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104th Congress                                            Rept. 104-578
                        HOUSE OF REPRESENTATIVES

 2d Session                                                      Part 1
_______________________________________________________________________


 
          INTELLIGENCE AUTHORIZATION ACT FOR FISCAL YEAR 1997

                                _______


                  May 15, 1996.--Ordered to be printed

_______________________________________________________________________


   Mr. Combest, from the Permanent Select Committee on Intelligence, 
                        submitted the following

                              R E P O R T

                             together with

                             MINORITY VIEWS

                        [To accompany H.R. 3259]

      [Including cost estimate of the Congressional Budget Office]

  The Permanent Select Committee on Intelligence, to whom was 
referred the bill (H.R. 3259) to authorize appropriations for 
fiscal year 1997 for intelligence and intelligence-related 
activities of the United States Government, the Community 
Management Account, and the Central Intelligence Agency 
Retirement and Disability System, and for other purposes, 
having considered the same, report favorably thereon with an 
amendment and recommend that the bill as amended do pass.

                                CONTENTS

                                                                   Page
Purpose..........................................................     6
Overall perspective on the intelligence budget and committee 
  intent.........................................................     6
Scope of committee review........................................     7
Committee findings and recommendations...........................     7
Areas of Special Interest........................................     9
    Personnel Issues.............................................     9
    Aerial Reconnaissance........................................    11
    Intelligence Support Equipment...............................    21
    All-Source Analysis..........................................    28
    Community Management.........................................    29
    The Consolidation of Clandestine Human Intelligence..........    31
    Creating a Virtual Intelligence Architecture.................    32
    Intelligence Sharing with the United Nations.................    34
    Sharing and Declassifying Intelligence.......................    35
    Satellite Architecture.......................................    36
Section-by-Section analysis of bill as reported..................    37
Title I--Intelligence Activities.................................    37
    Section 101--Authorization of appropriations.................    37
    Section 102--Classified schedule of authorizations...........    37
    Section 103--Personnel ceiling adjustments...................    37
    Section 104--Community management account....................    38
Title II--Central Intelligence Agency Retirement and Disability 
  System.........................................................    41
    Section 201--Authorization of appropriations.................    41
Title III--General Provisions....................................    42
    Section 301--Increase in employee compensation and benefits 
      authorized by law..........................................    42
    Section 302--Restriction on conduct of intelligence 
      activities.................................................    42
    Section 303--Limitation on availability of funds for 
      automatic declassification of Records Over Twenty-Five 
      Years Old..................................................    42
    Section 304--Application of sanctions laws to intelligence 
      activities.................................................    43
    Section 305--Expedited naturalization........................    43
Title IV--Central Intelligence Agency............................    44
    Section 401--Multiyear leasing authority.....................    44
    Section 402--Repeal of additional surcharge relating to 
      employees who retire or resign in fiscal year 1998 or 1999 
      and who receive voluntary separation incentive payments....    45
    Section 403--Implementation of Intelligence Community 
      personnel reform...........................................    45
Title V--Department of Defense Intelligence Activities...........    46
    Section 501--Standardization for certain Department of 
      Defense intelligence activities of exemptions from 
      disclosure of organizational and personnel information.....    46
Committee Position...............................................    46
Findings and recommendations of the Committee on Government 
  Reform and Oversight...........................................    46
Oversight Findings...............................................    46
Fiscal year cost projections.....................................    47
Congressional Budget Office estimates............................    47
Committee cost estimates.........................................    49
Inflationary Impact Statement....................................    49
Changes in existing law made by the bill, as Reported............    49
Minority and additional views....................................    54

  The amendment is as follows:
  Strike out all after the enacting clause and insert in lieu 
thereof the following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Intelligence Authorization Act for 
Fiscal Year 1997''.

                    TITLE I--INTELLIGENCE ACTIVITIES

SEC. 101. AUTHORIZATION OF APPROPRIATIONS.

  Funds are hereby authorized to be appropriated for fiscal year 1997 
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 Federal Bureau of Investigation.
          (10) The Drug Enforcement Administration.
          (11) The National Reconnaissance Office.
          (12) The Central Imagery Office.

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, 1997, 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 bill H.R. 3259 of the 104th 
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 1997 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 two 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 Permanent Select Committee on 
Intelligence of the House of Representatives and the Select Committee 
on Intelligence of the Senate whenever he exercises the authority 
granted by this section.

SEC. 104. 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 1997 the sum of 
$93,616,000. Within such amounts authorized, funds identified in the 
classified Schedule of Authorizations referred to in section 102(a) for 
the Advanced Research and Development Committee shall remain available 
until September 30, 1998.
  (b) Authorized Personnel Levels.--The Community Management Staff of 
the Director of Central Intelligence is authorized 273 full-time 
personnel as of September 30, 1997. Such personnel of the Community 
Management Staff may be permanent employees of the Community Management 
Staff or personnel detailed from other elements of the United States 
Government.
  (c) Reimbursement.--During fiscal year 1997, any officer or employee 
of the United States or a member of the Armed Forces who is detailed to 
the Community Management Staff 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.
  (d) Declassification.--In addition to amounts otherwise authorized to 
be appropriated by this Act, there is authorized to be appropriated 
$25,000,000 for the National Foreign Intelligence Program for the 
purposes of carrying out the provisions of section 3.4 of Executive 
Order 12958, dated April 17, 1995.
  (e) National Drug Intelligence Center.--In addition to amounts 
otherwise authorized to be appropriated by this Act, there is 
authorized to be appropriated $32,076,000 for the National Drug 
Intelligence Center located in Johnstown, Pennsylvania. Amounts 
appropriated for such 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)). The National Drug Intelligence Center is 
authorized 35 full-time personnel as of September 30, 1997.
  (f) Environmental Programs.--In addition to amounts otherwise 
authorized to be appropriated by this Act, there is authorized to be 
appropriated $6,000,000 for the Environmental Intelligence and 
Applications Program, formerly known as the Environmental Task Force, 
to remain available until September 30, 1998.

 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 1997 the sum of 
$194,400,000.

                     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. LIMITATION ON AVAILABILITY OF FUNDS FOR AUTOMATIC 
                    DECLASSIFICATION OF RECORDS OVER 25 YEARS OLD.

  Section 307 of the Intelligence Authorization Act for Fiscal Year 
1996 (109 Stat. 966) is amended striking out ``fiscal year 1996 by this 
Act'' in subsection (a) and inserting in lieu thereof ``any of the 
fiscal years 1996 through 2000''.

SEC. 304. APPLICATION OF SANCTIONS LAWS TO INTELLIGENCE ACTIVITIES.

  (a) Extension.--Section 905 of the National Security Act of 1947 (50 
U.S.C. 441d) is amended by striking out ``on the date which is one year 
after the date of the enactment of this title'' and inserting in lieu 
thereof ``on January 6, 1998''.
  (b) Format Amendments.--Section 904 of such Act (50 U.S.C. 441c) is 
amended by striking out ``required to be imposed by'' and all that 
follows and inserting in lieu thereof ``required to be imposed by any 
of the following provisions of law:
          ``(1) The Chemical and Biological Weapons Control and Warfare 
        Elimination Act of 1991 (title III of Public Law 102-182).
          ``(2) The Nuclear Proliferation Prevention Act of 1994 (title 
        VIII of Public Law 103-236).
          ``(3) Section 11B of the Export Administration Act of 1979 
        (50 U.S.C. App. 2410b).
          ``(4) Chapter 7 of the Arms Export Control Act (22 U.S.C. 
        2797 et seq.).
          ``(5) The Iran-Iraq Arms Non-Proliferation Act of 1992 (title 
        XVI of Public Law 102-484).
          ``(6) The following provisions of annual appropriations Acts:
                  ``(A) Section 573 of the Foreign Operations, Export 
                Financing, and Related Programs Appropriations Act, 
                1994 (Public Law 103-87; 107 Stat. 972).
                  ``(B) Section 563 of the Foreign Operations, Export 
                Financing, and Related Programs Appropriations Act, 
                1995 (Public Law 103-306; 108 Stat. 1649).
                  ``(C) Section 552 of the Foreign Operations, Export 
                Financing, and Related Programs Appropriations Act, 
                1996 (Public Law 104-107; 110 Stat. 741).
          ``(7) Comparable provisions.''.

SEC. 305. EXPEDITED NATURALIZATION.

  (a) In General.--With the approval of the Director of Central 
Intelligence, the Attorney General, and the Commissioner of Immigration 
and Naturalization, an applicant described in subsection (b) and 
otherwise eligible for naturalization may be naturalized without regard 
to the residence and physical presence requirements of section 316(a) 
of the Immigration and Nationality Act, or to the prohibitions of 
section 313 of such Act, and no residence within a particular State or 
district of the Immigration and Naturalization Service in the United 
States shall be required: Provided, That the applicant has resided 
continuously, after being lawfully admitted for permanent residence, 
within the United States for at least one year prior to naturalization: 
Provided further, That the provisions of this section shall not apply 
to any alien described in subparagraphs (A) through (D) of section 
243(h)(2) of such Act.
  (b) Eligible Applicant.--An applicant eligible for naturalization 
under this section is the spouse or child of a deceased alien whose 
death resulted from the intentional and unauthorized disclosure of 
classified information regarding the alien's participation in the 
conduct of United States intelligence activities.
  (c) Administration of Oath.--An applicant for naturalization under 
this section may be administered the oath of allegiance under section 
337(a) of the Immigration and Nationality Act by the Attorney General 
or any district court of the United States, without regard to the 
residence of the applicant. Proceedings under this subsection shall be 
conducted in a manner consistent with the protection of intelligence 
sources, methods, and activities.
  (d) Definitions.--For purposes of this section--
          (1) the term ``child'' means a child as defined in 
        subparagraphs (A) through (E) of section 101(b)(1) of the 
        Immigration and Nationality Act, without regard to age or 
        marital status; and
          (2) the term ``spouse'' means the wife or husband of a 
        deceased alien referred to in subsection (b) who was married to 
        such alien during the time the alien participated in the 
        conduct of United States intelligence activities.

                 TITLE IV--CENTRAL INTELLIGENCE AGENCY

SEC. 401. MULTIYEAR LEASING AUTHORITY.

  Section 5(e) of the Central Intelligence Agency Act of 1949 (50 
U.S.C. 403f(e)) is amended to read as follows:
  ``(e) Make alterations, improvements, and repairs on premises rented 
by the Agency and, for the purpose of furthering the cost-efficient 
acquisition of Agency facilities, enter into multiyear leases for up to 
15 years that are not otherwise authorized pursuant to section 8 of 
this Act; and''.

SEC. 402. REPEAL OF ADDITIONAL SURCHARGE RELATING TO EMPLOYEES WHO 
                    RETIRE OR RESIGN IN FISCAL YEARS 1998 OR 1999 AND 
                    WHO RECEIVE VOLUNTARY SEPARATION INCENTIVE 
                    PAYMENTS.

  Section 2 of the Central Intelligence Agency Voluntary Separation Pay 
Act (50 U.S.C. 403-4 note) is amended by striking out subsection (i).

SEC. 403. IMPLEMENTATION OF INTELLIGENCE COMMUNITY PERSONNEL REFORMS.

  None of the amounts authorized to be appropriated by this Act may be 
used to implement any Intelligence Community personnel reform until the 
Permanent Select Committee on Intelligence of the House of 
Representatives and the Select Committee on Intelligence of the Senate 
are fully briefed on such personnel reform.

         TITLE V--DEPARTMENT OF DEFENSE INTELLIGENCE ACTIVITIES

SEC. 501. STANDARDIZATION FOR CERTAIN DEPARTMENT OF DEFENSE 
                    INTELLIGENCE AGENCIES OF EXEMPTIONS FROM DISCLOSURE 
                    OF ORGANIZATIONAL AND PERSONNEL INFORMATION.

  (a) Consolidation and Standardization.--Chapter 21 of title 10, 
United States Code, is amended by striking out sections 424 and 425 and 
inserting in lieu thereof the following:

``Sec. 424. Disclosure of organizational and personnel information: 
                    exemption for the Defense Intelligence Agency and 
                    National Reconnaissance Office

  ``(a) Exemption From Disclosure.--Except as required by the President 
or as provided in subsection (b), no provision of law shall be 
construed to require the disclosure of--
          ``(1) the organization or any function of the Defense 
        Intelligence Agency or the National Reconnaissance Office; or
          ``(2) the number of persons employed by or assigned or 
        detailed to that Agency or Office or the name, official title, 
        occupational series, grade, or salary of any such person.
  ``(b) Provision of Information to Congress.--Subsection (a) does not 
apply with respect to the provision of information to Congress.''.
  (b) Clerical Amendment.--The table of sections at the beginning of 
subchapter I of such chapter is amended by striking out the items 
relating to sections 424 and 425 and inserting in lieu thereof the 
following:

``424. Disclosure of organizational and personnel information: 
exemption for the Defense Intelligence Agency and National 
Reconnaissance Office.''.

                                Purpose

    The bill would:
          (1) Authorize appropriations for fiscal year 1997 for 
        (a) the intelligence and intelligence-related 
        activities of the U.S. Government, (b) the Community 
        Management Account, and (c) the Central Intelligence 
        Agency Retirement and Disability System;
          (2) Authorize the personnel ceilings on September 30, 
        1997 for the intelligence and intelligence-related 
        activities of the U.S. Government;
          (3) Permit the Director of Central Intelligence to 
        authorize personnel ceilings in Fiscal Year 1997 for 
        any Intelligence element up to two percent above the 
        authorized levels, with the approval of the Director of 
        the Office of Management and Budget;
          (4) Authorize the President to stay the imposition of 
        sanctions when to proceed without delay would seriously 
        risk the compromise of an intelligence source or method 
        or an ongoing criminal investigation and require 
        reports to the Intelligence or Judiciary committees of 
        the House and Senate;
          (5) Authorize $25 million for carrying out Section 
        3.4 of Executive Order 12958;
          (6) Authorize $32,076,000 for the National Drug 
        Intelligence Center in Johnstown, Pennsylvania;
          (7) Authorize $6 million for the Environmental 
        Intelligence and Application Program;
          (8) Provide for expedited naturalization of a spouse 
        or child of a deceased alien whose death resulted from 
        the intentional an unauthorized information regarding 
        the alien's participation in the conduct of United 
        States intelligence activities;
          (9) Provide the Central Intelligence Agency with 
        multiyear leasing authority;
          (10) Relieve the Central Intelligence Agency from the 
        requirement of double payments for Central Intelligence 
        Agency employees who take early retirement under the 
        Civil Service Retirement System in fiscal year 1998 and 
        1999;
          (11) Deny funds for the implementation of personnel 
        reforms at the Central Intelligence Agency until the 
        committee is fully briefed on the reforms;
          (12) Eliminate unnecessary differences between 
        information disclosure statutes of the Defense 
        Intelligence Agency and the National Reconnaissance 
        Office.

    Overall Perspective on the Intelligence Budget Committee Intent

    The classified Schedule of Authorizations, and the detailed 
explanation of it found in the classified annex to this public 
report, contain a thorough discussion of all budget issues 
considered by the Committee and are available subject to the 
requirements of clause 13 of Rule XLIII of the House, to all 
Members of the House. The Schedule of Authorizations contains 
the dollar amounts and personnel ceilings for the programs 
authorized by the bill. The Schedule is directly incorporated 
into, and is an integral part of, the bill. It is the intent of 
the Committee that all intelligence programs discussed in the 
classified annex to this report be conducted in accordance with 
the guidance and limitations contained therein.

                       Scope of Committee Review

    U.S. intelligence and intelligence-related activities under 
the jurisdiction of the Committee include the National Foreign 
Intelligence Program, the Tactical Intelligence and Related 
Activities of the Department of Defense, and the Joint Military 
Intelligence Program.
    The National Foreign Intelligence Program (NFIP) consists 
of all programs of the Central Intelligence Agency, as well as 
those national foreign intelligence and/or counterintelligence 
programs conducted by: (1) the Department of Defense; (2) the 
Defense Intelligence Agency; (3) the National Security Agency; 
(4) the Central Imagery Office; (5) the National Reconnaissance 
Office; (6) the Departments of the Army, Navy and Air Force; 
(7) the Department of State; (8) the Department of the 
Treasury; (9) the Department of Energy; (10) the Federal Bureau 
of Investigation; and (11) the Drug Enforcement Administration.
    The Department of Defense Tactical Intelligence and Related 
Activities (TIARA) are a diverse array of reconnaissance and 
target acquisition programs that are a functional part of the 
basic military force structure and provide direct information 
support to military operations TIARA, as defined by the Joint 
Chiefs of Staff and the Secretary of Defense, includes those 
military intelligence activities outside the General Defense 
Intelligence Program that respond to the needs of military 
commanders for operational support information, as well as to 
national command, control and intelligence requirements. The 
programs comprising TIARA also fall within the jurisdiction of 
the Committee on National Security.
    The Joint Military Intelligence Program (JMIP) was 
established in 1995 to provide integrated program management of 
defense intelligence elements that support defense-wide or 
theater-level consumers. Included within JMIP are aggregations 
created for management efficiency and characterized by 
similarity, either in intelligence discipline (for example, 
Signals Intelligence, Imagery Intelligence) or function (for 
example, satellite support or aerial reconnaissance). The 
following aggregations are included in the JMIP: (1) the 
Defense Imagery Program (DIP); (2) the Defense Cryptologic 
Program (DCP); (3) the Defense Mapping, Charting, and Geodesy 
Program (DMCGP); and (4) the Defense General Intelligence 
Applications Program (GDIAP), which includes (a) the Defense 
Airborne Reconnaissance Program (DARP), (b) the Defense 
Intelligence Counterdrug Program (DICP), (c) the Defense 
Intelligence Agency Tactical Program (DIATP), (d) the Defense 
Intelligence Special Technologies Program (DISTP) and (e) the 
Defense Space Reconnaissance Program (DSRP).

                 Committee Findings and Recommendations

    The Committee completed its review of the President's 
fiscal year 1997 budget, carrying out its annual responsibility 
to prepare an authorization based on close examination of 
intelligence programs and proposed expenditures. This review 
reflected the Committee's belief that intelligence activities 
must be examined by function as well as by program and, thus, 
was structured across program lines and intelligence 
disciplines and themes. The Committee held six full Committee 
budget hearings on the following issues: Collection; Processing 
and Exploitation; Analysis; Dissemination; Community 
Management; and Covert Action. There were, in addition, 15 
Members briefings on specialized issues and more than 100 staff 
briefings on programs, specific activities, and budget 
requests.
    The Committee continued to place heavy emphasis on the 
future needs of the Intelligence Community. This was the key 
theme in the previous year's authorization process as well as 
in the Committee's ongoing work on ``IC21: The Intelligence 
Community in the 21st Century,'' which is the subject of 
separate legislation, H.R. 3227.
    The fiscal year 1997 budget request for the NFIP reflects 
an increase of approximately 6.3 percent over the amounts 
appropriated in fiscal year 1996. Based on the record developed 
at its hearings, the Committee has recommended an NFIP 
authorization that continues the rebuilding and revitalization 
of the U.S. Intelligence Community. When combined with the JMIP 
and TIARA accounts, the Committee's recommended authorization 
in the aggregate is 3.9 percent above the amounts requested by 
the President.
    In 1995, given the limited amount of time available to 
review the budget between the beginning of the 104th Congress 
and the budget's submission, the Committee deliberately avoided 
making revolutionary changes to the President's request. 
However, when Chairman Combest brought the FY 1996 Intelligence 
Authorization Conference Report to the floor, he noted his 
dissatisfaction with that budget as submitted by the President, 
noting that it was a ``snapshot'' of immediate needs rather 
than a blueprint for the future. He said that he expected--
based on conversations with the Vice President and the Director 
of Central Intelligence--to see a more forward-looking budget 
for fiscal year 1997. Unfortunately, in the view of the 
Committee, this was not the case. Therefore, the Committee's 
fiscal year 1997 actions reflects more significant changes to 
the President's request, particularly in the National 
Reconnaissance Program. The Committee hopes that the new 
leadership team at the National Reconnaissance Office will be 
attentive to the Committee's concerns and expectations. The 
Committee looks forward to working with them to assure that 
ongoing requirements and capabilities are sustained while 
invocation and some daring are restored to future programs.
    Four basic themes used successfully in 1996 again governed 
the Committee during its review:
    The Committee sought to evaluate each budgetary line solely 
on the program's merits.
    The Committee did not work toward a specific budgetary 
number while evaluating the programs. In other works, the 
Committee did not look to fund some programs and then reduce 
others in order to find offsets so as to stay within a given 
arbitrary final goal. As was the case last year, the Committee 
continues to believe that Congress will accept an intelligence 
authorization consisting of properly funded programs--even if 
that amounts to a significant increase in the aggregate of the 
President's request for the Intelligence Community. Therefore, 
for the most part, each program adjustment was considered as an 
individual, substantive issue, rather than a fiscal one.
    The Committee continues to emphasize the importance of 
``downstream'' activities--processing, exploitation and the 
dissemination of intelligence data and analysis. Although the 
balance between collection and these other activities has shown 
some improvement, the Committee continues to be deeply 
concerned about the ability to utilize the volume of 
information that is anticipated due to the emphasis in past 
years on collection resource developments.
    As noted, the Committee seeks to avoid short-term thinking 
and to build the Intelligence Community we will need in the 
21st Century, the basis for which must be built today.
    With these major themes in mind, several areas of interest 
developed in the budget review process. These included:
          Continued improvement in the centralized management 
        of resources and collection;
          Continued improvement in cross-program management and 
        operational efficiency;
          The methods by which intelligence requirements are 
        evaluated and given respective priorities;
          Acknowledgment of the limitations and vulnerabilities 
        of collection resources to increasingly capable foreign 
        denial and deception practices;
          The need to harness technology to create improved 
        intelligence networks--what some call the ``virtual 
        analytic community'';
          Reevaluating the validity of continued personnel 
        downsizing, especially in the analytical and imagery 
        exploitation workforces;
          Concern over the tension between increased openness 
        and the necessary safeguarding of sources and methods.

                       Areas of Special Interest

                            personnel issues

    The Intelligence Community has been in the throes of 
downsizing since 1993 in response to a Congressionally mandated 
17.5 percent reduction in civilian personnel. Former Director 
of Central Intelligence James Woolsey extended the downsizing 
goal for another two years, so as to achieve an overall 
reduction of 22.5 percent by the end of fiscal year 1999. This 
downsizing has not been without its price. The Intelligence 
Community workforce, which heretofore had looked to stable 
lifetime employment, saw a new environment where job security 
was no longer guaranteed.
    At the same time, the Community failed to address system-
wide personnel problems. To his credit, DCI Deutch made 
personnel reform a high priority. Even more noteworthy, the 
CIA's Executive Director was able to push through a personnel 
reform package that addresses many of the issues that the 
Committee had highlighted in the past, such as, training and 
career development programs and the need for a new personnel 
evaluation system. It is unfortunate, however, that the DCI's 
reform package was not completed earlier, so that funding 
requirements could be addressed fully in the Committee's bill. 
Indeed, the lack of information on this program, which will 
touch the lives and careers of every CIA employee, caused the 
Committee to adopt legislation--Section 403--denying 
authorization for the expenditure of any funds for personnel 
reforms until the Committee is fully briefed. The Committee has 
also learned that the Office of Management and Budget has not 
yet signed off on this proposal due to lack of information and 
details.
    In keeping with the IC21 examination of the needs of the 
Intelligence Community in the year 2000 and beyond, the 
Committee believes it is vital for each NFIP agency to conduct 
a full skills-mix study updated periodically to ascertain what 
its personnel requirements will be at the end of the downsizing 
period. Employees currently in the work force should be given 
effective career counseling to enable them to determine their 
relevance to future intelligence missions, the likelihood that 
they will make a significant contribution to them, and whether 
they are currently on a positive career track. The Committee 
notes once again that the Intelligence Community has failed to 
establish a personnel evaluation system that objectively 
evaluates the performance and contribution of each of its 
employees. There is no systematic ranking of employees. 
Therefore, should the Intelligence Community have to make 
selective involuntary personnel cuts, most managers do not have 
objective criteria with which to weed out those who are 
underachievers. The Committee recognizes that the current 
personnel system is very successful in finding, hiring and 
retaining well-qualified and highly-motivated personnel. 
Nonetheless, there are poor performers who remain entrenched in 
the system. A better evaluation system coupled with annual 
rankings would help to remedy this problem. The Committee is 
still waiting for an Intelligence Community personnel program 
designed to evaluate all Intelligence Community employees on an 
annual basis, ranking them to identify the high-achievers and 
under-performers.
    Recognizing that NSA has a particularly severe problem with 
the size, age, skills and make-up of its workforce, and in 
consideration of the work that NSA has already completed in 
this area, the Committee is sympathetic to the Secretary of 
Defense's request for authority to conduct a temporary program 
to permit the Director of NSA to offer, on a one-time basis, an 
opportunity for eligible employees in the Civil Service 
Retirement System at NSA to take early retirement and receive 
unreduced annuities. This program will address skills-mix 
problems at NSA and permit the retention of newly hired 
employees who represent the diverse employee environment that 
the NSA and our nation demand. Unfortunately, like the CIA 
personnel reform package, the DoD proposal was received too 
late for inclusion in the Authorization Act. However, this 
reform package was cleared by the Office of Personnel 
Management and the Office of Management and Budget. Therefore, 
to give it due consideration it was included in the IC-21 
reform proposals, H.R. 3237.
    The Committee continues to monitor carefully the hiring and 
promotion practices at CIA, DIA and NSA pertaining to 
minorities and women. The representation of minorities at these 
agencies lags behind the percentage of minority employees 
throughout the federal sector. Women are also underrepresented, 
although not the same degree as minorities. The Committee 
continues to believe that the United States' diverse work force 
is not being tapped fully to bring the very best minds to the 
Intelligence Community. Many citizens have native fluency in 
languages other than English and intimate knowledge of diverse 
and different cultures. Although they may have recently gained 
their U.S. citizenship, they should not be arbitrarily excluded 
from employment simply because they were born abroad. 
Accordingly, the Committee plans to hold another hearing on 
diversity hiring practices later this session to continue the 
same focus on these issues as in past years.

                         aerial reconnaissance

Airborne Reconnaissance Low (ARL): +$5.2 million

    The budget request contained $24.742 million for continued 
procurement of ARL components and aircraft.
    In fiscal year 1996, the Army unilaterally reprogrammed 
funding authorized and appropriated for converting ARL-I and 
ARL-C aircraft to multi-disciplined ARL-M aircraft. These 
reprogrammed funds were applied to the ARL moving target 
indicator (MTI) radar effort. Although this was an under-
threshold reprogramming action, it was not done with the 
consent of the congressional defense and intelligence 
authorization committees. The Committee does not condone the 
Army's actions. However, the Committee does support the 
validated requirement for MTI on ARL, and it is aware of a 
shortfall in procurement funding to complete the MTI purchase.
    Therefore, the Committee recommends an additional 
$5,200,000 for completing the MTI buy. However, the Committee 
directs the Army to resource all necessary funding to complete 
the ARL-I/C conversion to ARL-M from within other Army 
programs.

Tactical Air Reconnaissance Pod System (TARPS): +$2.6 million

    The budget request included $13.9 million for continued 
operation and maintenance of the F-14 TARPS system.
    The Committee is aware of the continued reliance on TARPS 
by the Navy, and more importantly, by theater commanders. The 
Committee is convinced that TARPS will be required and used 
well into the next century. Therefore, the Committee recommends 
an addition of $2.6 million for the continued TARPS maintenance 
and reliability/supportability upgrades.

Battle Group Passive Horizon Extension System--Surface Terminal: +$1.0 
        million

    The budget request included $1.853 million in PE 64721N for 
continued research and development of the Battle Group Passive 
Horizon Extension System--Surface Terminal (BGPHES-ST) 
capabilities.
    The Committee is convinced of the utility of the BGPHES-ST 
and is gratified that the Navy has elected to procure ground 
station capabilities already developed by the Air Force to keep 
costs down. However, the Committee is concerned that the Navy 
has not yet provided a capability to fully exploit airborne 
systems' abilities to collect the class of threats known as 
``PROFORMA.'' Therefore, the Committee recommends an additional 
$1,000,000 be provided for the Navy to procure existing USAF 
processing capabilities and algorithms. Specifically, this 
funding will be used to integrate EPR-157 or EPR-208 functional 
capabilities in existing BGPHES-ST hardware.

U.S. Navy Joint Surveillance and Targeting Radar System integration: 
        +$10.0 million

    The budget request included no funding for providing U.S. 
Naval forces the ability to receive, process, or utilize the 
Joint Surveilliance and Targeting Radar System (JSTARS) moving 
target indicator (MTI) synthetic aperture radar (SAR) system.
    The JSTARS MTI radar system will soon reach initial 
operating capability. However, neither the Air Force or Navy is 
adequately prepared to make efficient use of the JSTARS 
product. As a result, neither will be able to effectively 
utilize the advanced, standoff weapons that will soon be 
fielded to attack large numbers of mobile targets. In the Air 
Force, the key technical limitation is the requirement to use 
low-capacity and unreliable voice communications to provided 
target and threat information to attack aircraft. The Air Force 
is equipping JSTARS platforms with Link 16 and appropriate 
message sets, but until this year showed little interest in 
procuring data links sets for its ground attack aircraft.
    The Navy, in contrast, is already committed to procuring 
Link 16 capabilities for all of its tactical aircraft, but has 
shown no appreciation of the enormous improvements that JSTARS 
would make to Navy interdiction capabilities. This disinterest 
is puzzling since the naval aviation's performance in Operation 
Desert Storm in support of U.S. ground forces was not as 
stellar as it might have been, and since the Navy has expressed 
such a firm commitment to power projection ashore.
    Furthermore, the Navy is seeking approval for so-called 
``arsenal'' ships based in large part on their presumed ability 
to help halt an invasion with missiles such as Tomahawk. 
However, the Navy has almost no ability to acquire moving 
targets at long range, pass the data to Tomahawk mission 
planning cells, and update the missiles in flight as target 
dispositions change. Although the Tomahawk program office has 
proposed a program to correct these deficiencies (including 
JSTARS, Link 16, and smart submunitions), the Navy overall has 
yet to define an end-to-end architecture.
    The Committee believes that several steps are clearly in 
order. The Navy's tactical command, control, communications and 
intelligence system does not have the ability to communicate 
via Link 16, and Navy systems cannot receive, process, and 
display JSTARS MTI data. The Committee recommends an additional 
$10.0 million to develop these capabilities aboard ship, and to 
ensure that navy attack aircraft can receive and display JSTARS 
Link 16 data for use in standoff weapons targeting. The 
Committee directs the Secretary of the Navy to provide a report 
on the status of this initiative by April 15, 1997, which 
includes an estimate of the total funding required to equip 
appropriate Navy ships, aircraft, and missiles with a JSTARS 
targeting capability.

SENIOR SCOUT: +$.6 million

    The budget request included $1.3 million for operations of 
the SENIOR SCOUT intelligence support system.
    The Committee recognizes the capability provided by the 
SENIOR SCOUT system, and also recognizes that this system could 
be effectively used to backfill systems such as the RC-135 and 
EP-3 that are being pressed into high operations tempo rates in 
various crisis and contingency areas. The Committee therefore 
recommends an additional $600,000 be provided for the Guard's 
CINC's ``initiative fund'' to pay for C-130 transport flying 
hours to carry the SENIOR SCOUT package.

PACER COIN

    The budget request contained $2.6 million for spares and 
$8.0 million for operations of the C-130 PACER COIN special 
mission aircraft.
    In the statement of managers (H. Rept. 104-450) 
accompanying the fiscal year 1996 Defense Authorization bill, 
the conferees directed the Department of Defense to determine 
if PACER COIN could be configured to perform multiple missions 
including the PACER COIN, SENIOR SCOUT and airdrop missions. 
This direction was based on the condition that a PACER COIN-
unique mission would not be supported by the House defense and 
intelligence committees.
    Preliminary indications are that such modifications are not 
only possible, but cost effective and would provide a viable 
and unique multi-role aircraft. However, the President's 
request included no funds for such modifications, and this 
Committee received no indication from the National Guard Bureau 
that this was an effort they wished to pursue. Therefore, the 
committee denies the PACER COIN funding request.

PREDATOR Unmanned Aerial Vehicle (UAV): +$50.0 million--transfer $107.8 
        million

    The budget request included $57.8 million as part of the 
Defense Airborne Reconnaissance Program (DARP) for procurement 
of two Predator medium altitude endurance (MAE) UAV systems.
    The Committee is pleased with the demonstrated success of 
the Predator system in support of peacekeeping operations in 
Bosnia and understands that the Department has determined that 
Predator's demonstrated military utility merits its fielding to 
meet identified requirements.
    The Committee notes that theater commanders-in-chief 
(CINCs) have requirements for 17 Predator systems, but that the 
requested funding does not support productions rates to meet 
these requirements. Therefore, the Committee recommends $107.8 
million, an increase of $50.0 million, to procure up to four 
additional Predator systems. Further, the Committee recommends 
transferring these funds from the Procurement, Defense Wide, 
appropriation to the Other Procurement, Air Force, 
appropriation in order to ensure effective management of 
Predator production.
    The Committee also understands that the Air Force has 
identified a requirement to obtain a limited number of Predator 
systems to establish a training base for its Predator 
operators. The Committee directs the Secretary of the Air Force 
to conduct a cost analysis to determine whether leasing such 
systems (in addition to those procured) constitutes a cost-
effective strategy for meeting this immediate training 
requirement. A report containing the details of this analysis 
and the Secretary's recommendations should be provided to the 
congressional defense and intelligence committees not later 
than 60 days after enactment of this Act. Further, if leasing 
Predator systems proves to be a cost-effective solution to this 
requirement and is recommended by the Secretary, the Committee 
urges the Secretary to pursue immediately such a lease 
arrangement for this purpose.

Joint Surveillance Targeting Attack Radar System: +225.0 million

    The Committee is committed to classify properly those 
systems that are logically classified as tactical, joint or 
national intelligence systems. The Joint Surveillance Targeting 
Attack Radar System (JSTARS) platform and associated ground 
stations are currently contained in the Tactical Intelligence 
and Related Applications (TIARA) aggregation. Although the 
Committee realizes there are direct intelligence applications 
of the JSTARS associated Ground Support Modules (GSM) and the 
follow on Common Ground Stations (CGS), the Committee believes 
the JSTARS aircraft is a direct battle management and targeting 
applications weapon system, and not an intelligence system. 
Although it is true the JSTARS moving target indicator (MTI) 
radar system provides critical data to the operational and 
intelligence communities, the Committee believes the primary 
mission is direct weapon system targeting and should, 
therefore, not be contained within the TIARA aggregation. 
Conversely, since the associated ground stations are direct 
multi-source intelligence support applications with a 
definitive need to remain part of the entire intelligence 
support architecture, the Committee believes these must 
continue to be funded within TIARA aggregation.

U-2: +$57.0 million

    The budget request included $28.280 million in PE 35154D 
for sensor upgrades to the U-2 aircraft.
    The Committee is deeply concerned about the technical 
health of the various sensors carried on the U-2. The special 
sensors, for example, have not been upgraded since 1991 and are 
currently in several different configurations. Also, the multi-
sensor role of the aircraft is limited because the Advanced 
Synthetic Aperture Radar System (ASARS) and Senior Year 
Electro-optical Reconnaissance Systems (SYERS) sensors cannot 
operate simultaneously. Finally, because of older technologies 
and implementations, geolocation for precision strike targeting 
is insufficient for required operations.
    Therefore, the Committee recommends an increase of $57 
million for critical U-2 sensor upgrades. Of this amount, $10 
million is specifically for improving and downsizing the SYERS 
sensor such that SYERS and ASARS can be flown simultaneously. 
These funds will be also used to improve geolocational 
accuracies. The Committee directs that up to $7 million be used 
for the ASARS Improvement Program (AIP) to ensure this upgrade 
can be fielded by fiscal year 1998. The remainder of the 
funding is to be applied to SENIOR RUBY, SENIOR SPEAR, and 
SENIOR GLASS commonality upgrades. Specifically, the Committee 
directs that the Air Force upgrade the SPEAR/RUBY sensors to 
the GLASS configuration, and upgrade the SENIOR GLASS systems 
to an open architecture configuration consistent with an 
architectural approach approved by the Defense Cryptologic 
Program manager.
    Further, the Committee directs the Department to determine, 
and program for, the necessary future years' level-of-effort 
funding to continue evolutionary U-2 sensor upgrades.

DARK STAR UAV: +17.5 million

    The budget request included $17.4 million in PE 35154D for 
the DARK STAR unmanned aerial vehicle (UAV).
    Notwithstanding the recent loss of the first Dark Star 
vehicle, the Committee continues to support the objectives of 
the Dark Star program. The Committee remains convinced that the 
DARK STAR UAV holds significant promise for providing unique 
UAV support to the operational users.
    The Committee is aware that the current linear scanning 
array sensor does not provide the integrated multi-disciplined 
imagery capabilities nor geolocation accuracies that an 
integrated electro-optical (EO/IR) framing camera could 
provide. The Committee therefore recommends an additional $3.5 
million for integrating existing EO framing with on-chip 
forward motion compensation technology into the aircraft and 
associated ground processing equipment.
    Further, the Committee is aware of the synthetic aperture 
radar (SAR) coverage problem due to the use of a non-
developmental antenna. The Committee understands the required 
design is completed, but no funds to implement the correction 
are available. Because the Committee believes there is a need 
to ensure full ground coverage within the radar's field of 
view, it recommends an additional $10.0 million be provided to 
develop and install the necessary radar antenna.
    Just prior to marking up this bill and during flight test, 
the DARK STAR UAV crashed on takeoff, destroying the vehicle. 
DoD is just beginning an investigation of the cause of the 
mishap and of any necessary corrective actions. The Committee 
notes that it may be necessary to replace this lost airframe in 
fiscal year 1997 or to accelerate the acquisition of vehicles 3 
and 4, and to provide additional funding for recovery efforts. 
The Committee requests the Director, Defense Airborne 
Reconnaissance Office to provide recommendations to the 
congressional defense and intelligence committees prior to 
conference on these issues.
    Finally, in the statement of managers accompanying the 
conference report on H.R. 1530 (H. Rept. 104-450), the 
conferees directed the Department to assess user needs against 
a more capable DARK STAR air vehicle. The Defense Airborne 
Reconnaissance Office (DARO) responded specifically to this 
directed action stating that major improvements could be 
realized. However, the DARO has shown no further interest to 
pursue such improvements. As representatives from several 
committees were told, the DARO wanted to fly and test this 
aircraft before they would/could consider any improvements. 
Yet, this same philosophy does not seem to pertain to the 
Global Hawk UAV, as the DARO is pursuing many upgrades to this 
vehicle's capabilities--long before its first scheduled flight 
in December 1996.
    The Committee authorizes an additional $4.0 million for 
developing a concept of operations and design of an improved 
DARK STAR UAV. This funding is to be specifically used to 
pursue the designs necessary to develop a DARK STAR aircraft 
with a unit fly away cost of $20 million. The intent of this 
additional authorization is to provide the option for a more 
capable aircraft to potential users that satisfies the 
survivable long dwell reconnaissance need in a high threat 
environment.

Global Hawk UAV: -$10.0 million

    The Committee directs that no funds authorized for 
appropriation for the Global Hawk unmanned aerial vehicle (UAV) 
be used to develop, procure, integrate or install signals 
intelligence capabilities on the UAV until the vehicle has 
completed Phase III of the ACTD and a vehicle continuation 
decision has been made. Accordingly, all funds for such sensor 
procurement are to be applied to the upgrade of the U-2 
sensors. All U-2 upgrades are to be fully designed and built 
for compatibility with the Global Hawk vehicle.
    Further, the Committee is aware of existing state-of-the-
art imagery technologies that provide both electro-optic (EO) 
and infrared imagery within the same camera. The Committee is 
concerned by the Defense Airborne Reconnaissance Office's 
(DARO) decision to allow the Global Hawk contractor to develop 
a new EO-only camera for the UAV rather than using off-the-
shelf technologies. The Committee directs the DARO to provide a 
report to the defense and intelligence authorizations 
committees that details the analysis that went into this 
decision and, furthermore, provides rationale that an existing 
camera(s) could not be more cost effectively procured. This 
report will be transmitted to the congressional committees no 
later than July 1, 1996.

Joint Tactical Unmanned Aerial Vehicle: -$18.0 million

    The budget request included $51.4 million for the Joint 
Tactical Unmanned Aerial Vehicle (JTUAV). This program has 
evolved from the close range UAV and maneuver UAV, for which 
there had been previous authorizations and appropriations, to 
the current JTUAV program. It is one of at least six UAV's 
under development or in operational use.
    At the time of this report, the Committee had just learned 
that the Department had made a source selection in the JTUAV 
competition even though there had been no previous fiscal 
authorization or appropriation for this specific program.
    The Committee recommends a $33.4 million authorization for 
this project, a reduction of $18.0 million, because of the 
availability of prior year funds.

 Common Imagery Ground/Surface System: +$11.0 million

    The budget request included $47.737 million in PE 35154D 
for continued transition of the numerous ground stations to the 
Common Imagery Ground/Surface System (CIGSS) compliant 
standards.
    The Committee strongly supports both the technical 
solutions and the management approach for migrating the various 
imagery ground stations to the CIGSS configuration and 
standards as outlined in the published handbook. The Committee 
is aware that insufficient funds are available in fiscal year 
1997 to modify core components to ensure the CIGSS common, 
interoperable baseline is achieved by fiscal year 1998. The 
Committee therefore recommends an additional $11 million for 
this purpose. The Committee directs the Defense Airborne 
Reconnaissance Office (DARO) to provide a report to the defense 
and intelligence committees on specifically how this funding 
would be used and how and when the CIGSS baseline will be 
realized. The Committee further directs the DARO to ensure full 
funding for this program is provided in future requests.

Electro-optic (EO) framing technology: +$15.0 million

    The Committee believes there is demonstrated potential for 
electro-optical (EO) framing technology with on-chip forward 
motion compensation (FMC) for providing precision point target 
imaging and location. The Committee strongly supports the 
continuation of this technology and the earliest application of 
these sensors on manned and unmanned tactical reconnaissance 
aircraft/platforms.
    The Committee recommends an additional $15 million for 
continuation of the EO framing technologies with on-chip FMC. 
Specifically, $3 million is provided for the operational 
insertion and testing of the medium altitude wide area coverage 
``step frame'' sensor, $2.2 million is provided to develop 
enhanced data compression algorithms that provide higher 
compression ratios and provide equal or better video/image 
fidelity and at equal or higher throughput rates than currently 
fielded technologies to support the ultra high resolution EO 
framing reconnaissance sensors, $5.8 million is to fund an 
initial study and device development of a high quantum 
efficiency large area EO framing IR charge coupled device with 
on-chip FMC, and $4 million is for multi-spectral EO framing 
technologies with on-chip FMC.

Joint Airborne SIGINT System: No budgetary change

    The budget request included $51.8 million for the 
continuation of the Joint Airborne SIGINT System (JASS).
    The Committee is concerned about the current and long-term 
capability of airborne SIGINT reconnaissance assets. These 
platforms provide not only direct tactical support, but provide 
valuable products used by the national intelligence community. 
These systems require continuous sensor and system improvements 
to maintain pace with the constantly evolving threats against 
which they are tasked.
    Past upgrade developments have been inadequately 
coordinated between the services and defense agencies. The 
costs of independent upgrades, even when similar capabilities 
were being developed, were borne individually by each service 
and platform. The intent of the statement of managers 
accompanying the conference report on H.R. 2401 (H. Rept. 103-
357) and S. 1124 (H. Rept. 104-450) was that the architectures 
of existing SIGINT platforms be evolved to a common 
architecture and that the Department of Defense develop a 
testbed aircraft that could be used to evaluate commercial and 
evolving SIGINT architectures, standards and interface 
protocols such that all airborne SIGINT systems could benefit 
from the sensor upgrades developed by any service or agency. 
The statement of managers also endorsed ``maximum commonality'' 
of equipment to minimize duplication and enhance 
interoperability. There was no congressional intent for the 
Department to choose, or exclude, any architecture, including 
those already fielded, for application on the existing 
operational platforms.
    The Department's current development approach for JASS has 
been controversial, appears to be extremely costly and has not 
been well supported by the military services primarily due to 
cost concerns. Concern also exists that the current approach 
does not satisfy near-term operational needs, and the technical 
approach does not appear to capitalize fully on commercial 
standards and developments. The Committee believes the current 
JASS acquisition strategy could benefit from the early 
establishment of commercial standards, thereby allowing rapid 
evolution of capability through the use of commercial 
components to satisfy changing requirements. Additionally, the 
Committee understands that even under the current schedule, 
JASS will not provide new functional capabilities until after 
the turn of the century. The Committee believes this does not 
constitute an effective upgrade program for the resources being 
spent, nor does it believe there is sufficient use of 
commercial, off-the-shelf technologies. Finally, the Committee 
understands that JASS is better defined as a sensor function or 
subsystem that could be applicable to the various SIGINT 
platforms' systems. The Committee chooses to define a SIGINT 
system as all the functional subsystems including the sensors, 
the antennas, the radio frequency distribution systems, the 
recorders, the operator consoles, etc. JASS does not include 
these other functions, and therefore should be appropriately 
defined as such, particularly in terms of budget requests and 
total system costs submitted to the Congressional committees.
    The Committee fully supports the tenets of a Joint Airborne 
SIGINT Architecture (JASA) and believes there is a need to 
develop a formal set of standards and interface protocols that 
allow the platform program offices to build open architecture 
systems. The Committee believes that, as capabilities are 
developed or procured off-the-shelf that meet the established 
platform requirements, these functions must comply with 
established architectural and technical guidelines. This will 
allow these capabilities or functions to be portable from one 
platform to the next without separate development efforts and 
associated costs. Finally, the Committee believes there must be 
a central authority to enforce such commonalities.
    There is a need for a centralized architecture standards 
vision and joint development of new capabilities, with 
decentralized procurement and system integration. Fiscal 
constraints and threat phasing suggest an evolutionary upgrade 
approach to systems, based on specific and enforced interface 
standards. The approach should build on the strengths of each 
of the fielded systems and should be focused on the individual 
mission requirements. The Committee is committed to ensuring 
the services and agencies share these sensor developments, and 
believes this approach will increase industry competition by 
focusing on commercial products, decrease, risk, and most 
importantly, effectively ensure near and mid-term requirements 
satisfaction and decrease costs.
    Finally, due to the amounts of money already expended on 
the JASS high band prototype (HBP) and its predecessor, the 
Committee does not believe terminating this prototype effort 
prior to test would be appropriate.
    Therefore, the Committee authorizes up to $25.1 million of 
the request to continue and conclude JASS HBP functional 
development and testing. The Committee does not authorize the 
obligation and expenditure of any funding for a follow-on JASS 
high band effort until the HBP has completed flight test, and 
has effectively proven its utility. The Department of Defense 
is authorized to obligate and expend fiscal year 1997 
appropriated funds for other airborne SIGINT functional of 
subsystem developments provided they are coordinated through, 
and for use by, multiple services and agencies. However, the 
Committee directs the Secretary not to obligate or expend any 
fiscal year 1997 funds for such airborne SIGINT system research 
and development upgrades until the Secretary provides the 
defense and intelligence authorization committees a report 
that:
          (1) clearly identifies the airborne SIGINT system 
        standards and protocols that the platform offices will 
        use to build their architectures and functional 
        capabilities;
          (2) provides a plan for ensuring the operational and 
        intelligence requirements communities have the final 
        authority for expending intelligence funds;
          (3) provides a plan for maximizing use of commercial 
        off-the-shelf technologies;
          (4) provides a plan for ensuring the services 
        collaborates on sensor improvements;
          (5) provides an upgrade plan that satisfies both the 
        near-term and long-term operational requirements in a 
        coordinated architectural approach;
          (6) provides a plan for the National Security Agency 
        (NSA), under its Executive Order 12333 tasking, to 
        review and approve platform sensor developments to 
        ensure technical standards compliance;
          (7) provides a ``level of effort'' funding necessary 
        to ensure continuous upgrades to the existing 
        platforms; and
          (8) provides a detailed description of those 
        functional capabilities, resulting from the HBP efforts 
        that could be effectively used by the various platform 
        offices.
    An interim copy of this report should be provided to the 
congressional defense and intelligence committees before June 
10, 1996 and a final report will be delivered not later April 
1, 1997.

U-2 aircraft: + $5.0 million

    The budget request contained $142.832 million for U-2 
aircraft spares procurement. However, the request included no 
funds necessary to repair a U-2 aircraft that was damaged in a 
recent crash landing. The Committee recommends that an 
additional $5 million be provided to repair the damaged 
aircraft and return it to service.

Airborne reconnaissance fleet modifications: + $36.0 million

    The budget request contained $115.5 million within the 
Defense Airborne Reconnaissance Program (DARP) for continued 
aircraft modifications and spare parts procurement for the EP-
3E ARIES II and the RC-135 (RIVET JOINT and COMBAT SENT) 
aircraft.
    The Committee is convinced there is a critical need for a 
level-of-effort funding to improve continually, incrementally, 
and quickly these intelligence support aircraft in response to 
the improvements in threat technologies, against which they are 
tasked. The Committee recognizes the differences in the various 
services' platform missions and that these missions, 
necessarily, force differing requirements. The Committee 
believes many of the evolving requirements can most quickly and 
economically be satisfied through ``off-the-shelf,'' commercial 
procurements that are integrated into existing systems. 
However, although the Committee supports the needs to improve 
systems based on the mission, it is not willing to support 
multiple functional developments (this does not include 
specific integration efforts) and believes the National 
Security Agency's Defense Cryptologic Program Manager should 
monitor and coordinate such efforts to ensure an architectural 
compliance under the Defense Airborne Reconnaissance Office's 
research and development acquisition authority. The Committee 
would also not support long-term off-the-shelf procurements 
that result in perpetuation of unique hardware and software 
solutions to common threats and requirements. In sum, the 
Committee expects the Department to restrict the application of 
scarce research and development funds to important capabilities 
that are not available off-the-shelf.
    The Committee is very pleased by the willingness of the 
services to share and coordinate their upgrade efforts--as 
characterized by the memorandum of agreement between the Air 
Force and Navy for sharing processor developments. The 
Committee will continue to monitor this improving relationship 
and will respond appropriately in future funding requests to 
this level of cooperation.
    The Committee recommends an increase of $36 million--$10 
million for the ARIES II, $20 million for the RIVET JOINT and 
$6 million for the COMBAT SENT--to reinstate a level-of-effort 
upgrade program for those aspects of overall system 
capabilities not uniquely addressed by centrally-directed, 
joint development programs. Additionally, the Committee direct 
shte Air Force to determine and POM for such level-of-effort 
upgrades in future requests.

RC-135: +$39.3 million, +$13.0 million, +$145.0 million

    The budget request contained $66.2 million in the Defense 
Airborne Reconnaissance Program (DARP) for support of the RC-
135 fleet.
    The Committee notes the increased emphasis placed on this 
intelligence collection assets and supporting the effort 
initiated by Congress last year to enhance existing RC-135s and 
augment the fleet with additional aircraft. The Committee 
understands that the theater commanders-in-chief have a high 
priority requirement for two additional RC-135s and that this 
requirement has been validated by the Joint Requirement 
Oversight Council and approved by the Expanded Defense 
Resources Board. To address this requirement, the Committee 
recommends an increase of $39.3 million for equipment 
procurement and $13.0 million for modification to accelerate 
procurement of an additional aircraft (RIVET JOINT aircraft 
#16). To continue the ongoing reengining effort, the Committee 
also recommends an increase of $145.0 million to reengine six 
aircraft.

Pioneer unmanned aerial vehicle (UAV): +$30.0 million

    The budget request contained $10.6 million for procurement 
of attrition spares and support kits for the Pioneer UAV 
system.
    The Committee understands that the Department has decided 
to terminate procurement of the Hunter UAV system and use the 
existing equipment for testing and maintaining a residual 
capability. This decision results in the Pioneer being the only 
UAV currently capable of meeting Navy and Marine Corps short-
range requirements. The Committee further understands that 
several initiatives necessary to ensure continued effectiveness 
of the Pioneer are ongoing but have been underfunded in 
anticipation of future fielding of the Tactical UAV, a new 
advanced concepts technology demonstration program. 
Consequently, the Committee recommends $40.6 million, an 
increase of $30.0 million, to fund these initiatives and 
maintain the Pioneer system at acceptable readiness levels.

                     intelligence support equipment

Intelligence data support systems: +2.0 million, +$1.0 million, +$1.0 
        million, +$1.0 million, +$1.0 million

    The budget request included the following amounts for 
intelligence support systems:
          All Source Analysis System: PE 63745A $2.05 million;
          Joint Maritime Combat Information System: PE 64231N 
        $11.297 million;
          Intelligence Analysis System: PE 26313M $1.163 
        million;
          Combat Information System: PE 27431F $7.749 million.
    The Department of Defense is currently acquiring individual 
service/agency intelligence support systems, including the 
Army's ASAS, the Air Force's Combat Information System, the 
Navy's Joint Maritime Combat Information System, the Marine 
Corps' Intelligence Analysis System, and Special Operations 
Command's SOC Research, Analysis and Threat Evaluation System. 
These individual miltiary services' efforts provide the 
specific combat users with similar, but uniquely tailored 
intelligence systems, and are logical acquisitions. However, 
the Committee also believes there is a need to capitalize on 
specific system strengths and increase service cooperation to 
improve the collective capabilities of these individual 
systems. Such synergies of effort could lead to better 
interoperability, improved data fusion, reduced operator work 
loads and possibly reduced development costs.
    Therefore the Committee directs the Army to lead a joint 
service intelligence system group to exlore and initiate 
efforts to improve such interoperability and determine the 
applicability of, and where possible, implement existing 
capabilities. Specifically, the Committee recommends the 
following increases for the Army's All Source Analysis System; 
the Navy's JOint Maritime Combat Information System; the Marine 
Corps' Intelligence Analysis System; the Air Force's Combat 
Information System; and the Special Operations Command's 
Research, Analysis and Threat Evaluation System to examine and 
integrate correlation/fusion algorithms such as the Integrated 
Battlespace Intelligence Server and the Generic Monitoring 
System capabilities developed under the Defense Advanced 
Research Program Agency's WARBREAKER program:
          PE 63745A: $2 million;
          PE 64231N: $1 million;
          PE 26313M: $1 million;
          PE 27431F: $1 million;
          PE 1160405BB: $1 million.

Theater Rapid Response Intelligence Package (TRRIP): +$2.0 million

    The budget request contained no funds within the Army's 
Tactical Intelligence and Related Activities aggregation to 
purchase TRRIP components for counter-intelligence and Human 
Intelligence (HUMINT) forces for Corps and below units The 
Committee recommends an additional $2 million to purchase TRRIP 
and the attendant communications backbone for these elements.

Improved Remotely Monitored Battlefield Sensor System (I-REMBASS): 
        +$2.4 million

    The budget request contained no funding for continued 
procurement or replenishment of I-REMBASS systems or 
components.
    The I-REMBASS sensors have proven very effective in 
supporting Army operations in Bosnia. The Committee is aware of 
the need to field this system to replace older REMBASS sets in 
airborne and light forces. The Committee, therefore, recommends 
an additional $2.4 million to procure the non-expendable I-
REMBASS components for divisions currently holding the older 
REMBASS components.

Fixed distributed system: +$35.0 million

    The budget request included $35.2 million in PE 64784N for 
continued development of the Distributed Surveillance System. 
The Committee recommends an increase of $35.0 million to the 
budget request for a Fixed Distributed System commercial off-
the-shelf/non-developmental initiative fiber optics upgrade.

RADIANT MERCURY: +$2.0 million

    The budget request included $6.4 million in PE 64231N for 
tactical command systems including the RADIANT MERCURY 
automated multi-level security developments.
    The Committee is pleased this promising capability has 
transitioned to a joint program status. However, the Committee 
is concerned that the request provides insufficient funding to 
transfer successfully this Navy Tactical Exploitation of 
National Capabilities initiative to the other services and to 
use by allied coalition forces. Therefore, the Committee 
recommends an additional $2.0 million to support the efforts to 
proliferate the RADIANT MERCURY capabilities.

Joint Tactical Terminal (JTT)--Navy: +$11.0 million

    The budget request contained $2.433 million for U.S. Navy 
procurement of the Joint Tactical Terminal.
    The Committee believes there is an urgent need to 
expeditiously procure the functional intelligence support 
capability provided by the JTT for AEGIS, amphibious and 
flagships as soon as possible. Therefore, the Committee 
recommends an additional $11 million for early procurement of 
these terminals.

Tactical Electronic Reconnaissance Processing and Evaluation System: 
        +$.9 million

    The budget request included $2.484 million in PE 26313M for 
upgrades to, and communications integration testing within the 
Tactical Electronic Reconnaissance Processing and Evaluation 
System (TERPES) system.
    The Committee is aware that TERPES is currently fielded to 
Aviano Air Base in Italy and the Adriatic in support of multi-
service operations in Bosnia. The Committee is also aware of 
the unfunded and immediate need to improve TERPES 
interoperability with Global Command and Control System (GCCS) 
and Tactical Air Mission Planning System (TAMPS). Therefore, 
the Committee recommends an additional $855,000 to provide 
required communications software and interoperability upgrades.

Tactical Electronic Reconnaissance Processing and Evaluation System: 
        +$1.1 million

    The budget request contained $992,000 for purchasing TERPES 
spares.
    The Committee is aware that TERPES is currently fielded to 
Aviano Air Base in Italy and the Adriatic in support of multi-
service operations in Bosnia. The committee is also aware of 
the unfunded and immediate need to improve TERPES 
interoperability with the Global Command and Control System 
(GCCS) and Tactical Air Mission Planning System (TAMPS). 
Therefore, the Committee recommends an additional $1.125 
million to purchase required communications and networking 
hardware, workstation and data storage upgrades.

Intelligence Support Equipment/Secondary Imagery Dissemination: +$3.1 
        million

    The budget request contained $7.451 million for procurement 
of the Marine Corps Air Ground Task Force (MAGTF) Secondary 
Imagery Dissemination (SIDS) sets.
    The Committee believes there is economy of scale and cost 
benefits to completing the required procurement of sixty-three 
remaining SIDS sets sooner than now planned. The committee 
recommends an addition of $3,100,000 to complete this buy more 
quickly.

Radio Reconnaissance Equipment Program SIGINT Systems: +$2.7 million

    The budget request contained $3.498 million for continued 
purchase of the Radio Reconnaissance Equipment Program SIGINT 
Systems (RREP-SS-1) systems.
    The Committee believes there is cost and mission benefit to 
completing the required acquisition objective early, and 
therefore recommends an additional $2,700,000 to purchase the 
remaining sixteen systems with required spares, documentation 
and training.

Integrated Undersea Surveillance System improvements: +$22.1 million

    The budget request included $14.0 million in PE 24311N for 
research and development support of the Integrated Undersea 
Surveillance System (IUSS), including $3.3 million for research 
and development support of the Surveillance Towed Array Sensor 
Systems (SURTASS) and $10.7 million for the (IUSS) detection/
classification system. The Committee recommends an increase of 
$22.1 million to the budget request to continue development and 
integration of SURTASS twin line arrays; reduction in the size 
of transmit arrays; fiber optic array development; expanding 
the frequency processing capabilities and sea test of these 
developments; for the low frequency array program and 
development of more reliable low frequency active transmitters; 
and for adoption of SURTASS software algorithms for submarine 
sonar systems.

Over the Horizon Backscatter (OTH-B) Radar System: Fence $5.7 million

    The budget request included $5.7 million in PE 0102417F for 
continued ``warm storage'' maintenance of the two OTH-B radars. 
These radars are being maintained as part of NORAD's 
``reconstitution assets.''
    The Committee understands that it will require at least 24 
months to bring these first generation OTH-B radars out of 
caretaker status and into an operational status--if such a 
decision to do so were made. The Committee also understands 
that major upgrades, costing millions of dollars, will be 
necessary to bring the outdated technologies up to modern 
standards.
    When considered with the totality of terrestrial and space-
based warning systems, the Committee is not convinced the 
projected threat, or the technical capabilities of these older 
systems, warrants continued caretaker maintenance. The 
Committee does, however, understand the potentially high costs 
to the U.S. government of closing these systems down and 
returning the lands to the individual states.
    Therefore, the Committee directs the Secretary of Defense 
to conduct a study that determines the viability of retaining 
or terminating these radars. This study should include fully 
identified costs for all recommendations. The Secretary is to 
provide an interim report on the results of this study before 
the fiscal year 1997 defense authorization conference, with a 
completed report no later than 1 April 1997.

Space-based infrared system program: +$141.0 million

    The budget request included $113.2 million for the low 
component of the space-based infrared system (SBIRS) program 
and $6.9 million for Cobra Brass in program element (PE) 
63441F, and $173.3 million in PE 64441F for the high component. 
The Committee recommends an increase of $247.2 million, an 
increase of $134.0 million for SBIRS low (the Space and Missile 
Tracking System), $180.3 million, an increase of $7.0 million 
for the high component, and the requested amount for Cobra 
Brass.
    The Committee reaffirms support for the Space and Missile 
Tracking System (SMTS) program baseline established in section 
216 of the National Defense Authorization Act for Fiscal Year 
1996 (Public Law 104-106). However, the Committee is dismayed 
by the Department's continued withholding of $51.0 million of 
the total amount authorized and appropriated by Congress in 
fiscal year 1996 for SMTS. These funds are needed to support 
and implement the Department's own strategy of increasing 
competition within the program. The Committee directs the 
Secretary of Defense to release these funds immediately.
    The statement of managers accompanying the conference 
report on S. 1124 (H. Rept. 104-450) endorsed giving the Block 
I SMTS a missile defense focus. The Committee is interested in 
learning more about how the Department has interpreted this 
guidance. Therefore, the Committee directs the Secretary of 
Defense to provide a report to the Congressional defense and 
intelligence committees on the planned design configuration of 
the SMTS Block I, including the extent to which the satellite 
will be capable of performing portions of the missile warning, 
missile defense, technical intelligence, and battlespace 
characterization missions, and the assumed lifetime of the 
Block I satellites. The report shall be submitted not later 
than October 30, 1996.
    Finally, the Committee understands that the Joint 
Requirements Oversight Council is reviewing the appropriate 
level of system survivability and nuclear hardness for the 
elements of the SBIRS program. The Committee believes that 
adequate nuclear hardness should be a design feature of the 
SBIRS program, given the critical importance of assured 
tactical warning/attack assessment for national decision 
making. The Committee directs the Secretary of Defense to 
inform the Committee promptly of the Department's plan for 
providing a sufficient amount of nuclear hardening for the 
SBIRS program. The Secretary is strongly urged to consult 
closely with the commander-in-chief, U.S. Space Command and the 
commander-in-chief, U.S. Strategic Command before rendering a 
decision on this matter.

Defense Advanced Research Projects Agency: No Budgetary Action

    The Committee notes with some concern that the Defense 
Advanced Research Projects Agency (DARPA) Tactical Intelligence 
and Related Applications (TIARA) budget request for fiscal year 
1996 did not include many programs previously contained within 
the TIARA aggregation.
    The TIARA Congressional Justification Book accompanying the 
fiscal year 1996 request states that DARPA programs ``that have 
apparent relevance to intelligence related activities'' are 
included in the TIARA request, and that ``Conversely, a TIARA 
classified program is excluded from the TIARA aggregation when 
the program, or a portion of the program, matures to the extent 
that it is clearly evident that the effort is no longer 
applicable to TIARA.'' The Committee notes that the series of 
DARPA programs designed to locate, identify, and target 
critical mobile targets, known as WARBREAKER, are associated 
with battlefield characterization and information dominance. 
The Committee believes these programs are clearly intelligence-
related projects that fall well within the established 
guidelines for remaining TIARA funded.
    The Committee does not agree with DARPA's unilateral 
decision to remove the WARBREAKER projects from the TIARA 
aggregation. When questioned about this, DARPA officials told 
the Committee that DARPA removed the WARBREAKER programs from 
the TIARA request to keep the Agency from being overseen by two 
OSD functional staffs, rather than just one. The Committee does 
not believe this is a reasonable explanation for unilaterally 
removing programs from the TIARA aggregation.
    Therefore, the Committee directs the ASD (C3I) and the 
Director, DARPA to continue to include all intelligence and 
intelligence-related programs, including all the WARBREAKER-
associated activities, in the TIARA or JMIP aggregations in 
fiscal year 1998 and beyond.

Defense Mapping Agency: -$10.0 million

    The budget request included $100.997 million in PE 33139B 
for continued research and development of Defense Mapping 
Agency (DMA) production systems and capabilities.
    The Committee is aware of a recent Defense Science Board 
(DSB) recommendation that DMA re-engineer its production 
processes to focus on creating and maintaining digital 
geospatial databases vice its current primary production of 
maps. One of the DSB's most critical findings was that DMA 
should focus its development funding on a course that continues 
to provide for the near-term products, but that provides an 
evolutionary path that moves DMA to becoming a center for 
maintaining digital products. Although the Committee 
understands that DMA cannot discontinue map production in the 
near-term, it does believe DMA must pursue a course for digital 
future. The fiscal year 1997 budget submission appears to 
continue research and development focus on improved production 
of government developed products. Therefore, the Committee 
recommends a $10 million reduction in new mapping, charting and 
geodesy products. Of this amount, none is to be applied to the 
alternate source development effort. The Committee stresses its 
belief that DMA, as the DoD DSB recommended, should evolve to a 
digital geospatial product server vice a product developer.

Advanced Sensor Application Program: +$6.0 million

    The budget request included $24.0 million in PE 63714D for 
the Advanced Sensor Applications Program (ASAP), the 
independent non-acoustic antisubmarine warfare (NAASW) research 
program managed by the Office of the Secretary of Defense. The 
Committee has repeatedly expressed its views of the need for 
two viable, independent, and coordinated NAASW programs, one in 
the Navy and one in the Office of the Secretary of Defense. The 
Committee notes that the funding level request for the ASAP 
program is approximately $6.0 million, or 20 percent less than 
the level appropriated for fiscal year 1996 and approximately 
10 percent of the level originally programmed for fiscal year 
1997. In view of the increased capabilities of advanced nuclear 
submarines, the proliferation of modern, quiet diesel 
submarines and advanced non-nuclear submarine technology, and 
significant strides in submarine operational proficiency being 
made by several Third World submarine navies, the Committee 
believes these reductions are imprudent. Increased emphasis 
needs to be placed on improving the antisubmarine warfare 
capabilities of U.S. forces in general, and on the NAASW 
program in particular.
    The Committee notes with concern that this program's fiscal 
year 1996 appropriated funds were ``taxed'' by the Comptroller 
at a rate of nearly 20 percent to pay for various contingencies 
such as Bosnia. The Committee fully understands the necessity 
for programs to pay a ``fair share'' of unallocated cuts, but 
believes this program has paid considerably more than its fair 
share.
    Accordingly, the Committee recommends an increase of $6.0 
million to the budget request for the ASAP program. Of this 
increase, $5.0 million is to continue the ocean remote sensing 
research program at the Environmental Technology Laboratory of 
the National Oceanographic and Atmospheric Administration. The 
Committee believes that the theoretical work on radar 
scattering and radiometry is unique and critical to the success 
of the U.S. NAASW mission. The remaining $1.0 million shall be 
used for additional investigations of foreign technology and 
systems relevant to the missions of the ASAP program. The plans 
for expenditure of the increased authorizations shall be 
reported to the Congressional defense and intelligence 
committees before the additional funds are obligated.
    The Committee believes that the ASAP program office should 
begin to transfer the more mature technology it has developed 
to the Navy. The Committee encourages the Secretary of the Navy 
and the Assistant Secretary of Defense) Command, Control, 
Communications, and Intelligence) to develop plans for such a 
transfer and report the plans to the Congressional defense and 
intelligence committees with the submission of the fiscal year 
1998 Defense budget request.

Command Intelligence Architecture Program: +2.0 million

    The budget request included $2 million in PE 35898L for the 
Command Intelligence Architecture Program (CIAP) program to 
provide the unified commands with an intelligence planning 
process that documents and links requirements, intelligence 
operations and future intelligence capabilities.
    The Committee is pleased with the success of this effort 
and, more so, by the fact that the Command and Control, 
Communications and Computers Integration (C4I) Support Activity 
(CISA) has expanded CIAP to include C4I, surveillance and 
reconnaissance (C4ISR) programs. The Committee endorses this 
broader CIAP focus designed to maximize joint service 
operations and intelligence support. In view of the expanded 
role of the CIAP, the Committee recommends an increase of $2 
million to ensure the CIAP effort is fully expanded to all DoD 
services and agencies.

Defense Mapping Agency (DMA): Fence $30.0 million

    The budget request included $698.9 million in PE 0305131B 
for continued operations of the DMA. Of this amount 
approximately $30 million was designated for funding a future 
National Aeronautics and Space Agency (NASA) Space Shuttle 
(STS) mission to conduct earth imaging operations for mapping 
purposes.
    The committee supports this STS mission effort, but is not 
aware of a firm availability of a shuttle flight to carry the 
mapping payload. Therefore, the Committee fences $30 million of 
DMA operations and maintenance funding until DMA has a firm 
commitment and date for the STS mapping mission from NASA.
    Additionally, the DoD Defense Science Board (DSB) recently 
provided study recommendations for improving DMA business 
practices and operations. Specifically, the DSB recommended DMA 
production processes be reengineered to move away from making 
maps toward maintaining multi-source digital geospatial 
information data bases.--this includes incorporating commercial 
products. Although the Committee recognizes that DMA cannot 
decrease its map production in the short-term, it does 
recognize the fact that the DSB stressed that DMA needs to move 
in this direction. Therefore, the Committee directs DMA provide 
the Congressional defense and intelligence committees with a 
detailed evaluation of the DSB report, and a plan for 
implementing those DSB recommendations it considers 
appropriate. An interim report of this plan is to be provided 
to the Congressional defense and intelligence committees prior 
to the fiscal year 1997 defense authorization conference, with 
a final report provided no later than 1 April 1997.

                          all-source analysis

    During the past two years, the Committee has noted that the 
all-source analysis cadre throughout the Intelligence Community 
has been reduced to levels that now place in question the 
Community's ability to respond to national security needs. This 
assessment has been validated through repeated testimony by 
senior Intelligence Community managers who are faced with 
managing dwindling and inexperienced resources, knowing that 
all of the national security needs cannot be met. Two areas are 
of specific concern; the level of effort and expertise 
available for so-called lower-Tier countries (as categorized by 
the Administration in Presidential Decision Directive 35), and 
the necessary resources in the area of imagery analysis, which 
is closely linked to the all-source process.
    The personnel reductions that were legislated by Congress 
have appeared to be somewhat successful in forcing necessary 
restructuring of the Intelligence Community. The Central 
Intelligence Agency met its reduction goals early, thus 
allowing it to begin the process of hiring new analysts with 
education and experience in areas befitting the post-Cold War 
era. As the Committee noted last year, personnel skill-mix 
issues remain significant at the National Security Agency. 
However, the Committee is increasingly concerned about the 
future of the all-source workforce at the Defense Intelligence 
Agency and, generally, throughout Defense, and now believe that 
future reduction plans will prove detrimental to supporting the 
needs of the military commander and defense policymaker.
    The past summer, the DCI and the Deputy Secretary of 
Defense, through the Expanded Defense Resources Board (EDRB), 
acknowledged part of the problem by adding additional all-
source analytic positions to the General Defense Intelligence 
Program (GDIP) for fiscal year 1997. No additional imagery 
analysis positions were added. Even with the addition of 
positions, the GDIP still showed reduced personnel, as it meets 
the reduction goals legislated by Congress for the Intelligence 
Community. In fiscal years 1998 and 1999, however, continued 
reductions are scheduled as part of a Defense-wide reduction of 
civilian personnel.
    Recent testimony indicates that the overall reductions in 
GDIP personnel since 1991 have introduced a significant element 
of risk. At the same time the fragmented international 
political landscape, increasing danger of the proliferation of 
weapons of mass destruction and the means to deliver them, and 
the multiplication of regional and transnational actors 
inimical to our interests have all increased the challenges to 
effective intelligence analysis.
    The Committee understands, but does not necessarily agree 
with, the thinking behind having intelligence take its ``fair 
share'' of the Defense-wide civilian reductions, but when taken 
with continuing reductions in military personnel, these 
``taxes'' are problematic. Moreover, the Committee believes 
that as Defense resources decrease, intelligence resources need 
to increase in order to provide the lead-time to civilian and 
Defense policymakers that allows them either to manage the 
issue in order to prevent deployment of U.S. military forces, 
or to provide enough warning to allow military forces to 
prepare adequately. Accordingly, the Committee requests that 
the Secretary of Defense and the DCI reevaluate the utility of 
the additional reductions for the GDIP, especially in light of 
the EDRB actions, and urge that the GDIP be exempt from further 
defense-wide civilian personnel reduction beyond fiscal year 
1997.

                          community management

    Although the Committee's formal proposals for improving and 
strengthening Intelligence Community management are contained 
in H.R. 3237, the Intelligence Community Act, there are some 
areas of longstanding concern which merit attention and action 
regardless of the final disposition of H.R. 3237. The Committee 
has long been concerned that DCIs and their Community 
Management Staffs have not effectively exercised existing 
authorities for a variety of reasons: unwillingness to 
challenge the authority of the program managers; cultural and 
organizational barriers, compounded by having a large 
proportion of the CMS staff on rotation from the very agencies 
they are overseeing; and, most basically, insufficient 
personnel and ADP resources to do the job. The areas of most 
concern to the Committee have been resource management and 
collection and requirements management. However, the Committee 
has also looked to the CMS, largely in vain, to provide 
centralized management of administrative and infrastructure 
issues.
    The current DCI seems more willing to exert community 
control over the various NFIP agencies in the resource 
management area, and the Committee regards this as a positive 
trend. Bringing the Intelligence Community budgeting process 
into synchronization with the Department of Defense in the 
Expanded Defense Resources Board process makes sense, and 
should lead to a more coherent end-to-end intelligence program. 
However, the Committee still has concerns about the ability of 
the CMS to make cross-program and cross-INT trades within the 
NFIP. Because there is no community-wide budgeting and 
accounting system that allows apples-to-apples comparisons 
between the programs and that could identify areas of potential 
savings or investment, the CMS must rely on the programs 
themselves to do these analyses. It then cannot full utilize 
the data provided because it does not have enough people to 
devote to program analysis and resource management functions. 
In the authorization this year, the Committee is providing 10 
additional billets to perform resource management functions, 
and $10.0 million dollars to develop a budgeting and accounting 
system for the Intelligence Community, of which $5.0 million is 
specifically for the development of a compatible system for the 
National Reconnaissance Program. The Committee believes that 
this number of personnel is still insufficient, but hesitates 
to increase the staff by more than 20% in one fiscal year. The 
Committee expects that the Administration will request 
additional billet increases in the budget submission for fiscal 
year 1998.
    Another area of concern has been in the area of collection 
and requirements management. As articulated in the 
``Intelligence Community in the 21st Century'' (IC21) staff 
studies, the Committee is concerned that the discipline 
stovepipes hinder integrated, all-source collection management 
and synergistic collection operations. The targets of the 
future are going to require a more intensive, integrated 
approach, similar to that being pursued in the ``hard targets'' 
initiative led by the DDCI. It is also clear that competition 
for collection resources, in particular between immediate 
military requirements and longer-term national interests, is 
going to become increasingly fierce. The community requires an 
active forum for developing and monitoring collection plans and 
making collection resource trade-offs. The Committee has 
observed and supports the more active role being played in 
these areas by the National Intelligence Collection Board and 
believes that this role should continue and be enhanced. For 
this reason, we have designated 5 additional billets for the 
Plans and Requirements Group.
    Finally the Committee would like to commend the 
Intelligence Systems Secretariat and the DCI for successfully 
spearheading the establishment of a reinvestment reserve for 
information handling systems and an information systems 
strategy that embodies most of the principles of IC21 and of 
general good management. The Committee fully concurs in the 
priorities identified for reinvestment: integrated intelligence 
communications, Defense Messaging System, collaborative 
environment, and network security. The Committee also concurs 
with the distinction drawn between ``dedicated communications'' 
and ``assured services'' in the stragegy; the establishment of 
a single community executive agent for communications was 
hopefully the first step towards making this distinction 
meaningful and getting the individual programs ``out of the 
comms business.'' The Committee has also long been a support of 
the systems migration process and is concerned that there 
appears to be some ``backsliding'' within the programs. 
Therefore, the Committee requests a briefing on the status of 
this process and a report listing migration and legacy systems 
by program, with timelines for the phase-out of the legacy 
systems, by February 1, 1998, in time to be factored in to our 
consideration of the fiscal year 1998 budget request.

          The consolidation of clandestine human intelligence

    The Commission on the Roles and Capabilities of the United 
States Intelligence Community (the ``Aspin-Brown Commission''), 
after examining the rational behind the establishment of the 
Defense HUMINT Service (DHS) and the marginal value of most 
military clandestine operations to date, recommended that the 
clandestine recruitment of human sources, now carried out by 
active duty military officers assigned to Defense HUMINT 
Service (DHS) ``be transferred to the CIA, utilizing military 
personnel on detail from DoD, as necessary.'' The IC21 staff 
study of the Clandestine Service recommended that the DoD 
clandestine operations of DHS be merged in an independent NFIP 
agency, the Clandestine Service, that would come directly under 
the DCI and that would consist largely of the programs 
currently resident in the CIA Directorate of Operations (DO).
    Both studies note the importance and necessity of using 
military personnel in clandestine operations, but concludes 
that administrative and personnel policies within DoD make it 
highly unlikely that the intelligence produced by DHS will 
warrant the cost of establishing it as an independent entity. 
Additionally, although there is a tremendous need for 
centralized management of clandestine operations, the 
managerial framework under which DHS operations within DoD 
makes that extremely difficult. Finally, recent experiences of 
DHS have shown that, to fulfill the function is currently has 
been assigned within DoD, it will, in many ways, have to 
develop a parallel support infrastructure to that which already 
exists in the CIA. Some of the requested funding for DHS for 
fiscal year 1997 would have gone towards maintaining and 
building that redundant infrastructure.
    The Committee has heard that, in recent months, there have 
been serious discussions within and between DoD, the GDIP 
Program Manager, the CIA, and the DCI regarding the transfer of 
some, if not all, DHS clandestine activities to the CIA. 
Reportedly, these discussions have not yet been fruitful for a 
variety of reasons, among which is the issue of command and 
control of military personnel within a non-DoD agency. The 
Committee notes that, prior to the establishment of the 
position of Associate Director of Central Intelligence for 
Military Support by the DCI, a senior military officer was 
positioned within the management structure of the DO and that 
this proved beneficial to all sides. The Committee hopes that a 
solution will be found in the near future that goes beyond the 
simple formula proposed by Aspin-Brown: the detailing of 
military personnel ``as necessary'' to the CIA. At the same 
time, the Committee believes it is essential that whatever 
arrangement is worked out avoids the problems that currently 
exist in the management and operation of DHS as pointed out 
above.
    The consolidation of clandestine collection activities will 
also require a significant and lasting commitment on the part 
of the CIA actively to support and consolidate infrastructure 
and administrative resources to service civilian and military 
officers on an equal footing. Moreover, a commitment must be 
made by the CIA to serve validated military requirements. To do 
this, the CIA will have to work closely with DoD and the CINCs 
to ensure that their operational needs are met and that 
commanders have confidence in the support they are receiving. 
That, in turn, will be extremely difficult, if not impossible, 
to accomplish without the participation of active duty military 
personnel trained in the clandestine collection discipline. In 
the area of clandestine collection, the CIA and DoD need each 
other.
    In separate legislation (H.R. 3237, the ``Intelligence 
Community Act'') the Committee has proposed the transfer of DHS 
clandestine operations to the CIA. In this authorization, 
however, the Committee has taken intermediate steps within the 
GDIP account to encourage DHS to concentrate on fulfilling its 
preponderant mission--the collection of intelligence through 
overt means, as in its Defense Attache program overseas--and to 
limit its involvement in clandestine collection. Specifically, 
the Committee intends for DHS to restrict its clandestine 
collection and clandestine collection support activities to 
those that are not duplicative of those of the DO. The 
Committee notes that responsibility for success of future 
clandestine operations rests with the DO, as well, to ensure 
that clandestine military assets are fully supported. 
Regardless of the outcome of previous, recent attempts by the 
GDIP Program Manager and the DCI to accomplish merging 
clandestine activities, the Committee implores these 
individuals to continue this effort, and stands ready to assist 
as necessary.

            creating a ``virtual intelligence architecture''

    The Committee supports the Intelligence Community's initial 
efforts towards creating a ``virtual intelligence 
architecture'' that will link collectors, exploiters, analysts 
and intelligence customers electronically. The Committee 
believes that a virtual architecture will transcend 
organizational boundaries and, by providing more flexibility 
and less bureaucratic rigidity, electronic connectivity will 
allow the policy and intelligence communities continually to 
reevaluate requirements and refocus resources on those issues 
of paramount importance. Breaking down these boundaries will 
help synergy in all areas of the Community--collection, 
analysis, production and requirements formulation and vetting. 
Programs such as INTELINK and Joint Intelligence Virtual 
Architecture (JIVA) are harbingers of an era where 
collaborative reporting will be the standard among analysts 
throughout the Intelligence Community.
    As the Intelligence Community moves towards implementing a 
virtual intelligence architecture, however, it must thoroughly 
examine what effect this will have on the Intelligence 
Community's traditional production and management procedures 
and ``culture.'' Currently, Intelligence Community managers--
situated at the top of a vertical, hierarchical structure--
largely control the information flow to and from policymakers. 
In a virtual intelligence architecture, managers will probably 
have less direct control over the information flow. Instead, 
they will act as facilitators who monitor the dialogue between 
policymakers and substantive experts to ensure that Community 
resources are appropriately allocated to priority tasks and to 
help say ``no'' to requests when resources are not available.
    The Committee believes that the Intelligence Community must 
begin now to prepare for the issues and problems that may arise 
as analysts increasingly communicate electronically--with less 
management supervision--with policymakers, collectors and other 
analysts. The DCI's Non-Proliferatin Center (NPC)--as an IC 
Center that works intimately with policymakers and other 
Intelligence Community components and as a Center that has been 
more ``forward-leaning'' in utilizing electronic communications 
resources than most other Community offices and Centers--would 
serve as an excellent test-bed for examining the management 
issues that are likely to arise under a future virtual 
intelligence architecture. Accordingly, the Committee requests 
that the Community Management Staff, working with the Director 
of the NPC and the head of the Intelligence System Secretariat, 
supply to the Director of Central Intelligence a report 
addressing the questions outlined below. In compiling the 
research for this report, input from managers throughout the 
Intelligence Community should be sought. The Director of 
Central Intelligence shall forward this report to the 
congressional intelligence committees by March 15, 1997. The 
report should address the following questions:
          What ``cultural'' and procedural hurdles will 
        Intelligence Community management have to overcome as 
        the Community moves into a virtual environment? What 
        current practices will have to change?
          To what extent should Intelligence Community offices 
        and Centers, like the NPC, be electronically connected 
        to their policy customers and other elements of the 
        Intelligence Community? What are near-term and long-
        term plans for enhancing this connectivity?
          What role do managers--for example, NPC managers--
        play in controlling the information flow, particularly 
        in electronic media, between their offices, 
        policymakers and the Intelligence Community as a whole? 
        How might a ``virtual intelligence architecture'' 
        change this role?
          What, if any, procedures does or will NPC have in 
        place to monitor and differentiate between the 
        electronic distribution of official NPC products and ad 
        hoc spot assessments, evaluations or informal 
        communications between individual NPC collectors/
        analysts and policymakers? If none, what procedures 
        need to be considered or developed?
          As the Community moves towards a ``virtual 
        intelligence architecture,'' what problems or issues 
        might arise as various Community entities begin 
        posting, electronically, separate analytical products--
        whether they are single-source or all-source products--
        for intelligence customers? What mechanisms might be 
        used to monitor/control the information flow to ensure 
        that intelligence customers can differentiate between 
        the Community's official, all-source products and 
        single-source, possibly uncoordinated products from 
        individual Intelligence Community components? Should 
        there be a central ``clearing house'' for all 
        analytical products before they are posted 
        electronically?
          What ground rules should govern the information flow 
        between collectors and policymakers? Should these rules 
        be different from those governing the information flow 
        between analysts and policymakers or between analysts 
        and collectors?

              intelligence sharing with the united nations

    Based on an agreement between the State Department and the 
DCI, specific criteria must be met before the U.S. Government 
may share intelligence with the United Nations. First, a 
decision must be reached among senior State Department 
policymakers that the U.N. mission in question is an activity 
that the United States wishes to support. If the decision is 
made to support a U.N. activity with intelligence, Intelligence 
Community representatives meet to determine what kinds of 
intelligence information exist to satisfy the request and, of 
that information, what can be provided without compromising 
sources and methods. The Joint Staff is normally tasked to 
transmit the intelligence information. The information may be 
passed from the Pentagon to the U.S./U.N. mission in New York, 
and ultimately to the Situation Center in the U.N. The Joint 
Staff's Intelligence Center in the Pentagon also provides U.S. 
Unified Commanders overseas with sanitized information that can 
be shared with the U.N. Moreover, in the tactical setting, 
information is shared with the U.N. by local military 
commanders who make some ``on the ground'' decisions about 
releasing tactical intelligence.
    At the start of the 104th Congress, in January 1995, the 
Committee held a hearing to consider several sections of H.R. 
7, the National Security Revitalization Act, including Section 
512, a provision on intelligence sharing with the U.N. During 
the hearing, the Committee requested testimony on the variety 
of ways intelligence is shared with the U.N. There was strong 
Administration objection to the original Section 512, which 
required a written agreement between the U.N. and U.S. before 
intelligence could be shared. In addition to possible 
Constitutional problems pertaining to the provision's limiting 
the ability of the Executive to conduct foreign policy, the 
hearing witnesses objected to Section 512 on the basis that it 
would effectively shut down all intelligence sharing with the 
U.N. Moreover, the witnesses opined that such a formal, written 
agreement might make it difficult for the U.S. to choose not to 
share intelligence.
    The Committee amended Section 512 of H.R. 7 to provide that 
before intelligence is provided by the U.S. to the U.N., the 
President must ensure that the DCI, in consultation with the 
Secretaries of State and Defense, has established guidelines 
governing the provision of intelligence to the United Nations 
that protect intelligence sources and methods from unauthorized 
disclosure. The Committee provision also called for periodic 
and special reports by the President to Congress regarding 
intelligence provided to the U.N. Unauthorized disclosures of 
intelligence to the U.N. were required to be reported to 
Congress within 15 days after the disclosure became known to 
the President. The Committee passed its amendment to Section 
512 unanimously.
    During the course of the UNOSOM I and II operations in 
Somalia, problems again surfaced regarding intelligence sharing 
with the U.N. However, in March 1995, during the final 
withdrawal from Mogadishu, U.S. officials happened upon an 
unguarded room full of numerous sensitive documents--many of 
U.S. origin. The discovery of a roomful of unsecured and very 
disorganized ``intelligence'' documents purportedly under U.N. 
``control'' heightened the concerns that the U.N. inherently is 
ill-equipped to manage and protect the intelligence provided to 
it. Two major outcomes from the investigation of this incident 
have been: improved record keeping, document marking and 
management on the part of U.S. personnel engaged in the passage 
of material to the U.N.; and initiatives to help the U.N. to 
improve its document storage and handling practices.
    Although procedures have been established for sharing 
intelligence with the U.N., and statutes exist that charge the 
DCI with the overall responsibility to protect sources and 
methods, there remain concerns among some about the wisdom of 
sharing any intelligence with an organization possessing member 
countries whose interests are perceived as inimical to those of 
the U.S. Although the investigation was undertaken to examine 
the nature of the documents found in Mogadishu, there also was 
some renewed general concern about what kinds of information 
were being provided to the U.N. and whether the trend has been 
to increase the amount of sharing taking place. On the other 
hand, U.S. State Department and White House policymakers argue 
that the sharing of intelligence can be very persuasive at 
times when the U.S. seeks to garner multi-national support for 
a certain activity or action, and that they are not asking the 
Intelligence Community to compromise sources and methods. The 
debate continues in many quarters regarding how much 
intelligence sharing is necessary, to what degree sharing 
benefits the U.S. Government, and whether a proper balance is 
being struck between the need to protect intelligence sources 
and methods versus using intelligence to advocate a range of 
policymaker interests.
    In order that the Committee may improve its understanding 
of the nature and amount of intelligence sharing taking place 
between the U.S. Government and the United Nations, it is 
requested that the DCI and the State Department provide a 
report to the Intelligence Committees that described the types 
of intelligence being shared with the U.N. and the purposes for 
which the intelligence is being provided. The Committee also 
requests that the report describe the benefits of the 
intelligence sharing activities for the U.S. policymaking 
community and any counterintelligence risk that might have been 
considered. The Committee asks that the two reports be 
submitted yearly, the first on January 15, 1997, and the second 
on July 15, 1997.

                 SHARING AND DECLASSIFYING INTELLIGENCE

    The Committee is increasingly concerned about the pattern 
of activities and attitudes of senior intelligence Community 
and Defense officials related to the control and 
declassification of intelligence information, especially with 
regard to the protection of sensitive intelligence sources and 
methods. Recent instances include offering intelligence 
information to a foreign government as a foreign policy 
``carrot,'' on-the-record and background statements to the 
media about intelligence operations in Bosnia, release of 
classified information on the Internet, and the proposal to 
review documents for declassification using ``risk management'' 
and statistical sampling techniques--that basically consists of 
conducting the review by random sampling of documents in a file 
to determine whether the entire file is classified. These 
examples suggest an attitude by the Intelligence Community and 
the Department of Defense that is less rigorous than in the 
past, and that places declassification at a higher priority 
than the necessary protection of sources and methods.
    The Committee understands and supports the fact that 
policymakers and the military now operate in an era where 
coalition support--political and military--is becoming a normal 
part of foreign policy for the United States. Moreover, 
technology in the commercial sector has continued to develop so 
that some of the areas of information collection that were 
singularly the purview of the U.S. government are now widely 
known by other governments and non-government entities. 
Finally, this Committee has consistently called on the DCI to 
be more attentive in allowing the American people to understand 
Intelligence Community successes, rather than just read about 
the failures that the U.S. media publicizes. The Committee 
believes that, in the past, classification of information has 
been inflated--an area that also needs stricter supervision. 
That said, however, the Committee also believes that to respond 
to declassification without specific, well-planned, consistent 
guidelines and policies is a recipe for the possible compromise 
of our sensitive sources and methods.
    Given the level of knowledge about our collection systems 
and the fragility of many of our operations (from both a human 
and political perspective), some U.S. intelligence resources 
are in danger of being compromised if we are not more careful 
in our approach toward declassification and information 
sharing. Promoting a policy whereby information remains 
classified--and sources and methods protected--by exception 
rather than as a conscious and ongoing policy practice, may 
solve some short-term management concerns in foreign policy, 
but potentially at tremendous long-term costs. The Committee 
acknowledges that there is often a fine line between a decision 
to maintain information at a classified, U.S.-only level versus 
meeting immediate needs, especially when those needs address a 
potential military requirement or may garner support from 
another government or the American public. In this era when we 
are told that our military will rely on intelligence 
information to ``operate within the enemy's decision cycle,'' 
the ability to collect secrets will be the difference between 
success and defeat. Giving away too many secrets ultimately 
will mean the loss of the comparative edge that U.S. 
intelligence capabilities now provide to U.S. forces. 
Therefore, it is imperative that the DCI and the SECDEF 
approach this issue with caution and with the utmost scrutiny. 
This is an area where the Committee plans more in-depth work 
over the coming year.

                         SATELLITE ARCHITECTURE

    Last year, the Committee registered numerous concerns 
regarding the National Reconnaissance Program (NRP) and 
expected to see movement towards reducing current and future 
collection costs so that processing and exploitation could be 
improved and next-generation systems could be initiated. 
However, the Committee was disappointed to receive a budget 
request from the National Reconnaissance Office (NRO) that 
maintained the status quo, forcing the Committee, again, to 
redistribute funds within the NRP.
    The Committee continues to assert, and studies have borne 
out, that NRP imagery missions can be performed with less 
costly, smaller spacecraft and that now is the opportune time 
to begin acquisition of these smaller satellites. These 
``smallsats'' offer the potential to decrease overall program 
costs while increasing capability, flexibility, robustness of 
the architecture, quicker infusion of new technologies and 
operation techniques, better maintenance of the industrial 
base, and an opportunity for the NRO to return to streamlined 
acquisition. Further, these systems offer the NRO the 
opportunity to rethink its ground architecture, which, like 
current collection systems, is costly to upgrade and maintain.
    With the savings realized from collection deceases, the 
Committee was able to divert funding to several new and 
exciting processing and exploitation initiatives. These 
initiatives will allow the NRO to get more bang for the buck 
out of current and future collection systems. The Committee 
would like to see increased emphasis on processing and 
exploitation in the future.
    Finally, the Committee remains concerned about the NRO's 
current acquisition strategy and had recommended changes to 
correct the deleterious results of this strategy. To its 
credit, the NRO builds extremely robust satellites. However, it 
is exactly this robustness that is the cause of many current 
problems, with far reaching consequences throughout the 
Intelligence Community. Some may argue that the users will 
suffer because of the Committee's actions. Yet, it is these 
same users who will benefit from the Committee's effort to 
achieve an affordable and sustainable architecture over the 
long term.

            Section-by-Section Analysis of Bill as Reported

                    title i--intelligence activities

Section 101.--Authorization of appropriations

    Section 101 lists the departments, agencies, and other 
elements of the United States Government for whose intelligence 
and intelligence-related activities the Act authorizes 
appropriations for fiscal year 1997.

Section 102.--Classified schedule of authorizations

    Section 102 makes clear that the details of the amounts 
authorized to be appropriated for intelligence and 
intelligence-related activities and applicable personnel 
ceilings covered under this title for fiscal year 1997 are 
contained in a classified Schedule of Authorizations. The 
Schedule of Authorizations is incorporated into the Act by this 
section. The details of the Schedule are explained in the 
classified annex to this report.

Section 103.--Personnel ceiling adjustments

    Section 103 authorizes the Director of Central 
Intelligence, with the approval of the Director of the Office 
of Management and Budget, in fiscal year 1997 to exceed the 
personnel ceilings applicable to the components of the 
Intelligence Community under section 102 by an amount not to 
exceed two percent of the total of the ceilings applicable 
under section 102. The Director may exercise this authority 
only when doing so is necessary to the performance of important 
intelligence functions. Any exercise of this authority must be 
reported to the two intelligence committees of the Congress.
    The Committee emphasizes that the authority conferred by 
Section 103 is not intended to permit the wholesale raising of 
personnel strength in any intelligence component. Rather, the 
section provides the Director of Central Intelligence with 
flexibility to adjust personnel levels temporarily for 
contingencies and for overages caused by an imbalance between 
hiring of new employees and attrition of current employees. The 
Committee does not expect the Director of Central Intelligence 
to allow heads of intelligence components to plan to exceed 
levels set in the Schedule of Authorizations except for the 
satisfaction of clearly identified hiring needs which are 
consistent with the authorization of personnel strengths in 
this bill. In no case is this authority to be used to provide 
for positions denied by this bill.

Section 104.--Community management account

    (a) Authorizations of Appropriations: There is authorized 
to be appropriated for the Community Management Account of the 
Director of Central Intelligence for fiscal year 1997 the sum 
of $93,616,000. Within such amounts authorized, funds 
identified in the classified Schedule of Authorizations 
referred to in Section 102(a) for the Advanced Research and 
Development Committee shall remain available until September 
30, 1998.
    (b) Authorized Personnel Levels: The Community Management 
Staff of the Director of Central Intelligence is authorized 273 
full-time personnel as of September 30, 1997. Such personnel of 
the Community Management Staff may be permanent employees of 
the Community Management Staff or personnel detailed from other 
elements of the United States Government.
    (c) Reimbursement: During fiscal year 1997, any officer or 
employee of the United States or a member of the Armed Forces 
who is detailed to the Community Management Staff 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 non-reimbursable basis for a period 
of less than one year for the performance of temporary 
functions as required by the Director of Central Intelligence.
    (d) Declassification: This section authorizes $25 million 
for fiscal year 1997 for the purposes of carrying out the 
provisions of Section 3.4 of Executive Order 12958, dated April 
17, 1995.
    Section 307 of last year's Intelligence Authorization Act 
limited declassification expenditures to $25 million in fiscal 
year 1996 and requested a specific budget request from the 
President. The conferees noted that ``* * * there needs to be a 
continuing effort to fully evaluate the potential costs 
associated with declassification review program.'' The 
conferees also urged that the declassification effort be 
coordinated closely with CIA's Historical Review Program Office 
to enhance the intellectual coherence of the declassification 
process.
    The Committee remains committed to the systematic 
declassification of documents in the U.S. Intelligence 
Community. It is equally committed to ensuring that this is 
done in a fiscally sound manner consistent with the need to 
ensure that intelligence sources and methods are fully 
protected. The Committee continues to receive information that 
raises doubts about the prudence of the overall expenditure of 
declassification funds. Mindful that this is a priority program 
for President Clinton, the Committee has balanced this against 
spending priorities necessary to keep a strong and vibrant 
Intelligence Community; therefore, the Committee has kept the 
authorization at the same level as fiscal year 1996.
    This authorization provides funds to declassify documents 
25 years or older. The request was only one part of a much 
larger request for classification management and 
declassification of documents that is contained in the 
classified annex. Despite the fact that Section 307 of the 
Intelligence Authorization Act for Fiscal Year 1996 required 
that the President submit a detailed request for funds to carry 
out the provisions of his executive order, the submissions have 
been meager. Information provided to the Committee staff 
indicates that the declassification program is driven by 
numbers of documents that must be declassified, not a prudent 
regard for the protection of intelligence sources and methods 
or the costs.
    The Committee believes that the funds requested in the 
President's budget submission grossly understate the real cost 
of carrying out the provisions of Section 3.4. The Committee 
intends to follow this issue intensively in the coming months, 
and plans to hold at least one hearing at which it will 
aggressively address the issues of: (a) whether important 
intelligence sources and methods are at risk in the 
implementation of Executive Order 12958; (b) problems raised by 
having an Executive Order, in effect, automatically mandate 
annual expenditures; and, (c) whether this mandate should be 
fully funded at the expense of other high-priority programs.
    (e) National Drug Intelligence Center: This provision 
authorizes the appropriation of $32,076,000 to support the 
programs and personnel of the National Drug Interdiction Center 
(NDIC) in Johnstown, Pennsylvania.
    After 12 years of decline, between 1980 and 1992, drug use 
has risen steadily since 1993. According to Donna Shalala, 
Secretary of the Department of Health and Human Services, 
marijuana use among 12-17 year-olds doubled between 1992 and 
1994. These numbers have not yet reached the peak levels of 
1979, but the increase in first-time use of marijuana serves as 
a wake-up call. Accordingly, the Committee has taken the 
unusual step of authorizing the NDIC in the open bill to signal 
its strong commitment to waging the war on drugs.
    This Committee has long supported counter-drug programs 
funded through the NFIP, TIARA, and JMIP. Substantial increases 
in intelligence counter-drug programs were authorized by the 
Committee every year since President Bush announced his 
National Drug Strategy in August of 1989. The Intelligence 
Community plays a vital role in supporting drug interdiction 
efforts overseas before narcotics cross our borders. The NDIC, 
created in 1991, coordinates and consolidates drug intelligence 
from all national security and law enforcement agencies, and 
produces information on the structure, membership, finances, 
communications, and activities of drug trafficking 
organizations. It acts as a filter between intelligence 
operations and the law enforcement community, ensuring that 
information developed from lawful intelligence collection 
abroad is passed to the law enforcement agencies (such as FBI), 
without triggering prohibitions contained in the National 
Security Act on intelligence involvement in law enforcement.
    The Committee views the funding of the NDIC through the 
NFIP as a unique opportunity to underscore the important role 
intelligence plays in law enforcement. The Committee will 
carefully oversee the activities of the NDIC to provide it with 
adequate resources and authorities to ensure that the NDIC will 
play a vital role in supporting the law enforcement community. 
The Committee also believes that it is important to reduce 
redundant systems and capabilities, and will carefully review 
the NDIC mission against that of the El Paso Intelligence 
Center (EPIC) to ensure that these two facilities complement 
but do not duplicate each other.
    It is an Intelligence Community goal to improve the working 
relationships between intelligence and law enforcement agencies 
on the transnational drug problem. The Intelligence Community's 
focus on international narcotics trafficking and international 
organized crime have already led to increased foreign 
intelligence collection and analytic efforts on these issues as 
well as to the dissemination of such intelligence to the law 
enforcement community via the NDIC. These efforts are paying 
dividends; the recent and publicly noted arrests of Cali Cartel 
leaders in Colombia was due to cooperation between the Central 
Intelligence Agency, the Drug Enforcement Agency, and the 
Colombian authorities.
    The Intelligence Community can assist the law enforcement 
community by supporting NDIC. The Center's charter is to 
coordinate and consolidate drug intelligence from all national 
security and law enforcement agencies, and to produce 
information regarding the structure, membership, finances, 
communications, and activities of drug trafficking 
organizations. Consistent with the requirements of the National 
Security Act of 1947 and Executive Order 12333, NDIC can 
perform appropriate and timely exchange of intelligence 
information and resources between the law enforcement and 
intelligence communities.
    Despite the transfer of funding for NDIC from the Joint 
Military Intelligence Program to the National Foreign 
Intelligence Program (NFIP), NDIC will remain a law enforcement 
organization. Further, it is important to highlight, as 
described in a joint letter dated April 16, 1996, from the 
Deputy Director for Central Intelligence and the Deputy 
Attorney General to Chairman Combest and Ranking Democratic 
Member Dicks, the National Security Act of 1947 and Executive 
Order 12333 prevent the DCI from exercising any direction or 
control over NDIC operations because of its unique support for 
law enforcement.
    The Committee will work with the Attorney General and the 
Director of Central Intelligence to clarify the role of the 
Intelligence Community's support for the NDIC and law 
enforcement generally and ensure that funding the NDIC in the 
NFIP respects the current prohibition on CIA's involvement in 
law enforcement activities.
    (f) Environmental Programs: This section authorizes $6 
million to carry out programs administered by the Environmental 
Intelligence Application Program (EIAP), formerly known as the 
Environmental Task Force.
    This section authorizes the Environmental Intelligence and 
Applications Program (EIAP)--formerly known as the 
Environmental Task Force. The EIAP acts as a broker for the 
Intelligence Community as a source of security-cleared 
scientific talent upon which it can draw as the Intelligence 
Community addresses environmental intelligence issues as part 
of its normal intelligence collection and analysis efforts in 
support of policymakers.
    Fiscally sound programs that address environmental problems 
are of keen interest to this Committee. The Central 
Intelligence Agency is now working on a more coherent plan on 
how to address environmental intelligence issues, and the 
scientific talent of the EIAP will be part of the overall 
intelligence Community effort in this area.
    In December 1995, a senior CIA official testified at a 
hearing of the House National Security Committee's Subcommittee 
on Military Research and Development. In that testimony, which 
focused on Russian contamination of the Arctic Ocean, the 
official stated that the EIAP has demonstrated its ability to 
work closely with the Intelligence Community on issues that 
affect the U.S. national interest.
    The EIAP combines the talents of the scientific community, 
the Intelligence Community, and other government agencies to 
respond to policy-related questions concerning world-wide 
pollution effects. This was exemplified by the project the CIA 
undertook in the fall 1994 to perform a quick, but technically 
sophisticated, analysis of the Komi oil spill in Russia--an 
analysis that could not have been done so quickly without the 
extensive engagement of the scientists from the EIAP as well as 
analysts from NOAA and EPA.
    The Committee has questioned in the past some of the EIAP 
programs, because of their lack of focus. The EIAP program 
managers are now addressing these concerns. Information derived 
from the cooperative efforts of the EIAP and the Intelligence 
Community will assist other federal agencies previously 
authorized for the ETF departments. The Committee has, 
therefore, authorized $6 million for the EIAP. Finally, the 
Committee is disturbed to learn that U.S. intelligence funds 
may have been used to pay for foreign government officials to 
appear before the Congress. If the source of their travel funds 
was not disclosed, this would, at a minimum, constitute an 
unfortunate mistake. The Committee will examine this matter 
further.

title ii--central intelligence agency retirement and disability system 
                         and related provisions

Section 201.--Authorization of appropriations

    Section 201 authorizes appropriations in the amount of 
$184,200,000 for fiscal year 1996 for the Central Intelligence 
Agency Retirement and Disability Fund.

                     title iii--general provisions

Section 301.--Increase in employee compensation and benefits authorized 
        by law

    Section 301 provides that appropriations authorized by the 
conference report 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.

Section 302.--Restriction on conduct of intelligence activities

    Section 302 provides that the authorization of 
appropriations by the bill shall not be deemed to constitute 
authority for the conduct of any intelligence activity that is 
not otherwise authorized by the Constitution or laws of the 
United States.

Section 303.--Limitation on availability of funds for automatic 
        declassification of records over twenty-five years old

    This section establishes specific limits on authorizations 
for the expenditure of any appropriated funds for the purpose 
of carrying out Section 3.4 of Executive Order 12958, which 
directs the automatic declassification of documents older than 
25 years. This section also authorizes the DCI to allocate 
funds to the agencies within the NFIP to carry out Section 3.4. 
Despite the fact that the outlines of the executive order were 
well understood, the President only prospectively requested 
minimal funds to carry out the provisions of the Executive 
Order, which was signed on April 17, 1995. During the drafting 
and refinement of the Executive Order, the Administration 
conducted its own internal estimate for the cost of 
implementing Section 3.4 and determined that it would cost at 
least $450-500 million over five years. Prior to the passage of 
last year's Intelligence Authorization Act, the Committee 
received four different cost projections from the intelligence 
agencies affected by Section 3.4. Until a fiscally prudent 
program is developed, warehousing the same documents would only 
cost the U.S. taxpayers several hundred thousand dollars per 
year.
    Section 307 of last year's Intelligence Authorization bill 
limited declassification expenditures at $25 million in fiscal 
year 1996 and requested a specific budget request from the 
President for this declassification program. This provision 
reiterates the fiscal year 1996 language and again imposes a 
$25 million ceiling during fiscal year 1997. It gives the 
Director of Central Intelligence authority to allocate these 
funds within the National Foreign Intelligence Program.
    There is intense interest in this program in the Committee. 
Committee staff have sought, without success, to determine what 
the actual cost of implementing Executive Order 12958 will be. 
The declassification managers are being driven by arbitrary 
numbers of documents to be declassified. For example, the CIA 
program manager said he must reach his goal of 9 million 
documents this year. Therefore, traditional declassification 
procedures for careful review of all Intelligence Community 
holdings have been discarded; although costly, this traditional 
approach will offer greater protection from inadvertent and 
accidental disclosure of intelligence sources and methods. To 
illustrate, CIA is implementing a ``risk management approach'' 
to begin declassification of 20 million low sensitivity pages 
this year. Trial use of this method has surfaced two boxes of 
classified documents. This necessitated a more vigorous review 
that in turn surfaced another half box of highly classified 
material, which is not scheduled for release at this time. 
Nevertheless, the CIA is proceeding with its ``risk 
management'' strategy in order to meet the goal of 
declassification of 15 percent of the documents (9 million 
pages) this year. To improve confidence in its ``risk 
management'' program, the CIA put in place an ancillary 
screening program to capture every classified document. CIA has 
acknowledged that more classified material has already been 
found and that some may still slip through, but this is a risk 
that the CIA is prepared to take.
    The CIA, NSA, DIA, and NRO have all created offices and 
staffs to support this program. During this fiscal year, the 
money authorized has largely been spent for infrastructure. 
Since the Administration did not request funds in fiscal year 
1996 for this ``important'' program, the CIA has already sought 
to reprogram funds from other high-priority programs. The 
reprogramming request was only received in April, more than 
three months after the Intelligence Authorization Bill was 
signed into law. When asked why the CIA did not resort to 
funding this program from its ``reserve for contingencies,'' 
the response was that this was not an unforeseen contingency. 
Hence, the CIA had to take funds from other programs to pay for 
this initiative.
    The CIA's initiative to begin work on the declassification 
of 40 million sensitive documents is behind schedule. Its 
``declassification factory'' is not yet up and running, and it 
has encountered significant problems with automatic data 
processing. A software program, on which the CIA had rested its 
hopes for automating declassification, is not adaptable to its 
needs. The CIA must therefore start from scratch, and is only 
now beginning pilot testing of a new software program.

Section 304.--Application of sanctions laws to intelligence activities

    This provision was first included in the fiscal year 1996 
Intelligence Authorization Act; this section extends the 
provision's lifetime until January 6, 1998. The provision 
amended the National Security Act of 1947 to provide the 
President with the statutory authority to delay the imposition 
of a sanction upon a presidential determination that to proceed 
with the sanction would risk the compromise of an ongoing 
criminal investigation or an intelligence source or method. The 
President would be required to lift any stay of a sanction as 
soon as possible. In addition, the provision would require the 
President to report to Congress immediately upon imposition of 
the stay and when the duration of any stay imposed exceeds 120 
days.

Section 305.--Expedited naturalization

    This provision allows for the naturalization of certain 
applicants without their having to comply with the following 
statutory requirements: (1) continuous residence within the 
United States for a period of at least five years after having 
been lawfully admitted for permanent residence; (2) physical 
presence in the United States for at least 30 months of the 
five years preceding the date of filing a naturalization 
application; and (3) if applicable, freedom from membership or 
affiliation with the Communist Party or any other totalitarian 
organization for at least 10 years.
    This section would apply to individuals who are the spouse, 
son, or daughter of a deceased alien who died as a result of 
having been compromised by an individual who intentionally made 
an unauthorized disclosure of classified information that 
revealed the alien's cooperation with the United States 
Government in its intelligence activities. This extraordinary 
naturalization benefit would be conferred upon these applicants 
in recognition of the hardship and difficulties they encounter 
following the death by execution of their spouse or parent. For 
example, this benefit would be considered for individuals such 
as surviving spouses, sons, and daughters of United States 
Government assets and informants who died after being 
compromised by Aldrich Ames.

                 title iv--central intelligence agency

Section 401.--Multi-year leasing authority

    This provision clarifies the CIA's real property authority 
with respect to entering overt multi-year leases that could 
have terms as long as 15 years. Beginning in 1981, the CIA has 
routinely entered into a number of open multi-year leases in 
reliance upon section 8 of the CIA Act of 1949. The CIA's 
Inspector General raised concerns about the use of section 8 
for overt leases. Accordingly, the CIA stopped signing multi-
year leases in 1994. The CIA has incurred substantial costs as 
a result and has now sought legislative relief. GSA asserts 
that its role as a middle-man in such multi-year leasing 
arrangements reduces real property costs for the United States 
Government as a whole, but significant additional costs are 
borne by the CIA because GSA cannot move quickly and will not 
delegate leasing authority to the CIA.
    At a HPSCI hearing on May 1, 1996, CIA officials made the 
following arguments in support of granting the Agency multi-
year leasing authority: (1) savings can be realized in rental 
and renovation costs because landlords will offer lower rent 
and higher renovation contributions when they have the security 
of a 5-10 year lease; (2) in response to continually changing 
intelligence requirements, the CIA needs the flexibility to 
acquire appropriate space on short notice; (3) the CIA has 
unique facility telecommunications and security ``fit-up'' 
requirements that require investments that are not cost-
effective under single-year leases; (4) CIA is unique within 
the U.S. Government in that it does have authority to acquire 
space for overt requirements, but not on a multi-year basis; 
(5) landlords demand removal of and restoration for CIA-unique 
renovations in a short-term lease, and thereby drive up the 
costs of leased space; and (6) GSA management has not been 
cost-efficient, expeditious, or responsive to CIA's unique 
leasing requirements.
    GSA has stated that it is developing a new pricing plan and 
reforming their internal procedures to address CIA's concerns. 
The Committee welcomes this effort by the GSA. The Committee 
expects that the GSA will share the details of this plan with 
the CIA as well as any regulations necessary to implement it 
prior to the conference. Likewise, the Committee expects the 
CIA to evaluate any reform proposal developed by GSA. The 
Committee will assess the GSA proposal with the CIA's comments 
as it prepares for conference.

Section 402.--Repeal of additional surcharge relating to employees who 
        retire or resign in fiscal years 1998 or 1999 and who receive 
        voluntary separation incentive payments

    This provision would relieve CIA from being required to 
make double payments to the Civil Service Retirement and 
Disability Fund for those Agency employees who take an early 
retirement under the Civil Service Retirement System (CSRS) in 
fiscal years 1998 and 1999 and receive separation incentives. 
This section would avoid this duplicative charge to CIA, by 
repealing subsection (i) of the Central Intelligence Agency 
Voluntary Separation Pay Act.
    The Intelligence Authorization Act for Fiscal year 1996 
amended the CIA Voluntary Separation Pay Act (CVSPA) extending 
CIA's authority to offer voluntary separation incentives 
through fiscal year 1999. It also amended the CVSPA by adding a 
new section that requires the Director of Central Intelligence 
to remit to the Office of Personnel Management for deposit in 
the Civil Service Retirement and Disability Fund an amount 
equal to 15 percent of the final basic pay of each CSRS and 
FERS employee who voluntarily retires, and each CIA employee 
who resigns, in fiscal years 1998 and 1999 and receives 
separation incentive payments.
    It was not the intent of the Congress to have CIA make 
double payments to the Civil Service Retirement and Disability 
Fund of 24 percent of the final basic pay of those employees 
taking early CSRS retirement and receiving separation 
incentives in fiscal years 1998 and 1999. This provision will 
rectify this situation.

Section 403.--Implementation of intelligence community personnel 
        reforms

    On April 23, 1996, DCI Deutch announced a package of CIA 
personnel reforms that will affect Intelligence Community 
personnel at CIA and in the various DOD intelligence agencies. 
In recent briefings for HPSCI staff, information on the costs 
and program specifics of the reform proposals has been lacking 
in detail. The sweeping nature of these proposals will require 
further briefings and hearings to develop a firm legislative 
record. This provision blocks the expenditure of any amounts to 
implement any Intelligence Community personnel reforms until 
the Members of the Congressional intelligence committees have 
been fully briefed on these personnel reform proposals. It will 
send a clear signal that the Committee expects to be a full 
partner in any personnel reform plan implemented by the 
Director of Central Intelligence.

         title V--department of defense intelligence activities

Section 501.--Standardization for certain department of defense 
        intelligence agencies of exemptions from disclosure of 
        organizational and personnel information

    This provision corrects unnecessary differences between the 
information disclosure statutes of the Defense Intelligence 
Agency (10 U.S.C. 424) and the National Reconnaissance Office 
(10 U.S.C. 425). Both statutes were adopted after the last 
major revision of the Freedom of Information Act (FOIA) in 
1986, yet they contain distinctions that are unwarranted given 
the classified and sensitive functions of those agencies that 
are vital to national security.
    The amendments will make the DIA and the NRO disclosure 
statutes parallel to and more consistent with the older 
disclosure statutes of CIA and NSA. This will result in greater 
consistency in the handling of sensitive information and ensure 
greater security.

                           Committee Position

    On May 7, 1996, the Permanent Select Committee on 
Intelligence, a quorum being present, approved the bill, as 
amended by an amendment in the nature of a substitute, and, by 
a recorded vote of 10 ayes to 0 noes, ordered it favorably 
reported. On that recorded vote the Members present voted as 
follows: Mr. Combest (Chairman)--aye; Mr. Dornan--aye; Mr. 
Young--aye; Mr. Lewis--aye; Mr. Goss--aye; Mr. Castle--aye; Mr. 
Dicks--aye; Mr. Richardson--aye; Mr. Coleman--aye; Mr. Skaggs--
aye. The Committee, by voice vote, also authorized and directed 
the Chairman, or his designee, to make a motion under Rule XX 
of the House at the appropriate time to expedite taking the 
bill to conference with the Senate.

Findings and Recommendations of the Committee on Government Reform and 
                               Oversight

    With respect to clause 2(l)(3)(D) of rule XI of the House 
of Representatives, the Committee has not received a report 
from the Committee on Government Reform and Oversight 
pertaining to the subject to this bill.

                           Oversight Findings

    With respect to clause 2(l)(3)(A) of rule XI of the Rules 
of the House of Representatives, the Committee held six 
hearings, as well as a number of briefings, on the classified 
legislative, personnel, programmatic and budgetary issues 
raised by H.R. 3259. Testimony was heard from the Director of 
Central Intelligence, the Director of the National Security 
Agency, the Director of the Defense Intelligence Agency, 
numerous program managers and various other knowledgeable 
witnesses on the activities and plans of the Intelligence 
Community covered by this intelligence authorization bill. The 
bill, as reported by the Committee, reflects conclusions 
reached by the Committee in light of that oversight activity.

                      Fiscal Year Cost Projections

    The Committee has attempted pursuant to clause 7(a)(1) of 
rule XIII of the Rules of the House of Representatives to 
ascertain the outlays that will occur in fiscal year 1997 and 
the five years following if these amounts are appropriated. 
These estimates are contained in the classified annex and are 
in accordance with those of the executive branch.

                  Congressional Budget Office Estimate

    In compliance with clause 2(l)(3) (B) and (C) of rule XI of 
the Rules of the House of Representatives, an estimate prepared 
by the Congressional Budget Office submitted pursuant to 
sections 308 and 403 of the Congressional Budget Act of 1974 is 
as follows:

                                     U.S. Congress,
                               Congressional Budget Office,
                                      Washington, DC, May 14, 1996.
Hon. Larry Combest
Chairman, Permanent Select Committee on Intelligence, House of 
        Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 3259, the 
Intelligence Authorization Act for Fiscal Year 1997, as ordered 
reported by the House Permanent Select Committee on 
Intelligence on May 7, 1996.
    The bill would affect direct spending and thus would be 
subject to pay-as-you-go procedures under section 252 of the 
Balanced Budget and Emergency Deficit Control Act.
    If you wish further details on this estimate, we will be 
pleased to provide them.
            Sincerely,
                                          Paul Van de Water
                                   (For June E. O'Neill, Director).
    Enclosure.

               congressional budget office cost estimate

    1. Bill number: H.R. 3259.
    2. Bill title: Intelligence Authorization Act for Fiscal 
Year 1997.
    3. Bill status: As ordered reported by the House Permanent 
Select Committee on Intelligence on May 7, 1996.
    4. Bill purpose: This bill would authorize appropriations 
for fiscal year 1997 for intelligence activities of the United 
States government, the Community Management Staff of the 
Director of Central Intelligence, and the Central Intelligence 
Agency Retirement and Disability System (CIARDS).
    5. Estimated cost to the Federal Government: Table 1 
summarizes the budgetary effects of the bill. It shows the 
effects of the bill on direct spending and authorizations of 
appropriations for 1997. CBO was unable to obtain the necessary 
information to estimate the costs for the entire bill because 
parts are classified at a level above clearances now held by 
CBO employees. The estimated costs in Table 1, therefore, 
reflect only the costs of the unclassified portions of the 
bill.
    6. Basis of estimate: For purposes of this estimate, CBO 
assumed that H.R. 3259 will be enacted by October 1, 1996, and 
that the full amounts authorized will be appropriated for 
fiscal year 1997. Outlays are estimated according to historical 
spending patterns for intelligence programs.

Direct spending

    Section 402 would repeal the surcharge associated with 
Central Intelligence Agency (CIA) employees who receive a 
voluntary separation incentive payment in fiscal years 1998 or 
1999. Under current law, the CIA must pay the Civil Service 
Retirement Trust Fund 15 percent of final salary of all those 
who take a separation incentive payment in 1998 or 1999. Based 
on data from the CIA, CBO estimates that about 625 employees 
will take an incentive payment in those years. The result would 
be an estimated loss in mandatory offsetting receipts of $3 
million in both 1998 and 1999 and a corresponding reduction in 
discretionary spending.
    Section 401 would allow the Director of Central 
Intelligence to enter into long-term leases without them being 
subject to appropriations action. Thus, it would create direct 
spending authority equal to the net present value of the 
government's obligation over the term of the lease; outlays 
would equal the actual lease payments. CBO does not have enough 
information to estimate these costs, but they could amount to 
millions or tens of millions of dollars a year.

          TABLE 1.--ESTIMATED COST TO THE FEDERAL GOVERNMENT OF THE UNCLASSIFIED SECTIONS OF H.R. 3259          
                                    [By fiscal years, in millions of dollars]                                   
----------------------------------------------------------------------------------------------------------------
                                                           1996    1997    1998    1999    2000    2001    2002 
----------------------------------------------------------------------------------------------------------------
                                               DIRECT SPENDING \1\                                              
                                                                                                                
Direct spending:                                                                                                
    Estimated budget authority..........................       0       0       3       3       0       0       0
    Estimated outlays...................................       0       0       3       3       0       0       0
                                                                                                                
                                       SPENDING SUBJECT TO APPROPRIATIONS                                       
                                                                                                                
Spending under current law:                                                                                     
    Budget authority \2\................................     305       0       0       0       0       0       0
    Estimated outlays...................................     350      39      19       5       0       0       0
Proposed changes:                                                                                               
    Estimated authorization level.......................       0     351       0       0       0       0       0
    Estimated outlays...................................       0     280      39      24       8       0       0
Spending under the bill:                                                                                        
    Estimated authorization level \2\...................     305     351       0       0       0       0       0
    Estimated outlays...................................     350     319      58      29       8       0       0
----------------------------------------------------------------------------------------------------------------
\1\ Does not include the cost of long-term leases under section 401.                                            
\2\ The 1996 figures is the amount appropriated for programs authorized by this bill.                           
                                                                                                                
Note.--Because parts of this bill are highly classified, CBO is unable to provide a full accounting of the      
  bill's costs over the 1997-2000 period.                                                                       

Authorization of appropriations

    Section 104 would authorize appropriations of $93.6 million 
for 1997 for the Intelligence Community Management Account of 
the Director of Central Intelligence (DCI). In addition, 
section 104 would authorize $25 million for the National 
Foreign Intelligence Program, $32.1 million for the National 
Drug Intelligence Center, and $6 million for the Environmental 
Intelligence and Applications Program. Similarly, section 201 
specifies an authorization of appropriations for a contribution 
to the Central Intelligence Agency Retirement and Disability 
fund of $194.4 million.
    7. Pay-as-you-go considerations: The Balanced Budget and 
Emergency Deficit Control Act of 1985 sets up pay-as-you-go 
procedures for legislation affecting direct spending or 
receipts through 1998. CBO estimates that H.R. 3259 as ordered 
reported by the Permanent Select Committee on Intelligence 
would have the following pay-as-you-go impact:

------------------------------------------------------------------------
                                            1996       1997       1998  
------------------------------------------------------------------------
Changes in outlays1....................          0          0          3
Changes in receipts....................        (2)        (2)        (2)
------------------------------------------------------------------------
1 The table does not include the cost of long-term leases under section 
  401.                                                                  
2 Not applicable.                                                       

    8. Estimated impact on State, local, and tribal 
governments: Section 4 of Public Law 104-4 excludes from 
application of that Act legislative provisions that are 
necessary for the national security. CBO has determined that 
all the provisions of H.R. 3259 either fit within this 
exclusion or do not contain mandates as defined by Public Law 
104-4.
    9. Estimated impact on the private sector: Section 4 of 
Public Law 104-4 excludes from application of that Act 
legislative provisions that are necessary for the national 
security. CBO has determined that all the provisions of H.R. 
3259 either fit within this exclusion or do not contain 
mandates as defined by Public Law 104-4.
    10. Previous CBO estimate: None.
    11. Estimate prepared by: Wayne Boyington and Jeannette Van 
Winkle.
    12. Estimate approved by: Michael A. Miller for Paul N. Van 
de Water Assistant Director for Budget Analysis.

                        Committee Cost Estimates

    The Committee agrees with the estimate of the Congressional 
Budget Office.

                     Inflationary Impact Statement

    Pursuant to clause 2(l)(4) of rule XI of the Rules of the 
House of Representatives, the Committee has attempted to 
estimate the inflationary impact of enactment of the bill.
    The Committee finds no adequate method to identify the 
inflationary impact of this legislation. The bill does not 
provide specific budget authority but rather authorizations for 
appropriations. Thus, any inflationary impact would depend on 
the amounts actually appropriated and the effects that supplies 
of materials, production capacity or other economic resources 
would have on prices and costs in the operation of the national 
economy.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3 of rule XIII of the Rules of the 
House of Representatives, changes in existing law made by the 
bill, as reported, are shown as follows (existing law proposed 
to be omitted is enclosed in black brackets, new matter is 
printed in italic, existing law in which no change is proposed 
is shown in roman):

 SECTION 307 OF THE INTELLIGENCE AUTHORIZATION ACT FOR FISCAL YEAR 1996

SEC. 307. LIMITATION ON AVAILABILITY OF FUNDS FOR AUTOMATIC 
                    DECLASSIFICATION OF RECORDS OVER 25 YEARS OLD.

  (a) In General.--The Director of Central Intelligence shall 
use no more than $25,000,000 of the amounts authorized to be 
appropriated for [fiscal year 1996 by this Act] any of the 
fiscal years 1996 through 2000 for the National Foreign 
Intelligence Program to carry out the provisions of section 3.4 
of Executive Order 12958. The Director may, in the Director's 
discretion, draw on this amount for allocation to the agencies 
within the National Foreign Intelligence Program for the 
purpose of automatic declassification of records over 25 years 
old.
          * * * * * * *
                              ----------                              


                     NATIONAL SECURITY ACT OF 1947

          * * * * * * *

   TITLE IX--APPLICATION OF SANCTIONS LAWS TO INTELLIGENCE ACTIVITIES

          * * * * * * *

                          laws subject to stay

  Sec. 904. The President may use the authority of sections 901 
and 902 to stay the imposition of an economic, cultural, 
diplomatic, or other sanction or related action by the United 
States Government related to the proliferation of weapons of 
mass destruction, their delivery systems, or advanced 
conventional weapons otherwise [required to be imposed by the 
Chemical and Biological Weapons Control and Warfare Elimination 
Act of 1991 (title III of Public Law 102-182); the Nuclear 
Proliferation Prevention Act of 1994 (title VIII of Public Law 
103-236); title XVII of the National Defense Authorization Act 
for Fiscal Year 1991 (Public Law 101-510) (relating to the 
nonproliferation of missile technology); the Iran-Iraq Arms 
Nonproliferation Act of 1992 (title XVI of Public Law 102-484); 
section 573 of the Foreign Operations, Export Financing Related 
Programs Appropriations Act, 1994 (Public Law 103-87); section 
563 of the Foreign Operations, Export Financing Related 
Programs Appropriations Act, 1995 (Public Law 103-306); and 
comparable provisions.] required to be imposed by any of the 
following provisions of law:
          (1) The Chemical and Biological Weapons Control and 
        Warfare Elimination Act of 1991 (title III of Public 
        Law 102-182).
          (2) The Nuclear Proliferation Prevention Act of 1994 
        (title VIII of Public Law 103-236).
          (3) Section 11B of the Export Administration Act of 
        1979 (50 U.S.C. App. 2410b).
          (4) Chapter 7 of the Arms Export Control Act (22 
        U.S.C. 2797 et seq.).
          (5) The Iran-Iraq Arms Non-Proliferation Act of 1992 
        (title XVI of Public Law 102-484).
          (6) The following provisions of annual appropriations 
        Acts:
                  (A) Section 573 of the Foreign Operations, 
                Export Financing, and Related Programs 
                Appropriations Act, 1994 (Public Law 103-87; 
                107 Stat. 972).
                  (B) Section 563 of the Foreign Operations, 
                Export Financing, and Related Programs 
                Appropriations Act, 1995 (Public Law 103-306; 
                108 Stat. 1649).
                  (C) Section 552 of the Foreign Operations, 
                Export Financing, and Related Programs 
                Appropriations Act, 1996 (Public Law 104-107; 
                110 Stat. 741).
          (7) Comparable provisions.

                              application

  Sec. 905. This title shall cease to be effective [on the date 
which is one year after the date of the enactment of this 
title] on January 6, 1998.
                              ----------                              


        SECTION 5 OF THE CENTRAL INTELLIGENCE AGENCY ACT OF 1949

                          general authorities

  Sec. 5. In the performance of its functions, the Central 
Intelligence Agency is authorized to--
  (a) * * *
          * * * * * * *
  [(e) Make alterations, improvements, and repairs on premises 
rented by the Agency, and pay rent therefor without regard to 
limitations on expenditures contained in the Act of June 30, 
1932, as amended: Provided, That in each case the Director 
shall certify that exception from such limitations is necessary 
to the successful performance of the Agency's functions or to 
the security of its activities; and]
  (e) Make alterations, improvements, and repairs on premises 
rented by the Agency and, for the purpose of furthering the 
cost-efficient acquisition of Agency facilities, enter into 
multiyear leases for up to 15 years that are not otherwise 
authorized pursuant to section 8 of this Act; and
          * * * * * * *
                              ----------                              


 SECTION 2 OF THE CENTRAL INTELLIGENCE AGENCY VOLUNTARY SEPARATION PAY 
                                  ACT

SEC. 2. SEPARATION PAY.

  (a) * * *
          * * * * * * *
  [(i) Remittance of Funds.--The Director shall remit to the 
Office of Personnel Management for deposit in the Treasury of 
the United States to the credit of the Civil Service Retirement 
and Disability Fund (in addition to any other payments which 
the Director is required to make under subchapter III of 
chapter 83 and subchapter II of chapter 84 of title 5, United 
States Code), an amount equal to 15 percent of the final basic 
pay of each employee who, in fiscal year 1998 or fiscal year 
1999, retires voluntarily under section 8336, 8412, or 8414 of 
such title or resigns and to whom a voluntary separation 
incentive payment has been or is to be paid under this 
section.]
          * * * * * * *
                              ----------                              


                      TITLE 10, UNITED STATES CODE

          * * * * * * *

                    Subtitle A--General Military Law

          * * * * * * *

            PART I--ORGANIZATION AND GENERAL MILITARY POWERS

          * * * * * * *

         CHAPTER 21--DEPARTMENT OF DEFENSE INTELLIGENCE MATTERS

          * * * * * * *

                     SUBCHAPTER I--GENERAL MATTERS

Sec.
421.  Funds for foreign cryptologic support.
     * * * * * * *
[424.  Disclosure of organizational and personnel information: exemption 
          for Defense Intelligence Agency.
[425.  Disclosure of personnel information: exemption for National 
          Reconnaissance Office.]
424.  Disclosure of organizational and personnel information: exemption 
          for the Defense Intelligence Agency and National 
          Reconnaissance Office.
          * * * * * * *

[Sec. 424. Disclosure of organizational and personnel information: 
                    exemption for Defense Intelligence Agency

  [(a) Except as required by the President or as provided in 
subsection (b), the Secretary of Defense may not be required to 
disclose information with respect to--
          [(1) the organization or any function of the Defense 
        Intelligence Agency; or
          [(2) the number of persons employed by or assigned or 
        detailed to such Agency or the name, official title, 
        occupational series, grade, or salary of any such 
        person.
  [(b) This section does not apply--
          [(1) with respect to the provision of information to 
        Congress; or
          [(2) with respect to information required to be 
        disclosed by section 552 or 552a of title 5.

[Sec. 425. Disclosure of personnel information: exemption for National 
                    Reconnaissance Office

  [(a) Exemption From Disclosure.--Except as required by the 
President or as provided in subsection (b), no provision of law 
shall be construed to require the disclosure of the name, 
title, or salary of any person employed by, or assigned or 
detailed to, the National Reconnaissance Office or the 
disclosure of the number of such persons.
  [(b) Provision of Information to Congress.--Subsection (a) 
does not apply with respect to the provision of information to 
Congress.]

Sec. 424. Disclosure of organizational and personnel information: 
                    exemption for the Defense Intelligence Agency and 
                    National Reconnaissance Office

  (a) Exemption From Disclosure.--Except as required by the 
President or as provided in subsection (b), no provision of law 
shall be construed to require the disclosure of--
          (1) the organization or any function of the Defense 
        Intelligence Agency or the National Reconnaissance 
        Office; or
          (2) the number of persons employed by or assigned or 
        detailed to that Agency or Office or the name, official 
        title, occupational series, grade, or salary of any 
        such person.
  (b) Provision of Information to Congress.--Subsection (a) 
does not apply with respect to the provision of information to 
Congress.
          * * * * * * *
                             MINORITY VIEWS

                              introduction

    Although the bill was reported without recorded dissent, we 
have concerns about some of its provisions, particularly those 
affecting the National Reconnaissance Program. Those concerns 
are set forth in detail in the classified annex to this report. 
We were encouraged by Chairman Combest's assurances at the 
markup of this bill that issues concerning the direction and 
composition of our nation's satellite architecture would be 
explored through extensive hearings prior to conference with 
the Senate. We expect that those hearings will involve 
agencies, particularly the Department of Defense, that are 
affected by the decisions embodied in this legislation 
regarding our satellite architecture. It is essential that we 
clearly understand the impact that these decisions will have on 
our national security as reflected in the ability of 
battlefield commanders to effectively conduct military 
operations.
    The following discussion is of issues in the unclassified 
bill and report in which we disagree with positions taken by 
the majority.

                            personnel reform

    Section 403 prohibits any funds authorized to be 
appropriated by the bill from being used to implement any 
intelligence community personnel reform until the congressional 
intelligence committees are fully briefed about such personnel 
reform.
    On April 23, 1996, the Director of Central Intelligence 
generally described to the committee a major personnel 
initiative announced only the day before to employees of the 
Central Intelligence Agency. In the period between the 
Director's appearance before the committee and the date of the 
markup, substantial additional information about the initiative 
was provided. While questions remain, the statutory prohibition 
in section 403 can be read to imply that the Director has 
refused to provide whatever information on the personnel 
initiative that the committee might request, or that he intends 
to implement the initiative without the congressional approvals 
needed to redirect the use of appropriated funds. Neither 
implication is supported by the facts.
    Further, language in the classified annex accompanying the 
bill duplicates the stated purpose of section 403 which is to 
ensure that the committee is fully apprised of personnel 
reforms within the intelligence community. We believe it is 
always good practice to ensure that committee members are fully 
informed in an area as potentially controversial as personnel 
reform before they are asked to take action on a legislative 
proposal approving a major change in that area. That result, 
with respect to the CIA initiative, would be achieved by the 
language in the classified annex. Section 403 is, therefore, 
unnecessary and should be deleted from the bill as the 
legislative process proceeds.

                            declassification

    Implementation of section 3.4 of Executive Order 12958 on 
Classified National Security Information continues to be an 
issue of debate in the committee. This executive order, signed 
April 17, 1995, prescribes a uniform system for classifying, 
safeguarding, and declassifying national security information. 
It is intended to protect information critical to our national 
security, but recognizes that the nation's democratic 
principles require that the American people be informed of the 
activities of their government when it is possible to do so. 
Section 3.4 requires that, unless grounds for an exemption 
exist, classified information contained in records that are 
over 25 years old, and of permanent historical value, shall be 
automatically declassified within five years of the order 
whether or not the records have been reviewed. Information is 
exempt from declassification if, among other reasons, its 
release can be expected to reveal the identity of human 
sources; impair U.S. cryptologic systems or activities; 
undermine ongoing diplomatic activities; or assist in the 
development of weapons of mass destruction.
    The Intelligence Authorization Act for Fiscal Year 1996 
limited the Director of Central Intelligence to spending no 
more than $25 million to implement section 3.4 from funds 
otherwise authorized in the Act. The Act also required the 
President to submit budget requests for fiscal years 1997 
through 2000 which specifically set forth the funds requested 
for implementation. The conferees also urged the effort be 
coordinated closely with CIA's Historical Review Program Office 
to enhance the intellectual coherence of the declassification 
process.
    We commend the program managers of CIA, NSA, NRO and DIA 
for the significant progress they have made over the last year 
in planning how they will implement the requirements of section 
3.4. The program managers are working cooperatively to 
facilitate the development of an on-line, virtual analytic 
environment to speed and simplify the redaction of documents. 
They are acting jointly to handle documents located at the 
presidential libraries, and the DCI has made a commitment to 
bring historical coherence to the process. We do not believe 
the funding requested for implementation of section 3.4 in 
fiscal year 1997 was excessive in the context of the overall 
National Foreign Intelligence Program.
    Nevertheless, the bill deletes the specific budget requests 
found in the Central Intelligence Agency Program, Consolidated 
Cryptologic Program, National Reconnaissance Program, and 
General Defense Intelligence Program. Instead, section 104 of 
the bill authorizes 425 million for FY 1997 to carry out the 
Executive Order provisions. Section 303 of the bill makes $25 
million and annual ceiling on funding through fiscal year 2000 
and allows the Director, in his discretion, to draw on this 
amount for allocation to the agencies within the National 
Foreign Intelligence Program. Although we would have preferred 
full funding for this effort in each of the individual 
programs, the reduction imposed by the bill is relatively 
minor.
    We have noted that the majority may be proposing that a 
risk-elimination approach be adopted in handling the review of 
classified documents. It seems to us that the risk management 
philosophy adopted by the agencies is simply a sensible 
acknowledgement that resources should be focused on areas of 
greatest risk; it is not an abdication of responsibility to 
protect sources and methods. A totally risk adverse approach 
does not seem to be justified, particularly from the standpoint 
of cost. We believe the declassification of documents that 
remain classified for no other reason that inertia can be 
managed both in resource terms and in the protection of 
sensitive information.

          environmental intelligence and applications program

    Section 104 of the bill authorizes funding for the 
Environmental Intelligence and Applications Program (EIAP), 
formerly the Environmental Task Force, and the MEDEA scientists 
at $6 million, less than half the President's budget request. 
While we are heartened the funding for the program was not 
eliminated, as the original version of this legislation had 
proposed, we continue to be puzzled why this one program had 
been singled out among all the analytic efforts in the 
intelligence community. It is clearly responsive to the needs 
of national policymakers, brings unique information to our 
understanding of global environmental challenges, and has 
proven benefits for the intelligence community's own 
exploitation of national technical means.
    The Environmental Task Force, the initial phase of the 
EIAP, evaluate data collected by national technical means for 
their utility for scientific study of the environment. Its 
recommendations were a factor in the declassification of 
imagery from the Corona, Argon, and Lanyard systems. The MEDEA 
scientists who conducted that evaluation have continued to be a 
source of scientific talent for the intelligence community in 
addressing significant national questions involving 
environmental issues.
    The EIAP in fiscal year 1997 will continue to implement the 
``global fiducial'' data bank project. Classified digital data 
on a set of environmentally sensitive points around the globe 
will be collected by the intelligence community and stored by 
the civil and military environmental agencies as a legacy for 
future generations of environmental scientists until such time 
as these data are declassified. This seems to be a low cost 
investment that could pay large scientific dividends in the 
future.
    The EIAP has been particularly useful to the U.S. Navy. 
Admiral J.M. Boorda, Chief of Naval Operations, spelled out the 
benefits and activities of the EIAP in a recent letter to the 
Committee's Ranking Democratic Member:

                                 Chief of Naval Operations,
                                                       May 1, 1996.
Hon. Norman Dicks,
Ranking Minority Member, Permanent Select Committee on Intelligence, 
        House of Representatives, Washington, DC.
    Dear Norm: Thank you for your letter of April 24, 1996 
expressing interest in the Measurement of Earth Data for 
Environmental Analysis (MEDEA) and the plans for the FY97 
Environmental Intelligence and Applications Program (EIAP) 
funding included in the President's budget. As you know, MEDEA 
is a gathering of prominent American scientists cleared for 
access to highly classified data. They have been identifying 
the value of this national source data, and some classified 
Navy data sets, for use in addressing civil environmental 
problems. With these data the scientists are making a number of 
important discoveries, some of which can be applied to military 
as well as civil challenges.
    The Navy sees a number of benefits to the EIAP effort. In 
addition to developing emerging technologies and techniques, 
this project brings together the nation's top civil scientists 
with our operational and research oceanographers at a highly 
classified level. Such a close relationship provides Navy with 
the unique opportunity to apply civil academic talent to 
problems in Naval oceanography. Furthermore, we expect MEDEA to 
play a major role in cooperative projects sponsored under the 
National Oceanographic Partnership Act, introduced into the 
House on April 23, 1996 by Congressmen Weldon and Kennedy.
    You mentioned in your letter the upcoming U.S. Navy-Russian 
Federation Navy cooperative survey in the Sea of Okhotsk. 
Interest of the Gore-Chernomyrdin Commission Environmental 
Working Group has been a strong catalyst in allowing us to 
complete our negotiations for this Navy agreement. As a result 
of the cooperative effort, the U.S. Navy will survey in an area 
closer to continental Russia than ever before and will get 
twice as much data as could have been collected unilaterally.
    I hope this information has been useful to you and your 
Committee. Please don't hesitate to contact my staff with any 
further questions.
            Sincerely,
                                   J.M. Boorda, Admiral, U.S. Navy.
    We remain hopeful the EIAP can be fully funded in 
conference.

                                   Norm Dicks.
                                   Bill Richardson.
                                   Julian C. Dixon.
                                   Robert Torricelli.
                                   Ronald D. Coleman.
                                   David E. Skaggs.
                                   Nancy Pelosi.