II 

Calendar No. 619 

108TH CONGRESS 

2D SESSION S. 2386 

[Report No. 108–258] 

[Report No. 108–300] 

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 

JULY 8, 2004 

Reported by Mr. WARNER, with amendments 

[Omit the part struck through and insert the part printed in italic] 

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. 
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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’’. 

6 (b) TABLE OF CONTENTS.—The table of contents for 

7 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. 

Sec. 107. Preparation and submittal of reports, reviews, studies, and plans relating to intelligence activities of Department of Defense and Department of Energy. 

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

Sec. 503 502. Use of funds for counterdrug and counterterrorism activities for 

Colombia. 

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. 
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1 (13) The Coast Guard. 

2 (14) The Department of Homeland Security. 

3 SEC. 102. CLASSIFIED SCHEDULE OF AUTHORIZATIONS. 

4 (a) SPECIFICATIONS OF AMOUNTS AND PERSONNEL

5 CEILINGS.—The amounts authorized to be appropriated 

6 under section 101, and the authorized personnel ceilings 

7 as of September 30, 2005, for the conduct of the intel8 ligence and intelligence-related activities of the elements 

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

10 Schedule of Authorizations prepared to accompany the 

11 conference report on the bill ll of the One Hundred 

12 Eighth Congress. 

13 (b) AVAILABILITY OF CLASSIFIED SCHEDULE OF AU14 THORIZATIONS.—The Schedule of Authorizations shall be 

15 made available to the Committees on Appropriations of 

16 the Senate and House of Representatives and to the Presi17 dent. The President shall provide for suitable distribution 

18 of the Schedule, or of appropriate portions of the Sched19 ule, within the executive branch. 

20 SEC. 103. PERSONNEL CEILING ADJUSTMENTS. 

21 (a) AUTHORITY FOR ADJUSTMENTS.—With the ap22 proval of the Director of the Office of Management and 

23 Budget, the Director of Central Intelligence may authorize 

24 employment of civilian personnel in excess of the number 

25 authorized for fiscal year 2005 under section 102 when 
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1 the Director of Central Intelligence determines that such 

2 action is necessary to the performance of important intel3 ligence functions, except that the number of personnel em4 ployed in excess of the number authorized under such sec5 tion may not, for any element of the intelligence commu6 nity, exceed 2 percent of the number of civilian personnel 

7 authorized under such section for such element. 

8 (b) NOTICE TO INTELLIGENCE COMMITTEES.—The 

9 Director of Central Intelligence shall promptly notify the 

10 Select Committee on Intelligence of the Senate and the 

11 Permanent Select Committee on Intelligence of the House 

12 of Representatives whenever the Director exercises the au13 thority granted by this section. 

14 SEC. 104. INTELLIGENCE COMMUNITY MANAGEMENT AC15 COUNT. 

16 (a) AUTHORIZATION OF APPROPRIATIONS.—There is 

17 authorized to be appropriated for the Intelligence Commu18 nity Management Account of the Director of Central Intel19 ligence for fiscal year 2005 the sum of $342,995,000. 

20 Within such amount, funds identified in the classified 

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

22 for advanced research and development shall remain avail23 able until September 30, 2006. 

24 (b) AUTHORIZED PERSONNEL LEVELS.—The ele25 ments within the Intelligence Community Management 
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1 Account of the Director of Central Intelligence are author2 ized 310 full-time personnel as of September 30, 2005. 

3 Personnel serving in such elements may be permanent em4 ployees of the Intelligence Community Management Ac5 count or personnel detailed from other elements of the 

6 United States Government. 

7 (c) CLASSIFIED AUTHORIZATIONS.— 

8 (1) AUTHORIZATION OF APPROPRIATIONS.—In 

9 addition to amounts authorized to be appropriated 

10 for the Intelligence Community Management Ac11 count by subsection (a), there are also authorized to 

12 be appropriated for the Intelligence Community 

13 Management Account for fiscal year 2005 such addi14 tional amounts as are specified in the classified 

15 Schedule of Authorizations referred to in section 

16 102(a). Such additional amounts for research and 

17 development shall remain available until September 

18 30, 2006. 

19 (2) AUTHORIZATION OF PERSONNEL.—In addi20 tion to the personnel authorized by subsection (b) 

21 for elements of the Intelligence Community Manage22 ment Account as of September 30, 2005, there are 

23 also authorized such additional personnel for such 

24 elements as of that date as are specified in the clas25 sified Schedule of Authorizations. 
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1 (d) REIMBURSEMENT.—Except as provided in section 

2 113 of the National Security Act of 1947 (50 U.S.C. 

3 404h), during fiscal year 2005 any officer or employee of 

4 the United States or a member of the Armed Forces who 

5 is detailed to the staff of the Intelligence Community Man6 agement Account from another element of the United 

7 States Government shall be detailed on a reimbursable 

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

9 may be detailed on a nonreimbursable basis for a period 

10 of less than one year for the performance of temporary 

11 functions as required by the Director of Central Intel12 ligence. 

13 (e) NATIONAL DRUG INTELLIGENCE CENTER.— 

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

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

16 be available for the National Drug Intelligence Cen17 ter. Within such amount, funds provided for re18 search, development, testing, and evaluation pur19 poses shall remain available until September 30, 

20 2006, and funds provided for procurement purposes 

21 shall remain available until September 30, 2007. 

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

23 Central Intelligence shall transfer to the Attorney 

24 General funds available for the National Drug Intel25 ligence Center under paragraph (1). The Attorney 
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1 General shall utilize funds so transferred for the ac2 tivities of the National Drug Intelligence Center. 

3 (3) LIMITATION.—Amounts available for the 

4 National Drug Intelligence Center may not be used 

5 in contravention of the provisions of section 

6 103(d)(1) of the National Security Act of 1947 (50 

7 U.S.C. 403–3(d)(1)). 

8 (4) AUTHORITY.—Notwithstanding any other 

9 provision of law, the Attorney General shall retain 

10 full authority over the operations of the National 

11 Drug Intelligence Center. 

12 SEC. 105. INCORPORATION OF REPORTING REQUIRE13 MENTS. 

14 (a) IN GENERAL.—Each requirement to submit a re15 port to the congressional intelligence committees that is 

16 included in the joint explanatory statement to accompany 

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

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

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

20 a requirement in law. 

21 (b) CONGRESSIONAL INTELLIGENCE COMMITTEES

22 DEFINED.—In this section, the term ‘‘congressional intel23 ligence committees’’ means— 

24 (1) the Select Committee on Intelligence of the 

25 Senate; and 
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1 (2) the Permanent Select Committee on Intel2 ligence of the House of Representatives. 

3 SEC. 106. SPECIFIC AUTHORIZATION OF FUNDS FOR INTEL4 LIGENCE OR INTELLIGENCE-RELATED AC5 TIVITIES FOR WHICH FISCAL YEAR 2004 AP6 PROPRIATIONS EXCEED AMOUNTS AUTHOR7 IZED. 

8 Funds appropriated for an intelligence or intel9 ligence-related activity of the United States Government 

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

11 such activity in the classified Schedule of Authorizations 

12 prepared to accompany the Intelligence Authorization Act 

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

14 2599) shall be deemed to be specifically authorized by 

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

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

17 SEC. 107. PREPARATION AND SUBMITTAL OF REPORTS, RE18 VIEWS, STUDIES, AND PLANS RELATING TO 

19 INTELLIGENCE ACTIVITIES OF DEPARTMENT 

20 OF DEFENSE AND DEPARTMENT OF ENERGY. 

21 (a) CONSULTATION IN PREPARATION.—(1) The Direc22 tor of Central Intelligence shall ensure that any report, re23 view, study, or plan required to be prepared or conducted 

24 by a provision of this Act, including a provision of the clas25 sified Schedule of Authorizations referred to in section 
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1 102(a) or the classified annex to this Act, that involves the 

2 intelligence or intelligence-related activities of the Depart3 ment of Defense or the Department of Energy is prepared 

4 or conducted in consultation with the Secretary of Defense 

5 or the Secretary of Energy, as appropriate. 

6 (2) The Secretary of Defense or the Secretary of En7 ergy may carry out any consultation required by this sub8 section through an official of the Department of Defense or 

9 the Department of Energy, as the case may be, designated 

10 by such Secretary for that purpose. 

11 (b) SUBMITTAL.—Any report, review, study, or plan 

12 referred to in subsection (a) shall be submitted, in addition 

13 to any other committee of Congress specified for submittal 

14 in the provision concerned, to the following committees of 

15 Congress: 

16 (1) The Committee on Armed Services, the Sub17 committee on Defense of the Committee on Appropria18 tions, and the Select Committee on Intelligence of the 

19 Senate. 

20 (2) The Committee on Armed Services, and the 

21 Subcommittee on Defense of the Committee on Appro22 priations, and the Permanent Select Committee on 

23 Intelligence of the House of Representatives. 
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1 TITLE II—CENTRAL INTEL2 LIGENCE AGENCY RETIRE3 MENT AND DISABILITY SYS4 TEM 

5 SEC. 201. AUTHORIZATION OF APPROPRIATIONS. 

6 There is authorized to be appropriated for the Cen7 tral Intelligence Agency Retirement and Disability Fund 

8 for fiscal year 2005 the sum of $239,400,000. 

9 TITLE III—GENERAL 

10 PROVISIONS 

11 SEC. 301. INCREASE IN EMPLOYEE COMPENSATION AND 

12 BENEFITS AUTHORIZED BY LAW. 

13 Appropriations authorized by this Act for salary, pay, 

14 retirement, and other benefits for Federal employees may 

15 be increased by such additional or supplemental amounts 

16 as may be necessary for increases in such compensation 

17 or benefits authorized by law. 

18 SEC. 302. RESTRICTION ON CONDUCT OF INTELLIGENCE 

19 ACTIVITIES. 

20 The authorization of appropriations by this Act shall 

21 not be deemed to constitute authority for the conduct of 

22 any intelligence activity which is not otherwise authorized 

23 by the Constitution or the laws of the United States. 
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1 SEC. 303. MODIFICATION OF AUTHORITY TO OBLIGATE AND 

2 EXPEND CERTAIN FUNDS FOR INTELLIGENCE 

3 ACTIVITIES. 

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

5 1947 (50 U.S.C. 414(a)(3)) is amended— 

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

7 the end; 

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

9 (3) by redesignating subparagraph (C) as sub10 paragraph (B). 

11 SEC. 304. TREATMENT AS AGENT OF A FOREIGN POWER 

12 UNDER THE FOREIGN INTELLIGENCE SUR13 VEILLANCE ACT OF 1978 OF NON-UNITED 

14 STATES PERSONS WHO ENGAGE IN INTER15 NATIONAL TERRORISM WITHOUT AFFILI16 ATION WITH INTERNATIONAL TERRORIST 

17 GROUPS. 

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

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

20 1801(b)(1)) is amended by adding at the end the following 

21 new subparagraph: 

22 ‘‘(C) engages in international terrorism or 

23 activities in preparation therefor; or’’. 

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

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

26 of the USA PATRIOT Act of 2001 (Public Law 107–56; 
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1 115 Stat. 295), including the exception provided in sub2 section (b) of such section 224. 

3 SEC. 305. ADDITIONAL ANNUAL REPORTING REQUIRE4 MENTS UNDER THE FOREIGN INTELLIGENCE 

5 SURVEILLANCE ACT OF 1978. 

6 (a) ADDITIONAL REPORTING REQUIREMENTS.—The 

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

8 1801 et seq.) is amended— 

9 (1) by redesignating title VI as title VII; 

10 (2) by redesignating section 601 as section 701; 

11 and 

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

13 title VI: 

14 ‘‘TITLE VI—REPORTING REQUIREMENT 

15 ‘‘ANNUAL REPORT OF THE ATTORNEY GENERAL

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

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

18 year, the Attorney General shall submit to the appropriate 

19 committees of Congress each year a report setting forth 

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

21 such report— 

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

23 States persons targeted for orders issued under this 

24 Act, including a break-down of those targeted for— 
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1 ‘‘(A) electronic surveillance under section 

2 105; 

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

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

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

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

7 order issued under this Act who were determined 

8 pursuant to activities authorized by this Act to have 

9 acted wholly alone in the activities covered by such 

10 order; 

11 ‘‘(3) the number of times that the Attorney 

12 General has authorized that information obtained 

13 under this Act may be used in a criminal proceeding 

14 or any information derived therefrom may be used 

15 in a criminal proceeding; and 

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

17 of the national security of the United States— 

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

19 applications filed with the courts established 

20 under section 103 that include significant con21 struction or interpretation of the provisions of 

22 this Act, not including the facts of any par23 ticular matter, which may be redacted; and 

24 ‘‘(B) the portions of the opinions and or25 ders of the courts established under section 103 
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1 that include significant construction or interpre2 tation of the provisions of this Act, not includ3 ing the facts of any particular matter, which 

4 may be redacted. 

5 ‘‘(b) The first report under this section shall be sub6 mitted not later than six months after the date of the en7 actment of this Intelligence Authorization Act for Fiscal 

8 Year 2005. Subsequent reports under this section shall be 

9 submitted annually thereafter. 

10 ‘‘(c) In this section, the term ‘appropriate committees 

11 of Congress’ means— 

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

13 the Committee on the Judiciary of the Senate; and 

14 ‘‘(2) the Permanent Select Committee on Intel15 ligence and the Committee on the Judiciary of the 

16 House of Representatives.’’. 

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

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

19 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.’’. 
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1 SEC. 306. REPEAL OF LIMITATION ON LENGTH OF SERVICE 

2 AS MEMBER OF THE SELECT COMMITTEE ON 

3 INTELLIGENCE OF THE SENATE. 

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

5 (94th Congress) is amended— 

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

7 (2) by redesignating subsection (c) as sub8 section (b). 

9 (b) RULES OF THE SENATE.—Subsection (a) is en10 acted— 

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

12 the Senate; and 

13 (2) with full recognition of the constitutional 

14 right of the Senate to change the rules of the Senate 

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

16 of any other rule of the Senate. 

17 TITLE IV—CENTRAL 

18 INTELLIGENCE AGENCY 

19 SEC. 401. PERMANENT EXTENSION OF CENTRAL INTEL20 LIGENCE AGENCY VOLUNTARY SEPARATION 

21 INCENTIVE PROGRAM. 

22 (a) IN GENERAL.—Section 2 of the Central Intel23 ligence Agency Voluntary Separation Pay Act (50 U.S.C. 

24 403–4 note) is amended— 

25 (1) by striking subsection (f); and 
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1 (2) by redesignating subsections (g) and (h) as 

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

3 (b) TERMINATION OF FUNDS REMITTANCE RE4 QUIREMENT.—(1) Section 2 of such Act is further amend5 ed by striking subsection (i). 

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

7 Restructuring Act of 1994 (5 U.S.C. 8331 note) is amend8 ed by striking ‘‘, or section 2 of the Central Intelligence 

9 Agency Voluntary Separation Pay Act (Public Law 103– 

10 36; 107 Stat. 104)’’. 

11 SEC. 402. INTELLIGENCE OPERATIONS AND COVER EN12 HANCEMENT AUTHORITY. 

13 The Central Intelligence Agency Act of 1949 (50 

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

15 following: 

16 ‘‘INTELLIGENCE OPERATIONS AND COVER ENHANCEMENT

17 AUTHORITY

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

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

20 employee designated by the Director under sub21 section (b); and 

22 ‘‘(2) the term ‘Federal retirement system’ in23 cludes the Central Intelligence Agency Retirement 

24 and Disability System, and the Federal Employees 

25 Retirement System (including the Thrift Savings 

26 Plan). 
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1 ‘‘(b) IN GENERAL.— 

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

3 provision of law, the Director may exercise the au4 thorities under this section in order to— 

5 ‘‘(A) protect from unauthorized disclo6 sure— 

7 ‘‘(i) intelligence operations; 

8 ‘‘(ii) the identities of undercover intel9 ligence officers; 

10 ‘‘(iii) intelligence source and methods; 

11 or 

12 ‘‘(iv) intelligence cover mechanisms; or 

13 ‘‘(B) meet the special requirements of 

14 work related to collection of foreign intelligence 

15 or other authorized activities of the Agency. 

16 ‘‘(2) DESIGNATION OF EMPLOYEES.—The Di17 rector may designate any employee of the Agency 

18 who is under nonofficial cover to be an employee to 

19 whom this section applies. Such designation may be 

20 made with respect to any or all authorities exercised 

21 under this section. 

22 ‘‘(c) COMPENSATION.—The Director may pay a des23 ignated employee salary, allowances, and other benefits in 

24 an amount and in a manner consistent with the nonofficial 

25 cover of that employee, without regard to any limitation 
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1 that is otherwise applicable to a Federal employee. A des2 ignated employee may accept, utilize, and, to the extent 

3 authorized by regulations prescribed under subsection (i), 

4 retain any salary, allowances, and other benefits provided 

5 under this section. 

6 ‘‘(d) RETIREMENT BENEFITS.— 

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

8 and administer a nonofficial cover employee retire9 ment system under which a designated employee 

10 (and the spouse, former spouses, and survivors of 

11 such designated employee) shall receive treatment in 

12 the same manner and to the same extent as the 

13 Federal retirement system that would otherwise 

14 apply to such employee (and the spouse, former 

15 spouses, and survivors of that employee). A des16 ignated employee may not participate in the retire17 ment system established under this paragraph and 

18 another Federal retirement system at the same time. 

19 ‘‘(2) CONVERSION TO OTHER FEDERAL RETIRE20 MENT SYSTEM.— 

21 ‘‘(A) IN GENERAL.—A designated em22 ployee participating in the retirement system 

23 established under paragraph (1) may convert to 

24 coverage under the Federal retirement system 

25 which would otherwise apply to that employee 
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1 at any appropriate time determined by the Di2 rector (including at the time of separation of 

3 service by reason of retirement), if the Director 

4 determines that the employee’s participation in 

5 the retirement system established under this 

6 subsection is no longer necessary to protect 

7 from unauthorized disclosure— 

8 ‘‘(i) intelligence operations; 

9 ‘‘(ii) the identities of undercover intel10 ligence officers; 

11 ‘‘(iii) intelligence sources and meth12 ods; or 

13 ‘‘(iv) intelligence cover mechanisms. 

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

15 conversion under this paragraph— 

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

17 retirement system established under this 

18 subsection shall be deemed periods of cred19 itable service under the applicable Federal 

20 retirement system; 

21 ‘‘(ii) the Director shall transmit an 

22 amount for deposit in any applicable fund 

23 of that Federal retirement system that— 
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1 ‘‘(I) is necessary to cover all em2 ployee and agency contributions in3 cluding— 

4 ‘‘(aa) interest as determined 

5 by the head of the agency admin6 istering the Federal retirement 

7 system into which the employee 

8 is converting; or 

9 ‘‘(bb) in the case of an em10 ployee converting into the Fed11 eral Employee’s Retirement Sys12 tem, interest as determined 

13 under section 8334(e) of title 5, 

14 United States Code; and 

15 ‘‘(II) ensures that such conver16 sion does not result in any unfunded 

17 liability to that fund; and 

18 ‘‘(iii) in the case of a designated em19 ployee who participated in a retirement 

20 system established under paragraph (1) 

21 similar to subchapter III of chapter 84 of 

22 title 5, United States Code, and is con23 verting to coverage under subchapter III of 

24 that chapter, the Director shall transmit 

25 all amounts of that designated employee in 
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1 that similar retirement system (or similar 

2 part of that retirement system) to the 

3 Thrift Savings Fund. 

4 ‘‘(C) TRANSMITTED AMOUNTS.— 

5 ‘‘(i) IN GENERAL.—Amounts de6 scribed under subparagraph (B)(ii) shall 

7 be paid from the fund or appropriation 

8 used to pay the designated employee. 

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

10 amounts contributed by the designated em11 ployee to a retirement system established 

12 under paragraph (1) to offset amounts 

13 paid under clause (i). 

14 ‘‘(D) RECORDS.—The Director shall trans15 mit all necessary records relating to a des16 ignated employee who converts to a Federal re17 tirement system under this paragraph (includ18 ing records relating to periods of service which 

19 are deemed to be periods of creditable service 

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

21 agency administering that Federal retirement 

22 system. 

23 ‘‘(e) HEALTH INSURANCE BENEFITS.— 

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

25 and administer a nonofficial cover employee health 
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1 insurance program under which a designated em2 ployee (and the family of such designated employee) 

3 shall receive treatment in the same manner and to 

4 the same extent as provided under chapter 89 of 

5 title 5, United States Code. A designated employee 

6 may not participate in the health insurance program 

7 established under this paragraph and the program 

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

9 the same time. 

10 ‘‘(2) CONVERSION TO FEDERAL EMPLOYEES

11 HEALTH BENEFITS PROGRAM.— 

12 ‘‘(A) IN GENERAL.—A designated em13 ployee participating in the health insurance pro14 gram established under paragraph (1) may con15 vert to coverage under the program under chap16 ter 89 of title 5, United States Code, at any ap17 propriate time determined by the Director (in18 cluding at the time of separation of service by 

19 reason of retirement), if the Director deter20 mines that the employee’s participation in the 

21 health insurance program 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) the employee (and family, if ap9 plicable) shall be entitled to immediate en10 rollment and coverage under chapter 89 of 

11 title 5, United States Code; 

12 ‘‘(ii) any requirement of prior enroll13 ment in a health benefits plan under chap14 ter 89 of that title for continuation of cov15 erage purposes shall not apply; 

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

17 have had coverage under chapter 89 of 

18 that title from the first opportunity to en19 roll for purposes of continuing coverage as 

20 an annuitant; and 

21 ‘‘(iv) the Director shall transmit an 

22 amount for deposit in the Employees 

23 Health Benefits Fund that is necessary to 

24 cover any costs of such conversion. 
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1 ‘‘(C) TRANSMITTED AMOUNTS.—Any 

2 amount described under subparagraph (B)(iv) 

3 shall be paid from the fund or appropriation 

4 used to pay the designated employee. 

5 ‘‘(f) LIFE INSURANCE BENEFITS.— 

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

7 and administer a nonofficial cover employee life in8 surance program under which a designated employee 

9 (and the family of such designated employee) shall 

10 receive treatment in the same manner and to the 

11 same extent as provided under chapter 87 of title 5, 

12 United States Code. A designated employee may not 

13 participate in the life insurance program established 

14 under this paragraph and the program under chapter 

15 87 of title 5, United States Code, at the same time. 

16 ‘‘(2) CONVERSION TO FEDERAL EMPLOYEES

17 GROUP LIFE INSURANCE PROGRAM.— 

18 ‘‘(A) IN GENERAL.—A designated em19 ployee participating in the life insurance pro20 gram established under paragraph (1) may con21 vert to coverage under the program under chap22 ter 87 of title 5, United States Code, at any ap23 propriate time determined by the Director (in24 cluding at the time of separation of service by 

25 reason of retirement), if the Director determines 
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1 that the employee’s participation in the life in2 surance program established under this sub3 section is no longer necessary to protect from 

4 unauthorized disclosure— 

5 ‘‘(i) intelligence operations; 

6 ‘‘(ii) the identities of undercover intel7 ligence officers; 

8 ‘‘(iii) intelligence sources and meth9 ods; or 

10 ‘‘(iv) intelligence cover mechanisms. 

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

12 conversion under this paragraph— 

13 ‘‘(i) the employee (and family, if ap14 plicable) shall be entitled to immediate cov15 erage under chapter 87 of title 5, United 

16 States Code; 

17 ‘‘(ii) any requirement of prior enroll18 ment in a life insurance program under 

19 chapter 87 of that title for continuation of 

20 coverage purposes shall not apply; 

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

22 have had coverage under chapter 87 of 

23 that title for the full period of service dur24 ing which the employee would have been 
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1 entitled to be insured for purposes of con2 tinuing coverage as an annuitant; and 

3 ‘‘(iv) the Director shall transmit an 

4 amount for deposit in the Employees Life 

5 Insurance Fund that is necessary to cover 

6 any costs of such conversion. 

7 ‘‘(C) TRANSMITTED AMOUNTS.—Any 

8 amount described under subparagraph (B)(iii) 

9 shall be paid from the fund or appropriation 

10 used to pay the designated employee. 

11 ‘‘(g) EXEMPTION FROM CERTAIN REQUIREMENTS.— 

12 The Director may exempt a designated employee from 

13 mandatory compliance with any Federal regulation, rule, 

14 standardized administrative policy, process, or procedure 

15 that the Director determines— 

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

17 cover of that employee; and 

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

19 a Federal employee. 

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

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

22 provision of law, a designated employee— 

23 ‘‘(A) shall file a Federal or State tax re24 turn as if that employee is not a Federal em25 ployee and may claim and receive the benefit of 
28 

•S 2386 RS 

1 any exclusion, deduction, tax credit, or other 

2 tax treatment that would otherwise apply if 

3 that employee was not a Federal employee, if 

4 the Director determines that taking any action 

5 under this paragraph is necessary to— 

6 ‘‘(i) protect from unauthorized disclo7 sure— 

8 ‘‘(I) intelligence operations; 

9 ‘‘(II) the identities of undercover 

10 intelligence officers; 

11 ‘‘(III) intelligence source and 

12 methods; or 

13 ‘‘(IV) intelligence cover mecha14 nisms; and 

15 ‘‘(ii) meet the special requirements of 

16 work related to collection of foreign intel17 ligence or other authorized activities of the 

18 Agency; and 

19 ‘‘(B) shall receive social security benefits 

20 based on the social security contributions made. 

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

22 procedures to carry out this subsection. The proce23 dures shall be subject to periodic review by the In24 ternal Revenue Service. 
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1 ‘‘(i) REGULATIONS.—The Director shall prescribe 

2 regulations to carry out this section. The regulations shall 

3 ensure that the combination of salary, allowances, and 

4 benefits that an employee designated under this section 

5 may retain does not significantly exceed, except to the ex6 tent determined by the Director to be necessary to exercise 

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

8 allowances, and benefits otherwise received by Federal em9 ployees not designated under this section. 

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

11 authorized by this section made by the Director or the 

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

13 not be subject to review by any court. 

14 ‘‘(k) SUBSEQUENTLY ENACTED LAWS.—No law en15 acted after the effective date of this section shall affect 

16 the authorities and provisions of this section unless such 

17 law specifically refers to this section.’’. 
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1 TITLE V—DEPARTMENT OF DE2 FENSE INTELLIGENCE MAT3 TERS 

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

5 IN COMMERCIAL ACTIVITIES AS SECURITY 

6 FOR INTELLIGENCE COLLECTION ACTIVI7 TIES. 

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

9 amended by striking the second sentence. 

10 SEC. 502 501. DEFENSE INTELLIGENCE EXEMPTION FROM 

11 CERTAIN PRIVACY ACT REQUIREMENTS. 

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

13 shall not apply with respect to the collection of information 

14 by intelligence personnel of the Department of Defense 

15 who are authorized by the Secretary of Defense to collect 

16 intelligence from human sources. 

17 SEC. 503 502. USE OF FUNDS FOR COUNTERDRUG AND 

18 COUNTERTERRORISM ACTIVITIES FOR CO19 LOMBIA. 

20 (a) AUTHORITY.—Funds designated for intelligence 

21 or intelligence-related purposes for assistance to the Gov22 ernment of Colombia for counterdrug activities for fiscal 

23 year 2005, and any unobligated funds available to any ele24 ment of the intelligence community for such activities for 

25 a prior fiscal year, shall be available— 
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1 (1) to support a unified campaign by the Gov2 ernment of Colombia against narcotics trafficking 

3 and against activities by organizations designated as 

4 terrorist organizations (such as the Revolutionary 

5 Armed Forces of Colombia (FARC), the National 

6 Liberation Army (ELN), and the United Self-De7 fense Forces of Colombia (AUC)); and 

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

9 welfare in emergency circumstances, including un10 dertaking rescue operations. 

11 (b) APPLICABILITY OF CERTAIN LAWS AND LIMITA12 TIONS.—The use of funds pursuant to the authority in 

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

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

15 Operations, Export Financing, and Related Pro16 grams Appropriations Act, 2002 (Public Law 107– 

17 115; 115 Stat. 2160, 2165, and 2166). 

18 (2) Section 8077 of the Department of Defense 

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

20 Stat. 1090). 

21 (3) The numerical limitations on the number of 

22 United States military personnel and United States 

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

24 of the Emergency Supplemental Act, 2000 (division 

25 B of Public Law 106–246; 114 Stat. 575), as 
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1 amended by the Foreign Operations, Export Financ2 ing, and Related Programs Appropriations Act, 

3 2002 (115 Stat. 2131). 

4 (c) LIMITATION ON PARTICIPATION OF UNITED

5 STATES PERSONNEL.—No United States Armed Forces 

6 personnel or United States civilian contractor employed by 

7 the United States Armed Forces will participate in any 

8 combat operation in connection with assistance made 

9 available under this section, except for the purpose of act10 ing in self defense or during the course of search and res11 cue operations for United States citizens. 

Calendar No. 619 

108TH CONGRESS 

2D SESSION S. 2386 

[Report No. 108–258] [Report No. 108–300] 

A BILL 

To authorize appropriations for fiscal year 2005 for 

ability System, and for other purposes. tral Intelligence Agency Retirement and DisCommunity Management Account, and the Centhe United States Government, the Intelligence intelligence and intelligence-related activities of 

JULY 8, 2004 

Reported with amendments