[House Report 108-163]
[From the U.S. Government Publishing Office]




108th Congress                                                   Report
 1st Session                HOUSE OF REPRESENTATIVES             108-163
======================================================================
 
          INTELLIGENCE AUTHORIZATION ACT FOR FISCAL YEAR 2004

                                _______
                                

 June 18, 2003.--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. 2417]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Permanent Select Committee on Intelligence, 
to whom was referred the bill (H.R. 2417) to authorize 
appropriations for fiscal year 2004 for intelligence and 
intelligence-related activities of the United States 
Government, the Community Management Account, and the Central 
Intelligence Agency Retirement and Disability System, and for 
other purposes, having considered the same, report favorably 
thereon with an amendment and recommend that the bill as 
amended do pass.

                                CONTENTS

                                                                   Page
Purpose..........................................................    14
Overall Perspective on the Intelligence Budget and Committee 
  Intent.........................................................    15
Scope of Committee Review........................................    16
Committee Findings and Recommendations...........................    16
Section-by-Section Analysis of the Bill as Reported..............    33
Title I--Intelligence Activities.................................    33
    Section 101--Authorization of Appropriations.................    33
    Section 102--Classified Schedule of Authorizations...........    33
    Section 103--Personnel Ceiling Adjustments...................    33
    Section 104--Community Management Account....................    33
    Section 105--Intelligence elements of the Department of the 
      Treasury...................................................    34
Title II--Central Intelligence Agency Retirement and Disability 
  System.........................................................    35
    Section 201--Authorization of Appropriations.................    35
Title III--General Provisions....................................    35
Subtitle A--Recurring General Provisions.........................    35
    Section 301--Increase in employee compensation and benefits 
      authorized by law..........................................    35
    Section 302--Restriction on conduct of intelligence 
      activities.................................................    35
Subtitle B--Intelligence.........................................    36
    Section 311--Modification of notice and wait requirements on 
      projects to construct or improve Intelligence Community 
      facilities.................................................    36
Subtitle C--Counterintelligence..................................    36
    Section 321--Counterintelligence initiatives for the 
      Intelligence Community.....................................    36
Subtitle D--Other Matters........................................    37
    Section 331--Extension of suspension of reorganization of 
      Diplomatic Telecommunications Service Program Office.......    37
    Section 332--Modifications of authorities on explosive 
      materials..................................................    37
    Section 333--Modification of prohibition on the 
      naturalization of certain persons..........................    38
    Section 334--Modification to definition of financial 
      institution in the Right to Financial Privacy Act..........    38
    Section 335--Procedural requirements for Central Intelligence 
      Agency relating to products of Federal prison industries...    39
    Section 336--Improvement of information sharing among 
      federal, State, and local government officials.............    39
Subtitle E--Reports and Technical Amendments.....................    40
    Section 341--Extension of deadline for final report of the 
      National Commission for the Review of the Research and 
      Development Programs of the United States Intelligence 
      Community..................................................    40
    Section 342--Modification of various reports required of 
      intelligence community elements............................    40
    Section 343--Technical amendments............................    40
    Section 344--Report on lessons learned from military 
      operations in Iraq.........................................    41
Title IV--Central Intelligence Agency............................    41
    Section 401--Protection from tort liability for certain 
      Central Intelligence Agency personnel......................    41
    Section 402--Repeal of limitation on use of funds in Central 
      Services Working Capital Fund..............................    42
Title V--Department of Defense...................................    43
    Section 501--Use of funds for counter-drug and counter-
      terrorism activities for Colombia..........................    43
    Section 502--Authority to provide living quarters for certain 
      students in cooperative and summer education programs of 
      the National Security Agency...............................    43
    Section 503--Authority for Intelligence Community elements of 
      Department of Defense to award personal service contracts..    44
    Section 504--Protection of certain National Security Agency 
      personnel from tort liability..............................    45
    Section 505--Measurement and signatures intelligence 
      program....................................................    45
Committee Position...............................................    46
Correspondence with Other Committees Regarding Particular 
  Provisions.....................................................    46
    Letter from Chairman Hunter to Chairman Goss.................    50
    Letter from Chairman Goss to Chairman Hunter.................    50
    Letter from Chairman Sensenbrenner to Chairman Goss..........    46
    Letter from Chairman Goss to Chairman Sensenbrenner..........    47
    Letter from Chairman Oxley to Chairman Goss..................    48
    Letter from Chairman Goss to Chairman Oxley..................    49
Oversight Findings and Recommendations...........................    51
Fiscal Year Cost Projections.....................................    51
Congressional Budget Office Estimates............................    52
Committee Cost Estimates.........................................    57
Specific Constitutional Authority for Congressional Enactment of 
  this Legislation...............................................    57
Changes to Existing Law..........................................    57
    The amendment is as follows:
    Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

  (a) Short Title.--This Act may be cited as the ``Intelligence 
Authorization Act for Fiscal Year 2004''.
  (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.

                    TITLE I--INTELLIGENCE ACTIVITIES

Sec. 101. Authorization of appropriations.
Sec. 102. Classified schedule of authorizations.
Sec. 103. Personnel ceiling adjustments.
Sec. 104. Intelligence Community Management Account.
Sec. 105. Intelligence elements of the Department of the Treasury.

 TITLE II--CENTRAL INTELLIGENCE AGENCY RETIREMENT AND DISABILITY SYSTEM

Sec. 201. Authorization of appropriations.

                     TITLE III--GENERAL PROVISIONS

                Subtitle A--Recurring General Provisions

Sec. 301. Increase in employee compensation and benefits authorized by 
law.
Sec. 302. Restriction on conduct of intelligence activities.

                        Subtitle B--Intelligence

Sec. 311. Modification of notice and wait requirements on projects to 
construct or improve intelligence community facilities.

                    Subtitle C--Counterintelligence

Sec. 321. Counterintelligence initiatives for the intelligence 
community.

                       Subtitle D--Other Matters

Sec. 331. Extension of suspension of reorganization of Diplomatic 
Telecommunications Service Program Office.
Sec. 332. Modifications of authorities on explosive materials.
Sec. 333. Modification of prohibition on the naturalization of certain 
persons.
Sec. 334. Modification to definition of financial institution in the 
Right to Financial Privacy Act.
Sec. 335. Procedural requirements for Central Intelligence Agency 
relating to products of Federal prison industries.
Sec. 336. Improvement of information sharing among federal, State, and 
local government officials.

              Subtitle E--Reports and Technical Amendments

Sec. 341. Extension of deadline for final report of the National 
Commission for the Review of the Research and Development Programs of 
the United States Intelligence Community.
Sec. 342. Modification of various reports required of intelligence 
community elements.
Sec. 343. Technical amendments.
Sec. 344. Report on lessons learned from military operations in Iraq.

                 TITLE IV--CENTRAL INTELLIGENCE AGENCY

Sec. 401. Protection from tort liability for certain Central 
Intelligence Agency personnel.
Sec. 402. Repeal of limitation on use of funds in Central Services 
Working Capital Fund.

          TITLE V--DEPARTMENT OF DEFENSE INTELLIGENCE MATTERS

Sec. 501. Use of funds for counterdrug and counterterrorism activities 
for Colombia.
Sec. 502. Authority to provide living quarters for certain students in 
cooperative and summer education programs of the National Security 
Agency.
Sec. 503. Authority for intelligence community elements of Department 
of Defense to award personal service contracts.
Sec. 504. Protection of certain National Security Agency personnel from 
tort liability.
Sec. 505. Measurement and signatures intelligence program.

                    TITLE I--INTELLIGENCE ACTIVITIES

SEC. 101. AUTHORIZATION OF APPROPRIATIONS.

  Funds are hereby authorized to be appropriated for fiscal year 2004 
for the conduct of the intelligence and intelligence-related activities 
of the following elements of the United States Government:
          (1) The Central Intelligence Agency.
          (2) The Department of Defense.
          (3) The Defense Intelligence Agency.
          (4) The National Security Agency.
          (5) The National Reconnaissance Office.
          (6) The National Imagery and Mapping Agency.
          (7) The Department of the Army, the Department of the Navy, 
        and the Department of the Air Force.
          (8) The Department of State.
          (9) The Department of the Treasury.
          (10) The Department of Energy.
          (11) The Department of Justice.
          (12) The Federal Bureau of Investigation.
          (13) The Department of Homeland Security.
          (14) The Coast Guard.

SEC. 102. CLASSIFIED SCHEDULE OF AUTHORIZATIONS.

  (a) Specifications of Amounts and Personnel Ceilings.--The amounts 
authorized to be appropriated under section 101, and the authorized 
personnel ceilings as of September 30, 2004, for the conduct of the 
intelligence and intelligence-related activities of the elements listed 
in such section, are those specified in the classified Schedule of 
Authorizations prepared to accompany the bill H.R. 2417 of the One 
Hundred Eighth Congress.
  (b) Availability of Classified Schedule of Authorizations.--The 
Schedule of Authorizations shall be made available to the Committees on 
Appropriations of the Senate and House of Representatives and to the 
President. The President shall provide for suitable distribution of the 
Schedule, or of appropriate portions of the Schedule, within the 
executive branch.

SEC. 103. PERSONNEL CEILING ADJUSTMENTS.

  (a) Authority for Adjustments.--With the approval of the Director of 
the Office of Management and Budget, the Director of Central 
Intelligence may authorize employment of civilian personnel in excess 
of the number authorized for fiscal year 2004 under section 102 when 
the Director of Central Intelligence determines that such action is 
necessary to the performance of important intelligence functions, 
except that the number of personnel employed in excess of the number 
authorized under such section may not, for any element of the 
intelligence community, exceed 2 percent of the number of civilian 
personnel authorized under such section for such element.
  (b) Notice to Intelligence Committees.--The Director of Central 
Intelligence shall notify promptly 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 2004 the sum of 
$192,640,000. 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, 2005.
  (b) Authorized Personnel Levels.--The elements within the 
Intelligence Community Management Account of the Director of Central 
Intelligence are authorized 320 full-time personnel as of September 30, 
2004. Personnel serving in such elements may be permanent employees of 
the Intelligence Community Management Account or personnel detailed 
from other elements of the United States Government.
  (c) Classified Authorizations.--
          (1) Authorization of appropriations.--In addition to amounts 
        authorized to be appropriated for the Intelligence Community 
        Management Account by subsection (a), there are also authorized 
        to be appropriated for the Intelligence Community Management 
        Account for fiscal year 2004 such additional amounts as are 
        specified in the classified Schedule of Authorizations referred 
        to in section 102(a). Such additional amounts shall remain 
        available until September 30, 2004.
          (2) Authorization of personnel.--In addition to the personnel 
        authorized by subsection (b) for elements of the Intelligence 
        Community Management Account as of September 30, 2004, there 
        are 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 2004 any 
officer or employee of the United States or a member of the Armed 
Forces who is detailed to the staff of the Intelligence Community 
Management Account from another element of the United States Government 
shall be detailed on a reimbursable basis, except that any such 
officer, employee, or member may be detailed on a nonreimbursable basis 
for a period of less than one year for the performance of temporary 
functions as required by the Director of Central Intelligence.
  (e) National Drug Intelligence Center.--
          (1) In general.--Of the amount authorized to be appropriated 
        in subsection (a), $34,248,000 shall be available for the 
        National Drug Intelligence Center. Within such amount, funds 
        provided for research, development, testing, and evaluation 
        purposes shall remain available until September 30, 2005, and 
        funds provided for procurement purposes shall remain available 
        until September 30, 2006.
          (2) Transfer of funds.--The Director of Central Intelligence 
        shall transfer to the Attorney General funds available for the 
        National Drug Intelligence Center under paragraph (1). The 
        Attorney General shall utilize funds so transferred for the 
        activities of the National Drug Intelligence Center.
          (3) Limitation.--Amounts available for the National Drug 
        Intelligence Center may not be used in contravention of the 
        provisions of section 103(d)(1) of the National Security Act of 
        1947 (50 U.S.C. 403-3(d)(1)).
          (4) Authority.--Notwithstanding any other provision of law, 
        the Attorney General shall retain full authority over the 
        operations of the National Drug Intelligence Center.

SEC. 105. INTELLIGENCE ELEMENTS OF THE DEPARTMENT OF THE TREASURY.

  (a) In General.--(1) 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:
   ``bureau of intelligence and enforcement of the department of the 
                                treasury
  ``Sec. 119. (a) In General.--There is within the Department of the 
Treasury a Bureau of Intelligence and Enforcement headed by an 
Assistant Secretary for Intelligence and Enforcement, who shall be 
appointed by the President, by and with the advice and consent of the 
Senate.
  ``(b) Responsibilities.--(1) The Assistant Secretary for Intelligence 
and Enforcement shall oversee and coordinate functions of the Bureau of 
Intelligence and Enforcement.
  ``(2) The Assistant Secretary shall report directly to the Secretary 
of the Treasury.
  ``(c) Composition of Bureau.--The Bureau of Intelligence and 
Enforcement shall consist of the following offices:
          ``(1) The Office of Intelligence Support.
          ``(2) The Office of Foreign Assets Control.
          ``(3) The Financial Crimes Enforcement Network.
          ``(4) Such other offices as the Assistant Secretary may 
        establish.''.
  (2) The table of contents contained in the first section of such Act 
is amended by inserting after the item relating to section 118 the 
following new item:

``Sec. 119. Bureau of Intelligence and Enforcement of the Department of 
the Treasury.''.

  (b) Consultation With DCI in Appointment of Assistant Secretary for 
Intelligence and Enforcement.--Section 106(b)(2) of such Act (50 U.S.C. 
403-6(b)(2)) is amended by adding at the end the following new 
subparagraph:
          ``(E) The Assistant Secretary for Intelligence and 
        Enforcement.''.
  (c) Conforming Amendments.--(1) Section 3(4) of such Act (50 U.S.C. 
401a(4)) is amended--
          (A) by striking ``the Department of the Treasury,'' in 
        subparagraph (H);
          (B) by striking ``and'' at the end of subparagraph (J);
          (C) by redesignating subparagraph (K) as subparagraph (L); 
        and
          (D) by inserting after subparagraph (J) the following new 
        subparagraph:
                  ``(K) the Bureau of Intelligence and Enforcement of 
                the Department of the Treasury; and''.
  (2) Section 5315 of title 5, United States Code, is amended in the 
item relating to Assistant Secretaries of the Treasury by striking 
``(7)'' and inserting ``(8)''.

 TITLE II--CENTRAL INTELLIGENCE AGENCY RETIREMENT AND DISABILITY SYSTEM

SEC. 201. AUTHORIZATION OF APPROPRIATIONS.

  There is authorized to be appropriated for the Central Intelligence 
Agency Retirement and Disability Fund for fiscal year 2004 the sum of 
$226,400,000.

                     TITLE III--GENERAL PROVISIONS

                Subtitle A--Recurring General Provisions

SEC. 301. INCREASE IN EMPLOYEE COMPENSATION AND BENEFITS AUTHORIZED BY 
                    LAW.

  Appropriations authorized by this Act for salary, pay, retirement, 
and other benefits for Federal employees may be increased by such 
additional or supplemental amounts as may be necessary for increases in 
such compensation or benefits authorized by law.

SEC. 302. RESTRICTION ON CONDUCT OF INTELLIGENCE ACTIVITIES.

  The authorization of appropriations by this Act shall not be deemed 
to constitute authority for the conduct of any intelligence activity 
which is not otherwise permitted under the Constitution or authorized 
pursuant to the laws of the United States.

                        Subtitle B--Intelligence

SEC. 311. MODIFICATION OF NOTICE AND WAIT REQUIREMENTS ON PROJECTS TO 
                    CONSTRUCT OR IMPROVE INTELLIGENCE COMMUNITY 
                    FACILITIES.

  (a) Increase of Thresholds for Notice.--Section 602(a) of the 
Intelligence Authorization Act for Fiscal Year 1995 (Public Law 103-
359; 108 Stat. 3432; 50 U.S.C. 403-2b(a)) is amended--
          (1) by striking ``$750,000'' each place it appears and 
        inserting ``$5,000,000'';
          (2) by striking ``$500,000'' each place it appears and 
        inserting ``$1,000,000''; and
          (3) in paragraph (2), as amended by paragraph (2) of this 
        subsection, by inserting after ``$1,000,000'' the second place 
        it appears, the following: ``but less than $5,000,000''.
  (b) Notice and Wait Requirements for Emergency Projects.--Section 
602(b)(2) of the Intelligence Authorization Act for Fiscal Year 1995 
(Public Law 103-359; 108 Stat. 3432; 50 U.S.C. 403-2b(b)(2)) is 
amended--
          (1) in the third sentence, by striking ``21-day'' and 
        inserting ``7-day''; and,
          (2) by adding at the end the following new sentence: 
        ``Notwithstanding the preceding provisions of this paragraph, 
        when the Director of Central Intelligence and Secretary of 
        Defense jointly determine that an emergency relating to the 
        national security or to the protection of health, safety, or 
        environmental quality exists and that delay would irreparably 
        harm any or all of those interests, the project may begin on 
        the date the notification is received by such committees.''.

                    Subtitle C--Counterintelligence

SEC. 321. COUNTERINTELLIGENCE INITIATIVES FOR THE INTELLIGENCE 
                    COMMUNITY.

  (a) In General.--(1) Title XI of the National Security Act of 1947 
(50 U.S.C. 401 et seq.) is amended by adding at the end the following 
new section:
                   ``counterintelligence initiatives
  ``Sec. 1102. (a) Inspection Process.--(1) In order to protect 
intelligence sources and methods from unauthorized disclosure, the 
Director of Central Intelligence shall establish and implement an 
inspection process for all agencies and departments of the United 
States that handle classified information relating to the national 
security of the United States intended to assure that those agencies 
and departments maintain effective operational security practices and 
programs directed against counterintelligence activities.
  ``(2) The Director shall carry out the process through the Office of 
the National Counterintelligence Executive.
  ``(b) FBI Counterintelligence Office.--The Attorney General, acting 
through the Director of the Federal Bureau of Investigation, shall 
establish an Office of Counterintelligence within the Bureau to 
investigate potential espionage activities within the Bureau.
  ``(c) Annual Review of Dissemination Lists.--(1) The Director of 
Central Intelligence shall establish and implement a process for all 
elements of the intelligence community (as defined in section 101(4)) 
to review, on an annual basis, individuals included on distribution 
lists for access to classified information. Such process shall ensure 
that only individuals who have a particularized `need to know' (as 
determined by the Director) are continued on such distribution lists.
  ``(2) Not later than October 15 of each year, the Director shall 
certify to the congressional intelligence committees that the review 
required under paragraph (1) has been conducted in all elements of the 
intelligence community during the preceding fiscal year.
  ``(d) Required Completion of Financial Disclosure Statements.--(1) 
The Director of Central Intelligence shall establish and implement a 
process by which heads of the elements of the intelligence community 
(as defined in section 101(4)) direct that all employees, in order to 
be granted access to classified information, submit financial 
disclosure forms required under section 1.3(b) of Executive Order No. 
12969 (August 2, 1995; 60 F.R. 40245; 50 U.S.C. 435 note).
  ``(2) The Director shall carry out paragraph (1) through the Office 
of the National Counterintelligence Executive.
  ``(e) Arrangements To Handle Sensitive Information.--The Director of 
Central Intelligence shall establish, for all elements of the 
intelligence community (as defined in section 101(4)), programs and 
procedures by which sensitive classified information relating to human 
intelligence is safeguarded against unauthorized disclosure by 
employees of those elements.''.
  (2) The table of contents contained in the first section of such Act 
is amended in the items relating to title XI by adding at the end the 
following new item:

``Sec. 1102. Counterintelligence initiatives.''.

  (b) Intelligence and National Security Aspects of Espionage 
Prosecutions.--The Attorney General, acting through the Office of 
Intelligence Policy and Review of the Department of Justice, in 
consultation with the Office of the National Counterintelligence 
Executive, shall establish policies and procedures to assist the 
Attorney General in the Attorney General's consideration of 
intelligence and national security equities in the development of 
charging documents and related pleadings in espionage prosecutions.

                       Subtitle D--Other Matters

SEC. 331. EXTENSION OF SUSPENSION OF REORGANIZATION OF DIPLOMATIC 
                    TELECOMMUNICATIONS SERVICE PROGRAM OFFICE.

  Section 311 of the Intelligence Authorization Act for Fiscal Year 
2002 (Public Law 107-108; 115 Stat. 1401; 22 U.S.C. 7301 note), as 
amended by section 351 of the Intelligence Authorization Act for Fiscal 
Year 2003 (Public Law 107-306; 116 Stat. 2401; 22 U.S.C. 7301 note), is 
amended--
          (1) in the heading, by striking ``TWO-YEAR'' before 
        ``SUSPENSION OF REORGANIZATION''; and
          (2) in the text, by striking ``ending on October 1, 2003'' 
        and inserting ``ending on the date that is 60 days after the 
        date on which appropriate congressional committees of 
        jurisdiction (as defined in section 324(d) of that Act (22 
        U.S.C. 7304(d)) are notified jointly by the Secretary of State 
        (or the Secretary's designee) and the Director of the Office of 
        Management and Budget (or the Director's designee) that the 
        operational framework for the office has been terminated''.

SEC. 332. MODIFICATIONS OF AUTHORITIES ON EXPLOSIVE MATERIALS.

  (a) Authority To Distribute Explosive Materials to Qualified 
Aliens.--Notwithstanding any other provision of law, it shall be lawful 
for any person knowingly to distribute explosive materials to any 
qualified alien--
          (1) if, in the case of a qualified alien described in 
        subsection (c)(1), the distribution to, shipment to, 
        transportation to, receipt by, or possession by the alien of 
        the explosive materials is in furtherance of such cooperation; 
        or
          (2) if, in the case of a qualified alien described in 
        subsection (c)(2), the distribution to, shipping to, 
        transporting to, possession by, or receipt by the alien of 
        explosive materials is in furtherance of the authorized 
        military purpose.
  (b) Authority for Qualified Aliens To Ship Explosive Materials.--
Notwithstanding any other provision of law, it shall be lawful for a 
qualified alien to ship or transport any explosive in or affecting 
interstate or foreign commerce or to receive or possess any explosive 
which has been shipped or transported in or affecting interstate or 
foreign commerce--
          (1) if, in the case of a qualified alien described in 
        subsection (c)(1), the possession, shipment, or transportation 
        by the alien of the explosive materials is in furtherance of 
        such cooperation; or
          (2) if, in the case of a qualified alien described in 
        subsection (c)(2), the possession, shipment, or transportation 
        by the alien of explosive materials is in furtherance of the 
        authorized military purpose.
  (c) Qualified Alien Defined.--In this section, the term ``qualified 
alien'' means an alien--
          (1) who is lawfully present in the United States in 
        cooperation with the Director of Central Intelligence; or
          (2) who is a member of a North Atlantic Treaty Organization 
        (NATO), or other friendly foreign military force (as determined 
        by the Attorney General with the concurrence of the Secretary 
        of Defense) who is present in the United States under military 
        orders for training or other military purpose authorized by the 
        United States.

SEC. 333. MODIFICATION OF PROHIBITION ON THE NATURALIZATION OF CERTAIN 
                    PERSONS.

  Section 313(e)(4) of the Immigration and Nationality Act (8 U.S.C. 
1424(e)(4)) is amended--
          (1) by inserting ``when Department of Defense activities are 
        relevant to the determination'' after ``Secretary of Defense''; 
        and
          (2) by inserting ``and the Secretary of Homeland Security'' 
        after ``Attorney General''.

SEC. 334. MODIFICATION TO DEFINITION OF FINANCIAL INSTITUTION IN THE 
                    RIGHT TO FINANCIAL PRIVACY ACT.

  (a) In General.--Section 1101(1) of the Right to Financial Privacy 
Act of 1978 (12 U.S.C. 3401(1)) is amended by inserting ``, except as 
provided in section 1114,'' before ``means any office''.
  (b) Definition.--Section 1114 of such Act (12 U.S.C. 3414) is amended 
by adding at the end the following:
  ``(c) For purposes of this section, the term `financial institution' 
has the same meaning as in section 5312(a)(2) of title 31, United 
States Code, except that, for purposes of this section, such term shall 
include only such a financial institution any part of which is located 
inside any State or territory of the United States, the District of 
Columbia, Puerto Rico, Guam, American Samoa, or the United States 
Virgin Islands.''.

SEC. 335. PROCEDURAL REQUIREMENTS FOR CENTRAL INTELLIGENCE AGENCY 
                    RELATING TO PRODUCTS OF FEDERAL PRISON INDUSTRIES.

  The Central Intelligence Agency Act of 1949 (50 U.S.C. 403a et seq.) 
is amended by adding at the end the following new section:
 ``procedural requirements for central intelligence agency relating to 
                 products of federal prison industries
  ``Sec. 23. (a) Market Research.--Before purchasing a product listed 
in the latest edition of the Federal Prison Industries catalog under 
section 4124(d) of title 18, United States Code, the Director shall 
conduct market research to determine whether the Federal Prison 
Industries product is comparable to products available from the private 
sector that best meet the Agency's needs in terms of price, quality, 
and time of delivery.
  ``(b) Competition Requirement.--If the Director determines that a 
Federal Prison Industries product is not comparable in price, quality, 
or time of delivery to products available from the private sector that 
best meet the Agency's needs in terms of price, quality, and time of 
delivery, the Director shall use competitive procedures for the 
procurement of the product or shall make an individual purchase under a 
multiple award contract. In conducting such a competition or making 
such a purchase, the Director shall consider a timely offer from 
Federal Prison Industries.
  ``(c) Implementation by Director.--The Director shall ensure that--
          ``(1) the Agency does not purchase a Federal Prison 
        Industries product or service unless a contracting officer of 
        the Agency determines that the product or service is comparable 
        to products or services available from the private sector that 
        best meet the Agency's needs in terms of price, quality, and 
        time of delivery; and
          ``(2) Federal Prison Industries performs its contractual 
        obligations to the same extent as any other contractor for the 
        Agency.
  ``(d) Market Research Determination Not Subject to Review.--A 
determination by a contracting officer regarding whether a product or 
service offered by Federal Prison Industries is comparable to products 
or services available from the private sector that best meet the 
Agency's needs in terms of price, quality, and time of delivery shall 
not be subject to review pursuant to section 4124(b) of title 18.
  ``(e) Performance as a Subcontractor.--(1) A contractor or potential 
contractor of the Agency may not be required to use Federal Prison 
Industries as a subcontractor or supplier of products or provider of 
services for the performance of a contract of the Agency by any means, 
including means such as--
          ``(A) a contract solicitation provision requiring a 
        contractor to offer to make use of products or services of 
        Federal Prison Industries in the performance of the contract;
          ``(B) a contract specification requiring the contractor to 
        use specific products or services (or classes of products or 
        services) offered by Federal Prison Industries in the 
        performance of the contract; or
          ``(C) any contract modification directing the use of products 
        or services of Federal Prison Industries in the performance of 
        the contract.
  ``(2) In this subsection, the term `contractor', with respect to a 
contract, includes a subcontractor at any tier under the contract.
  ``(f) Protection of Classified and Sensitive Information.--The 
Director may not enter into any contract with Federal Prison Industries 
under which an inmate worker would have access to--
          ``(1) any data that is classified;
          ``(2) any geographic data regarding the location of--
                  ``(A) surface and subsurface infrastructure providing 
                communications or water or electrical power 
                distribution;
                  ``(B) pipelines for the distribution of natural gas, 
                bulk petroleum products, or other commodities; or
                  ``(C) other utilities; or
          ``(3) any personal or financial information about any 
        individual private citizen, including information relating to 
        such person's real property however described, without the 
        prior consent of the individual.
  ``(g) Application of Provision.--This section is subject to the 
preceding provisions of this Act, and shall not be construed as 
affecting any right or duty of the Director under those provisions.
  ``(h) Definitions.--In this section:
          ``(1) The terms `competitive procedures' and `procurement' 
        have the meanings given such terms in section 4 of the Office 
        of Federal Procurement Policy Act (41 U.S.C. 403).
          ``(2) The term `market research' means obtaining specific 
        information about the price, quality, and time of delivery of 
        products available in the private sector through a variety of 
        means, which may include--
                  ``(A) contacting knowledgeable individuals in 
                government and industry;
                  ``(B) interactive communication among industry, 
                acquisition personnel, and customers; and
                  ``(C) interchange meetings or pre-solicitation 
                conferences with potential offerors.''.

SEC. 336. IMPROVEMENT OF INFORMATION SHARING AMONG FEDERAL, STATE, AND 
                    LOCAL GOVERNMENT OFFICIALS.

  (a) Pilot Project To Encourage State and Local Officials, As Well As 
Representatives of Critical Infrastructure, To Collect and Share 
Relevant Information.--Section 892(c) of the Homeland Security Act of 
2002 (Public Law 107-296; 6 U.S.C. 482) is amended by adding at the end 
the following new paragraph:
          ``(3)(A) The Under Secretary for Information Analysis and 
        Infrastructure Protection of the Department of Homeland 
        Security, in consultation with the Director of Central 
        Intelligence, may conduct projects in several cities to 
        encourage officials of State and local government, as well as 
        representatives of industries that comprise the critical 
        infrastructure in those cities to lawfully collect and to pass 
        on to the appropriate Federal officials information vital for 
        the prevention of terrorist attacks against the United States.
          ``(B) The Director of Central Intelligence shall carry out 
        any duty under this paragraph through the Director of the 
        Terrorist Threat Integration Center.
          ``(C) Under the projects, training shall be provided to such 
        officials and representatives to--
                  ``(i) identify sources of potential threats through 
                such methods as the Secretary determines appropriate;
                  ``(ii) report information relating to such potential 
                threats to the appropriate Federal agencies in the 
                appropriate form and manner; and
                  ``(iii) assure that all reported information is 
                systematically submitted to and passed on by the 
                Department for use by appropriate Federal agencies.
          ``(D) The Under Secretary shall carry out the pilot project 
        under this paragraph for a period of 3 years.
          ``(E) Not later than 1 year after the implementation of the 
        pilot project, and annually thereafter, the Under Secretary 
        shall submit to Congress a report on the pilot project 
        conducted under this paragraph. Each such report shall 
        include--
                  ``(i) an assessment of the effectiveness of the 
                project; and
                  ``(ii) recommendations on the continuation of the 
                project as well as any recommendations to improve the 
                effectiveness of information collection and sharing by 
                such officials and representatives and the Federal 
                government.''.
  (b) Pilot Project To Test Use of Tear-line Intelligence Reports.--(1) 
Subtitle C of title II of the Homeland Security Act of 2002 (Public Law 
107-296) is amended by adding at the end the following new section:

``SEC. 226. PILOT PROJECT TO TEST USE OF TEAR-LINE INTELLIGENCE 
                    REPORTS.

  ``(a) Authority.--The Under Secretary for Information Analysis and 
Infrastructure Protection of the Department of Homeland Security, in 
consultation with the Director of Central Intelligence, may carry out a 
pilot program under which the Under Secretary may make intelligence 
information in the possession of the Department available to officials 
of State and local governments through the use of tear-line 
intelligence reports.
  ``(b) Tear-line Intelligence Reports Described.--For purpose of this 
section, a tear-line report is a report containing intelligence 
gathered by an agency or department of the United States that is in the 
possession of the Department that is prepared in a manner such that 
information relating to intelligence sources and methods is easily 
severable from the report to protect such sources and methods from 
disclosure. Such a report may be in a paper or an electronic format.
  ``(c) Duration of Project.--The Under Secretary shall carry out the 
pilot project under this section for a period of 3 years.
  ``(d) Reports to Congress.--Not later than 1 year after the 
implementation of the pilot project, and annually thereafter, the Under 
Secretary shall submit to Congress a report on the pilot project 
conducted under this section, and shall include in the report an 
assessment of--
          ``(1) the effectiveness of the use of the tear-line reports 
        in providing intelligence information on a timely basis to 
        State and local authorities; and
          ``(2) if the use of such tear-line reports were to be made 
        permanent, whether additional safeguards are needed with 
        respect to the use of such reports.
  ``(e) Authorization of Appropriations.--There are authorized to be 
appropriated to the Under Secretary such sums as may be necessary to 
carry out this section.''.
  (2) The table of contents in section 1(b) of such Act is amended in 
subtitle C of title II by adding at the end the following new item.

``Sec. 226. Pilot project to test use of tear-line intelligence 
reports.''.

  (c) Homeland Defender Intelligence Training Program.
          (1) Establishment of program.--The Director of Central 
        Intelligence may establish a comprehensive program of 
        orientation and training to qualified State and local officials 
        in accessing and using available resources of the intelligence 
        community (as defined in section 3(4) of the National Security 
        Act of 1947 (50 U.S.C. 401(4))).
          (2) Consultation.--Insofar as the Director establishes the 
        intelligence training program under paragraph (1), the Director 
        shall consult and coordinate with the director of the Federal 
        Bureau of Investigation and the Secretary of Homeland Security 
        on the development and administration of the program.
          (3) Program goals.--Any intelligence training program 
        established under paragraph (1) shall provide qualified State 
        and local officials instruction on the mission and roles of the 
        intelligence community to promote more effective information 
        sharing among Federal, State, and local officials to prevent 
        terrorist attacks against the United States.
          (4) Curriculum.--Insofar as the Director establishes the 
        intelligence training program under paragraph (1), the Director 
        shall develop a curriculum for the program after consultation 
        with qualified State and local officials. The curriculum shall 
        include classroom instruction with respect to and orientation 
        to the various elements of the intelligence community.
          (5) Reports to congress.--Not later than 1 year after the 
        initial implementation of the intelligence training program 
        under paragraph (1), and annually thereafter, the Director 
        shall submit to Congress a report on the program. Each such 
        report shall include--
                  (A) an assessment of the effectiveness of the 
                project; and
                  (B) recommendations on the continuation of the 
                project as well as any recommendations to improve the 
                effectiveness of information collection and sharing by 
                qualified officials and representatives and the Federal 
                government.
          (6) Qualified state and local officials defined.--For 
        purposes of this subsection, the term ``qualified State and 
        local officials'' means officials of State and local government 
        agencies that Director of Central Intelligence determines--
                  (A) have received appropriate security clearances 
                from the Director of the Federal Bureau of 
                Investigation for access to classified information; and
                  (B) oversee or manage first responders or 
                counterterrorism activities.
          (7) Authorization of appropriations.--There is authorized to 
        be appropriated to the Director such sums as are necessary to 
        carry out the intelligence training program under this 
        subsection.
  (d) Advisory Councils.--(1) The Director of the Terrorist Threat 
Integration Center shall establish two advisory councils (described in 
paragraph (2)) to provide the Director such advice and recommendations 
as the Director may require to effectively carry out the functions of 
the Center.
  (2)(A) One advisory council shall have as its focus privacy and civil 
liberties issues.
  (B) The other advisory council shall have as its focus State and 
local government information needs.

              Subtitle E--Reports and Technical Amendments

SEC. 341. EXTENSION OF DEADLINE FOR FINAL REPORT OF THE NATIONAL 
                    COMMISSION FOR THE REVIEW OF THE RESEARCH AND 
                    DEVELOPMENT PROGRAMS OF THE UNITED STATES 
                    INTELLIGENCE COMMUNITY.

  (a) In General.--Subsection (a) of section 1007 of the Intelligence 
Authorization Act for Fiscal Year 2003 (Public Law 107-306; 50 U.S.C. 
401 note; 116 Stat. 2442) is amended by striking ``September 1, 2003'' 
and inserting ``September 1, 2004''.
  (b) Effective Date.--The amendment made by subsection (a) shall take 
effect as if included in the enactment of section 1007 of the 
Intelligence Authorization Act for Fiscal Year 2003.

SEC. 342. MODIFICATION OF VARIOUS REPORTS REQUIRED OF INTELLIGENCE 
                    COMMUNITY ELEMENTS.

  (a) Reports on Acquisition of Technology Relating to Weapons of Mass 
Destruction and Advanced Conventional Munitions.--Subsection (b)(1) of 
section 721 of the Intelligence Authorization Act for Fiscal Year 1997 
(Public Law 104-293; 110 Stat. 3474; 50 U.S.C. 2366), as amended by 
section 811(b)(5)(C) of the Intelligence Authorization Act for Fiscal 
Year 2003 (Public Law 107-306; 116 Stat. 2424; 50 U.S.C. 2366), is 
amended by striking ``a semiannual'' and inserting ``an annual''.
  (b) Periodic and Special Reports on Disclosure of Intelligence 
Information to United Nations.--Section 112(b)(1) of the National 
Security Act of 1947 (50 U.S.C. 404g(b)(1)) is amended by striking 
``semiannually'' and inserting ``annually''.

SEC. 343. TECHNICAL AMENDMENTS.

  (a) National Security Act of 1947.--Section 112(d)(1) of the National 
Security Act of 1947 (50 U.S.C. 404g(d)(1)) is amended by striking 
``section 103(c)(6)'' and inserting ``section 103(c)(7)''.
  (b) Central Intelligence Agency Act of  1949.--(1) Section 6 of the 
Central Intelligence Agency Act of 1949 (50 U.S.C. 403g) is amended by 
striking ``section 103(c)(6)'' and inserting ``section 103(c)(7)''.
  (2) Section 15 of such Act (50 U.S.C. 403o) is amended--
          (A) in subsection (a)(1), by striking ``special policemen of 
        the General Services Administration perform under the first 
        section of the Act entitled `An Act to authorize the Federal 
        Works Administrator or officials of the Federal Works Agency 
        duly authorized by him to appoint special policemen for duty 
        upon Federal property under the jurisdiction of the Federal 
        Works Agency, and for other purposes' (40 U.S.C. 318),'' and 
        inserting ``officers and agents of the Department of Homeland 
        Security, as provided in section 1315(b)(2) of title 40, United 
        States Code,''; and
          (B) in subsection (b), by striking ``the fourth section of 
        the Act referred to in subsection (a) of this section (40 
        U.S.C. 318c)'' and inserting ``section 1315(c)(2) of title 40, 
        United States Code''.
  (c) National Security Agency Act of  1959.--Section 11 of the 
National Security Agency Act of 1959 (50 U.S.C. 402 note) is amended--
          (1) in subsection (a)(1), by striking ``special policemen of 
        the General Services Administration perform under the first 
        section of the Act entitled `An Act to authorize the Federal 
        Works Administrator or officials of the Federal Works Agency 
        duly authorized by him to appoint special policemen for duty 
        upon Federal property under the jurisdiction of the Federal 
        Works Agency, and for other purposes' (40 U.S.C. 318)'' and 
        inserting ``officers and agents of the Department of Homeland 
        Security, as provided in section 1315(b)(2) of title 40, United 
        States Code,''; and
          (2) in subsection (b), by striking ``the fourth section of 
        the Act referred to in subsection (a) (40 U.S.C. 318c)'' and 
        inserting ``section 1315(c)(2) of title 40, United States 
        Code''.
  (d) Intelligence Authorization Act for Fiscal Year 2003.--Section 343 
of the Intelligence Authorization Act for Fiscal Year 2003 (Public Law 
107-306; 116 Stat. 2399; 50 U.S.C. 404n-2) is amended--
          (1) in subsection (c), by striking ``section 103(c)(6) of the 
        National Security Act of 1947 (50 U.S.C. 403-3(c)(6))'' and 
        inserting ``section 103(c)(7) of the National Security Act of 
        1947 (50 U.S.C. 403-3(c)(7))''; and
          (2) in subsection (e)(2), by striking ``section 103(c)(6)'' 
        and inserting ``section 103(c)(7)''.
  (e) Public Law 107-173.--Section 201(c)(3)(F) of the Enhanced Border 
Security and Visa Entry Reform Act of 2002 (Public Law 107-173; 116 
Stat. 548; 8 U.S.C. 1721(c)(3)(F)) is amended by striking ``section 
103(c)(6) of the National Security Act of 1947 (50 U.S.C. 403-
3(c)(6))'' and inserting ``section 103(c)(7) of the National Security 
Act of 1947 (50 U.S.C. 403-3(c)(7))''.
  (f) Federal Information Security Management Act of 2002.--Section 
3535(b)(1) of title 44, United States Code, as added by section 
1001(b)(1) of the Homeland Security Act of 2002 (Public Law 107-296), 
and section 3545(b)(1) of title 44, United States Code, as added by 
section 301(b)(1) of the E-Government Act of 2002 (Public Law 107-347), 
are each amended by inserting ``or any other law'' after ``1978''.

SEC. 344. REPORT ON LESSONS LEARNED FROM MILITARY OPERATIONS IN IRAQ.

  (a) Report.--Not later than one year after the date of the enactment 
of this Act, the Director of Central Intelligence shall submit to the 
appropriate committees of Congress a report on the intelligence lessons 
learned as a result of Operation Iraqi Freedom, including lessons 
relating to the following:
          (1) The tasking, collection, processing, exploitation, 
        analysis, and dissemination of intelligence.
          (2) Accuracy, timeliness, and objectivity of intelligence 
        analysis.
          (3) Intelligence support to policymakers and members of the 
        Armed Forces in combat.
          (4) Coordination of intelligence activities and operations 
        with military operations.
          (5) Strengths and limitations of intelligence systems and 
        equipment.
          (6) Such other matters as the Director considers appropriate.
  (b) Recommendations.--The report under subsection (a) shall include 
such recommendations on improvement in the matters described in 
subsection (a) as the Director considers appropriate.
  (c) Appropriate Committees of Congress Defined.--In this section, the 
term ``appropriate committees of Congress'' means--
          (1) the Permanent Select Committee on Intelligence and the 
        Committee on Armed Services of the House of Representatives; 
        and
          (2) the Select Committee on Intelligence and the Committee on 
        Armed Services of the Senate.

                 TITLE IV--CENTRAL INTELLIGENCE AGENCY

SEC. 401. PROTECTION FROM TORT LIABILITY FOR CERTAIN CENTRAL 
                    INTELLIGENCE AGENCY PERSONNEL.

  (a) In General.--Section 15 of the Central Intelligence Agency Act of 
1949 (50 U.S.C. 403o) is amended by adding at the end the following new 
subsection:
  ``(d)(1) Notwithstanding any other provision of law, any Agency 
personnel designated by the Director under subsection (a) shall be 
deemed for purposes of chapter 171 of title 28, United States Code, or 
any other provision of law relating to tort liability, to be acting 
within the scope of their office or employment if the Agency personnel 
take reasonable action, which may include the use of force, to--
          ``(A) protect an individual in the presence of the Agency 
        personnel from a crime of violence;
          ``(B) provide immediate assistance to an individual who has 
        suffered or who is threatened with bodily harm; or
          ``(C) prevent the escape of any individual whom the Agency 
        personnel reasonably believe to have committed a crime of 
        violence in the presence of such personnel.
  ``(2) In this subsection, the term `crime of violence' has the 
meaning given that term in section 16 of title 18, United States 
Code.''.
  (b) Construction.--Subsection (d) of section 15, as added by 
subsection (a), shall not be construed as affecting the authorities of 
the Attorney General under the Federal Employees Liability Reform and 
Tort Compensation Act of 1988 (Public Law 100-694; 28 U.S.C. 2671, 
2674, 2679(b), 2679(d)).

SEC. 402. REPEAL OF LIMITATION ON USE OF FUNDS IN CENTRAL SERVICES 
                    WORKING CAPITAL FUND.

  Section 21(f)(2) of the Central Intelligence Agency Act of 1949 (50 
U.S.C. 403u(f)(2)) is amended--
          (1) in subparagraph (A), by striking ``(A) Subject to 
        subparagraph (B), the Director'' and inserting ``The 
        Director''; and
          (2) by striking subparagraph (B).

          TITLE V--DEPARTMENT OF DEFENSE INTELLIGENCE MATTERS

SEC. 501. USE OF FUNDS FOR COUNTERDRUG AND COUNTERTERRORISM ACTIVITIES 
                    FOR COLOMBIA.

  (a) Extension of Authority.--Subsection (a) of section 501 of the 
Intelligence Authorization Act for Fiscal Year 2003 (Public Law 107-
306; 116 Stat. 2404) is amended by striking ``for fiscal years 2002 and 
2003'' and inserting ``for each of fiscal years 2002 through 2005''.
  (b) Modification.--Subsection (e) of such section is amended to read 
as follows:
  ``(e) Prohibition.--No United States Armed Forces personnel, United 
States civilian employee or contractor engaged by the United States 
will participate in any combat operation in connection with assistance 
made available under this section, except for the purpose of acting to 
protect the life or the physical security of others, in self defense, 
or during the course of search and rescue operations.''.
  (c) Technical Amendment.--Subsection (d) of such section is amended 
by striking ``Sections 556, 567, and 568 of Public Law 107-115, section 
8093 of the Department of Defense Appropriations Act, 2002,'' and 
inserting ``Section 553 and the certification requirements of section 
564(a)(2) of the Foreign Operations, Export Financing, and Related 
Programs Appropriations Act, 2003 (division E of Public Law 108-7; 117 
Stat. 200, 205), and section 8093 of the Department of Defense 
Appropriations Act, 2003 (Public Law 107-248; 116 Stat. 1558; 10 U.S.C. 
182 note),''.
  (d) Effective Date.--The amendments made by subsections (b) and (c) 
shall apply to assistance made available under such section 501 during 
fiscal years 2004 and 2005.

SEC. 502. AUTHORITY TO PROVIDE LIVING QUARTERS FOR CERTAIN STUDENTS IN 
                    COOPERATIVE AND SUMMER EDUCATION PROGRAMS OF THE 
                    NATIONAL SECURITY AGENCY.

  Section 2195 of title 10, United States Code, is amended by adding at 
the end the following new subsection:
  ``(d)(1) The Director of the National Security Agency may provide a 
qualifying employee of a defense laboratory of that Agency with living 
quarters at no charge, or at a rate or charge prescribed by the 
Director by regulation, without regard to section 5911(c) of title 5.
  ``(2) In this subsection, the term `qualifying employee' means a 
student who is employed at the National Security Agency under--
          ``(A) a Student Educational Employment Program of the Agency 
        conducted under this section or any other provision of law; or
          ``(B) a similar cooperative or summer education program of 
        the Agency that meets the criteria for Federal cooperative or 
        summer education programs prescribed by the Office of Personnel 
        Management.''.

SEC. 503. AUTHORITY FOR INTELLIGENCE COMMUNITY ELEMENTS OF DEPARTMENT 
                    OF DEFENSE TO AWARD PERSONAL SERVICE CONTRACTS.

  (a) In General.--Subchapter I of chapter 21 of title 10, United 
States Code, is amended by adding at the end the following new section:

``Sec. 426. Personal services contracts: authority and limitations

  ``(a) Personal Services.--(1) The Secretary of Defense may, 
notwithstanding section 3109 of title 5, enter into personal services 
contracts in the United States if the personal services directly 
support the mission of a defense intelligence component or counter-
intelligence organization.
  ``(2) The contracting officer for a personal services contract shall 
be responsible for ensuring that a personal services contract is the 
appropriate vehicle for carrying out the purpose of the contract.
  ``(b) Definition.--In this section, the term `defense intelligence 
component' means a component of the Department of Defense that is an 
element of the intelligence community, as defined in section 3(4) of 
the National Security Act of 1947 (50 U.S.C. 401a(4)).''.
  (b) Clerical Amendment.--The table of sections at the beginning of 
such subchapter is amended by adding at the end the following new item:

``426. Personal services contracts: authority and limitations.''.

SEC. 504. PROTECTION OF CERTAIN NATIONAL SECURITY AGENCY PERSONNEL FROM 
                    TORT LIABILITY.

  Section 11 of the National Security Agency Act of 1959 (50 U.S.C. 402 
note) is amended by adding at the end the following new subsection:
  ``(d)(1) Notwithstanding any other provision of law, agency personnel 
designated by the Director of the National Security Agency under 
subsection (a) shall be considered for purposes of chapter 171 of title 
28, United States Code, or any other provision of law relating to tort 
liability, to be acting within the scope of their office or employment 
when such agency personnel take reasonable action, which may include 
the use of force, to--
          ``(A) protect an individual in the presence of such agency 
        personnel from a crime of violence;
          ``(B) provide immediate assistance to an individual who has 
        suffered or who is threatened with bodily harm; or
          ``(C) prevent the escape of any individual whom such agency 
        personnel reasonably believe to have committed a crime of 
        violence in the presence of such agency personnel.
  ``(2) Paragraph (1) shall not affect the authorities of the Attorney 
General under section 2679(d)(1) of title 28, United States Code.
  ``(3) In this subsection, the term `crime of violence' has the 
meaning given that term in section 16 of title 18, United States 
Code.''.

SEC. 505. MEASUREMENT AND SIGNATURES INTELLIGENCE RESEARCH PROGRAM.

  (a) Research Program.--The Secretary of Defense, acting through the 
Director of the Defense Intelligence Agency's Directorate for MASINT 
and Technical Collection, shall carry out a program to incorporate the 
results of basic research on sensors into the measurement and 
signatures intelligence systems of the United States, to the extent the 
results of such research is applicable to such systems.
  (b) Program Components.--The program under subsection (a) shall 
review and assess both basic research on sensors and technologies 
conducted by the United States Government and by non-governmental 
entities. In carrying out the program, the Director shall protect 
intellectual property rights, maintain organizational flexibility, and 
establish research projects, funding levels, and potential benefits in 
an equitable manner through Directorate.
  (c) Advisory Panel.--(1) The Director shall establish an advisory 
panel to assist the Director in carrying out the program under 
subsection (a).
  (2) The advisory panel shall be headed by the Director who shall 
determine the selection, review, and assessment of the research 
projects under the program.
  (3)(A) The Director shall appoint as members of the advisory panel 
representatives of each entity of the MASINT community, and may appoint 
as such members representatives of national laboratories, universities, 
and private sector entities.
  (B) For purposes of this subsection the term ``MASINT community'' 
means academic, professional, industrial, and government entities that 
are committed towards the advancement of the sciences in measurement 
and signatures intelligence.
  (C) The term for a member of the advisory panel shall be established 
by the Director, but may not exceed a period of 5 consecutive years.
  (D) Members of the advisory panel may not receive additional pay, 
allowances, or benefits by reason of their service on the advisory 
panel, but may receive per diem in lieu of subsistence, in accordance 
with applicable provisions under subchapter I of chapter 57 of title 5, 
United States Code.
  (4) The Director may accept contributions from non-governmental 
participants on the advisory panel to defray the expenses of the 
advisory panel.

                                Purpose

    The bill would:
          (1) Authorize appropriations for fiscal year 2004 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, 
        2004 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 2003 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 $226.4 million for the Central 
        Intelligence Agency Retirement and Disability Fund 
        (CIARDS) in order to fully fund the accruing cost of 
        retirement benefits for individuals in the Civil 
        Service Retirement System, CIARDS, and other federal 
        retirement systems;
          (4) Establish a Bureau of Intelligence and 
        Enforcement within the Department of the Treasury, to 
        be headed by an Assistant Secretary for Intelligence 
        and Enforcement, that will enhance the government's 
        ability to gather and process information about the 
        financial support of terrorism and other illegal 
        activity;
          (5) Improve the government's ability to identify and 
        prosecute individuals engaged in espionage against the 
        United States;
          (6) Require the DCI to report on lessons learned as a 
        result of military operations in Iraq;
          (7) Improve information sharing among federal, State, 
        and local government officials;
          (8) Extend the reporting deadline for the National 
        Commission for the Review of the Research and 
        Development Programs of the United States Intelligence 
        Community;
          (9) Extend the authority for the use of funds 
        designated for intelligence and intelligence-related 
        purposes for assistance to the Government of Colombia 
        for counter-drug activities to be used also to fund 
        counterterrorism activities in Colombia for each of 
        fiscal years 2004 through 2005; and
          (10) Provide limited immunity from tort liability to 
        those Special Police Officers of the Central 
        Intelligence Agency and the National Security Agency.

  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 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 XXIII of the House, and the Rules of Procedure of 
the House Permanent Select Committee on Intelligence.

                       Scope of Committee Review

    U.S. intelligence and intelligence-related activities under 
the jurisdiction of the Committee include the National Foreign 
Intelligence Program (NFIP), 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 National 
Reconnaissance Office; (5) the National Imagery and Mapping 
Agency; (6) the Departments of the Army, Navy, and Air Force; 
(7) the Department of State; (8) the Department of the 
Treasury; (9) the Department of Energy; (10) the Department of 
Justice; (11) the Federal Bureau of Investigation; (12) the 
Department of Homeland Security; and (13) the Coast Guard.
    The Department of Defense TIARA are 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 shared 
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 shared 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 2004 budget request, carrying out its annual 
responsibility to prepare an authorization based on close 
examination of intelligence programs and proposed expenditures. 
The Committee, and in some cases, its component subcommittees, 
held 12 budget-related hearings covering all major intelligence 
programs within the National Foreign Intelligence Program, the 
Joint Military Intelligence Program, and the Tactical 
Intelligence and Related Activities accounts.
    As always, the Committee's legislative and budgetary 
actions are based on more than these budget-specific hearings. 
The actions taken in this bill are the result of the 
Committee's ongoing, rigorous oversight of the U.S. 
Intelligence Community. This oversight activity includes scores 
of Committee and subcommittee hearings on intelligence 
capabilities, strategies, plans, and challenges each year. In 
addition, the Committee Members and staff undertake hundreds of 
briefings and site visits annually.
    Members of this Committee (and other observers) have noted 
repeatedly that the Global War on Terrorism (GWOT) has focused 
greater public attention on the Intelligence Community and its 
mission. In the 21 months since the terrorist attacks on the 
World Trade Center, the Pentagon, and United Flight 93, the men 
and women of the United States Intelligence Community have 
faced many and varied challenges. They have responded with 
commendable skill and determination.
    Overall, the Committee finds that the U.S. Intelligence 
Community is making progress in many areas and that there has 
been a degree of recovery from the cutbacks in budgets, 
personnel, and capabilities that occurred following the end of 
the Cold War. As this Committee has stressed repeatedly, 
however, intelligence capabilities cannot be created--or 
bought--overnight. It takes time, sustained effort, and a long-
term strategy to bring human intelligence (HUMINT), signals 
intelligence (SIGINT), imagery intelligence (IMINT), and other 
intelligence systems and disciplines to life successfully. A 
similar commitment is required to build and maintain the 
analytic expertise and depth of coverage necessary to make wise 
and timely use of the information collected.
    Therefore, increased investments in resources and 
personnel, while necessary, are only a partial answer to the 
question of how to build an effective Intelligence Community 
for the decades to come. The Committee has sought to understand 
where those investments are made, how they will be sustained in 
the future, what specific intelligence capabilities are 
created, and how the information collected and analyzed as a 
result of those capabilities will be shared across the 
Community.
    This legislation, along with its accompanying report and 
classified annex, contains the Committee's specific 
recommendations for where the U.S. Intelligence Community 
should be heading and how the fiscal year 2004 intelligence 
budget should be invested. The Committee's budgetary oversight 
activities have resulted in the Committee recommending in this 
legislation unanimously an authorization of appropriations that 
is just above the President's request.Underlying the individual 
provisions of this bill is the continued belief that the nation's 
security would benefit from fundamental structural and management 
changes within the Intelligence Community.
    Specifically, H.R. 2417:
          Provides full support for the Intelligence 
        Community's efforts in the war on terrorism;
          Postures the Intelligence Community for the future 
        with a unified overhead imagery architecture;
          Makes needed investments in analysis and analytic 
        tools; and
          Focuses on counterintelligence issues, including the 
        adoption of several recommendations that stem from the 
        Hanssen damage assessment.
    Finally, the Committee continues to have significant 
concerns regarding the extent to which the Intelligence 
Community relies on supplemental appropriations to support a 
range of activities that the Committee considers core mission 
areas. The Committee reiterates its belief that supplemental 
funding may provide short-term fixes for specific emergencies, 
but the widespread, long-term reliance on supplemental funds 
has an erosive, negative effect on planning, investment, and 
oversight.

                       AREAS OF SPECIAL INTEREST

    In the following several pages, the Committee highlights 
areas of concern that it believes must be addressed with a high 
priority by the Director of Central Intelligence (DCI) as the 
leader of the Intelligence Community, and by the administration 
generally if intelligence sufficient to protect our national 
security is to be obtained and provided. The Committee places 
particular emphasis on issues that impact the Intelligence 
Community as a whole or that involve several various programs.

CIA's Compensation Reform Plan

    The Committee is disconcerted that many of the rank and 
file at the Central Intelligence Agency believe that the 
Congress is no longer interested in or engaged on the issue of 
compensation reform at the Agency. This is most certainly not 
the case. The Committee is further concerned that the 
prevailing belief is that the proposed compensation reform will 
become a reality regardless of the results of the ongoing pilot 
program.
    The Congress directed, in the fiscal year 2003 Intelligence 
Authorization Act, that CIA establish a one-year pilot program 
to test a revised ``pay for performance'' compensation system 
proposed by CIA management. Given that the pilot program was 
not begun until February 1, 2003, the Committee considers it 
premature for CIA management to promote the idea that the 
compensation reform proposal is successful and will be 
implemented immediately upon completion of the pilot program. 
Clearly, an objective evaluation will need to be conducted once 
the pilot program has been completed. The Committee wants to 
make it clearly understood that any implementation of 
compensation reform will occur only after CIA management and 
the oversight committees have had ample opportunity to 
thoroughly review and fully address the conclusions of the 
pilot program evaluation.

The Intelligence Community Imperative: The Primacy of the Analyst

    The Committee notes that the Intelligence Community (IC) 
has regularly touted the importance of the analyst. If one of 
the main goals of the IC is to put evaluated information before 
policy makers, then the importance of the analyst should be 
self-evident. There has been little evidence, however, to 
suggest that analytical efforts have received the primacy they 
deserve.
    Part of this is driven by an imbalance of monetary 
requirements. Collection systems simply cost much more than do 
analytical efforts. The Committee is not suggesting that the IC 
reduce collection or that it invest in fewer collection 
mechanisms. On the contrary, the Committee believes that the IC 
must position itself to analyze more of what it collects. This 
is not an either/or choice. Collection is meaningless unless 
there are analysts available to work on the collected 
intelligence.
    Several management issues are presented:
    New analysts must be trained and retained. The formal 
training analysts receive remains brief and uneven across the 
Community. More emphasis must be placed on analyst training, on 
consistent career development, and on better mentoring.
    Analytic tools can be helpful, but they cannot replace 
analysts in either numbers or in quality. A highly skilled and 
motivated analyst is more important than any analytic tool and 
far more dependable.
    Analytic needs should drive collection, not vice versa. 
This has been repeated time after time by the Committee and 
across the Community, to little effect. A ``collection 
dominated'' system does not serve policy makers well. In such 
systems chances grow of a disjuncture between policy and 
intelligence.
    Analysis is sharpened when there is competition among 
agencies on specific issues. It has become more difficult for 
agencies to take part in competitive analysis as the numbers of 
analysts have shrunk. The Committee expects that with increased 
hiring and better retention of the analytic cadre, that 
competitive analysis will likewise increase.
    The Committee notes that some positive steps have been 
taken on these matters. The National Intelligence Priorities 
Framework (NIPF) that the Assistant Directors of Central 
Intelligence (ADCI) for Analysis & Production and for 
Collection have developed to carry out the President's 
intelligence priorities make strides to correcting many of 
these issues. The Committee believes that the Director of 
Central Intelligence (DCI) must develop a coherent, focused 
program to achieve the above goals, in order to assure that 
analysis finally has the primacy it needs for the Intelligence 
Community to best serve the needs of policy makers and the 
nation's security.

Global HUMINT and Core Mission

    Supporting the global war on terrorism is currently the top 
priority of America's intelligence agencies. The Committee 
believes that, with few exceptions, they are doing a 
commendable--and sometimes remarkable--job. One of the 
casualties of this war, however, is adequate HUMINT coverage in 
areas of the world that easily could produce America's next 
security crisis. Given the very limited numbers of experienced 
HUMINT officers, and especially those with deep geographical 
area and foreign language expertise, the agencies have been 
forced to make whole regions of the world, and certain key 
issues, a lower intelligence collection priority. The primary 
reason for this inadequacy is the underinvestment in this core 
capability during the mid to late 1990s.
    As a result of that underinvestment, experienced HUMINT 
officers have needed to be ``surged'' time and again from their 
home areas to provide crisis support. Gaps in intelligence 
collection and production are the immediate, noticeable result. 
Less noticeable, but perhaps more ominous, is the inevitable 
damage to America's future security. Quality human-sourced 
intelligence is entirely dependent on carefully nurtured human 
relationships, and the key elementof such relationships is 
mutual trust. Human partnerships of this sort cannot be built 
overnight. Trusted, quality, human-sourced intelligence cannot be 
treated like water in a fire hydrant; to be opened only in cases of 
emergency. Rather, it needs to be a deep reservoir that is consistently 
available.
    When officers are ``surged'' away from their areas of 
expertise, their existing relationships often wither, and the 
new relationships they are expected to build in a compressed 
timeframe, and with pressing national security imperatives, 
never come into being. The sources of future HUMINT, to include 
intelligence on the plans and intentions of future foes, and 
erstwhile friends, are like seeds for future crops. An 
inadequate number of seeds were planted over the past decade. 
Far too few are being planted currently. The Committee would 
note, with disapproval, that in some areas they are not being 
planted at all. This is an entirely unacceptable state of 
affairs.
    The Committee recognizes the extraordinary demands being 
made on our limited HUMINT cadres, and likewise understands 
management's inclination to mass resources on the terrorist 
target. Still, it seems that more attention must be given, as 
well, to the development of quality human-sourced intelligence 
that is forward looking and not constrained predominately by 
the counterterrorism collection requirements. This need not be 
an ``either/or'' proposition. The Committee believes that 
keeping expert officers in the area of their expertise, for the 
sake of America's future needs, is critical to meeting this 
enhanced HUMINT collection capability.
    The Committee has received welcome assurances that the 
situation in the future will be better with the hiring and 
training of increased numbers of HUMINT officers. The Committee 
will only be completely assured, however, when these new 
officers, with their new tradecraft and foreign language 
skills, are sent abroad to acquire core mission experience and 
establish area expertise. If they, too, are ``surged'' away to 
areas of crisis in response to the needs of the moment, then 
the current rebuilding of core mission capabilities and global 
HUMINT coverage will not be seen as a promising exercise. 
Needless to say, the Committee will be aggressive in its 
oversight on this issue. The United States and its citizens can 
afford nothing less.

FBI Reform Efforts

    The Committee wishes to commend the Federal Bureau of 
Investigation for its remarkable efforts and progress since 
September 11, 2001. The Federal Bureau of Investigation, has 
undertaken a critical reevaluation of both its priorities and 
its methods of accomplishing its national security obligations 
and objectives. In order to meet emerging threats and to 
counter the means used to carry out those threats, the FBI has 
developed a new strategic focus.
    In order to meet each of its priorities, the FBI's 
workforce is being realigned in several ways. The FBI Director 
has, among other initiatives,
          shifted approximately 1,000 Special Agents to 
        counterterrorism, thereby doubling the FBI's prior 
        commitment;
          established Joint Terrorism Task Forces (JTTFs) in 
        every FBI field office and a National JTTF at FBI 
        Headquarters (which includes representatives from 30 
        federal, State, and local agencies);
          created the Counterterrorism Prevention and Analysis 
        Branch;
          hired approximately 100 counterterrorism analysts in 
        fiscal year 2002;
          strengthened its language translation capabilities by 
        more than 200% over pre-9/11 levels, with a particular 
        emphasis in languages pertinent to the threat posed by 
        al Qaeda; and
          enabled State and local law enforcement authorities 
        to participate more fully in the national 
        counterterrorism effort by placing relevant information 
        in the Violent Gang/Terrorist Organizations File 
        (VGTOF) of the National Crime Information Center 
        (NCIC), which is a database available to over 600,000 
        State and local law enforcement officers.
    The FBI, likewise, leads the Foreign Terrorist Tracking 
Task Force (FTTTF), which is a multi-agency task force 
established by the President to keep foreign terrorists and 
their supporters out of the U.S. through entry denial, removal, 
or other appropriate action. The FBI is a main participant in 
the Terrorist Threat Integration Center (TTIC). Finally, the 
FBI operates with the Central Intelligence Agency, the National 
Security Agency, and the Defense Intelligence Agency in a 
Document Exploitation working group to review documents, 
electronic media, videotapes, and other materials obtained as a 
result of military and intelligence community actions, 
particularly in Afghanistan and Pakistan. All of this is 
progress, and the Committee anticipates continued improvements 
in this regard.
    The FBI has also acknowledged the need for improving its 
counterintelligence capabilities. The Hanssen damage assessment 
and the recent criminal charges leveled against Katrina Leung 
and J.J. Smith make plain the need for immediate corrective 
action in this regard. Moreover, the foreign intelligence 
threat currently facing the U.S. from foreign nation-state and 
non-state actors is increasingly complex and asymmetrical. The 
Committee supports steps the FBI has taken so far, such as:
          Developing a national CI strategy with specified 
        objectives;
          Establishing a centrally managed analysis program to 
        assess foreign intelligence threats on a national 
        level;
          Designating a counterespionage section to focus 
        investigative efforts on espionage activities.
The Committee notes with concern the lack of management 
oversight of CI cases that has become apparent in the Leung 
case, and while it may be a vestige of past historical 
practices,looks forward to regular updates on how management 
practices and CI guidelines, including asset validation efforts, are 
currently being implemented.
    The Committee notes that there are still several proposals 
relating to the enhancement of the FBI's CI program that are in 
various stages of development and implementation. The Committee 
anticipates positive movement in this regard and anticipates 
status reports from the FBI as these matters move closer to 
completion.
    The Committee applauds the FBI for its acknowledgment that 
few things are more critical to the ability of the FBI to 
accomplish its counterterrorism and other missions than the 
establishment of a solid relationship between it and the larger 
law enforcement community at all levels of government. In order 
to ensure that the communication flow and valued relationships 
continue to improve, the FBI created the Office of Law 
Enforcement Coordination to build and strengthen relationships 
among and between the FBI and its federal, State, and local law 
enforcement colleagues. Committee members remain concerned that 
information sharing between the FBI and State and local law 
enforcement colleagues still needs improvements. The Committee 
strongly urges the FBI to place a high priority on making 
additional progress on this issue.
    Finally, the Committee supports the FBI's plan to improve 
its information technology infrastructure. The development of 
flexible, powerful, and user-friendly information management 
tools is central to the FBI's ability to meet its requirements 
with respect to counterterrorism as well as 
counterintelligence. The Committee is aware of the progress the 
FBI has made in this regard, including the development of a 
Virtual Case File. The importance of such improvements 
continuing and being sustained in the out-years cannot be 
overstated.

Funding by Supplemental Appropriations

    The Committee is compelled to restate its concern with 
respect to the use of supplemental appropriations to fund lower 
priority, but still important, intelligence and intelligence-
related programs. But these have not been the only programs 
funded through this process. Core mission and core mission 
support programs have also been included in supplemental 
appropriations. The Committee recognizes that this practice has 
its genesis in a fiscal strategy presented due to crisis 
response. The repeated reliance on supplemental appropriations 
has an erosive negative effect on planning, and impedes long-
term, strategic planning. The Committee hopes that the IC has 
finally reached a plateau of resources and capabilities on 
which long-term strategic planning can now begin.
    It is imperative that the FY 2005 budget request for the IC 
identify both the strategic and tactical needs of the IC. The 
Committee expects that the FY 2005 budget request will 
prioritize rationally across the various agencies. The 
Committee anticipates that it will provide the necessary 
funding to accomplish core mission, core mission support, and 
strategic posturing. It should anticipate the intelligence 
needs of the future and provide sufficient research and 
development funds to position the IC well for the next 
generation of national security issues facing the nation.
    The Committee cannot help but note that budgeting by 
supplemental consequentially limits congressional oversight. 
The Committee strongly believes that the health of the IC is 
directly related to the oversight from Congress it receives. 
Certainly, the confidence of the American people in the 
activities and programs of the IC is increased significantly as 
a result of the transparency that exists between the IC and its 
congressional overseers.

Consolidation of Information Technology

    In the Fiscal Year 2003 Intelligence Authorization Act, the 
Conferees directed that funds authorized within the 
Consolidated Cryptologic Program (CCP) could be obligated or 
expended on information technology (including computers, 
storage capability, servers, switches, etc.) only after review 
and approval by the Information Technology Directorate. The 
Committee notes, however, that the fiscal year 2004 CCP 
Congressional Budget Justification Book and NSA briefings have 
not provided the assurance that this review and approval is 
occurring. Duplication of effort, for example, continues to 
occur as efforts to recapitalize the information technology 
infrastructure at SIGINT field site progresses. Numerous 
examples can be identified. The Information Technology 
Directorate should be managing these information technology 
infrastructure modernization efforts in a prioritized method 
based on user needs. The Senior Acquisition Executive should be 
responsible for ensuring the acquisition programs directed to 
deliver the needed information technology capabilities are 
executing the acquisitions properly.
    For the GROUNDBREAKER program, the Information Technology 
Directorate conducted a wall-to-wall inventory of 
``administrative'' information technology resources. As a 
result, most of the ``administrative'' information technology 
resources are also used as ``mission'' information technology 
resources. The boundaries between administrative and mission 
information technology are artificial, and are apparently used 
to justify developing and purchasing information technology 
resources without the knowledge and consent of the Director of 
Information Technology, who is responsible for information 
technology resources.
    Accordingly, to ensure that funding for information 
technology resources is effectively spent, the Committee 
directs that no funding within the CCP may be obligated or 
expended for any information technology hardware used for 
administrative or mission purposes without the review and 
approval of the Director of Information Technology. This review 
is intended to ensure that information technology solutions are 
not being provided elsewhere, and that they are consistent with 
the information technology configuration baseline, support 
agreements and modernization plans. The NSA Senior Acquisition 
Executive remains responsible and accountable for acquisition 
of all such capability.

National Foreign Intelligence Support to Homeland Security

    The Committee understands that certain Department of 
Defense agencies funded within the National Foreign 
Intelligence Program (NFIP) have been directed to limit the 
amount of resources dedicated to supporting the Department of 
Homeland Security. The Committee notes that the Director of 
Central Intelligence is, through the resources and activities 
of the NFIP,responsible for supporting all U.S. government 
national security interests, as directed by the President. The 
Committee would find very troubling any direction to NFIP agencies that 
would limit the DCI's ability to provide intelligence to any 
appropriate U.S. government entity, particularly the Department of 
Homeland Security.

The Intelligence Community's Role in Protecting the Homeland

    The Committee supports the goal of developing an effective 
intelligence architecture for protecting the homeland. The 
Committee, of course, supports innovation in the IC's missions, 
structures, and processes to improve its role in securing the 
homeland. The Committee notes, however, a number of important 
challenges facing the IC.
    The first challenge is that of focusing sufficient 
attention on the role of State, local, and private sector 
actors. The Committee recognizes the tremendous progress made 
in sharing information and coordinating operationally with 
State and local officials on counterterrorism matters. 
Nevertheless, with anecdotal evidence indicating improvements 
are still needed, the Committee encourages renewed attention to 
these efforts, and would highlight the need for incorporating 
private sector security officials within the information cycle. 
In particular, the Committee suggests reinforcing the 
information sharing mechanisms inherent in the FBI's JTTF 
program. The IC should also complement the significant but 
informal verbal communication channels with increasingly 
automated and more useful near-real-time electronic 
dissemination mechanisms. Additionally, efforts should be made 
to ensure that State, local, and private sector 
counterterrorism officials are appropriately-trained and tied 
in to federal counterterrorism efforts through the FBI, the 
Department of Homeland Security, and all other relevant federal 
mechanisms.
    The next challenge involves building an effective IT 
infrastructure ensuring interoperability and information 
sharing across federal, State, and local (to include the 
private sector) levels. This ``virtual'' reorganization is 
important to any degree of success in this area. The Committee 
notes that these efforts are just beginning within the 
Intelligence Community and within a number of other federal 
agencies. Senior managers across the intelligence agencies, 
including particularly the newly-established Terrorist Threat 
Integration Center (TTIC), should ensure that new phases of 
implementation of IT information sharing infrastructure are 
appropriately coordinated to ensure an effective and productive 
government-wide enterprise architecture.
    Thirdly, building new capabilities that are not just 
available, but that are coordinated parts of an integrated 
whole may be the most difficult challenge faced by federal, 
State, local, and private sector counterterrorism authorities. 
Since the September 11th terrorist attacks, a range of 
initiatives have been undertaken to focus on improving the 
architecture for the collection, analysis, and use of 
intelligence for the protection of the U.S. homeland. The FBI, 
as noted, has undertaken a number of structural, personnel, and 
information management reforms to improve its counterterrorism 
capabilities, as well as its intelligence collection, analysis, 
and exploitation capabilities. Part of this effort included the 
expansion of the JTTF program into 66 locations across the 
nation in order to address information sharing and operational 
coordination needs between federal, State, and local 
counterterrorism personnel. The Committee notes this progress 
with approval. The Committee would suggest, however, that the 
FBI still has much to do to transform itself into something 
that is more than just a highly capable criminal investigative 
organization. The Committee's vision for the FBI is for the FBI 
to also provide the U.S. government with a distinct preemptive 
capability and to engage both domestically and internationally, 
in coordination with other IC elements, wherever and whenever 
the threat of terrorism affects U.S. interests. Moving the FBI, 
strategically and aggressively, into the international arena, 
in close coordination with other IC elements, can be a force 
multiplier for the American people.
    In addition to the FBI, the new Department of Homeland 
Security opened for business on March 1, 2003, with the goal of 
creating a stronger homeland protection capability, while also 
building a new Directorate for Information Analysis and 
Infrastructure Protection (IAIP) to link threat information to 
critical infrastructure vulnerabilities. Moreover, the 
Department of Defense has established a new command, Northern 
Command (NORTHCOM), to provide an intelligence picture for DOD 
components supporting the defense of the homeland. Finally, on 
May 1, 2003, the TTIC opened its doors, with plans to move 
elements of the FBI's Counterterrorism Division and CIA's 
Counterterrorism Center into a collocated facility within a 
year. Undoubtedly, the Committee welcomes all of this action in 
defense of the American homeland. The Committee looks to the 
IC, along with the revitalized Homeland Security Council, to 
play a central coordinating role in terms of helping government 
avoid unnecessary duplication, inefficient use of resources, 
and managing the inevitable interagency squabbles that will 
develop.
    The Committee urges the President and the DCI to continue 
to devote significant attention to the process of coordination 
and interagency management on these restructuring efforts. 
Ultimately, the Committee supports efforts to ensure a 
strategic focus on innovation and on building necessary new 
capabilities. It will remain a primary focus of the Committee's 
attention.

Congressional Budget Justification Books

    For over three years the intelligence and appropriations 
committees have requested that National Foreign Intelligence 
Program (NFIP) Congressional Budget Justification Books (CBJB) 
follow the same format and contain at least the same detail 
level as the Department of Defense TIARA Congressional 
Justification Books (CBJ's). The Committee believes that this 
format change would result in greater understanding of NFIP 
budgets, resulting in many fewer formal questions for the 
record. Some agencies have been able to produce more detailed 
budgetary information when specifically requested, but in most 
cases this information is not provided in the CBJBs. The 
Committee believes, for example, that acquisition program 
details in the CBJBs should include major milestones and 
deliverables for contracted projects for the entire length of a 
contract and contain more specificity for the budget year of 
the request. Many of the project milestones in the CBJBs are, 
however, at such a high-level that the Committee is unable to 
determine the stage of the development activity or what will be 
accomplished in the coming year. The project descriptions are 
often so vague that the Committee is unable to determine the 
valueof, or even what is being developed. The Committee 
discusses this issue further in the classified annex to accompany this 
bill.

Intelligence Community Efforts To Improve Its Skills Mix, Expertise, 
        and Capabilities through Diversity

    The Committee has previously expressed the view that 
diversity throughout the Intelligence Community (IC) 
population, and in its management ranks, can pay dividends with 
respect to the richness it brings to the work of the IC, 
particularly as it relates to cultural understanding of 
particular target sets, increased language capabilities, and 
increased skills to address particular intelligence problems. 
The Committee urges the IC to continue to work to improve its 
efforts in this regard.
    The Committee supports the Director of Central 
Intelligence's (DCI) programs to improve diversity throughout 
the IC and encourages the DCI to place special attention on 
recruitment initiatives, retention programs, student programs, 
and management training. The Committee notes, however, the 
apparent lack of progress made by the IC with respect to 
improvements in the hiring, promotion, and retention of women 
and individuals from minority communities throughout the IC, 
particularly in senior ranks and in core mission areas. The 
Committee is concerned about a failure to improve in this area. 
Therefore, the Committee urges the DCI to refocus his efforts 
to increase among the IC population the diversity of skills, 
languages, talents, expertise, and people that is critical to 
the success of the IC's mission.
    The Committee requests that the DCI submit a report no 
later than February 15, 2004, outlining the current program 
plan, including the IC's short term and long-term goals with 
respect to these issues. The report should also detail the 
progress that has been made by each element of the IC in 
implementing the current plan. The Committee has limited the 
use of a portion of the funds authorized to be appropriated to 
the Community Management Account until such time as the 
requested report has been provided to the Committee.
    The Committee also requests that the DCI submit to the 
Committee any and all completed studies conducted within the 
CIA relating to hiring, promotion, or retention trends for 
women and individuals from minority communities.

Information Technology and Information Management

    The tragedy of September 11th, the ensuing war in 
Afghanistan, Operation Iraqi Freedom, and recent studies and 
analyses demonstrate conclusively the importance of digital 
information sharing, electronic collaboration, and ``horizontal 
integration'' across sensor types and intelligence disciplines. 
These capabilities cannot be realized across the Intelligence 
Community (IC) and the operational arms of the Department of 
Defense (DOD) and the Central Intelligence Agency (CIA) without 
a thorough electronic ``makeover'' and a cultural revolution 
regarding access to information and personnel networking. The 
needed changes do not involve moving boxes around on an 
organization chart or feuding about authorities; the changes 
required, though ``virtual,'' are nonetheless profound. The 
Committee has identified a number of issues that require 
serious IC leadership attention. Many of the issues that are 
addressed generally in the following six sections are more 
specifically addressed elsewhere in this report, or in the 
classified annex.

Information Sharing Policies

    The Committee has, in the past several years and 
particularly since September 11, 2001, repeatedly noted the 
need for better data sharing among the various Intelligence 
Community (IC) agencies, organizations, and entities. In fact, 
the Director of Central Intelligence, during a hearing by the 
Joint Inquiry into the Terrorist Attacks of September 11 2001, 
stated ``we also need systems that enable us to share critical 
information quickly across bureaucratic boundaries.'' He went 
on to say, ``Now, more than ever before, we need to make sure 
our customers get from us exactly what they need--which 
generally means exactly what they want--fast and free of 
unnecessary restrictions.''
    The Committee notes that information sharing within the IC 
has improved since the terrorist attacks on the United States. 
Problems and ``unnecessary restrictions,'' however, continue to 
exist. Failure to share information across the IC is simply 
unacceptable. Nevertheless, the Committee understands fully the 
need for protecting sources and methods, but, believes that the 
protection of sources and methods can be managed sufficiently 
through the use of appropriate technological applications. 
Technical shortfalls in communications and collaboration 
systems are often cited as reasons for not being able to fully 
share information. Although the Committee understands the need 
to overcome such technical hurdles, it notes that with proper 
IC management and capital investments those technical 
limitations can be overcome. In this respect, the Committee is 
favorably impressed by, and supports the efforts of, the IC 
Chief Information Officer and the Assistant Secretary of 
Defense for Networks and Information Integration to jointly 
develop the communications and information technology 
infrastructure necessary to allow for a more robust information 
sharing technical architecture.
    As part of correcting the technical limitations to 
information sharing, IC leadership should institute a program 
to share useful information management tools, capabilities and 
operating systems across the IC. For example, the IC has a 
great number of ``analytic tool'' developments and operational 
systems. These capabilities often provide unique solutions to 
unique needs. The Committee generally supports these 
initiatives. Often, however, such solutions may have a wide 
application across the IC, but, for whatever reason, are not 
shared with the other IC elements. Reasons for this include 
jeopardizing organic acquisitions, or, more likely, agency 
funding. This is an IC management failure and is indefensible.
    More important than technological solutions to information 
sharing are the needs for updated policies to direct such 
sharing. IC management has not clarified sufficiently 
information sharing policies to all the IC agencies. As a 
result, information stagnates and perishes as a result of 
outdated directives or misperceptions about what information 
can or cannot be shared and with whom. There are simply too 
many examples of the need for improvements and clarifications 
of such policies to list here.
    Suffice to say, the Committee strongly believes that the 
current situation cannot continue. Corrective measures must be 
undertaken immediately. To that end, the Committee requests the 
DCI to document the analytical needs of each agency and review 
all current IC information sharing policies to determine what 
corrections must be made. This should include a review of the 
policies of individual IC agencies. Once this review is 
complete, the DCI should formulate and promulgate specific, 
written policy guidance to the IC that results in dramatically 
improved information sharing across the IC. The Committee 
requests periodic status updates on the progress being made in 
this regard. The Committee urges the DCI to complete this 
review by July 1, 2004.

Data Tagging

    The Committee has learned that one of the most challenging 
impediments to finding, accessing, and retrieving information 
from, and across, the many Intelligence Community (IC) 
databases is the lack of data tagging. With respect to the IC, 
data tagging provides information, or the so-called `metadata,' 
about collected, processed or exploited intelligence data or 
information. Timothy West, chairman of the Intelligence 
Community Metadata Working Group, has noted that ``metadata is 
the key to sharing information.'' Since standardized metadata 
tagging can allow users to precisely, repeatedly, and 
accurately recall data, according to Mr. West, ``the consumer 
can spend more time using the information and less time 
searching'' for the information.
    The Committee understands that many within the IC have come 
to the realization that data tagging has become an imperative. 
The Committee, however, is not aware of a formal IC-wide 
strategy for agreeing on a set of tagging standards. Nor is it 
certain that any policy decisions have been made or standards 
set for tagging both new data as it is collected, or the 
massive amounts of existing information currently in the many 
data repositories across the IC. In fact, the Committee has 
learned from many within the analysis community that one of the 
greatest analytic needs is for collected data to be tagged, at 
the point of collection, so that it can be discovered, more 
readily and with improved efficiency by analysts across the 
intelligence enterprise.
    The Committee believes that the Director of Central 
Intelligence and the Secretary of Defense jointly should 
mandate metadata tagging standards for all components of the 
IC. Further, the Committee believes that the DCI should develop 
a plan to begin metadata tagging all IC collected information, 
at the point of collection, and to develop a plan for tagging 
all other archived data residing in Community databases. The 
Committee requests the DCI and the Secretary provide the 
congressional intelligence committees a briefing on their plans 
to tag collected information to improve analysis by January 30, 
2004.

Electronic Collaboration

    The importance of electronic collaboration between 
analysts, collectors, and operations personnel located far from 
one another requires no elaboration. Modern tools allow close 
interaction between peers and rapid shifts in the composition 
of networks in response to shifting priorities and crises. 
Exploiting fully the advantages of this technology necessitates 
changes in management. The practice of lengthy, hierarchical 
reviews of single agency reports to ensure quality and 
conformity must give way to an environment where personnel have 
more latitude and responsibility to create products and take 
actions within a network of multi-intelligence discipline 
peers.
    With respect to the collaboration tools themselves, the 
Committee is disappointed at the many reports it has received 
that the Joint Intelligence Virtual Architecture (JIVA) Joint 
Collaboration Environment (JCE) program is failing to live up 
to its earlier promise. By several accounts, JCE is not keeping 
up with the commercial marketplace and is not meeting the need 
for community-wide, seamless collaboration. Some years ago, the 
Committee endorsed the decision of the Assistant Secretary of 
Defense (Command, Control, Communication and Intelligence (ASD/
C3I) to adopt Microsoft's NetMeeting for DoD's unclassified 
collaboration needs, and JCE as a compatible classified 
collaboration system. DoD is now shifting to a standards-based 
approach as the commercial marketplace has matured, whereby 
organizations can procure the collaboration tools that best 
meet their needs provided that compliance with the standard is 
proven through testing. If JCE is no longer the best avenue for 
advanced collaboration with full interoperability across the 
intelligence and operational communities, a new path should be 
charted. The DoD and IC CIOs, with guidance from the USD(I) and 
the DDCI/CM, must come to an agreement quickly on a strategy to 
achieve seamless collaboration throughout the IC on a time 
scale that matches the fielding of the Global Information Grid-
Bandwidth Expansion (GIG-BE) and Intelligence Community System 
for Information Sharing (ICSIS). A summary of this strategy 
should be available to the congressional intelligence and 
defense committees by January 30, 2004.

Horizontal Integration

    Networking the IC internally, and networking the IC with 
DoD's combatant commands is critical to support fast-moving 
military or law enforcement operations. If once the CIA might 
have questioned the need for the National Foreign Intelligence 
Program (NFIP) to provide extensive tactical support, the war 
on terrorism and the war in Iraq demonstrate clearly that the 
CIA is a significant consumer and producer of operational 
information.
    The Committee requests that the DDCI/CM and the USD(I) 
produce at least an initial plan by May 15, 2004, to achieve 
integrated tasking and exploitation capabilities to support 
policy and operations, and report to the congressional 
intelligence and defense committees.

Communications

    After years of complaining about the lack of coordination 
and effective planning for high-capacity, interoperable 
communications in the DoD and the IC, the Committee is 
gratified that excellent progress has been made over the last 
year and that the prospects for the future are bright. The IC 
CIO has a good plan for servicing the entire IC. The Assistant 
Secretary of Defense for Networks and Information Integration 
(NI2), likewise, has done an excellent job of rationalizing the 
Defense Information Systems Agency's (DISA) investment in a 
parallel fibernetwork, and as of this writing was on the verge 
of winning approval for a new pricing policy for DISA's services. 
Moreover, DoD and IC CIO planners appear to be converging on how to 
interconnect the two networks, to share bandwidth, to achieve 
interoperability, and to maintain security. After years of needless 
delay, these decisions and agreements may finally allow the 
intelligence agencies and their consumers to move high volumes of data 
affordably, the prerequisite for network-centric operations.

Counterterrorism Document Exploitation

    The Committee cannot overstate its view that it is 
critically important to rapidly exploit terrorism related 
documents and to make those documents available to counter-
terrorism analysts across the community.
    The Committee understands that seized or collected 
documents are initially reviewed for immediate threat 
information, and that there then is a determination to restrict 
further dissemination. The Committee notes that documents 
deemed restricted typically have value beyond explicit threat 
reporting and should therefore be provided to counter-terrorism 
analysts expeditiously.
    The Committee requests that the Associate Director for 
Central Intelligence for Analysis and Production (ADCI A&P) 
provide the intelligence authorization committees with an 
assessment of the current state of document exploitation 
processing and analysis. This should include a review of 
materials that have not been released to all IC-wide terrorism 
analysts. The Committee expects this review to contain general 
information on what these materials are, when they were 
collected, who has them, and why the material has not been 
released for broader Intelligence Community analysis. Finally, 
the Committee requests the ADCI/A&P to develop a process for 
reviewing the status of DOCEX information sharing on a 
quarterly basis.

Iraq: Lessons Learned to Strengthen Intelligence Capabilities to 
        Counter Weapons of Mass Destruction

    Before and during the military conflict in Iraq, the 
Intelligence Community was asked to do many tough jobs. The 
dangerous work of intelligence officers continues today, and 
the Committee applauds the bravery, patriotism, and sacrifices 
of the personnel of the Intelligence Community leading up to 
and during Operation Iraqi Freedom. Now that regime change has 
occurred, however, the Committee believes a retrospective will 
be helpful in order to learn lessons regarding the effective 
execution of intelligence roles and missions before, during, 
and after the military conflict in Iraq.
    The Committee has requested that the DCI conduct an after-
action review of the IC's activities related to the Iraq 
conflict and provide a report to the Congressional oversight 
committees within one year of the enactment of this Act 
reviewing intelligence lessons learned as a result of Operation 
Iraqi Freedom. The DCI has been asked to include lessons 
relating to the tasking, collection, processing, exploitation, 
and dissemination of intelligence; accuracy, timeliness, and 
objectivity of intelligence analysis; intelligence support to 
policymakers and members of the Armed Forces in combat; 
coordination of intelligence activities and operations with 
military operations; strengths and limitations of intelligence 
systems and equipment; and other matters the Director deems 
appropriate. This request is entirely consistent with previous 
``after action'' studies undertaken following past conflicts.
    The Committee also believes a comprehensive effort is 
warranted to determine whether major new collection, 
analytical, and operational capabilities are needed to improve 
the US Intelligence Community's performance in combating the 
spread of WMD in the future. An after-action review is 
appropriate to ensure sensible investments are made in our 
future intelligence capabilities against WMD.
    In the Committee's view, the current task for the IC is to 
try to figure out who has the WMD and how they got there. The 
Committee believes the IC must ensure that it focuses on the 
highest-priority national intelligence missions. These include 
the identification of the WMD infrastructure, determining the 
whereabouts of Saddam Hussein and key regime leadership, use of 
Iraqi territory as a sanctuary by terrorist groups, and 
strategic intelligence to support post-conflict reconstruction 
efforts to build a new, viable, and peaceful Iraq.
    The Committee acknowledges that gathering intelligence 
related to WMD is difficult. Yet, the WMD challenges in Iran 
and North Korea, terrorist interest in WMD, and enforcement of 
international nonproliferation regimes are among the nation's 
most pressing intelligence and security issues. The Iraq 
conflict brings into sharp focus the need for a marshaling of 
intelligence resources for counterproliferation of WMD.

EP-3E ARIES II Recapitalization

    The Committee is aware that the U.S. Navy's EP-3E ARIES II 
signals intelligence (SIGINT) reconnaissance fleet is rapidly 
reaching its end of service life. The Committee has learned 
that because of dramatically increased operations tempo rates 
in support of the global war on terrorism and Operation Iraqi 
Freedom, nearly one-half of the EP-3E aircraft may reach end of 
service life beginning in fiscal year 2004, with the remainder 
of the fleet by fiscal year 2009. Unfortunately, there is no 
program to replace these vital intelligence aircraft, and a 
replacement is late to need.
    Dating back to 1992, the Congress has repeatedly urged the 
Department of Defense to develop a plan for replacing or 
integrating the Navy's EP-3 and the Air Force's RC-135 RIVET 
JOINT manned SIGINT reconnaissance aircraft. However, despite 
nearly two dozen various studies on this issue, there is no 
plan, no program and no dedicated funding for any effort to 
replace the aging EP-3s or to integrate the Navy operations 
with the Air Force. The Committee believes that, because of the 
imminent loss of the EP-3E aircraft, continued study or debate 
on this issue is no longer an option.
    The Committee understands that the Navy is currently 
executing a contract to, once again, study options for 
replacing the EP-3 fleet. The Committee further understands 
that options under consideration include service life extension 
of the current aircraft, the Navy's futureMulti-Mission 
Aircraft, the Army's future Aerial Common Sensor, and the Air Force's 
RC-135. The Committee believes that of the options available, the only 
choice that provides replacement aircraft in the near-term, has long-
term service-life applicability beyond 2020, and that, most 
importantly, allows the integration of Navy and Air Force operators is 
the RC-135 option. The Committee understands that the Chief of Naval 
Operations and the Chief of Staff of the Air Force agree that there is 
a great deal of synergy that could be achieved by integrating the Navy 
and Air Force operators on joint missions. The Committee agrees that 
side-by-side operations would bring the best operational concepts of 
both services to these Joint Staff-directed, theater-level, 
reconnaissance missions, and that this is an opportunity that should 
not be lost.
    Further, the Committee understands that most vehement 
objections to this integrated mission approach have been 
focused on the need for naval fleet support and the cost of the 
RC-135 versus the EP-3. As for fleet support tasking, the 
Committee notes that the Navy's EP-3 aircraft are tasked in 
precisely the same manner, and by the same authorities, as are 
the RC-135 aircraft. Further, these two aircraft are fielded 
around the world in precisely the same locations, flying the 
same mission routes. With respect to the cost of the aircraft, 
the Committee understands that past cost comparisons of the two 
aircraft have not considered all direct and indirect costs, 
and, that in fact, when all factors are considered the two 
aircraft are not dramatically different in cost, particularly 
when the additional mission capacity of the RC-135 is factored 
into the calculus. Finally, the Committee understands that six 
to eight RC-135s could replace the 12 EP-3s now in service, and 
that the resulting smaller single fleet of aircraft would 
provide the same mission capability as today's two separate 
fleets. The logic of this approach appears overwhelming.
    The Committee believes that the benefits of consolidated 
Air Force and Navy manned SIGINT reconnaissance operations are 
many, and therefore recommends $180.0 million to begin 
replacing EP-3s with RC-135 aircraft.
    Finally, the Committee understands that the Air Force Chief 
of Staff believes that new generation aircraft such as the 
Boeing 767 must be pursued for the long-term replacement of the 
RC-135. The Committee supports moving towards a more modern 
aircraft at the proper time and when the proper funding can be 
provided. When such a program can be logically pursued, the 
Committee directs that the consolidated mission approach 
outlined above must be continued.

International Narcotics Trafficking and Other Transnational Organized 
        Crime Threats to U.S. National Security

    The Committee is concerned about the level of resources and 
personnel being allocated to combatting the threats posed by 
international narcotics trafficking and other transnational 
organized crime, such as arms smuggling and money laundering. 
Given the clear and well-documented linkages between terrorist 
activity, narcotics trafficking, and other transnational 
organized crime in Colombia, Afghanistan, and North Korea, the 
Committee urges the DCI to identify and allocate sufficient 
additional IC personnel and funding to restore the IC's efforts 
in combatting transnational drug trafficking and other 
organized crime activities. These programs address significant 
threats to the country's national security and must have 
adequate personnel and funding in their own right. The 
Committee believes they deserve additional support and senior-
level engagement. The Committee expects to see a reinvigorated 
strategy to combat narcotics trafficking and other 
transnational organized crime--with appropriate funding and 
personnel levels for the DCI's Crime and Narcotics Center 
(CNC)--in the Administration's FY 2005 budget submission.

Options for Fort Ritchie, Maryland

    The Committee has noted the remarkable facility located at 
the recently closed Fort Ritchie, Maryland. Its proximity to 
Washington, D.C., within the pastoral vicinity of the Catoctin 
Mountains, makes it a location that the Committee believes 
should be strongly considered by the DCI, the Undersecretary of 
Defense for Intelligence, and the Director of the FBI, as the 
home of a future IC-wide College for Analytical Studies or IC-
wide language training facility. The facilities can accommodate 
either or both of the endeavors suggested above. The facilities 
and the surrounding region easily could also provide an idyllic 
setting for IC conferences.

              Section-by-Section Analysis and Explanation


                    Title I--Intelligence Activities


Section 101--Authorization of appropriations

    Section 101 lists the United States Government departments, 
agencies, and other elements for which the Act authorizes 
appropriations for intelligence and intelligence-related 
activities for fiscal year 2004.

Section 102--Classified schedule of authorizations

    Section 102 makes clear that the details of the amounts 
authorized to be appropriated for intelligence and 
intelligence-related activities and applicable personnel 
ceilings covered under this title for fiscal year 2004 are 
contained in a classified Schedule of Authorizations. The 
Schedule of Authorizations shall be made available to the 
Committees on Appropriations of the Senate and House of 
Representatives and to the President.

Section 103--Personnel ceiling adjustments

    Section 103 authorizes the Director of Central Intelligence 
(DCI), with the approval of the Director of the Office of 
Management and Budget (OMB), in fiscal year 2004 to authorize 
employment of civilian personnel in excess of the personnel 
ceilings applicable to the components of the Intelligence 
Community under section 102 by an amount not to exceed two 
percent of the total of the ceilings applicable under section 
102. The DCI may exercise this authority only if necessary to 
the performance of important intelligence functions. Any 
exercise of this authority must be reported to the intelligence 
committees of the Congress.

Section 104--Community Management Account

    Section 104 authorizes appropriations for the Community 
Management Account (CMA) of the DCI and sets the personnel end-
strength for the Intelligence Community Management Staff for 
fiscal year 2004.
    Subsection (a) authorizes appropriations of $192,640,000 
for fiscal year 2004 for the activities of the CMA of the DCI. 
Subsection (a) also authorizes funds identified for advanced 
research and development to remain available for two years. 
Subsection (c) explicitly authorizes the classified portion of 
the Intelligence Community Management Account.
    Subsection (b) authorizes 320 full-time personnel for 
elements within the CMA for fiscal year 2004 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) authorizes additional appropriations and 
personnel for the CMA as specified in the classified Schedule 
of Authorizations and permits the additional funding amount to 
remain available through September 30, 2005.
    Subsection (d) requires that, except as provided in section 
113 of the National Security Act of 1947, personnel from 
another element of the United States Government be detailed to 
an element of the CMA on a reimbursable basis, or for temporary 
situations of less than one year on a non-reimbursable basis.
    Subsection (e) authorizes $34,248,000 of the amount 
authorized in subsection (a) to be made available for the 
National Drug Intelligence Center (NDIC). Subsection (e) 
requires the DCI to transfer these funds to the 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.

Section 105--Intelligence elements of the Department of the Treasury

    Section 105 authorizes the establishment of a Bureau for 
Intelligence and Enforcement within the Treasury Department, 
headed by a Presidentially nominated and Congressionally 
approved Assistant Secretary. The Assistant Secretary of the 
Treasury for Intelligence and Enforcement would be appointed 
following consultations between the Treasury Secretary and the 
Director of Central Intelligence. The Bureau would consist of 
personnel drawn from Treasury's Office of Intelligence Support, 
the Office of Foreign Assets Control (OFAC), and the Financial 
Crimes Enforcement Network (FinCEN).
    Given the findings of the 9/11 Joint Inquiry, the Committee 
is very interested in ensuring that there is full, appropriate, 
and timely sharing of information and analysis within the U.S. 
Government concerning the financial networks associated with 
international terrorism. Since the September 11, 2001 terrorist 
attacks, the U.S. Government has blocked the assets of over 260 
individuals and groups supporting terrorist causes, and has 
frozen approximately $120 million in terrorist assets.
    There is currently no single office in the executive branch 
that is tasked by statute with ensuring that all elements of 
the intelligence and law enforcement communities cooperate and 
coordinate in the identification and the targeting of terrorist 
financial assets. The Committee is increasingly concerned that 
the Department of the Treasury needs to be more effective in 
articulating the counter-terrorist financing mission to the 
public and in implementing the mission requirements from an 
intelligence sharing and/or operational perspective. 
Coordination on terrorist financing issues within Treasury 
Department units and between Treasury and the Intelligence 
Community is uneven and disjointed.
    The Committee recognizes that the staffs of the Office of 
Foreign Assets Control (OFAC) and the Financial Crimes 
Enforcement Network (FinCEN) possess unique analytical 
capabilities on terrorist financial targets. However, the 
Treasury Department's access to IntelligenceCommunity 
information needs to be enhanced, and Treasury's analytical products 
need to be more effectively coordinated and disseminated jointly with 
the Intelligence Community.
    The Committee also wants to ensure that the requirements of 
the Intelligence Authorization Act for Fiscal Year 2003 (Public 
Law 107-306) are met. Section 341 of the Act requires that the 
Director of Central Intelligence establish a Foreign Terrorist 
Asset Tracking Center (FTAT-C) within the CIA. Establishment of 
a Treasury Bureau of Intelligence and Enforcement should 
markedly strengthen FTAT-C's analytic capacity. Section 342 of 
the Intelligence Authorization Act for Fiscal Year 2003 also 
requires that the Secretary of the Treasury submit semi-annual 
reports concerning operations by the United States Government 
against terrorist financial networks. The first Section 342 
report was due on February 1, 2003, but it was delivered to 
HPSCI on May 12, 2003. Following the establishment of a Bureau 
of Intelligence and Enforcement at the Treasury Department, the 
Committee expects that future Section 342 reports will provide 
a more timely and informative assessment of progress against 
terrorist financial targets.

 Title II--Central Intelligence Agency Retirement and Disability System


Section 201--Authorization of appropriations

    Section 201 authorizes appropriations in the amount of 
$226,400,000 for fiscal year 2004 for the Central Intelligence 
Agency Retirement and Disability Fund.

                     Title III--General Provisions


                SUBTITLE A--RECURRING GENERAL PROVISIONS

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

    Section 301 provides that funds authorized to be 
appropriated 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 by the Act shall not be deemed to constitute 
authority for the conduct of any intelligence activity that is 
not otherwise permitted under the Constitution or authorized 
pursuant to the laws of the United States.

                        SUBTITLE B--INTELLIGENCE

Section 311--Modification of notice and wait requirements on projects 
        to construct or improve intelligence community facilities

    Section 311 amends section 602(a) and section 602(b)(2) of 
the Intelligence Authorization Act for Fiscal Year 1995, Pub. 
L. No. 103-359 (Oct. 14, 1994) (50 U.S.C. 403-2b(a) and 403-
2b(b) (2)), by increasing certain thresholds for Congressional 
notification and/or approval with respect to certain 
construction or renovation projects.
    Subsection (a) raises the threshold for specific 
identification of a construction project in the President's 
annual fiscal year budget request and specific authorization by 
Congress for such project from $750,000 to $5,000,000. The 
section also raises the standard for notification for any new 
construction from ``$500,000 to $750,000'' to ``$1,000,000 to 
$5,000,000'' and for renovations from $500,000 to $1,000,000. 
These adjustments take into account increases in construction 
costs--particularly those related to security and information 
technology--over the eight-plus years since enactment of the 
original section 602(a).
    Subsection (b) amends section 602(b)(2) of the Intelligence 
Authorization Act for Fiscal Year 1995, Pub. L. No. 103-359 
(Oct. 14, 1994) (50 U.S.C. 403-2b(b)(2)), to provide the 
Director of Central Intelligence and Secretary of Defense with 
authority to initiate within seven days (vice 21 days) of 
congressional notification unprogrammed construction projects 
in excess of the amount specified in section 602(a) of the Act. 
Section 311 amends section 602(b)(2) to provide an effective 
means by which the Intelligence Community may move forward with 
only a 7-day waiting period on certain construction projects, 
while keeping the appropriate committees of Congress fully 
apprised of such projects. In addition, the provision provides 
a separate authority, in emergency circumstances, to initiate 
construction immediately upon notification, notwithstanding the 
7-day waiting period that would normally apply to such 
projects. This emergency authority is subject to a joint 
determination by the Director of Central Intelligence and the 
Secretary of Defense that ``an emergency relating to the 
national security or the protection of health, safety, or 
environmental quality exists and that delay would harm any or 
all of those interests.'' If the project primarily concerns the 
Central Intelligence Agency, subsection (b)(3) authorizes the 
Director of Central Intelligence to make the required 
determination unilaterally. The circumstances under which the 
exercise of this emergency authority are warranted will be 
rare, but under those circumstances, the expeditious start of 
such projects will be necessary to protect vital interests.

                    SUBTITLE C--COUNTERINTELLIGENCE

Section 321--Counterintelligence initiatives for the intelligence 
        community

    Section 321 provides for several counterintelligence reform 
initiatives following the recommendations of the inter-agency 
damage assessment team that evaluated the U.S. Government's 
management of the espionage case involving former FBI agent 
Robert Philip Hanssen.
    Subsection (a) requires the DCI, through the Office of the 
National Counterintelligence Executive (NCIX), to establish and 
implement an inspection process for all U.S. Government 
agencies that handle classified information related to national 
security matters.
    Subsection (b) requires the Attorney General, acting 
through the FBI Director, to establish an FBI Office of 
Counterintelligence to investigate potential espionage 
activities within the FBI.
    Subsection (c) requires the DCI to establish and implement 
an annual review process for all elements of the Intelligence 
Community--not later than October 15th of each year--to ensure 
that only individuals who have a particularized ``need to 
know'' are continued on classified access distribution lists.
    Subsection (d) requires the DCI, through the Office of the 
National Counterintelligence Executive (NCIX), to establish and 
implement a process by which all Intelligence Community agency 
heads direct that all employees submit financial disclosure 
forms required under section 1.3(b) of Executive order No. 
12969 (August 2, 1995; 60 F.R. 40245), in order to be granted 
access to classified information.
    Subsection (e) requires the DCI to establish and implement 
programs and procedures for all elements of the Intelligence 
Community by which sensitive classified information relating to 
human intelligence is properly safeguarded.
    Subsection (f) requires the Attorney General, acting 
through the Justice Department's Office of Intelligence Policy 
and Review and in consultation with the Office of the NCIX, to 
establish policies and procedures to assist the Attorney 
General's consideration of intelligence and national security 
equities in the development of indictments and related 
pleadings in espionage prosecutions.

                       SUBTITLE D--OTHER MATTERS

Section 331--Extension of suspension of reorganization of Diplomatic 
        Telecommunications Service Program Office

    Section 331 extends for an indefinite period the suspension 
authorized in section 311 of the Intelligence Authorization Act 
for Fiscal Year 2002, Pub. L. No. 107-108 (Dec. 28, 2001), and 
extended by section 351 of the Intelligence Authorization Act 
for Fiscal Year 2003, Pub. L. No. 107-306 (Nov. 27, 2002). 
Section 311 of the Intelligence Authorization Act for Fiscal 
Year 2002 suspended the provisions of the Intelligence 
Authorization Act for Fiscal Year 2001 (22 U.S.C. 7301 et seq.) 
that required reorganization of the Diplomatic 
Telecommunications Service Program Office (DTS-PO). Section 315 
of this Act extends the suspension until 60 days after the 
appropriate congressional committees are notified by the 
Secretary of State or the Director of OMB, or the Director's 
designees, that the present operating framework for the DTS-PO 
has been terminated.

Section 332--Modifications of authorities on explosive materials

    Section 332 provides sufficient authority for the Director 
of Central Intelligence and the Secretary of Defense to 
conduct, respectively, authorized intelligence and military 
activities of the United States Government.

Section 333--Modification of prohibition on the naturalization of 
        certain persons

    Section 333 amends section 313(e)(4) of the Immigration and 
Nationality Act (8 U.S.C. 1424(e)(4)), bringing the provision 
into essential conformity with the determination process 
established in comparable provisions of law governing the 
admission or expedited naturalization of certain aliens and 
their immediate family members, based on the alien having 
contributed to the national security or intelligence mission of 
the United States. Under section 7 of the Central Intelligence 
Agency Act of 1949 (50 U.S.C. 403h), section 316(f) of the INA 
(8 U.S.C. 1427(f)), and section 305 of Pub. L. No. 104-293 
(Oct. 11, 1996) (8 U.S.C. 1427 note), admission determinations 
regarding an alien's national security or intelligence mission 
contribution are made by the Director of Central Intelligence, 
the Attorney General, and (formerly) the Commissioner of 
Immigration and Naturalization. Unlike those provisions, 
section 313(e)(4) requires consultation with the Secretary of 
Defense. This difference from comparable determination 
processes has created implementation difficulties. This 
amendment to section 313(e)(4) leaves the determination process 
to the Director of Central Intelligence, the Attorney General, 
and the Secretary of Homeland Security, reflecting the transfer 
of responsibility for adjudication of naturalization petitions 
from the Commissioner of Immigration and Naturalization to the 
Department of Homeland Security. See Homeland Security Act of 
2002, Sec. 451(b)(2) Pub. L. No. 107-296 (Nov. 25, 2002). The 
Secretary of Defense may still request the naturalization of a 
particular alien by forwarding to the Director of Central 
Intelligence the names of aliens who have made a national 
security or intelligence contribution to the Department of 
Defense. Moreover, when Department of Defense activities are 
relevant to the determination, consultation with the Secretary 
of Defense would still be required.

Section 334--Modification of definition of financial institution in the 
        Right to Financial Privacy Act

    Section 334 provides enhanced authority for authorized 
Intelligence Community collection activities designed to 
prevent, deter, and disrupt counterintelligence activities 
directed against the United States. This section expands the 
definition of ``financial institution'' for purposes of section 
1114 of the Right to Financial Privacy Act (12 U.S.C. 3414). 
Section 1114 currently permits government authorities engaged 
in counterintelligence activities to obtain certain financial 
records. The definition of ``financial institution'' in the 
Right to Financial Privacy Act--essentially unmodified since 
the Act became law in 1978--significantly excludes certain 
entities that provide financial services to the public. 
Financial records maintained by these entities are not covered 
by the Act and, thus, are not accessible by counterintelligence 
elements of the United States government under the Act, 
limiting the effectiveness of counterintelligence 
investigations. In order to expand the definition of 
``financial institution'' for purposes only of section 1114, 
this subsection adopts, in part, the definition of ``financial 
institution'' found in section 5312(a)(2) of Title 31, United 
States Code. The expansion of thisdefinition is consistent with 
the definition used in section 804(5) of the Counterintelligence and 
Security Enhancements Act of 1994 (50 U.S.C. 438).

Section 335--Procedural requirements for Central Intelligence Agency 
        relating to products of Federal Prison Industries

    Section 335 applies new procedural requirements with 
respect to the purchasing authorities granted to the Director 
of Central Intelligence. Subsection (a) requires the DCI to 
conduct market research to determine whether products 
manufactured by Federal Prison Industries (FPI) are comparable 
to products available from the private sector that best meet 
the CIA's needs in terms of price, quality, and time of 
delivery. Subsection (b) imposes a competition requirement on 
all products manufactured by FPI that are being considered for 
purchase by CIA officials. Under subsection (g), the DCI may 
apply this provision selectively, based on pre-existing legal 
obligations under the Central Intelligence Agency Act of 1949 
(50 U.S.C. 403a et seq.).

Section 336--Improvement of information sharing among federal, State, 
        and local government officials

    Section 336 authorizes the Under Secretary for Information 
Analysis and Infrastructure Protection of the Department of 
Homeland Security, in consultation with the Director of Central 
Intelligence, to conduct two three-year pilot projects to 
improve the sharing of intelligence collected by the Federal 
government with state and local officials. These pilot projects 
are intended to complement efforts to implement the provisions 
of the Homeland Security Information Sharing Act.
    The first pilot program should be designed to encourage 
state and local officials and representatives of industries 
that comprise the critical infrastructure to share lawfully 
collected information vital to the prevention of terrorist 
attacks in the United States with appropriate federal 
officials. The training provided to officials and 
representatives should help the officials to identify sources 
of potential threats; report information related to potential 
threats to the appropriate agencies in the appropriate form and 
manner; and assure reported information is systematically 
submitted to, and passed on by the Department of Homeland 
Security for use by the appropriate Federal agencies. A report 
is required which assesses the effectiveness of the project and 
makes recommendations on its continuation and ways to improve 
the effectiveness of information sharing among officials. The 
project does not grant new authorities for the collection of 
information.
    The second pilot project should be designed to make 
intelligence information in the possession of the Department of 
Homeland Security available to State and local officials 
through the use of ``tear-line'' intelligence reports. The 
Under Secretary is required to submit a report to Congress 
which assesses the effectiveness of the use of ``tear-line'' 
reports in providing timely intelligence information to State 
and local authorities and whether permanent use of ``tear-
line'' reports requires additional safeguards. The objective of 
this project is to ensure the timely flow of actionable 
intelligence that can be used by State and locals officials to 
prevent terrorist attacks to the United States while protecting 
intelligence sources and methods.
    Section 336 also authorizes the Director of Central 
Intelligence to establish a comprehensive orientation and 
training program for state and local officials in accessing and 
using available Intelligence Community resources. In 
establishing such a program, the Director of Central 
Intelligence is required to consult and coordinate with the 
Director of the Federal Bureau of Investigation and the 
Secretary of Homeland Security on the development and 
administration of the program. The program should be designed 
with the goal of instructing state and local officials on the 
missions and roles of the Intelligence Community in an effort 
to promote better information sharing to prevent terrorist 
attacks. A report is required that assesses the effectiveness 
of the project, and makes recommendations on its continuation 
and steps to improve its effectiveness.
    Section 336 also requires the Director of the Terrorist 
Threat Integration Center to establish two advisory councils. 
One council should provide advice and recommendations on 
privacy and civil liberties issues. The other council should 
provide advice and recommendations on state and local 
government information needs.

              SUBTITLE E--REPORTS AND TECHNICAL AMENDMENTS

Section 341--Extension of deadline for final report of the National 
        Commission for the Review of the Research and Development 
        Programs of the United States Intelligence Community

    Section 341 extends the deadline for the final report of 
the National Commission for the Review of the Research and 
Development Programs of the United States Intelligence 
Community from September 1, 2003 until September 1, 2004. This 
Commission was established in Title X of the Intelligence 
Authorization Act for Fiscal Year 2003 (Public Law 107-306; 50 
U.S.C. 401 note).

Section 342--Modification of various reports required of intelligence 
        community elements

    Section 342 changes two semi-annual statutory reporting 
requirements to annual requirements.

Section 343--Technical amendments

    Section 343 makes technical corrections to several 
intelligence related provisions.
    Subsections (a),(d) and (e) correct now-erroneous citations 
to section 103(c)(6) of the National Security Act of 1947 (50 
U.S.C. 403-3(c)(7)). Section 103(c)(6) was redesignated section 
103(c)(7) by section 901 of the Uniting and Strengthening 
America by Providing Appropriate Tools Required to Intercept 
and Obstruct Terrorism (USA PATRIOT) Act of 2001, Pub. L. No. 
107-56 (Oct. 26, 2001), thus necessitating the technical 
correction made by this section.
    Subsection (b) amends Section 15 of the Central 
Intelligence Agency Act of 1949 to reflect the reorganization 
of the functions previously performed by ``special policemen of 
the General Services Administration'' to ``officers and agents 
of the Department of Homeland Security''. This section is a 
technical amendment incorporating in Section 15 of the CIA Act 
the modifications enacted as Section 1706(b)(1) of the Homeland 
Security Act of 2002, Pub. L. No. 107-296 (Nov. 25, 2002) (40 
U.S.C. 1315).
    Subsection (c) amends Section 11 of the National Security 
Agency Act of 1959, Pub. L. No. 86-36 (May 29, 1959) (50 U.S.C. 
402 note), as amended by Section 506 of the Intelligence 
Authorization Act for Fiscal Year 2002, Pub. L. No. 107-108 
(Dec. 28, 2001), to reflect the reorganization of functions 
previously performed by ``special policemen of the General 
Services Administration'' to ``officers and agents of the 
Department of Homeland Security''. This section is a technical 
amendment incorporating in Section 11 of the NSA Act the 
modifications enacted as Section 1706(b)(1) of the Homeland 
Security Act of 2002, Pub. L. No. 107-296 (Nov. 25, 2002) (40 
U.S.C. Sec. 1315).
    Subsection (f) is a technical amendment to the Federal 
Information Security Management Act of 2002. Section 1001(b)(1) 
of the Homeland Security Act of 2002 and Section 301(b)(1) of 
the E-Government Act of 2002 amended Title 44, United States 
Code, to require an annual independent evaluation of 
information security programs. As enacted, only an Inspector 
General created by the Inspector General Act of 1978 or an 
independent external auditor may perform the evaluation 
required by these provisions. Section 312 clarifies that 
Inspectors General authorized by other statutes (e.g., Section 
17 of the Central Intelligence Agency Act of 1949 (50 U.S.C. 
403q)) may also perform the required evaluation.

Section 344--Report on lessons learned from military operations in Iraq

    Section 344 requires the Director of Central Intelligence 
(DCI) to report to the Congressional oversight committees on 
intelligence lessons learned as a result of the Iraq conflict. 
The report should include lessons learned relating to the 
tasking, collection, processing, exploitation, and 
dissemination of intelligence; accuracy, timeliness, and 
objectivity of intelligence analysis; intelligence support to 
policymakers and members of the Armed Forces in combat; 
coordination of intelligence activities and operations with 
military operations; strengths and limitations of intelligence 
systems and equipment; and other matters the DCI deems 
appropriate. In addition, the report should include 
recommendations on improving the aforementioned activities.
    The committee believes that the Intelligence Community must 
engage in a comprehensive and candid assessment of its 
activities related to the Iraq conflict in order to better 
understand the strengths and weaknesses of its systems and 
processes. Such an understanding will allow the DCI to identify 
intelligence needs and to make the resource adjustments 
required to better position the Intelligence Community to meet 
future global challenges.

                 Title IV--Central Intelligence Agency


Section 401--Protection from tort liability for certain Central 
        Intelligence Agency personnel

    Section 401 clarifies that Central Intelligence Agency 
personnel designated by the Director of Central Intelligence 
under section 15(a) of the Central Intelligence Agency Act of 
1949 (CIA Act) are afforded the same protection against common 
law tort liability (e.g., assault, battery, false arrest, 
negligence, etc.) that specified law enforcement officers and 
Diplomatic Security Service officers receive by virtue of 
section 627 of the Omnibus Consolidated and Emergency 
Supplemental Appropriations Act of 1999, Pub. L. No. 105-277 
(Oct. 21, 1998), as amended by section 623 of the Treasury and 
General Government Appropriations Act, 2000, Pub. L. No. 106-58 
(Sept. 29, 1999) (28 U.S.C. 2671 note). Agency personnel 
designated under section 15(a) of the CIA Act of 1949 do not 
fall within the definition of ``law enforcement officer'' for 
purposes of section 627. Section 401 extends to such personnel 
the same protections afforded specified law enforcement 
officers and officers of the Diplomatic Security Services under 
section 627. Thus, while on official duty, designated personnel 
are deemed ``within the scope of [their] office or employment'' 
for purposes of the Federal Tort Claims Act or any other 
provision of law relating to tort liability, if such personnel
        ``take[ ] reasonable action, including the use of 
        force, to--
        (1)  protect an individual in the presence of the 
        [personnel] from a crime of violence;
        (2)  provide immediate assistance to an individual who 
        has suffered or who is threatened with bodily harm; or
        (3)  prevent the escape of any individual who the 
        [personnel] reasonably believe[ ] to have committed in 
        the presence of the [personnel] a crime of violence.''
See Section 627(b) of the Omnibus Consolidated and Emergency 
Supplemental Appropriations Act of 1999, Pub. L. No. 105-277 
(Oct. 21, 1998), as amended by Section 623 of the Treasury and 
General Government Appropriations Act, 2000, Pub. L. No. 106-58 
(Sept. 29, 1999) (28 U.S.C. 2671 note). This provision does not 
affect the authorities of the Attorney General under the 
Federal Employees Liability Reform and Tort Compensation Act of 
1988, Pub. L. No. 100-694 (Nov. 18, 1988) (``Westfall Act'') 
(28 U.S.C. 2679(d)(1)).

Section 402--Repeal on limitation on use of funds in Central Services 
        Working Capital Fund

    Section 402 modifies the Central Intelligence Agency 
Central Services Program (CSP) by removing the technically 
expired requirements of section 21(f)(2)(B) of the Central 
Intelligence Agency Act of 1949 (50 U.S.C. 403u(f)(2)(B)). This 
subparagraph required the Director of Central Intelligence to 
obtain the approval of the Director of Office of Management and 
Budget (OMB) and to notify the Intelligence Committees before 
expending amounts in the CSP Working Capital Fund that are 
attributable to certain fees imposed and collected under the 
program. Although the CIA has continued to comply with the 
terms of this expired mandate, the approval and notification 
requirements set forth in the subparagraph are no longer 
necessary given the CIA experience using CSP authorities. 
Removing the requirement of subparagraph (f)(2)(b) will not 
deprive OMB of its oversight role with respect to the CSP. 
Sections 21(b)(2) and (d) of the CIA Act preserve the Director 
of OMB's role in approving certain CSP activities. The CIA will 
continue to comply with other generally applicable reporting 
requirements, such as those in Title V of the National Security 
Act of 1947.

         Title V--Department of Defense Intelligence Activities


Section 501--Use of funds for counterdrug and counterterrorism 
        activities for Colombia

    Section 501 authorizes the use of funds designated for 
intelligence and intelligence-related purposes for assistance 
to the Government of Colombia for counter-drug activities for 
fiscal years 2004 and 2005 (and any unobligated funds 
designated for such purposes from prior years) to be utilized 
to support a unified campaign against narcotics trafficking and 
against activities by organizations designated as terrorist 
organizations and to take actions to protect human health and 
welfare in emergency circumstances, including undertaking 
rescue actions. This provision is intended to extend the 
authority previously granted in Title V of the FY2003 
Intelligence Authorization Act through fiscal years 2004 and 
2005.

Section 502--Authority to provide living quarters for certain students 
        in cooperative and summer education programs of the National 
        Security Agency

    Section 502 allows the National Security Agency (NSA) to 
provide and pay for living quarters for Cooperative Education 
(Co-op) Program and Summer Program students to address an 
existing housing shortage. NSA would enter into a contract with 
a local real estate management company and seek to achieve 
economies of cost based on the number of apartment units rented 
and the duration of leases. The contractor would maintain the 
apartments and handle all leasing issues. While the housing 
program would be voluntary, given that a revolving pool of 
students are participating in the programs year-round, 
occupancy rates should remain steady, and the NSA student 
programs office would schedule students in a manner ensuring 
that the apartments would be filled for the full year. Summer 
Program students also would be able to take advantage of this 
allowance to further maximize the year-round use of the 
apartments.
    NSA's Co-op Program provides the greatest return on 
investment of any Agency recruitment program. It is a critical 
tool that supports NSA's ongoing requirement to hire 
individuals with hard-to-find scientific and technical skills. 
Under the program, NSA obtains the critical services of up to 
175 engineering and computer undergraduate science students 
(average GPA of 3.5) for a minimum of 52 weeks. Just as 
important, NSA obtains the benefit of their state-of-the-art 
training and gets to evaluate their skills in a real-world work 
setting. In return, these students have an unparalleled 
opportunity to learn about a career at NSA. This results in 
high levels of attraction and retention. Compared to other 
Federal agencies, NSA's retention rate is nearly twice the 
national average. Throughout this program's history, NSA has 
been able to retain more than 80% of its highly sought-after 
graduates. In an average year, the Co-op Program puts as many 
as 50 permanent hires with critically needed skills on the NSA 
payroll. For example, in FY 2002, over 97% of the Co-op 
students converted to full-time status. Currently, NSA has more 
than 600 former Co-op students permanently employed in critical 
positions. In July 2001, the National Association of Colleges 
and Employers identified NSA's Co-op Program as a ``Best in 
Class'' experiential education program.
    NSA has experienced similar success with its Summer 
Employment Program. This program provides highly skilled and 
motivated temporary employees the opportunity to spend 
approximately 12 weeks working on projects in math, computer 
science, electrical and computer engineering, network 
evaluation, physical sciences, and intelligence analysis. The 
primary cost to NSA is the salaries for the students, and the 
benefit is that the Agency often receives a fresh perspective 
on difficult problems. On average, 105 students participate in 
the program each year. The students return to school and upon 
graduation, approximately 50% of eligible students join NSA. In 
FY 2002, 24 of 47 eligible participants accepted full-time 
employment. More than 76 former Summer Employment Program 
participants are now counted among the Agency workforce. In 
order for NSA to be effective in future skills markets, which 
are projected to be tight, NSA seeks an increased emphasis on 
student programs to bolster full-time hiring.
    Student programs are essential for NSA to compete in the 
present highly-challenging labor market. The single biggest 
obstacle to the growth of NSA's Co-op and Summer Employment 
Programs is a lack of affordable short-term housing. More than 
95% of the approximately 350 Co-op and Summer Program students 
recruited nationally to work at NSA each year come from out of 
the area, and nearly 100% of these students are in need of 
affordable, short-term housing. The local housing market 
provides little relief. Apartment vacancy rates in the area are 
at 1%, and local landlords simply have limited economic 
incentive to provide the type of short-term leases needed by 
Co-op and Summer Program students.
    For years, NSA has relied on the student housing facilities 
at the University of Maryland Baltimore County campus (UMBC) to 
house its summer hires. Historically, UMBC has been the only 
facility in the local commuting area that could accommodate a 
large contingent of summer students (for example 106 for FY 
2002). This year, however, UMBC was unable to meet NSA's demand 
for rooms. Based upon current trends, the availability of 
housing at UMBC is expected to become worse in the future.
    NSA needs to ensure that it remains a competitive, 
prospective employer for students. This section would ensure 
that future students are not deterred from seeking a valuable 
and beneficial employment opportunity with NSA simply because 
of the unavailability of affordable, short-term housing.

Section 503--Authority for intelligence community elements of 
        Department of Defense to award personal service contracts

    Section 503 provides authority for Intelligence Community 
elements of the Department of Defense (DoD) to award personal 
services contracts, similar to the CIA's existing authority for 
personal services contracts under Section 8 of the Central 
Intelligence Agency Act of 1949 (50 U.S.C. 403j(a)(1)). 
Intelligence Community elements of DoD frequently have a 
temporary need for additional personnel with specific expertise 
to meet unanticipated yet significant operational requirements 
requiring a bolstering of organizational and personnel efforts 
created by world events. Current examples include experts on 
al-Qa'ida, the countries of the Middle East, chemical and 
biological warfare, and Islamic militant personalities, along 
with linguists to support interrogation of detainees and review 
of captured documents. Under current law, U.S. government 
agencies generally must choose between hiring additional 
personnel as government employees or contracting for their 
services under the restrictive provisions for the temporary 
orintermittent employment of experts and consultants under 5 U.S.C. 
3109. This proposal will help to optimize the capabilities of 
Intelligence Community elements of the DoD in the performance of their 
roles in the global war on terrorism and in the execution of future 
national security missions.

Section 504--Protection of certain National Security Agency personnel 
        from tort liability

    Section 504 clarifies that National Security Agency 
personnel designated by the Director of the National Security 
Agency under section 11(a) of the National Security Agency Act 
of 1959 (NSA Act) are afforded the same protection against 
common law tort liability (e.g., assault, battery, false 
arrest, negligence, etc.) that specified law enforcement 
officers and Diplomatic Security Service officers receive by 
virtue of section 627 of the Omnibus Consolidated and Emergency 
Supplemental Appropriations Act of 1999, Pub. L. No. 105-277 
(Oct. 21, 1998), as amended by section 623 of the Treasury and 
General Government Appropriations Act, 2000, Pub. L. No. 106-58 
(Sept. 29, 1999) (28 U.S.C. 2671 note). NSA personnel 
designated under section 11(a) of the NSA Act do not fall 
within the definition of ``law enforcement officer'' for 
purposes of section 627. Section 504 extends to such personnel 
the same protections afforded specified law enforcement 
officers and officers of the Diplomatic Security Services under 
section 627. Thus, while on official duty, designated personnel 
are deemed ``within the scope of [their] office or employment'' 
for purposes of the Federal Tort Claims Act or any other 
provision of law relating to tort liability, if such personnel
        ``take[ ] reasonable action, including the use of 
        force, to--
          (1) protect an individual in the presence of the 
        [personnel] from a crime of violence;
          (2) provide immediate assistance to an individual who 
        has suffered or who is threatened with bodily harm; or
          (3) prevent the escape of any individual who the 
        [personnel] reasonably believe[ ] to have committed in 
        the presence of the [personnel] a crime of violence.''
See Section 627(b) of the Omnibus Consolidated and Emergency 
Supplemental Appropriations Act of 1999, Pub. L. No. 105-277 
(Oct. 21, 1998), as amended by Section 623 of the Treasury and 
General Government Appropriations Act, 2000, Pub. L. No. 106-58 
(Sept. 29, 1999) (28 U.S.C. 2671 note). This provision does not 
affect the authorities of the Attorney General under the 
Federal Employees Liability Reform and Tort Compensation Act of 
1988, Pub. L. No. 100-694 (Nov. 18, 1988) (``Westfall Act'') 
(28 U.S.C. 2679(d)(1)).

Section 505--Measurement and signatures intelligence program

    Section 505 authorizes the Director of the Defense 
Intelligence Agency (DIA), acting through the DIA's Directorate 
for Measurement and Signatures Intelligence (MASINT) and 
Technical Collection (DT), to establish a National Advisory 
Panel for MASINT Research. The National Advisory Panel shall be 
established under the guidance of the Secretary of Defense. The 
DT's Director shall head the National Advisory Panel, and shall 
determine the selection, review and assessment of the MASINT 
research projects carried out under its program. The DT's 
Director shall appoint an advisory board to conduct the work of 
the National Advisory Panel. The term limit for each advisory 
board member should not exceed five consecutive years. The 
advisory board membership shall be comprised of representatives 
of MASINT community agencies, as well as representatives from 
the national weapons and science laboratories, universities, 
and the private sector. Its mission shall be to review and 
assess basic research on sensors and technologies conducted by 
the United States government as well as by non-governmental 
entities. The advisory board shall periodically make 
recommendations and findings to the Director on the status of 
approved MASINT project research. The National Advisory Panel 
shall protect intellectual rights, maintain organizational 
flexibility and recommend research projects, funding levels, 
and potential benefits in an equitable manner. The Committee 
intends that the National Advisory Panel's non-governmental 
representatives shall bear their own costs of participation.

              Committee Position and Recorded Votes Taken

    On June 12, 2003, in open session, a quorum being present, 
the Permanent Select Committee on Intelligence, by a recorded 
vote of 16 ayes to 0 noes, approved the bill, H.R. 2417, as 
amended. By that vote, the Committee ordered the bill reported 
favorably to the House.
    On that vote, the Members present recorded their votes as 
follows: Mr. Goss (Chairman)--aye; Mr. Bereuter--aye; Mr. 
Gibbons--aye; Mr. LaHood--aye; Mr. Cunningham--aye; Mr. 
Hoekstra--aye; Mr. Burr--aye; Mr. Everett--aye; Mr. Collins--
aye; Ms. Harman--aye; Mr. Hastings--aye; Mr. Reyes--aye; Mr. 
Peterson--aye; Mr. Cramer--aye; Mr. Holt--aye; Mr. 
Ruppersberger--aye.

       Action of Other Committees Regarding Particular Provisions


Committee on the Judiciary

                          House of Representatives,
                                Committee on the Judiciary,
                                     Washington, DC, June 17, 2003.
Hon. Porter Goss,
Chairman, Permanent Select Committee on Intelligence,
House of Representatives, Washington, DC.
    Dear Chairman Goss: In recognition of the desire to 
expedite floor consideration of H.R. 2417, the intelligence 
authorization bill for fiscal year 2004, the Committee on the 
Judicary hereby waives consideration of the bill with the 
understanding that you will continue to work with me on 
sections within the Committee on the Judiciary's jurisdiction 
and that for any of those sections on which we cannot reach a 
mutually agreeable resolution, you will remove them before 
enactment. I further understand that you will support the 
Committee on the Judiciary's request for conferees on these 
sections.
    The sections in the bill as reported that contain matters 
within the Committee on the Judiciary's Rule X jurisdiction 
are:
          --104(e) (relating to funding for the Department of 
        Justice's National Drug Intelligence Center);
          --321 (relating to procedures for using classified 
        information);
          --332 (relating to the use of explosives by certain 
        qualified aliens if they are in the United States to 
        cooperate with the CIA or the United States military);
          --333 (relating to the naturalization of certain 
        persons);
          --334 (relating to the types of financial 
        institutions from which law enforcement can obtain 
        financial records for criminal investigation purposes);
          --335 (relating to certain aspects of the mandatory 
        source rules for Federal Prison Industries as they 
        relate to procurements by the Central Intelligence 
        Agency);
          --336 (relating to pilot projects to encourage the 
        sharing of intelligence information between state and 
        local officials and representatives of critical 
        infrastructure industries on the one hand and federal 
        officials on the other);
          --401 (relating to giving certain employees of the 
        Central Intelligence Agency the protections of the 
        Federal Tort Claims Act when they take certain actions 
        to prevent crime);
          --504 (relating to giving certain employees of the 
        National Security Agency the protections of the Federal 
        Tort Claims Act when they take certain actions to 
        prevent crime).
(These section numbers refer to the bill as reported.) Based on 
this understanding, I will not request a sequential referral 
based on their inclusion in the bill as reported.
    The Committee on the Judiciary takes this action with the 
understanding that the Committee's jurisdiction over these 
provisions is in no way diminished or altered. I would 
appreciate your including this letter in your Committee's 
report on H.R. 2417 and the Congressional Record during 
consideration of the legislation on the House floor.
            Sincerely,
                               F. James Sensenbrenner, Jr.,
                                                          Chairman.
                              ----------                              

                          House of Representatives,
                Permanent Select Committee on Intelligence,
                                     Washington, DC, June 16, 2003.
Hon. F. James Sensenbrenner, Jr.,
Chairman, Committee on the Judiciary,
House of Representatives, Washington, DC.
    Dear Chairman Sensenbrenner: Thank you for your letter 
regarding H.R. 2417, the intelligence authorization bill for 
fiscal year 2004. As you noted, several provisions of the bill 
as reported fall within the Rule X jurisdiction of the 
Committee on the Judiciary. I will continue to work with you on 
these sections. For any of these sections on which we cannot 
reach a mutually agreeable resolution, I will remove them 
before enactment. Further, I will support the Committee on the 
Judiciary's request for conferees on these sections.
    The sections of the bill as reported that contain matters 
within the Committee on the Judiciary's Rule X jurisdiction 
are:
          --104(e) (relating to funding for the Department of 
        Justice's National Drug Intelligence Center);
          --321 (relating to procedures for using classified 
        information);
          --332 (relating to the use of explosives by certain 
        qualified aliens if they are in the United States to 
        cooperate with the CIA or the United States military);
          --333 (relating to the naturalization of certain 
        persons);
          --334 (relating to the types of financial 
        institutions from which law enforcement can obtain 
        financial records for criminal investigation purposes);
          --335 (relating to certain aspects of the mandatory 
        source rules for Federal Prison Industries as they 
        relate to procurements by the Central Intelligence 
        Agency);
          --336 (relating to pilot projects to encourage the 
        sharing of intelligence information between state and 
        local officials and representatives of critical 
        infrastructure industries on the one hand and federal 
        officials on the other);
          --401 (relating to giving certain employees of the 
        Central Intelligence Agency the protections of the 
        Federal Tort Claims Act when they take certain actions 
        to prevent crime);
          --504 (relating to giving certain employees of the 
        National Security Agency the protections of the Federal 
        Tort Claims Act when they take certain actions to 
        prevent crime).
(These section numbers refer to the bill as reported.) I 
appreciate your willingness to forgo consideration of the bill 
and not request a sequential referral based on this 
understanding.
    I acknowledge that by agreeing to waive its consideration 
of the bill, the Committee on the Judiciary does not waive its 
jurisdiction over the bill or any of the matters under your 
jurisdiction. I will include a copy of your letter and this 
response in our Committee's report on H.R. 2417 and the 
Congressional Record during consideration of the legislation on 
the House floor.
    Thank you for your assistance in this matter.
            Sincerely,
                                            Porter J. Goss,
                                                          Chairman.

Committee on Financial Services

                          House of Representatives,
                           Committee on Financial Services,
                                     Washington, DC, June 17, 2003.
Hon. Porter J. Goss,
Chairman, Select Committee on Intelligence,
The Capitol, Washington, DC.
    Dear Chairman Goss: On June 12, 2003, the Select Committee 
on Intelligence ordered reported H.R. 2417, The Intelligence 
Authorization Act for Fiscal Year 2004. As you are aware, the 
bill as reported contained several provisions which fall within 
the jurisdiction of the Committee on Financial Services 
pursuant to the Committee's jurisdiction under Rule X of the 
Rules of the House of Representatives.
    As you know, we continue to have strong concerns about some 
of these provisions, particularly those relating to the 
creation of a Bureau of Enforcement and Intelligence within the 
Department of the Treasury. However, because of your commitment 
to support my position regarding all of these provisions as the 
bill moves through the process and the need to move this 
legislation expeditiously, I will waive consideration of the 
bill by the Financial Services Committee. By agreeing to waive 
its consideration of the bill, the Financial Services Committee 
does not waive its jurisdiction over H.R. 2417. In addition, 
the Committee on Financial Services reserves its authority to 
seek conferees on any provisions of the bill that are within 
the Financial Services Committee's jurisdiction during any 
House-Senate conference that may be convened on this 
legislation. I ask your commitment to support any request by 
the Committee on Financial Services for conferees on H.R. 2417 
or related legislation.
    Finally, I request that you include a copy of this letter 
and your response in the Select Committee's report on the bill, 
and that they be printed in the Congressional Record during the 
consideration of this legislation on the floor.
    I appreciate your commitment to address my concerns as the 
process moves forward and willingness to work constructively 
toward common goals.
            Sincerely,
                                          Michael G. Oxley,
                                                          Chairman.
                              ----------                              

                          House of Representatives,
                Permanent Select Committee on Intelligence,
                                     Washington, DC, June 17, 2003.
Hon. Michael G. Oxley,
Chairman, Committee on Financial Services,
Rayburn House Office Building, Washington, DC.
    Dear Chairman Oxley: On June 12, 2003, the Select Committee 
on Intelligence ordered reported H.R. 2417, the ``Intelligence 
Authorization Act for Fiscal Year 2004.'' The bill as reported 
contained several provisions which fall within the jurisdiction 
of the Committee on Financial Services, pursuant to the 
Committee's jurisdiction under Rule X of the Rules of the House 
of Representatives.
    I am quite aware of, and sensitive to the specific concerns 
you raise about the inclusion of section 105 in H.R. 2417 
concerning the establishment of a Bureau of Intelligence and 
Enforcement within the Department of the Treasury. Once again, 
I want to convey my personal commitment to work with you to 
resolve this issue to our common satisfaction and support your 
position in a conference with the Senate on the Intelligence 
Authorization bill.
    I very much appreciate your willingness to waive 
consideration of H.R. 2417 by the Financial Services Committee. 
I acknowledge that, by agreeing to waive its consideration of 
the bill, the Financial Services Committee does not waive its 
jurisdiction over H.R. 2417. I further recognize that the 
Committee on Financial Services reserves its authority to seek 
conferees on any provisions of the bill that are within the 
Financial Services Committee's jurisdiction during any House-
Senate conference that may be convened on this legislation. I 
will support a request by the Committee on Financial Services 
for conferees on H.R. 2417 or related legislation.
    Finally, I am pleased to accommodate your request to 
include a copy of your letter and my response in the Select 
Committee's report on the bill, and that they be printed in the 
Congressional Record during the consideration of this 
legislation on the floor.
    I appreciate your commitment to work together so as to 
achieve an appropriate and mutually satisfactory resolution of 
this important national security matter.
            Sincerely,
                                            Porter J. Goss,
                                                          Chairman.

Committee on Armed Services

                       Committee on Armed Services,
                                  House of Representatives,
                                     Washington, DC, June 18, 2003.
Hon. Porter J. Goss,
Chairman, House Permanent Select Committee on Intelligence,
Capitol, Washington, DC.
    Dear Chairman Goss: I am writing to you concerning the 
jurisdictional interest of the Committee on Armed Services in 
matters being considered in H.R. 2417, the Intelligence 
Authorization Act for Fiscal Year 2004.
    I recognize the importance of H.R. 2417 and the need for 
this legislation to move expeditiously. Therefore, while the 
committee is entitled to a jurisdictional claim on this 
legislation, I do not intend to request a sequential referral.
    The Committee on Armed Services asks that you support our 
request to be conferees on the provisions over which we have 
jurisdiction during any House-Senate conference. Additionally, 
I request that you include this letter as part of your 
committee's report on H.R. 2417.
    Thank you for your cooperation in this matter.
            Sincerely,
                                             Duncan Hunter,
                                                          Chairman.
                              ----------                              

                          House of Representatives,
                Permanent Select Committee on Intelligence,
                                     Washington, DC, June 18, 2003.
Hon. Duncan Hunter,
Chairman, Committee on Armed Services,
Rayburn House Office Building, Washington, DC.
    Dear Chairman Hunter: Thank you for your letter regarding 
H.R. 2417, the intelligence authorization bill for fiscal year 
2004. As you noted, elements of the bill as reported fall 
within the Rule X jurisdiction of the Committee on Armed 
Services. I will continue to work with you on these sections. I 
will support the Committee on Armed Services' request for 
conferees on these sections.
    I appreciate your willingness to forgo consideration of the 
bill and not request a sequential referral based on this 
understanding.
    I acknowledge that by agreeing to waive its consideration 
of the bill, the Committee on Armed Services does not waive its 
jurisdiction over the bill or any of the matters under your 
jurisdiction. I will include a copy of your letter and this 
response in our Committee's report on H.R. 2417 and the 
Congressional Record during consideration of the legislation on 
the House floor.
    Thank you for you assistance in this matter.
            Sincerely,
                                            Porter J. Goss,
                                                          Chairman.

   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 Permanent Select Committee on Intelligence 
is not subject to this requirement; therefore, the Committee 
has not received a report from the Committee on Government 
Reform 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 12 hearings 
and numerous briefings on the classified budgetary issues 
raised by H.R. 2417. Testimony was taken from senior officials 
of the Central Intelligence Agency; the DCI's Community 
Management Staff; the Department of Defense; the Defense 
Intelligence Agency; the National Security Agency; the National 
Reconnaissance Office; the National Imagery and Mapping Agency; 
the Departments of the Army, Navy, and Air Force; the 
Department of State; the Department of Treasury; the Department 
of Energy; the Department of Justice; the Federal Bureau of 
Investigation; the Department of Homeland Security; and the 
Coast Guard. Such testimony related to 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 2004. 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 2004 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

                          House of Representatives,
                Permanent Select Committee on Intelligence,
                                     Washington, DC, June 12, 2003.
Dr. Douglas Holtz-Eakin,
Director, Congressional Budget Office,
Ford House Office Building, Washington, DC.
    Dear Dr. Holtz-Eakin: In compliance with the Rules of the 
House of Representatives, I am writing to request a cost 
estimate of H.R. 2417, the ``Intelligence Authorization Act for 
Fiscal Year 2004,'' 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 earlier today.
    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 
Christopher Barton, the Committee's General Counsel. Thank you 
in advance for your assistance with this request.
            Sincerely,
                                            Porter J. Goss,
                                                          Chairman.
                              ----------                              

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, June 16, 2003.
Hon. Porter J. Goss,
Chairman, Permanent Select Committee on Intelligence,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: As you requested, the Congressional 
Budget Office has prepared the enclosed cost estimate for H.R. 
2417, the Intelligence Authorization Act for Fiscal Year 2004.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Matthew 
Schmit.
            Sincerely,
                                       Douglas Holtz-Eakin,
                                                          Director.
    Enclosure.

H.R. 2417--Intelligence Authorization Act for Fiscal Year 2004

    Summary: H.R. 2417 would authorize appropriations for 
fiscal year 2004 for intelligence activities of the U.S. 
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 certain provisions of the bill would cost $320 
million over the 2004-2008 period, assuming appropriation of 
the specified and estimated amounts. CBO also estimates the 
bill would affect direct spending and receipts by an 
insignificant amount.
    H.R. 2417 contains intergovernmental and private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA), 
but CBO estimates that the costs of complying with these 
mandates would not exceed the thresholds established by that 
act ($59 million for intergovernmental mandates and $117 
million for private-sector mandates in 2003, adjusted annually 
for inflation).
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 2417 is shown in the following table. 
CBO cannot obtain the necessary information to estimate the 
costs for the entire bill because parts are classified at a 
level above clearances held by CBO employees. For purposes of 
this estimate, CBO assumes that the bill will be enacted by 
October 1, 2003, and that the necessary amounts will be 
appropriated for each year. 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
                                                           -----------------------------------------------------
                                                              2003     2004     2005     2006     2007     2008
----------------------------------------------------------------------------------------------------------------
                                      SPENDING SUBJECT TO APPROPRIATION \1\
 Spending Under Current Law for Information Analysis and
 Infrastructure Protection and the Community Management
 Account: \2\
    Authorization Level...................................      350        0        0        0        0        0
    Estimated Outlays.....................................      330      108       21        4        0        0
Proposed Changes:
    Intelligence Community Management Account:
        Specified Authorization Level.....................        0      193        0        0        0        0
        Estimated Outlays.................................        0      119       58       11        3        0
    Information Sharing Among Federal, State, and Local
     Governments:
        Estimated Authorization Level.....................        0       23       21       22       22       22
        Estimated Outlays.................................        0       19       22       22       21       22
    Counterintelligence Initiatives:
        Estimated Authorization Level.....................        0        3        5        5        5        6
        Estimated Outlays.................................        0        2        5        5        5        6
Total Changes:
    Estimated Authorization Level.........................        0      218       27       27       27       28
    Estimated Outlays.....................................        0      140       84       38       30       28
Spending Under H.R. 2417 for Information Analysis and
 Infrastructure Protection and the Community Management
 Account: \1\
    Estimated Authorization Level.........................      350      218       27       27       27       28
    Estimated Outlays.....................................      330      248      105       42       30       28
----------------------------------------------------------------------------------------------------------------
\1\ In addition to effects on spending subject to appropriation, CBO estimates H.R. 2417 would have an
  insignificant effect on direct spending and receipts.
\2\ The 2003 level is the amount appropriated for that year for the Information Analysis and Infrastructure
  protection Directorate of the Department of Homeland Security and the Intelligence Community Management
  Account.
Note.--Components may not sum to totals because of rounding.

    Spending subject to appropriation: H.R. 2417 would 
specifically authorize the appropriation of $193 million for 
the Intelligence Community Management Account, which funds the 
coordination of programs, budget oversight, and management of 
the intelligence agencies. The bill would earmark $34 million 
for the National Drug Intelligence Center from the funds 
authorized for the Intelligence Community Management Account. 
In addition to the costs covered by the specified 
authorization, the bill contains several new provisions, 
primarily dealing with information sharing and 
counterintelligence initiatives, that CBO estimates would 
require additional appropriations of $134 million over the 
2004-2008 period to implement. CBO estimates that implementing 
these provisions would cost $320 million over the 2004-2008 
period, assuming appropriation of the specified and estimated 
amounts.
    Information sharing among Federal, State, and local 
governments. Section 336 would authorize the creation of 
several new programs to improve the sharing of information 
among federal, state, and local governments. Largest among 
these would be the Homeland Defender Intelligence Training 
Program, where the Director of Central Intelligence would 
establish a program to train qualified state and local 
officials in assessing and using available resources of the 
intelligence community. The cost of implementing this program 
would depend on the still-to-be-determined course curriculum 
and number of participants. Without information from the 
Central Intelligence Agency (CIA) on how this program would be 
implemented, CBO based its estimate on the cost of federal 
counterdrug training programs offered by the National Guard for 
state and local officials. Based on this analogy, CBO estimates 
the cost of implementing this new program would be about $20 
million a year and $106 million over the 2004-2008 period. 
Costs would be slightly higher in the first year due to start-
up costs.
    Section 336 also would authorize two three-year pilot 
programs designed to improve information sharing among federal, 
state, and local officials. The first would authorize the 
Information Analysis and Infrastructure Protection Directorate 
of the Department of Homeland Security to train local officials 
to collect and report information to mitigate threats against 
critical infrastructure. The second pilot program would allow 
federal intelligence agencies to distribute certain modified 
intelligence reports to state and local officials. The cost of 
these pilot programs would depend on the number of cities 
chosen to participate and, in the case of the first pilot 
program, depend on the course curriculum and number of 
participants. CBO cannot estimate the budgetary impact of 
implementing these programs, however, since we lack sufficient 
information to estimate the cost.
    Counterintelligence initiatives. Section 321 would direct 
the Director of Central Intelligence to establish programs and 
procedures for all federal agencies to help prevent the 
unauthorized disclosure of classified information. The cost of 
this initiative would depend on the degree to which existing 
federal agency resources and procedures for the monitoring and 
handling of classified materials are adopted. Absent 
information on how this program would be implemented, CBO based 
its estimate on the cost of security review programs carried 
out by the Department of Defense. Based on this analogy, CBO 
estimates that implementing this section would cost about $5 
million a year, after a one-year phase-in period, and about $23 
million over the 2004-2008 period.
    Section 321 also would require all employees of the 
intelligence community who handle classified information to 
submit financial disclosure forms. This requirement was 
previously put forth in Executive Order Number 12968 (60 F.R. 
40245). The status of the implementation of this requirement 
varies from agency to agency. Several agencies are already in 
full compliance, while others are still planning how they would 
implement the requirement. For those agencies not in 
compliance, there would be a cost to administering this 
provision, mainly for additional personnel needed to distribute 
and collect the forms. CBO cannot provide an estimate of this 
provision, because the data needed for such an estimate, such 
as the number of affected personnel, are classified.
    Codification and reorganization of certain intelligence 
agencies. Two sections of H.R. 2417 would create new 
intelligence organizations within the federal government. 
Section 105 would create the Bureau of Intelligence and 
Enforcement of the Department of the Treasury, and section 321 
would create an Office of Counterintelligence within the 
Federal Bureau of Investigation. Based on information from the 
affected agencies, CBO believes these organizations would be 
created from existing offices and functions; therefore, any 
costs associated with creating these new organizations would be 
insignificant.
    Measurement and signatures intelligence research program. 
Section 505 would create a new program within the Defense 
Intelligence Agency to incorporate the results of basic 
research on sensors into measurement and signatures 
intelligence systems. The Department of Defense and the 
intelligence community currently spend substantial amounts on 
research related to measurement and signatures intelligence. 
The cost of this new program would depend on the degree to 
which it generates new research programs and budget 
requirements above current levels. Until specific research and 
development projects are identified, CBO does not have enough 
information to estimate the costs of this section.
    Direct spending and revenues: The bill would authorize $226 
million for CIARDS to cover retirement costs attributable to 
military service and various unfunded liabilities. The payment 
to CIARDS is consideredmandatory, and the authorization under 
this bill would be the same as assumed in the CBO baseline. Thus, this 
estimate does not ascribe any additional cost to that provision.
    Section 341 would extend by one year the National 
Commission for Review of Research and Development Programs of 
the U.S. Intelligence Community to continue its review of the 
status of research and development programs and activities 
within the intelligence community and report on its findings. 
The provision also would extend the commission's authority to 
accept and spend gifts. CBO estimates that enacting this 
provision would have no net effect on direct spending because 
it would allow the commission to spend any gifts that it 
collects. (Gifts and donations are recorded in the budget as 
revenues.)
    Section 502 would allow the National Security Agency (NSA) 
to provide housing to students in its Student Educational 
Employment Program and charge the students a fee for this 
service, which NSA could spend without further appropriation. 
CBO estimates that the net result of the collection and 
expenditure of these proceeds would be insignificant.
    Section 505 would establish an advisory panel to review and 
make recommendations on measurement and signatures intelligence 
programs. Under this provision, the Director of the Defense 
Intelligence Agency would be allowed to accept contributions to 
defray the expenses of the advisory panel. CBO estimates any 
contributions received under this section would be 
insignificant.
    Estimated impact on State, local, and tribal governments: 
This bill contains three preemptions of state and local 
authority.
    Section 332 could preempt states' power to regulate and 
restrict the possession and transportation of explosives; if 
so, it would be an intergovernmental mandate as defined in 
UMRA.
    Section 341 would extend for one year the National 
Commission for the Review of the Research and Development 
Programs of the U.S. Intelligence Community. That commission 
has the power to subpoena testimony and evidence, which is an 
enforceable duty. Because this bill would extend the commission 
and its associated subpoena power, it also contains an 
intergovernmental mandate as defined in UMRA.
    Sections 401 and 504 provide that personnel in the CIA and 
the NSA who are designated to carry firearms would be protected 
from any provision of law relating to tort liability for 
certain actions. These sections would preempt state laws 
related to tort liability and would limit the ability of state 
and local governments to seek damages against these personnel. 
Such preemptions and limitations are mandates under UMRA. The 
provision related to NSA personnel is more relevant to domestic 
laws, but according to NSA none of their personnel operating 
domestically have been sued to date. CBO has no basis for 
predicting how many such tort liability cases may occur over 
the next 10 years, but we consider it unlikely that any 
governmental entities would forgo significant damages as a 
result of these provisions.
    CBO estimates that none of these mandates would impose 
significant costs on state, local, or tribal governments; thus 
the threshold for intergovernmental mandates ($59 million in 
2003, adjusted annually for inflation) would not be exceeded.
    In addition, section 336 would authorize programs to 
improve information sharing among federal, state, and local 
government officials. These programs would benefit state and 
local governments by training their officials in the 
identification of potential threats and the use of available 
intelligence resources. It also would allow for the preparation 
of intelligence information in a way that it may be made 
available to state and local officials.
    Estimated impact on the private sector: Section 334 
provides enhanced authority for U.S. government authorities 
engaged in counterintelligence or foreign intelligence 
activities to obtain certain financial records by expanding the 
definition of ``financial institution'' in the Right to 
Financial Privacy Act. Financial records maintained by these 
additional entities are not covered by the act and, thus, are 
not accessible by counterintelligence and foreign intelligence 
elements of the U.S. government under the act. To the extent 
that responding to counterintelligence and foreign intelligence 
related requests for financial records imposes an 
administrative burden on the affected entities, this 
constitutes a private-sector mandate under UMRA.
    Section 341 would extend for one year the National 
Commission for the Review of the Research and Development 
Programs of the U.S. Intelligence Community. That commission 
has the power to subpoena testimony and evidence, which is an 
enforceable duty. Because this bill would extend the commission 
and its associated subpoena power, it contains a private-sector 
mandate as defined in UMRA.
    Sections 401 and 504 provide that certain personnel in the 
CIA and the NSA would be protected from any provision of law 
relating to tort liability for certain actions. These sections 
would preempt laws related to tort liability and would limit 
the ability of private entities to seek damages against these 
personnel. CBO has no basis for predicting how manysuch tort 
liability cases may occur over the next 10 years, but we consider it 
unlikely that any private entities would forgo significant damages as a 
result of these provisions.
    CBO estimates that the costs of these mandates would not 
exceed the threshold established in UMRA ($117 for private-
sector mandates in 2003, adjusted annually for inflation).
    Previous CBO estimate: On May 15, 2003, CBO transmitted a 
cost estimate for the unclassified portion of S. 1025, the 
Intelligence Authorization Act for Fiscal Year 2004, as 
reported by the Senate Select Committee on Intelligence on May 
8, 2003. The differences in the estimated costs reflect 
differences in the bills. In particular, S. 1025 would 
authorize $198 million for the Intelligence Community 
Management Account, while H.R. 2417 would authorize $193 
million for that account. H.R. 2417 would also authorize new 
programs for information sharing and counterintelligence, which 
CBO estimates would require additional appropriations of about 
$134 million over the 2004-2008 period.
    Estimate prepared by: Federal costs: Matthew Schmit; impact 
on State, local, and tribal governments: Melissa Merrell; 
impact on the private sector: David Arthur.
    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 1, 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


                              short title

  That this Act may be cited as the ``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. 119. Bureau of Intelligence and Enforcement of the Department of 
          the Treasury.
     * * * * * * *

                       TITLE XI--OTHER PROVISIONS

     * * * * * * *
Sec. 1102. Counterintelligence initiatives.

           *       *       *       *       *       *       *


                              DEFINITIONS

  Sec. 3. As used in this Act:
          (1) * * *

           *       *       *       *       *       *       *

          (4) The term ``intelligence community'' includes--
                  (A) * * *

           *       *       *       *       *       *       *

                  (H) the intelligence elements of the Army, 
                the Navy, the Air Force, the Marine Corps, the 
                Federal Bureau of Investigation, [the 
                Department of the Treasury,] the Department of 
                Energy, and the Coast Guard;
                  (J) the elements of the Department of 
                Homeland Security concerned with the analyses 
                of foreign intelligence information; [and]
                  (K) the Bureau of Intelligence and 
                Enforcement of the Department of the Treasury; 
                and
                  [(K)] (L) such other elements of any other 
                department or agency as may be designated by 
                the President, or designated jointly by the 
                Director of Central Intelligence and the head 
                of the department or agency concerned, as an 
                element of the intelligence community.

           *       *       *       *       *       *       *


TITLE I--COORDINATION FOR NATIONAL SECURITY

           *       *       *       *       *       *       *



     APPOINTMENT OF OFFICIALS RESPONSIBLE FOR INTELLIGENCE-RELATED 
                               ACTIVITIES

  Sec. 106. (a) * * *
  (b) Consultation with DCI in Certain Appointments.--(1) * * *
  (2) Paragraph (1) applies to the following positions:
          (A) * * *

           *       *       *       *       *       *       *

          (E) The Assistant Secretary for Intelligence and 
        Enforcement.

           *       *       *       *       *       *       *


RESTRICTIONS ON INTELLIGENCE SHARING WITH THE UNITED NATIONS

           *       *       *       *       *       *       *


  Sec. 112. (a) * * *
  (b) Periodic and Special Reports.--(1) The President shall 
report [semiannually] annually to the appropriate committees of 
Congress on the types and volume of intelligence provided to 
the United Nations and the purposes for which it was provided 
during the period covered by the report. The President shall 
also report to the appropriate committees of Congress within 15 
days after it has become known to the United States Government 
that there has been an unauthorized disclosure of intelligence 
provided by the United States to the United Nations.

           *       *       *       *       *       *       *

  (d) Relationship to Existing Law.--Nothing in this section 
shall be construed to--
          (1) impair or otherwise affect the authority of the 
        Director of Central Intelligence to protect 
        intelligence sources and 
        methods from unauthorized disclosure pursuant to 
        section [103(c)(6)] 103(c)(7) of this Act; or

           *       *       *       *       *       *       *


    BUREAU OF INTELLIGENCE AND ENFORCEMENT OF THE DEPARTMENT OF THE 
                                TREASURY

  Sec. 119. (a) In General.--There is within the Department of 
the Treasury a Bureau of Intelligence and Enforcement headed by 
an Assistant Secretary for Intelligence and Enforcement, who 
shall be appointed by the President, by and with the advice and 
consent of the Senate.
  (b) Responsibilities.--(1) The Assistant Secretary for 
Intelligence and Enforcement shall oversee and coordinate 
functions of the Bureau of Intelligence and Enforcement.
  (2) The Assistant Secretary shall report directly to the 
Secretary of the Treasury.
  (c) Composition of Bureau.--The Bureau of Intelligence and 
Enforcement shall consist of the following offices:
          (1) The Office of Intelligence Support.
          (2) The Office of Foreign Assets Control.
          (3) The Financial Crimes Enforcement Network.
          (4) Such other offices as the Assistant Secretary may 
        establish.

           *       *       *       *       *       *       *


TITLE XI--ADDITIONAL MISCELLANEOUS PROVISIONS

           *       *       *       *       *       *       *



                    COUNTERINTELLIGENCE INITIATIVES

  Sec. 1102. (a) Inspection Process.--(1) In order to protect 
intelligence sources and methods from unauthorized disclosure, 
the Director of Central Intelligence shall establish and 
implement an inspection process for all agencies and 
departments of the United States that handle classified 
information relating to the national security of the United 
States intended to assure that those agencies and departments 
maintain effective operational security practices and programs 
directed against counterintelligence activities.
  (2) The Director shall carry out the process through the 
Office of the National Counterintelligence Executive.
  (b) FBI Counterintelligence Office.--The Attorney General, 
acting through the Director of the Federal Bureau of 
Investigation, shall establish an Office of Counterintelligence 
within the Bureau to investigate potential espionage activities 
within the Bureau.
  (c) Annual Review of Dissemination Lists.--(1) The Director 
of Central Intelligence shall establish and implement a process 
for all elements of the intelligence community (as defined in 
section 101(4)) to review, on an annual basis, individuals 
included on distribution lists for access to classified 
information. Such process shall ensure that only individuals 
who have a particularized ``need to know'' (as determined by 
the Director) are continued on such distribution lists.
  (2) Not later than October 15 of each year, the Director 
shall certify to the congressional intelligence committees that 
the review required under paragraph (1) has been conducted in 
all elements of the intelligence community during the preceding 
fiscal year.
  (d) Required Completion of Financial Disclosure Statements.--
(1) The Director of Central Intelligence shall establish and 
implement a process by which heads of the elements of the 
intelligence community (as defined in section 101(4)) direct 
that all employees, in order to be granted access to classified 
information, submit financial disclosure forms required under 
section 1.3(b) of Executive Order No. 12969 (August 2, 1995; 60 
F.R. 40245; 50 U.S.C. 435 note).
  (2) The Director shall carry out paragraph (1) through the 
Office of the National Counterintelligence Executive.
  (e) Arrangements To Handle Sensitive Information.--The 
Director of Central Intelligence shall establish, for all 
elements of the intelligence community (as defined in section 
101(4)), programs and procedures by which sensitive classified 
information relating to human intelligence is safeguarded 
against unauthorized disclosure by employees of those elements.

           *       *       *       *       *       *       *

                              ----------                              


              SECTION 5315 OF TITLE 5, UNITED STATES CODE


Sec. 5315. Positions at level IV

  Level IV of the Executive Schedule applies to the following 
positions, for which the annual rate of basic pay shall be the 
rate determined with respect to such level under chapter 11 of 
title 2, as adjusted by section 5318 of this title:
          Deputy Administrator of General Services.

           *       *       *       *       *       *       *

          Assistant Secretaries of the Treasury [(7)] (8).

           *       *       *       *       *       *       *

                              ----------                              


 SECTION 602 OF THE INTELLIGENCE AUTHORIZATION ACT FOR FISCAL YEAR 1995


SEC. 602. LIMITATION ON CONSTRUCTION OF FACILITIES TO BE USED PRIMARILY 
                    BY THE INTELLIGENCE COMMUNITY.

  (a) In General.--
          (1) In general.--Except as provided in subsection 
        (b), no project for the construction of any facility to 
        be used primarily by personnel of any component of the 
        intelligence community which has an estimated Federal 
        cost in excess of [$750,000] $5,000,000 may be 
        undertaken in any fiscal year unless such project is 
        specifically identified as a separate item in the 
        President's annual fiscal year budget request and is 
        specifically authorized by the Congress.
          (2) Notification.--In the case of a project for the 
        construction of any facility to be used primarily by 
        personnel of any component of the intelligence 
        community which has an estimated Federal cost greater 
        than [$500,000] $1,000,000 but less than [$750,000] 
        $5,000,000, or where any improvement project to such a 
        facility has an estimated Federal cost greater than 
        [$500,000] $1,000,000 but less than $5,000,000, the 
        Director of Central Intelligence shall submit a 
        notification to the intelligence committees 
        specifically identifying such project.
  (b) Exception.--
          (1) * * *
          (2) Report.--When a decision is made to carry out a 
        construction project under this subsection, the 
        Secretary of Defense and the Director of Central 
        Intelligence jointly shall submit a report in writing 
        to the appropriate committees of Congress on that 
        decision. Each such report shall include (A) the 
        justification for the project and the current estimate 
        of the cost of the project, (B) the justification for 
        carrying out the project under this subsection, and (C) 
        a statement of the source of the funds to be used to 
        carry out the project. The project may then be carried 
        out only after the end of the [21-day] 7-day period 
        beginning on the date the notification is received by 
        such committees. Notwithstanding the preceding 
        provisions of this paragraph, when the Director of 
        Central Intelligence and Secretary of Defense jointly 
        determine that an emergency relating to the national 
        security or to the protection of health, safety, or 
        environmental quality exists and that delay would 
        irreparably harm any or all of those interests, the 
        project may begin on the date the notification is 
        received by such committees.

           *       *       *       *       *       *       *

                              ----------                              


 SECTION 311 OF THE INTELLIGENCE AUTHORIZATION ACT FOR FISCAL YEAR 2002


SEC. 311. [TWO-YEAR] SUSPENSION OF REORGANIZATION OF DIPLOMATIC 
                    TELECOMMUNICATIONS SERVICE PROGRAM OFFICE.

  Notwithstanding any provision of subtitle B of title III of 
the Intelligence Authorization Act for Fiscal Year 2001 (Public 
Law 106-567; 114 Stat. 2843; 22 U.S.C. 7301 et seq.), relating 
to the reorganization of the Diplomatic Telecommunications 
Service Program Office, no provision of that subtitle shall be 
effective during the period beginning on the date of the 
enactment of this Act and [ending on October 1, 2003] ending on 
the date that is 60 days after the date on which appropriate 
congressional committees of jurisdiction (as defined in section 
324(d) of that Act (22 U.S.C. 7304(d)) are notified jointly by 
the Secretary of State (or the Secretary's designee) and the 
Director of the Office of Management and Budget (or the 
Director's designee) that the operational framework for the 
office has been terminated.
                              ----------                              


           SECTION 313 OF THE IMMIGRATION AND NATIONALITY ACT


prohibition upon the naturalization of persons opposed to government or 
           law, or who favor totalitarian forms of government

  Sec. 313. (a) * * *

           *       *       *       *       *       *       *

  (e) A person may be naturalized under this title without 
regard to the prohibitions in subsections (a)(2) and (c) of 
this section if the person--
          (1) * * *

           *       *       *       *       *       *       *

          (4) is determined by the Director of Central 
        Intelligence, in consultation with the Secretary 
ofDefense when Department of Defense activities are relevant to the 
determination, and with the concurrence of the Attorney General and the 
Secretary of Homeland Security, to have made a contribution to the 
national security or to the national intelligence mission of the United 
States.
                              ----------                              


                 RIGHT TO FINANCIAL PRIVACY ACT OF 1978


TITLE XI--RIGHT TO FINANCIAL PRIVACY

           *       *       *       *       *       *       *



                              DEFINITIONS

      Sec. 1101. For the purpose of this title, the term--
          (1) ``financial institution'', except as provided in 
        section 1114, means any office of a bank, savings bank, 
        card issuer as defined in section 103 of the Consumers 
        Credit Protection Act (15 U.S.C. 1602(n)), industrial 
        loan company, trust company, savings association, 
        building and loan, or homestead association (including 
        cooperative banks), credit union, or consumer finance 
        institution, located in any State or territory of the 
        United States, the District of Columbia, Puerto Rico, 
        Guam, American Samoa, or the Virgin Islands;

           *       *       *       *       *       *       *


                           SPECIAL PROCEDURES

      Sec. 1114. (a) * * *

           *       *       *       *       *       *       *

  (c) For purposes of this section, the term ``financial 
institution'' has the same meaning as in section 5312(a)(2) of 
title 31, United States Code, except that, for purposes of this 
section, such term shall include only such a financial 
institution any part of which is located inside any State or 
territory of the United States, the District of Columbia, 
Puerto Rico, Guam, American Samoa, or the United States Virgin 
Islands.

           *       *       *       *       *       *       *

                              ----------                              


CENTRAL INTELLIGENCE AGENCY ACT OF 1949

           *       *       *       *       *       *       *


  Sec. 6. In the interests of the security of the foreign 
intelligence activities of the United States and in order 
further to implement section [103(c)(6)] 103(c)(7) of the 
National Security Act of 1947 (50 U.S.C. 403-3(c)(6)) that the 
Director of Central Intelligence shall be responsible for 
protecting intelligence sources and methods from unauthorized 
disclosure, the Agency shall be exempted from the provisions of 
sections 1 and 2, chapter 795 of the Act of August 28, 1935 (49 
Stat. 956, 957; 5 U.S.C. 654), and the provisions of any other 
laws which require the publication or disclosure of the 
organization, functions, names, official titles, salaries, or 
numbers of personnel employed by the Agency: Provided, That in 
furtherance of this section, the Director of the Office of 
Management and Budget shall make no reports to the Congress in 
connection with the Agency under section 607, title VI, chapter 
212 of the Act of June 30, 1945, as amended (5 U.S.C. 947(b)).

           *       *       *       *       *       *       *


               security personnel at agency installations

  Sec. 15. (a)(1) The Director may authorize Agency personnel 
within the United States to perform the same functions as 
[special policemen of the General Services Administration 
perform under the first section of the Act entitled ``An Act to 
authorize the Federal Works Administrator or officials of the 
Federal Works Agency duly authorized by him to appoint special 
policemen for duty upon Federal property under the jurisdiction 
of the Federal Works Agency, and for other purposes'' (40 
U.S.C. 318),] officers and agents of the Department of Homeland 
Security, as provided in section 1315(b)(2) of title 40, United 
States Code, with the powers set forth in that section, except 
that such personnel shall perform such functions and exercise 
such powers--
          (A) * * *

           *       *       *       *       *       *       *

  (b) The Director is authorized to establish penalties for 
violations of the rules or regulations promulgated by the 
Director under subsection (a) of this section. Such penalties 
shall not exceed those specified in [the fourth section of the 
Act referred to in subsection (a) of this section (40 U.S.C. 
318c)] section 1315(c)(2) of title 40, United States Code.

           *       *       *       *       *       *       *

  (d)(1) Notwithstanding any other provision of law, any Agency 
personnel designated by the Director under subsection (a) shall 
be deemed for purposes of chapter 171 of title 28, United 
States Code, or any other provision of law relating to tort 
liability, to be acting within the scope of their office or 
employment if the Agency personnel take reasonable action, 
which may include the use of force, to--
          (A) protect an individual in the presence of the 
        Agency personnel from a crime of violence;
          (B) provide immediate assistance to an individual who 
        has suffered or who is threatened with bodily harm; or
          (C) prevent the escape of any individual whom the 
        Agency personnel reasonably believe to have committed a 
        crime of violence in the presence of such personnel.
  (2) In this subsection, the term ``crime of violence'' has 
the meaning given that term in section 16 of title 18, United 
States Code.

           *       *       *       *       *       *       *


                        CENTRAL SERVICES PROGRAM

  Sec. 21. (a) * * *

           *       *       *       *       *       *       *

  (f) Fees.--(1) * * *
  (2)[(A) Subject to subparagraph (B), the Director] The 
Director may obligate and expend amounts in the Fund that are 
attributable to the fees imposed and collected under paragraph 
(1) to acquire equipment or systems for, or to improve the 
equipment or systems of, central service providers and any 
elements of the Agency that are not designated for 
participation in the program in order to facilitate the 
designation of such elements for future participation in the 
program.
  [(B) The Director may not expend amounts in the Fund for 
purposes specified in subparagraph (A) in fiscal year 1998, 
1999, or 2000 unless the Director--
          [(i) secures the prior approval of the Director of 
        the Office of Management and Budget; and
          [(ii) submits notice of the proposed expenditure to 
        the Permanent Select Committee on Intelligence of the 
        House of Representatives and the Select Committee on 
        Intelligence of the Senate.]

           *       *       *       *       *       *       *


  PROCEDURAL REQUIREMENTS FOR CENTRAL INTELLIGENCE AGENCY RELATING TO 
                 PRODUCTS OF FEDERAL PRISON INDUSTRIES

  Sec. 23. (a) Market Research.--Before purchasing a product 
listed in the latest edition of the Federal Prison Industries 
catalog under section 4124(d) of title 18, United States Code, 
the Director shall conduct market research to determine whether 
the Federal Prison Industries product is comparable to products 
available from the private sector that best meet the Agency's 
needs in terms of price, quality, and time of delivery.
  (b) Competition Requirement.--If the Director determines that 
a Federal Prison Industries product is not comparable in price, 
quality, or time of delivery to products available from the 
private sector that best meet the Agency's needs in terms of 
price, quality, and time of delivery, the Director shall use 
competitive procedures for the procurement of the product or 
shall make an individual purchase under a multiple award 
contract. In conducting such a competition or making such a 
purchase, the Director shall consider a timely offer from 
Federal Prison Industries.
  (c) Implementation by Director.--The Director shall ensure 
that--
          (1) the Agency does not purchase a Federal Prison 
        Industries product or service unless a contracting 
        officer of the Agency determines that the product or 
        service is comparable to products or services available 
        from the private sector that best meet the Agency's 
        needs in terms of price, quality, and time of delivery; 
        and
          (2) Federal Prison Industries performs its 
        contractual obligations to the same extent as any other 
        contractor for the Agency.
  (d) Market Research Determination Not Subject to Review.--A 
determination by a contracting officer regarding whether a 
product or service offered by Federal Prison Industries is 
comparable to products or services available from the private 
sector that best meet the Agency's needs in terms of price, 
quality, and time of delivery shall not be subject to review 
pursuant to section 4124(b) of title 18.
  (e) Performance as a Subcontractor.--(1) A contractor or 
potential contractor of the Agency may not be required to use 
Federal Prison Industries as a subcontractor or supplier of 
products or provider of services for the performance of a 
contract of the Agency by any means, including means such as--
          (A) a contract solicitation provision requiring a 
        contractor to offer to make use of products or services 
        of Federal Prison Industries in the performance of the 
        contract;
          (B) a contract specification requiring the contractor 
        to use specific products or services (or classes of 
        products or services) offered by Federal Prison 
        Industries in the performance of the contract; or
          (C) any contract modification directing the use of 
        products or services of Federal Prison Industries in 
        the performance of the contract.
  (2) In this subsection, the term ``contractor'', with respect 
to a contract, includes a subcontractor at any tier under the 
contract.
  (f) Protection of Classified and Sensitive Information.--The 
Director may not enter into any contract with Federal Prison 
Industries under which an inmate worker would have access to--
          (1) any data that is classified;
          (2) any geographic data regarding the location of--
                  (A) surface and subsurface infrastructure 
                providing communications or water or electrical 
                power distribution;
                  (B) pipelines for the distribution of natural 
                gas, bulk petroleum products, or other 
                commodities; or
                  (C) other utilities; or
          (3) any personal or financial information about any 
        individual private citizen, including information 
        relating to such person's real property however 
        described, without the prior consent of the individual.
  (g) Application of Provision.--This section is subject to the 
preceding provisions of this Act, and shall not be construed as 
affecting any right or duty of the Director under those 
provisions.
  (h) Definitions.--In this section:
          (1) The terms ``competitive procedures'' and 
        ``procurement'' have the meanings given such terms in 
        section 4 of the Office of Federal Procurement Policy 
        Act (41 U.S.C. 403).
          (2) The term ``market research'' means obtaining 
        specific information about the price, quality, and time 
        of delivery of products available in the private sector 
        through a variety of means, which may include--
                  (A) contacting knowledgeable individuals in 
                government and industry;
                  (B) interactive communication among industry, 
                acquisition personnel, and customers; and
                  (C) interchange meetings or pre-solicitation 
                conferences with potential offerors.
                              ----------                              


                     HOMELAND SECURITY ACT OF 2002


SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

  (a) * * *
  (b) Table of Contents.--The table of contents for this Act is 
as follows:

Sec. 1. Short title; table of contents.
     * * * * * * *

      TITLE II--INFORMATION ANALYSIS AND INFRASTRUCTURE PROTECTION

     * * * * * * *

                    Subtitle C--Information Security

Sec. 221. Procedures for sharing information.
     * * * * * * *
Sec. 226. Pilot project to test use of tear-line intelligence reports.

           *       *       *       *       *       *       *


SEC. 226. PILOT PROJECT TO TEST USE OF TEAR-LINE INTELLIGENCE REPORTS.

  (a) Authority.--The Under Secretary for Information Analysis 
and Infrastructure Protection of the Department of Homeland 
Security, in consultation with the Director of Central 
Intelligence, may carry out a pilot program under which the 
Under Secretary may make intelligence information in the 
possession of the Department available to officials of State 
and local governments through the use of tear-line intelligence 
reports.
  (b) Tear-line Intelligence Reports Described.--For purpose of 
this section, a tear-line report is a report containing 
intelligence gathered by an agency or department of the United 
States that is in the possession of the Department that is 
prepared in a manner such that information relating to 
intelligence sources and methods is easily severable from the 
report to protect such sources and methods from disclosure. 
Such a report may be in a paper or an electronic format.
  (c) Duration of Project.--The Under Secretary shall carry out 
the pilot project under this section for a period of 3 years.
  (d) Reports to congress.--Not later than 1 year after the 
implementation of the pilot project, and annually thereafter, 
the Under Secretary shall submit to Congress a report on the 
pilot project conducted under this section, and shall include 
in the report an assessment of--
          (1) the effectiveness of the use of the tear-line 
        reports in providing intelligence information on a 
        timely basis to State and local authorities; and
          (2) if the use of such tear-line reports were to be 
        made permanent, whether additional safeguards are 
        needed with respect to the use of such reports.
  (e) Authorization of Appropriations.--There are authorized to 
be appropriated to the Under Secretary such sums as may be 
necessary to carry out this section.

           *       *       *       *       *       *       *


TITLE VIII--COORDINATION WITH NON-FEDERAL ENTITIES; INSPECTOR GENERAL; 
UNITED STATES SECRET SERVICE; COAST GUARD; GENERAL PROVISIONS

           *       *       *       *       *       *       *


Subtitle I--Information Sharing

           *       *       *       *       *       *       *


SEC. 892. FACILITATING HOMELAND SECURITY INFORMATION SHARING 
                    PROCEDURES.

  (a) * * *

           *       *       *       *       *       *       *

  (c) Sharing of Classified Information and Sensitive but 
Unclassified Information With State and Local Personnel.--
          (1) * * *

           *       *       *       *       *       *       *

          (3)(A) The Under Secretary for Information Analysis 
        and Infrastructure Protection of the Department of 
        Homeland Security, in consultation with the Director of 
        Central Intelligence, may conduct projects in several 
        cities to encourage officials of State and local 
        government, as well as representatives of industries 
        that comprise the critical infrastructure in those 
        cities to lawfully collect and to pass on to the 
        appropriate Federal officials information vital for the 
        prevention of terrorist attacks against the United 
        States.
          (B) The Director of Central Intelligence shall carry 
        out any duty under this paragraph through the Director 
        of the Terrorist Threat Integration Center.
          (C) Under the projects, training shall be provided to 
        such officials and representatives to--
                  (i) identify sources of potential threats 
                through such methods as the Secretary 
                determines appropriate;
                  (ii) report information relating to such 
                potential threats to the appropriate Federal 
                agencies in the appropriate form and manner; 
                and
                  (iii) assure that all reported information is 
                systematically submitted to and passed on by 
                the Department for use by appropriate Federal 
                agencies.
          (D) The Under Secretary shall carry out the pilot 
        project under this paragraph for a period of 3 years.
          (E) Not later than 1 year after the implementation of 
        the pilot project, and annually thereafter, the Under 
        Secretary shall submit to Congress a report on the 
        pilot project conducted under this paragraph. Each such 
        report shall include--
                  (i) an assessment of the effectiveness of the 
                project; and
                  (ii) recommendations on the continuation of 
                the project as well as any recommendations to 
                improve the effectiveness of information 
                collection and sharing by such officials and 
                representatives and the Federal government.
                              ----------                              

           *       *       *       *       *       *       *



INTELLIGENCE AUTHORIZATION ACT FOR FISCAL YEAR 2003

           *       *       *       *       *       *       *



TITLE III--GENERAL PROVISIONS

           *       *       *       *       *       *       *


Subtitle E--Terrorism

           *       *       *       *       *       *       *


SEC. 343. TERRORIST IDENTIFICATION CLASSIFICATION SYSTEM.

  (a) * * *

           *       *       *       *       *       *       *

  (c) Information Sharing.--Subject to [section 103(c)(6) of 
the National Security Act of 1947 (50 U.S.C. 403-3(c)(6))] 
section 103(c)(7) of the National Security Act of 1947 (50 
U.S.C. 403-3(c)(7)), relating to the protection of intelligence 
sources and methods, the Director shall provide for the sharing 
of the list, and information on the list, with such departments 
and agencies of the Federal Government, State and local 
government agencies, and entities of foreign governments and 
international organizations as the Director considers 
appropriate.

           *       *       *       *       *       *       *

  (e) Report on Criteria for Information Sharing.--(1) * * *
  (2) The report shall include a description of the 
circumstances in which the Director has determined that sharing 
information on the list with the departments and agencies of 
the Federal Government, and of State and local governments, 
described by subsection (c) would be inappropriate due to the 
concerns addressed by section [103(c)(6)] 103(c)(7) of the 
National Security Act of 1947, relating to the protection of 
sources and methods, and any instance in which the sharing of 
information on the list has been inappropriate in light of such 
concerns.

           *       *       *       *       *       *       *


         TITLE V--DEPARTMENT OF DEFENSE INTELLIGENCE ACTIVITIES

SEC. 501. USE OF FUNDS FOR COUNTERDRUG AND COUNTERTERRORISM ACTIVITIES 
                    FOR COLOMBIA.

  (a) Authority.--Funds designated for intelligence or 
intelligence-related purposes for assistance to the Government 
of Colombia for counterdrug activities [for fiscal years 2002 
and 2003] for each of fiscal years 2002 through 2005, and any 
unobligated funds available to any element of the intelligence 
community for such activities for a prior fiscal year, shall be 
available to support a unified campaign against narcotics 
trafficking and against activities by organizations designated 
as terrorist organizations (such as the Revolutionary Armed 
Forces of Colombia (FARC), the National Liberation Army (ELN), 
and the United Self-Defense Forces of Colombia (AUC)), and to 
take actions to protect human health and welfare in emergency 
circumstances, including undertaking rescue operations.

           *       *       *       *       *       *       *

  (d) Application of Certain Provisions of Law.--[Sections 556, 
567, and 568 of Public Law 107-115, section 8093 of the 
Department of Defense Appropriations Act, 2002,] Section 553 
and the certification requirements of section 564(a)(2) of the 
Foreign Operations, Export Financing, and Related Programs 
Appropriations Act, 2003 (division E of Public Law 108-7; 117 
Stat. 200, 205), and section 8093 of the Department of Defense 
Appropriations Act, 2003 (Public Law 107-248; 116 Stat. 1558; 
10 U.S.C. 182 note), and the numerical limitations on the 
number of United States military personnel and United States 
individual civilian contractors in section 3204(b)(1) of Public 
Law 106-246 shall be applicable to funds made available 
pursuant to the authority contained in subsection (a).
  [(e) Limitation on Participation of United States 
Personnel.--No United States Armed Forces personnel or United 
States civilian contractor employed by the United States will 
participate in any combat operation in connection with 
assistance made available under this section, except for the 
purpose of acting in self defense or rescuing any United States 
citizen to include United States Armed Forces personnel, United 
States civilian employees, and civilian contractors employed by 
the United States.]
  (e) Prohibition.--No United States Armed Forces personnel, 
United States civilian employee or contractor engaged by the 
United States will participate in any combat operation in 
connection with assistance made available under this section, 
except for the purpose of acting to protect the life or the 
physical security of others, in self defense, or during the 
course of search and rescue operations.

           *       *       *       *       *       *       *


  TITLE X--NATIONAL COMMISSION FOR REVIEW OF RESEARCH AND DEVELOPMENT 
PROGRAMS OF THE UNITED STATES INTELLIGENCE COMMUNITY

           *       *       *       *       *       *       *


SEC. 1007. FINAL REPORT; TERMINATION.

  (a) Final Report.--Not later than September 1, [2003] 2004, 
the Commission shall submit to the congressional intelligence 
committees, the Director of Central Intelligence, and the 
Secretary of Defense a final report as required by section 
1002(h)(2).

           *       *       *       *       *       *       *

                              ----------                              


 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) * * *
  (b) Submittal Dates.--(1) The report required by subsection 
(a) shall be submitted each year to the congressional 
intelligence committees and the congressional leadership on [a 
semiannual] an annual basis on the dates provided in section 
507 of the National Security Act of 1947.

           *       *       *       *       *       *       *

                              ----------                              


         SECTION 11 OF THE NATIONAL SECURITY AGENCY ACT OF 1959

  Sec. 11. (a)(1) The Director of the National Security Agency 
may authorize agency personnel within the United States to 
perform the same functions as [special policemen of the General 
Services Administration perform under the first section of the 
Act entitled ``An Act to authorize the Federal Works 
Administrator or officials of the Federal Works Agency duly 
authorized by him to appoint special policemen for duty upon 
Federal property under the jurisdiction of the Federal Works 
Agency, and for other purposes'' (40 U.S.C. 318)] officers and 
agents of the Department of Homeland Security, as provided in 
section 1315(b)(2) of title 40, United States Code, with the 
powers set forth in that section, except that such personnel 
shall perform such functions and exercise such powers--
          (A) * * *

           *       *       *       *       *       *       *

  (b) The Director of the National Security Agency is 
authorized to establish penalties for violations of the rules 
or regulations prescribed by the Director under subsection (a). 
Such penalties shall not exceed those specified in [the fourth 
section of the Act referred to in subsection (a) (40 U.S.C. 
318c)] section 1315(c)(2) of title 40, United States Code.

           *       *       *       *       *       *       *

  (d)(1) Notwithstanding any other provision of law, agency 
personnel designated by the Director of the National Security 
Agency under subsection (a) shall be considered for purposes of 
chapter 171 of title 28, United States Code, or any other 
provision of law relating to tort liability, to be acting 
within the scope of their office or employment when such agency 
personnel take reasonable action, which may include the use of 
force, to--
          (A) protect an individual in the presence of such 
        agency personnel from a crime of violence;
          (B) provide immediate assistance to an individual who 
        has suffered or who is threatened with bodily harm; or
          (C) prevent the escape of any individual whom such 
        agency personnel reasonably believe to have committed a 
        crime of violence in the presence of such agency 
        personnel.
  (2) Paragraph (1) shall not affect the authorities of the 
Attorney General under section 2679(d)(1) of title 28, United 
States Code.
  (3) In this subsection, the term ``crime of violence'' has 
the meaning given that term in section 16 of title 18, United 
States Code.
                              ----------                              


 SECTION 201 OF THE ENHANCED BORDER SECURITY AND VISA ENTRY REFORM ACT 
                                OF 2002


SEC. 201. INTERIM MEASURES FOR ACCESS TO AND COORDINATION OF LAW 
                    ENFORCEMENT AND OTHER INFORMATION.

  (a) * * *

           *       *       *       *       *       *       *

  (c) Coordination Plan.--
          (1) * * *

           *       *       *       *       *       *       *

          (3) Protections regarding information and uses 
        thereof.--The plan under this subsection shall 
        establish conditions for using the information 
        described in subsection (b) received by the Department 
        of State and Immigration and Naturalization Service--
                  (A) * * *

           *       *       *       *       *       *       *

                  (F) in a manner that protects the sources and 
                methods used to acquire intelligence 
                information as required by [section 103(c)(6) 
                of the National Security Act of 1947 (50 U.S.C. 
                403-3(c)(6))] section 103(c)(7) of the National 
                Security Act of 1947 (50 U.S.C. 403-3(c)(7)).

           *       *       *       *       *       *       *

                              ----------                              


TITLE 44, UNITED STATES CODE

           *       *       *       *       *       *       *



CHAPTER 35--COORDINATION OF FEDERAL INFORMATION POLICY

           *       *       *       *       *       *       *



SUBCHAPTER II--INFORMATION SECURITY

           *       *       *       *       *       *       *



Sec. 3535. Annual independent evaluation

  (a) * * *
  (b) Subject to subsection (c)--
          (1) for each agency with an Inspector General 
        appointed under the Inspector General Act of 1978 or 
        any other law, the annual evaluation required by this 
        section shall be performed by the Inspector General or 
        by an independent external auditor, as determined by 
        the Inspector General of the agency; and

           *       *       *       *       *       *       *


SUBCHAPTER III--INFORMATION SECURITY

           *       *       *       *       *       *       *



Sec. 3545. Annual independent evaluation

  (a) * * *
  (b) Independent Auditor.--Subject to subsection (c)--
          (1) for each agency with an Inspector General 
        appointed under the Inspector General Act of 1978 or 
        any other law, the annual evaluation required by this 
        section shall be performed by the Inspector General or 
        by an independent external auditor, as determined by 
        the Inspector General of the agency; and

           *       *       *       *       *       *       *

                              ----------                              


TITLE 10, UNITED STATES CODE

           *       *       *       *       *       *       *



                    Subtitle A--General Military Law

PART I--ORGANIZATION AND GENERAL MILITARY POWERS

           *       *       *       *       *       *       *



CHAPTER 21--DEPARTMENT OF DEFENSE INTELLIGENCE MATTERS

           *       *       *       *       *       *       *



                     SUBCHAPTER I--GENERAL MATTERS

Sec.
421.  Funds for foreign cryptologic support.
     * * * * * * *
426.  Personal services contracts: authority and limitations.

           *       *       *       *       *       *       *


Sec. 426. Personal services contracts: authority and limitations

  (a) Personal Services.--(1) The Secretary of Defense may, 
notwithstanding section 3109 of title 5, enter into personal 
services contracts in the United States if the personal 
services directly support the mission of a defense intelligence 
component or counter-intelligence organization.
  (2) The contracting officer for a personal services contract 
shall be responsible for ensuring that a personal services 
contract is the appropriate vehicle for carrying out the 
purpose of the contract.
  (b) Definition.--In this section, the term ``defense 
intelligence component'' means a component of the Department of 
Defense that is an element of the intelligence community, as 
defined in section 3(4) of the National Security Act of 1947 
(50 U.S.C. 401a(4)).

           *       *       *       *       *       *       *


PART III--TRAINING AND EDUCATION

           *       *       *       *       *       *       *


CHAPTER 111--SUPPORT OF SCIENCE, MATHEMATICS, AND ENGINEERING EDUCATION

           *       *       *       *       *       *       *



Sec. 2195. Department of Defense cooperative education programs

  (a) * * *

           *       *       *       *       *       *       *

  (d)(1) The Director of the National Security Agency may 
provide a qualifying employee of a defense laboratory of that 
Agency with living quarters at no charge, or at a rate or 
charge prescribed by the Director by regulation, without regard 
to section 5911(c) of title 5.
  (2) In this subsection, the term ``qualifying employee'' 
means a student who is employed at the National Security Agency 
under--
          (A) a Student Educational Employment Program of the 
        Agency conducted under this section or any other 
        provision of law; or
          (B) a similar cooperative or summer education program 
        of the Agency that meets the criteria for Federal 
        cooperative or summer education programs prescribed by 
        the Office of Personnel Management.

           *       *       *       *       *       *       *


                                
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