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[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 2386 Referral Instructions Senate (RIS)]

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

                              May 7, 2004

Referred to the Committee on Armed Services pursuant to Section 3(b) of 
   S. Res. 400, 94th Congress, for a period not to exceed 30 days of 
                                session

_______________________________________________________________________

                                 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.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Intelligence 
Authorization Act for Fiscal Year 2005''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
                    TITLE I--INTELLIGENCE ACTIVITIES

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

                    TITLE I--INTELLIGENCE ACTIVITIES

SEC. 101. AUTHORIZATION OF APPROPRIATIONS.

    Funds are hereby authorized to be appropriated for fiscal year 2005 
for the conduct of the intelligence and intelligence-related activities 
of the following elements of the United States Government:
            (1) The Central Intelligence Agency.
            (2) The Department of Defense.
            (3) The Defense Intelligence Agency.
            (4) The National Security Agency.
            (5) The Department of the Army, the Department of the Navy, 
        and the Department of the Air Force.
            (6) The Department of State.
            (7) The Department of the Treasury.
            (8) The Department of Energy.
            (9) The Department of Justice.
            (10) The Federal Bureau of Investigation.
            (11) The National Reconnaissance Office.
            (12) The National Geospatial-Intelligence Agency.
            (13) The Coast Guard.
            (14) The Department of Homeland Security.

SEC. 102. CLASSIFIED SCHEDULE OF AUTHORIZATIONS.

    (a) Specifications of Amounts and Personnel Ceilings.--The amounts 
authorized to be appropriated under section 101, and the authorized 
personnel ceilings as of September 30, 2005, for the conduct of the 
intelligence and intelligence-related activities of the elements listed 
in such section, are those specified in the classified Schedule of 
Authorizations prepared to accompany the conference report on the bill 
__ of the One Hundred Eighth Congress.
    (b) Availability of Classified Schedule of Authorizations.--The 
Schedule of Authorizations shall be made available to the Committees on 
Appropriations of the Senate and House of Representatives and to the 
President. The President shall provide for suitable distribution of the 
Schedule, or of appropriate portions of the Schedule, within the 
executive branch.

SEC. 103. PERSONNEL CEILING ADJUSTMENTS.

    (a) Authority for Adjustments.--With the approval of the Director 
of the Office of Management and Budget, the Director of Central 
Intelligence may authorize employment of civilian personnel in excess 
of the number authorized for fiscal year 2005 under section 102 when 
the Director of Central Intelligence determines that such action is 
necessary to the performance of important intelligence functions, 
except that the number of personnel employed in excess of the number 
authorized under such section may not, for any element of the 
intelligence community, exceed 2 percent of the number of civilian 
personnel authorized under such section for such element.
    (b) Notice to Intelligence Committees.--The Director of Central 
Intelligence shall promptly notify the Select Committee on Intelligence 
of the Senate and the Permanent Select Committee on Intelligence of the 
House of Representatives whenever the Director exercises the authority 
granted by this section.

SEC. 104. INTELLIGENCE COMMUNITY MANAGEMENT ACCOUNT.

    (a) Authorization of Appropriations.--There is authorized to be 
appropriated for the Intelligence Community Management Account of the 
Director of Central Intelligence for fiscal year 2005 the sum of 
$342,995,000. Within such amount, funds identified in the classified 
Schedule of Authorizations referred to in section 102(a) for advanced 
research and development shall remain available until September 30, 
2006.
    (b) Authorized Personnel Levels.--The elements within the 
Intelligence Community Management Account of the Director of Central 
Intelligence are authorized 310 full-time personnel as of September 30, 
2005. Personnel serving in such elements may be permanent employees of 
the Intelligence Community Management Account or personnel detailed 
from other elements of the United States Government.
    (c) Classified Authorizations.--
            (1) Authorization of appropriations.--In addition to 
        amounts authorized to be appropriated for the Intelligence 
        Community Management Account by subsection (a), there are also 
        authorized to be appropriated for the Intelligence Community 
        Management Account for fiscal year 2005 such additional amounts 
        as are specified in the classified Schedule of Authorizations 
        referred to in section 102(a). Such additional amounts for 
        research and development shall remain available until September 
        30, 2006.
            (2) Authorization of personnel.--In addition to the 
        personnel authorized by subsection (b) for elements of the 
        Intelligence Community Management Account as of September 30, 
        2005, there are also authorized such additional personnel for 
        such elements as of that date as are specified in the 
        classified Schedule of Authorizations.
    (d) Reimbursement.--Except as provided in section 113 of the 
National Security Act of 1947 (50 U.S.C. 404h), during fiscal year 2005 
any officer or employee of the United States or a member of the Armed 
Forces who is detailed to the staff of the Intelligence Community 
Management Account from another element of the United States Government 
shall be detailed on a reimbursable basis, except that any such 
officer, employee, or member may be detailed on a nonreimbursable basis 
for a period of less than one year for the performance of temporary 
functions as required by the Director of Central Intelligence.
    (e) National Drug Intelligence Center.--
            (1) In general.--Of the amount authorized to be 
        appropriated in subsection (a), $34,911,000 shall be available 
        for the National Drug Intelligence Center. Within such amount, 
        funds provided for research, development, testing, and 
        evaluation purposes shall remain available until September 30, 
        2006, and funds provided for procurement purposes shall remain 
        available until September 30, 2007.
            (2) Transfer of funds.--The Director of Central 
        Intelligence shall transfer to the Attorney General funds 
        available for the National Drug Intelligence Center under 
        paragraph (1). The Attorney General shall utilize funds so 
        transferred for the activities of the National Drug 
        Intelligence Center.
            (3) Limitation.--Amounts available for the National Drug 
        Intelligence Center may not be used in contravention of the 
        provisions of section 103(d)(1) of the National Security Act of 
        1947 (50 U.S.C. 403-3(d)(1)).
            (4) Authority.--Notwithstanding any other provision of law, 
        the Attorney General shall retain full authority over the 
        operations of the National Drug Intelligence Center.

SEC. 105. INCORPORATION OF REPORTING REQUIREMENTS.

    (a) In General.--Each requirement to submit a report to the 
congressional intelligence committees that is included in the joint 
explanatory statement to accompany the conference report on the bill __ 
of the One Hundred Eighth Congress, or in the classified annex to this 
Act, is hereby incorporated into this Act, and is hereby made a 
requirement in law.
    (b) Congressional Intelligence Committees Defined.--In this 
section, the term ``congressional intelligence committees'' means--
            (1) the Select Committee on Intelligence of the Senate; and
            (2) the Permanent Select Committee on Intelligence of the 
        House of Representatives.

SEC. 106. SPECIFIC AUTHORIZATION OF FUNDS FOR INTELLIGENCE OR 
              INTELLIGENCE-RELATED ACTIVITIES FOR WHICH FISCAL YEAR 
              2004 APPROPRIATIONS EXCEED AMOUNTS AUTHORIZED.

    Funds appropriated for an intelligence or intelligence-related 
activity of the United States Government for fiscal year 2004 in excess 
of the amount specified for such activity in the classified Schedule of 
Authorizations prepared to accompany the Intelligence Authorization Act 
for Fiscal Year 2004 (Public Law 108-177; 117 Stat. 2599) shall be 
deemed to be specifically authorized by Congress for purposes of 
section 504(a)(3) of the National Security Act of 1947 (50 U.S.C. 
414(a)(3)).

 TITLE II--CENTRAL INTELLIGENCE AGENCY RETIREMENT AND DISABILITY SYSTEM

SEC. 201. AUTHORIZATION OF APPROPRIATIONS.

    There is authorized to be appropriated for the Central Intelligence 
Agency Retirement and Disability Fund for fiscal year 2005 the sum of 
$239,400,000.

                     TITLE III--GENERAL PROVISIONS

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

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

SEC. 302. RESTRICTION ON CONDUCT OF INTELLIGENCE ACTIVITIES.

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

SEC. 303. MODIFICATION OF AUTHORITY TO OBLIGATE AND EXPEND CERTAIN 
              FUNDS FOR INTELLIGENCE ACTIVITIES.

    Section 504(a)(3) of the National Security Act of 1947 (50 U.S.C. 
414(a)(3)) is amended--
            (1) in subparagraph (A), by inserting ``and'' at the end;
            (2) by striking subparagraph (B); and
            (3) by redesignating subparagraph (C) as subparagraph (B).

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.

    (a) In General.--Section 101(b)(1) of the Foreign Intelligence 
Surveillance Act of 1978 (50 U.S.C. 1801(b)(1)) is amended by adding at 
the end the following new subparagraph:
                    ``(C) engages in international terrorism or 
                activities in preparation therefor; or''.
    (b) Sunset.--The amendment made by subsection (a) shall be subject 
to the sunset provision in section 224 of the USA PATRIOT Act of 2001 
(Public Law 107-56; 115 Stat. 295), including the exception provided in 
subsection (b) of such section 224.

SEC. 305. ADDITIONAL ANNUAL REPORTING REQUIREMENTS UNDER THE FOREIGN 
              INTELLIGENCE SURVEILLANCE ACT OF 1978.

    (a) Additional Reporting Requirements.--The Foreign Intelligence 
Surveillance Act of 1978 (50 U.S.C. 1801 et seq.) is amended--
            (1) by redesignating title VI as title VII;
            (2) by redesignating section 601 as section 701; and
            (3) by inserting after title V the following new title VI:

                   ``TITLE VI--REPORTING REQUIREMENT

                ``annual report of the attorney general

    ``Sec. 601. (a) In addition to the reports required by sections 
107, 108, 306, 406, and 502 in April each year, the Attorney General 
shall submit to the appropriate committees of Congress each year a 
report setting forth with respect to the one-year period ending on the 
date of such report--
            ``(1) the aggregate number of non-United States persons 
        targeted for orders issued under this Act, including a break-
        down of those targeted for--
                    ``(A) electronic surveillance under section 105;
                    ``(B) physical searches under section 304;
                    ``(C) pen registers under section 402; and
                    ``(D) access to records under section 501;
            ``(2) the number of individuals covered by an order issued 
        under this Act who were determined pursuant to activities 
        authorized by this Act to have acted wholly alone in the 
        activities covered by such order;
            ``(3) the number of times that the Attorney General has 
        authorized that information obtained under this Act may be used 
        in a criminal proceeding or any information derived therefrom 
        may be used in a criminal proceeding; and
            ``(4) in a manner consistent with the protection of the 
        national security of the United States--
                    ``(A) the portions of the documents and 
                applications filed with the courts established under 
                section 103 that include significant construction or 
                interpretation of the provisions of this Act, not 
                including the facts of any particular matter, which may 
                be redacted; and
                    ``(B) the portions of the opinions and orders of 
                the courts established under section 103 that include 
                significant construction or interpretation of the 
                provisions of this Act, not including the facts of any 
                particular matter, which may be redacted.
    ``(b) The first report under this section shall be submitted not 
later than six months after the date of the enactment of this 
Intelligence Authorization Act for Fiscal Year 2005. Subsequent reports 
under this section shall be submitted annually thereafter.
    ``(c) In this section, the term `appropriate committees of 
Congress' means--
            ``(1) the Select Committee on Intelligence and the 
        Committee on the Judiciary of the Senate; and
            ``(2) the Permanent Select Committee on Intelligence and 
        the Committee on the Judiciary of the House of 
        Representatives.''.
    (b) Clerical Amendment.--The table of contents for that Act is 
amended by striking the items relating to 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.''.

SEC. 306. REPEAL OF LIMITATION ON LENGTH OF SERVICE AS MEMBER OF THE 
              SELECT COMMITTEE ON INTELLIGENCE OF THE SENATE.

    (a) Repeal.--Section 2 of Senate Resolution 400 (94th Congress) is 
amended--
            (1) by striking subsection (b); and
            (2) by redesignating subsection (c) as subsection (b).
    (b) Rules of the Senate.--Subsection (a) is enacted--
            (1) as an exercise of the rulemaking power of the Senate; 
        and
            (2) with full recognition of the constitutional right of 
        the Senate to change the rules of the Senate at any time and to 
        the same extent as in the case of any other rule of the Senate.

                 TITLE IV--CENTRAL INTELLIGENCE AGENCY

SEC. 401. PERMANENT EXTENSION OF CENTRAL INTELLIGENCE AGENCY VOLUNTARY 
              SEPARATION INCENTIVE PROGRAM.

    (a) In General.--Section 2 of the Central Intelligence Agency 
Voluntary Separation Pay Act (50 U.S.C. 403-4 note) is amended--
            (1) by striking subsection (f); and
            (2) by redesignating subsections (g) and (h) as subsections 
        (f) and (g), respectively.
    (b) Termination of Funds Remittance Requirement.--(1) Section 2 of 
such Act is further amended by striking subsection (i).
    (2) Section 4(a)(2)(B)(ii) of the Federal Workforce Restructuring 
Act of 1994 (5 U.S.C. 8331 note) is amended by striking ``, or section 
2 of the Central Intelligence Agency Voluntary Separation Pay Act 
(Public Law 103-36; 107 Stat. 104)''.

SEC. 402. INTELLIGENCE OPERATIONS AND COVER ENHANCEMENT AUTHORITY.

    The Central Intelligence Agency Act of 1949 (50 U.S.C. 403a et 
seq.) is amended by adding at the end the following:

       ``intelligence operations and cover enhancement authority

    ``Sec. 23. (a) Definitions.--In this section--
            ``(1) the term `designated employee' means an employee 
        designated by the Director under subsection (b); and
            ``(2) the term `Federal retirement system' includes the 
        Central Intelligence Agency Retirement and Disability System, 
        and the Federal Employees Retirement System (including the 
        Thrift Savings Plan).
    ``(b) In General.--
            ``(1) Authority.--Notwithstanding any other provision of 
        law, the Director may exercise the authorities under this 
        section in order to--
                    ``(A) protect from unauthorized disclosure--
                            ``(i) intelligence operations;
                            ``(ii) the identities of undercover 
                        intelligence officers;
                            ``(iii) intelligence source and methods; or
                            ``(iv) intelligence cover mechanisms; or
                    ``(B) meet the special requirements of work related 
                to collection of foreign intelligence or other 
                authorized activities of the Agency.
            ``(2) Designation of employees.--The Director may designate 
        any employee of the Agency who is under nonofficial cover to be 
        an employee to whom this section applies. Such designation may 
        be made with respect to any or all authorities exercised under 
        this section.
    ``(c) Compensation.--The Director may pay a designated employee 
salary, allowances, and other benefits in an amount and in a manner 
consistent with the nonofficial cover of that employee, without regard 
to any limitation that is otherwise applicable to a Federal employee. A 
designated employee may accept, utilize, and, to the extent authorized 
by regulations prescribed under subsection (i), retain any salary, 
allowances, and other benefits provided under this section.
    ``(d) Retirement Benefits.--
            ``(1) In general.--The Director may establish and 
        administer a nonofficial cover employee retirement system under 
        which a designated employee (and the spouse, former spouses, 
        and survivors of such designated employee) shall receive 
        treatment in the same manner and to the same extent as the 
        Federal retirement system that would otherwise apply to such 
        employee (and the spouse, former spouses, and survivors of that 
        employee). A designated employee may not participate in the 
        retirement system established under this paragraph and another 
        Federal retirement system at the same time.
            ``(2) Conversion to other federal retirement system.--
                    ``(A) In general.--A designated employee 
                participating in the retirement system established 
                under paragraph (1) may convert to coverage under the 
                Federal retirement system which would otherwise apply 
                to that employee at any appropriate time determined by 
                the Director (including at the time of separation of 
                service by reason of retirement), if the Director 
                determines that the employee's participation in the 
                retirement system established under this subsection is 
                no longer necessary to protect from unauthorized 
                disclosure--
                            ``(i) intelligence operations;
                            ``(ii) the identities of undercover 
                        intelligence officers;
                            ``(iii) intelligence sources and methods; 
                        or
                            ``(iv) intelligence cover mechanisms.
                    ``(B) Conversion treatment.--Upon a conversion 
                under this paragraph--
                            ``(i) all periods of service under the 
                        retirement system established under this 
                        subsection shall be deemed periods of 
                        creditable service under the applicable Federal 
                        retirement system;
                            ``(ii) the Director shall transmit an 
                        amount for deposit in any applicable fund of 
                        that Federal retirement system that--
                                    ``(I) is necessary to cover all 
                                employee and agency contributions 
                                including--
                                            ``(aa) interest as 
                                        determined by the head of the 
                                        agency administering the 
                                        Federal retirement system into 
                                        which the employee is 
                                        converting; or
                                            ``(bb) in the case of an 
                                        employee converting into the 
                                        Federal Employee's Retirement 
                                        System, interest as determined 
                                        under section 8334(e) of title 
                                        5, United States Code; and
                                    ``(II) ensures that such conversion 
                                does not result in any unfunded 
                                liability to that fund; and
                            ``(iii) in the case of a designated 
                        employee who participated in a retirement 
                        system established under paragraph (1) similar 
                        to subchapter III of chapter 84 of title 5, 
                        United States Code, and is converting to 
                        coverage under subchapter III of that chapter, 
                        the Director shall transmit all amounts of that 
                        designated employee in that similar retirement 
                        system (or similar part of that retirement 
                        system) to the Thrift Savings Fund.
                    ``(C) Transmitted amounts.--
                            ``(i) In general.--Amounts described under 
                        subparagraph (B)(ii) shall be paid from the 
                        fund or appropriation used to pay the 
                        designated employee.
                            ``(ii) Offset.--The Director may use 
                        amounts contributed by the designated employee 
                        to a retirement system established under 
                        paragraph (1) to offset amounts paid under 
                        clause (i).
                    ``(D) Records.--The Director shall transmit all 
                necessary records relating to a designated employee who 
                converts to a Federal retirement system under this 
                paragraph (including records relating to periods of 
                service which are deemed to be periods of creditable 
                service under subparagraph (B)) to the head of the 
                agency administering that Federal retirement system.
    ``(e) Health Insurance Benefits.--
            ``(1) In general.--The Director may establish and 
        administer a nonofficial cover employee health insurance 
        program under which a designated employee (and the family of 
        such designated employee) shall receive treatment in the same 
        manner and to the same extent as provided under chapter 89 of 
        title 5, United States Code. A designated employee may not 
        participate in the health insurance program established under 
        this paragraph and the program under chapter 89 of title 5, 
        United States Code, at the same time.
            ``(2) Conversion to federal employees health benefits 
        program.--
                    ``(A) In general.--A designated employee 
                participating in the health insurance program 
                established under paragraph (1) may convert to coverage 
                under the program under chapter 89 of title 5, United 
                States Code, at any appropriate time determined by the 
                Director (including at the time of separation of 
                service by reason of retirement), if the Director 
                determines that the employee's participation in the 
                health insurance program established under this 
                subsection is no longer necessary to protect from 
                unauthorized disclosure--
                            ``(i) intelligence operations;
                            ``(ii) the identities of undercover 
                        intelligence officers;
                            ``(iii) intelligence sources and methods; 
                        or
                            ``(iv) intelligence cover mechanisms.
                    ``(B) Conversion treatment.--Upon a conversion 
                under this paragraph--
                            ``(i) the employee (and family, if 
                        applicable) shall be entitled to immediate 
                        enrollment and coverage under chapter 89 of 
                        title 5, United States Code;
                            ``(ii) any requirement of prior enrollment 
                        in a health benefits plan under chapter 89 of 
                        that title for continuation of coverage 
                        purposes shall not apply;
                            ``(iii) the employee shall be deemed to 
                        have had coverage under chapter 89 of that 
                        title from the first opportunity to enroll for 
                        purposes of continuing coverage as an 
                        annuitant; and
                            ``(iv) the Director shall transmit an 
                        amount for deposit in the Employees Health 
                        Benefits Fund that is necessary to cover any 
                        costs of such conversion.
                    ``(C) Transmitted amounts.--Any amount described 
                under subparagraph (B)(iv) shall be paid from the fund 
                or appropriation used to pay the designated employee.
    ``(f) Life Insurance Benefits.--
            ``(1) In general.--The Director may establish and 
        administer a nonofficial cover employee life insurance program 
        under which a designated employee (and the family of such 
        designated employee) shall receive treatment in the same manner 
        and to the same extent as provided under chapter 87 of title 5, 
United States Code. A designated employee may not participate in the 
life insurance program established under this paragraph and the program 
under chapter 87 of title 5, United States Code, at the same time.
            ``(2) Conversion to federal employees group life insurance 
        program.--
                    ``(A) In general.--A designated employee 
                participating in the life insurance program established 
                under paragraph (1) may convert to coverage under the 
                program under chapter 87 of title 5, United States 
                Code, at any appropriate time determined by the 
                Director (including at the time of separation of 
                service by reason of retirement), if the Director 
                determines that the employee's participation in the 
                life insurance program established under this 
                subsection is no longer necessary to protect from 
                unauthorized disclosure--
                            ``(i) intelligence operations;
                            ``(ii) the identities of undercover 
                        intelligence officers;
                            ``(iii) intelligence sources and methods; 
                        or
                            ``(iv) intelligence cover mechanisms.
                    ``(B) Conversion treatment.--Upon a conversion 
                under this paragraph--
                            ``(i) the employee (and family, if 
                        applicable) shall be entitled to immediate 
                        coverage under chapter 87 of title 5, United 
                        States Code;
                            ``(ii) any requirement of prior enrollment 
                        in a life insurance program under chapter 87 of 
                        that title for continuation of coverage 
                        purposes shall not apply;
                            ``(iii) the employee shall be deemed to 
                        have had coverage under chapter 87 of that 
                        title for the full period of service during 
                        which the employee would have been entitled to 
                        be insured for purposes of continuing coverage 
                        as an annuitant; and
                            ``(iv) the Director shall transmit an 
                        amount for deposit in the Employees Life 
                        Insurance Fund that is necessary to cover any 
                        costs of such conversion.
                    ``(C) Transmitted amounts.--Any amount described 
                under subparagraph (B)(iii) shall be paid from the fund 
                or appropriation used to pay the designated employee.
    ``(g) Exemption From Certain Requirements.--The Director may exempt 
a designated employee from mandatory compliance with any Federal 
regulation, rule, standardized administrative policy, process, or 
procedure that the Director determines--
            ``(1) would be inconsistent with the nonofficial cover of 
        that employee; and
            ``(2) could expose that employee to detection as a Federal 
        employee.
    ``(h) Taxation and Social Security.--
            ``(1) In general.--Notwithstanding any other provision of 
        law, a designated employee--
                    ``(A) shall file a Federal or State tax return as 
                if that employee is not a Federal employee and may 
                claim and receive the benefit of any exclusion, 
                deduction, tax credit, or other tax treatment that 
                would otherwise apply if that employee was not a 
                Federal employee, if the Director determines that 
                taking any action under this paragraph is necessary 
                to--
                            ``(i) protect from unauthorized 
                        disclosure--
                                    ``(I) intelligence operations;
                                    ``(II) the identities of undercover 
                                intelligence officers;
                                    ``(III) intelligence source and 
                                methods; or
                                    ``(IV) intelligence cover 
                                mechanisms; and
                            ``(ii) meet the special requirements of 
                        work related to collection of foreign 
                        intelligence or other authorized activities of 
                        the Agency; and
                    ``(B) shall receive social security benefits based 
                on the social security contributions made.
            ``(2) IRS review.--The Director shall establish procedures 
        to carry out this subsection. The procedures shall be subject 
        to periodic review by the Internal Revenue Service.
    ``(i) Regulations.--The Director shall prescribe regulations to 
carry out this section. The regulations shall ensure that the 
combination of salary, allowances, and benefits that an employee 
designated under this section may retain does not significantly exceed, 
except to the extent determined by the Director to be necessary to 
exercise the authority in subsection (b), the combination of salary, 
allowances, and benefits otherwise received by Federal employees not 
designated under this section.
    ``(j) Finality of Decisions.--Any determinations authorized by this 
section made by the Director or the Director's designee shall be final 
and conclusive and shall not be subject to review by any court.
    ``(k) Subsequently Enacted Laws.--No law enacted after the 
effective date of this section shall affect the authorities and 
provisions of this section unless such law specifically refers to this 
section.''.

          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.

    Section 431(a) of title 10, United States Code, is amended by 
striking the second sentence.

SEC. 502. DEFENSE INTELLIGENCE EXEMPTION FROM CERTAIN PRIVACY ACT 
              REQUIREMENTS.

    Section 552a(e)(3) of title 5, United States Code, shall not apply 
with respect to the collection of information by intelligence personnel 
of the Department of Defense who are authorized by the Secretary of 
Defense to collect intelligence from human sources.

SEC. 503. USE OF FUNDS FOR COUNTERDRUG AND COUNTERTERRORISM ACTIVITIES 
              FOR COLOMBIA.

    (a) Authority.--Funds designated for intelligence or intelligence-
related purposes for assistance to the Government of Colombia for 
counterdrug activities for fiscal year 2005, and any unobligated funds 
available to any element of the intelligence community for such 
activities for a prior fiscal year, shall be available--
            (1) to support a unified campaign by the Government of 
        Colombia against narcotics trafficking and against activities 
        by organizations designated as terrorist organizations (such as 
        the Revolutionary Armed Forces of Colombia (FARC), the National 
        Liberation Army (ELN), and the United Self-Defense Forces of 
        Colombia (AUC)); and
            (2) to take actions to protect human health and welfare in 
        emergency circumstances, including undertaking rescue 
        operations.
    (b) Applicability of Certain Laws and Limitations.--The use of 
funds pursuant to the authority in subsection (a) shall be subject to 
the following:
            (1) Sections 556, 567, and 568 of the Foreign Operations, 
        Export Financing, and Related Programs Appropriations Act, 2002 
        (Public Law 107-115; 115 Stat. 2160, 2165, and 2166).
            (2) Section 8077 of the Department of Defense 
        Appropriations Act, 2004 (Public Law 108-87; 117 Stat. 1090).
            (3) The numerical limitations on the number of United 
        States military personnel and United States individual civilian 
        contractors in section 3204(b)(1) of the Emergency Supplemental 
        Act, 2000 (division B of Public Law 106-246; 114 Stat. 575), as 
        amended by the Foreign Operations, Export Financing, and 
        Related Programs Appropriations Act, 2002 (115 Stat. 2131).
    (c) Limitation on Participation of United States Personnel.--No 
United States Armed Forces personnel or United States civilian 
contractor employed by the United States Armed Forces will participate 
in any combat operation in connection with assistance made available 
under this section, except for the purpose of acting in self defense or 
during the course of search and rescue operations for United States 
citizens.
                                 <all>
```