In the Senate of the United States,
October 11, 2004.
Resolved, That the bill from the House of Representa-
tives (H.R. 4548) entitled ‘‘An Act to authorize appropria-
tions for fiscal year 2005 for intelligence and intelligence-re-
lated activities of the United States Government, the Commu-
nity Management Account, and the Central Intelligence
Agency Retirement and Disability System, and for other pur-
poses.’’, do pass with the following
AMENDMENT:
Strike out all after the enacting clause and insert:
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TITLE V—DEPARTMENT OF DEFENSE INTELLIGENCE MATTERS
Sec. 501. Use of funds for counterdrug and counterterrorism activities for Colom-
bia.
TITLE I—INTELLIGENCE
ACTIVITIES
SEC. 101. AUTHORIZATION OF APPROPRIATIONS.
Funds are hereby authorized to be appropriated for fis-
cal year 2005 for the conduct of the intelligence and intel-
ligence-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 Depart-
ment 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 Agen-
cy.
(13) The Coast Guard.
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(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 re-
port on the bill ll of the One Hundred Eighth Congress.
(b) AVAILABILITY OF CLASSIFIED SCHEDULE OF AU-
THORIZATIONS.—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 ap-
proval 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
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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 per-
cent of the number of civilian personnel authorized under
such section for such element.
(b) NOTICE TO INTELLIGENCE COMMITTEES.—The Di-
rector of Central Intelligence shall promptly notify the Se-
lect Committee on Intelligence of the Senate and the Perma-
nent Select Committee on Intelligence of the House of Rep-
resentatives whenever the Director exercises the authority
granted by this section.
SEC. 104. INTELLIGENCE COMMUNITY MANAGEMENT AC-
COUNT.
(a) AUTHORIZATION OF APPROPRIATIONS.—There is
authorized to be appropriated for the Intelligence Commu-
nity Management Account of the Director of Central Intel-
ligence 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 Sep-
tember 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
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in such elements may be permanent employees of the Intel-
ligence Community Management Account or personnel de-
tailed 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 ap-
propriated for the Intelligence Community Manage-
ment Account for fiscal year 2005 such additional
amounts as are specified in the classified Schedule of
Authorizations referred to in section 102(a). Such ad-
ditional amounts for research and development shall
remain available until September 30, 2006.
(2) AUTHORIZATION OF PERSONNEL.—In addi-
tion to the personnel authorized by subsection (b) for
elements of the Intelligence Community Management
Account as of September 30, 2005, there are also au-
thorized such additional personnel for such elements
as of that date as are specified in the classified Sched-
ule 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 de-
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tailed to the staff of the Intelligence Community Manage-
ment Account from another element of the United States
Government shall be detailed on a reimbursable basis, ex-
cept that any such officer, employee, or member may be de-
tailed on a nonreimbursable basis for a period of less than
one year for the performance of temporary functions as re-
quired 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 Cen-
ter. 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 Cen-
tral 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 Na-
tional Drug Intelligence Center may not be used in
contravention of the provisions of section 103(d)(1) of
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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 re-
port to the congressional intelligence committees that is in-
cluded in the joint explanatory statement to accompany the
conference report on the bill ll 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 DE-
FINED.—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 Intel-
ligence of the House of Representatives.
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SEC. 106. SPECIFIC AUTHORIZATION OF FUNDS FOR INTEL-
LIGENCE OR INTELLIGENCE-RELATED ACTIVI-
TIES FOR WHICH FISCAL YEAR 2004 APPRO-
PRIATIONS 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 ac-
company 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 sec-
tion 504(a)(3) of the National Security Act of 1947 (50
U.S.C. 414(a)(3)). Such funds shall remain available until
September 30, 2005.
SEC. 107. PREPARATION AND SUBMITTAL OF REPORTS, RE-
VIEWS, STUDIES, AND PLANS RELATING TO
INTELLIGENCE ACTIVITIES OF DEPARTMENT
OF DEFENSE AND DEPARTMENT OF ENERGY.
(a) CONSULTATION IN PREPARATION.—(1) The Direc-
tor of Central Intelligence shall ensure that any report, re-
view, study, or plan required to be prepared or conducted
by a provision of this Act, including a provision of the clas-
sified Schedule of Authorizations referred to in section
102(a) or the classified annex to this Act, that involves the
intelligence or intelligence-related activities of the Depart-
ment of Defense or the Department of Energy is prepared
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or conducted in consultation with the Secretary of Defense
or the Secretary of Energy, as appropriate.
(2) The Secretary of Defense or the Secretary of En-
ergy may carry out any consultation required by this sub-
section through an official of the Department of Defense or
the Department of Energy, as the case may be, designated
by such Secretary for that purpose.
(b) SUBMITTAL.—Any report, review, study, or plan
referred to in subsection (a) shall be submitted, in addition
to any other committee of Congress specified for submittal
in the provision concerned, to the following committees of
Congress:
(1) The Committee on Armed Services, the Sub-
committee on Defense of the Committee on Appropria-
tions, and the Select Committee on Intelligence of the
Senate.
(2) The Committee on Armed Services, and the
Subcommittee on Defense of the Committee on Appro-
priations, and the Permanent Select Committee on
Intelligence of the House of Representatives.
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TITLE 
II—CENTRAL 
INTEL-
LIGENCE 
AGENCY 
RETIRE-
MENT AND DISABILITY SYS-
TEM
SEC. 201. AUTHORIZATION OF APPROPRIATIONS.
There is authorized to be appropriated for the Central
Intelligence Agency Retirement and Disability Fund for fis-
cal 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.
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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 sub-
paragraph (B).
SEC. 304. TREATMENT AS AGENT OF A FOREIGN POWER
UNDER THE FOREIGN INTELLIGENCE SUR-
VEILLANCE ACT OF 1978 OF NON-UNITED
STATES PERSONS WHO ENGAGE IN INTER-
NATIONAL 
TERRORISM 
WITHOUT 
AFFILI-
ATION 
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 subpara-
graph:
‘‘(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
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Stat. 295), including the exception provided in subsection
(b) of such section 224.
SEC. 305. ADDITIONAL ANNUAL REPORTING REQUIRE-
MENTS 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 com-
mittees 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, in-
cluding a break-down of those targeted for—
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‘‘(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 pur-
suant 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 Gen-
eral 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 ap-
plications 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
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include significant construction or interpretation
of the provisions of this Act, not including the
facts of any particular matter, which may be re-
dacted.
‘‘(b) The first report under this section shall be sub-
mitted not later than six months after the date of the enact-
ment of this Intelligence Authorization Act for Fiscal Year
2005. Subsequent reports under this section shall be sub-
mitted 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 Intel-
ligence 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.’’.
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SEC. 306. INTELLIGENCE ASSESSMENT ON SANCTUARIES
FOR TERRORISTS.
(a) ASSESSMENT REQUIRED.—Not later than the date
specified in subsection (b), the Director of Central Intel-
ligence shall submit to Congress an intelligence assessment
that identifies and describes each country or region that is
a sanctuary for terrorists or terrorist organizations. The as-
sessment shall be based on current all-source intelligence.
(b) SUBMITTAL DATE.—The date of the submittal of
the intelligence assessment required by subsection (a) shall
be the earlier of—
(1) the date that is six months after the date of
the enactment of this Act; or
(2) June 1, 2005.
SEC. 307. ADDITIONAL EXTENSION OF DEADLINE FOR
FINAL REPORT OF THE NATIONAL COMMIS-
SION FOR THE REVIEW OF THE RESEARCH
AND 
DEVELOPMENT 
PROGRAMS 
OF 
THE
UNITED STATES INTELLIGENCE COMMUNITY.
Section 1007(a) of the Intelligence Authorization Act
for Fiscal Year 2003 (Public Law 107–306; 50 U.S.C. 401
note) is amended by striking ‘‘September 1, 2004’’ and in-
serting ‘‘September 1, 2005’’.
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SEC. 308. FOUR-YEAR EXTENSION OF PUBLIC INTEREST DE-
CLASSIFICATION BOARD.
Section 710(b) of the Public Interest Declassification
Act of 2000 (title VII of Public Law 106–567; 114 Stat.
2856; 50 U.S.C. 435 note) is amended by striking ‘‘4 years’’
and inserting ‘‘8 years’’.
TITLE IV—CENTRAL
INTELLIGENCE AGENCY
SEC. 401. PERMANENT EXTENSION OF CENTRAL INTEL-
LIGENCE 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 REQUIRE-
MENT.—(1) Section 2 of such Act is further amended by
striking subsection (i).
(2) Section 4(a)(2)(B)(ii) of the Federal Workforce Re-
structuring 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)’’.
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SEC. 402. INTELLIGENCE OPERATIONS AND COVER EN-
HANCEMENT 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’ in-
cludes the Central Intelligence Agency Retirement and
Disability System, and the Federal Employees Retire-
ment System (including the Thrift Savings Plan).
‘‘(b) IN GENERAL.—
‘‘(1) AUTHORITY.—Notwithstanding any other
provision of law, the Director may exercise the au-
thorities under this section in order to—
‘‘(A) protect from unauthorized disclosure—
‘‘(i) intelligence operations;
‘‘(ii) the identities of undercover intel-
ligence officers;
‘‘(iii) intelligence source and methods;
or
‘‘(iv) intelligence cover mechanisms; or
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‘‘(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 Direc-
tor 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 des-
ignated 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 des-
ignated employee may accept, utilize, and, to the extent au-
thorized by regulations prescribed under subsection (i), re-
tain 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 retire-
ment system for designated employees (and the
spouse, former spouses, and survivors of such des-
ignated employees). A designated employee may not
participate in the retirement system established under
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this paragraph and another Federal retirement sys-
tem at the same time.
‘‘(2) CONVERSION TO OTHER FEDERAL RETIRE-
MENT SYSTEM.—
‘‘(A) IN GENERAL.—A designated employee
participating in the retirement system estab-
lished under paragraph (1) may convert to cov-
erage under the Federal retirement system which
would otherwise apply to that employee at any
appropriate time determined by the Director (in-
cluding at the time of separation of service by
reason of retirement), if the Director determines
that the employee’s participation in the retire-
ment system established under this subsection is
no longer necessary to protect from unauthorized
disclosure—
‘‘(i) intelligence operations;
‘‘(ii) the identities of undercover intel-
ligence officers;
‘‘(iii) intelligence sources and methods;
or
‘‘(iv) intelligence cover mechanisms.
‘‘(B) CONVERSION
TREATMENT.—Upon a
conversion under this paragraph—
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‘‘(i) all periods of service under the re-
tirement system established under this sub-
section shall be deemed periods of creditable
service under the applicable Federal retire-
ment 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 em-
ployee 
and 
agency 
contributions
including—
‘‘(aa) interest as determined
by the head of the agency admin-
istering the Federal retirement
system into which the employee is
converting; or
‘‘(bb) in the case of an em-
ployee converting into the Federal
Employee’s Retirement System,
interest as determined under sec-
tion 8334(e) of title 5, United
States Code; and
‘‘(II) ensures that such conversion
does not result in any unfunded liabil-
ity to that fund; and
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‘‘(iii) in the case of a designated em-
ployee who participated in an employee in-
vestment 
retirement 
system 
established
under paragraph (1) and is converted to
coverage under subchapter III of chapter 84
of title 5, United States Code, the Director
may transmit any or all amounts of that
designated employee in that employee in-
vestment retirement system (or similar part
of that retirement system) to the Thrift Sav-
ings 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 em-
ployee to a retirement system established
under paragraph (1) to offset amounts paid
under clause (i).
‘‘(D) RECORDS.—The Director shall trans-
mit all necessary records relating to a designated
employee who converts to a Federal retirement
system under this paragraph (including records
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relating to periods of service which are deemed
to be periods of creditable service under subpara-
graph (B)) to the head of the agency admin-
istering that Federal retirement system.
‘‘(e) HEALTH INSURANCE BENEFITS.—
‘‘(1) IN GENERAL.—The Director may establish
and administer a nonofficial cover employee health
insurance program for designated employees (and the
family of such designated employees). 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 re-
tirement), if the Director determines that the em-
ployee’s participation in the health insurance
program established under this subsection is no
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longer necessary to protect from unauthorized
disclosure—
‘‘(i) intelligence operations;
‘‘(ii) the identities of undercover intel-
ligence 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 ap-
plicable) shall be entitled to immediate en-
rollment and coverage under chapter 89 of
title 5, United States Code;
‘‘(ii) any requirement of prior enroll-
ment in a health benefits plan under chap-
ter 89 of that title for continuation of cov-
erage 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 an-
nuitant; and
‘‘(iv) the Director shall transmit an
amount for deposit in the Employees Health
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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 in-
surance program for designated employees (and the
family of such designated employees). 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 es-
tablished 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 re-
tirement), if the Director determines that the em-
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ployee’s participation in the life insurance pro-
gram established under this subsection is no
longer necessary to protect from unauthorized
disclosure—
‘‘(i) intelligence operations;
‘‘(ii) the identities of undercover intel-
ligence 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 ap-
plicable) shall be entitled to immediate cov-
erage under chapter 87 of title 5, United
States Code;
‘‘(ii) any requirement of prior enroll-
ment 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
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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)(iv)
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 man-
datory 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 ex-