II 

★(Star Print) 

Calendar No. 499 

108TH CONGRESS 

2D SESSION S. 2386 

[Report No. 108–258] 

To authorize appropriations for fiscal year 2005 for intelligence and intelligence-related activities of the United States Government, the Intelligence Community Management Account, and the Central Intelligence 

Agency Retirement and Disability System, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MAY 5, 2004 

Mr. ROBERTS, from the Select Committee on Intelligence, reported the 

following original bill; which was read twice and placed on the calendar 

A BILL 

To authorize appropriations for fiscal year 2005 for intelligence and intelligence-related activities of the United 

States Government, the Intelligence Community Management Account, and the Central Intelligence Agency Retirement and Disability System, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Intelligence Authorization Act for Fiscal Year 2005’’. 
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1 (b) TABLE OF CONTENTS.—The table of contents for 

2 this Act is as follows: 

Sec. 1. Short title; table of contents. 

TITLE I—INTELLIGENCE ACTIVITIES 

Sec. 101. Authorization of appropriations. 

Sec. 102. Classified schedule of authorizations. 

Sec. 103. Personnel ceiling adjustments. 

Sec. 104. Intelligence Community Management Account. 

Sec. 105. Incorporation of reporting requirements. 

Sec. 106. Specific authorization of funds for intelligence or intelligence-related 

activities for which fiscal year 2004 appropriations exceed 

amounts authorized. 

TITLE II—CENTRAL INTELLIGENCE AGENCY RETIREMENT AND 

DISABILITY SYSTEM 

Sec. 201. Authorization of appropriations. 

TITLE III—GENERAL PROVISIONS 

Sec. 301. Increase in employee compensation and benefits authorized by law. 

Sec. 302. Restriction on conduct of intelligence activities. 

Sec. 303. Modification of authority to obligate and expend certain funds for intelligence activities. 

Sec. 304. Treatment as agent of a foreign power under the Foreign Intelligence 

Surveillance Act of 1978 of non-United States persons who engage in international terrorism without affiliation with international terrorist groups. 

Sec. 305. Additional annual reporting requirements under the Foreign Intelligence Surveillance Act of 1978. 

Sec. 306. Repeal of limitation on length of service as member of the Select 

Committee on Intelligence of the Senate. 

TITLE IV—CENTRAL INTELLIGENCE AGENCY 

Sec. 401. Permanent extension of Central Intelligence Agency voluntary separation incentive program. 

Sec. 402. Intelligence operations and cover enhancement authority. 

TITLE V—DEPARTMENT OF DEFENSE INTELLIGENCE MATTERS 

Sec. 501. Repeal of sunset on authority to engage in commercial activities as 

security for intelligence collection activities. 

Sec. 502. Defense intelligence exemption from certain Privacy Act requirements. 

Sec. 503. Use of funds for counterdrug and counterterrorism activities for Colombia. 
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1 TITLE I—INTELLIGENCE 

2 ACTIVITIES 

3 SEC. 101. AUTHORIZATION OF APPROPRIATIONS. 

4 Funds are hereby authorized to be appropriated for 

5 fiscal year 2005 for the conduct of the intelligence and 

6 intelligence-related activities of the following elements of 

7 the United States Government: 

8 (1) The Central Intelligence Agency. 

9 (2) The Department of Defense. 

10 (3) The Defense Intelligence Agency. 

11 (4) The National Security Agency. 

12 (5) The Department of the Army, the Depart13 ment of the Navy, and the Department of the Air 

14 Force. 

15 (6) The Department of State. 

16 (7) The Department of the Treasury. 

17 (8) The Department of Energy. 

18 (9) The Department of Justice. 

19 (10) The Federal Bureau of Investigation. 

20 (11) The National Reconnaissance Office. 

21 (12) The National Geospatial-Intelligence Agen22 cy. 

23 (13) The Coast Guard. 

24 (14) The Department of Homeland Security. 
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1 SEC. 102. CLASSIFIED SCHEDULE OF AUTHORIZATIONS. 

2 (a) SPECIFICATIONS OF AMOUNTS AND PERSONNEL

3 CEILINGS.—The amounts authorized to be appropriated 

4 under section 101, and the authorized personnel ceilings 

5 as of September 30, 2005, for the conduct of the intel6 ligence and intelligence-related activities of the elements 

7 listed in such section, are those specified in the classified 

8 Schedule of Authorizations prepared to accompany the 

9 conference report on the bill ll of the One Hundred 

10 Eighth Congress. 

11 (b) AVAILABILITY OF CLASSIFIED SCHEDULE OF AU12 THORIZATIONS.—The Schedule of Authorizations shall be 

13 made available to the Committees on Appropriations of 

14 the Senate and House of Representatives and to the Presi15 dent. The President shall provide for suitable distribution 

16 of the Schedule, or of appropriate portions of the Sched17 ule, within the executive branch. 

18 SEC. 103. PERSONNEL CEILING ADJUSTMENTS. 

19 (a) AUTHORITY FOR ADJUSTMENTS.—With the ap20 proval of the Director of the Office of Management and 

21 Budget, the Director of Central Intelligence may authorize 

22 employment of civilian personnel in excess of the number 

23 authorized for fiscal year 2005 under section 102 when 

24 the Director of Central Intelligence determines that such 

25 action is necessary to the performance of important intel26 ligence functions, except that the number of personnel em-
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1 ployed in excess of the number authorized under such sec2 tion may not, for any element of the intelligence commu3 nity, exceed 2 percent of the number of civilian personnel 

4 authorized under such section for such element. 

5 (b) NOTICE TO INTELLIGENCE COMMITTEES.—The 

6 Director of Central Intelligence shall promptly notify the 

7 Select Committee on Intelligence of the Senate and the 

8 Permanent Select Committee on Intelligence of the House 

9 of Representatives whenever the Director exercises the au10 thority granted by this section. 

11 SEC. 104. INTELLIGENCE COMMUNITY MANAGEMENT AC12 COUNT. 

13 (a) AUTHORIZATION OF APPROPRIATIONS.—There is 

14 authorized to be appropriated for the Intelligence Commu15 nity Management Account of the Director of Central Intel16 ligence for fiscal year 2005 the sum of $342,995,000. 

17 Within such amount, funds identified in the classified 

18 Schedule of Authorizations referred to in section 102(a) 

19 for advanced research and development shall remain avail20 able until September 30, 2006. 

21 (b) AUTHORIZED PERSONNEL LEVELS.—The ele22 ments within the Intelligence Community Management 

23 Account of the Director of Central Intelligence are author24 ized 310 full-time personnel as of September 30, 2005. 

25 Personnel serving in such elements may be permanent em-
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1 ployees of the Intelligence Community Management Ac2 count or personnel detailed from other elements of the 

3 United States Government. 

4 (c) CLASSIFIED AUTHORIZATIONS.— 

5 (1) AUTHORIZATION OF APPROPRIATIONS.—In 

6 addition to amounts authorized to be appropriated 

7 for the Intelligence Community Management Ac8 count by subsection (a), there are also authorized to 

9 be appropriated for the Intelligence Community 

10 Management Account for fiscal year 2005 such addi11 tional amounts as are specified in the classified 

12 Schedule of Authorizations referred to in section 

13 102(a). Such additional amounts for research and 

14 development shall remain available until September 

15 30, 2006. 

16 (2) AUTHORIZATION OF PERSONNEL.—In addi17 tion to the personnel authorized by subsection (b) 

18 for elements of the Intelligence Community Manage19 ment Account as of September 30, 2005, there are 

20 also authorized such additional personnel for such 

21 elements as of that date as are specified in the clas22 sified Schedule of Authorizations. 

23 (d) REIMBURSEMENT.—Except as provided in section 

24 113 of the National Security Act of 1947 (50 U.S.C. 

25 404h), during fiscal year 2005 any officer or employee of 
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1 the United States or a member of the Armed Forces who 

2 is detailed to the staff of the Intelligence Community Man3 agement Account from another element of the United 

4 States Government shall be detailed on a reimbursable 

5 basis, except that any such officer, employee, or member 

6 may be detailed on a nonreimbursable basis for a period 

7 of less than one year for the performance of temporary 

8 functions as required by the Director of Central Intel9 ligence. 

10 (e) NATIONAL DRUG INTELLIGENCE CENTER.— 

11 (1) IN GENERAL.—Of the amount authorized to 

12 be appropriated in subsection (a), $34,911,000 shall 

13 be available for the National Drug Intelligence Cen14 ter. Within such amount, funds provided for re15 search, development, testing, and evaluation pur16 poses shall remain available until September 30, 

17 2006, and funds provided for procurement purposes 

18 shall remain available until September 30, 2007. 

19 (2) TRANSFER OF FUNDS.—The Director of 

20 Central Intelligence shall transfer to the Attorney 

21 General funds available for the National Drug Intel22 ligence Center under paragraph (1). The Attorney 

23 General shall utilize funds so transferred for the ac24 tivities of the National Drug Intelligence Center. 
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1 (3) LIMITATION.—Amounts available for the 

2 National Drug Intelligence Center may not be used 

3 in contravention of the provisions of section 

4 103(d)(1) of the National Security Act of 1947 (50 

5 U.S.C. 403–3(d)(1)). 

6 (4) AUTHORITY.—Notwithstanding any other 

7 provision of law, the Attorney General shall retain 

8 full authority over the operations of the National 

9 Drug Intelligence Center. 

10 SEC. 105. INCORPORATION OF REPORTING REQUIRE11 MENTS. 

12 (a) IN GENERAL.—Each requirement to submit a re13 port to the congressional intelligence committees that is 

14 included in the joint explanatory statement to accompany 

15 the conference report on the bill ll of the One Hundred 

16 Eighth Congress, or in the classified annex to this Act, 

17 is hereby incorporated into this Act, and is hereby made 

18 a requirement in law. 

19 (b) CONGRESSIONAL INTELLIGENCE COMMITTEES

20 DEFINED.—In this section, the term ‘‘congressional intel21 ligence committees’’ means— 

22 (1) the Select Committee on Intelligence of the 

23 Senate; and 

24 (2) the Permanent Select Committee on Intel25 ligence of the House of Representatives. 
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1 SEC. 106. SPECIFIC AUTHORIZATION OF FUNDS FOR INTEL2 LIGENCE OR INTELLIGENCE-RELATED AC3 TIVITIES FOR WHICH FISCAL YEAR 2004 AP4 PROPRIATIONS EXCEED AMOUNTS AUTHOR5 IZED. 

6 Funds appropriated for an intelligence or intel7 ligence-related activity of the United States Government 

8 for fiscal year 2004 in excess of the amount specified for 

9 such activity in the classified Schedule of Authorizations 

10 prepared to accompany the Intelligence Authorization Act 

11 for Fiscal Year 2004 (Public Law 108–177; 117 Stat. 

12 2599) shall be deemed to be specifically authorized by 

13 Congress for purposes of section 504(a)(3) of the National 

14 Security Act of 1947 (50 U.S.C. 414(a)(3)). 

15 TITLE II—CENTRAL INTEL16 LIGENCE AGENCY RETIRE17 MENT AND DISABILITY SYS18 TEM 

19 SEC. 201. AUTHORIZATION OF APPROPRIATIONS. 

20 There is authorized to be appropriated for the Cen21 tral Intelligence Agency Retirement and Disability Fund 

22 for fiscal year 2005 the sum of $239,400,000. 
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1 TITLE III—GENERAL 

2 PROVISIONS 

3 SEC. 301. INCREASE IN EMPLOYEE COMPENSATION AND 

4 BENEFITS AUTHORIZED BY LAW. 

5 Appropriations authorized by this Act for salary, pay, 

6 retirement, and other benefits for Federal employees may 

7 be increased by such additional or supplemental amounts 

8 as may be necessary for increases in such compensation 

9 or benefits authorized by law. 

10 SEC. 302. RESTRICTION ON CONDUCT OF INTELLIGENCE 

11 ACTIVITIES. 

12 The authorization of appropriations by this Act shall 

13 not be deemed to constitute authority for the conduct of 

14 any intelligence activity which is not otherwise authorized 

15 by the Constitution or the laws of the United States. 

16 SEC. 303. MODIFICATION OF AUTHORITY TO OBLIGATE AND 

17 EXPEND CERTAIN FUNDS FOR INTELLIGENCE 

18 ACTIVITIES. 

19 Section 504(a)(3) of the National Security Act of 

20 1947 (50 U.S.C. 414(a)(3)) is amended— 

21 (1) in subparagraph (A), by inserting ‘‘and’’ at 

22 the end; 

23 (2) by striking subparagraph (B); and 

24 (3) by redesignating subparagraph (C) as sub25 paragraph (B). 
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1 SEC. 304. TREATMENT AS AGENT OF A FOREIGN POWER 

2 UNDER THE FOREIGN INTELLIGENCE SUR3 VEILLANCE ACT OF 1978 OF NON-UNITED 

4 STATES PERSONS WHO ENGAGE IN INTER5 NATIONAL TERRORISM WITHOUT AFFILI6 ATION WITH INTERNATIONAL TERRORIST 

7 GROUPS. 

8 (a) IN GENERAL.—Section 101(b)(1) of the Foreign 

9 Intelligence Surveillance Act of 1978 (50 U.S.C. 

10 1801(b)(1)) is amended by adding at the end the following 

11 new subparagraph: 

12 ‘‘(C) engages in international terrorism or 

13 activities in preparation therefor; or’’. 

14 (b) SUNSET.—The amendment made by subsection 

15 (a) shall be subject to the sunset provision in section 224 

16 of the USA PATRIOT Act of 2001 (Public Law 107–56; 

17 115 Stat. 295), including the exception provided in sub18 section (b) of such section 224. 

19 SEC. 305. ADDITIONAL ANNUAL REPORTING REQUIRE20 MENTS UNDER THE FOREIGN INTELLIGENCE 

21 SURVEILLANCE ACT OF 1978. 

22 (a) ADDITIONAL REPORTING REQUIREMENTS.—The 

23 Foreign Intelligence Surveillance Act of 1978 (50 U.S.C. 

24 1801 et seq.) is amended— 

25 (1) by redesignating title VI as title VII; 
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1 (2) by redesignating section 601 as section 701; 

2 and 

3 (3) by inserting after title V the following new 

4 title VI: 

5 ‘‘TITLE VI—REPORTING REQUIREMENT 

6 ‘‘ANNUAL REPORT OF THE ATTORNEY GENERAL

7 ‘‘SEC. 601. (a) In addition to the reports required 

8 by sections 107, 108, 306, 406, and 502 in April each 

9 year, the Attorney General shall submit to the appropriate 

10 committees of Congress each year a report setting forth 

11 with respect to the one-year period ending on the date of 

12 such report— 

13 ‘‘(1) the aggregate number of non-United 

14 States persons targeted for orders issued under this 

15 Act, including a break-down of those targeted for— 

16 ‘‘(A) electronic surveillance under section 

17 105; 

18 ‘‘(B) physical searches under section 304; 

19 ‘‘(C) pen registers under section 402; and 

20 ‘‘(D) access to records under section 501; 

21 ‘‘(2) the number of individuals covered by an 

22 order issued under this Act who were determined 

23 pursuant to activities authorized by this Act to have 

24 acted wholly alone in the activities covered by such 

25 order; 
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1 ‘‘(3) the number of times that the Attorney 

2 General has authorized that information obtained 

3 under this Act may be used in a criminal proceeding 

4 or any information derived therefrom may be used 

5 in a criminal proceeding; and 

6 ‘‘(4) in a manner consistent with the protection 

7 of the national security of the United States— 

8 ‘‘(A) the portions of the documents and 

9 applications filed with the courts established 

10 under section 103 that include significant con11 struction or interpretation of the provisions of 

12 this Act, not including the facts of any par13 ticular matter, which may be redacted; and 

14 ‘‘(B) the portions of the opinions and or15 ders of the courts established under section 103 

16 that include significant construction or interpre17 tation of the provisions of this Act, not includ18 ing the facts of any particular matter, which 

19 may be redacted. 

20 ‘‘(b) The first report under this section shall be sub21 mitted not later than six months after the date of the en22 actment of this Intelligence Authorization Act for Fiscal 

23 Year 2005. Subsequent reports under this section shall be 

24 submitted annually thereafter. 
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1 ‘‘(c) In this section, the term ‘appropriate committees 

2 of Congress’ means— 

3 ‘‘(1) the Select Committee on Intelligence and 

4 the Committee on the Judiciary of the Senate; and 

5 ‘‘(2) the Permanent Select Committee on Intel6 ligence and the Committee on the Judiciary of the 

7 House of Representatives.’’. 

8 (b) CLERICAL AMENDMENT.—The table of contents 

9 for that Act is amended by striking the items relating to 

10 title VI and inserting the following new items: 

‘‘TITLE VI—REPORTING REQUIREMENT 

‘‘Sec. 601. Annual report of the Attorney General. 

‘‘TITLE VII—EFFECTIVE DATE 

‘‘Sec. 701. Effective date.’’. 

11 SEC. 306. REPEAL OF LIMITATION ON LENGTH OF SERVICE 

12 AS MEMBER OF THE SELECT COMMITTEE ON 

13 INTELLIGENCE OF THE SENATE. 

14 (a) REPEAL.—Section 2 of Senate Resolution 400 

15 (94th Congress) is amended— 

16 (1) by striking subsection (b); and 

17 (2) by redesignating subsection (c) as sub18 section (b). 

19 (b) RULES OF THE SENATE.—Subsection (a) is en20 acted— 

21 (1) as an exercise of the rulemaking power of 

22 the Senate; and 
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1 (2) with full recognition of the constitutional 

2 right of the Senate to change the rules of the Senate 

3 at any time and to the same extent as in the case 

4 of any other rule of the Senate. 

5 TITLE IV—CENTRAL 

6 INTELLIGENCE AGENCY 

7 SEC. 401. PERMANENT EXTENSION OF CENTRAL INTEL8 LIGENCE AGENCY VOLUNTARY SEPARATION 

9 INCENTIVE PROGRAM. 

10 (a) IN GENERAL.—Section 2 of the Central Intel11 ligence Agency Voluntary Separation Pay Act (50 U.S.C. 

12 403–4 note) is amended— 

13 (1) by striking subsection (f); and 

14 (2) by redesignating subsections (g) and (h) as 

15 subsections (f) and (g), respectively. 

16 (b) TERMINATION OF FUNDS REMITTANCE RE17 QUIREMENT.—(1) Section 2 of such Act is further amend18 ed by striking subsection (i). 

19 (2) Section 4(a)(2)(B)(ii) of the Federal Workforce 

20 Restructuring Act of 1994 (5 U.S.C. 8331 note) is amend21 ed by striking ‘‘, or section 2 of the Central Intelligence 

22 Agency Voluntary Separation Pay Act (Public Law 103– 

23 36; 107 Stat. 104)’’. 
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1 SEC. 402. INTELLIGENCE OPERATIONS AND COVER EN2 HANCEMENT AUTHORITY. 

3 The Central Intelligence Agency Act of 1949 (50 

4 U.S.C. 403a et seq.) is amended by adding at the end the 

5 following: 

6 ‘‘INTELLIGENCE OPERATIONS AND COVER ENHANCEMENT

7 AUTHORITY

8 ‘‘SEC. 23. (a) DEFINITIONS.—In this section— 

9 ‘‘(1) the term ‘designated employee’ means an 

10 employee designated by the Director under sub11 section (b); and 

12 ‘‘(2) the term ‘Federal retirement system’ in13 cludes the Central Intelligence Agency Retirement 

14 and Disability System, and the Federal Employees 

15 Retirement System (including the Thrift Savings 

16 Plan). 

17 ‘‘(b) IN GENERAL.— 

18 ‘‘(1) AUTHORITY.—Notwithstanding any other 

19 provision of law, the Director may exercise the au20 thorities under this section in order to— 

21 ‘‘(A) protect from unauthorized disclo22 sure— 

23 ‘‘(i) intelligence operations; 

24 ‘‘(ii) the identities of undercover intel25 ligence officers; 
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1 ‘‘(iii) intelligence source and methods; 

2 or 

3 ‘‘(iv) intelligence cover mechanisms; or 

4 ‘‘(B) meet the special requirements of 

5 work related to collection of foreign intelligence 

6 or other authorized activities of the Agency. 

7 ‘‘(2) DESIGNATION OF EMPLOYEES.—The Di8 rector may designate any employee of the Agency 

9 who is under nonofficial cover to be an employee to 

10 whom this section applies. Such designation may be 

11 made with respect to any or all authorities exercised 

12 under this section. 

13 ‘‘(c) COMPENSATION.—The Director may pay a des14 ignated employee salary, allowances, and other benefits in 

15 an amount and in a manner consistent with the nonofficial 

16 cover of that employee, without regard to any limitation 

17 that is otherwise applicable to a Federal employee. A des18 ignated employee may accept, utilize, and, to the extent 

19 authorized by regulations prescribed under subsection (i), 

20 retain any salary, allowances, and other benefits provided 

21 under this section. 

22 ‘‘(d) RETIREMENT BENEFITS.— 

23 ‘‘(1) IN GENERAL.—The Director may establish 

24 and administer a nonofficial cover employee retire25 ment system under which a designated employee 
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1 (and the spouse, former spouses, and survivors of 

2 such designated employee) shall receive treatment in 

3 the same manner and to the same extent as the 

4 Federal retirement system that would otherwise 

5 apply to such employee (and the spouse, former 

6 spouses, and survivors of that employee). A des7 ignated employee may not participate in the retire8 ment system established under this paragraph and 

9 another Federal retirement system at the same time. 

10 ‘‘(2) CONVERSION TO OTHER FEDERAL RETIRE11 MENT SYSTEM.— 

12 ‘‘(A) IN GENERAL.—A designated em13 ployee participating in the retirement system 

14 established under paragraph (1) may convert to 

15 coverage under the Federal retirement system 

16 which would otherwise apply to that employee 

17 at any appropriate time determined by the Di18 rector (including at the time of separation of 

19 service by reason of retirement), if the Director 

20 determines that the employee’s participation in 

21 the retirement system established under this 

22 subsection is no longer necessary to protect 

23 from unauthorized disclosure— 

24 ‘‘(i) intelligence operations; 
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1 ‘‘(ii) the identities of undercover intel2 ligence officers; 

3 ‘‘(iii) intelligence sources and meth4 ods; or 

5 ‘‘(iv) intelligence cover mechanisms. 

6 ‘‘(B) CONVERSION TREATMENT.—Upon a 

7 conversion under this paragraph— 

8 ‘‘(i) all periods of service under the 

9 retirement system established under this 

10 subsection shall be deemed periods of cred11 itable service under the applicable Federal 

12 retirement system; 

13 ‘‘(ii) the Director shall transmit an 

14 amount for deposit in any applicable fund 

15 of that Federal retirement system that— 

16 ‘‘(I) is necessary to cover all em17 ployee and agency contributions in18 cluding— 

19 ‘‘(aa) interest as determined 

20 by the head of the agency admin21 istering the Federal retirement 

22 system into which the employee 

23 is converting; or 

24 ‘‘(bb) in the case of an em25 ployee converting into the Fed-
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1 eral Employee’s Retirement Sys2 tem, interest as determined 

3 under section 8334(e) of title 5, 

4 United States Code; and 

5 ‘‘(II) ensures that such conver6 sion does not result in any unfunded 

7 liability to that fund; and 

8 ‘‘(iii) in the case of a designated em9 ployee who participated in a retirement 

10 system established under paragraph (1) 

11 similar to subchapter III of chapter 84 of 

12 title 5, United States Code, and is con13 verting to coverage under subchapter III of 

14 that chapter, the Director shall transmit 

15 all amounts of that designated employee in 

16 that similar retirement system (or similar 

17 part of that retirement system) to the 

18 Thrift Savings Fund. 

19 ‘‘(C) TRANSMITTED AMOUNTS.— 

20 ‘‘(i) IN GENERAL.—Amounts de21 scribed under subparagraph (B)(ii) shall 

22 be paid from the fund or appropriation 

23 used to pay the designated employee. 

24 ‘‘(ii) OFFSET.—The Director may use 

25 amounts contributed by the designated em-
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1 ployee to a retirement system established 

2 under paragraph (1) to offset amounts 

3 paid under clause (i). 

4 ‘‘(D) RECORDS.—The Director shall trans5 mit all necessary records relating to a des6 ignated employee who converts to a Federal re7 tirement system under this paragraph (includ8 ing records relating to periods of service which 

9 are deemed to be periods of creditable service 

10 under subparagraph (B)) to the head of the 

11 agency administering that Federal retirement 

12 system. 

13 ‘‘(e) HEALTH INSURANCE BENEFITS.— 

14 ‘‘(1) IN GENERAL.—The Director may establish 

15 and administer a nonofficial cover employee health 

16 insurance program under which a designated em17 ployee (and the family of such designated employee) 

18 shall receive treatment in the same manner and to 

19 the same extent as provided under chapter 89 of 

20 title 5, United States Code. A designated employee 

21 may not participate in the health insurance program 

22 established under this paragraph and the program 

23 under chapter 89 of title 5, United States Code, at 

24 the same time. 
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1 ‘‘(2) CONVERSION TO FEDERAL EMPLOYEES

2 HEALTH BENEFITS PROGRAM.— 

3 ‘‘(A) IN GENERAL.—A designated em4 ployee participating in the health insurance pro5 gram established under paragraph (1) may con6 vert to coverage under the program under chap7 ter 89 of title 5, United States Code, at any ap8 propriate time determined by the Director (in9 cluding at the time of separation of service by 

10 reason of retirement), if the Director deter11 mines that the employee’s participation in the 

12 health insurance program established under this 

13 subsection is no longer necessary to protect 

14 from unauthorized disclosure— 

15 ‘‘(i) intelligence operations; 

16 ‘‘(ii) the identities of undercover intel17 ligence officers; 

18 ‘‘(iii) intelligence sources and meth19 ods; or 

20 ‘‘(iv) intelligence cover mechanisms. 

21 ‘‘(B) CONVERSION TREATMENT.—Upon a 

22 conversion under this paragraph— 

23 ‘‘(i) the employee (and family, if ap24 plicable) shall be entitled to immediate en-
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1 rollment and coverage under chapter 89 of 

2 title 5, United States Code; 

3 ‘‘(ii) any requirement of prior enroll4 ment in a health benefits plan under chap5 ter 89 of that title for continuation of cov6 erage purposes shall not apply; 

7 ‘‘(iii) the employee shall be deemed to 

8 have had coverage under chapter 89 of 

9 that title from the first opportunity to en10 roll for purposes of continuing coverage as 

11 an annuitant; and 

12 ‘‘(iv) the Director shall transmit an 

13 amount for deposit in the Employees 

14 Health Benefits Fund that is necessary to 

15 cover any costs of such conversion. 

16 ‘‘(C) TRANSMITTED AMOUNTS.—Any 

17 amount described under subparagraph (B)(iv) 

18 shall be paid from the fund or appropriation 

19 used to pay the designated employee. 

20 ‘‘(f) LIFE INSURANCE BENEFITS.— 

21 ‘‘(1) IN GENERAL.—The Director may establish 

22 and administer a nonofficial cover employee life in23 surance program under which a designated employee 

24 (and the family of such designated employee) shall 

25 receive treatment in the same manner and to the 
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1 same extent as provided under chapter 87 of title 5, 

2 United States Code. A designated employee may not 

3 participate in the life insurance program established 

4 under this paragraph and the program under chapter 

5 87 of title 5, United States Code, at the same time. 

6 ‘‘(2) CONVERSION TO FEDERAL EMPLOYEES

7 GROUP LIFE INSURANCE PROGRAM.— 

8 ‘‘(A) IN GENERAL.—A designated em9 ployee participating in the life insurance pro10 gram established under paragraph (1) may con11 vert to coverage under the program under chap12 ter 87 of title 5, United States Code, at any ap13 propriate time determined by the Director (in14 cluding at the time of separation of service by 

15 reason of retirement), if the Director deter16 mines that the employee’s participation in the 

17 life insurance program established under this 

18 subsection is no longer necessary to protect 

19 from unauthorized disclosure— 

20 ‘‘(i) intelligence operations; 

21 ‘‘(ii) the identities of undercover intel22 ligence officers; 

23 ‘‘(iii) intelligence sources and meth24 ods; or 

25 ‘‘(iv) intelligence cover mechanisms. 
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1 ‘‘(B) CONVERSION TREATMENT.—Upon a 

2 conversion under this paragraph— 

3 ‘‘(i) the employee (and family, if ap4 plicable) shall be entitled to immediate cov5 erage under chapter 87 of title 5, United 

6 States Code; 

7 ‘‘(ii) any requirement of prior enroll8 ment in a life insurance program under 

9 chapter 87 of that title for continuation of 

10 coverage purposes shall not apply; 

11 ‘‘(iii) the employee shall be deemed to 

12 have had coverage under chapter 87 of 

13 that title for the full period of service dur14 ing which the employee would have been 

15 entitled to be insured for purposes of con16 tinuing coverage as an annuitant; and 

17 ‘‘(iv) the Director shall transmit an 

18 amount for deposit in the Employees Life 

19 Insurance Fund that is necessary to cover 

20 any costs of such conversion. 

21 ‘‘(C) TRANSMITTED AMOUNTS.—Any 

22 amount described under subparagraph (B)(iii) 

23 shall be paid from the fund or appropriation 

24 used to pay the designated employee. 
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1 ‘‘(g) EXEMPTION FROM CERTAIN REQUIREMENTS.— 

2 The Director may exempt a designated employee from 

3 mandatory compliance with any Federal regulation, rule, 

4 standardized administrative policy, process, or procedure 

5 that the Director determines— 

6 ‘‘(1) would be inconsistent with the nonofficial 

7 cover of that employee; and 

8 ‘‘(2) could expose that employee to detection as 

9 a Federal employee. 

10 ‘‘(h) TAXATION AND SOCIAL SECURITY.— 

11 ‘‘(1) IN GENERAL.—Notwithstanding any other 

12 provision of law, a designated employee— 

13 ‘‘(A) shall file a Federal or State tax re14 turn as if that employee is not a Federal em15 ployee and may claim and receive the benefit of 

16 any exclusion, deduction, tax credit, or other 

17 tax treatment that would otherwise apply if 

18 that employee was not a Federal employee, if 

19 the Director determines that taking any action 

20 under this paragraph is necessary to— 

21 ‘‘(i) protect from unauthorized disclo22 sure— 

23 ‘‘(I) intelligence operations; 

24 ‘‘(II) the identities of undercover 

25 intelligence officers; 
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1 ‘‘(III) intelligence source and 

2 methods; or 

3 ‘‘(IV) intelligence cover mecha4 nisms; and 

5 ‘‘(ii) meet the special requirements of 

6 work related to collection of foreign intel7 ligence or other authorized activities of the 

8 Agency; and 

9 ‘‘(B) shall receive social security benefits 

10 based on the social security contributions made. 

11 ‘‘(2) IRS REVIEW.—The Director shall establish 

12 procedures to carry out this subsection. The proce13 dures shall be subject to periodic review by the In14 ternal Revenue Service. 

15 ‘‘(i) REGULATIONS.—The Director shall prescribe 

16 regulations to carry out this section. The regulations shall 

17 ensure that the combination of salary, allowances, and 

18 benefits that an employee designated under this section 

19 may retain does not significantly exceed, except to the ex20 tent determined by the Director to be necessary to exercise 

21 the authority in subsection (b), the combination of salary, 

22 allowances, and benefits otherwise received by Federal em23 ployees not designated under this section. 

24 ‘‘(j) FINALITY OF DECISIONS.—Any determinations 

25 authorized by this section made by the Director or the 
28 

S 2386 PCS1S 

1 Director’s designee shall be final and conclusive and shall 

2 not be subject to review by any court. 

3 ‘‘(k) SUBSEQUENTLY ENACTED LAWS.—No law en4 acted after the effective date of this section shall affect 

5 the authorities and provisions of this section unless such 

6 law specifically refers to this section.’’. 

7 TITLE V—DEPARTMENT OF DE8 FENSE INTELLIGENCE MAT9 TERS 

10 SEC. 501. REPEAL OF SUNSET ON AUTHORITY TO ENGAGE 

11 IN COMMERCIAL ACTIVITIES AS SECURITY 

12 FOR INTELLIGENCE COLLECTION ACTIVI13 TIES. 

14 Section 431(a) of title 10, United States Code, is 

15 amended by striking the second sentence. 

16 SEC. 502. DEFENSE INTELLIGENCE EXEMPTION FROM CER17 TAIN PRIVACY ACT REQUIREMENTS. 

18 Section 552a(e)(3) of title 5, United States Code, 

19 shall not apply with respect to the collection of information 

20 by intelligence personnel of the Department of Defense 

21 who are authorized by the Secretary of Defense to collect 

22 intelligence from human sources. 
29 

S 2386 PCS1S 

1 SEC. 503. USE OF FUNDS FOR COUNTERDRUG AND 

2 COUNTERTERRORISM ACTIVITIES FOR CO3 LOMBIA. 

4 (a) AUTHORITY.—Funds designated for intelligence 

5 or intelligence-related purposes for assistance to the Gov6 ernment of Colombia for counterdrug activities for fiscal 

7 year 2005, and any unobligated funds available to any ele8 ment of the intelligence community for such activities for 

9 a prior fiscal year, shall be available— 

10 (1) to support a unified campaign by the Gov11 ernment of Colombia against narcotics trafficking 

12 and against activities by organizations designated as 

13 terrorist organizations (such as the Revolutionary 

14 Armed Forces of Colombia (FARC), the National 

15 Liberation Army (ELN), and the United Self-De16 fense Forces of Colombia (AUC)); and 

17 (2) to take actions to protect human health and 

18 welfare in emergency circumstances, including un19 dertaking rescue operations. 

20 (b) APPLICABILITY OF CERTAIN LAWS AND LIMITA21 TIONS.—The use of funds pursuant to the authority in 

22 subsection (a) shall be subject to the following: 

23 (1) Sections 556, 567, and 568 of the Foreign 

24 Operations, Export Financing, and Related Pro25 grams Appropriations Act, 2002 (Public Law 107– 

26 115; 115 Stat. 2160, 2165, and 2166). 
30 

S 2386 PCS1S 

1 (2) Section 8077 of the Department of Defense 

2 Appropriations Act, 2004 (Public Law 108–87; 117 

3 Stat. 1090). 

4 (3) The numerical limitations on the number of 

5 United States military personnel and United States 

6 individual civilian contractors in section 3204(b)(1) 

7 of the Emergency Supplemental Act, 2000 (division 

8 B of Public Law 106–246; 114 Stat. 575), as 

9 amended by the Foreign Operations, Export Financ10 ing, and Related Programs Appropriations Act, 

11 2002 (115 Stat. 2131). 

12 (c) LIMITATION ON PARTICIPATION OF UNITED

13 STATES PERSONNEL.—No United States Armed Forces 

14 personnel or United States civilian contractor employed by 

15 the United States Armed Forces will participate in any 

16 combat operation in connection with assistance made 

17 available under this section, except for the purpose of act18 ing in self defense or during the course of search and res19 cue operations for United States citizens. 

Calendar No. 499

108TH CONGRESS 

2D SESSION S. 2386

[Report No. 108–258] 

A BILL

To authorize appropriations for fiscal year 2005 for 

intelligence and intelligence-related activities of the United States Government, the Intelligence Community Management Account, and the Central Intelligence Agency Retirement and Disability System, and for other purposes. 

MAY 5, 2004

Read twice and placed on the calendar