490 
temporary basis pursuant to this section shall not count 
against any personnel ceiling applicable to the Bureau. 
‘‘(e) EXPENSES.—The Director may provide mem-
bers of the FBI Reserve Service transportation and per 
diem in lieu of subsistence, in accordance with applicable 
provisions of this title, for the purpose of participating in 
any training that relates to service as a member of the 
FBI Reserve Service. 
‘‘(f) LIMITATION ON MEMBERSHIP.—Membership of 
the FBI Reserve Service is not to exceed 500 members 
at any given time.’’. 
(b) CLERICAL AMENDMENT.—The analysis for chap-
ter 35 of title 5, United States Code, is amended by add-
ing at the end the following: 
‘‘SUBCHAPTER VII—RETENTION OF RETIRED SPECIALIZED EMPLOYEES AT 
THE FEDERAL BUREAU OF INVESTIGATION 
‘‘3598. Federal Bureau of Investigation Reserve Service.’’. 
SEC. 5054. CRITICAL POSITIONS IN THE FEDERAL BUREAU 
OF INVESTIGATION INTELLIGENCE DIREC-
TORATE. 
Section 5377(a)(2) of title 5, United States Code, is 
amended— 
(1) by striking ‘‘and’’ at the end of subpara-
graph (E); 
(2) by striking the period at the end of sub-
paragraph (F) and inserting ‘‘; and’’; and
491 
(3) by inserting after subparagraph (F) the fol-
lowing: 
‘‘(G) a position at the Federal Bureau of 
Investigation, the primary duties and respon-
sibilities of which relate to intelligence functions 
(as determined by the Director of the Federal 
Bureau of Investigation).’’. 
CHAPTER 3—MANAGEMENT AUTHORITY 
SEC. 5061. MANAGEMENT AUTHORITY. 
(a) 
MANAGEMENT
AUTHORITY.—Section 
7103(b)(1)(A) of title 5, United States Code, is amended 
by adding ‘‘homeland security,’’ after ‘‘investigative,’’. 
(b) EXCLUSIONARY AUTHORITY.—Section 842 of the 
Homeland Security Act (Public Law 107–296; 6 U.S.C. 
412) is repealed. 
Subtitle F—Security Clearance 
Modernization 
SEC. 5071. DEFINITIONS. 
In this subtitle: 
(1) The term ‘‘Director’’ means the National 
Intelligence Director. 
(2) The term ‘‘agency’’ means— 
(A) an executive agency, as defined in sec-
tion 105 of title 5, United States Code;
492 
(B) a military department, as defined in 
section 102 of title 5, United States Code; and 
(C) elements of the intelligence community, 
as defined in section 3(4) of the National Secu-
rity Act of 1947 (50 U.S.C. 401a(4)). 
(3) The term ‘‘authorized investigative agency’’ 
means an agency authorized by law, regulation or di-
rection of the Director to conduct a counterintel-
ligence investigation or investigation of persons who 
are proposed for access to classified information to 
ascertain whether such persons satisfy the criteria 
for obtaining and retaining access to such informa-
tion. 
(4) The term ‘‘authorized adjudicative agency’’ 
means an agency authorized by law, regulation or di-
rection of the Director to determine eligibility for ac-
cess to classified information in accordance with Ex-
ecutive Order 12968. 
(5) The term ‘‘highly sensitive program’’ 
means— 
(A) a government program designated as a 
Special Access Program (as defined by section 
4.1(h) of Executive Order 12958); and 
(B) a government program that applies re-
strictions required for—
493 
(i) Restricted Data (as defined by sec-
tion 11 y. of the Atomic Energy Act of 
1954 (42 U.S.C. 2014(y)); or 
(ii) other information commonly re-
ferred to as ‘‘Sensitive Compartmented In-
formation’’. 
(6) The term ‘‘current investigation file’’ 
means, with respect to a security clearance, a file on 
an investigation or adjudication that has been con-
ducted during— 
(A) the 5-year period beginning on the 
date the security clearance was granted, in the 
case of a Top Secret Clearance, or the date ac-
cess was granted to a highly sensitive program; 
(B) the 10-year period beginning on the 
date the security clearance was granted in the 
case of a Secret Clearance; and 
(C) the 15-year period beginning on the 
date the security clearance was granted in the 
case of a Confidential Clearance. 
(7) The term ‘‘personnel security investigation’’ 
means any investigation required for the purpose of 
determining the eligibility of any military, civilian, or 
government contractor personnel to access classified 
information.
494 
(8) 
The 
term 
‘‘periodic 
reinvestigations’’ 
means— 
(A) investigations conducted for the pur-
pose of updating a previously completed back-
ground investigation— 
(i) every five years in the case of a 
Top Secret Clearance or access to a highly 
sensitive program; 
(ii) every 10 years in the case of a Se-
cret Clearance; and 
(iii) every 15 years in the case of a 
Confidential Clearance; 
(B) on-going investigations to identify per-
sonnel security risks as they develop, pursuant 
to section 105(c). 
(9) The term ‘‘appropriate committees of Con-
gress’’ means— 
(A) the Permanent Select Committee on 
Intelligence and the Committees on Armed 
Services, Judiciary, and Government Reform of 
the House of Representatives; and 
(B) the Select Committee on Intelligence 
and the Committees on Armed Services, Judici-
ary, and Governmental Affairs of the Senate.
495 
SEC. 5072. SECURITY CLEARANCE AND INVESTIGATIVE 
PROGRAMS OVERSIGHT AND ADMINISTRA-
TION. 
The Deputy National Intelligence Director for Com-
munity Management and Resources shall have responsi-
bility for the following: 
(1) Directing day-to-day oversight of investiga-
tions and adjudications for personnel security clear-
ances to highly sensitive programs throughout the 
Federal Government. 
(2) Developing and implementing uniform and 
consistent policies and procedures to ensure the ef-
fective, efficient, and timely completion of security 
clearances and determinations for access to highly 
sensitive programs, including the standardization of 
security questionnaires, financial disclosure require-
ments for security clearance applicants, and poly-
graph policies and procedures. 
(3) Serving as the final authority to designate 
an authorized investigative agency or authorized ad-
judicative agency pursuant to section 5074(d). 
(4) Ensuring reciprocal recognition of access to 
classified information among agencies, including act-
ing as the final authority to arbitrate and resolve 
disputes involving the reciprocity of security clear-
ances and access to highly sensitive programs.
496 
(5) Ensuring, to the maximum extent prac-
ticable, that sufficient resources are available in each 
agency to achieve clearance and investigative pro-
gram goals. 
(6) Reviewing and coordinating the development 
of tools and techniques for enhancing the conduct of 
investigations and granting of clearances. 
SEC. 5073. RECIPROCITY OF SECURITY CLEARANCE AND 
ACCESS DETERMINATIONS. 
(a) REQUIREMENT FOR RECIPROCITY.—(1) All secu-
rity clearance background investigations and determina-
tions completed by an authorized investigative agency or 
authorized adjudicative agency shall be accepted by all 
agencies. 
(2) All security clearance background investigations 
initiated by an authorized investigative agency shall be 
transferable to any other authorized investigative agency. 
(b) PROHIBITION
ON ESTABLISHING ADDITIONAL 
REQUIREMENTS.—(1) An authorized investigative agency 
or authorized adjudicative agency may not establish addi-
tional investigative or adjudicative requirements (other 
than requirements for the conduct of a polygraph exam-
ination) that exceed requirements specified in Executive 
Orders establishing security requirements for access to 
classified information.
497 
(2) Notwithstanding the paragraph (1), the Director 
may establish additional requirements as needed for na-
tional security purposes. 
(c) PROHIBITION
ON
DUPLICATIVE
INVESTIGA-
TIONS.—An authorized investigative agency or authorized 
adjudicative agency may not conduct an investigation for 
purposes of determining whether to grant a security clear-
ance to an individual where a current investigation or 
clearance of equal level already exists or has been granted 
by another authorized adjudicative agency. 
SEC. 5074. ESTABLISHMENT OF NATIONAL DATABASE. 
(a) ESTABLISHMENT.—Not later than 12 months 
after the date of the enactment of this Act, the Director 
of the Office of Personnel Management, in cooperation 
with the Director, shall establish, and begin operating and 
maintaining, an integrated, secure, national database into 
which appropriate data relevant to the granting, denial, 
or revocation of a security clearance or access pertaining 
to military, civilian, or government contractor personnel 
shall be entered from all authorized investigative and adju-
dicative agencies. 
(b) INTEGRATION.—The national database estab-
lished under subsection (a) shall function to integrate in-
formation from existing Federal clearance tracking sys-
498 
tems from other authorized investigative and adjudicative 
agencies into a single consolidated database. 
(c) REQUIREMENT TO CHECK DATABASE.—Each au-
thorized investigative or adjudicative agency shall check 
the national database established under subsection (a) to 
determine whether an individual the agency has identified 
as requiring a security clearance has already been granted 
or denied a security clearance, or has had a security clear-
ance revoked, by any other authorized investigative or ad-
judicative agency. 
(d) CERTIFICATION OF AUTHORIZED INVESTIGATIVE 
AGENCIES OR AUTHORIZED ADJUDICATIVE AGENCIES.— 
The Director shall evaluate the extent to which an agency 
is submitting information to, and requesting information 
from, the national database established under subsection 
(a) as part of a determination of whether to certify the 
agency as an authorized investigative agency or authorized 
adjudicative agency. 
(e) 
EXCLUSION
OF
CERTAIN
INTELLIGENCE 
OPERATIVES.—The Director may authorize an agency to 
withhold information about certain individuals from the 
database established under subsection (a) if the Director 
determines it is necessary for national security purposes.
499 
(f) COMPLIANCE.—The Director shall establish a re-
view procedure by which agencies can seek review of ac-
tions required under section 5073. 
(g) AUTHORIZATION OF APPROPRIATIONS.—There is 
authorized to be appropriated such sums as may be nec-
essary for fiscal year 2005 and each subsequent fiscal year 
for the implementation, maintenance and operation of the 
database established in subsection (a). 
SEC. 5075. USE OF AVAILABLE TECHNOLOGY IN CLEAR-
ANCE INVESTIGATIONS. 
(a) INVESTIGATIONS.—Not later than 12 months 
after the date of the enactment of this Act, each author-
ized investigative agency that conducts personnel security 
clearance investigations shall use, to the maximum extent 
practicable, available information technology and data-
bases to expedite investigative processes and to verify 
standard information submitted as part of an application 
for a security clearance. 
(b) INTERIM CLEARANCE.—If the application of an 
applicant for an interim clearance has been processed 
using the technology under subsection (a), the interim 
clearances for the applicant at the secret, top secret, and 
special access program levels may be granted before the 
completion of the appropriate investigation. Any request 
to process an interim clearance shall be given priority, and
500 
the authority granting the interim clearance shall ensure 
that final adjudication on the application is made within 
90 days after the initial clearance is granted. 
(c) ON-GOING MONITORING OF INDIVIDUALS WITH 
SECURITY CLEARANCES.—(1) Authorized investigative 
agencies and authorized adjudicative agencies shall estab-
lish procedures for the regular, ongoing verification of per-
sonnel with security clearances in effect for continued ac-
cess to classified information. Such procedures shall in-
clude the use of available technology to detect, on a regu-
larly recurring basis, any issues of concern that may arise 
involving such personnel and such access. 
(2) Such regularly recurring verification may be used 
as a basis for terminating a security clearance or access 
and shall be used in periodic reinvestigations to address 
emerging threats and adverse events associated with indi-
viduals with security clearances in effect to the maximum 
extent practicable. 
(3) If the Director certifies that the national security 
of the United States is not harmed by the discontinuation 
of periodic reinvestigations, the regularly recurring 
verification under this section may replace periodic re-
investigations.
501 
SEC. 5076. REDUCTION IN LENGTH OF PERSONNEL SECU-
RITY CLEARANCE PROCESS. 
(a) 60-Day PERIOD
FOR
DETERMINATION
ON 
CLEARANCES.—Each authorized adjudicative agency shall 
make a determination on an application for a personnel 
security clearance within 60 days after the date of receipt 
of the completed application for a security clearance by 
an authorized investigative agency. The 60-day period 
shall include— 
(1) a period of not longer than 40 days to com-
plete the investigative phase of the clearance review; 
and 
(2) a period of not longer than 20 days to com-
plete the adjudicative phase of the clearance review. 
(b) EFFECTIVE DATE AND PHASE-IN.— 
(1) EFFECTIVE
DATE.—Subsection (a) shall 
take effect 5 years after the date of the enactment 
of this Act. 
(2) PHASE-IN.—During the period beginning on 
a date not later than 2 years after the date after the 
enactment of this Act and ending on the date on 
which subsection (a) takes effect as specified in 
paragraph (1), each authorized adjudicative agency 
shall make a determination on an application for a 
personnel security clearance pursuant to this title 
within 120 days after the date of receipt of the ap-
502 
plication for a security clearance by an authorized 
investigative agency. The 120-day period shall in-
clude— 
(A) a period of not longer than 90 days to 
complete the investigative phase of the clear-
ance review; and 
(B) a period of not longer than 30 days to 
complete the adjudicative phase of the clearance 
review. 
SEC. 5077. SECURITY CLEARANCES FOR PRESIDENTIAL 
TRANSITION. 
(a) CANDIDATES FOR NATIONAL SECURITY POSI-
TIONS.—(1) The President-elect shall submit to the Direc-
tor the names of candidates for high-level national security 
positions, for positions at the level of under secretary of 
executive departments and above, as soon as possible after 
the date of the general elections held to determine the elec-
tors of President and Vice President under section 1 or 
2 of title 3, United States Code. 
(2) The Director shall be responsible for the expedi-
tious completion of the background investigations nec-
essary to provide appropriate security clearances to the in-
dividuals who are candidates described under paragraph 
(1) before the date of the inauguration of the President-
503 
elect as President and the inauguration of the Vice-Presi-
dent-elect as Vice President. 
(b) SECURITY CLEARANCES FOR TRANSITION TEAM 
MEMBERS.—(1) In this section, the term ‘‘major party’’ 
has the meaning provided under section 9002(6) of the 
Internal Revenue Code of 1986. 
(2) Each major party candidate for President, except 
a candidate who is the incumbent President, shall submit, 
before the date of the general presidential election, re-
quests for security clearances for prospective transition 
team members who will have a need for access to classified 
information to carry out their responsibilities as members 
of the President-elect’s transition team. 
(3) Necessary background investigations and eligi-
bility determinations to permit appropriate prospective 
transition team members to have access to classified infor-
mation shall be completed, to the fullest extent practicable, 
by the day after the date of the general presidential elec-
tion. 
SEC. 5078. REPORTS. 
Not later than February 15, 2006, and annually 
thereafter through 2016, the Director shall submit to the 
appropriate committees of Congress a report on the 
progress made during the preceding year toward meeting
504 
the requirements specified in this Act. The report shall 
include— 
(1) the periods of time required by the author-
ized investigative agencies and authorized adjudica-
tive agencies during the year covered by the report 
for conducting investigations, adjudicating cases, 
and granting clearances, from date of submission to 
ultimate disposition and notification to the subject 
and the subject’s employer; 
(2) a discussion of any impediments to the 
smooth and timely functioning of the implementation 
of this title; and 
(3) such other information or recommendations 
as the Deputy Director deems appropriate. 
Subtitle G—Emergency Financial 
Preparedness 
SEC. 5081. DELEGATION AUTHORITY OF THE SECRETARY 
OF THE TREASURY. 
Subsection (d) of section 306 of title 31, United 
States Code, is amended by inserting ‘‘or employee’’ after 
‘‘another officer’’.
505 
SEC. 5082. EXTENSION OF EMERGENCY ORDER AUTHORITY 
OF THE SECURITIES AND EXCHANGE COM-
MISSION. 
(a) EXTENSION OF AUTHORITY.—Paragraph (2) of 
section 12(k) of the Securities Exchange Act of 1934 (15 
U.S.C. 78l(k)(2)) is amended to read as follows: 
‘‘(2) EMERGENCY ORDERS.—(A) The Commis-
sion, in an emergency, may by order summarily take 
such action to alter, supplement, suspend, or impose 
requirements or restrictions with respect to any mat-
ter or action subject to regulation by the Commis-
sion or a self-regulatory organization under the secu-
rities laws, as the Commission determines is nec-
essary in the public interest and for the protection 
of investors— 
‘‘(i) to maintain or restore fair and orderly 
securities markets (other than markets in ex-
empted securities); 
‘‘(ii) to ensure prompt, accurate, and safe 
clearance and settlement of transactions in se-
curities (other than exempted securities); or 
‘‘(iii) to reduce, eliminate, or prevent the 
substantial disruption by the emergency of (I) 
securities markets (other than markets in ex-
empted securities), investment companies, or 
any other significant portion or segment of such