Sec. 422. Cover enhancement authorities
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Part II of subtitle A of title 10, United States Code, is amended by inserting after chapter 88 the following new chapter (and conforming the table of chapters at the beginning of such part accordingly): Sec. 1801. Definitions. 1802. Cover enhancement authority. 1803. Compensation. 1804. Retirement benefits. 1805. Health insurance benefits. 1806. Life insurance benefits. 1807. Exemption from certain requirements. 1808. Taxation and social security. 1809. Regulations. 1810. Finality of decisions. 1811.
Subsequently enacted laws. In this chapter: The term designated employee means an employee of the Department of Defense designated by the Secretary of Defense under section 1802(b). The term designated member means a member of the armed forces designated by the Secretary of Defense under section 1802(b). The term Federal retirement system includes the Federal Employees’ Retirement System (including the Thrift Savings Plan). The term military retirement system includes military retired pay programs under chapters 61, 63, 65, and 67 of this title and the Survivor Benefit Plan established by chapter 73 of this title.
Notwithstanding any other provision of law, the Secretary of Defense may exercise the authorities under this chapter to protect from unauthorized disclosure— intelligence operations of the Department of Defense; the identities of undercover officers; intelligence sources and methods; or cover mechanisms. Subject to paragraph (2), the Secretary of Defense may designate any employee of the Department of Defense or member of the armed forces who is under cover to be an employee or a member to whom this chapter applies.
The Secretary of Defense may not designate more than 15 persons under paragraph
(1)in a fiscal year unless the Secretary provides notice of the intent to designate more than 15 persons in such fiscal year to the congressional defense committees and the congressional intelligence committees (as such term is defined in section 3 of the National Security Act of 1957 ( 50 U.S.C. 3003 )). A designation may be made under this subsection with respect to any or all authorities exercised under this chapter. Establishment of any such cover enhancement authority for intelligence operations of the Department of Defense shall be pre-coordinated using processes and procedures for intelligence community deconfliction mutually agreed upon by the Secretary of Defense and the Director of the Central Intelligence Agency. The Secretary of Defense may pay a designated employee or designated member salary, allowances, and other benefits in an amount and in a manner consistent with the cover of that employee or member, without regard to any limitation that is otherwise applicable to a Federal employee or member of the armed forces. A designated employee or designated member may accept, use, and, to the extent authorized by regulations prescribed under this chapter, retain any salary, allowances, and other benefits provided under this chapter. The Secretary of Defense may establish, administer, contract for, or implement through another Federal department or agency, a cover retirement system for designated employees and designated members (and the spouse, former spouses, and survivors of such designated employees and designated members). A designated employee or designated member may not receive credit for service under the retirement system established under this paragraph and another Federal retirement system for the same time period. A designated employee or designated member participating in the retirement system established under subsection
(a)may convert to coverage under the Federal retirement system or military retirement system that would otherwise apply to such employee or member at any appropriate time determined by the Secretary of Defense (including at the time of separation of service by reason of retirement), if the Secretary of Defense determines that the participation of the employee or member in the retirement system established under this subsection is no longer necessary to protect from unauthorized disclosure— intelligence operations; the identities of undercover officers; intelligence sources and methods; or cover mechanisms. Upon a conversion under subsection (b)— all periods of service under the retirement system established under this section shall be deemed periods of creditable service under the applicable Federal retirement system or military retirement system; the Secretary of Defense shall transmit an amount for deposit in any applicable fund of that Federal retirement system or military retirement system that— is necessary to cover all employee or member and agency contributions including— interest as determined by the head of the agency administering the Federal retirement system or military retirement system into which the employee or member is converting; or in the case of an employee or member converting into the Federal Employee’s Retirement System or military retirement system, interest as determined under chapter 84 of title 5 or chapter 74 of this title, as the case may be; and ensures that such conversion does not result in any unfunded liability to that fund; and in the case of a designated employee or designated member who participated in an employee or member investment retirement system established under subsection
(a)and is converted to coverage under the Federal retirement system or military retirement system, the Secretary of Defense may transmit any or all amounts of that designated employee or designated member in that employee or military investment retirement system (or similar part of that retirement system) to the Thrift Savings Fund. Amounts described under subsection (c)(2) shall be paid from any fund the Secretary of Defense deems appropriate. The Secretary of Defense may use amounts contributed by the designated employee or designated member to a retirement system established under subsection
(a)to offset amounts paid under paragraph (1). The Secretary of Defense shall transmit all necessary records relating to a designated employee or designated member who converts to a Federal retirement system or military retirement system under subsection
(b)(including records relating to periods of service which are deemed to be periods of creditable service under subsection (c)(1)) to the head of the agency administering that Federal retirement system or military retirement system. The Secretary of Defense may establish, administer, contract for, or implement through another Federal agency, a cover health insurance program for designated employees and designated members and eligible family members. A designated employee or designated member may not participate in the health insurance program established under this section and the program under chapter 89 of title 5 or chapter 55 of this title at the same time. A designated employee participating in the health insurance program established under subsection
(a)may convert to coverage under the program under chapter 89 of title 5, and a designated member participating in the program established under subsection
(a)may convert to coverage under the program under chapter 55 of this title or chapter 17 of title 38, at any appropriate time determined by the Secretary of Defense (including at the time of separation of service by reason of retirement), if the Secretary of Defense determines that the participation of the employee or member in the health insurance program established under this subsection is no longer necessary to protect from unauthorized disclosure— intelligence operations; the identities of undercover officers; intelligence sources and methods; or cover mechanisms. Upon a conversion of a designated employee under subsection (b)— the employee (and family, if applicable) shall be entitled to immediate enrollment and coverage under chapter 89 of title 5; any requirement of prior enrollment in a health benefits plan under chapter 89 of title 5 for continuation of coverage purposes shall not apply; the employee shall be deemed to have had coverage under chapter 89 of title 5 from the first opportunity to enroll for purposes of continuing coverage; and the Secretary of Defense shall transmit an amount for deposit in the Employees’ Health Benefits Fund that is necessary to cover any costs of such conversion. Any amount described under subsection (c)(4) shall be paid from any fund the Secretary of Defense deems appropriate. In this section, the term eligible family member means— with respect to an employee, a member of a family as defined in section 8901 of title 5; and with respect to a member of the armed forces, a dependent as defined in section 1072 of this title. The Secretary of Defense may establish, administer, contract for, or implement through another Federal agency, a cover life insurance program for designated employees and designated members (and the family of such designated employees or designated members). A designated employee or designated member may not participate in the life insurance program established under this section and the program under chapter 87 of title 5 for the same time period. A designated employee participating in the life insurance program established under subsection
(a)may convert to coverage under the program under chapter 87 of title 5, and a designated member participating in the life insurance program established under subsection
(a)may convert to coverage under the program under chapter 19 of title 38, at any appropriate time determined by the Secretary of Defense (including at the time of separation of service by reason of retirement), if the Secretary of Defense determines that the participation of the employee or member in the life insurance program established under this section is no longer necessary to protect from unauthorized disclosure— intelligence operations; the identities of undercover officers; intelligence sources and methods; or cover mechanisms. Upon a conversion of a designated employee under subsection (b)— the employee (and family, if applicable) shall be entitled to immediate coverage under chapter 87 of title 5; any requirement of prior enrollment in a life insurance program under chapter 87 of title 5 for continuation of coverage purposes shall not apply; the employee shall be deemed to have had coverage under chapter 87 of title 5 for the full period of service during which the employee would have been entitled to be insured for purposes of continuing coverage; and the Secretary of Defense shall transmit an amount for deposit in the Employees’ Life Insurance Fund that is necessary to cover any costs of such conversion. Any amount described under subsection (c)(4) shall be paid from any fund the Secretary of Defense deems appropriate. The Secretary of Defense may exempt a designated employee or designated member from mandatory compliance with any Federal regulation, rule, standardized administrative policy, process, or procedure that the Secretary of Defense determines— would be inconsistent with the cover of that employee or member; and could expose that employee to detection as a Federal employee or that member as a member of the armed forces. Notwithstanding any other provision of law, a designated employee or designated member— shall file a Federal or State tax return as if that employee or member is not a Federal employee or member of the armed forces and may claim and receive the benefit of any exclusion, deduction, tax credit, or other tax treatment that would otherwise apply if that designated employee was not a Federal employee or that designated member was not a member of the armed forces, if the Secretary of Defense determines that taking any action under this subsection is necessary to protect from unauthorized disclosure— intelligence operations; the identities of undercover officers; intelligence sources and methods; or cover mechanisms; and shall receive social security benefits based on the social security contributions made. In the case of a designated employee or designated member who files a tax return as provided in subsection (a)(1), the Secretary may increase (on a grossed-up basis) the compensation of such employee or member under section 1803 to account for any increased income tax liability attributable to having so filed. The Secretary of Defense shall establish procedures to carry out this section. The procedures shall be subject to periodic review by the Internal Revenue Service. The Secretary of Defense shall prescribe regulations to carry out this chapter. The regulations shall ensure that the combination of salary, allowances, and benefits that an employee or member designated under this chapter may retain does not significantly exceed, except to the extent determined by the Secretary of Defense to be necessary to exercise the authority in this chapter, the combination of salary, allowances, and benefits otherwise received by employees or members not designated under this chapter. Any determinations authorized by this chapter to be made by the Secretary of Defense or a designee of the Secretary shall be final and conclusive and may not be subject to review by any court. No law enacted after the effective date of this chapter shall affect the authorities and provisions of this chapter unless such law specifically refers to this chapter. .
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Sec. 422
Cover enhancement authorities
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