[House Report 108-724]
[From the U.S. Government Publishing Office]



108th Congress                                            Rept. 108-724
                        HOUSE OF REPRESENTATIVES
 2d Session                                                      Part 2
_______________________________________________________________________

                                     


    TO PROVIDE FOR REFORM OF THE INTELLIGENCE COMMUNITY, TERRORISM 
    PREVENTION AND PROSECUTION, BORDER SECURITY, AND INTERNATIONAL 
          COOPERATION AND COORDINATION, AND FOR OTHER PURPOSES

                               __________

                                 REPORT

                                 OF THE

                      COMMITTEE ON ARMED SERVICES

                        HOUSE OF REPRESENTATIVES

                                   ON

                                H.R. 10

                             together with

                            ADDITIONAL VIEWS
                                     
      [Including cost estimate of the Congressional Budget Office]



                                     

                October 4, 2004.--Ordered to be printed


                   HOUSE COMMITTEE ON ARMED SERVICES
                      One Hundred Eighth Congress

                  DUNCAN HUNTER, California, Chairman
CURT WELDON, Pennsylvania            IKE SKELTON, Missouri
JOEL HEFLEY, Colorado                JOHN SPRATT, South Carolina
JIM SAXTON, New Jersey               SOLOMON P. ORTIZ, Texas
JOHN M. McHUGH, New York             LANE EVANS, Illinois
TERRY EVERETT, Alabama               GENE TAYLOR, Mississippi
ROSCOE G. BARTLETT, Maryland         NEIL ABERCROMBIE, Hawaii
HOWARD P. ``BUCK'' McKEON,           MARTY MEEHAN, Massachusetts
    California                       SILVESTRE REYES, Texas
MAC THORNBERRY, Texas                VIC SNYDER, Arkansas
JOHN N. HOSTETTLER, Indiana          JIM TURNER, Texas
WALTER B. JONES, North Carolina      ADAM SMITH, Washington
JIM RYUN, Kansas                     LORETTA SANCHEZ, California
JIM GIBBONS, Nevada                  MIKE McINTYRE, North Carolina
ROBIN HAYES, North Carolina          CIRO D. RODRIGUEZ, Texas
HEATHER WILSON, New Mexico           ELLEN O. TAUSCHER, California
KEN CALVERT, California              ROBERT A. BRADY, Pennsylvania
ROB SIMMONS, Connecticut             BARON P. HILL, Indiana
JO ANN DAVIS, Virginia               JOHN B. LARSON, Connecticut
ED SCHROCK, Virginia                 SUSAN A. DAVIS, California
W. TODD AKIN, Missouri               JAMES R. LANGEVIN, Rhode Island
J. RANDY FORBES, Virginia            STEVE ISRAEL, New York
JEFF MILLER, Florida                 RICK LARSEN, Washington
JOE WILSON, South Carolina           JIM COOPER, Tennessee
FRANK A. LoBIONDO, New Jersey        JIM MARSHALL, Georgia
TOM COLE, Oklahoma                   KENDRICK B. MEEK, Florida
JEB BRADLEY, New Hampshire           MADELEINE Z. BORDALLO, Guam
ROB BISHOP, Utah                     TIM RYAN, Ohio
MICHAEL TURNER, Ohio                 CHARLES STENHOLM, Texas
JOHN KLINE, Minnesota
CANDICE S. MILLER, Michigan
PHIL GINGREY, Georgia
MIKE ROGERS, Alabama
TRENT FRANKS, Arizona

                    Robert S. Rangel, Staff Director


                            C O N T E N T S

                              ----------                              
                                                                   Page

Purpose and Background...........................................     4
Legislative History..............................................     5
Hearings.........................................................     5
Section-by-Section Analysis......................................     5
TITLE I--REFORM OF THE INTELLIGENCE COMMUNITY....................     6
  LEGISLATIVE PROVISIONS.........................................     6
      Section 1001--Short Title..................................     6
    Subtitle A--Establishment of National Intelligence Director..     6
      Section 1011--Reorganization and Improvement of Management 
        of Intelligence Community................................     6
      Section 1012--Revised Definition of National Intelligence..     6
      Section 1013--Joint Procedures for Operational Coordination 
        between Department of Defense and Central Intelligence 
        Agency...................................................     7
      GSection 1014--Role of National Intelligence Director in 
        Appointment of Certain Officials Responsible for 
        Intelligence-related Activities..........................     7
      Section 1015--Initial Appointment of the National 
        Intelligence Director....................................     7
      Section 1016--Executive Schedule Matters...................     7
    Subtitle B--National Counterterrorism Center and Civil 
      Liberties Protections......................................     7
      Section 1021--National Counterterrorism Center.............     7
      Section 1022--Civil Liberties Protection Officer...........     8
    Subtitle C--Joint Intelligence Community Council.............     8
      Section 1031--Joint Intelligence Community Council.........     8
    Subtitle D--Improvement of Human Intelligence (HUMINT).......     8
      Section 1041--Human Intelligence as an Increasingly 
        Critical Component of the Intelligence Community.........     8
      Section 1042--Improvement of Human Intelligence Capacity...     8
    Subtitle E--Improvement of Education for the Intelligence 
      Community..................................................     8
      Section 1051--Modification of Obligated Service 
        Requirements under National Security Education Program...     8
      Section 1052--Improvements to the National Flagship 
        Language Initiative......................................     9
      Section 1053--Establishment of Scholarship Program for 
        English Language Studies for Heritage Community Citizens 
        of the United States within the National Security 
        Education Program........................................     9
      Section 1054--Sense of Congress with Respect to Language 
        and Education for the Intelligence Community; Reports....     9
      Section 1055--Advancement of Foreign Languages Critical to 
        the Intelligence Community...............................     9
      Section 1056--Pilot Project for Civilian Linguist Reserve 
        Corps....................................................    10
      Section 1057--Codification of Establishment of the National 
        Virtual Translation Center...............................    10
      Section 1058--Report on Recruitment and Retention of 
        Qualified Instructors of the Defense Language Institute..    10
    Subtitle F--Additional Improvements of Intelligence 
      Activities.................................................    10
      Section 1061--Permanent Extension of Central Intelligence 
        Agency Voluntary Separation Incentive Program............    10
      Section 1062--National Security Agency Emerging 
        Technologies Panel.......................................    00
      Section 1063--Service and National Laboratories and the 
        Intelligence Community...................................    10
      Section 1064--Improvement in Translation and Delivery of 
        Suspected Terrorist Communications.......................    10
    Subtitle G--Conforming and Other Amendments..................    11
      Section 1071--Conforming Amendments Relating to Roles of 
        National Intelligence Director and Director of the 
        Central Intelligence Agency..............................    11
      Section 1072--Other Conforming Amendments..................    11
      Section 1073--Elements of Intelligence Community under 
        National Security Act of 1947............................    11
      Section 1074--Redesignation of National Foreign 
        Intelligence Program as National Intelligence Program....    11
      Section 1075--Repeal of Superseded Authorities.............    11
      Section 1076--Clerical Amendments to National Security Act 
        of 1947..................................................    11
      Section 1077--Conforming Amendments Relating to Prohibiting 
        Dual Service of the Director of the Central Intelligence 
        Agency...................................................    11
      Section 1078--Access to Inspector General Protections......    11
      Section 1079--General References...........................    11
      Section 1080--Application of Other Laws....................    12
    Subtitle H--Transfer, Termination, Transition and Other 
      Provisions.................................................    12
      Section 1091--Transfer of Community Management Staff.......    12
      Section 1092--Transfer of Terrorist Threat Integration 
        Center...................................................    12
      Section 1093--Termination of Positions of Assistant 
        Directors of Central Intelligence........................    12
      Section 1094--Implementation Plan..........................    12
      Section 1095--Transitional Authorities.....................    13
      Section 1096--Effective Dates..............................    13
    Subtitle I--Other Matters....................................    13
      Section 1101--Study of Promotion and Professional Military 
        Education School Selection Rates for Military 
        Intelligence Officers....................................    13
Committee Position...............................................    13
Congressional Budget Office Estimate.............................    13
Committee Cost Estimate..........................................    29
Oversight Findings...............................................    29
General Performance Goals and Objectives.........................    29
Constitutional Authority Statement...............................    30
Statement of Federal Mandates....................................    30
Record Votes.....................................................    30
Changes in Existing Laws Made by the Bill, as Reported...........    36
Additional Views.................................................    37
  Additional views of Ike Skelton, John Spratt, Solomon P. Ortiz, 
    Lane Evans, Neil Abercrombie, Marty Meehan, Silvestre Reyes, 
    Vic Snyder, Jim Turner, Adam Smith, Loretta Sanchez, Mike 
    McIntyre, Ciro D. Rodriguez, Ellen O. Tauscher, Robert A. 
    Brady, Baron P. Hill, John B. Larson, Susan A. Davis, James 
    R. Langevin, Steve Israel, Rick Larsen, Jim Cooper, Kendrick 
    B. Meek, Madeleine Z. Bordallo, Tim Ryan, Ohio, Charles 
    Stenholm.....................................................    37


108th Congress                                            Rept. 108-724
                        HOUSE OF REPRESENTATIVES
 2d Session                                                      Part 2

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



 
                9/11 RECOMMENDATIONS IMPLEMENTATION ACT

                                _______
                                

                October 4, 2004.--Ordered to be printed

                                _______
                                

    Mr. Hunter, from the Committee on Armed Services, submitted the 
                               following

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                         [To accompany H.R. 10]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Armed Services, to whom was referred the 
bill (H.R. 10) to provide for reform of the intelligence 
community, terrorism prevention and prosecution, border 
security, and international cooperation and coordination, and 
for other purposes, having considered the same, report 
favorably thereon with amendments and recommend that the bill 
as amended do pass.

  The amendments (stated in terms of the page and line numbers 
of the introduced bill) are as follows:

  Page 33, after line 10, insert the following new 
subparagraph:

          ``(H) The Associate National Intelligence Director 
        for Science and Technology.

  Page 33, line 11, strike ``(H)'' and insert ``(I)'', line 12, 
strike ``(I)'' and insert ``(J)'', and line 14, strike ``(J)'' 
and insert ``(K).

  Page 37, after line 9, insert the following new subsection:

  ``(i) Associate National Intelligence Director for Science 
and Technology.--(1) There is an Associate National 
Intelligence Director for Science and Technology who shall be 
appointed by the National Intelligence Director.
  ``(2) The Associate National Intelligence Director for 
Science and Technology shall--
          ``(A) advise the National Intelligence Director 
        regarding research and development efforts and 
        priorities in support of the intelligence mission, to 
        ensure that the science and technology needs of the 
        National Intelligence Program will be met;
          ``(B) develop in consultation with appropriate 
        agencies and the Associate National Intelligence 
        Directors for Military Support, Domestic Security, and 
        Diplomatic Affairs a strategic plan to support United 
        States leadership in science and technology to 
        facilitate intelligence missions; and
          ``(C) perform such other duties and exercise such 
        powers as the National Intelligence Director may 
        prescribe.

  Page 37, line 10, strike ``(i)'' and insert ``(j)''.

  Page 39, line 9, strike ``(j)'' and insert ``(k)''.

  Page 41, line 13, strike ``(k)'' and insert ``(l)''.

  Page 42, line 1, strike ``(l)'' and insert ``(m)''.

  Page 44, after line 20, insert the following new subsection:

  ``(n) Counterintelligence Officer to the National 
Intelligence Director.--(1) There is a Counterintelligence 
Officer to the National Intelligence Director who shall be 
appointed by the National Intelligence Director.
  ``(2) The mission of the Counterintelligence Officer to the 
National Intelligence Director is to assist the National 
Intelligence Director in reducing the threats of disclosure or 
loss of classified or sensitive information or penetration of 
national intelligence functions that may be potentiated by 
increased information sharing, enterprise architectures, or 
other activities under this Act.
  ``(3) The Counterintelligence Officer to the National 
Intelligence Director shall--
          ``(A) assist the Deputy National Intelligence 
        Director for Community Management and Resources in 
        developing and implementing counterintelligence 
        policies for the functions of the Office of the 
        National Intelligence Director, in consultation with 
        the Associate National Intelligence Directors;
          ``(B) ensure that policies under subparagraph (A) and 
        the implementation of those policies are coordinated 
        with counterintelligence activities of appropriate 
        agencies and elements of the National Intelligence 
        Program, and with the activities of the Intelligence 
        Community Information Officer;
          ``(C) review resource requirements to support the 
        mission of the Counterintelligence Officer under this 
        subsection and make recommendations to the Deputy 
        National Intelligence Director for Community Management 
        and Resources with respect to those requirements; and
          ``(D) perform such other duties as the National 
        Intelligence Director shall prescribe.

  Page 52, line 6, after the period insert the following new 
sentence: ``In the case in which the National Intelligence 
Director does not concur in such a recommendation, the Director 
and the head of the department or agency concerned may advise 
the President directly of the intention to withhold concurrence 
or to make a recommendation, as the case may be.''.

  At the end of subtitle F of title I (page 93, after line 21), 
insert the following new sections (and conform the table of 
contents in section 2 accordingly):

SEC. 1063. SERVICE AND NATIONAL LABORATORIES AND THE INTELLIGENCE 
                    COMMUNITY.

  The National Intelligence Director, in cooperation with the 
Secretary of Defense and the Secretary of Energy, should seek 
to ensure that each service laboratory of the Department of 
Defense and each national laboratory of the Department of 
Energy may, acting through the relevant Secretary and in a 
manner consistent with the missions and commitments of the 
laboratory--
          (1) assist the National Intelligence Director in all 
        aspects of technical intelligence, including research, 
        applied sciences, analysis, technology evaluation and 
        assessment, and any other aspect that the relevant 
        Secretary considers appropriate; and
          (2) make available to the intelligence community, on 
        a community-wide basis--
                  (A) the analysis and production services of 
                the service and national laboratories, in a 
                manner that maximizes the capacity and services 
                of such laboratories; and
                  (B) the facilities and human resources of the 
                service and national laboratories, in a manner 
                that improves the technological capabilities of 
                the intelligence community.

SEC. 1064. IMPROVEMENT IN TRANSLATION AND DELIVERY OF SUSPECTED 
                    TERRORIST COMMUNICATIONS.

  (a) Requirement for Prompt Translation and Transmission.--The 
National Intelligence Director shall develop and transmit to 
the appropriate agencies guidelines to ensure that all 
suspected terrorist communications, including transmissions, 
are translated and delivered in a manner consistent with 
timelines contained in regulations of the Federal Bureau of 
Investigations to the extent practicable.
  (b) Prevention of Deletion of Terrorist Communications.--The 
National Intelligence Director shall take such steps as are 
necessary to ensure that terrorist communications are not 
deleted or discarded before those communications are 
translated.

  At the end of title I (page 116, after line 19), insert the 
following (and conform the table of contents in section 2 
accordingly):

                       Subtitle I--Other Matters

SEC. 1101. STUDY OF PROMOTION AND PROFESSIONAL MILITARY EDUCATION 
                    SCHOOL SELECTION RATES FOR MILITARY INTELLIGENCE 
                    OFFICERS.

  (a) Study.--The Secretary of Defense shall conduct a study of 
the promotion selection rates, and the selection rates for 
attendance at professional military education schools, of 
intelligence officers of the Armed Forces, particularly in 
comparison to the rates for other officers of the same Armed 
Force who are in the same grade and competitive category.
  (b) Report.--The Secretary shall submit to the Committees on 
Armed Services of the Senate and House of Representatives a 
report providing the Secretary's findings resulting from the 
study under subsection (a) and the Secretary's recommendations 
(if any) for such changes in law as the Secretary considers 
needed to ensure that intelligence officers, as a group, are 
selected for promotion, and for attendance at professional 
military education schools, at rates not less than the rates 
for all line (or the equivalent) officers of the same Armed 
Force (both in the zone and below the zone) in the same grade. 
The report shall be submitted not later than April 1, 2005.

                         PURPOSE AND BACKGROUND

    The purpose of H.R. 10 is to amend the National Security 
Act of 1947, which contains the authorities and 
responsibilities of the Secretary of Defense and the Director 
of Central Intelligence (DCI) and to address the central 
findings of the National Commission on Terrorist Attacks Upon 
the United States, known as the 9/11 Commission.
    On July 22, 2004, the commission released its final report 
concerning the terrorist attacks of September 11, 2001. The 
report highlights policies and procedures across the federal 
government that need improvement and recommends a range of 
general and specific solutions to those problems. These 
recommendations affect several executive departments, including 
the Department of Defense and many recommendations would 
require action by Congress to be implemented.
    The President signed several executive orders on August 27, 
2004, implementing the commission's recommendations, in part. 
In addition, the administration recommended that the Congress 
adopt several changes to the National Security Act of 1947, and 
submitted suggested legislative language on September 16, 2004.
    The committee's consideration of H.R. 10 was limited to 
title I, the National Security Intelligence Improvement Act of 
2004, which addresses the core issues of the commission's 
report concerning the organization of the intelligence 
community.
    The Department operates the majority of the nation's 
national intelligence apparatus through the National Security 
Agency, the National Reconnaissance Office, and the National 
Geospatial-Intelligence Agency. These agencies support the 
intelligence requirements of both the DCI and the Secretary 
under a well established partnership arrangement. That 
partnership works effectively today and was effective before 
September 11, 2001, according to testimony before the committee 
by the vice chairman of the commission.
    The reason for this complicated arrangement is that our 
nation's intelligence assets are a unique and valuable 
instrument of national security policy that must serve multiple 
purposes. We do not have two separate intelligence systems. 
Today, the same national capability and the same satellites 
that inform the President and senior policymakers are also used 
by front line military forces to carry out their mission. The 
use of expensive, complex systems for multiple purposes is both 
efficient and synergistic to effective intelligence analysis.
    This integration of national and tactical intelligence and 
the sharing of this information to users up and down the 
command chain is exactly what the committee has been 
encouraging for well over a decade, to leverage this strategic 
capability for maximum effect. Therefore, the suggestion that 
national and tactical intelligence operations and assets can be 
surgically split into separate organizations and budgets fails 
to account for the negative impact such a step would have on 
how we operate and perform on today's modern battlefield. 
Consequently, the budget authorities that the newly created 
National Intelligence Director (NID) would have under H.R. 10 
were carefully crafted to preserve the ability of the Secretary 
to rely on these agencies to supply critical military 
intelligence to combatant commanders, yet enable the NID to 
effectively perform his national intelligence mission.
    The system works today because of the delicately balanced 
partnership that exists between the DCI and the Secretary. 
Thus, as this bill moves toward a new organizational concept 
that creates a National Intelligence Director to manage the 
community, the committee must ensure that this critical 
partnership is maintained to ensure that in the rush to reform, 
those parts of the intelligence system that work well and are 
critical to our men and women in uniform are not broken.

                          LEGISLATIVE HISTORY

    As noted above, H.R. 10 was introduced on September 24, 
2004, and referred to the Permanent Select Committee on 
Intelligence, and in addition to the Committees on Armed 
Services, Education and the Workforce, Energy and Commerce, 
Financial Services, Government Reform, International Relations, 
the Judiciary, Rules, Science, Transportation and 
Infrastructure, Ways and Means, and Select Homeland Security. 
On September 29, 2004, the Permanent Select Committee on 
Intelligence reported favorably the bill, as amended, by a 
record vote of 17 ayes to 2 noes, and the Committee on 
Financial Services on September 29, 2004, reported favorably 
the bill, as amended, by voice vote. The bill, as amended, was 
reported favorably by the Committee on Government Reform on 
September 29, 2004, by voice vote, and by the Committee on the 
Judiciary on September 29, 2004, by a record vote of 19 ayes to 
12 noes.
    On September 29, 2004, the Committee on Armed Services held 
a mark-up session to consider H.R. 10. The committee reported 
favorably the bill, as amended, by a record vote of 59 ayes to 
0 noes, a quorum being present.

                                HEARINGS

    Committee consideration of the matter contained in the 
National Security Intelligence Improvement Act of 2004, title I 
of this Act, results from four full committee hearings 
conducted on August 10 and 11, 2004.

                      SECTION-BY-SECTION ANALYSIS

    The following is a section-by-section analysis of those 
sections of H.R. 10 as amended by the Armed Services Committee.

             TITLE I--REFORM OF THE INTELLIGENCE COMMUNITY

                         LEGISLATIVE PROVISIONS


                       Section 1001--Short Title

    This section would establish the short title of title I of 
this Act as the ``National Security Intelligence Improvement 
Act of 2004.''

      Subtitle A--Establishment of National Intelligence Director


     Section 1011--Reorganization and Improvement of Management of 
                         Intelligence Community

    This section would amend sections 102 through 104 of title 
50, United States Code, the ``National Security Act of 1947.'' 
It would establish a National Intelligence Director (NID) to 
head the United States intelligence community. The NID would 
act as the principal advisor to the President, the National 
Security Council, and the Homeland Security Council for foreign 
and domestic intelligence matters relating to national 
security. Contrary to prior law, the NID would be prohibited 
from concurrent service as the Director of the Central 
Intelligence Agency. The NID would manage, oversee and direct 
the execution of the National Intelligence Program (NIP). The 
NID would provide national intelligence to the President, heads 
of departments and agenciesof the executive branch, the 
Chairman of the Joint Chiefs of Staff and senior military commanders, 
and the Senate and House of Representatives, as appropriate.
    This section would also enhance the NID's authority to 
execute the annual intelligence budget. The NID would work 
through the heads of the departments in the intelligence 
community. This section would also provide the NID with 
authority to transfer funds out of any department or agency 
within the NIP in a single fiscal year if the amount is less 
than $100.0 million and that is less than five percent of the 
amounts available to a department or agency under the NIP. A 
transfer would not be allowed if the result would be to 
terminate a program.

       Section 1012--Revised Definition of National Intelligence

    This section would clarify the terms ``national 
intelligence'' and ``intelligence related to national 
security'' as referring to all intelligence, regardless of the 
source from which derived and including information gathered 
within or outside the United States that pertains to more than 
one United States Government agency and that involves threats 
to the United States, its people, property, or interests, the 
development, proliferation, or use of weapons of mass 
destruction or any other matter bearing on United States 
national or homeland security.

  Section 1013--Joint Procedures for Operational Coordination Between 
         Department of Defense and Central Intelligence Agency

    This section would require development of joint procedures 
to improve the coordination and deconfliction of operations 
that involve both the Armed Forces and the Central Intelligence 
Agency. This section would require a report to the 
congressional defense committees and the congressional 
intelligence committees describing the procedures established 
not less than 180 days after the date of enactment of this Act.

Section 1014--Role of National Intelligence Director in Appointment of 
   Certain Officials Responsible for Intelligence-related Activities

    This section would require the Secretary of Defense to 
obtain concurrence of the National Intelligence Director (NID) 
before appointing, or recommending to the President, an 
individual to fill the positions of Director of the National 
Security Agency, the Director of the National Reconnaissance 
Office or the Director of the National Geospatial-Intelligence 
Agency. If the NID does not concur with the recommendation, the 
Secretary may not fill the vacancy or make the recommendation 
to the President. If the NID does not concur with such a 
recommendation, the NID and the Secretary may advise the 
President directly of the intention to withhold concurrence or 
to make a recommendation, as the case may be.

Section 1015--Initial Appointment of the National Intelligence Director

    This section would give the President discretion to appoint 
the current Director of Central Intelligence (DCI) as the 
National Intelligence Director (NID) upon the date of the 
enactment of the Act. Any reference to the DCI, in the capacity 
as the head of the intelligence community, would be deemed to 
be a reference to the NID. Also, any reference to the DCI, in 
the capacity as the head of the Central Intelligence Agency, 
would be deemed to be a reference to the DCI.

                Section 1016--Executive Schedule Matters

    This section would amend sections 5312, 5313 and 5315 of 
title 5, United States Code, to reflect the creation of the 
National Intelligence Director, Deputy National Intelligence 
Director and Director of the National Counterterrorism Center.

   Subtitle B--National Counterterrorism Center and Civil Liberties 
                              Protections


             Section 1021--National Counterterrorism Center

    This section would establish the National Counterterrorism 
Center (NCTC) within the Office of the National Intelligence 
Director. This section would define the mission of the NCTC as 
the primary organization in the United States Government for 
analyzing and integrating all intelligence possessed or 
acquired by the United States pertaining to terrorism, except 
intelligence pertaining exclusively to domestic 
counterterrorism, for conducting strategic operational 
planning, for supporting operational responsibilities assigned 
to lead agencies for counterterrorism by ensuring access to 
intelligence, and for ensuring appropriate access to all-source 
intelligence support needed to execute counterterrorism plans. 
This section would also explicitly define the duties and 
responsibilities of the Director of the NCTC.

            Section 1022--Civil Liberties Protection Officer

    This section would establish a Civil Liberties Protection 
Officer within the Office of the National Intelligence Director 
(NID). This officer would ensure that the protection of civil 
liberties and privacy be appropriately incorporated by the 
Office of the NID, oversee compliance by the Office of the NID, 
review and assess complaints, ensure that the use of 
technologies does not erode privacy protections, ensure 
personal information is handled in compliance with section 552a 
of title 5, United States Code, and conduct privacy impact 
assessments.

            Subtitle C--Joint Intelligence Community Council


           Section 1031--Joint Intelligence Community Council

    This section would establish a Joint Intelligence Community 
Council (JICC) to advise the National Intelligence Director 
(NID), as appropriate. The JICC would consist of the NID as 
chair, the Secretary of State, the Secretary of the Treasury, 
the Secretary of Defense, the Attorney General, the Secretary 
of Energy, the Secretary of Homeland Security, and other 
officials designated by the President.

         Subtitle D--Improvement of Human Intelligence (HUMINT)


Section 1041--Human Intelligence as an Increasingly Critical Component 
                     of the Intelligence Community

    This section would express the sense of Congress regarding 
the increasing importance of human intelligence as a critical 
component of the intelligence community.

        Section 1042--Improvement of Human Intelligence Capacity

    This section would require the National Intelligence 
Director to submit to Congress, not later than six months after 
the date of enactment of this Act, a report on existing human 
intelligence (HUMINT) capacity across the intelligence 
community.

  Subtitle E--Improvement of Education for the Intelligence Community


  Section 1051--Modification of Obligated Service Requirements Under 
                  National Security Education Program

    This section would modify obligations of recipients of a 
scholarship or fellowship under the National Security Education 
program by requiring that the recipients commence work in a 
specified national security position within two years of 
completion of study. This section would also allow recipients 
to accept positions in the Department of State or in the 
Department of Homeland Security if positions are not available 
within the Department of Defense or in any element of the 
intelligence community.

Section 1052--Improvements to the National Flagship Language Initiative

    This section would authorize $12.0 million for fiscal year 
2005, and each fiscal year thereafter for the National Flagship 
Language Initiative. This section would also require a 
recipient to reimburse the United States if employment is 
terminated due to misconduct by the employee or by the employee 
voluntarily. This section would also increase the number of 
educational institutions that could receive grants under this 
program.

Section 1053--Establishment of Scholarship Program for English Language 
Studies for Heritage Community Citizens of the United States Within the 
                  National Security Education Program

    This section would establish a scholarship program for 
United States citizens who are native speakers of a foreign 
language identified as critical to the national security 
interests of the United States and who are not proficient at a 
professional level in the English language. This section would 
also authorize $4.0 million for fiscal year 2005, and each 
fiscal year thereafter to provide scholarships under this 
program.

Section 1054--Sense of Congress With Respect to Language and Education 
                for the Intelligence Community; Reports

    This section would express the sense of Congress that there 
should be a senior official within the Office of the National 
Intelligence Director (NID) responsible for assisting the NID 
in establishing polices and procedures for foreign language 
education and training of the intelligence community. The 
official would oversee and coordinate requirements for foreign 
language education, establish policy, standards and priorities 
relating to such requirements, identify languages that are 
critical to the capabilities of the intelligence community, and 
monitor the allocation of resources for foreign language 
education. This section would also require reports that 
identify the skills and processes involved in learning a 
foreign language; and characteristics and teaching techniques 
that are most effective in teaching foreign languages.

    Section 1055--Advancement of Foreign Languages Critical to the 
                         Intelligence Community

    This section would authorize the Secretary of Defense and 
National Intelligence Director (NID) to jointly establish a 
program to advance foreign language skills in languages that 
are critical to the capability of the intelligence community to 
carry out national security activities of the United States. 
This section would also allow education partnership agreements 
with United States education institutions in order to encourage 
the study of foreign languages critical to the capability of 
the intelligence community. Further, this section would allow 
the NID to assign military and civilian analysts as students in 
foreign language training programs.

    Section 1056--Pilot Project for Civilian Linguist Reserve Corps

    This section would require the National Intelligence 
Director to conduct a three-year pilot project to establish a 
Civilian Linguist Reserve Corps, comprised of United States 
citizens with advanced levels of proficiency in foreign 
languages, in the federal government. This section would 
authorize such sums are necessary to carry out the pilot 
project in fiscal years 2005, 2006 and 2007.

  Section 1057--Codification of Establishment of the National Virtual 
                           Translation Center

    This section would establish a National Virtual Translation 
Center under the direction of the National Intelligence 
Director. The purpose of this center would be to provide for 
timely and accurate translations of foreign intelligence for 
all other elements of the intelligence community.

    Section 1058--Report on Recruitment and Retention of Qualified 
             Instructors of the Defense Language Institute

    This section would require the Secretary of Defense to 
conduct a study on methods to improve the recruitment and 
retention of qualified foreign language instructors at the 
Defense Language Institute's Foreign Language Center.

     Subtitle F--Additional Improvements of Intelligence Activities


   Section 1061--Permanent Extension of Central Intelligence Agency 
                 Voluntary Separation Incentive Program

    This section would make permanent the Central Intelligence 
Agency Voluntary Separation Pay incentive program.

   Section 1062--National Security Agency Emerging Technologies Panel

    This section would establish the National Security Agency 
Emerging Technologies Panel as a standing panel of the National 
Security Agency (NSA). The panel would study, assess and advise 
the Director of the NSA on the research, development and 
application of existing and emerging science and technology 
advances.

 Section 1063--Service and National Laboratories and the Intelligence 
                               Community

    This section would allow each national laboratory of the 
Department of Energy to assist the National Intelligence 
Director through technical support to the intelligence 
community.

  Section 1064--Improvement in Translation and Delivery of Suspected 
                        Terrorist Communications

    This section would require the National Intelligence 
Director (NID) to develop and transmit to appropriate agencies 
guidelines to ensure that all suspected terrorist 
communications are translated, to the extent practicable, in a 
manner consistent with timelines contained in regulations of 
the Federal Bureau of Investigations. This section would also 
require the NID to take necessary steps to ensure that 
terrorist communications are not deleted or discarded before 
those communications are translated.

              Subtitle G--Conforming and Other Amendments


   Section 1071--Conforming Amendments Relating to Roles of National 
 Intelligence Director and Director of the Central Intelligence Agency

    This section would strike ``Director of Central 
Intelligence'' in specified sections of the United States Code 
and insert ``National Intelligence Director.''

               Section 1072--Other Conforming Amendments

    This section would make other conforming amendments.

    Section 1073--Elements of Intelligence Community Under National 
                          Security Act of 1947

    This section would amend section 401 of title 50, United 
States Code, to include the National Intelligence Director in 
the definition of ``intelligence community.''

Section 1074--Redesignation of National Foreign Intelligence Program as 
                     National Intelligence Program

    This section would redesignate the ``National Foreign 
Intelligence Program'' as the ``National Intelligence 
Program.''

             Section 1075--Repeal of Superseded Authorities

    This section would repeal superseded authorities.

   Section 1076--Clerical Amendments to National Security Act of 1947

    This section would make technical and clerical amendments.

   Section 1077--Conforming Amendments Relating to Prohibiting Dual 
       Service of the Director of the Central Intelligence Agency

    This section would make a conforming amendment to section 
403a of title 50, United States Code.

         Section 1078--Access to Inspector General Protections

    This section would amend section 403q(a)(1) of title 50, 
United States Code, to include ``programs and operations of the 
Office of the National Intelligence Director.''

                    Section 1079--General References

    This section would clarify general references to the 
Director of Central Intelligence and the National Intelligence 
Director. Any reference to the Director of Central Intelligence 
in his or her capacity as the head of the intelligence 
community would be deemed to be a reference to the National 
Intelligence Director. Any reference to the Director of Central 
Intelligence in his or her capacity as the head of the Central 
Intelligence Agency would be deemed to be a reference to the 
Director of the Central Intelligence Agency. Any reference to 
the Community Management staff would be deemed a reference to 
the staff of the Office of the National Intelligence Director.

                Section 1080--Application of Other Laws

    This section would amend sections 7323(b)(2)B)(i) and 
7342(f)(4) of title 5, United States Code relating to political 
service of personnel and information about foreign gifts. This 
section would also amend section 105(a)(1) of title 5, United 
States Code App., by inserting ``the Office of the National 
Intelligence Director''.

   Subtitle H--Transfer, Termination, Transition and Other Provisions


          Section 1091--Transfer of Community Management Staff

    This section would transfer the Community Management Staff 
to the Office of the National Intelligence Director.

     Section 1092--Transfer of Terrorist Threat Integration Center

    This section would transfer all functions and activities of 
the Terrorist Threat Integration Center (TTIC) to the National 
Counterterrorism Center. The Director of the TTIC would 
administer the National Counterterrorism Center after the date 
of enactment of this Act.

   Section 1093--Termination of Positions of Assistant Directors of 
                          Central Intelligence

    This section would abolish, within the Central Intelligence 
Agency, the positions of the Assistant Director of Central 
Intelligence for Collection, the Assistant Director of Central 
Intelligence for Analysis and Production, and the Assistant 
Director of Central Intelligence for Administration.

                   Section 1094--Implementation Plan

    This section would direct the President to transmit to 
Congress a plan for the implementation of this title and the 
amendments made by this title, including:
          (1) The transfer of personnel, assets and obligations 
        to the National Intelligence Director (NID);
          (2) Any consolidation, reorganization, or 
        streamlining of activities transferred to the NID;
          (3) The establishment of offices within the Office of 
        the NID to implement the duties of the NID;
          (4) Specification of any proposed disposition of 
        property, facilities, contracts, records and others 
        assets transferred to the NID; and
          (5) Recommendations for additional legislative or 
        administrative action.
    This section would also express the sense of Congress that 
the Office of the NID should be located at a location other 
than the George Bush Center for Intelligence in Langley, 
Virginia.

                 Section 1095--Transitional Authorities

    This section would allow the head of any executive agency, 
upon the request of the National Intelligence Director (NID), 
to provide services or detail personnel to the NID, on a 
reimbursable basis.

                     Section 1096--Effective Dates

    This section would make the title and amendments to this 
Act effective on the date of the enactment. This section would 
also require the National Intelligence Director (NID) to 
appoint individuals to positions within the Office of the NID. 
This section would not apply with respect to the Deputy 
National Intelligence Director. This section also would require 
the President to transmit to Congress the implementation plan 
required, not later than 180 days after enactment.

                       Subtitle I--Other Matters


 Section 1101--Study of Promotion and Professional Military Education 
       School Selection Rates for Military Intelligence Officers

    This section would require the Secretary of Defense to 
conduct a study of the promotion selection rates, and the 
selection rates for attendance at professional military 
education schools, of intelligence officers of the Armed 
Forces. This section would require the Secretary to submit to 
the Senate Committee on Armed Services and the House Committee 
on Armed Services a report of the Secretary's findings not 
later than April 1, 2005.

                           COMMITTEE POSITION

    On September 29, 2004, the Committee on Armed Services, a 
quorum being present, reported H.R. 10, as amended, favorably 
by a vote of 59 ayes to 0 noes.

                  CONGRESSIONAL BUDGET OFFICE ESTIMATE

    Pursuant to clause 3(d) of rule XIII of the Rules of the 
House of Representatives, the committee attempted to ascertain 
annual outlays resulting from the bill during fiscal year 2005 
and the following four years. The results of such efforts are 
reflected in the cost estimate prepared by the Director of the 
Congressional Budget Office under section 402 of the 
Congressional Budget Act of 1974, which is included in this 
report pursuant to clause 3(c)(3).

                                                   October 4, 2004.
Hon. Duncan Hunter
Chairman, Committee on Armed Services,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 10, the 9/11 
Recommendations Implementation Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Raymond J. 
Hall.
            Sincerely,
                                       Douglas Holtz-Eakin,
                                                          Director.

               Congressional Budget Office Cost Estimate

    Summary: H.R. 10 would affect the intelligence community, 
terrorism prevention and prosecution, and border security, as 
well as international cooperation and coordination. Title I 
would establish an Office of the National Intelligence Director 
(NID) to manage and oversee intelligence activities of the U.S. 
government, including foreign intelligence and 
counterintelligence activities. The legislation would transfer 
some existing intelligence organizations to that office and 
would establish a National Counterterrorism Center and one or 
more national intelligence centers within the Office of the 
NID. Title II would authorize funding for law enforcement, 
counterterrorism activities, and programs related to aviation 
safety. Title III would increase the number of agents 
performing border security and immigration functions, improve 
the security of identity documents such as driver's licenses, 
and increase the number of consular officers within the 
Department of State. Title IV would authorize funds for a 
number of international cooperation programs. Finally, title V 
would reauthorize and restructure several homeland security 
programs.
    CBO estimates that implementing H.R. 10 would cost about 
$550 million in 2005 and $14.4 billion over the 2005-2009 
period, assuming appropriation of the specified and estimated 
amounts. That total does not include possible additional costs 
associated with implementing provisions dealing with the 
creation of an interoperable data system for exchanging law 
enforcement and intelligence data or the establishment of a 
Federal Bureau of Investigation (FBI) reserve service because 
CBO does not have sufficient information to estimate those 
costs at this time. With regard to the FBI reserve service, CBO 
cannot predict when a national emergency would occur, but 
expects that costs for the proposed reserve service would 
likely be insignificant in most years.
    The bill also contains provisions that would decrease 
direct spending. In particular, it would establish a fund 
within the Department of Homeland Security (DHS) to enhance 
efforts to detect explosives at security checkpoints in 
airports; authorize the collection and spending of $30 million 
a year of fees from airline passengers in 2005 and 2006 for 
that purpose; allow the Director of the FBI to waive the 
mandatory retirement requirement for agents until age 65; and 
extend indefinitely the authority of the Central Intelligence 
Agency (CIA) to offer incentive payments to employees who 
voluntarily retire or resign. CBO estimates that enacting those 
provisions would decrease direct spending by about $25 million 
in 2005, $4 million over the 2005-2009 period, and $2 million 
over the 2005-2014 period. The estimate of direct spending does 
not include the effects of extending the authority of the CIA 
to offer incentive payments to employees who voluntarily retire 
or resign because the data needed to prepare such an estimate 
are classified. Enacting H.R. 10 would not affect receipts.
    H.R. 10 contains several intergovernmental mandates as 
defined in the Unfunded Mandates Reform Act (UMRA). CBO 
estimates that those mandates, in aggregate, would impose costs 
on state, local, and tribal governments totaling more than $600 
million over fiscal years 2005 through 2009. CBO estimates that 
the costs in at least one of those years would exceed the 
threshold established in UMRA ($60 million in 2004, adjusted 
annually for inflation). The bill would authorize 
appropriations for grants to states to cover such costs. H.R. 
10 contains no private-sector mandates as defined in UMRA.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 10 is summarized in Table 1. The costs 
of this legislation fall within budget functions 050 (national 
defense), 400 (transportation), 450 (community and regional 
development), 550 (health), 750 (administration of justice), 
and 800 (general government).
    Basis of estimate: Most of H.R. 10's effects on the federal 
budget would be subject to appropriation of amounts necessary 
to implement the bill. For this estimate, CBO assumes that the 
bill will be enacted by the end of the calendar year, that all 
such amounts will be appropriated near the start of each fiscal 
year, and that outlays will follow historical patterns for 
similar activities.

 TABLE 1.--BUDGETARY IMPACT OF H.R. 10, THE 9/11 RECOMMENDATIONS IMPLEMENTATION ACT, AS ORDERED REPORTED BY THE
                                        HOUSE COMMITTEE ON ARMED SERVICES
----------------------------------------------------------------------------------------------------------------
                                                                       By fiscal year, in millions of dollars--
                                                                    --------------------------------------------
                                                                       2005     2006     2007     2008     2009
----------------------------------------------------------------------------------------------------------------
                                CHANGES IN SPENDING SUBJECT TO APPROPRIATION \1\

Estimated Authorization Level......................................    1,134    5,025    1,341    4,697    5,261
Estimated Outlays..................................................      533    4,289    2,093    3,265    4,263

                                         CHANGES IN DIRECT SPENDING \2\

Estimated Budget Authority.........................................        *        *        *        *        *
Estimated Outlays..................................................      -25      -12       19       10       5
----------------------------------------------------------------------------------------------------------------
\1\ These amounts do not include the costs of section 2192 because CBO cannot estimate such costs at this time.
  The amounts also exclude the costs associated with establishing a reserve service within the Federal Bureau of
  Investigation. Any such costs would be insignificant in most years, and CBO has no basis for predicting when a
  national emergency would occur.
\2\ These amounts do not include the costs of section 1061 because the data needed to prepare an estimate are
  classified.

Note.--* = between zero and -$500,000.

    Spending Subject to Appropriation. The bill contains 
provisions that would affect the intelligence community, 
terrorism prevention and prosecution, and border security, as 
well as international cooperation and coordination. Table 2 
presents CBO's estimates of the cost of those provisions. In 
total, we estimate that implementing H.R. 10 would cost $14.4 
billion over the 2005-2009 period, assuming appropriation of 
the specified and estimated amounts. That total does not 
include the possible additional costs associated with 
implementing provisions dealingwith the creation of an 
interoperable data system for exchanging law enforcement and 
intelligence data or the establishment of an FBI reserve service 
because CBO does not have sufficient information to estimate those 
costs at this time. With regard to the FBI reserve service, CBO cannot 
predict when a national emergency would occur, but expects that costs 
for the proposed reserve service would likely be insignificant in most 
years.

 TABLE 2.--ESTIMATED CHANGES IN SPENDING SUBJECT TO APPROPRIATION UNDER H.R. 10 AS ORDERED REPORTED BY THE HOUSE
                                           COMMITTEE ON ARMED SERVICES
----------------------------------------------------------------------------------------------------------------
                                                                       By fiscal year, in millions of dollars--
                                                                    --------------------------------------------
                                                                       2005     2006     2007     2008     2009
----------------------------------------------------------------------------------------------------------------
Reform the Intelligence Community:
    Estimated Authorization Level..................................       40      235       75       90       70
    Estimated Outlays..............................................       30       60      110      145      140
Combating Financial Crimes:
    Authorization Level 51.........................................       51        0        0        0        0
    Estimated Outlays..............................................       36       15        0        0        0
Aviation Security:
    Estimated Authorization Level..................................      528    4,343      330        0        0
    Estimated Outlays..............................................      238    3,666      957      340        0
Improve Intelligence Capabilities of the FBI:
    Estimated Authorization Level..................................        4        5        6        7        8
    Estimated Outlays..............................................        3        5        6        8        8
Increase the Number of Border Patrol and Immigration Agents:
    Estimated Authorization Level..................................        0      174      526      981    1,451
    Estimated Outlays..............................................        0      165      509      958    1,427
Grants to Improve Security of Driver's Licenses:
    Estimated Authorization Level..................................       80       30       30       10       10
    Estimated Outlays..............................................       80       30       30       10       10
New Standards for Issuance of Birth and Death Certificates:
    Estimated Authorization Level..................................      330       20       30       40       50
    Estimated Outlays..............................................       70      150      160       35       45
Expand Immigration Services at Foreign Airports:
    Authorization Level............................................       49       88      137        0        0
    Estimated Outlays..............................................       39       80      127       28        0
Increase the Number of Consular Officers:
    Estimated Authorization Level..................................        0       33       62       93      125
    Estimated Outlays..............................................        0       27       54       84      115
Reform International Cooperation and Coordination:
    Estimated Authorization Level..................................       17       17       17        7        7
    Estimated Outlays..............................................        7       15       17       15        9
First-Responder Grants:
    Estimated Authorization Level..................................        0        0        0    3,314    3,381
    Estimated Outlays..............................................        0        0        0    1,491    2,350
Counternarcotics Office:
    Estimated Authorization Level..................................        6        6        6        6        6
    Estimated Outlays..............................................        4        6        6        6        6
Security Clearance Modernization:
    Estimated Authorization Level..................................       23       68      116      143      147
    Estimated Outlays..............................................       21       64      111      140      147
Public Safety Communications Interoperability:
    Estimated Authorization Level..................................        6        6        6        6        6
    Estimated Outlays..............................................        5        6        6        6        6
Total Changes: \1\
    Estimated Authorization Level..................................    1,134    5,025    1,341    4,697    5,261
    Estimated Outlays..............................................      533    4,289    2,093    3,265   4,263
----------------------------------------------------------------------------------------------------------------
\1\ These amounts do not include the costs of section 2192 because CBO cannot estimate such costs at this time.
  The amounts also exclude the costs associated with establishing a reserve service within the Federal Bureau of
  Investigation. Any such costs would be insignificant in most years, and CBO has no basis for predicting when a
  national emergency would occur.

 Note.--FBI = Federal Bureau of Investigation.

    Reform the Intelligence Community. Title I would reform the 
intelligence community by establishing the position of National 
Intelligence Director and an Office of the National 
Intelligence Director to manage and oversee intelligence 
activities of the U.S. government, including foreign 
intelligence and counterintelligence activities. The 
legislation also would transfer some existing organizations, 
specifically the Office of the Deputy Director of Central 
Intelligence for Community Management and the Terrorist Threat 
Integration Center (TTIC), to that office and would establish a 
National Counterterrorism Center and one or more national 
intelligence centers within the Office of the NID. The bill 
would expand language training within the intelligence 
community and authorize additional scholarships for new 
recruits. Finally, the legislation would establish a civilian 
linguist reserve corps.
    CBO estimates that implementing title I and other 
provisions relating to the intelligence community would cost 
about $490 million over the 2005-2009 period (see Table 3). 
These costs are in addition to those that would be incurred 
under current law by the Office of the Deputy Director of 
Central Intelligence for Community Management and the Terrorist 
Threat Integration Center. The estimated costs include expenses 
to establish, house, and administer the new Office of the 
National Intelligence Director and implement other specified 
programs, such as improving training programs and establishing 
a scholarship program.

 TABLE 3.--ESTIMATED CHANGES IN SPENDING SUBJECT TO APPROPRIATION FOR REFORMING THE INTELLIGENCE COMMUNITY UNDER
                      H.R. 10 AS ORDERED REPORTED BY THE HOUSE COMMITTEE ON ARMED SERVICES
----------------------------------------------------------------------------------------------------------------
                                                                       By fiscal year, in millions of dollars--
                                                                    --------------------------------------------
                                                                       2005     2006     2007     2008     2009
----------------------------------------------------------------------------------------------------------------
Create the Office of the National Intelligence Director:
    Estimated Authorization Level..................................       15      210       50       80       60
    Estimated Outlays..............................................       10       35       80      135      130
Other Program Authorizations:
    Estimated Authorization Level..................................       25       25       25       10       10
    Estimated Outlays..............................................       20       25       25       10       10
Total Changes:
    Estimated Authorization Level..................................       40      235       75       90       70
    Estimated Outlays..............................................       30       60      110      145      140
----------------------------------------------------------------------------------------------------------------

    Create the Office of the National Intelligence Director. 
CBO estimates that establishing, housing, and administering the 
Office of the NID would cost about $390 million over the 2005-
2009 period. The bill would transfer the Office of the Deputy 
Director of Central Intelligence for Community Management 
(identified as the Intelligence Community Management Account 
within the budget) and the TTIC to the Office of the NID.
    The Intelligence Community Management Account (ICMA) was 
established by Congressional direction to provide resources 
that directly support the Director of the Central Intelligence 
Agency and the intelligence community as a whole in 
coordinating cross-program activities. Because part of its 
budget is classified, CBO does not know the overall size of 
this organization. Unclassified budgets for the ICMA indicate 
that the office has a staff of about 300 people who develop the 
National Foreign Intelligence Program budget, oversee research 
and development activities, and develop intelligence plans and 
requirements, but the Congress also authorizes and appropriates 
funds for additional staff in the classified portion of the 
intelligence budget.
    Similarly, CBO has no budget information on the TTIC, but 
public information released by the White House indicates that 
the center opened in May 2003 with a staff of about 60 people 
working alongside the counterterrorism offices of the Federal 
Bureau of Investigation and the CIA. That same information 
indicates that the Administration expects to eventually staff 
the TTIC with between 200 and 300 people to serve as the hub 
for all intelligence regarding terrorist threats.
    CBO expects that the NID would require staff to perform its 
authorized functions in addition to the staff transferred from 
the ICMA and the planned staff for the TTIC. Because much of 
the detailed information regarding the organization, staffing 
levels, and budgets of the intelligence community are 
classified at a level above clearances held by CBO employees, 
CBO has used information about staff requirements from similar 
organizations within the Department of Defense (DoD), the 
Department of Homeland Security, and other federal agencies to 
attempt to estimate the number of additional staff that might 
be needed by the NID. Based on that analysis, CBO estimates 
that the NID might need to hire around 300 new staff, including 
appointees such as principal and deputy directors, key managers 
such as a general counsel, a civil liberties protection 
officer, personnel to perform administrative functions such as 
policy development and budget and finance activities, and 
personnel for the National Counterterrorism Center and one or 
more national intelligence centers. CBO expects that many of 
these new hires would be staff transferred from other 
organizations within the intelligence community but that those 
other organizations would eventually fill many of the vacated 
positions within their organizations over about a four year 
period following enactment of this legislation.
    Based on information about the staffing levels and costs 
for the administrative offices of the Department of Defense, 
the Department of Homeland Security, and other agencies, CBO 
estimates that the personnel and related expenses to provide 
centralized leadership, coordination, and support and 
analytical services for the Office of the National Intelligence 
Director would eventually cost around $45 million annually, but 
that costs would be much lower in the first few years as 
positions are filled. CBO estimates that such costs would be 
minimal in the first year and total about $130 million over the 
2005-2009 period.
    Section 1094 would express the sense of the Congress that 
the permanent location of the NID headquarters be at a location 
other than the George Bush Center for Intelligence in Langley, 
Virginia. For this estimate, CBO assumes that the Director's 
office and associated staff would occupy the space currently 
used by the Intelligence Community Management staff until 
fiscal year 2007. Starting in 2007, CBO assumes that the office 
would move to new office space in a building owned by the 
General Services Administration (GSA) until a new building can 
be built for its use. CBO estimates that initially GSA would 
need to renovate and furnish office space for the NID staff. 
(After 2009, CBO expects that these positions would be 
relocated to the new permanent NID headquarters.) CBO estimates 
that the GSA rental payments would reach about $20 million a 
year and total about $40 million over the 2007-2009 period. 
Additional costs to purchase computers, network equipment, and 
supplies in the first few years following the relocation into 
the GSA-owned building also would be significant. CBO estimates 
that those costs would total $30 million over the 2007-2009 
period.
    CBO assumes that GSA would construct a new building on land 
already owned by the federal government to serve as the 
headquarters for the Office of the NID. Based on information 
provided by GSA about recent federal office building projects, 
CBO estimates that planning and design of the new headquarters 
would cost $15 million over the 2005-2006 period, and that 
constructing the facility to house NID employees would cost 
about $175 million over the 2006-2009 period. (An additional 
$20 million in spending would occur in 2010 to complete 
construction of the new building.) CBO assumes that the 
headquarters would be located on property already owned by the 
federal government in the Washington, D.C. area. If GSA had to 
buy land for the building site, costs would be higher. CBO 
assumes that construction of the new facility would not start 
until sometime in late 2006 and would be completed after 2009. 
Therefore, CBO estimates that no costs associated with 
furnishing, equipping, and maintaining the new space would be 
incurred during the 2005-2009 period nor would there be costs 
to relocate NID staff from the interim offices to the new 
headquarters over that period.
    Other Program Authorizations. Title I also would authorize 
the President and the NID to initiate or enhance several 
programs within the intelligence community. Based on 
information from the Administration and on the costs of other 
similar efforts, CBO estimates that those efforts would cost 
about $20 million in 2005 and total around $90 million over the 
2005-2009 period, subject to appropriation of the specified and 
estimated amounts.
     Section 1052 would authorize the appropriation of 
an additional $2 million a year to carry out the grant program 
for the National Flagship Language Initiative, which was 
established to improve higher education in foreign languages 
that the Secretary of Defense has identified as critical to the 
interests of the national security of the United States. CBO 
estimates that implementing this section would cost $10 million 
over the 2005-2009 period, assuming appropriation of the 
specified amounts.
     Section 1053 would establish a new scholarship 
program within the National Security Education Trust Fund. The 
scholarships would be available to students who are U.S. 
citizens and are native speakers of a foreign language that is 
identified as critical to the national security interests of 
the United States. The scholarships would enable those students 
to pursue English language studies at an institution of higher 
education in the United States to attain proficiency in those 
skills. The bill would authorize the appropriation of $4 
million a year starting in 2005 for these scholarships. CBO 
estimates that the costs for the scholarship program would 
total about $20 million over the 2005-2009 period, assuming 
appropriation of the specified amounts.
     Section 1055 would establish a program operated 
jointly by the NID and the Department of Defense to advance 
foreign language skills in languages that are critical to the 
capability of the intelligence community to carry out national 
security activities. Under this provision, personnel from the 
intelligence community could be reimbursed for the total cost 
of tuition and training in foreign language studies undertaken 
at educational institutions that have entered into educational 
partnerships with the U.S. government. In addition, federal 
agencies would be allowed to provide financial assistance to 
those educational institutions, including the loan of equipment 
and instructional materials. CBO has no specific information 
about how this joint NID/DoD program would be implemented. 
Assuming that participation levels would be similar to those 
for another foreign language program offered within the 
National Security Education Trust Fund, CBO estimates that the 
new program would cost about $1 million a year.
     Section 1056 would allow the NID to establish a 
civilian linguist reserve corps consisting of U.S. citizens 
with advanced levels of proficiency in foreign languages. CBO 
assumes that members of the reserve corps would receive pay, 
transportation, and per diem when performing work for the 
federal government as requested by the President. The pilot 
project would be conducted for a three-year period, starting in 
2005. Based on information provided by the staff of the 
National Security Education Program, CBO expects that the 
reserve corps would consist of about 150 people at any given 
time and cost about $50 million over the 2005-2007 period.
     Section 1062 would establish an Emerging 
Technologies Panel within the National Security Agency to 
advise the NID on the research, development, and application of 
existing and emerging science and technology advances, advances 
in encryption, and other topics. Based on the budgets of other 
advisory panels, CBO estimates that the costs to operate this 
panel would be about $1 million in 2005 and would total $10 
million over the 2005-2009 period.
    Combating Financial Crimes. Sections 2101 and 2102 would 
authorize the appropriation of $51 million for fiscal year 2005 
for the Financial Crimes Enforcement Center to improve its 
computer systems and to assist states and localities in 
combating financial crimes. CBO estimates that this provision 
would result in outlays of $36 million in 2005 and $15 million 
in 2006, assuming appropriation of the specified amount.
    Aviation Security. Title II would authorize the 
appropriation of the funds necessary to continue aviation 
security programs in 2006 and to deploy explosive-detection 
equipment atairport check points. Based on information from DHS 
and current funding levels, CBO estimates that title II would authorize 
the appropriation of about $5.2 billion over the 2005-2007 period for 
aviation security programs administered by the Department of Homeland 
Security. We estimate that most of that amount--roughly $4 billion--
would be authorized to be appropriated in fiscal year 2006 for ongoing 
programs administered by the Transportation Security Administration 
(TSA) and for the federal air marshals. (That estimate is net of almost 
$2 billion in offsetting collections from passenger and air-carrier 
fees that we assume will continue to be collected by DHS in 2006 to 
partly offset the cost of aviation security programs in that year.) 
This estimate also includes almost $1 billion over the 2005-2007 period 
for installing explosive-detection equipment at airport screening 
checkpoints and $70 million in 2005 for programs to better control 
access to airports, improve passenger screening, and train federal law 
enforcement officials in certain counterterrorism measures. In 
addition, title II would specifically authorize the appropriation of 
$95 million in 2005 for security projects at airports and $2 million 
for a pilot program to test technology to reduce the threat of 
explosions of baggage and cargo on commercial flights. Assuming 
appropriation of the specified and estimated amounts, CBO estimates 
that implementing all of these provisions would cost $238 million in 
2005 and $5.2 billion over the 2005-2009 period.
    Improve the Intelligence Capabilities of the FBI. Section 
2193 would direct the FBI to continue to improve the 
intelligence capabilities of the bureau and to develop and 
maintain a national intelligence workforce within the FBI. 
Today, the FBI spends about $30 million on counterterrorism 
training. Since 2002, more than 1,500 agents have been added to 
the bureau's staff to meet its counterterrorism mission, an 
increase of about 20 percent. In addition, since the events of 
September 11, 2001, the FBI has partnered with other 
intelligence agencies to provide training in counterterrorism 
and counterintelligence to its staff, and it plans to increase 
that training in the future. CBO assumes that implementation of 
this bill would require the agency to conduct more extensive 
training than is currently planned. Based on information from 
the bureau, we estimate that this additional training would 
cost $3 million in 2005 and almost $30 million over the 2005-
2009 period, assuming appropriation of the necessary amounts.
    Interoperable Law Enforcement and Intelligence Data System. 
Under the Enhanced Border Security and Visa Entry Reform Act of 
2002 (Public Law 107-173), the Administration is required to 
integrate all law enforcement data into an interoperable 
electronic data system known as the Chimera system. However, 
the act did not establish a firm date by which the 
Administration must deploy a fully operational Chimera system. 
Section 2192 would transfer the responsibility for this 
activity to the NID. The provision would direct the NID to 
design a state-of-the-art Chimera system with both biometric 
identification and linguistic capabilities satisfying the best 
technology standards, and to deliver a fully operational system 
by September 11, 2007, for use by the intelligence community, 
federal law enforcement agencies, and counterterrorism 
personnel to collect and share information. Although CBO 
believes that establishing a firm deadline for the operational 
system would likely result in increased discretionary spending 
in the near term, CBO does not have sufficient information to 
estimate that increase at this time. Absent information as to 
whether this transfer would result in changes to the system, 
CBO also cannot estimate whether any long-term costs would 
result from this transfer.
    Increase the Number of Border Patrol and Immigration 
Agents. Sections 3003 and 3004 would direct DHS to increase the 
number of border patrol agents by 2,000 per year and the number 
of investigators of immigration violations by 800 each year 
over the 2006-2010 period. Implementing this provision would 
increase the number of federal agents by 14,000 by 2010. 
Assuming appropriation of the necessary amounts, CBO estimates 
that this provision would cost $165 million in fiscal year 2006 
and $3.1 billion over the 2006-2009 period.
    Grants To Improve the Security of Driver's Licenses. 
Section 3055 would authorize the appropriation of such sums as 
necessary for fiscal years 2005 through 2009 for DHS to make 
grants to states to cover the costs of improving the security 
of driver's licenses as required by the bill. Based on 
information from states and from the American Association of 
Motor Vehicle Administrators (AAMVA), CBO estimates that 
implementing this provision would cost $80 million in 2005 and 
$160 million over the 2005-2009 period, assuming appropriation 
of the necessary amounts.
    New Standards for Issuance of Birth and Death Certificates. 
Sections 3062 and 3063 would require new federal standards 
governing the issuance and management of birth certificates 
recognized by the federal government. Section 3064 would 
require the establishment of a uniform electronic birth and 
death registration system, and section 3065 would extend that 
system to allow electronic verification of vital records.
    Maintaining birth and death records has long been a 
function of state governments. The Secretary of Health and 
Human Services, acting through the Centers for Disease Control 
and Prevention (CDC), currently works with states to compile 
birth and death data for epidemiological studies. H.R. 10 would 
authorize the Secretary to expand that cooperation to the 
formal linking of birth and death records for purposes of 
preventing fraud and other government uses. The bill also would 
authorize the appropriation of such sums as may be necessary 
for these activities, including grants to states to comply with 
these new requirements.
    Based on information from the CDC and the National 
Association for Public Health Statistics and Information 
Systems, CBO estimates that implementing the new security 
standards and building the electronic system of vital records 
would cost $460 million over the 2005-2009 period, assuming 
appropriation of the necessary amounts. That cost would be for 
grants to states to meet the new federal requirements. Of these 
amounts, $70 million in 2005 and $330 million over the 2005-
2009 period would cover start-up costs, including digitalizing 
old birth and death certificates, building electronic systems 
for reporting deaths in some states, upgrading security 
arrangements, and acquiring computer infrastructure. CBO 
estimates that operating the new system for vital records over 
the 2006-2009 period would cost $130 million. We expect that 
the system would be fully operational in 2009, at which point 
annual operating costs would total $50 million.
    Expand Immigration Services at Foreign Airports. Sections 
3082 and 3083 would authorize the appropriation of $49 million 
for 2005, $88 million for 2006, and $137 million for 2007 for 
DHS to expand preinspection services and immigration security 
at foreign airports. CBO estimates that implementing this 
provision would cost $274 million over the 2005-2009 period, 
assuming appropriation of the specified amounts.
    Increase the Number of Consular Officers. Section 3084 
would authorize the Secretary of State to increase the number 
of consular officers by 150 each year over the number allotted 
in the previous year during the 2006-2009 period. It also would 
authorize the Secretary to provide additional training to 
consular officers in the detection of fraudulent documents 
presented by applicants for admission into the United States. 
Based on the average cost of training and stationing consular 
officers overseas, CBO estimates that implementing the 
provision would cost $27 million in 2006 and $280 million over 
the 2006-2009 period.
    Reform International Cooperation and Coordination. Title IV 
would require the President to produce numerous reports, 
express the sense of the Congress on many issues, and urge the 
President to seek agreements with other countries to improve 
cooperation in the global fight against terrorist 
organizations. The title also would authorize some additional 
spending. Subtitle D, the Afghanistan Freedom Support Act 
Amendments of 2004, would authorize additional rule-of-law, 
disarmament, and counternarcotics activities in Afghanistan by 
the U.S. Department of State, but would not increase the 
overall authorization of appropriations above the $425 million 
authorized for each of fiscal years 2005 and 2006 in current 
law.
    Title IV contains three indefinite authorizations of 
appropriations and other provisions that CBO estimates would 
cost $7 million in 2005 and $63 million over the 2005-2009 
period, assuming appropriation of the necessary amounts. In the 
cases where the same provision has been included in other bills 
at specified authorization levels, CBO used that authorization 
level for this estimate. CBO assumes that spending for these 
programs will follow the historical pattern of similar 
programs.
     Section 4041 would authorize the appropriation of 
such sums as may be necessary in 2005, 2006, and 2007 to 
provide grants to American-sponsored schools in predominately 
Muslim countries to provide scholarships to students from 
lower- and middle-income families of those countries. H.R. 
4303, the American Education Promotion Act, as ordered reported 
by the House Committee on International Relations on June 24, 
2004, would authorize the appropriation of $5 million each year 
for such grants. That amount is included in this estimate.
     Section 4042 would authorize the appropriation of 
such sums as may be necessary in 2005, 2006, and 2007 for 
grants by the National Endowment for Democracy to enhance free 
and independent media worldwide. H.R. 1950, the Foreign 
Relations Authorization Act, Fiscal Years 2004 and 2005, as 
reported by the House Committee on International Relations on 
May 16, 2003, would have authorized $15 million for such 
grants. CBO assumes the amount would be provided in three equal 
installments over the three-year period.
     Section 4103 would authorize the appropriation of 
such sums as may be necessary for programs to reduce the number 
of shoulder-fired missiles. For the purpose of the estimate, 
CBO assumed the appropriation of $5 million each year, an 
amount similar to the cost of other programs for reducing the 
availability of small arms.
     Section 4035 would establish within the Department 
of State an Office on Multilateral Negotiations. In our 
estimate for H.R. 4053, the United States International 
Leadership Act of 2004, as ordered reported by the House 
Committee on International Relations on March 31, 2004, CBO 
estimated that establishing and operating an Office on 
Multilateral Negotiations would cost $2 million a year.
     Sections 4011 and 4012 would require the Secretary 
of State to fill vacancies on the Arms Control and 
Nonproliferation Advisory Board and to provide resources to 
procure the services of experts and consultants. Based on the 
cost of other advisory boards, CBO estimates that implementing 
these sections would cost less than $200,000 a year.
    First-Responder Grants. Subtitle A of title V would 
authorize funding for grants to state and local governments for 
staff and equipment to respond to acts of terrorism and natural 
disasters. It would authorize the Secretary of the Department 
of Homeland Security to change the criteria used to distribute 
funding for four existing first-responder grant programs--the 
State Homeland Security, the Urban Area Security Initiative, 
the Law Enforcement Terrorism Prevention, and the Citizen Corps 
grant programs. Assuming appropriation of the necessary funds, 
CBO estimates that implementing this subtitle would cost $3.8 
billion over the 2008-2009 period.
    Almost $10 billion has been appropriated for first-
responder grants since fiscal year 2003, including about $3 
billion in fiscal year 2004. The Office of Domestic 
Preparedness (within DHS) derives its primary authority to 
distribute grants to states and localities to prepare and 
respond to terrorism from the USA Patriot Act (Public Law 107-
56). That law authorized the appropriation of such sums as 
necessary for first-responder grants through fiscal year 2007. 
This subtitle would supersede this authority for first-
responder grants in the Patriot Act and continue the 
authorization to appropriate such sums as necessary after 2007.
    For this estimate, CBO assumes that the amount in CBO's 
baseline--$3.3 billion--would be appropriated for first-
responder grants in 2008 and that 2009 funding levels for 
first-responder grants would continue at that level, adjusted 
for anticipated inflation.
    Counternarcotics Office. Section 5021 would authorize the 
appropriation of $6 million in fiscal year 2005 to strengthen 
the authority of the Counternarcotics Officer at DHS. Under the 
bill, the Office of Counternarcotics Enforcement would be 
responsible for coordinating policies and federal operations 
aimed at preventing the entry of illegal drugs into the United 
States. DHS currently has a Counternarcotics Officer within the 
Chief of Staff's office. According to that office, the 
Counternarcotics Office is working with limited authority to 
coordinate the agency's anti-drug effort. Assuming the 
appropriation of the necessary amounts to continue this effort 
over the next five years, CBO estimates that implementing this 
provision would cost $28 million over the 2005-2009 period.
    FBI Reserve Service. Section 5053 would allow the FBI to 
establish a reserve service consisting of former employees of 
the FBI who would be eligible for temporary reemployment during 
a period of national emergency. Under the bill, the total 
number of personnel in this reserve service could not exceed 
500 individuals. Members of the reserve service would receive 
reimbursement for transportation and per diem expenses when 
participating in any training, and members who are retired 
federal employees would be allowed to collect both pay and 
retirement benefits during their period of reemployment. CBO 
cannot predict when a national emergency might occur, so no 
costs are included in this estimate for activating the proposed 
FBI Reserve Service. In most years, CBO expects that the cost 
associated with the reserve service would be insignificant--
mostly covering limited training time, per diem, and 
transportation expenses. In an emergency, if all members of the 
reserve corps were reemployed for six months, the costs would 
total about $25 million.
    Security Clearance Modernization. Beginning five years 
after enactment of this bill, section 5076 would require the 
Office of Personnel Management (OPM) to achieve a 60-day 
turnaround period for all security clearances requested by 
federal agencies. Currently, OPM anticipates that by the fall 
of 2005 the typical turnaround period for security clearances 
will be approximately 120 days. Based on information from OPM, 
CBO expects that approximately 1,700 new investigators would 
have to be hired over the next three years to meet the 60-day 
standard. With an average annual cost of about $80,000 per 
investigator, and assuming the appropriation of thenecessary 
amounts, CBO estimates that this provision would cost $483 million over 
the 2005-2009 period.
    Interoperability of Public Safety Communications. Section 
5131 would establish a program within DHS to provide assistance 
and training to enhance the interoperability of public safety 
communication among federal, state, and local governments in 
high-risk jurisdictions. DHS currently conducts activities to 
enhance communications; however, according to that office, it 
is working with limited funds and legal authority. Based on 
information from DHS, CBO estimates that implementing this 
section would cost $29 million over the 2005-2009 period.

Direct spending

    The bill contains provisions that would decrease direct 
spending (see Table 4). CBO estimates that enacting those 
provisions would decrease direct spending by about $25 million 
in 2005, $4 million over the 2005-2009 period, and $2 million 
over the 2005-2014 period. The estimate of direct spending does 
not include spending associated with extending the authority of 
the CIA to offer incentive payments to employees who 
voluntarily retire or resign because the data needed to prepare 
such an estimate are classified.

 TABLE 4.--CHANGES IN DIRECT SPENDING UNDER H.R. 10 AS ORDERED REPORTED BY THE HOUSE COMMITTEE ON ARMED SERVICES
                                                       \1\
----------------------------------------------------------------------------------------------------------------
                                                     By fiscal year, in millions of dollars--
                                 -------------------------------------------------------------------------------
                                   2005    2006    2007    2008    2009    2010    2011    2012    2013    2014
----------------------------------------------------------------------------------------------------------------
Estimated Budget Authority......       *       *       *       *       *       *       *       *       *       *
Estimated Outlays...............     -25     -12      19      10       5       3       *       *       *      *
----------------------------------------------------------------------------------------------------------------
\1\ These amounts do not include the costs of section 1061 because the data needed to prepare an estimate are
  classified.
Note.--* = between zero and -$500,000.


    Authority To Offer Incentive Payments to Employees of the 
CIA Who Voluntarily Resign or Retire. Section 1061 would extend 
indefinitely the authority of the CIA to offer incentive 
payments to employees who voluntarily retire or resign. Under 
current law, this authority would expire on September 30, 2005. 
This section also would eliminate the requirement that the CIA 
make a deposit to the Civil Service Retirement and Disability 
Fund equal to 15 percent of final pay for each employee who 
accepts an incentive payment. Extending authority to offer 
incentive payments to these employees could increase outlays 
from the Civil Service Retirement System in the near term, 
although those amounts would be offset by reduced retirement 
payments in later years. CBO cannot provide an estimate of the 
direct spending effects because the data needed for such an 
estimate are classified.
    Aviation Security. Section 2177 would establish a fund 
within DHS to enhance efforts to detect explosives at security 
checkpoints in airports. The bill would authorize the 
collection and spending of $30 million a year of fees from 
airline passengers in 2005 and 2006.
    The cost of the new program would be offset by fee 
collections authorized under the bill. TSA already collects a 
$2.50 fee from airline passengers each time they board an 
aircraft (with a maximum of $5.00 per one-way trip). Under 
current law, such fees may be collected only to the extent 
provided for in advance in appropriations acts, and income from 
those fees is recorded as an offset to appropriated spending. 
H.R. 10 would require TSA to collect up to $30 million a year 
from passengers without appropriation action. Under H.R. 10, we 
estimate that the agency would collect that amount each year. 
Because H.R. 10 would cause such fees to be used to finance the 
activities related to explosives detection at airport 
checkpoints, such fees would not be available to reduce the 
costs of other TSA spending. In other words, the collections 
under H.R. 10 would lead to a reduction in the amount of fees 
recorded as offsets to appropriated spending--essentially 
changing some discretionary offsetting collections into 
mandatory offsetting receipts.
    Based on historical spending patterns for similar 
activities, CBO estimates that fees collected under this 
provision would exceed the amounts actually spent for 
explosives detection for the next few years. Hence, we estimate 
that enacting section 2177 would reduce net direct spending by 
$37 million in 2005 and 2006, but would increase net direct 
spending in later years and have no net impact on the budget 
over the 2005-2014 period.
    Increased Fines for New Federal Crimes. Several sections in 
title II would establish new federal crimes for offenses 
relating to the commission of terrorist acts. Because those 
prosecuted and convicted under the bill could be subject to 
fines, the federal government might collect additional fines if 
the legislation is enacted. Criminal fines are deposited as 
receipts in the Crime Victims Fund and later spent. CBO expects 
any additional revenues and direct spending under the bill 
would be negligible because of the small number of cases 
involved.
    Authority To Waive Separation Age Requirement for FBI 
Agents. Section 5051 would provide the FBI with the ability to 
allow agents to remain at the agency beyond the age of 60. 
Under current law, FBI agents are required to retire at age 57, 
although the agency's director may waive that requirement until 
the agent turns 60. This section would allow the director to 
waive the mandatory retirement requirement until age 65. This 
authority would last though the end of 2009, at which time the 
waiver authority would revert to current law. Information 
provided by the FBI indicates that the agency issues waivers to 
between 25 and 75 employees annually. By expanding the current 
waiver authority, CBO expects the bill would cause some FBI 
employees to retire later than they otherwise would have. We 
anticipate this would cause retirement annuities to fall in the 
near term, and to increase after the expanded waiver authority 
expires in 2009. CBO estimates this section would reduce direct 
spending for retirement benefits by less than $500,000 in 2005 
and by a total of $2 million over the 2005-2014 period.
    Estimated impact on state, local, and tribal governments: 
H.R. 10 contains several intergovernmental mandates as defined 
in UMRA. The major mandates would require state, local, and 
tribal governments to significantly change the way they process 
and issue driver's licenses, identification cards, and birth 
and death certificates. The costs to state, local, and tribal 
governments would depend on federal regulations that are yet to 
be developed. However, based on information from state 
agencies, CBO estimates that, in aggregate, the 
intergovernmental mandates in the bill would impose costs on 
state, local, and tribal governments totaling more than $600 
million over fiscal years 2005 through 2009.CBO estimates that 
the costs in at least one of those years would exceed the threshold 
established in UMRA ($60 million in 2004, adjusted annually for 
inflation). The bill would authorize appropriations for grants to 
states to cover such costs.

Intergovernmental mandates with significant costs

    Driver's Licenses. H.R. 10 would effectively require state 
agencies that issue driver's licenses to comply with new 
standards for producing, verifying, and ensuring the security 
of driver's licenses and identification cards. Those provisions 
would be effective three years after the bill's enactment. CBO 
considers these standards to be mandates because any driver's 
licenses issued after that time would be invalid for federal 
identification purposes unless they met those requirements.
    Based on information from AAMVA and other groups 
representing state and local governments, CBO expects that 
states would face significant additional costs to administer 
the new system. Specifically, state licensing agencies would be 
required to verify, with the issuing agency, each document 
presented as proof of identification and residency. Agencies 
such as the Social Security Administration currently charge a 
fee for each verification, and assuming that other agencies 
would charge similar fees, states would incur ongoing costs as 
well as one-time costs to upgrade computer systems to meet 
those requirements. States also would face significant costs to 
upgrade computer systems to digitize and store electronic 
copies of all source documents and to create and maintain the 
Driver's License Agreement, an interstate database to share 
driver information. Finally, certain states that do not 
currently require background checks for certain employees would 
face additional costs to complete those checks.
    CBO assumes that states would begin to establish procedures 
for complying with these standards in 2005, the year following 
the bill's enactment; we estimate that they would incur 
additional costs totaling $80 million during that first year 
and another $80 million over fiscal years 2006 through 2009.
    Issuance and Verification of Vital Statistics Information. 
H.R. 10 also would impose several intergovernmental mandates 
with significant costs on state, local, and tribal agencies 
that issue birth and death certificates. Those agencies would 
effectively be required to print birth certificates on safety 
paper, to establish a central database of vital information, 
and to ensure that certain employees have security clearances. 
Those provisions also would be effective three years after the 
bill's enactment. Certificates issued after that date would be 
invalid for certain purposes unless they met those 
requirements. We estimate that state, local, and tribal 
governments would face additional costs to comply with those 
requirements totaling more than $70 million in 2005, and almost 
$400 million over fiscal years 2006 through 2009. Most of those 
costs would be for upgrading computer software and hardware, 
and for staff time to convert existing paper records into 
electronic records. These are mostly one-time costs that would 
be incurred over the five-year period.
    Mandates With No Significant Costs. The bill also contains 
several other inter-governmental mandates, but CBO expects that 
they would probably not impose significant additional costs on 
state, local, or tribal governments. Specifically, the bill 
would:
     Require state licensing agencies to include 
minimum features on all driver's license and identification 
cards, including full legal name, date of birth, gender, 
driver's license or identification number, photo, legal 
address, physical security features, and machine-readable 
technology. According to AAMVA, all states currently include 
these minimum features on licenses.
     Require state agencies to meet minimum standards 
before issuing driver's licenses, including documenting the 
individual's name, date of birth, address, and proof of Social 
Security number. While states currently set their own standards 
for such information, all states currently require at least 
this minimum documentation.
     Require states to maintain a database of driver 
information; require states to implement training classes for 
employees to identify fraudulent documents; and require 
documents and supplies to be securely stored. According to 
state officials, all states currently comply with those 
requirements.
     Require offices that maintain vital information to 
comply with requirements for securing their buildings. Based on 
information from representatives of state offices of vital 
statistics, CBO believes that most offices already would be in 
compliance, assuming that the Secretary of the Department of 
Homeland Security would establish minimum security requirements 
in any event.
     Require that state and local governments limit 
access to birth and death certificates. Fourteen states 
currently allow public access to those records, but CBO 
estimates that they would incur no additional costs to limit 
access.
     Prohibit states from accepting any foreign 
document, other than an official passport, for identification 
purposes for the issuance of driver's licenses. Currently, at 
least 10 states accept identification cards issued by foreign 
governments, such as the ``matricula consular'' issued by 
Mexico. This prohibition would preempt state authority.
     Require states to resolve any discrepancies that 
arise from verifying Social Security numbers, though the 
language is unclear as to what specific actions would be 
required. Currently, at least two states prohibit their 
employees from enforcing immigration laws, and many of those 
discrepancies may be related to immigration. This requirement 
might preempt those state laws.
     Prohibit states from displaying Social Security 
numbers on driver's licenses or from including Social Security 
numbers (SSNs) in bar codes, magnetic strips, or similar 
devices. CBO has found few instances where states used SSNs as 
identifiers on licenses or coded SSNs in some other manner on 
the license.
     Require all law enforcement officers who are 
armed, including state and local personnel, to have a 
standardized credential when traveling on aircraft. CBO assumes 
TSA would establish and issue such credentials.
    Estimated impact on the private sector: The bill contains 
no private-sector mandates as defined in UMRA.
    Previous CBO estimates: On October 4, 2004, CBO transmitted 
a cost estimate for H.R. 10 as ordered reported by the House 
Permanent Select Committee on Intelligence on September 29, 
2004. The two versions of the bill are almost identical. The 
differences in the legislation do not affect the estimated 
costs of either bill. Thus, the two CBO estimates are 
identical.
    On September 24, 2004, CBO transmitted a cost estimate for 
S. 2840, the National Intelligence Reform Act of 2004, as 
reported by the Senate Committee on Governmental Affairs. Both 
bills would create a new Office of the National Intelligence 
Director and reform certain aspects of the intelligence 
community. H.R. 10 also would reform terrorism prevention and 
prosecution, border security, and international cooperation and 
coordination activities--areas not addressed by S. 2840. 
Differences in the estimated costs reflect differences between 
the two bills.
    Estimate prepared by: Federal Costs: Intelligence Programs: 
Raymond J. Hall, Homeland Security: Megan Carroll and Julie 
Middleton, Justice: Mark Grabowicz, Vital Records: Timothy J. 
Gronniger, International Programs: Joseph C. Whitehill, General 
Government: Matthew Pickford. Impact on State, Local, and 
Tribal Governments: Melissa Merrell. Impact on the Private 
Sector: Chad Goldberg.
    Estimate approved by: Robert A. Sunshine, Assistant 
Director for Budget Analysis

                        COMMITTEE COST ESTIMATE

    Pursuant to clause 3(d) of rule XIII of the Rules of the 
House of Representatives, the committee generally concurs with 
the estimate as contained in the report of the Congressional 
Budget Office.

                           OVERSIGHT FINDINGS

    With respect to clause 3(c)(1) of rule XIII of the Rules of 
the House of Representatives, this legislation results from 
hearings and other oversight activities conducted by the 
committee pursuant to clause 2(b)(1) rule X and are reflected 
in the body of this report.
    With respect to clause 3(c)(2) of rule XIII of the Rules of 
the House of Representatives and section 308(a) of the 
Congressional Budget Act of 1974, this legislation does not 
include any new spending or credit authority, nor does it 
provide for any increase or decrease in tax revenues or 
expenditures. The bill does, however, authorize appropriations. 
Other fiscal features of this legislation are addressed in the 
estimate prepared by the committee under clause 3(d)(2) of rule 
XIII of the Rules of the House of Representatives.

                GENERAL PERFORMANCE GOALS AND OBJECTIVES

    With respect to clause 3(c)(4) of rule XIII of the Rules 
for the House of Representatives, this legislation would 
address several general and outcome related performance goals 
and objectives. The general goal and objective of this 
legislation is to improve the quality and accuracy of 
intelligence analysis conducted by the intelligence community, 
and to improve intelligence sharing among all users of national 
intelligence. This legislation seeks to accomplish this goal by 
establishing a National Intelligence Director (NID), separate 
from the Central Intelligence Agency, as the central authority 
over national intelligence programs. This legislation seeks to 
accomplish this objective by providing the NID with expanded, 
statutory, budgetary, and personnel powers to centrally manage 
the national intelligence community, while at the same time 
ensuring the ability of the Secretary of Defense to provide 
direct intelligence support for the military user.

                   CONSTITUTIONAL AUTHORITY STATEMENT

    Pursuant to clause 3(d)(1) of rule XIII of the Rules of the 
House of Representatives, the committee finds the authority for 
this legislation in Article I, section 8 of the United States 
Constitution.

                     STATEMENT OF FEDERAL MANDATES

    Pursuant to section 423 of Public Law 104-4, 
intergovernmental mandates, and federal mandates with respect 
to state, local, and tribal governments, contained in this Act 
are addressed in the report of the Congressional Budget Office. 
This Act provides no private sector mandates.

                              RECORD VOTES

    In accordance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, record and voice votes were taken 
with respect to the committee's consideration of H.R. 10. The 
record of these votes is attached to this report.
    The committee ordered H.R. 10, as amended, reported to the 
House with a favorable recommendation by a vote of 59-0, a 
quorum being present.


         CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

    The committee intends to take steps to make available the 
analysis of changes in existing law made by the bill, as 
required by clause 3(e) of rule XIII of the Rules of the House 
of Representatives.

                            ADDITIONAL VIEWS

    We want to register our objections to the manner in which 
the Armed Services Committee came to consider H.R. 10, a bill 
that would reorganize our national intelligence apparatus. We 
also regret the action taken by the committee during its mark 
up of this legislation.
    How we fix the national intelligence mechanisms that let us 
down in the attacks of September 11, 2001 deserves careful 
review. Literally, our national security may depend on what we 
legislate. Unfortunately, the way in which this bill was put 
together and is being pushed through the House is not likely to 
produce a result that will serve the country well over the long 
term.
    The starting point for our concern is our view that our 
national security should be a bipartisan proposition. 
Historically, legislation affecting our national security has 
been undertaken in a bipartisan spirit during consideration in 
the Armed Services Committee. The recommendations of the 9/11 
Commission were both unanimous and bipartisan. Bipartisan bills 
consistent with the commission's recommendations have been 
introduced in both chambers.
    Unfortunately, the way H.R. 10 was put together marks a 
dramatic departure from this important tradition. House 
Democrats were not consulted in the drafting of this bill, but 
there's no reason we should not have been. We on this side of 
the aisle are just as committed to a strong national defense, 
to supporting our troops, and to making sure they have the 
battlefield intelligence they need as our Republican 
colleagues. We have useful, constructive ideas about how to 
reform the intelligence community that could have made this 
bill better from its inception. It is disappointing to see this 
bill handled in such a partisan way.
    Apart from the writing of the bill, the process that 
brought us to this point has been deficient. This 542 page bill 
was introduced last Friday and marked up Wednesday. Because 
members were back home working in their districts until Tuesday 
evening, there was precious little time for members to review 
the bill before it was considered in committee. Moreover, whole 
titles of this bill fall within the legislative jurisdiction of 
other committees, such as the International Relations and 
Homeland Security Committees, but those committees were not 
permitted to mark up the bill. The members of the House deserve 
the opportunity to review legislation before they pass 
judgment, and it is regrettable that they were deprived of such 
an opportunity in this case.
    We also believe that a matter of this importance should not 
be considered in such a partisan manner in the final days of a 
heated election cycle, in which everything we do is colored by 
politics. A more responsible approach would have been to 
introduce and consider bipartisan legislation in the days 
following the issuance of the 9/11 Commission report, when 
election year politics were not as predominant. In addition, 
marking up this bill the week before Congress adjourns makes 
the chances both Houses will pass bills and conference them 
before the end of the session remote. The timing of the 
committee's mark up suggests that consideration of this bill 
was driven by politics, and we believe it is wrong to seek to 
exploit a subject as important as intelligence reform for 
political purposes.
    The other bills in Congress, at least one of which has been 
endorsed by the 9/11 commissioners, would have presented the 
opportunity for the committee, indeed the Congress, to consider 
intelligence reform issues in the bipartisan fashion that 
characterized their development. Why didn't we consider one of 
these bills instead of one created out of whole cloth behind 
closed doors and on a partisan basis?
    Reforming our government's intelligence and other 
counterterrorism mechanisms is terribly important. There was no 
reason for the partisanship and cavalier process. We can only 
hope that our national security will not suffer in the long run 
as a result.

                                   Ike Skelton.
                                   John Spratt.
                                   Solomon P. Ortiz.
                                   Lane Evans.
                                   Neil Abercrombie.
                                   Martin T. Meehan.
                                   Silvestre Reyes.
                                   Vic Snyder.
                                   Jim Turner.
                                   Adam Smith.
                                   Loretta Sanchez.
                                   Mike McIntyre.
                                   Ciro D. Rodriguez.
                                   Ellen O. Tauscher.
                                   Robert A. Brady.
                                   Baron Hill.
                                   John B. Larson.
                                   Susan A. Davis.
                                   Jim Langevin.
                                   Steve Israel.
                                   Rick Larsen.
                                   Jim Cooper.
                                   Kendrick B. Meek.
                                   Madeleine Z. Bordallo.
                                   Tim Ryan.
                                   Charles N. Stenholm.

                                  
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