19–010

Calendar No. 172

108TH CONGRESS REPORT " SENATE ! 1st Session 108–80

INTELLIGENCE AUTHORIZATION ACT FOR FISCAL YEAR 

2004

JUNE 26, 2003.—Ordered to be printed 

Mr. WARNER, from the Committee on Armed Services, 

submitted the following 

R E P O R T 

[To accompany S. 1025]

The Committee on Armed Services, to which was referred the bill 

(S. 1025) to authorize appropriations for fiscal year 2004 for intelligence and intelligence-related activities of the United States Government, the Community Management Account, and the Central 

Intelligence Agency Retirement and Disability System, and for 

other purposes, having considered the same, reports favorably 

thereon with amendments and recommends that the bill, as 

amended, do pass. 

PURPOSE OF THE BILL

S. 1025 would authorize appropriations and other matters for 

Fiscal Year 2004 for intelligence activities of the United States, including certain Department of Defense intelligence-related activities within the jurisdiction of the Senate Armed Services Committee. 

The Senate Select Committee on Intelligence reported the bill on 

May 8, 2003, and it was referred to the Committee on Armed Services in accordance with section 3(b) of Senate Resolution 400, 94th 

Congress. 

SCOPE OF THE COMMITTEE REVIEW

The committee has carefully reviewed the Intelligence Authorization Act for Fiscal Year 2004 and the Senate report to accompany 

S. 1025 (S. Rept. 108–44). The total amount within the jurisdiction 

of the Committee on Armed Services recommended for the National 

Foreign Intelligence Program has been incorporated into the budget tables in the Senate Amendment to H.R. 1588, the National DeVerDate Jan 31 2003 03:10 Jun 29, 2003 Jkt 019006 PO 00000 Frm 00001 Fmt 6659 Sfmt 6602 E:\HR\OC\SR080.XXX SR080
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fense Authorization Act for Fiscal Year 2004, which the Senate 

passed on June 4, 2003. 

The following explains the committee’s proposed amendments to 

the bill, as reported by the Senate Select Committee on Intelligence, as well as the committee’s clarification to the report issued 

by the Senate Select Committee on Intelligence. 

Classified annex to the committee report 

The committee has prepared a classified annex to this report that 

describes other recommendations and concerns that are classified 

in nature. 

Operational files of the National Security Agency 

Section 501 of S. 1025 would exempt certain files of the National 

Security Agency from review and disclosure under current Freedom 

of Information Act (FOIA) procedures. The National Defense Authorization Act for Fiscal Year 2004 (S. 1050) contains a similar 

provision, Section 1035 of S. 1050. Based on discussions with the 

National Security Agency (NSA) and private citizens concerned 

about rightful access to unclassified and declassified holdings, the 

Senate Armed Services Committee amended its original provision 

to specifically define which files within the National Security Agency would be exempted, ensuring that highly sensitive files within 

two directorates at NSA that contain technical information about 

U.S. intelligence collection capabilities are exempt until declassified, but that all other files at NSA remain subject to normal 

FOIA procedures. The committee’s proposed amendment to S. 1025 

would substitute the language contained in Section 1035 of S. 1050 

for the language contained in the Intelligence Authorization Act for 

Fiscal Year 2004 (S. 1025), as reported by the Senate Select Committee on Intelligence. 

Provision of living quarters for certain students working at National Security Agency laboratory 

Section 502 of S. 1025 would authorize the National Security 

Agency (NSA) to provide, and if necessary subsidize, living quarters for certain students working in NSA laboratories. The National Defense Authorization Act for Fiscal Year 2004 (S. 1050) 

contains a similar provision, Section 1034. The provision would 

amend Section 2195 of title 10, United States Code, which is the 

responsibility of the Committee on Armed Services of the Senate. 

The committee’s proposed amendment to S. 1025 would strike the

language contained in Section 502. This provision will be addressed 

by the committee of conference on the National Defense Authorization Act for Fiscal Year 2004. 

Authority to enter into personal services contracts 

Section 504 of S. 1025 would authorize Intelligence Community 

elements of the Department of Defense to enter into personal services contracts in order to address temporary needs for additional 

personnel with specific expertise to meet unanticipated, operational 

requirements. The National Defense Authorization Act for Fiscal 

Year 2004 (S. 1050) contains a similar provision, Section 813. The 

committee’s proposed amendment to S. 1025 would strike the language contained in Section 504. The committee believes that the 

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language contained in Section 813 of S. 1050 is a more comprehensive provision that would amend title 10, United States Code, and 

would apply not only to intelligence elements of the Department of 

Defense, but also to certain activities of U.S. Special Operations 

Command. This provision will be addressed by the committee of 

conference on the National Defense Authorization Act for Fiscal 

Year 2004. 

Defense Finance and Accounting Service and the National Security 

Agency 

The committee takes note of the concerns about financial and accounting practices at the National Security Agency (NSA) expressed by the Senate Select Committee on Intelligence in their report (S. Rept. 108–44). As as matter of more efficient and uniform 

financial and accounting practices within the Department of Defense (DOD), the Defense Finance and Accounting Service (DFAS) 

is considering moving certain aspects of NSA finance and accounting support centers under the more centralized control of DFAS. 

Jurisdiction over DFAS and accounting practices of the Department 

of Defense lies within the exclusive practices of the Department of 

Defense lies within the exclusion jurisdiction of the Committee on 

Armed Services of the Senate. The committee does not agree with 

the need for the Department of Defense to seek approval of the 

Senate Select Committee on Intelligence to improve, streamline 

and standardize financial and accounting practices across the Department. The Department should look to the Committee on Armed 

Services of the Senate for oversight and any required approval of 

plans to alter current finance and accounting procedures. The committee will consult with the Senate Select Committee on Intelligence regarding significant changes. The committee fully supports 

the Department of Defense’s efforts to improve department-wide financial management and accountability. As DOD implements its financial management modernization effort, the Committee expects 

the Department to ensure that classified financial information at 

NSA is adequately protected, and all NSA financial information, as 

well as that of all Defense Agencies, is reviewed and processed in 

a manner that provides for greater accountability, efficiency, and 

oversight by DOD. 

COMMITTEE ACTION

In accordance with the Legislative Reorganization Act of 1946, as 

amended by the Legislative Reorganization Act of 1970, the committee approved a motion to report favorably to the Senate S. 1025, 

with an amendment. 

FISCAL DATA

The committee will publish in the Congressional Record information on five-year cost projections when such information is received 

from the Congressional Budget Office. 

REGULATORY IMPACT

Paragraph 11(b) of rule XXVI of the Standing Rules of the Senate requires that a report on the regulatory impact of a bill be included in the report on the bill. The committee finds that there is 

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no regulatory impact in the cost of S. 1025, the Intelligence Authorization Act for Fiscal Year 2004. 

CHANGES IN EXISTING LAW

Pursuant to the provisions of paragraph 12 of rule XXVI of the 

Standing Rules of the Senate, the changes in existing law made by 

certain portions of the bill have not been shown in this section of 

the report because, in the opinion of the committee, it is necessary 

to dispense with showing such changes in order to expedite the 

business of the Senate and reduce the expenditure of funds.

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