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Information fusion system designs require sensor and resource management (SM) for effective and efficient data collection, processing, and dissemination. Common Level 4 fusion sensor management (or process refinement) inter-relations with target tracking and identification (Level 1 fusion) have been detailed in the literature. At the ISIF Fusion Conference, a panel discussion was held to examine the contemporary issues and challenges pertaining to the interaction between SM and situation and threat assessment (Level 2/3 fusion). This summarizes the key tenants of the invited panel experts. The common themes were: (1) Addressing the user in system control, (2) Determining a standard set of metrics, (3) Evaluating fusion systems to deliver timely information needs, (4) Dynamic updating for planning mission time-horizons, (5) Joint optimization of objective functions at all levels, (6) L2/3 situation entity definitions for knowledge discovery, modeling, and information projection, and (7) Addressing constraints for resource planning and scheduling.