding year) and June 30, respectively. 
Within thirty days of receipt of such reports, the Director 
shall transmit such reports to the intelligence committees with 
any comments he may deem appropriate. Such reports shall, at a 
minimum, include a list of the title or subject of each 
inspection, investigation, or audit conducted during the 
reporting period and--
          (A) * * *

           *       *       *       *       *       *       *

          (D) a certification that the Inspector General has 
        had full and direct access to all information relevant 
        to the performance of his functions; and
          [(E) a description of all cases occurring during the 
        reporting period where the Inspector General could not 
        obtain documentary evidence relevant to any inspection, 
        audit, or investigation due to his lack of authority to 
        subpoena such information; and]
          [(F)] (E) such recommendations as the Inspector 
        General may wish to make concerning legislation to 
        promote economy and efficiency in the administration of 
        programs and operations undertaken by the Agency, and 
        to detect and eliminate fraud and abuse in such 
        programs and operations.

           *       *       *       *       *       *       *

  (e) Authorities of the Inspector General.--(1) * * *

           *       *       *       *       *       *       *

  (8) Subject to the concurrence of the Director, the Inspector 
General may request such information or assistance as may be 
necessary for carrying out his duties and responsibilities from 
any [Federal] Government agency. Upon request of the Inspector 
General for such information or assistance, the head of the 
[Federal] Government agency involved shall, insofar as is 
practicable and not in contravention of any existing statutory 
restriction or regulation of the [Federal] Government agency 
concerned, furnish to the Inspector General, or to an 
authorized designee, such information or assistance.

           *       *       *       *       *       *       *


                        central services program

  Sec. 21. (a) * * *

           *       *       *       *       *       *       *

  (c) Central Services Working Capital Fund.--(1) There is 
established a fund to be known as the Central Services Working 
Capital Fund (in this section referred to as the ``Fund''). The 
purpose of the Fund is to provide sums for activities under the 
program.
  (2) There shall be deposited in the Fund the following:
          (A) * * *

           *       *       *       *       *       *       *

          (F) Receipts from miscellaneous reimbursements from 
        individuals and receipts from the rental of property 
        and equipment to employees and detailees. 
          [(F)] (G) Such other amounts as the Director is 
        authorized to deposit in or transfer to the Fund.

           *       *       *       *       *       *       *

                              ----------                              


              SECTION 431 OF TITLE 10, UNITED STATES CODE

Sec. 431. Authority to engage in commercial activities as security for 
                    intelligence collection activities

  (a) Authority.--The Secretary of Defense, subject to the 
provisions of this subchapter, may authorize the conduct of 
those commercial activities necessary to provide security for 
authorized intelligence collection activities abroad undertaken 
by the Department of Defense. No commercial activity may be 
initiated pursuant to this subchapter after [December 31, 2000] 
December 31, 2003.

           *       *       *       *       *       *       *

                                  
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