You're right - most of this bill focuses more section 501. That's where most of the debate in Congress has been, as it specifically collects on US citizens. You have a good reason for concern on the section 702 parts, but I disagree on why. The part on section 702 doesn't authorize collection against US persons - it's strangely worded. "A query of the contents of communications acquired under this section with a selector known to be used by a United States person" - in other words, the collection must already be acquired in the documented pursuit of a valid foreign intelligence target under section 702 (b) [1]. The analyst can then search the collection for selectors known to be used by a US person. (EDIT: reworded for clarification) The bill goes on to say that this may only be done for the purpose of gathering foreign intelligence information and must be documented and reported to Congress, DoJ, FISC, etc.

The concern here is that it may be a loophole to allow reverse targeting - collecting foreigner's communications not because the foreigner is interesting, but rather because the Americans that foreigner is in contact with are interesting. Personally, I'd like to see more language in the bill to address this.

Your second loophole doesn't apply to the NSA (they're not a law enforcement agency), but is a concern for the FBI. It doesn't make much sense to me why it would be worded this way in her bill, since the potential loophole is addressed in Section 704 of the existing law:

"No element of the intelligence community may intentionally target, for the purpose of acquiring foreign intelligence information, a United States person reasonably believed to be located outside the United States under circumstances in which the targeted United States person has a reasonable expectation of privacy and a warrant would be required if the acquisition were conducted inside the United States for law enforcement purposes, unless a judge of the Foreign Intelligence Surveillance Court has entered an order with respect to such targeted United States person or the Attorney General has authorized an emergency acquisition pursuant to subsection (c) or (d), respectively, or any other provision of this Act."

I'd also like to address your targeting US citizens argument:

Although 702 has been used to target US citizens [2], the law doesn't reflect this usage -- yet.

That's a bold claim, and the evidence you provide doesn't seem to support that. I'm not saying that is hasn't necessarily happened, but the evidence isn't there. From the article you cite:

"While the FAA 702 minimization procedures approved on 3 October 2011 now allow for use of certain United States person names and identifiers as query terms when reviewing collected FAA 702 data," the glossary states, "analysts may NOT/NOT [not repeat not] implement any USP [US persons] queries until an effective oversight process has been developed by NSA and agreed to by DOJ/ODNI [Office of the Director of National Intelligence]."

...

The document – which is undated, though metadata suggests this version was last updated in June 2012 – does not say whether the oversight process it mentions has been established or whether any searches against US person names have taken place.

I'd like to see a document showing specific examples of instances where 702 was used to target Americans and what the NSA's reason for doing so was. This shows a blurb saying that certain minimization procedures have been proposed, but have not been approved, so analysts are still not allowed to query against US persons.

The article goes on to cite leaked minimization procedures [2]. Those procedures talk a lot about what to do if the NSA comes across US communications, procedures standardizing how to determine whether or not a selector belongs to a US person, what to do if an analyst finds out that they've inadvertently targeted a US person, what to do if a foreign target comes to the US, etc.

There's a whole section in 702 detailing how minimization procedures are to established and updated (see section entitled "Judicial review of certifications and procedures") - the Attorney General and FISC both need to sign off. The blurb seems to fit with the bill that Feinstein is putting forward. It's anyone's guess as to whether the minimization procedures were approved by the courts and DoJ first and is being legitimized by the bill, or if the courts/DoJ said the law won't back up that interpretation and Feinstein is now trying to fill it in.

[1] https://www.govtrack.us/congress/bills/110/hr6304/text

[2] http://www.theguardian.com/world/2013/jun/20/fisa-court-nsa-...