(a) Additional Compensation Based on Title 5 Authorities.—The Secretary of Defense may provide employees in defense intelligence positions compensation (in addition to basic pay), including benefits, incentives, and allowances, consistent with, and not in excess of the level authorized for, comparable positions authorized by title 5.

(b) Allowances Based on Living Costs and Environment.—(1) In addition to basic pay, employees in defense intelligence positions who are citizens or nationals of the United States and are stationed outside the continental United States or in Alaska may be paid an allowance, in accordance with regulations prescribed by the Secretary of Defense, while they are so stationed.

(2) An allowance under this subsection shall be based on—

(A) living costs substantially higher than in the District of Columbia;

(B) conditions of environment which (i) differ substantially from conditions of environment in the continental United States, and (ii) warrant an allowance as a recruitment incentive; or

(C) both of the factors specified in subparagraphs (A) and (B).

(3) An allowance under this subsection may not exceed the allowance authorized to be paid by section 5941(a) of title 5 for employees whose rates of basic pay are fixed by statute.

(c) Additional Allowances and Benefits for Certain Employees of the Defense Clandestine Service.—(1) Beginning on the date on which the Secretary of Defense submits the report under paragraph (3)(A), in addition to the authority to provide compensation under subsection (a), the Secretary may provide a covered employee allowances and benefits under paragraph (1) of section 9904 of title 5 without regard to the limitations in that section—

(A) that the employee be assigned to activities outside the United States; or

(B) that the activities to which the employee is assigned be in support of Department of Defense activities abroad.

(2) The Secretary may not provide allowances and benefits under paragraph (1) to more than 125 covered employees per year.

(3)

(A) The Secretary shall submit to the appropriate congressional committees a report containing a strategy addressing the mission of the Defense Clandestine Service during the period covered by the most recent future-years defense program submitted under section 221 of this title, including—

(i) how such mission will evolve during such period;

(ii) how the authority provided by paragraph (1) will assist the Secretary in carrying out such mission; and

(iii) an implementation plan for carrying out paragraph (1), including a projection of how much the amount of the allowances and benefits provided under such paragraph compare with the amount of the allowances and benefits provided before the date of the report.

(B) Not later than December 31, 2020, and each year thereafter, the Secretary shall submit to the appropriate congressional committees a report, with respect to the fiscal year preceding the date on which the report is submitted—

(i) identifying the number of covered employees for whom the Secretary provided allowances and benefits under paragraph (1); and

(ii) evaluating the efficacy of such allowances and benefits in enabling the execution of the objectives of the Defense Intelligence Agency.

(C) The reports under subparagraphs (A) and (B) may be submitted in classified form.

(4) In this subsection:

(A) The term "appropriate congressional committees" means—

(i) the congressional defense committees; and

(ii) the Permanent Select Committee on Intelligence of the House of Representatives and the Select Committee on Intelligence of the Senate.

(B) The term "covered employee" means an employee in a defense intelligence position who is assigned to the Defense Clandestine Service at a location in the United States that the Secretary determines has living costs equal to or higher than the District of Columbia.