    [House Report 105-132]
    [From the U.S. Government Publishing Office]

    105th Congress             HOUSE OF REPRESENTATIVES             Report
     1st Session                                                   105-132

    _______________________________________________________________________

            NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 1998

                                   ----------

                                  R E P O R T

                                     OF THE

                         COMMITTEE ON NATIONAL SECURITY
                            HOUSE OF REPRESENTATIVES

                                       ON

                                   H.R. 1119

                                 together with

                        ADDITIONAL AND DISSENTING VIEWS

          [Including cost estimate of the Congressional Budget Office]

     June 16, 1997.--Committed to the Committee of the Whole House on the
                  State of the Union and ordered to be printed

    _______________________________________________________________________

    105th Congress          HOUSE OF REPRESENTATIVES                 Report
      1st Session                                                   105-132

    _______________________________________________________________________

            NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 1998

                                   __________

                                  R E P O R T

                                     OF THE

                         COMMITTEE ON NATIONAL SECURITY

                            HOUSE OF REPRESENTATIVES

                                       ON

                                   H.R. 1119

                                 together with

                        ADDITIONAL AND DISSENTING VIEWS

          [Including cost estimate of the Congressional Budget Office]

     June 16, 1997.--Committed to the Committee of the Whole House on the
                  State of the Union and ordered to be printed

                                     ----------

                            U.S. GOVERNMENT PRINTING OFFICE
    41-401                          WASHINGTON : 1997

    _______________________________________________________________________

                      HOUSE COMMITTEE ON NATIONAL SECURITY

                           One Hundred Fifth Congress

                   FLOYD D. SPENCE, South Carolina, Chairman

    BOB STUMP, Arizona                   RONALD V. DELLUMS, California
    DUNCAN HUNTER, California            IKE SKELTON, Missouri
    JOHN R. KASICH, Ohio                 NORMAN SISISKY, Virginia
    HERBERT H. BATEMAN, Virginia         JOHN M. SPRATT, Jr., South
    JAMES V. HANSEN, Utah                    Carolina
    CURT WELDON, Pennsylvania            SOLOMON P. ORTIZ, Texas
    JOEL HEFLEY, Colorado                OWEN PICKETT, Virginia
    JIM SAXTON, New Jersey               LANE EVANS, Illinois
    STEVE BUYER, Indiana                 GENE TAYLOR, Mississippi
    TILLIE K. FOWLER, Florida            NEIL ABERCROMBIE, Hawaii
    JOHN M. McHUGH, New York             MARTIN T. MEEHAN, Massachusetts
    JAMES TALENT, Missouri               ROBERT A. UNDERWOOD, Guam
    TERRY EVERETT, Alabama               JANE HARMAN, California
    ROSCOE G. BARTLETT, Maryland         PAUL McHALE, Pennsylvania
    HOWARD ``BUCK'' McKEON, California   PATRICK J. KENNEDY, Rhode Island
    RON LEWIS, Kentucky                  ROD R. BLAGOJEVICH, Illinois
    J.C. WATTS, Jr., Oklahoma            SILVESTRE REYES, Texas
    MAC THORNBERRY, Texas                TOM ALLEN, Maine
    JOHN N. HOSTETTLER, Indiana          VIC SNYDER, Arkansas
    SAXBY CHAMBLISS, Georgia             JIM TURNER, Texas
    VAN HILLEARY, Tennessee              F. ALLEN BOYD, Jr., Florida
    JOE SCARBOROUGH, Florida             ADAM SMITH, Washington
    WALTER B. JONES, Jr., North          LORETTA SANCHEZ, California
        Carolina                         JAMES H. MALONEY, Connecticut
    LINDSEY GRAHAM, South Carolina       MIKE McINTYRE, North Carolina
    SONNY BONO, California               CIRO D. RODRIGUEZ, Texas
    JIM RYUN, Kansas
    MICHAEL PAPPAS, New Jersey
    BOB RILEY, Alabama
    JIM GIBBONS, Nevada

                        Andrew K. Ellis, Staff Director

                                C O N T E N T S

                                  ----------
                                                                       Page

    Explanation of the Committee Amendment...........................     1
    Purpose..........................................................     1
    Relationship of Authorization to Appropriations..................     2
    Summary of Authorization in the Bill.............................     2
      Summary Table of Authorizations................................     2
    Rationale for the Committee Bill.................................    10
      Readiness......................................................    13
      Quality of Life................................................    14
      Modernization and Innovation...................................    15
      Defense Reform.................................................    16
      Conclusion.....................................................    17
    Hearings.........................................................    18

    DIVISION A--DEPARTMENT OF DEFENSE AUTHORIZATION..................    19
    TITLE I--PROCUREMENT.............................................    19

      OVERVIEW.......................................................    19
        Aircraft Procurement, Army...................................    22
          Overview...................................................    22
          Items of Special Interest..................................    25
        Missile Procurement, Army....................................    27
          Overview...................................................    27
          Items of Special Interest..................................    30
        Weapons and Tracked Combat Vehicles, Army....................    31
          Overview...................................................    31
          Items of Special Interest..................................    34
        Ammunition Procurement, Army.................................    36
          Overview...................................................    36
          Items of Special Interest..................................    40
        Other Procurement, Army......................................    41
          Overview...................................................    41
          Items of Special Interest..................................    50
        Aircraft Procurement, Navy...................................    57
          Overview...................................................    57
          Items of Special Interest..................................    61
        Weapons Procurement, Navy....................................    66
          Overview...................................................    66
          Items of Special Interest..................................    70
        Ammunition Procurement, Navy/Marine Corps....................    71
          Overview...................................................    71
          Items of Special Interest..................................    74
        Shipbuilding and Conversion, Navy............................    74
          Overview...................................................    74
          Items of Special Interest..................................    77
        Other Procurement, Navy......................................    81
          Overview...................................................    81
          Items of Special Interest..................................    91
        Procurement, Marine Corps....................................    95
          Overview...................................................    95
          Items of Special Interest..................................   100
        Aircraft Procurement, Air Force..............................   101
          Overview...................................................   101
          Items of Special Interest..................................   106
        Ammunition Procurement, Air Force............................   110
          Overview...................................................   110
        Missile Procurement, Air Force...............................   113
          Overview...................................................   113
          Items of Special Interest..................................   116
        Other Procurement, Air Force.................................   117
          Overview...................................................   117
          Items of Special Interest..................................   123
        Procurement, Defense-Wide....................................   124
          Overview...................................................   124
          Items of Special Interest..................................   129
        National Guard and Reserve Equipment.........................   130
          Overview...................................................   130
          Items of Special Interest..................................   134
        Chemical Agents and Munitions Destruction, Defense...........   134
          Overview...................................................   134
          Items of Special Interest..................................   136
        Defense Export Loan Guarantees...............................   137
          Overview...................................................   137
      LEGISLATIVE PROVISIONS.........................................   139
        Subtitle A--Authorization of Appropriations..................   139
          Sections 101-108--Authorization of Appropriations..........   139
          Section 121--Limitation on Obligation of Funds for the
            Seawolf Submarine Program................................   139
          Section 122--Report on Annual Budget Submission Regarding
            the Reserve Components...................................   139

    TITLE II--RESEARCH, DEVELOPMENT, TEST, AND EVALUATION............   140

      OVERVIEW.......................................................   140
        Army RDT&E-..................................................   142
          Overview...................................................   142
          Items Of Special Interest..................................   151
        Navy RDT&E...................................................   164
          Overview...................................................   164
          Items Of Special Interest..................................   174
        Air Force RDT&E..............................................   202
          Overview...................................................   202
          Items Of Special Interest..................................   211
        Defense Agencies RDT&E.......................................   216
          Overview...................................................   216
          Items Of Special Interest..................................   225
      LEGISLATIVE PROVISIONS.........................................   255
        Subtitle A--Authorization of Appropriations..................   255
          Section 201--Authorization Of Appropriations...............   255
          Section 202--Amount For Basic And Applied Research.........   255
          Section 203--Dual Use Technology Programs..................   255
        Subtitle B--Program Requirements, Restrictions, and
          Limitations................................................   255
          Section 211--Manufacturing Technology Program..............   255
          Section 212--Strategic Environmental Research and
            Development Program......................................   256
          Section 213--Tactical Unmanned Aerial Vehicles.............   256
          Section 214--Revisions to Membership of and Appointment
            Authority for National Ocean Research Leadership Council.   257
          Section 215--Maintenance and Repair of Real Property at Air
            Force Installations......................................   257
          Section 216--Expansion of Eligibility for the Defense
            Experimental Program to Stimulate Competitive Research...   257
          Section 217--Limitation on the Use of Funds for Adaptation
            of Integrated Defensive Electronic Countermeasures
            (IDECM) Program to F/A-18E/F Aircraft and AV-8B Aircraft.   257
          Section 218--Bioassay Testing of Veterans..................   257
        Subtitle C--Ballistic Missile Defense Programs...............   258
          Section 231--Budgetary Treatment of Amount Requested for
            Procurement for Ballistic Missile Defense Programs.......   258
          Section 232--Cooperative Ballistic Missile Defense Programs   258
          Section 233--Deployment Dates for Core Theater Missile
            Defense Programs.........................................   258
          Section 234--Annual Report on Threat Posed to the United
            States by Weapons of Mass Destruction, Ballistic
            Missiles, and Cruise Missiles............................   260
          Section 235--Director of Ballistic Missile Defense
            Organization (BMDO)......................................   260
          Section 236--Tactical High Energy Laser Program (THEL).....   261

    TITLE III--OPERATION AND MAINTENANCE.............................   262

      OVERVIEW.......................................................   262
        Funding Priorities...........................................   262
        Readiness....................................................   263
        Reform.......................................................   264
        Funding Overview.............................................   264
      ITEMS OF SPECIAL INTEREST......................................   292
        Budget Request Reductions....................................   292
          Administration and Support Accounts........................   292
          Bulk Fuel..................................................   292
          Advisory and Assistance Services...........................   293
        Defense Support Services Reform..............................   293
          Overview...................................................   293
          Contracting Out Firefighter and Security Activities at
            Military Installations...................................   294
          Criminal Investigations and Board on Audits................   294
          Defense Reutilization and Marketing Service Improvements...   295
          Defense Supply and Logistics Management....................   295
          Definition of Mission Essential Support Services...........   296
          Extensively Studied Functions..............................   297
          Multi-Service Contracting of Base Operations Functions.....   297
          Oversight of Outsourced Functions..........................   298
          Procurement and Electronic Commerce Technical Assistance
            Program..................................................   298
          United States Transportation Command.......................   299
        Environmental Issues.........................................   300
          Air Force Plant #3, Tulsa, Oklahoma........................   300
          Compliance Funding.........................................   300
          Environmental Cleanup at the Washington Navy Yard..........   301
          Exploring Options to Reduce Environmental Cleanup Costs....   302
          Performance Based Contracting..............................   302
        Intelligence Matters.........................................   303
          Budget Justification Materials.............................   303
          Command and Control, Communications, Computers and
            Intelligence Integrated Architecture Plan................   304
          Defense Space Reconnaissance Program (DSRP)................   304
          Foreign Instrumentation Intelligence.......................   305
          Imagery and Geospatial System Production...................   305
          Intelligence System Interoperability.......................   306
          Interferometric Synthetic Aperture Radar...................   307
          Joint Planning and Program Review..........................   307
          National Imagery and Mapping Agency Civilian Personnel.....   307
          National Imagery and Mapping Agency Mission Support........   308
          Tactical Unmanned Aerial Vehicle (UAV).....................   309
          Tactical Information Program...............................   309
          Tactical Support...........................................   309
        Morale, Welfare, and Recreation Issues.......................   310
          Deferred Payment Programs of Military Exchanges............   310
          MWR Reimbursement from Closure of Foreign Military
            Installations............................................   310
          Pentagon Concessions Committee Activities..................   311
          Report on Black Marketing of Beer in Korea.................   312
          Report on Tobacco Sales at Commissaries....................   312
          Uniform Health Benefit Program for Nonappropriated Fund
            Employees................................................   313
          Defense Commissary Agency Produce Purchasing...............   313
        Other Issues.................................................   314
          Army After Next............................................   314
          Army Aviation Training.....................................   315
          Army Civilian Personnel Management.........................   315
          Army Depot Maintenance Funding.............................   316
          Automatic Document Conversion Technology...................   316
          Budget Justification Materials.............................   316
          Computer Crimes and Information Technology Security........   317
          Contractor Operated Civil Engineering Supply Stores........   317
          Department of Defense Next Generation Weather Radar-Doppler   318
          Emergency Communications Services for Members of the Armed
            Forces and Their Families................................   318
          Flying Hour Shortfalls.....................................   319
          Impending Change in Air Force Supply Management Activity
            Group....................................................   320
          Logistics Augmentation Programs............................   320
          Military Affiliate Radio System............................   321
          Mobility Infrastructure Enhancement........................   322
          Non-BRAC Caretaker Costs...................................   322
          Repair and Maintenance Projects............................   322
          Renovation of Building for Defense Accounting Service
            Center...................................................   323
          Shatter Resistant Window Film..............................   323
          Travel Reengineering.......................................   323
      LEGISLATIVE PROVISIONS.........................................   324
        Subtitle A--Authorization Of Appropriations..................   324
          Section 301--Operation and Maintenance Funding.............   324
          Section 302--Working Capital Funds.........................   324
          Section 303--Armed Forces Retirement Home..................   324
          Section 304--Transfer From National Defense Stockpile
            Transaction Fund.........................................   325
          Section 305--Refurbishment and Installation of Air Search
            Radar....................................................   325
          Section 306--Refurbishment of M1A1 Tanks...................   325
          Section 307--Procurement and Electronic Commerce Technical
            Assistance Program.......................................   325
          Section 308--Availability of Funds for Separation Pay for
            Defense Acquisition Personnel............................   325
        Subtitle B--Military Readiness Issues........................   325
          Overview...................................................   325
          Section 311--Expansion of Scope of Quarterly Readiness
            Reports..................................................   328
          Section 312--Limitation on Reallocation of Funds Within
            Operation and Maintenance Appropriations.................   329
          Section 313--Operation of Prepositioned Fleet, National
            Training Center, Fort Irwin, California..................   329
          Section 314--Prohibition of Implementation of Tiered
            Readiness System.........................................   329
          Section 315--Reports on Transfers From High Priority
            Readiness Appropriations.................................   330
          Section 316--Report on Chairman, Joint Chiefs of Staff
            Exercise Program and Partnership for Peace Program.......   331
          Section 317--Quarterly Reports on Execution of Operation
            and Maintenance Appropriations...........................   331
        Subtitle C--Civilian Personnel...............................   331
          Section 321--Pay Practices When Overseas Teachers Transfer
            To General Schedule Positions............................   331
          Section 322--Use of Approved Fire-Safe Accommodations by
            Government Employees on Official Business................   332
        Subtitle D--Depot-Level Activities...........................   332
          Section 331--Extension of Authority for Aviation Depots and
            Naval Shipyards to Engage in Defense Related Production
            and Services.............................................   332
          Section 332--Exclusion of Certain Large Maintenance and
            Repair Projects from Percentage Limitation on Contracting
            for Depot-Level Maintenance..............................   332
          Section 333--Restrictions on Contracts for Performance of
            Depot-Level Maintenance and Repair at Certain Facilities.   332
          Section 334--Core Logistics Functions of Department of
            Defense..................................................   333
          Section 335--Centers of Industrial and Technical Excellence   333
          Section 336--Personnel Reductions, Army Depots
            Participating in Army Workload and Performance System....   334
        Subtitle E--Environmental Provisions.........................   334
          Section 341--Revision of Membership Terms for Strategic
            Environmental Research and Development Program Scientific
            Advisory Board...........................................   334
          Section 342--Amendments to Authority to Enter into
            Agreements with Other Agencies in Support of
            Environmental Technology Certification...................   334
          Section 343--Authorization to Pay Negotiated Settlement for
            Environmental Cleanup at Former Department of Defense
            Sites in Canada..........................................   334
          Section 344--Modifications of Authority to Store and
            Dispose of Nondefense Toxic and Hazardous Materials......   335
          Section 345--Revision of Report Requirement for Navy
            Program to Monitor Ecological Effects of Organotin.......   335
          Section 346--Partnerships for Investment in Innovative
            Environmental Technologies...............................   335
          Section 347--Pilot Program to Test Alternative Technology
            for Eliminating Solid and Liquid Waste Emissions During
            Ship Operations..........................................   336
        Subtitle F--Commissaries And Nonappropriated Fund
          Instrumentalities..........................................   336
          Section 361--Reorganization of Laws Regarding Commissaries,
            Exchanges, and other Morale, Welfare, and Recreation
            Activities...............................................   336
          Section 362--Merchandise and Pricing Requirements for
            Commissary Stores........................................   336
          Section 363--Limitation on Noncompetitive Procurement of
            Brand-Name Commercial Items for Resale in Commissary
            Stores...................................................   337
          Section 364--Transfer of Jurisdiction over Exchange,
            Commissary, and Morale, Welfare and Recreation Activities
            to Under Secretary of Defense (Comptroller)..............   337
          Section 365--Public and Private Partnerships to Benefit
            Morale, Welfare and Recreation Activities................   337
          Section 366--Treatment of Certain Amounts Received by
            Defense Commissary Agency................................   338
          Section 367--Authorized Use of Appropriated Funds for
            Relocation of Navy Exchange Service Command..............   338
        Subtitle G--Other Matters....................................   338
          Section 371--Assistance to Local Educational Agencies That
            Benefit Dependents of Members of the Armed Forces and
            Department of Defense Civilian Employees.................   338
          Section 372--Continuation of Operation Mongoose............   339
          Section 373--Inclusion of Air Force Depot Maintenance as
            Operation and Maintenance Budget Activity Group..........   339
          Section 374--Programs to Commemorate 50th Anniversary of
            Marshall Plan and Korean Conflict........................   339
          Section 375--Prohibition on Use of Special Operations
            Command Budget for Base Operation Support................   340
          Section 376--Continuation and Extension of Demonstration
            Program to Identify Overpayments Made to Vendors.........   340
          Section 377--Applicability of Federal Printing Requirements
            to Defense Automated Printing Service....................   340
          Section 378--Base Operations Support for Military
            Installations on Guam....................................   341

    MILITARY PERSONNEL OVERVIEW......................................   341
    TITLE IV--MILTARY PERSONNEL AUTHORIZATIONS.......................   346

      LEGISLATIVE PROVISIONS.........................................   346
        Subtitle A--Active Forces....................................   346
          Section 401--End Strengths for Active Forces...............   346
        Subtitle B--Reserve Forces...................................   347
          Section 411--End Strengths for Selected Reserve............   347
          Section 412--End Strengths for Reserves on Active Duty in
            Support of the Reserves..................................   348
          Section 413--End Strengths for Military Technicians (Dual
            Status)..................................................   348
          Section 414--Increase in Number of Members in Certain
            Grades Authorized to Serve on Active Duty in Support of
            the Reserves.............................................   349
        Subtitle C--Authorization of Appropriations..................   349
          Section 421--Authorization of Appropriations for Military
            Personnel................................................   349

    TITLE V--MILITARY PERSONNEL POLICY...............................   350

      ITEMS OF SPECIAL INTEREST......................................   350
          Family Life Assistance Programs............................   350
          Increased Support for Military Recruiting..................   350
          Investigation of the Deaths of Military Personnel by Self-
            inflicted Causes.........................................   350
          Joint Recruiting Information Support System................   351
          Military Identification Cards..............................   352
          Military Occupational Specialties (MOS) Consolidations.....   352
          Retention of Military Leave for Federal Civilian Employees
            Who Perform Reserve Duty.................................   352
          Sexual Misconduct in the Armed Services....................   353
      LEGISLATIVE PROVISIONS.........................................   354
        Subtitle A--Officer Personnel Policy.........................   354
          Section 501--Limitation on Number of General and Flag
            Officers Who May Serve in Positions Outside Their Own
            Service..................................................   354
          Section 502--Exclusion of Certain Retired Officers from
            Limitation on Period of Recall to Active Duty............   355
          Section 503--Clarification of Officers Eligible for
            Consideration by Selection Boards........................   355
          Section 504--Authority to Defer Mandatory Retirement for
            Age of Officers Serving As Chaplains.....................   355
        Subtitle B--Reserve Component Matters........................   355
          Section 511--Individual Ready Reserve Activation Authority.   355
          Section 512--Termination of Mobilization Income Insurance
            Program..................................................   356
          Section 513--Correction of Inequities in Medical and Dental
            Care and Death and Disability Benefits for Reserve
            Members Who Incur or Aggravate an Illness in the Line of
            Duty.....................................................   357
          Section 514--Time-in-Grade Requirements for Reserve
            Commissioned Officers Retired During the Drawdown Period.   357
          Section 515--Authority to Permit Non-Unit Assigned Officers
            to be Considered by Vacancy Promotion Board to General
            Officer Grades...........................................   357
          Section 516--Grade Requirement for Officers Eligible to
            Serve on Involuntary Separation Boards...................   357
          Section 517--Limitation on Use of Air Force Reserve AGR
            Personnel for Air Force Base Security Functions..........   357
        Subtitle C--Military Technicians.............................   358
          Section 521--Authority to Retain on the Reserve Active-
            Status List Until Age 60 Military Technicians in the
            Grade of Brigadier General...............................   358
          Section 522--Military Technicians (Dual Status)............   358
          Section 523--Non-Dual Status Military Technicians..........   359
        Subtitle D--Measures to Improve Recruit Quality and Reduce...   359
        Recruit Attrition............................................   359
          Section 531--Reform of Military Recruiting Systems.........   359
          Section 532--Improvements in Medical Prescreening of
            Applicants for Military Service..........................   360
          Section 533--Improvements in Physical Fitness of Recruits..   360
        Subtitle E--Military Education and Training..................   360
          Section 541--Independent Panel to Review Military Basic
            Training.................................................   360
          Section 542--Reform of Army Drill Sergeant Selection and
            Training Process.........................................   361
          Section 543--Requirement for Candidates for Admission to
            United States Naval Academy to Take Oath of Allegiance...   362
          Section 544--Reimbursement of Expenses Incurred for
            Instruction at Service Academies of Persons from Foreign
            Countries................................................   362
          Section 545--United States Naval Postgraduate School.......   363
          Section 546--Air Force Academy Cadet Foreign Exchange
            Program..................................................   363
          Section 547--Training in Human Relations Matters for Army
            Drill Sergeant Trainees..................................   364
          Section 548--Study of Feasibility of Gender-Segregated
            Basic Training...........................................   364
        Subtitle F--Military Decorations and Awards..................   364
          Section 551--Study of New Decorations for Injury or Death
            in Line of Duty..........................................   364
          Section 552--Purple Heart to be Awarded Only to Members of
            the Armed Forces.........................................   365
          Section 553--Eligibility for Armed Forces Expeditionary
            Medal for Participation in Operation Joint Endeavor or
            Operation Joint Guard....................................   365
          Section 554--Waiver of Time Limitations for Award of
            Certain Decorations to Specified Persons.................   365
        Subtitle G--Other Matters....................................   365
          Section 561--Suspension of Temporary Early Retirement
            Authority................................................   365
          Section 562--Treatment of Educational Accomplishments of
            National Guard ChalleNGe Program Participants............   365
          Section 563--Authority for Personnel to Participate in
            Management of Certain Non-Federal Entities...............   366
          Section 564--Crew Requirements of WC-130J Aircraft.........   366
          Section 565 and Section 566--Civil-Military Programs.......   366
          Section 567--Continuation of Support to Senior Military
            Colleges.................................................   367
          Section 568--Restoration of Missing Persons Authorities
            Applicable to Department of Defense as in Effect Before
            Enactment of National Defense Authorization Act For
            Fiscal Year 1997.........................................   367
          Section 569--Establishment of Sentence of Confinement for
            Life Without Eligibility for Parole......................   368
          Section 570--Limitation on Appeal of Denial of Parole for
            Offenders Serving Life Sentence..........................   368
          Section 571--Establishment of Public Affairs Branch in the
            Army.....................................................   368

    TITLE VI--COMPENSATION AND OTHER PERSONNEL BENEFITS..............   369

      ITEMS OF SPECIAL INTEREST......................................   369
          Armed Forces Health Professions Scholarship Program
            (AFHPSP).................................................   369
          Communication of Retirement Benefits to New Accessions.....   369
          Study of Certain Compensation Issues.......................   370
          Tax Deferred Savings Plan..................................   370
      LEGISLATIVE PROVISIONS.........................................   371
        Subtitle A--Pay and Allowances...............................   371
          Section 601--Increase in Basic Pay for Fiscal Year 1998....   371
          Section 602--Annual Adjustment of Basic Pay and Protection
            of Member's Total Compensation While Performing Certain
            Duty.....................................................   371
          Section 603--Use of Food Cost Information to Determine
            Basic Allowance for Subsistence..........................   372
          Section 604--Consolidation of Basic Allowance for Quarters,
            Variable Housing Allowance, and Overseas Housing
            Allowances...............................................   372
        Subtitle B--Bonuses and Special and Incentive Pays...........   373
          Section 611--One-Year Extension of Certain Bonuses and
            Special Pay Authorities for Reserve Forces...............   373
          Section 612--One-Year Extension of Certain Bonuses and
            Special Pay Authorities for Nurse Officer Candidates,
            Registered Nurses, and Nurse Anesthetists................   373
          Section 613--One-Year Extension of Authorities Relating to
            Payment of Other Bonuses and Special Pays................   373
          Section 614--Increase in Minimum Monthly Rate of Hazardous
            Duty Incentive Pay for Certain Members...................   374
          Section 615--Availability of Multiyear Retention Bonus for
            Dental Officers..........................................   374
          Section 616--Increase in Variable and Additional Special
            Pays for Certain Dental Officers.........................   374
          Section 617--Special Pay for Duty at Designated Hardship
            Duty Locations...........................................   374
          Section 618--Selected Reserve Reenlistment Bonus...........   375
          Section 619--Selected Reserve Enlistment Bonus for Former
            Enlisted Members.........................................   375
          Section 620--Special Pay or Bonuses for Enlisted Members
            Extending Tours of Duty Overseas.........................   375
          Section 621--Increase in Amount of Family Separation
            Allowance................................................   375
          Section 622--Change in Requirements for Ready Reserve
            Muster Duty Allowance....................................   375
        Subtitle C--Travel and Transportation Allowances.............   375
          Section 631--Travel and Transportation Allowances for
            Dependents of Member Sentenced by Court-Martial..........   375
          Section 632--Dislocation Allowance.........................   376
        Subtitle D--Retired Pay, Survivor Benefits, and Related
          Matters....................................................   376
          Section 641--Time in Which Certain Changes in Beneficiary
            Under Survivor Benefit Plan May Be Made..................   376
        Subtitle E--Other Matters....................................   376
          Section 651--Definition of Sea Duty for Purposes of Career
            Sea Pay..................................................   376
          Section 652--Loan Repayment Program for Commissioned
            Officers in Certain Health Professions...................   376
          Section 653--Conformance of NOAA Commissioned Officers
            Separation Pay to Separation Pay for Members of Other
            Uniformed Services.......................................   376
          Section 654--Reimbursement of Public Health Service
            Officers for Adoption Expenses...........................   376
          Section 655--Payment of Back Quarters and Subsistence
            Allowances to World War II Veterans Who Served as
            Guerrilla Fighters in the Philippines....................   377
          Section 656--Space Available Travel for Members of Selected
            Reserve..................................................   377
          Section 657--Study on Military Personnel At, Near, or Below
            the Poverty Line.........................................   377
          Section 658--Implementation of Department of Defense
            Supplemental Food Program for Military Personnel Outside
            the United States........................................   377

    TITLE VII--HEALTH CARE PROVISIONS................................   378

        OVERVIEW.....................................................   378
        ITEMS OF SPECIAL INTEREST....................................   379
            CHAMPUS as a Second-Payer to Other Health Insurance......   379
            Pacific Medical Network..................................   379
            TRICARE Program..........................................   379
            Vietnam Repatriated Prisoner of War Program..............   380
        LEGISLATIVE PROVISIONS.......................................   381
          Subtitle A--Health Care Services...........................   381
            Section 701--Expansion of Retiree Dental Insurance Plan
              to Include Surviving Spouse and Child Dependents of
              Certain Deceased Members...............................   381
            Section 702--Provision of Prosthetic Devices to Covered
              Beneficiaries..........................................   381
          Subtitle B--TRICARE Program................................   381
            Section 711--Addition of Definition of TRICARE Program to
              Title 10...............................................   381
            Section 712--Plan for Expansion of Managed Care Option of
              TRICARE Program........................................   381
          Subtitle C--Uniformed Services Treatment Facilities........   382
            Section 721--Implementation of Designated Provider
              Agreements for Uniformed Services Treatment Facilities.   382
            Section 722--Limitation on Total Payments................   382
            Section 723--Continued Acquisition of Reduced-Cost Drugs.   382
          Subtitle D--Other Changes to Existing Laws Regarding Health
            Care Management..........................................   382
            Section 731--Waiver or Reduction of Copayments Under
              Overseas Dental Program................................   382
            Section 732--Premium Collection Requirements for Medical
              and Dental Insurance Programs..........................   382
            Section 733--Consistency Between CHAMPUS and Medicare in
              Payment Rates for Service..............................   383
            Section 734--Use of Personal Services Contracts for
              Provision of Health Care Services and Legal Protection
              for Providers..........................................   383
            Section 735--Portability of State Licenses for Department
              of Defense Health Care Professionals...................   384
            Section 736--Standard Form and Requirements Regarding
              Claims for Payment for Services........................   384
            Section 737--Medical Personnel Conscience Clause.........   384
          Subtitle E--Other Matters..................................   384
            Section 741--Continued Admission of Civilians as Students
              in Physician Assistant Training Program of Army Medical
              Department.............................................   384
            Section 742--Emergency Health Care in Connection with
              Overseas Activities of On-Site Inspection Agency of the
              Department of Defense..................................   385
            Section 743--Comptroller General Study of Adequacy and
              Effect of Maximum Allowable Charges for Physicians
              under CHAMPUS..........................................   385
            Section 744--Comptroller General Study of Department of
              Defense Pharmacy Programs..............................   385
            Section 745--Comptroller General Study of Navy Graduate
              Medical Education Program..............................   385
            Section 746--Study of Expansion of Pharmaceuticals by
              Mail Program to Include Additional Medicare-Eligible
              Covered Beneficiaries..................................   386

    TITLE VIII--ACQUISITION POLICY, ACQUISITION MANAGEMENT, AND
      RELATED MATTERS-...............................................   387

      ITEMS OF SPECIAL INTEREST......................................   387
          Cost Accounting Standards Board............................   387
          Management Responsibility for Acquisition Policy...........   387
          Training and Education of the Acquisition Workforce........   388
      LEGISLATIVE PROVISIONS.........................................   389
        Subtitle A--Acquisition Policy...............................   389
          Section 801--Case-by-Case Waivers of Domestic Source
            Limitations..............................................   389
          Section 802--Expansion of Authority to Enter Into Contracts
            Crossing Fiscal Years to All Severable Services Contracts
            Not Exceeding a Year.....................................   390
          Section 803--Clarification of Vestiture of Title Under
            Contracts................................................   390
          Section 804--Exclusion of Disaster Relief, Humanitarian,
            and Peacekeeping Operations from Restrictions on Use of
            Undefinitized Contract Actions...........................   390
          Section 805--Limitation and Report on Payment of
            Restructuring Costs under Defense Contracts..............   390
          Section 806--Authority Relating to Purchase of Certain
            Vehicles.................................................   390
          Section 807--Multiyear Procurement Contracts...............   390
          Section 808--Domestic Source Limitation Amendments.........   391
          Section 809--Repeal of Expiration of Domestic Source
            Limitation for Certain Naval Vessel Propellers...........   391
        Subtitle B--Other Matters....................................   391
          Section 821--Repeal of Certain Acquisition Reports and
            Requirements.............................................   391
          Section 822--Extension of Authority for use of Test and
            Evaluation Installations by Commercial Entities..........   391
          Section 823--Requirement to Develop and Maintain List of
            Firms Not Eligible for Defense Contracts.................   391

    TITLE IX--DEPARTMENT OF DEFENSE ORGANIZATION AND MANAGEMENT......   392

        ITEMS OF SPECIAL INTEREST....................................   392
          Armed Services Patent Advisory Board.......................   392
          Defense Acquisition Workforce..............................   392
          Defense Boards and Commissions.............................   393
          Defense Reorganization.....................................   394
          Management Headquarters and Headquarters Support Personnel.   394
        LEGISLATIVE PROVISIONS.......................................   395
          Section 901--Limitation on Operation and Support Funds for
            the Office of the Secretary of Defense...................   395
          Section 902--Components of National Defense University.....   396
          Section 903--Authorization for the Marine Corps University
            to Employ Civilian Professors............................   396
          Section 904--Center for the Study of Chinese Military
            Affairs..................................................   396
          Section 905--White House Communications Agency.............   397
          Section 906--Revision to Required Frequency for Provision
            of Policy Guidance for Contingency Plans.................   397
          Section 907--Termination of the Defense Airborne
            Reconnaissance Office....................................   397

    TITLE X--GENERAL PROVISIONS......................................   399

        Counterdrug Activities.......................................   399
          Overview...................................................   399
          Items of Special Interest..................................   399
            C-26 aircraft photo reconnaissance upgrade...............   399
            Gulf states counterdrug initiative.......................   399
            Mapping, charting and geodesy............................   400
            Mexican, Caribbean and South American initiative.........   400
            Non-Intrusive Inspection Systems.........................   402
            Optionally piloted air vehicle...........................   403
            Southwest border fence project...........................   403
            Tracker aircraft.........................................   403
        Other Matters................................................   404
          Implementation of Whistleblower Protections................   404
          Intelligence Shortcomings During Persian Gulf War..........   404
          Resolution of Commercial Disputes in Saudi Arabia..........   405
      LEGISLATIVE PROVISIONS.........................................   405
        Subtitle A--Financial Matters................................   405
          Section 1001--Transfer Authority...........................   405
          Section 1002--Incorporation of Classified Annex............   405
          Section 1003--Authority for Obligation of Unauthorized
            Fiscal Year 1997 Defense Appropriations..................   406
          Section 1004--Authorization of Supplemental Appropriations
            for Fiscal Year 1997.....................................   406
          Section 1005--Increase in Fiscal Year 1996 Transfer
            Authority................................................   406
          Section 1006--Fisher House Trust Fund......................   406
          Section 1007--Flexibility in Financing Closure of Certain
            Outstanding Contracts for Which a Small Final Payment is
            Due......................................................   406
        Subtitle B--Naval Vessels and Shipyards......................   406
          Section 1021--Relationship of Certain Laws to Disposal of
            Vessels for Export from the Naval Vessel Register and the
            National Defense Reserve Fleet...........................   406
          Section 1022--Authority to Enter into a Long-Term Charter
            for a Vessel in Support of the Surveillance Towed Array
            Sensor (SURTASS) Program.................................   407
          Section 1023--Transfer of Two Specified Obsolete Tugboats
            of the Army..............................................   407
          Section 1024--Naming of a DDG-51 Class Destroyer the U.S.S.
            Thomas F. Connolly.......................................   407
          Section 1025--Congressional Review Period with Respect to
            Transfer of the Ex-U.S.S. Midway (CV-41).................   407
        Subtitle C--Counter-Drug Activities..........................   408
          Section 1031--Prohibition on Use of National Guard for
            Civil-Military Activities Under State Drug Interdiction
            and Counterdrug Activities Plan..........................   408
        Subtitle D--Miscellaneous Report Requirements and Repeals....   409
          Section 1041--Repeal of Miscellaneous Obsolete Reports
            Required by Prior Defense Authorization Acts.............   409
          Section 1042--Repeal of Annual Report Requirement Relating
            to Training of Special Operations Forces with Friendly
            Foreign Forces...........................................   409
        Subtitle E--Other Matters....................................   409
          Section 1051--Authority for Special Agents of the Defense
            Criminal Investigative Service to Execute Warrants and
            Make Arrests.............................................   409
          Section 1052--Study of Investigative Practices of Military
            Criminal Investigative Organizations Relating to Sex
            Crimes...................................................   409
          Section 1053--Technical and Clerical Amendments............   410
          Section 1054--Display of POW/MIA Flag......................   410
          Section 1055--Certification Required Before Observance of
            Moratorium on Use by Armed Forces of Antipersonnel
            Landmines................................................   410
          Section 1056--Protection of Safety-Related Information
            Voluntarily Provided by Air Carriers.....................   410
          Section 1057--National Guard ChalleNGe Program to Create
            Opportunities for Civilian Youth.........................   411
          Section 1058--Lease of Non-Excess Personal Property of the
            Military Departments.....................................   412
          Section 1059--Commendation of Members of the Armed Forces
            and Government Civilian Personnel who Served During the
            Cold War.................................................   412

    TITLE XI--COOPERATIVE THREAT REDUCTION WITH STATES OF FORMER
      SOVIET UNION...................................................   413

      OVERVIEW.......................................................   413
      ITEMS OF SPECIAL INTEREST......................................   413
          Arms Elimination Projects in Russia........................   413
          Arms Elimination Projects in Ukraine.......................   414
          Auditing of CTR Assistance.................................   414
          Chemical Weapons Destruction...............................   415
          Fissile Material Storage Facility..........................   417
          Nuclear Reactor Core Conversion............................   418
          Nuclear Weapons Storage Security In Russia.................   419
          Other Support Programs.....................................   419
          Program Overhead...........................................   420
          Prohibition of Specified Activities........................   420
      LEGISLATIVE PROVISIONS.........................................   420
          Section 1101--Specification of Cooperative Threat Reduction
            Programs.................................................   420
          Section 1102--Fiscal Year 1998 Funding Allocations.........   420
          Section 1103--Prohibition on Use of Funds for Specified
            Purposes.................................................   420
          Section 1104--Prohibition on Use of Funds Until Specified
            Reports are Submitted....................................   420
          Section 1105--Limitation on Use of Funds Until Submission
            of Certification.........................................   420
          Section 1106--Use of Funds for Chemical Weapons Destruction
            Facility.................................................   421
          Section 1107--Limitation on Use of Funds for Storage
            Facility for Russian Fissile Material....................   421
          Section 1108--Limitation on Use of Funds for Weapons
            Storage Security.........................................   421
          Section 1109--Report to Congress on Issues Regarding
            Payment of Taxes or Duties on Assistance Provided to
            Russia Under Cooperative Threat Reduction Programs.......   421
          Section 1110--Limitation on Obligation of Funds for a
            Specified Period.........................................   421
          Section 1111--Availability of Funds........................   421

    TITLE XII--MATTERS RELATING TO OTHER NATIONS.....................   422

      OVERVIEW.......................................................   422
          African Center for Security Studies........................   422
          Arms Control Implementation................................   422
          Defense Logistics Cooperation with the People's Republic of
            China....................................................   424
          The Khobar Towers Bombing and Force Protection in Southwest
            Asia.....................................................   424
          Strategic Force Reductions.................................   426
      LEGISLATIVE PROVISIONS.........................................   427
          Section 1201--Reports to Congress relating to United States
            forces in Bosnia.........................................   427
          Section 1202--One-year Extension of Counterproliferation
            Authorities..............................................   429
          Section 1203--Report on Future Military Capabilities and
            Strategy of the People's Republic of China...............   429
          Section 1204--Temporary Use of General Purpose Vehicles and
            Nonlethal Military Equipment under Acquisition and Cross
            Servicing Agreements.....................................   429

    DIVISION B--MILITARY CONSTRUCTION AUTHORIZATIONS.................   431

      PURPOSE........................................................   431
      MILITARY CONSTRUCTION OVERVIEW.................................   431

    TITLE XXI--ARMY..................................................   452

      SUMMARY........................................................   452
      ITEMS OF SPECIAL INTEREST......................................   452
          Improvements of Military Family Housing....................   452
          Planning and Design........................................   452
      LEGISLATIVE PROVISIONS.........................................   452
          Section 2101--Authorized Army Construction and Land
            Acquisition Projects.....................................   452
          Section 2102--Family Housing...............................   452
          Section 2103--Improvements to Military Family Housing Units   453
          Section 2104--Authorization of Appropriations, Army........   453
          Section 2105--Correction In Authorized Uses of Funds, Fort
            Irwin, California........................................   453

    TITLE XXII--NAVY.................................................   454

      SUMMARY........................................................   454
      ITEMS OF SPECIAL INTEREST......................................   454
          Co-Composting Facility, Naval Education & Training Center,
            Newport, Rhode Island....................................   454
          Improvements to Military Family Housing....................   454
          Prepositioned Equipment Maintenance Facilities, Blount
            Island, Jacksonville, Florida............................   454
      LEGISLATIVE PROVISIONS.........................................   455
          Section 2201--Authorized Navy Construction and Land
            Acquisition Projects.....................................   455
          Section 2202--Family Housing...............................   455
          Section 2203--Improvements to Military Family Housing Units   455
          Section 2204--Authorization of Appropriations, Navy........   455
          Section 2205--Authorization of Military Construction
            Project at Naval Air Station, Pascagoula, Mississippi,
            for which Funds have been Appropriated...................   455

    TITLE XXIII--AIR FORCE...........................................   456

      SUMMARY........................................................   456
      ITEMS OF SPECIAL INTEREST......................................   456
          Disposal of Real Property, Hancock Field, Syracuse, New
            York.....................................................   456
          Improvements to Military Family Housing....................   456
          Inter-Departmental Land Transfer, Bellows Air Force
            Station, Hawaii..........................................   456
      LEGISLATIVE PROVISIONS.........................................   457
          Section 2301--Authorized Air Force Construction and Land
            Acquisition Projects.....................................   457
          Section 2302--Family Housing...............................   457
          Section 2303--Improvements to Military Family Housing Units   457
          Section 2304--Authorization of Appropriations, Air Force...   457
          Section 2305--Authorization of Military Construction
            Project at McConnell Air Force Base, Kansas, for which
            Funds Have Been Appropriated.............................   457

    TITLE XXIV--DEFENSE AGENCIES.....................................   458

      SUMMARY........................................................   458
      LEGISLATIVE PROVISIONS.........................................   458
          Section 2401--Authorized Defense Agencies Construction and
            Land Acquisition Projects................................   458
          Section 2402--Military Housing Planning and Design.........   458
          Section 2403--Improvements to Military Family Housing Units   458
          Section 2404--Energy Conservation Projects.................   458
          Section 2405--Authorization Of Appropriations, Defense
            Agencies.................................................   458
          Section 2406--Correction in Authorized Use of Funds,
            McClellan Air Force Base, California.....................   458
          Section 2407--Modification of Authority to carry out Fiscal
            Year 1995 Projects.......................................   459

    TITLE XXV--NORTH ATLANTIC TREATY ORGANIZATION INFRASTRUCTURE.....   460

      SUMMARY........................................................   460
      LEGISLATIVE PROVISIONS.........................................   460
          Section 2501--Authorized NATO Construction and Land
            Acquisition Projects.....................................   460
          Section 2502--Authorization of Appropriations, NATO........   460

    TITLE XXVI--GUARD AND RESERVE FORCES FACILITIES..................   461

      SUMMARY........................................................   461
      ITEMS OF SPECIAL INTERESTS.....................................   461
          Budget Process to Support the Validation of Military
            Construction Requirements for the Army National Guard....   461
      LEGISLATIVE PROVISIONS.........................................   462
          Section 2601--Authorized Guard and Reserve Construction and
            Land Acquisition Projects................................   462
          Section 2602--Authorization of Military Construction
            Projects for Which Funds Have Been Appropriated..........   462
          Section 2603--Army Reserve Construction Project, Salt Lake
            City, Utah...............................................   462

    TITLE XXVII--EXPIRATION AND EXTENSION OF AUTHORIZATIONS..........   463

      LEGISLATIVE PROVISIONS.........................................   463
          Section 2701--Expiration of Authorizations and Amounts
            Required to be Specified by Law..........................   463
          Section 2702--Extensions of Authorizations of Certain
            Fiscal Year 1995 Projects................................   463
          Section 2703--Extension of Authorizations of Certain Fiscal
            Year 1994 Projects.......................................   463
          Section 2704--Extension of Authorizations of Certain Fiscal
            Year 1993 Projects.......................................   463
          Section 2705--Extension of Authorizations of Certain Fiscal
            Year 1992 Projects.......................................   463
          Section 2706--Extension of Availability of Funds for
            Construction of Over-the-Horizon Radar in Puerto Rico....   464
          Section 2707--Effective Date...............................   464

    TITLE XXVIII--GENERAL PROVISIONS.................................   465

      ITEMS OF SPECIAL INTEREST......................................   465
          Force Protection for Overseas Facilities from Chemical and
            Biological Weapons.......................................   465
          Military Construction in the Republic of Korea and
            Burdensharing Support for United States Forces Korea.....   465
          Withdrawals of Public Lands for Military Purposes..........   466
      LEGISLATIVE PROVISIONS.........................................   466
        Subtitle A--Military Construction Program and Military Family
          Housing Changes............................................   466
          Section 2801--Use of Mobility Enhancement Funds for
            Unspecified Minor Construction...........................   466
          Section 2802--Limitation on the Use of Operation and
            Maintenance Funds for Facility...........................   466
          Section 2803--Leasing of Military Family Housing, United
            States Southern Command, Miami, Florida..................   467
          Section 2804--Use of Financial Incentives Provided as Part
            of Energy Savings and Water Conservation Activities......   467
          Section 2805--Congressional Notification Requirements
            Regarding Use of Department of Defense Housing Funds for
            Investments in Nongovernmental Entities..................   467
        Subtitle B--Real Property and Facilities Administration......   467
          Section 2811--Increase in Ceiling for Minor Land
            Acquisition Projects.....................................   467
          Section 2812--Administrative Expenses for Certain Real
            Property Transactions....................................   467
          Section 2813--Disposition of the Proceeds from the Sale of
            Air Force Plant 78, Brigham City, Utah...................   467
        Subtitle C--Defense Base Closure and Realignment.............   468
          Section 2821--Consideration of Military Installations as
            Sites for New Federal Facilities.........................   468
          Section 2822--Prohibition against Conveyance of Property at
            Military Installations to State-Owned Shipping Companies.   468
        Subtitle D--Land Conveyances Generally.......................   468
          Part I--Army Conveyances...................................   468
          Section 2831--Land Conveyance, James T. Roker Army Reserve
            Center, Durant, Oklahoma.................................   468
          Section 2832--Land Conveyance, Fort A.P. Hill, Virginia....   468
          Section 2833--Expansion of Land Conveyance, Indiana Army
            Ammunition Plant, Charlestown, Indiana...................   468
          Section 2834--Modification of Land Conveyance, Lompoc,
            California...............................................   469
          Section 2835--Modification of Land Conveyance, Rocky
            Mountain Arsenal, Colorado...............................   469
          Section 2836--Correction of Land Conveyance Authority, Army
            Reserve Center, Anderson, South Carolina.................   469
          Section 2837--Land Conveyance, Fort Bragg, North Carolina..   469
          Section 2838--Land Conveyance, Gibson Army Reserve Center,
            Chicago, Illinois........................................   469
          Section 2839--Land Conveyance, Fort Dix, New Jersey........   469
          Part II--Navy Conveyances..................................   470
          Section 2851--Correction of Lease Authority, Naval Air
            Station, Meridian, Mississippi...........................   470
          Part III--Air Force Conveyances............................   470
          Section 2861--Land Transfer, Eglin Air Force Base, Florida.   470
          Section 2862--Study of Land Exchange Options, Shaw Air
            Force Base, South Carolina...............................   470
          Section 2863--Land Conveyance, March Air Force Base,
            California...............................................   470
        Subtitle E--Other Matters....................................   470
          Section 2881--Repeal of Requirement to Operate Naval
            Academy Dairy Farm.......................................   470
          Section 2882--Long-Term Lease of Property, Naples, Italy...   471
          Section 2883--Designation of Military Family Housing at
            Lackland Air Force Base, Texas, in Honor of Frank Tejeda,
            a Former Member of the House of Representatives..........   471

    TITLE XXIX--SIKES ACT IMPROVEMENT AMENDMENTS.....................   472

      LEGISLATIVE PROVISIONS.........................................   472
          Section 2902--Definition of Sikes Act for Purposes of
            Amendments...............................................   472
          Section 2903--Codification of Short Title of Act...........   472
          Section 2904--Integrated Natural Resource Management Plans.   472
          Section 2905--Review for Preparation of Integrated Natural
            Resource Management Plans................................   472
          Section 2906--Annual Reviews and Reports...................   472
          Section 2907--Transfer of Wildlife Conservation Fees from
            Closed Military Installations............................   472
          Section 2908--Federal Enforcement of Integrated Natural
            Resource Management Plans and Enforcement of Other Laws..   473
          Section 2909--Natural Resource Management Services.........   473
          Section 2910--Definitions..................................   473
          Section 2911--Cooperative Agreements.......................   473
          Section 2912--Repeal of Superseded Provision...............   473
          Section 2913--Clerical Amendments..........................   473
          Section 2914--Authorizations of Appropriations.............   473

    DIVISION C--DEPARTMENT OF ENERGY NATIONAL SECURITY AUTHORIZATIONS
      AND OTHER AUTHORIZATIONS.......................................   475

    TITLE XXXI--DEPARTMENT OF ENERGY NATIONAL SECURITY PROGRAMS......   475

      PURPOSE........................................................   475
      OVERVIEW.......................................................   475
      ITEMS OF SPECIAL INTEREST......................................   488
          Accelerated Strategic Computing Initiative and Control of
            Supercomputer Technology.................................   488
          Chemistry and Metallurgy Research Facility at the Los
            Alamos National Laboratory...............................   488
          Defense Asset Acquisition..................................   489
          Defense Environmental Restoration and Waste Management.....   489
          Enhanced Surveillance Program at the Production Plants.....   491
          Inertial Confinement Fusion................................   491
          Infrastructure and Manufacturing Improvements at Weapons
            Production Sites.........................................   492
          Initiatives For Proliferation Prevention...................   492
          Laboratory Review of Missile Defenses......................   493
          Management and Organization of DOE's Nuclear Weapons
            Program..................................................   493
          Materials Protection, Control, and Accounting Program......   494
          Naval Reactors.............................................   494
          Nuclear Energy.............................................   495
          Operation of F and H canyons...............................   495
          Privatization..............................................   495
          Program Direction for Defense Programs.....................   498
          Recurring General Provision Relating to Availability of
            Funds....................................................   498
          Stockpile Life Extension Program at Y-12 Plant.............   499
          Technology Transfer........................................   499
          Transfer of Funds Associated with Security at Rocky Flats
            Site and the Fernald Site................................   499
          Tritium Production.........................................   499
          Worker and Community Transition............................   500
      LEGISLATIVE PROVISIONS.........................................   501
        Subtitle A--National Security Program Authorization..........   501
          Section 3101--Weapons Activities...........................   501
          Section 3102--Environmental Restoration and Waste
            Management...............................................   501
          Section 3103--Other Defense Activities.....................   501
          Section 3104--Defense Nuclear Waste Disposal...............   501
        Subtitle B--Recurring General Provisions.....................   501
          Section 3121--Reprogramming................................   501
          Section 3122--Limits on General Plant Projects.............   502
          Section 3123--Limits on Construction Projects..............   502
          Section 3124--Fund Transfer Authority......................   502
          Section 3125--Authority for Conceptual and Construction
            Design...................................................   502
          Section 3126--Authority for Emergency Planning, Design and
            Construction Activities..................................   502
          Section 3127--Funds Available for all National Security
            Programs of the Department of Energy.....................   503
          Section 3128--Authority Relating to Transfer of Defense
            Environmental Management Funds...........................   503
        Subtitle C--Program Authorizations, Restrictions, and
          Limitations................................................   503
          Section 3131--Ballistic Missile Defense National Laboratory
            Program..................................................   503
        Subtitle D--Other Matters....................................   503
          Section 3141--Plan for Stewardship, Management, and
            Certification of Warheads in the Nuclear Weapons
            Stockpile................................................   503
          Section 3142--Repeal of Obsolete Reporting Requirement.....   503
          Section 3143--Revisions to Defense Nuclear Facilities
            Workforce Restructuring Plan Requirements................   503
          Section 3144--Extension of Authority for Appointment of
            Certain Scientific, Engineering, and Technical Personnel.   504
          Section 3145--Report on Proposed Contract for Hanford Tank
            Waste Vitrification Project..............................   504
          Section 3146--Limitation on Conduct of Subcritical Nuclear
            Weapons Tests............................................   504
          Section 3147--Limitation on Use of Certain Funds Until
            Future Use Plans are Submitted...........................   505
          Section 3148--Plan for External Oversight of National
            Laboratories.............................................   505
          Section 3149--University-Based Research Center.............   505
          Section 3150--Stockpile Stewardship Program................   505
          Section 3151--Reports on Advanced Supercomputer Sales to
            Certain Foreign Nations..................................   505

    TITLE XXXII--DEFENSE NUCLEAR FACILITIES SAFETY BOARD
      AUTHORIZATION..................................................   507

      LEGISLATIVE PROVISIONS.........................................   507
          Section 3201--Authorization................................   507
          Section 3202--Plan for Transfer of Functions of Defense
            Nuclear Facilities Safety Board to Nuclear Regulatory
            Commission...............................................   507

    TITLE XXXIII--NATIONAL DEFENSE STOCKPILE.........................   508

      LEGISLATIVE PROVISIONS.........................................   508
          Section 3301--Authorized Uses of Stockpile Funds...........   508
          Section 3302--Disposal of Beryllium Copper Master Alloy
            From National Defense Stockpile..........................   508
          Section 3303--Disposal of Titanium Sponge in National
            Defense Stockpile........................................   508
          Section 3304--Conditions on Transfer of Stockpiled Platinum
            Reserves for Treasury Use................................   508
          Section 3305--Restrictions on Disposal of Certain Manganese
            Ferro....................................................   508
          Section 3306--Required Procedures for Disposal of Strategic
            and Critical Materials...................................   509

    TITLE XXXIV--NAVAL PETROLEUM RESERVES............................   510

      LEGISLATIVE PROVISIONS.........................................   510
          Section 3401--Authorization of Appropriations..............   510
          Section 3402--Price Requirement on Sale of Certain
            Petroleum During Fiscal Year 1998........................   510
          Section 3403--Termination of Assignment of Navy Officers to
            Office of Naval Petroleum and Oil Shale Reserves.........   510

    TITLE XXXV--PANAMA CANAL COMMISSION..............................   511

      LEGISLATIVE PROVISIONS.........................................   511
        Subtitle A--Authorization Of Expenditures From Revolving Fund   511
        Subtitle B--Facilitation Of Panama Canal Transition..........   511
          Section 3511--Short Title; References......................   511
          Section 3512--Definitions Relating to Canal Transition.....   511
          Part I--Transition Matters Relating to Commission Officers
            and Employees............................................   511
          Section 3521--Authority for the Administrator of the
            Commission to Accept Appointment as Administrator of the
            New Panama Canal Authority...............................   511
          Section 3522--Post-Canal Transfer Personnel Authorities....   512
          Section 3523--Enhanced Authority of Commission to Establish
            Compensation of Commission Officers and Employees........   512
          Section 3524--Travel, Transportation and Subsistence
            Expenses for Commission Personnel No Longer Subject to
            Federal Travel Regulations...............................   513
          Section 3525--Enhanced Recruitment and Retention
            Authorities..............................................   513
          Section 3526--Transition Separation Incentive Payments.....   513
          Section 3527--Labor-Management Relations...................   513
          Section 3528--Availability of Panama Canal Revolving Fund
            for Severance Pay for Certain Employees Separated by the
            Panama Canal Authority after Canal Transfer Date.........   514
          Part II--Transition Matters Relating to Operation and
            Administration of Canal..................................   514
          Section 3541--Establishment of Procurement System and Board
            of Contract Appeals......................................   514
          Section 3542--Transactions with the Panama Canal Authority.   515
          Section 3543--Time Limitations for Filing of Claims for
            Damages..................................................   515
          Section 3544--Tolls for Small Vessels......................   515
          Section 3545--Date of Actuarial Evaluation of FECA
            Liability................................................   515
          Section 3546--Notaries public..............................   516
          Section 3547--Commercial Services..........................   516
          Section 3548--Transfer from President to Commission of
            Certain Regulatory Functions Relating to Employment
            Classification Appeals...................................   516
          Section 3548--Enhanced Printing Authority..................   516
          Section 3549--Technical and Conforming Amendments..........   516

    TITLE XXXVI--MARITIME ADMINISTRATION.............................   516

      LEGISLATIVE PROVISIONS.........................................   516
          Section 3601--Authorization of Appropriations for Fiscal
            Year 1998................................................   516
          Section 3602--Repeal of Obsolete Annual Report Requirement
            Concerning Relative Cost of Shipbuilding in the Various
            Coastal Districts of the United States...................   517
          Section 3603--Provisions Relating to Maritime Security
            Fleet Program............................................   517
          Section 3604--Authority to Utilize Replacement Vessels and
            Capacity.................................................   517
          Section 3605--Authority to Convey National Defense Reserve
            Vessel...................................................   518
    Departmental Data................................................   519
      Department of Defense Authorization Request....................   519
      Military Construction Authorization Request....................   519
    Committee Position...............................................   520
    Communications From Other Committees.............................   520
    Fiscal Data......................................................   528
      Congressional Budget Office Estimate...........................   528
      Congressional Budget Office Cost Estimate......................   528
        Authorization of Appropriations..............................   529
      Committee Cost Estimate........................................   537
      Inflation-Impact Statement.....................................   537
    Oversight Findings...............................................   537
    Constitutional Authority Statement...............................   538
    Statement of Federal Mandates....................................   538
    Roll Call Votes..................................................   538
    Changes in Existing Law Made by the Bill, as Reported............   546
    Additional and dissenting Views..................................   768
      Dissenting views of Ronald V. Dellums..........................   768
      Additional views of John Spratt................................   770
      Additional views of James Hansen, Tillie Fowler and Solomon
        Ortiz........................................................   773
      Additional views of James M. Talent............................   777
      Additional views of Patrick J. Kennedy.........................   779
      Additional Views of Van Hilleary, Stephen Buyer, Tillie Fowler,
        Roscoe Bartlett, Buck McKeon, Joe Scarborough, Lindsey
        Graham, and Jim Ryun.........................................   781
    105th Congress                                                   Report
                            HOUSE OF REPRESENTATIVES

     1st Session                                                    105-132
    _______________________________________________________________________

            NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 1998

                                    _______

     June 16, 1997.--Committed to the Committee of the Whole House on the
                  State of the Union and ordered to be printed

    _______________________________________________________________________

      Mr. Spence, from the Committee on National Security, submitted the
                                   following

                                  R E P O R T

                            [To accompany H.R. 1119]

          [Including cost estimate of the Congressional Budget Office]

        The Committee on National Security, to whom was referred
    the bill (H.R. 1119) to authorize appropriations for fiscal
    years 1988 and 1999 for military activities of the Department
    of Defense, to prescribe military personnel strengths for
    fiscal years 1998 and 1999, and for other purposes, having
    considered the same, report favorably thereon with amendments
    and recommend that the bill as amended do pass.
        The amendments are as follows:
        The amendment strikes out all after the enacting clause of
    the bill and inserts a new test which appears in italic type in
    the reported bill.
        The title of the bill is amended to reflect the amendment
    to the text of the bill.

                     EXPLANATION OF THE COMMITTEE AMENDMENT

        The committee adopted an amendment in the nature of a
    substitute during the consideration of H.R. 1119. The remainder
    of the report discusses the bill, as amended.

                                    PURPOSE

        The bill would--(1) Authorize appropriations for fiscal
    year 1998 for procurement and for research, development, test
    and evaluation (RDT&E); (2) Authorize appropriations for fiscal
    year 1998 for operation and maintenance (O&M) and for working
    capital funds; (3) Authorize for fiscal year 1998: (a) the
    personnel strength for each active duty component of the
    military departments; (b) the personnel strength for the
    Selected Reserve for each reserve component of the armed
    forces; (c) the military training student loads for each of the
    active and reserve components of the military departments; (4)
    Modify various elements of compensation for military personnel
    and impose certain requirements and limitations on personnel
    actions in the defense establishment; (5) Authorize
    appropriations for fiscal year 1998 for military construction
    and family housing; (6) Authorize appropriations for fiscal
    year 1998 for the Department of Energy National Security
    Programs; (7) Modify provisions related to the National Defense
    Stockpile; (8) Authorize appropriations for fiscal year 1998
    for the operation of the Panama Canal Commission; and (9)
    Authorize appropriations for fiscal year 1998 for the Maritime
    Administration.

                RELATIONSHIP OF AUTHORIZATION AND APPROPRIATIONS

        Importantly, the bill does not generally provide budget
    authority. The bill authorizes appropriations. Subsequent
    appropriation acts provide budget authority. The bill addresses
    the following categories in the Department of Defense budget:
    procurement; research, development, test and evaluation;
    operation and maintenance; working capital funds, military
    personnel; and military construction and family housing. The
    bill also addresses Department of Energy National Security
    Programs and the Maritime Administration.
        Active duty and reserve personnel strengths authorized in
    this bill and legislation affecting compensation for military
    personnel determine the remaining appropriation requirements of
    the Department of Defense. However, this bill does not provide
    authorization of specific dollar amounts for personnel.

                      SUMMARY OF AUTHORIZATION IN THE BILL

        The President requested budget authority of $265.6 billion
    for the national defense budget function for fiscal year 1998.
    Of this amount, the President requested $251.0 billion for the
    Department of Defense (including $8.4 billion for military
    construction and family housing) and $13.6 billion for
    Department of Energy national security programs and the Defense
    Nuclear Facilities Safety Board.
        The committee recommends an overall level of $268.2 billion
    in budget authority. This amount is an increase of
    approximately $2.6 billion from the amount requested for the
    national defense budget function by the President. The
    committee's recommendation is consistent with the amounts
    established in the budget resolution for fiscal year 1998 for
    the national security budget function.

                        SUMMARY TABLE OF AUTHORIZATIONS

        The following table provides a summary of the amounts
    requested and that would be authorized for appropriation in the
    bill (in the column labeled ``Budget Authority Implication of
    Committee Recommendation'') and the committee's estimate of how
    the committee's recommendations relate to the budget totals for
    the national defense function. For purposes of estimating the
    budget authority implications of committee action, the table
    reflects the numbers contained in the President's budget for
    proposals not in the committee's legislative jurisdiction.

                        RATIONALE FOR THE COMMITTEE BILL

        H.R. 1119, the National Defense Authorization Act for
    Fiscal Year 1998, reflects the committee's continued efforts to
    manage the risks that continued force downsizing and budget
    reductions pose for U.S. national security interests in an
    uncertain world. The committee and the Congress have helped
    bring a measure of stability to the U.S. defense program over
    the past two years, moving to restore some balance between the
    need to maintain sufficiently large and capable forces today
    and the need to modernize and introduce innovative new
    technologies and concepts that will provide a basis for
    continued American military superiority in future.
        The committee believes that the fundamental dilemma facing
    the Department of Defense remains constant: how to maintain a
    viable all-volunteer force in an environment where the number,
    scope and duration of military missions, especially
    peacekeeping and humanitarian missions, continue to grow while
    military forces and defense budgets continue to decline.
    Although the Department's recent Quadrennial Defense Review
    (QDR) recognized these realities, the long-standing gap between
    strategy and resources will persist and, in fact, is likely to
    widen. The National Defense Panel (NDP), an independent body
    selected by the Administration and Congress to assess the QDR,
    summarized the problem when it concluded that the QDR exposed a
    ``risk in defense resources.'' In particular, the NDP concluded
    that the QDR's plan to improve modernization funding was based
    upon ``tenuous'' assumptions which ``collec tively . . .
    represent a budget risk which could potentially undermine the
    entire Defense Strategy.''
        The QDR acknowledges that a sound national military
    strategy is based upon protecting the ability of U.S. military
    forces to respond to today's challenges while also preparing
    for the challenges of an uncertain future. This strategy
    requires three principle tasks of the Department of Defense.
    First, U.S. military forces must help to maintain the security
    and stability among powerful nations that is by and large the
    result of the American-led victory in the Cold War. Second,
    U.S. forces must protect today's security and stability from
    lesser threats, be they smaller nations, ethnic conflicts,
    terrorism or myriad other sources. Finally, U.S. forces must
    begin to prepare now for the possibility of future great-power
    conflicts that may be fought with military forces quite
    different from today's.
        This first task of maintaining current security and
    stability has been articulated in a clear set of standards that
    account for the size and structure of today's U.S. military
    forces. These standards include the need to maintain
    approximately 100,000 troops both in Europe and in East Asia,
    and sufficient forces available to deploy, fight and rapidly
    win two nearly simultaneous major wars. The committee continues
    to support these standards. The troop levels in Europe and Asia
    represent an enduring commitment by the United States to these
    vital regions, while the capability to fight two wars
    simultaneously ensures that the United States will be able to
    respond to crises without compromising the ability to maintain
    stability elsewhere. With the continued imminent threats in
    Korea and the Persian Gulf, this two-war capability must remain
    a basic building block of U.S. military forces.
        At the same time, the dominance of U.S. conventional
    military forces and the continued strength of our nuclear
    deterrent is compelling adversaries to be more innovative and
    aggressive. Countering more diffuse and less traditional
    threats accounts for the second principle task of U.S. armed
    forces. Terrorism, proliferation of weapons of mass
    destruction, tribal and ethnicconflicts, the potential for
    ``information warfare'' and other asymmetric threats are placing new
    burdens upon the U.S. military. In the past year, the terrorist bombing
    of the Khobar Towers complex in Dhahran, Saudi Arabia has highlighted
    the need for improved force protection measures for U.S. units deployed
    abroad. The proliferation of ballistic missile technology and weapons
    of mass destruction also has accelerated in the past year, and the
    committee continues to believe that efforts to develop and deploy
    effective defenses against such threats must remain a national
    priority.
        The QDR also has acknowledged, under the rubric of
    ``smaller-scale contingencies,'' that U.S. military forces will
    be engaged in a growing number of peacekeeping and humanitarian
    missions. Because the Administration regularly has deployed the
    U.S. military on such missions, the QDR concluded that these
    lesser contingencies will represent a significant element of
    U.S. military operations over the next decade. The QDR also
    recognized the strains that multiple peacekeeping and
    humanitarian deployments place on U.S. troops, their families,
    military equipment and training for combat. However, based upon
    its continued attention to the growing readiness problems that
    U.S. forces confront, the committee is skeptical that the
    Department can maintain the current level of operational and
    personnel tempo without sacrificing critical military
    capabilities. Units and troops absorbed in repeated
    peacekeeping operations are unable to train effectively, for
    the high-intensity combat missions necessary to execute the
    national military strategy.
        The committee has long been concerned that the third
    principle task of the U.S. armed forces--preparing today for
    the eventuality of future great-power conflicts--has been
    undervalued by the administration. By contrast, the committee
    considers the maintenance of peace and stability among the
    world's most powerful nations to be America's unique
    contribution to global security, and of critical importance to
    the nation's ability to protect its interests around the world.
    However, today's security is the historical exception rather
    than the rule. As historian Donald Kagan testified before the
    committee, ``War has been a persistent part of human experience
    since before the birth of civilization. In 1968, Will and Ariel
    Durant calculated that there had been only 268 years free of
    war in the previous 3,421.'' There is every reason to believe
    that the current epoch should be viewed not as a ``post-war''
    period, but instead as an interwar period. With history as a
    teacher, it is only prudent to assume that a large power or
    coalition of powers eventually will contest a vital U.S.
    national security interest.
        While the committee cannot predict with certainty who this
    challenger will be or exactly when the challenge will arise, it
    is possible to identify what our enduring national interests
    are, for they have remained constant. Even in the post-Cold War
    era and absent a global competitor like the Soviet Union, the
    United States retains its traditional interests in protecting
    the American homeland and its people; preventing a hostile
    power or coalition of hostile powers from dominating Europe,
    East Asia and the energy-producing regions of the world; and
    protecting the international order of nation-states. These
    abiding interests preceded, and have survived, the Cold War.
        The most serious and sustained threats to these enduring
    interests can only come from other powers capable of fielding
    substantial conventional military forces or nuclear weapons.
    While the QDR represents an improvement over the
    Administration's 1993 Bottom-Up Review, the QDR presents an
    overly optimistic view of the possibility of future challenges
    to America's core security interests. The committee believes
    that a sound national military strategy must account not only
    for the likelihood of threats but also for the gravity of any
    threat to these core security interests.
        In the past year, the committee has focused on the
    challenges posed by China--an emerging power--and Russia--a
    once and perhaps future power--to United States global
    interests. While neither nation is currently an enemy of the
    United States, they do represent the nations most likely and
    able to accumulate military power sufficient to challenge U.S.
    vital national security interests. The QDR's projection that
    neither China nor Russia is likely to emerge as a regional
    great power until beyond 2015 is questionable.
        The committee remains supportive of efforts to bolster the
    democratic process in Russia. The collapse of the Soviet Union
    has created an opportunity to more closely tie Russia to the
    world's democracies. However, the committee believes that
    Russia's future will be shaped less by U.S. policies than by
    whether Russia decides to remain an independent power pursuing
    its own strategic goals, driven by its own history and
    character, or decides to form working partnerships with the
    United States and its allies. The current Russian experiment in
    quasi-democracy is struggling against a centuries-long
    tradition of autocracy, and the United States must remain
    guarded in assessing prospects for the experiment's success.
    Moreover, history has demonstrated that the transition to
    democracy often proves a tumultuous and violent process. A vast
    but collapsed empire, governed by a weak central authority and
    armed with an arsenal of nuclear weaponry under questionable
    control, Russia must provide cause for great caution. Even if
    Russia succeeds in becoming more fully democratic, it still may
    establish security goals that conflict with those of the United
    States.
        China is an emerging power and poses an inverse problem.
    The Administration believes that the nature of Chinese power is
    not yet determined, and that China's external relations can be
    shaped through engagement to allow it to make a positive
    contribution to regional stability and to act as a responsible
    member of the international community. The committee takes a
    guarded view, more consistent with the Department of Defense
    report prepared pursuant to the National Defense Authorization
    Act for Fiscal Year 1997. The report concluded that China's
    goal is to become one of the world's great powers, that China
    will be securely established as the leading political power in
    East Asia early in the coming century and that China will
    ``build its military power to the point where it can engage and
    defeat any potential enemy within the region with its
    conventional forces and can deter any global threat to China's
    national security.'' Whether or not an emerging China becomes
    an enemy of the United States and its allies remains to be
    seen, but China's stated strategic goals would appear to
    challenge America's current position as a powerful presence for
    peace and stability in East Asia.
        The committee believes that the process of managing
    strategic risk must be shaped first and foremost by the risks
    of renewed great-power rivalries. The surest way to optimize
    the chances of an American strategic partnership with either
    Russia or China is for the United States to continue to be the
    world's most powerful force for peace and stability. However,
    the committee also recognizes that the assumption that either
    Russia or China will acquiesce in American global leadership is
    a dangerous premise upon which to base U.S. security strategy
    for the coming century.
        The making of strategy has always been a process of
    managing risk. In a post-Cold War environment of shrinking
    military forces and constrained defense budgets, the imperative
    to maintain strategic priorities grows while the margin for
    error gets smaller. The QDR strategy is consistent with the
    committee's view of the role America should play in the post-
    Cold Warworld, and the committee is hopeful that the review
    might provide a more stable foundation for maintaining the armed forces
    necessary for the nation to meet these future challenges. However, the
    continued decline in defense spending means that the committee's two-
    year-old effort to begin revitalizing U.S. military forces will take
    longer and will involve higher risk to the nation.
        The projected real decline in future defense budgets,
    assumed in the QDR and ratified in the recent budget agreement,
    adds to strategic risk. Neither the Administration's fiscal
    year 1998 defense budget request nor the defense plan
    established in the QDR adequately address budgetary shortfalls
    that exacerbate the strategic risks inherent in a dangerous
    world. The QDR has not allayed the committee's skepticism
    regarding the Administration's commitment to establishing a
    defense program that balances the pillars of a sound defense
    program: the maintenance of sufficient combat forces in a state
    of readiness necessary to execute the national military
    strategy, the guarantee of a decent quality of military life
    and an adequate program of equipment modernization to ensure
    for the future the advantages U.S. military force enjoy today.
    If the defense program is to be truly brought into balance, and
    the harmony between current readiness, quality of life, and
    modernization restored, more dramatic actions are demanded.

                                   READINESS

        The committee reaffirms its commitment to maintaining a
    high state of military readiness. In past years, the committee
    has added significant funds to restore pay raises, increase the
    level of combat training, improve the level of equipment
    maintenance and undertake many other initiatives to compel the
    Administration to address readiness problems. However, the
    readiness of U.S. armed forces, particularly for the high-
    intensity combat missions central to the nation's military
    strategy, has continued to erode. It is apparent that the high
    pace of military operations, due in large part to the burdens
    of repeated deployments for peacekeeping and humanitarian
    missions, and declining budgets are taking a heavy toll on U.S.
    military forces. Four trends are salient. First, soldiers,
    sailors, airmen and Marines are working harder and longer to
    execute their peacetime missions due to an inherent tension
    between personnel and resources shortages and the increased
    pace of operations. Military personnel and their families are
    paying an increasingly higher human price from being repeatedly
    asked to ``do more with less.'' Second, the quantity and
    quality of combat training is being compromised, especially for
    the most demanding mission--to fight and win tomorrow's high-
    intensity wars. Third, the quality of military life continues
    to erode to the point where a growing number of talented and
    dedicated military personnel and their families are questioning
    the desirability of a life in uniform. And fourth, military
    equipment is aging prematurely due to extended use and reduced
    maintenance. Budget cuts and the increased operational tempo
    have started to affect the reliability and availability of
    existing fleets of equipment. In sum, these trends depict a
    significant, systemic readiness problem that will continue to
    undermine the preparedness of U.S. military forces.
        The committee bill represents an effort to manage the risk
    associated with a deepening readiness problem by protecting
    funding for high-intensity combat training and maintenance of
    equipment and infrastructure. In addition, the committee
    believes that the Administration's personnel budget request
    will not be able to provide the forces needed to execute the
    national military strategy and to support current operational
    tempo while providing a decent quality of military life. Nor
    does the committee accept the QDR's end-strength
    recommendations, which are likely to exacerbate the personnel
    readiness problems outlined above. To more prudently manage the
    risk associated with the problems inherent in the
    Administration's budget request, the committee has maintained
    the end-strength floors established in 1996 and continues to
    protect what it believes to be prudent active-duty force
    levels. The committee also has continued its commitment to
    readiness by adding funds for depot maintenance, real property
    maintenance and mobility enhancements needed to maintain a
    power-projection force capable of rapid reaction to world
    crises.

                                QUALITY OF LIFE

        In past, the committee has considered the quality of
    military life to be an essential component of a balanced
    defense program, and has strengthened military housing
    programs, programs to reduce out-of-pocket costs for military
    personnel and their families, and has funded full pay raises,
    whether requested by the Administration or not. Nonetheless,
    many troops and their families have grown increasingly
    dissatisfied with the quality of military life. Much of this
    dissatisfaction stems from the stress of extended time away
    from home resulting from almost continuous peacekeeping and
    other humanitarian missions.
        Quality of life is inherently difficult to quantify. It is
    a complex construct, reflected in a delicate mix of variables
    such as balancing family life and military service, decent
    housing, adequate pay and benefits, reliable and affordable
    health care and many other factors. Providing a decent quality
    of military life is essential to recruit, retain and maintain
    the professional, all-volunteer force upon which U.S. military
    strategy relies. Since the 1970s, when the draft was
    terminated, the compact between the nation and the men and
    women who serve it in uniform has rested upon the proposition
    that soldiers, sailors, airmen and Marines and their families
    will be provided with a standard of living that approximates
    that of middle-class America.
        However, there is a widespread belief among service
    personnel and their families that the quality of their lives is
    eroding. As a consequence, many in the military are beginning
    to question whether the rewards of military life are worth the
    mounting hardships. Perhaps the leading cause of
    dissatisfaction is increased family separations. Given that 65
    percent of the force, officer and enlisted, is married, the
    choice between professional requirements and personal needs is
    becoming more complicated. One Navy spouse summarized the
    problem when she told the committee, ``In such a high
    [operations tempo] environment, the best marriages, the ones
    that survive, are those in which people learn to live apart.''
        The services' attempts to balance quality of life with
    other factors reveal just how difficult a management problem
    this is. For example, the commander of the Army's III Corps at
    Fort Hood, Texas, has demanded that important training time and
    resources be diverted to create opportunities for soldiers to
    attend to basic and essential activities of family life, such
    as parent-teacher conferences. This is a poignant and
    disturbing example of the dilemmas facing military families.
    Since the committee began reporting on the growing readiness
    problem, the Department of Defense has begun to recognize the
    problem, and has introduced a number of measures to better
    manage the strains of high operational and personnel tempos.
    The committee notes these small belated steps with
    satisfaction, but believes that more aggressive actions will be
    necessary.

                          MODERNIZATION AND INNOVATION

        A third critical component of a balanced defense program is
    ensuring that U.S. military personnel are equipped with modern
    technology. There is widespread general consensus that the
    ``procurement holiday'' of the past five years must come to an
    end. The Joint Chiefs of Staff have identified a goal of $60
    billion per year in procurement spending as the approximate
    funding level needed to recapitalize the U.S. armed forces--a
    figure reconfirmed by the QDR. The committee continues to
    support this objective, but continues to doubt the
    Administration's commitment.
        In the context of trying to manage risk in an environment
    of constrained resources, the committee believes it is
    necessary to set modernization priorities that reflect
    strategic priorities. Systems that promise only marginal
    improvement over those currently in the field should, and
    eventually will, give way to those systems that demonstrate
    more cost-effective and strategically relevant capabilities.
    There is no better example than tactical aircraft programs,
    where plans far exceed projected budgets and the half-measures
    recommended in the QDR do not address the problem.
        The committee was pleased to see, in several instances,
    that the QDR did make important strides toward aligning
    modernization priorities with strategic need. For example, the
    QDR's recognition that the Administration's own ``three-plus-
    three'' national missile defense program was substantially
    underfunded confirms the committee's approach to this important
    program over the past several years. The committee stands by
    its belief that continued global proliferation of ballistic
    missile technology makes the deployment of an effective
    national missile defense system of the highest priority.
    However, the committee continues to question the
    Administration's commitment to either national or theater
    missile defenses. Despite claims advanced in the fiscal year
    1998 defense budget request that theater defense programs were
    being accelerated, funding for these programs was cut by more
    than $400 million from current spending levels.

                                 DEFENSE REFORM

        Serious readiness, quality of life and modernization
    problems and shortfalls add increased urgency to the
    committee's continuing efforts to reform the Department of
    Defense establishment to create a smaller, smarter and
    streamlined bureaucracy. In an environment where combat forces
    continue to be reduced while they are deploy more often, the
    committee believes that it is untenable to continue devoting 60
    percent of the defense budget to support and infrastructure. If
    the goal to reestablish a defense program balanced among the
    need to maintain ready forces and to ensure a decent quality of
    military life today while modernizing U.S. military forces for
    tomorrow is to become a reality, the Administration must become
    a more active partner in pursuing meaningful defense reform.
        Defense reform is no longer just about being more
    efficient. Rather, it is about survival in an environment where
    failure to achieve real defense reform will result in degraded
    combat capability for lack of adequate resources. The committee
    initiated a number of reforms during the 104th Congress in the
    areas of acquisition policy, infrastructure and support
    services, and defense structure and organization. All were
    intended to increase overall efficiency within the Department
    while, at the same time, encouraging the shift of resources
    from the Department's support ``tail'' to the services' combat
    ``tooth'' in an effort to preserve the military's warfighting
    effectiveness.
        The committee acknowledges Secretary Cohen's promise to
    pursue defense reform through the establishment of the Task
    Force on Defense Reform, but the committee notes that the
    results of that new review will not be known until late in the
    year. While additional reviews may be warranted, it is the
    committee's view that in the aftermath of the 1995 Commission
    on Roles and Mission, the 1996 Defense Science Board Task Force
    on Outsourcing and Privatization, and the 1997 QDR, the time
    for aggressive action is now.
        To accelerate the process of reform, the committee reported
    H.R. 1778, the Defense Reform Act of 1997, to the House of
    Representatives. This bill pursues meaningful reform in three
    basic areas: streamlining the defense bureaucracy, improving
    defense business practices and adding a measure of common sense
    to the environmental regulations governing the Department's
    operations. Chief among the bureaucratic reforms are
    initiatives to reduce headquarters staffs by 25 percent and the
    defense acquisition workforce by more than 40 percent.
    According to the Congressional Budget Office, these reforms
    will save $15 billion over the next five years and an
    additional $5 billion each year thereafter without taking into
    account the additional potential savings resulting from the
    mandated increases in competition of defense support services.
    Finally, the environmental reforms will not merely help to
    control the rapidly escalating cost--now $12 billion per year--
    of defense environmental clean-up efforts, they will ensure
    that these funds actually are spent on restoration work itself,
    rather than to satisfy excessive and redundant regulatory
    requirements. The committee recognizes the need for
    environmental restoration of former military and defense
    installations, but believes that taxpayer dollars should be
    devoted to the needed cleanup work, not on paperwork.

                                   CONCLUSION

        Secretary of Defense Cohen has admitted that the defense
    posture outlined in the Quadrennial Defense Review will allow
    U.S. forces to execute the national military strategy, but at
    increased risk. He also quantified the budgetary risk--the
    amount of defense spending required to close the strategy-
    resource gap--at approximately $15 billion per year. While the
    committee believes that the annual shortfall is greater than
    $15 billion, what was most striking about the Secretary's
    estimate was the relatively small size of the budget shortfall
    in comparison to the tremendous strategic risk associated with
    not addressing it. At $15 billion, the estimate represents
    approximately one-tenth of 1 percent of the federal budget. Yet
    the military, strategic and political risks associated with not
    fixing this shortfall are monumental. For the military, the
    budget shortfall translates into declining readiness,
    diminished quality of military life and postponed modernization
    problems described above. The continued erosion of military
    capability will threaten the nation's capabilities to protect
    and promote its interests around the world and will inevitably
    lead to the loss of American international influence. In the
    committee's view, the risks of inaction or failure far outweigh
    the cost of addressing shortfalls in the defense budget--
    whether $15 billion per year, or more.
        Although the QDR was completed too late to shape the
    Administration's fiscal year 1998 defense budget request or to
    factor significantly in the committee's deliberations, H.R.
    1119 reflects the committee's mounting sense of urgency to
    restore a proper balance among readiness, quality of military
    life and modernization and to push the Department of Defense in
    the directionof meaningful reform. The nation cannot afford
    status quo defense budgets. The way forward is uncertain and involves
    great risks. The committee would prefer to be raising and maintaining
    military forces capable of an unquestioned response to challenges
    anywhere in the world, rather than managing budgetary, military and
    strategic risk with no margin for error. In this context, H.R. 1119
    reflects the committee's effort to address serious shortfalls while
    managing risk in a resource-constrained environment.

                                    HEARINGS

        Committee consideration of the National Defense
    Authorization Act for Fiscal Year 1998 results from extensive
    hearings that began on February 12, 1997 and that were
    completed on May 22, 1997. The full committee conducted 11
    sessions. In addition, a total of 54 sessions were conducted by
    five different subcommittees and two panels of the committee on
    various titles of the bill.
                DIVISION A--DEPARTMENT OF DEFENSE AUTHORIZATION

                              TITLE I--PROCUREMENT

                                    OVERVIEW

        The last few years have seen a vigorous debate concerning
    the adequacy of the Clinton Administration budgets for defense
    modernization. Administration officials argue that a
    ``holiday'' in weapons procurement was justified due to the
    many new weapons purchased in the 1980s and to not having to
    replace older weapons retired as a result of the drawdown in
    the size of the force. The 104th Congress reasoned otherwise:
    namely, that the disproportionate cuts in the equipment
    modernization accounts jeopardized the technological edge that
    was so brilliantly demonstrated in the Persian Gulf War.
    Consequently, Congress added $11 billion to these accounts in
    the fiscal year 1996 and fiscal year 1997 National Defense
    Authorization Acts (Public Laws 104-106 and 104-201)--a 15
    percent increase over the budget request for each of those two
    years--despite the Administration's opposition to doing so. In
    taking these actions, the 104th Congress sought the expert
    advice of the military service chiefs on how best to apply the
    additional funds to the most urgent unfunded modernization
    priorities. Regrettably, no sooner had these acts had been
    signed into law than the Administration proposed to use the
    added modernization funds to pay for the operations and
    readiness shortages contained in their budgets.
        This same pattern continues with the fiscal year 1998
    budget request. Attainment of even modest modernization
    increases has again been deferred until ``next year.'' Despite
    obvious and compelling evidence of procurement shortfalls and
    despite the fact that the Chairman of the Joint Chiefs of Staff
    concluded that, beginning with fiscal year 1998, the Department
    required $60 billion annually to keep the force modernized, the
    fiscal year 1998 budget request of $42.6 billion represents a
    cut of $1.5 billion from the budget enacted for fiscal year
    1997 and is $2.9 billion below the spending levels forecast in
    the President's budget for fiscal year 1998 just last year.
    Furthermore, the budget request marks the fourth consecutive
    year that the Administration has reduced the fiscal year 1998
    procurement figure--by a cumulative total of $14.5 billion--
    relative to its earlier projections.
        The committee notes that the recently-released Quadrennial
    Defense Review (QDR) acknowledges that the planned ``rebound''
    in procurement ``has been repeatedly postponed in recent
    budgets as increases previously projected for the procurement
    accounts have been eroded by unexpected demands for additional
    funding in operational activities.'' The committee is dismayed
    by the fact that the
    Department believes this shift in resources from modernization
    to operations will continue and that procurement funding,
    instead of growing to $60 billion per year, could be expected
    to stall in the range of $45-$50 billion. The committee further
    notes that this belief is reinforced by the independent
    National Defense Panel's critique of the QDR, which found the
    QDR modernization plan risky due to tenuous assumptions of
    further base closures and savings from acquisition and other
    infrastructure reforms.
        Notwithstanding the Administration's lack of resolve to
    deal proactively with the continuing modernization problem, the
    committee--for the third year in a row--has added funds
    significantly in excess of the procurement budget request.
    Moreover, in formulating its proposed addition of $3.8 billion,
    the committee has also once again been responsive to meeting
    the unfunded priorities submitted by the various military
    service chiefs of staff. However, because the committee
    believes that the QDR has not made the correct decisions
    regarding tactical aircraft and the B-2, it has taken different
    positions on these two issues. Furthermore, the committee
    disagrees with the Department's assessment of the Arsenal Ship
    demonstrator's utility and its proposed teaming arrangement for
    construction of the New Attack Submarine. These topics are
    discussed at length in the report.

                           Aircraft Procurement, Army

                                    Overview

        The budget request contained $1,162.5 million for Aircraft
    Procurement, Army in fiscal year 1998. The committee recommends
    authorization of $1,535.3 million for fiscal year 1998.
        The committee recommends approval of the request except for
    those programs adjusted in the following table. Unless
    otherwise specified, adjustments are without prejudice and
    based on affordability considerations.

                           Items of Special Interest

    Aircraft survivability equipment (ASE)
        The budget request contained $900,000 for project
    management support and fielding of ASE systems, however, no
    funding was included for upgrades to the Aircraft Survivability
    Equipment Trainer IV (ASET IV).
        The ASET IV is a ground-based, mobile aviation threat
    emitter simulation and training system, which teaches aircrews
    to recognize surface-to-air-missile (SAM) and anti-aircraft
    artillery threats in order to employ the correct aircraft
    threat avoidance tactics. ASET IV systems are currently fielded
    at major training centers throughout the United States and
    Germany and require that an aircraft have a fully operational
    ASE suite of sensors on board for training. The committee
    understands that in its present configuration, however, the
    ASET IV cannot locate, identify, or track aircraft at night nor
    can it simulate the most current infrared (IR) SAM threats,
    thereby limiting aircrews to daylight training against older IR
    SAM threats, which is not representative of the Army's ``train
    as you fight concept.''
        The committee is aware of upgrades to the ASET IV system
    that would enable nighttime training through the incorporation
    of a night vision camera and provide an up-to-date IR SAM
    threat emitter simulation capability. Based on the Army's
    requirement for forces to train in realistic threat
    environments, the committee recommends an increase of $14.8
    million for upgrading eight ASET IV systems with IR SAM threat
    simulators and night vision cameras.
    Aircraft survivability equipment (ASE) modifications
        The budget request contained $4.6 million for ASE
    modifications, of which $2.2 million was to complete the
    installation of AN/AVR-2A Laser Detecting Sets (LDS) on the AH-
    64 Apache. However, no funding was requested for procurement of
    additional LDSs for other types of aircraft despite the fact
    that only 413 of the required 2,063 systems have been fielded
    by the Army.
        The LDS detects, identifies, and characterizes threats from
    laser-targeted weapons 360-degrees-around and plus-or-minus 45
    degrees above-and-below an aircraft. It is the only device
    procured by the Army that provides warning to helicopter crews
    when they have been illuminated by a laser-targeted weapon. As
    a result of the increasing proliferation of laser technology,
    the committee believes the Army should fulfill its requirement
    for these unique detection systems as soon as possible and,
    therefore, recommends an increase of $15.0 million for
    continued procurement of LDS for installation on UH-60
    Blackhawks, MH-60K Blackhawks, and MH-47E Chinooks.
    C-12 cargo aircraft modifications
        The budget request contained $600,000 for avionics and
    cockpit upgrades to C-12 cargo aircraft.
        The C-12 is based throughout the world and is one of the
    Army's primary passenger-carrying aircraft. The C-12 is
    expected to remain active in service for at least the next 20
    years and will be one of four types of aircraft that will
    remain in the Army's fixed wing utility aircraft fleet after a
    major consolidation of the inventory is completed.
        Based on the need for passenger-carrying military aircraft
    to have the latest technology for safe flight operations and
    noting that the majority of the Army's C-12 aircraft were
    purchased in the 1970s and 1980s with avionics and navigation
    equipment that was state-of-the-art at that time but obsolete
    today, the committee believes these upgrades should be
    accelerated. Therefore, the committee recommends an increase of
    $6.0 million for avionics and cockpit upgrades for 34 C-12
    cargo aircraft.

    Longbow training devices

        The budget request contained $474.8 million for the Longbow
    modification program, of which $81.6 million was for Longbow
    training devices. The requested funding will procure two types
    of pilot trainers, the Longbow Crew Trainer and the Longbow
    Collective Training System, and several types of maintenance
    trainers.
        The Army has deemed these devices critical for training,
    since the Apache Longbow will be a primary weapon system in
    almost all Army operations and deployments. The committee
    recommended an increase of $53.0 million in fiscal year 1997 to
    accelerate procurement of these devices to support pilot and
    maintenance training when the Army's first Apache Longbow
    battalions are fielded. Since $28.5 million of this amount was
    not appropriated in fiscal year 1997, the committee recommends
    an increase of $28.5 million in fiscal year 1998 for this
    purpose.

    OH-58D kiowa warrior modifications

        The budget request contained $38.8 million for Kiowa
    Warrior modifications.
        The committee notes that the current inventory of Kiowa
    Warriors is still below the requirement of 507, yet, the Army
    has not requested funds for the procurement of additional
    aircraft. While there are sufficient aircraft to meet the
    active Army division, regiment, and battalion component
    requirements, an insufficient amount exists for active
    component target acquisition and reconnaissance platoons, as
    well as for Force XXI needs and Army National Guard units.
    Therefore, the committee recommends $175.0 million to fund an
    additional 21 aircraft.

    Training devices

        The budget request did not contain funding for training
    devices.
        Currently, the Korean-based Eight Army (EUSA) UH-60
    Blackhawk, CH-47 Chinook, and AH-64 Apache flight simulators
    visually depict generic terrain that does not duplicate any
    real-world location. The committee is concerned that EUSA
    helicopter pilots do not have the correct visual databases,
    state-of-the-art image generators and associated computers to
    simulate the Korean terrain. Further, the committee believes
    that having the capability to practice flying over Korean-
    simulated terrain in a simulator would greatly reduce the
    possibility of inadvertent flights over politically sensitive
    and potentially hostile areas. The committee is aware of an
    EUSA requirement for improved flight simulators, including
    geographic-specific databases and state-of-the-art image
    generators, and recommends an increase of $18.6 million for
    these hardware and software upgrades.

    UH-60 blackhawk

        The budget request contained $183.2 million for 18 UH-60L
    Blackhawks but did not contain funding to modify Blackhawks to
    the UH-60Q enhanced medical evacuation variant.
        Noting that the total Blackhawk requirement for the Army
    National Guard's (ARNG) aging utility helicopter fleet is in
    excess of 400 aircraft, the committee recommends an increase of
    $90.0 million to procure an additional 12 Blackhawks for the
    ARNG. The committee further recommends an increase of $6.0
    million for modification kits to configure three of these
    aircraft as UH-60Q enhanced medical evacuation models in
    acknowledgment of the fact that this modification is also a
    priority modernization requirement of the ARNG.

                           Missile Procurement, Army

                                    Overview

        The budget request contained $1,178.2 million for Missile
    Procurement, Army in fiscal year 1998. The committee recommends
    authorization of $1,176.5 million for fiscal year 1998.
        The committee recommends approval of the request except for
    those programs adjusted in the following table. Unless
    otherwise specified, adjustments are without prejudice and
    based on affordability considerations.

                           Items of Special Interest

    Army tactical missile system (ATACMS)
        The budget request contained $97.8 million for the
    procurement of 153 Block IA ATACMS missiles to be acquired
    using a multiyear procurement contract. The committee notes,
    however, that the Army has changed its plans for initiating a
    multiyear procurement contract as a result of deficiencies in
    operational testing performed on the missile prior to its
    entering into full-rate production.
        As a result of the multiyear procurement cancellation, the
    committee understands that only 100 missiles will be procured
    in fiscal year 1998. Therefore, the committee recommends a
    corresponding reduction of $10.8 million.
    Avenger modifications
        The budget request did not contain funding for
    modifications to Avenger fire units, which constitute the rear
    component of the Army's Forward Area Air Defense System (FAADS)
    and are the first element of FAADS that has been fielded.
        The committee notes that the Avenger's current
    configuration limits its capability to rapidly lock on and
    track newly emerging threats to ground forces, such as cruise
    missiles and unmanned aerial vehicles, both of which are under
    development by many countries around the world. The slew-to-cue
    upgrade gives the Avenger an automatic and much more rapid
    target identification, tracking and processing capability in
    response to these types of targets and provides an over 50
    percent increase in kill capability as a result of the greater
    speed of operation.
        Since the committee believes it is vitally important to
    enhance the capability of the Army's only FAADS fielded assets,
    it recommends an increase of $13.3 million for 125 slew-to-cue
    upgrade kits.
    Improved target acquisition system/tube-launched, optically-tracked,
            wire-guided (ITAS/TOW) missile modifications
        The budget request contained $62.8 million for ITAS/TOW
    modifications, of which no funding was included for the Missile
    Ordnance Inhibit Circuit (MOIC) modification.
        The MOIC modification provides for installation of a
    circuit on TOW training missiles to prevent flyback in the
    event of a missile malfunction. This critical safety
    enhancement is fundamental for troops to be able to train with
    live-fire missiles. Therefore, the committee recommends an
    increase of $7.0 million for the procurement and installation
    of the MOIC on both the basic and improved versions of the TOW
    missile.
    Stinger modifications
        The budget request contained $12.4 million for modification
    upgrades to 751 Stinger Block I missiles.
        This electronics, software and guidance upgrade extends the
    service life of Block I missiles and increases the
    effectiveness of the Stinger against low-flying fixed and
    rotary wing targets. Consequently, consistent with actions
    taken by the committee in fiscal years 1996 and 1997, the
    committee recommends an increase of $9.3 million for an
    additional 549 Block I upgrades to continue to maintain an
    economic production rate of this missile.

                   Weapons and Tracked Combat Vehicles, Army

                                    Overview

        The budget request contained $1,065.7 million for
    procurement of Army weapons and tracked combat vehicles for
    fiscal year 1998. The committee recommends authorization of
    $1,519.5 million for fiscal year 1998.
        The committee recommends approval of the request except for
    those programs adjusted in the following table. Unless
    otherwise specified, adjustments are without prejudice and
    based on affordability considerations.

                           Items of Special Interest

    Bradley fighting vehicle system series modifications
        The budget request contained $61.2 million for
    modifications to the Bradley fighting vehicle, of which $34.6
    million is for upgrading Bradley ``A2'' version vehicles to the
    Operation Desert Storm (ODS) variant.
        The Bradley ODS variant incorporates changes that improve
    the vehicle's lethality, survivability, and mobility, as well
    as the situational awareness of its crew. Modifications include
    installation of a laser range finder, Global Positioning System
    navigation capability, a combat identification system, a
    driver's thermal viewer and a missile countermeasure device.
        When the Army completes all of its planned modifications to
    the Bradley, the active fleet will include a mix of the most
    advanced ``A3'' variant, along with ``A2'' and ODS versions.
    The Army National Guard (ARNG), however, will be left with
    unmodified, first-generation ``A0'' vehicles, which, because of
    major survivability deficiencies, were not used in ODS and will
    not be taken into future combat.
        Because the ARNG comprises an increasing percentage of the
    total force warfighting assets as a result of active component
    force reductions, the committee recommends an increase of
    $120.0 million for modifying 120 Bradley ``A0'' vehicles to the
    ODS variant for the ARNG.
    M109A6 paladin/M992A2 field artillery ammunition support vehicle
            (FAASV)
        The budget request did not contain funding to procure
    M109A6 Paladin self-propelled howitzers or M992A2 FAASVs for
    the Army National Guard (ARNG).
        Although ARNG units comprise the majority of the Army's
    field artillery force, the committee notes that the ARNG does
    not have a full complement of the most recently upgraded
    versions of either the M109A6 Paladin or the M992A2 FAASV.
    Since ARNG artillery battalions will have a greatly enhanced
    role in the future, yet only 16 of the 48 ARNG battalions are
    scheduled to receive the fully-digitized Paladin system, the
    committee recommends an increase of $111.0 million for 72
    Paladins and a corresponding $81.1 million increase for 72
    FAASVs to upgrade four additional ARNG artillery battalions.
    M113 carrier modifications
        The budget request contained $20.2 million for modifying 66
    M113 carriers to the ``A3'' configuration. The M113A3 upgrade
    program, forecast to add an additional 20 years of service life
    to the vehicle, includes depot overhaul and rebuild of the
    vehicle along with the installation of a new engine,
    transmission, external fuel tanks, driver controls, and spall
    liners. The committee recommends an increase of $53.0 million
    for M113 modifications, as discussed below.
        The committee notes that the budget request falls far short
    of the required amount, as it has in previous years, for the
    planned upgrade of 250 vehicles per year andrecommends an
    increase of $24.6 million, which, when combined with the budget
    request, will provide for approximately this number. Also, the
    committee is concerned that the M113 may not provide sufficient armor
    protection for its crew and that the majority of the M113 fleet cannot
    operate at night. Therefore, the committee recommends an increase of
    $20.0 million for reactive armor tiles to enhance the vehicle's
    survivability and an increase of $8.4 million to accelerate equipping
    the M113A3 with night vision driver viewers.

    M240B medium machine gun

        The budget request did not contain funding for the M240B
    medium machine gun. The M240B is intended to replace the M60
    series machine gun in light infantry, mechanized infantry, and
    combat engineer units. Although the Army has a total
    procurement objective of over 11,000 M240B machine guns, the
    service has only procured 1,200 of these weapons to date.
        The committee notes that the Army has failed to fund this
    requirement for a second straight year and that funding to
    fulfill the Army's objective falls far short of the 11,000
    weapons objective through the future years defense program.
    Moreover, the Army has not entered into a multiyear procurement
    as the committee strongly encouraged in the committee report on
    H.R. 3230 (H Rept. 104-563)
        To ensure that the requirements for small arms are
    fulfilled, the committee recommends an increase of $20.0
    million for 2,100 M240B medium machine guns and strongly urges
    the Secretary of the Army to include funding in the fiscal year
    1999 budget request for this weapon.

    M88A2 improved recovery vehicle

        The budget request contained $28.6 million for modifying 12
    existing ``A1'' variant vehicles to the more capable ``A2''
    version.
        The A2 upgrade enables the vehicle to safely perform
    battlefield recovery of the 70-ton M1 Abrams tank and other
    vehicles weighing 60 tons or more. It consists of structural
    improvements to the vehicle chassis, an increased-horsepower
    engine, additional armor, an improved winch, and the addition
    of a hydraulic-assisted braking system. Although 24 vehicles
    per year is the minimum sustaining production rate, the budget
    request is sufficient to fund only 12 vehicles.
        The committee believes that this upgrade program is vital
    to the Army's future mobility and, consistent with its actions
    for the past two fiscal years, recommends an increase of $27.8
    million for 12 additional vehicles.

    M9 armored combat earthmover (ACE)

        The budget request did not contain funding for the M9 ACE.
        The M9 ACE provides infantry, tank and artillery units with
    survivable fighting positions and creates anti-tank ditches as
    obstacles against enemy maneuver units. The committee believes
    the vehicle's high speed and heavy digging capabilities are
    essential to the success of any ground combat unit's maneuver
    effectiveness.
        Consistent with its recommendation for fiscal year 1997 to
    fund an additional 54 M9 ACE vehicles, the committee recommends
    an increase of $52.4 million to fund the remaining 54 M9 ACEs
    necessary to complete the active Army's requirement for 108
    vehicles.

                          Ammunition Procurement, Army

                                    Overview

        The budget request contained $890.9 million for Ammunition
    Procurement, Army in fiscal year 1998. The committee recommends
    authorization of $1,093.8 million for fiscal year 1998.
        The committee recommends approval of the request except for
    those programs adjusted in the following table. Unless
    otherwise specified, adjustments are without prejudice and
    based on affordability considerations.

                           Items of Special Interest

    Ammunition
        The budget request contained $694.2 million for procurement
    of ammunition. The committee recommends $915.1 million, an
    increase of $212.9 million for the following types of
    ammunition:

                            [In millions of dollars]

    Small/Medium Cal Ammunition:
        CTG 5.56mm Blank M200 Linked..................................   2.4
        CTG 7.62mm ball M80 linked....................................   6.0
        CTG 50 caliber ball M33 w/M9 linked...........................   0.1
        CTG 50 caliber 4 ball/1 Tracer................................   0.1
    Mortar Ammunition:
        CTG Mortar 120mm HE M934 w/mo Fuze............................   9.0
        CTG Mortar 120mm Illum M930...................................   3.0
    Tank Ammunition:
        CTG Tank 120mm TPCSDS-T M865..................................  12.8
        CTG Tank 120mm TP-T M831/M831A................................   9.8
    Artillery Ammunition:
        CTG Arty 105mm DPICM M915.....................................  10.0
        CTG Arty 105mm HERA M927......................................  20.0
        PROJ Arty 155mm HE M795.......................................  50.0
    Artillery Fuzes:
        M767A1 Electronic Artillery Fuze..............................  20.0
    Mines:
        M87 Volcano...................................................  12.0
    Rockets:
        Bunker Defeating Munition.....................................  10.0
        Rocket, Hydra-70 MPSM Practice................................  37.2
    Demolition Munitions, All Types:
        SLAM..........................................................  10.0
    Other Ammunition:
        Antitank Simulator M27........................................   0.5

    Armament retooling and manufacturing support (ARMS) initiative

        The budget request contained $5.0 million for the ARMS
    initiative.
        The committee is aware that several refinements could be
    made to the ARMS Act of 1992 (Public Law 102-484), which
    provides for the reutilization of excess capacity of
    government-owned, contractor-operated ammunition facilities of
    the Department of the Army for commercial purposes. While the
    committee is supportive of innovative ways to reduce the impact
    of defense downsizing on communities, it believes that a
    thoroughreview of the benefits of these proposed refinements is
    required before considering permanent changes to existing authorities.
        Therefore, the committee directs the Secretary of the Army
    to provide a report to the congressional defense committees by
    March 31, 1998, that evaluates the following issues: (1)
    establishment of a special account for the accumulation of
    revenues generated from ARMS activities and the benefits of
    allowing the Secretary of the Army to retain those revenues for
    ARMS industrial base projects; (2) authorization for the
    Secretary to offer an ARMS participant who had made
    nonseverable property improvements to a facility to have the
    first right of refusal in acquiring title to the improved
    property at a fair market or negotiated value in the event that
    the Army decided to dispose of the property or facility as
    surplus; (3) authorization for the Secretary to enter into
    sole-source contracts with a facility-use contractor for long-
    term periods; (4) authorization for the Secretary to be able to
    accept a combination of funds, property, services or other
    consideration in lieu of rental payments for the use of
    property accountable under an ARMS facility-use contract; and
    (5) authorization for the Army Industrial Operations Command to
    make an ammunition facility available for ARMS initiatives,
    even in cases where the facility was considered ``excess,''
    thus providing an alternative to the current requirement to
    transfer an ``excess'' facility to the Army Corps of Engineers
    for environmental remediation and property management
    determinations.

    Conventional ammunition demilitarization

        The budget request contained $106.1 million for
    conventional ammunition demilitarization.
        The committee strongly supports demilitarization of older
    ammunition but notes that the request represents a 10 percent
    increase over the amount requested in prior years and that is
    forecast for fiscal year 1999 in the future years defense
    program. The committee recommends $96.1 million, a $10.0
    million reduction, which the committee believes would create
    neither a near-term safety hazard nor prevent the execution of
    a balanced and safe ammunition demilitarization program.

                            Other Procurement, Army

                                    Overview

        The budget request contained $2,455.0 million for Other
    Procurement, Army in fiscal year 1998. The committee recommends
    authorization of $2,640.3 million for fiscal year 1998.
        The committee recommends approval of the request except for
    those programs adjusted in the following table. Unless other
    specified, adjustments are without prejudice and based on
    affordability considerations.

                           Items of Special Interest

    Area common user system (ACUS) modifications
        The budget request contained $82.4 million for
    implementation and engineering support of the ACUS modification
    program to update current legacy information systems and
    transition them to the Warfighter Information Network (WIN),
    which will support the Army's Force XXI digitization efforts.
    However, no funding was included for procurement of Tactical
    Personal Communications Services (PCS).
        As part of the Army's future wireless command post,
    Tactical PCS will replace wire-based communications with
    cellular communications. The committee is supportive of the
    Army's WIN communications upgrades and is aware of demonstrated
    cellular technologies that could meet preliminary Army Tactical
    PCS requirements. Based on the Army's plan to field a fully
    digitized division by fiscal year 2001 and its related mobile
    communications requirements, the committee recommends an
    increase of $10.0 million for the procurement of currently
    available Tactical PCS technologies for evaluation by Force XXI
    experimental forces.
    Army data distribution system (ADDS)
        The budget request contained $57.2 million for the ADDS, of
    which $37.0 was for procurement of 304 Enhanced Position
    Location Reporting System (EPLRS) radios.
        As the digital ``backbone'' of the Army's Force XXI
    battlefield digitization efforts, EPLRS provides field
    commanders position information on their forces, in addition to
    supporting the majority of their data communication
    requirements. The Army's procurement objective for EPLRS is
    5,015 units, however, it has only procured 1,776 units to date.
    The committee understands the unique position location
    information that this system contributes to a combat unit's
    situational awareness, and, therefore, recommends an increase
    of $37.4 million for the procurement of 1,092 additional EPLRS
    radios.
    All source analysis system (ASAS)
        The budget request contained $7.8 million for procurement
    of six ASAS-Extended unit sets to replace selected ASAS Common
    Hardware Software (CHS)-I workstations with CHS-II workstations
    and enhanced software.
        The ASAS is a ground-based, mobile, intelligence
    information processing and fusion system designed to provide
    automated intelligence support to combat commanders. The system
    interfaces with selected national, joint, and theater-level
    intelligence assets to provide commanders at echelons above
    corps down through battalion level a common, comprehensive
    picture of an opposing force's capabilities and potential
    actions.
        The committee anticipates that the Army will become
    increasingly reliant upon timely and accurate all source
    intelligence data provided by ASAS for the rapid targeting and
    employment of precision weapons and, therefore, recommends an
    increase of $9.0 million for the procurement of additional
    ASAS-Extended unit sets and enhanced software.
    Automated data processing equipment
        The budget request contained $125.1 million for the Army's
    sustaining base automation systems, of which no funding was
    included for Sustaining Base Information Services (SBIS).
        As the Army modernizes its warfighting forces for the
    twenty-first century, it must also leverage state-of-the-art
    automation technology to plan, organize, train, equip, deploy,
    sustain, and redeploy these forces. The committee notes that
    continental United States (CONUS)-based combat service support
    for forces forward-deployed throughout the world will likely
    expand in the future to include logistics, personnel, finance,
    transportation, medical, and other sustaining base functions.
    However, the committee understands that the overall base
    automation infrastructure is currently overburdened, is
    reaching technological obsolescence, and may not be able to
    provide the level of combat service support expected of it by
    Army leaders. Consequently, the committee recommends an
    increase of $13.0 million to procure additional SBIS hardware
    for application fielding to additional CONUS bases and urges
    the Secretary of the Army to fully fund SBIS requirements in
    future budget requests.
    Close combat tactical trainer (CCTT)
        The budget request contained $93.0 million for continued
    low rate initial production of the CCTT system, to include 122
    modules for fixed sites and seven mobile modules.
        The CCTT is a networked system of manned simulators for the
    Abrams tank, Bradley fighting vehicle, High Mobility
    Multipurpose Wheeled Vehicle, and M113A3 carrier and will train
    both active and reserve component crews of armored and
    mechanized infantry combat units. The committee is aware of the
    cost savings that can be achieved through simulation training
    and is encouraged with the progress made to date. However, the
    committee notes that a delay in the Initial Operational Test
    and Evaluation of the CCTT from April 1997 to the second
    quarter of fiscal year 1998 has occurred due to software
    reliability difficulties. Accordingly, the committee recommends
    a reduction of $11.5 million.
    Common hardware software (CHS)
        The budget request did not contain funding for the
    procurement of CHS, which provides the standardized hardware
    and software for the information systems that will support the
    Army's first fully digitized division.
        The committee understands that the Army's contract for CHS-
    I will expire prior to the end of fiscal year 1997. The
    committee believes it would be imprudent to terminate the
    existing CHS-I contract until a thorough analysis of the
    results of the recently concluded Advanced Warfighting
    Experiment, which evaluated its ``digital battlefield''
    modernization efforts, has been completed. Allowing the CHS-I
    contract to expire prior to the complete evaluation of CHS-I,
    CHS-II and other battlefield digitization hardware could
    potentially delay fielding of critically-needed command,
    control and communications capabilities. Therefore, the
    committee directs the Army to extend the expiring CHS-I
    contract for one year, a period commensurate with minimizing
    fielding interruptions and with attaining the final
    certification of CHS-II.
    Communications satellite radios
        The budget request did not contain funding for procurement
    of satellite communications radios for counterintelligence (CI)
    units in Korea.
        The committee is aware that communications shortfalls exist
    to fully support CI units deployed throughout the Korean
    peninsula and that a recent study identified a requirement to
    provide satellite communications connectivity for these units.
    Therefore, the committee recommends an increase of $2.8 million
    for this purpose.
    Depot maintenance of other end items
        The budget request contained $24.8 million for depot
    maintenance of other end items.
        The committee is puzzled by the first-time request for
    these funds, as many of the projects included in the budget
    justification material appear to be associated with research,
    development, test and evaluation of existing systems rather
    than related to depot maintenance activities. Therefore, the
    committee recommends a reduction of $24.8 million.
    Family of heavy tactical vehicles (FHTV)
        The budget request contained $9.1 million for procurement
    of Palletized Load System (PLS) cargo beds and handling
    devices.
        The FHTV includes the PLS along with companion trailers and
    flatracks, three variants of Heavy Expanded Mobility Tactical
    Trucks, and the Heavy Equipment Transporter System (HETS). The
    committee has recommended increases in funding for this class
    of vehicles in previous fiscal years because it recognized the
    increased role that they play in the Army's expanding mission
    areas and the multiple requirements they have fulfilled during
    operations in Bosnia. However, the committee notes that the
    Army National Guard still has a shortfall of approximately 500
    HETS. Therefore, the committee recommends an increase of $45.0
    million for 96 of these vehicles in order to equip an Army
    National Guard HETS company.
    Family of medium tactical vehicles (FMTV)
        The budget request contained $209.4 million for 1,506 FMTV
    vehicles. The FMTV program provides for replacement for
    approximately 50 percent of the two-and-halfton and 100 percent
    of the five-ton trucks in the Army's inventory, all of which are
    reaching the end of their useful service lives.
        While the committee strongly supports the Army's
    requirement for medium trucks, it notes that there is a large
    increase in the funds requested for engineering change orders.
    Therefore, the committee recommends a decrease of $10.0 million
    and believes the funds remaining for engineering change orders
    are adequate for a program at this level of maturity.

    Handheld computer terminal units

        The budget request contained $13.1 million for three
    Forward Area Air Defense Command and Control (FAAD C2) computer
    and software systems and $2.4 million for 20 Forward Entry
    Devices (FED). No funding was included for the XM-30 Mortar
    Ballistic Computer (MBC). The committee recommends a total
    increase of $33.2 million for these programs, as discussed
    below.
        The automated, deployable FAAD C2 system provides accurate
    and timely targeting information for the employment of FAAD
    weapon systems. The committee notes that although full-rate
    production of the FAAD C2 system was approved by the Joint
    Requirements Oversight Council in June 1995, funding requests
    for this critical air defense system have continued to decrease
    since fiscal year 1996. The committee, therefore, recommends an
    increase of $10.0 million for accelerated fielding of the FAAD
    C2 system to five divisions.
        The FED, a ruggedized, lightweight, high resolution,
    handheld computer, is an integral part of the Advanced Field
    Artillery Tactical Data System (AFATDS) and is used by Forward
    Observers (FO), Fire Support Teams (FIST) and Field Artillery
    Battery Commanders to control and synchronize fire support
    assets within the AFATDS. The committee understands that
    currently-fielded systems require upgrading in order to provide
    artillery forces with a much faster computer processing
    capability. The committee is concerned that FOs, FISTs, and
    Battery Commanders have the processing capability to rapidly
    coordinate artillery fire and counterfire support missions,
    and, also notes that these devices are high on the Army Chief
    of Staff's fiscal year 1998 unfunded priority list. Therefore,
    the committee recommends an increase of $16.3 million to
    procure upgraded FEDs for these purposes.
        The XM-30 MBC will replace the obsolete M23 MBC and provide
    accurate, rapid ballistic trajectory calculations for all
    cartridge and fuze combinations of 60mm, 81mm, 107mm and 120mm
    mortars as well as automated digital communications with other
    fire support devices via the AFATDS. The M23 MBC is
    incompatible with FEDs and is no longer supportable in the
    field due to the lack of unique repair parts and components.
    Based upon the enhanced response times, improved accuracy and
    commonality with AFATDS and FEDs, the committee recommends an
    increase of $6.9 million for the XM-30 MBC.

    High mobility multi-purpose wheeled vehicle (HMMWV)

        The budget request contained $66.2 million to procure 774
    HMMWVs, of which $28.8 million was for 250 Up-Armored HMMWVs.
        In response to increased peacekeeping mission requirements,
    the Army developed the Up-Armored HMMWV variant to provide
    increased ballistic and blast protection primarily for the
    military police. This variant has proven to be a valuable asset
    and is responsible for saving the lives of soldiers whose
    vehicles were struck by mine blasts in Bosnia. Since the
    committee anticipates that the Up-Armored HMMWV will play a
    continuing role in more frequent deployments to areas of unrest
    around the world, it recommends an increase of $38.7 million
    for an additional 360 of these HMMWV variants.

    Logtech

        The budget request contained $3.4 million for automatic
    identification technology (AIT), which consists of various
    radio frequency (RF), bar code scanning and data carrier
    devices. AIT devices, as components of automated logistics
    systems, contribute to expedited receiving, storage,
    distribution, and inventory management of new and reparable
    items.
        The committee is aware of an AIT that employs an RF tagging
    device to identify items and track their location for supply
    and logistics purposes. The committee understands that the
    device is currently used to track supplies being shipped from
    several inventory control points in the continental United
    States to Guantanamo Bay, Cuba, as well as to forces deployed
    in Bosnia. The committee further understands that the device is
    used to automate manufacturing process controls for jet engine
    repairs and inventory tracking of ground support equipment at
    various military depots. The committee is impressed with the
    promising results achieved to date with the RF tagging device
    and believes that substantial savings can be achieved from
    further implementation of the device into automated inventory
    and repair processes. Therefore, the committee recommends an
    increase of $11.7 million for this purpose.

    M915/M916 line haul tractor trailer truck

        The budget request contained $36.1 million to initiate the
    procurement of 293 commercially available vehicles.
        While the committee is well aware of the requirements for
    this cargo handling vehicle and commends the Army for procuring
    a commercial truck, it believes there should be a more moderate
    initial rate of procurement. For this reason, the committee
    recommends a reduction of $18.0 million.

    Modifications to in-service equipment

        The budget request contained $1.2 million for modifications
    to Firefinder radars, including the AN/TPQ-36 Mortar Locating
    Radar.
        This radar is the primary target acquisition and
    counterfire system for Army field artillery forces. It is
    capable of rapidly locating multiple indirect fire weapons,
    such asmortars and rocket launchers, simultaneously and
    transmitting target data in near-real-time. However, the committee
    understands that currently-fielded radars generate false target
    location errors and believes there is a critical need to eliminate
    these errors. Therefore, the committee recommends an increase of $6.5
    million for modification kits to correct the AN/TPQ-36 Mortar Locating
    Radar false target location errors. The committee also recommends an
    increase of $1.5 million for spares and logistics support.

    Night vision devices

        The budget request contained $85.3 million for procurement
    of night vision devices, of which $24.3 million was for the
    procurement of AN/PVS-7 night vision goggles. However, no
    funding was included for the procurement of 25mm generation
    three image intensifier tubes for upgrading the Aviator's Night
    Vision Imaging System (ANVIS). The committee recommends a total
    increase of $30.8 million for night vision devices as discussed
    below and elsewhere in this report.
        The AN/PVS-7 night vision goggle is a head- or helmet-
    mounted, third-generation, image intensifying, device used by
    soldiers for nighttime operations. The Army procurement
    objective for this device is 281,000 however, at the end of
    fiscal year 1997, only 166,180 units will have been procured.
        The committee is aware of the enhanced operational
    capability that night vision devices provide combat forces and
    believes that these devices will play an increasingly important
    role in future Army deployments. Accordingly, the Army Chief of
    Staff has designated these devices as one of the Army's highest
    unfunded priorities for fiscal year 1998. The committee
    understands that an increase in funding would allow for
    procurement of an additional 6,239 devices, enabling the Army
    to fulfill force requirements earlier than planned. Therefore,
    the committee recommends an increase of $17.0 million to
    procure AN/PVS-7 night vision goggles for this purpose.
        The ANVIS upgrade, also included in the Army Chief of
    Staff's top unfunded fiscal year 1998 priorities, will provide
    aviators with a significantly enhanced night flying capability
    and contribute immeasurably to their safety of flight. The
    ANVIS collects critical flight information, such as, altitude
    and course heading from aircraft sensors and converts this
    information onto a visual imaging heads-up display. The upgrade
    will provide new image intensifier tubes that generate higher
    resolution images at lower light levels, which the committee
    understands will increase pilot reaction time to avoid
    obstacles by 40 percent. Because of the critical safety
    improvements that will result from this upgrade, the committee
    recommends an increase of $5.4 million for ANVIS 25mm
    generation three image intensifier tubes.

    Nonsystem training devices

        The budget request contained $49.7 million for nonsystem
    training devices, of which no funding was included for
    firefighter trainers. This training device is a computer-
    controlled, natural-gas-fueled system, which is currently
    providing safe, realistic, and environmentally-friendly
    training for firefighters at airports and training academies
    throughout the country.
        The committee understands that Army firefighter training
    sites have been or will be closed in the future because most
    are not in compliance with environmental regulations. Because
    of the site closures, the Army has established a program to
    provide regional firefighter training and has awarded a
    contract to procure 28 firefighter trainers over a five-year
    period for this purpose. However, it has procured only four of
    these trainers to date. The committee believes these trainers
    provide a safe, unique and fundamental fire prevention and
    teaching capability for Army firefighters and, therefore,
    recommends an increase of $4.0 million to procure four
    additional firefighter trainers.

    Reserve component automation system (RCAS)

        The budget request contained $114.3 million for continued
    procurement and fielding of the RCAS. The RCAS provides the
    Army the capability to more effectively administer, manage, and
    deploy the Army National Guard and Reserve forces.
        While the committee is a strong supporter of the National
    Guard and Reserve forces, it is concerned with the significant
    increase in funding requested for this program, an increase of
    50 percent over the combined amounts contained in the budget
    requests for the previous two years. The committee believes
    that such a large increase is not warranted and, therefore,
    recommends a reduction of $24.0 million.

    Sentinel

        The budget request contained $41.0 million for 12 Sentinel
    systems.
        The Sentinel system consists of a trailer-mounted radar and
    an identification-friend-or-foe device, along with Forward Area
    Air Defense stCommand, Control and Intelligence interfaces. The
    system plays an integral role in the digital battlefield by
    automatically detecting, identifying, and reporting cruise
    missiles, unmanned aerial vehicles (UAV), and rotary and fixed
    wing aircraft targets and rapidly transmitting data on these
    targets to air defense units.
        The committee believes that the Sentinel system will play
    increasingly critical air defense and force protection roles,
    especially with the proliferation of UAVs and cruise missiles
    throughout the world. These small targets require early
    detection in order to provide maximum reaction times for
    engagement at ranges well beyond the forward line of troops.
    Therefore, the committee recommends an increase of $20.3
    million for 14 additional Sentinel systems.

    Shortstop

        The budget request did not contain funding for procurement
    of the Shortstop Electronic Protection System (SEPS).
        The SEPS is a commercial electronics radio frequency
    countermeasure system that protects personnel and high value
    assets from artillery and mortar rounds and rockets by
    detonating their proximity fuzes well before they impact in the
    target area. The committee understands that initial Army
    testing of 5000 artillery rounds fired at the SEPSresulted in a
    100 percent pre-detonation success rate, while follow-on tests with
    both artillery and rockets were also highly successful.
        The initial SEPS units were developed as a quick reaction
    capability system and deployed during Operation Desert Storm.
    More recently the SEPS has been deployed to Bosnia. The
    committee is aware of an urgent need statement for 62 systems
    for the Eighth Army in Korea. Funding for procurement of 20
    units for Korea was appropriated in fiscal year 1997; however,
    the Army failed to request funding for SEPS in the fiscal year
    1998 budget request. Therefore, the committee recommends an
    increase of $9.0 million for the procurement of 42 additional
    SEPS to ensure that deployed forces have adequate protection
    from artillery, mortar and rocket attacks.

    Single channel anti-jam manportable (SCAMP) terminals

        The budget request contained $4.3 million for fielding of
    SCAMP terminals. No funds were requested to procure new
    terminals even though the Army has procured less than half of
    its requirement for 660 terminals.
        These satellite communications terminals provide extended-
    range, anti-jam voice and data command and control (C2)
    communications capability worldwide as part of the extremely
    high frequency Milstar satellite communications program.
        Based on the critical requirement for joint C2
    communications and to ensure that the Army can be fully
    integrated into the joint C2 network provided by the Milstar
    communications network, the committee recommends an increase of
    $12.3 million for SCAMP terminals and encourages the Secretary
    of Army to exercise the existing firm fixed price contract
    option for these terminals in fiscal year 1998.

                           Aircraft Procurement, Navy

                                    Overview

        The budget request contained $6,086.0 million for Aircraft
    Procurement, Navy in fiscal year 1998. The committee recommends
    authorization of $6,173.0 million for fiscal year 1998.
        The committee recommends approval of the request except for
    those programs adjusted in the following table. Unless
    otherwise specified, adjustments are without prejudice and
    based on affordability considerations.

                           Items of Special Interest

    Aircraft spares and repair parts
        The budget request contained $740.2 million for aircraft
    spares and repair parts.
        The committee recommends an additional $62.0 million to
    procure 11 improved F402-408A engines for the TAV-8B Harrier
    trainer aircraft. The committee notes that the Commandant of
    the Marine Corps identified a requirement for 22 of these
    engines among his highest unfunded aviation procurement
    priorities. In making this recommendation, the committee
    understands that these engines will enhance the safety margin
    of flight training operations and increase AV-8B pilot training
    production by twenty percent. The committee encourages the Navy
    to include the remaining 11 F402-408A engines in its fiscal
    year 1999 budget request in order to re-engine all 22 TAV-8B
    trainer aircraft.
    AN/ALR-67E(V)2 radar warning receiver upgrade
        The budget request contained $32.9 million for common
    electronic countermeasures modifications but did not include
    any funding to upgrade the AN/ALR-67E(V)2 radar warning
    receiver (RWR).
        The AN/ALR-67E(V)2 RWR is the common RWR installed on all
    Navy and Marine Corps front-line strike and fighter aircraft.
    The committee understands that low cost upgrades to the AN/ALR-
    67E(V)2 RWR are now available that would provide significantly
    greater survivability through better signal analysis, longer
    detection ranges, and improved situation awareness. The
    committee further understands that these upgrades would
    significantly lower the RWR's life cycle costs through
    maintainability improvements to the operating system software.
    Accordingly, the committee recommends an increase of $15.0
    million to provide these upgrades to the AN/ALR-67E(V)2.
    AN/ALQ-165 airborne self-protection jammer (ASPJ)
        The budget request contained $32.9 million for common
    electronic countermeasures equipment, but did not include
    funding to procure the AN/ALQ-165 ASPJ for the F-14D or the F/
    A-18C/D aircraft.
        The self-protection system installed on the F/A-18C/D,
    except those configured with the ASPJ for contingency
    operations, has no capability against pulse doppler or
    continuous wave radars that currently are the most widely
    deployed air-to-air and air-to-surface radar threats to
    tactical aircraft. The committee is aware that the Navy can
    only equip approximately 72 aircraft with the ASPJ, although it
    has a requirement for employment of this system on over 500 F-
    14Ds and F/A-18C/Ds. The committee understands that in order to
    meet its current deployment requirements in the Bosnia and
    Persian Gulf theaters, the Navy must remove the ASPJs from
    aircraft returning from these areas and install them on
    aircraft beginning deployment. Furthermore, as a result of this
    shortfall, ASPJs are not available to support training or other
    potential combatrequirements. Accordingly, the committee
    recommends an increase of $75.0 million for production of 50 AN/ALQ-165
    ASPJs.

    AN/AWW-13 guided weapon control monitor set

        The budget request did not contain funding to procure AN/
    AWW-13 guided weapon control monitor sets.
        The AN/AWW-13 provides the data link capability for the F/
    A-18 series aircraft to employ the precision-guided Walleye and
    Stand-off Land Attack Missiles (SLAM). The committee
    understands that the Navy requires 218 AN/AWW-13s, but only
    plans to procure 200 of these systems through calendar year
    1997, when production of the AN/AWW-13 is scheduled for
    termination. To meet the Navy's requirement and retain AN/AWW-
    13 production capability for future F/A-18s or other aircraft
    that employ Walleye or SLAM, the committee recommends an
    increase of $9.0 million to procure the remaining 18 systems.

    AV-8B

        The budget request contained $277.6 million to procure 11
    remanufactured AV-8B aircraft, and $19.4 million for advance
    procurement of 12 remanufactured aircraft in fiscal year 1999.
        The committee continues to support the upgraded AV-8B's
    enhanced mission-capability and safety-related improvements and
    notes that, for fiscal year 1997, it authorized the procurement
    of two more additional aircraft than were appropriated. Since
    the Commandant of the Marine Corps identified an additional AV-
    8B as his highest unfunded aviation procurement priority for
    fiscal year 1998, the committee recommends an additional $33.0
    million to procure this aircraft.

    Contract aerial refueling services

        The budget request did not contain funding for contract
    aerial refueling services.
        The committee understands that commercial aerial refueling
    may be less expensive than the cost-per-flight-hour of the
    current Air Force tankers and believes this concept warrants
    further evaluation. Accordingly, the committee recommends an
    increase of $6.0 million to modify three aircraft for this
    purpose.

    E-2C

        The budget request contained $236.5 million to procure
    three E-2C aircraft, and $23.6 million for advance procurement
    of four aircraft in fiscal year 1999.
        Fleet aviation continues to require modern, robust,
    carrier-based airborne early warning (AEW) command and control
    aircraft. Except for fiscal year 1998, the Department plans to
    procure four new AEW aircraft per year throughout the future
    years defense program. The Chief of Naval Operations (CNO), in
    order to maintain a steady production rate of four aircraft per
    year, identified an additional E-2C as one of his top two
    unfunded procurement priorities in fiscal year 1998.
        The committee supports the CNO's request and recommends an
    additional $68.0 million to procure one additional E-2C
    aircraft. This increase will result in a more efficient
    production flow, provide aircraft to the fleet sooner, and save
    $13.2 million.

    EA-6B modifications

        The budget request contained $86.8 million for EA-6B
    modifications but did not include funding to replace wing
    center sections (WCS) or for the turbine engine blade
    containment system (TEBS).
        The first 65 EA-6B aircraft were manufactured with an
    aluminum alloy WCS that is susceptible to stress corrosion
    cracking. Thirty nine of these aircraft are still in service,
    20 of which Congress provided WCS replacement funding in fiscal
    years 1995 and 1997. Consistent with its prior actions, the
    committee recommends an increase of $50.0 million to replace
    the WCSs of 10 additional EA-6Bs. The committee urges the
    Secretary of the Navy to provide funds to complete the WCS
    modifications in his fiscal year 1999 budget request.
        Based on historical data analysis of the EA-6B's engine,
    the Navy determined that the EA-6B will experience between
    three and five aircraft losses due to catastrophic failure of
    turbine engine blades before the EA-6B reaches its retirement.
    In fiscal year 1997, the Congress provided $5.0 million to
    address this problem, but the committee has since learned that
    the cost to outfit the entire fleet has risen to $60.0 million.
    Since the EA-6B is no longer in production and the total cost
    to modify all EA-6Bs with the TEBS is less than the value of
    one aircraft, the committee recommends an increase of $18.0
    million to continue this modification.

    F/A-18

        The budget request contained $2,101.1 million for
    procurement of 20 F/A-18E/F aircraft, four fewer than the
    number for which advance procurement funds were requested in
    fiscal year 1997, and $90.5 million for advanced procurement of
    30 aircraft in fiscal year 1999.
        Based on the recently-released recommendations of the
    Quadrennial Defense Review (QDR), the Navy's current
    procurement objective for the F/A-18E/F is 548 to 785 aircraft,
    at a maximum production rate of 48 aircraft per year, which has
    been decreased from the fiscal year 1998 budget request
    procurement plan of 1,000 aircraft at a maximum production rate
    of 60 aircraft per year. The committee understands that the
    Navy plans to determine its actual procurement objective based
    on the initial operational capability date of the Joint Strike
    Fighter (JSF).
        The committee is sensitive to the Navy's requirement to
    modernize its tactical aircraft fleet. Unfortunately, the Navy
    failed in its attempts to replace the A-6 and F-14 fleets first
    with the A-12 and then with the A/F-X, both of which were
    terminated. Consequently, the F/A-18E/F program emerged--more
    by default than by design--as the Navy's choice to replace the
    A-6 in the all-weather attack mission, replace the F-14 in
    thefleet air defense and tactical reconnaissance missions, and to
    supplement existing F/A-18C/Ds. The F/A-18E/F improves range and
    payload capabilities compared to the F/A-18C/D, but it will not be
    nearly as survivable as either the A-12 or the A/F-X would have been.
    Accordingly, the committee strongly supports the Navy's participation
    in the JSF program to meet its longer-term force structure and
    modernization requirements and believes that the JSF will be more cost
    and operationally effective than any previous Naval aircraft when it
    enters service with the fleet. Therefore, the committee recommends an
    increase of $20.0 million in PE63800N to accelerate development of the
    Naval variant of the JSF, as explained elsewhere in this report.
        The committee notes that the budget request proposal to
    reduce the quantity of F/A-18E/Fs procured in fiscal years 1998
    and 1999 by 10 from the 60 proposed in the fiscal year 1997
    acquisition plan, together with the QDR recommendation to
    reduce both the total procurement objective and the maximum
    production rate of this aircraft, suggests that future
    aircraft, shipbuilding, and other weapons procurement demands
    on the Navy's budget are necessitating consideration of
    alternative F/A-18E/F production rates. Accordingly, the
    committee recommends $1,348.9 million for continued F/A-18E/F
    production, a reduction of $752.2 million. The committee
    believes that until the review of the QDR by the independent
    National Defense Panel is completed in December 1997 and
    assessed by the Congress, the F/A-18E/F program should proceed
    at a slower pace.

    H-1 series modifications

        The budget request contained $18.5 million for
    modifications to the H-1 series helicopter, of which $18.3
    million was planned for communications and navigation block
    upgrades. The budget request also contained $80.7 million in
    research and development funding for future H-1 upgrades.
        Subsequent to the Department's submission of the budget
    request, the Navy determined a need to restructure its
    communications and navigation block upgrades and research and
    development plans for the H-1 series helicopters. The
    restructured program, which requires transferring funds from
    the aircraft procurement account to the research and
    development account, would improve commonality between the UH-
    1N and AH-1W helicopters through a new plan to design common
    cockpit architecture and to procure common parts and software.
    The committee supports this initiative and recommends $12.7
    million for H-1 communications and navigation block upgrades, a
    reduction of $5.6 million, and a corresponding increase in PE
    0604245N for research and development of H-1 series upgrades.

    Lightweight environmentally sealed parachute assembly (LESPA)

        The budget request did not contain funding for LESPA.
        The committee continues to support this initiative, begun
    in fiscal year 1997, to replace old parachutes in the P-3 and
    EP-3 aircraft with the LESPA. Due to its longer repack cycle
    and extended service life, the committee understands that the
    Navy will realize substantial life cycle cost savings by
    procuring LESPA compared to continued use of existing
    parachutes. Accordingly, the committee recommends an additional
    $11.0 million to procure LESPA for P-3 and EP-3 aircraft fleets
    as follows: $10.8 million for the P-3 and $200 thousand for the
    EP-3.

    Oil debris detection system (ODDS)

        The budget request contained $164.9 million for the
    modification of P-3 aircraft, $49.1 million for the
    modification of E-2 aircraft, and $19.2 million for the
    modification of C-2 aircraft. The budget request did not
    contain funding for the procurement and installation of ODDS in
    the T-56 engine, which is common to the P-3, E-2 and C-2
    fleets.
        The ODDS is an on-board detection system that alerts
    aircrews to the presence of metal chips in engines and
    propeller gear boxes, allowing flights to be terminated prior
    to catastrophic failure of critical components. It also permits
    the clearing of smaller particles that routinely accumulate in
    engine oil and cause false impending engine failure alarms,
    resulting in unnecessary termination of aircraft missions and
    costly engine diagnostics. Since the ODDS, which has been
    successfully integrated into many other Department of Defense
    aircraft, both reduces aircraft maintenance costs and enhances
    aircrew safety, the committee recommends an increase of $1.6
    million to incorporate this system on the P-3, E-2 and C-2
    fleets as follows: $1.4 million for the P-3 and $100 thousand
    each for the E-2 and C-2 fleets.

    P-3 series modifications

        The budget request contained $164.9 million for P-3 series
    modifications, $74.7 million of which is for four anti-surface
    warfare improvement program (AIP) kits, and $41.3 million of
    which is for 11 sustained readiness program (SRP) kits.
        The AIP improves the P-3's capabilities in communications,
    survivability and over-the-horizon targeting through the
    installation of commercial-off-the-shelf components. The
    committee understands that the Commanders-in-Chief (CINCs) of
    the Atlantic and Pacific theaters require 68 AIP-configured P-3
    aircraft by fiscal year 2001, but the future years defense
    program only provides for 44 aircraft by this time. In the last
    year alone, these aircraft have played major roles in joint
    naval operations in Bosnia, Liberia, Central Africa, the
    Formosa Strait and the Strait of Hormuz by providing littoral
    and overland surveillance. Consequently, in order to meet CINC
    requirements and achieve a more efficient production rate, the
    committee recommends an increase of $56.6 million for an
    additional eight AIP kits.
        The SRP extends the service life of the P-3C by replacing
    and refurbishing airframe components. The committee understands
    that material conditions of the fleet aircraft are
    deteriorating faster than originally forecast, requiring
    frequent major airframe repairs in advance of the nominal 30-
    year expected operational service life. If left unchecked,
    aircraft could be rendered unserviceable due to corrosion or
    cracking of major structural components. Accordingly, the
    committee recommends an increase of $35.1 million to procure 17
    additional shipsets of SRP kits.

    T-45 training system

        The budget request contained $244.0 million to procure 12
    T-45C aircraft and associated ground-based training equipment,
    and $6.2 million for advance procurement of 12 T-45C aircraft
    in fiscal year 1999.
        The committee is aware that the T-45A Goshawks delivered
    thus far are performing extremely well and have exceeded
    expectations in almost every performance measure. The last T-
    45A is planned for delivery in February 1998 and a
    significantly upgraded T-45C, with a digital cockpit, will
    begin deliveries in October 1997. Student training in the
    digitally instrumented T-45C will begin in mid-summer 1998.
        The committee is concerned that the aging TA-4J and T-2C
    aircraft, now scheduled for retirement in fiscal years 1998 and
    2003 respectively, are increasingly expensive to operate due to
    an increased instructor requirement, more frequent parts
    replacement cycle, and more aircraft flight time required to
    train students to the desired standard. Lead time for spares is
    excessive and results in an increased period of time that the
    aircraft are unavailable for training. Moreover, the T-2 fleet
    has been grounded on numerous occasions due to flight control
    problems and other maintenance issues related to an aging
    aircraft. Taken together, these factors could cause the fiscal
    year 1998 pilot training rate to fall short of the Navy's
    yearly quota by approximately 100 naval aviators.
        Therefore, the committee recommends an increase of $100.0
    million to procure six additional T-45C aircraft. The committee
    understands that by continuing to procure the T-45C at the rate
    of 18 aircraft per year, the Navy would complete its T-45
    aircraft procurement program three years earlier and save
    $210.0 million in aircraft procurement costs compared to the
    future years defense program, as well as $262.2 million in T-2
    flight hour cost avoidance.

    V-22

        The budget request contained $472.0 million to procure five
    V-22 aircraft and $69.7 million for advance procurement of
    seven aircraft in fiscal year 1999.
        The committee has been a strong supporter of accelerated V-
    22 procurement and endorses the recently-released Quadrennial
    Defense Review's (QDR) recommendation to achieve a long-term
    production rate of 30 aircraft per year by 2004. However, the
    committee notes that despite the fact that in fiscal year 1997
    Congress appropriated advance procurement funding for 12
    aircraft in fiscal year 1998, the Department has requested only
    five. Therefore, consistent with its prior actions, the
    recommendations of the QDR, and the Commandant of the Marine
    Corps' unfunded priorities for fiscal year 1998, the committee
    recommends an increase of $189.3 million to procure two
    additional aircraft.

                           Weapons Procurement, Navy

                                    Overview

        The budget request contained $1,136.3 million for Weapons
    Procurement, Navy in fiscal year 1998. The committee recommends
    authorization of $1,214.7 million for fiscal year 1998.
        The committee recommends approval of the request except for
    those programs adjusted in the following table. Unless
    otherwise specified, adjustments are without prejudice and
    based on affordability considerations.

                           Items of Special Interest

    Close-in weapon system (CIWS) surface mode upgrade
        The budget request contained $10.0 million for CIWS but did
    not include funding to procure surface mode upgrade kits for
    this system.
        The CIWS is a fully autonomous, radar-directed gun system
    designed for anti-ship missile defense. While the existing
    system is effective against its designed threat, the Navy's new
    focus on littoral operations requires an ability to defend
    against small, fast surface craft for which most Navy ships
    have a limited defense. To address this deficiency, the
    committee recommends an increase of $20.0 million to procure
    CIWS upgrade kits for both surface combatants and other ships
    equipped with this system.

                              Hellfire II missiles

        The budget request did not contain funding for the Hellfire
    II missile.
        The Hellfire II missile is an anti-armor and anti-ship
    weapon used by the Marine Corps on the AH-1W and by the Navy on
    the SH-60B. Neither the Navy nor the Marine Corps have procured
    Hellfire II missiles since fiscal year 1994. The committee has
    been informed that because of this situation, the Navy's and
    the Marine Corps' inventories of Hellfire II missiles is 25
    percent below requirements. To address this shortfall, the
    committee recommends $37.5 million to procure 700 Hellfire
    missiles.
    Joint stand off weapon (JSOW)
        The budget request contained $58.7 million for 113 JSOW
    missiles for the Navy. No funds were requested to procure JSOW
    missiles for the Air Force until fiscal year 1999.
        The committee continues to support accelerated procurement
    of precision guided munitions and integration of these weapons
    into aircraft and mission planning subsystems. Also, the
    committee notes that the Chief of Naval Operations included
    additional JSOW procurement in the top one-third of his fiscal
    year 1998 unfunded priorities.
        The committee added funding in fiscal year 1997 to
    accelerate the integration of precision guided weapons on the
    B-2 bomber and understands that some of this funding will be
    used to complete JSOW integration in late 1998. The committee
    urges the Air Force to accelerate updating the B-2's mission
    support system in order to employ JSOW at the earliest possible
    date.
        The committee recommends an increase of $10.0 million for
    the Navy to procure 37 additional missiles and an increase of
    $29.0 million for the Air Force to initiate procurement of 100
    missiles. The committee understands that these increases will
    reduce the fiscal year 1998 JSOW unit cost by 24 percent. The
    committee expects the Air Force to accelerate JSOW capability
    on the B-2 with these weapons.
    Standard Missile (SM)-2 Block IIIB medium range (MR) modification kits
        The budget request contained $35.6 million for 80 SM-2
    Block IIIB MR modification kits.
        The SM is the Navy's primary surface-to-air weapon against
    hostile aircraft and anti-ship cruise missiles. The latest MR
    version to enter production, SM-2 Block IIIB, retains the full
    performance of earlier models and adds improvements against
    electronic countermeasures. However, the current SM inventory
    is dominated by older versions that are less capable against
    modern anti-ship weapons and ineffective against some newer
    threat missiles.
        Even though the Navy plans to supplement its new missile
    production by upgrading older missiles to the Block IIIB
    configuration, its projected Block IIIB inventories at the turn
    of the century will still fall significantly short of the
    quantity required to meet deployment inventories. Accordingly,
    the committee recommends an increase of $33.0 million to
    procure an additional 80 SM-2 Block IIIB MR modification kits.
    This action will allow the Navy to field more of the latest-
    version missiles and reduce the need to ``cross deck'' the
    missiles between deploying and returning ships.

                   Ammunition Procurement, Navy/Marine Corps

                                    Overview

        The budget request contained $336.8 million for Ammunition
    Procurement, Navy/Marine Corps in fiscal year 1998. The
    committee recommends authorization of $470.4 million for fiscal
    year 1998.
        The committee recommends approval of the request except for
    those programs adjusted in the following table. Unless
    otherwise specified, adjustments are without prejudice and
    based on affordability considerations.

                           Items of Special Interest

    Marine corps ammunition
        The budget request contained $99.0 million for procurement
    of ammunition. The committee recommends $227.0 million, an
    increase of $128.0 million for the following types of
    ammunition:

                            [In millions of dollars]

    CTG 5.56mm training rounds........................................   3.0
    CTG 7.62mm training rounds........................................   6.0
    Rocket Motor, 5 inch..............................................   1.5
    Charge, demolition linear HE......................................  10.0
    CTG 40mm practice grenade linked M918.............................  10.6
    CTG Tank 120mm M830A1 (HEAT)......................................  33.4
    CTG Tank 120mm TPCSDS-T M865......................................   5.2
    Fuze, ET, XM762...................................................   7.0
    CTG 25mm TPDS-T, linked...........................................   1.1
    Signal Smoke, illumination........................................   3.4
    Charge, demolition assembly M183..................................  43.3
    Fuze, ET, M767....................................................   3.5

                       Shipbuilding and Conversion, Navy

                                    Overview

        The budget request contained $7,438.2 million for
    Shipbuilding and Conversion, Navy in fiscal year 1998. The
    committee recommends authorization of $7,655.0 million for
    fiscal year 1998.
        The committee recommends approval of the request except for
    those programs adjusted in the following table. Unless
    otherwise specified, adjustments are without prejudice and
    based on affordability considerations.

                           Items of Special Interest

    Fast patrol craft
        The budget request did not contain funding for a fast
    patrol craft.
        The Navy and Marine Corps emphasis on the employment of
    expeditionary forces, coupled with the enormous investment
    required for construction of major combatant ships, combine to
    make the procurement of an inexpensive, multi-mission fast
    patrol craft a highly desirable objective. The committee
    direction for such a craft, contained in its report on H.R.
    1530 (H. Rept. 104-131), was clear--a high-speed vessel capable
    of carrying multiple anti-surface ship missiles, as well as
    command, control, and intelligence assets. The committee
    continues to believe that a fleet of such small multi-mission
    craft would be a national asset and, consequently, recommends
    an increase of $20.0 million, to be combined with the $9.5
    million authorized and appropriated in fiscal year 1996, to
    construct this platform. The committee directs the Secretary of
    the Navy to release these funds to the Office of Naval Research
    only for the purpose of contracting for the fast patrol craft.
    Landing craft air cushion (LCAC) service life extension program (SLEP)
        The budget request did not contain funding for LCAC SLEP.
        Congress provided $3.0 million in fiscal year 1997 for
    advance procurement of components needed to initiate an LCAC
    SLEP, based on its understanding that the Navy was prepared to
    fully fund this program in fiscal year 1998. The committee
    understands that these funds will not be released until fiscal
    year 1999 because the Navy now intends to begin the LCAC SLEP
    in fiscal year 2000. However, the committee also understands
    that the Navy's strategy to begin this SLEP in fiscal year 2000
    is currently under review in order to address the realities of
    more extensive corrosion and greater obsolescence of electronic
    equipment in the LCAC fleet than earlier realized.
        The LCAC is the only surface platform that can provide
    high-speed, heavy lift from over-the-horizon. Without a SLEP,
    the first LCACs will begin retiring in 2004; with a SLEP, ten
    years of useful life will be added to the LCAC fleet. Since no
    funding is programmed for a replacement craft, allowing the
    LCACs to deteriorate without a SLEP would result in a severe
    degradation in the Navy's ability to perform amphibious warfare
    and operational maneuver from the sea. Accordingly, the
    committee recommends $17.3 million to begin the LCAC SLEP in
    fiscal year 1998.
    LPD-18
        The budget request did not contain funding for the LPD-18.
         LPD-18 is the second ship of 12 in the LPD-17 class of new
    amphibious ships with which the Navy plans to replace 41
    obsolete amphibious vessels. The LPD-17 class will not only
    provide the Navy and Marine Corps with advanced-technology
    command systems and extensively improved ship self-defense
    capabilities but also reduce by 60 percent the crew
    requirements of the four existing classes of ships it will
    replace. Thecommittee notes that the Chief of Naval Operations
    considers the procurement of the LPD-18 to be among his top unfunded
    procurement priorities for fiscal year 1998 and recommends $185.0
    million for the advance procurement of this ship.

    New attack submarine (NAS)

        The budget request contained $2,314.9 million for
    procurement of the first NAS and $284.9 million for advance
    procurement of the second and third NASs in fiscal years 1999
    and 2001 respectively.
        In presenting its budget request for fiscal year 1996 two
    years ago, the Navy was poised to proceed with its plan to
    begin producing a 30-ship class of NASs at a single shipyard,
    the Electric Boat Division of General Dynamics. Congress
    rejected the Navy's plan, directing that the NAS would not be a
    serially-produced new class of nuclear attack submarines and
    further directing that Newport News Shipbuilding would
    participate in the future construction of such submarines.
    Congress was concerned over having the NAS design serially
    produced at a single shipyard since it could have led to
    production of a scaled-down, less capable, version of the NAS
    predecessor, the Seawolf, while precluding the consideration of
    technological innovation available through the other nuclear-
    capable shipyard. Moreover, because Congress was concerned with
    the prospects of an unaffordable nuclear attack submarine, it
    reasoned that competition between Electric Boat and Newport
    News was viewed as important to controlling costs.
        The results of Congress' efforts were enacted into law in
    the National Defense Authorization Act for Fiscal Year 1996
    (Public Law 104-106). Section 131 of that Act replaced the
    Navy's plan with one that set forth a series of four
    submarines, beginning construction in each of fiscal years 1998
    through 2001, which use the NAS as a baseline design and
    successively incorporate new technologies. The first and third
    of these submarines were to be built at Electric Boat; the
    second and fourth were to be built at Newport News. The
    Congressional plan stated that the best designs from each
    shipyard would form the basis for serial production of the
    first of a new class of next-generation submarines beginning in
    2003 (amended to 2002 by the National Defense Authorization Act
    for Fiscal Year 1997 (Public Law 104-201)). Although the Navy's
    original plan also projected commencing construction of four
    NASs between fiscal year 1998 and fiscal year 2003, the Navy,
    nevertheless, maintained that the Congressional plan was
    unaffordable.
        Notwithstanding the previously signed Memorandum of
    Agreement (MOA) with Electric Boat and Newport News to
    facilitate the competition requirements of Section 131, the
    Navy's budget request for fiscal year 1998 is premised upon
    having the two shipyards team to produce not only the first
    four NASs, beginning construction in fiscal years 1998, 1999,
    2001 and 2002 respectively, but all NASs thereafter. This
    teaming arrangement, in conjunction with authorization to
    initiate a proposed multiyear procurement contract for the
    first four submarines, would, according to the Navy, save
    $600.0 million ``over the current plan.''
        The committee notes several inconsistencies between
    provisions contained in the formal Team Agreement and
    representations made to the committee in other documents: (1)
    The Team Agreement states that, ``The Government, acting
    through the Department of the Navy (``Government'') planned to
    construct four NAS submarines, the first and third of which
    were to be built by Electric Boat, and the second and fourth of
    which were to be built by Newport News, in accordance with the
    National Defense Authorization Act for Fiscal Year 1997.'' The
    Assistant Secretary of the Navy (Research, Development, and
    Acquisition), in a formal witness statement submitted to the
    committee earlier this year stated, ``The plan the Secretary of
    Defense submitted to the Congress in March of last year, for
    fiscal year 1997, included funding for two of the four
    submarines and concluded that it would be very difficult to
    accelerate funding for the program in the context of other
    modernization priorities.'' (2) The Team Agreement states that,
    ``Both Electric Boat and Newport News have been encouraged by
    the Government to enter into a team arrangement for NAS
    submarines, and the parties anticipate alterations to existing
    law to accommodate the team arrangement contemplated by this
    Agreement.'' In the same formal statement noted above, the
    Assistant Secretary of the Navy stated that, ``In December
    1996, Electric Boat and Newport News proposed to construct New
    Attack Submarines as a team, rather than as competitors.'' The
    committee is puzzled by such apparent contradictions and
    believes they call into question the forthrightness with which
    the Navy is dealing with the Congress.
        Additionally, the committee notes that the Navy has
    proposed legislation that would waive section 2306b (a) of
    Title 10, United States Code, which enumerates those
    determinations that an agency head must make as being in the
    best interests of the government in order to enter into a
    multiyear procurement contract, and would repeal the provisions
    of the National Defense Authorization Acts for Fiscal Years
    1996 and 1997, which codified the Congressional plan for next-
    generation nuclear attack submarines. Based on the Navy's
    request for a waiver of section 2306b (a), the committee can
    only infer that authorizing a multiyear procurement in the case
    of the NAS may not be in the best interests of the government.
    Accordingly, the committee does not recommend approval of this
    waiver. Moreover, the committee believes that the current NAS
    design is the best the Navy is willing to do rather than the
    best the Navy is capable of doing and, therefore, declines to
    repeal the Congressional plan for production of the next-
    generation submarine, as enacted into law.
        The committee is pleased that the Navy has followed the
    committee's direction to increase funding for advanced
    submarine technologies and notes that the fiscal year 1998
    request adds approximately $60.0 million to the amount
    requested in fiscal year 1997 for this purpose. However, the
    committee is not convinced that the Navy is committed to
    maturing these advanced technologies and inserting them into
    the NAS, especially into any of the first four submarines.
    Although the Navy asserts there are many technology insertion
    ``opportunities'' on these four submarines, the committee does
    not yet see evidence of a funding commitment to incorporate
    more than a very few of them as they mature. Because of this
    apparent shortcoming, the committee recommends a provision
    (sec. 121) that would prohibit the obligation of more than 50
    percent of the funds authorized and appropriated for fiscal
    year 1998 for the Seawolf (SSN-23) until the Secretary of
    Defense certifies that he will fully fund in the future years
    defense program accompanying the fiscal year 1999 budget
    request 50 percent of the procurement resources estimated to be
    required for incorporation into each of the first four NASs
    thetechnology ``opportunities'' available for those vessels, as briefed
    to the committee by the Assistant Secretary of the Navy (Research,
    Development, and Acquisition).
        The committee is aware that the initial sea trials of the
    Seawolf produced some very unexpected and positive results.
    Those results testify to the potential of contemporary
    hydrodynamic design to both improve the performance and enhance
    the affordability of the NAS. Unfortunately, the Seawolf's
    hydrodynamic design is not reflected in the NAS, and the
    committee believes that the results of these sea trials
    demonstrate that the Congressional plan not to freeze the NAS
    design has merit.
        Based on the Seawolf initial sea trials, the committee
    believes that the current NAS power plant might be capable of
    providing performance levels beyond those demonstrated by the
    Seawolf, if alternative hydrodynamic technologies are
    exploited. If such is the case, then: (1) an even smaller power
    plant might be used on an NAS-displacement platform to produce
    planned-for NAS performance levels while simultaneously
    yielding more space for additional weapons storage; or (2) a
    smaller power plant might be used to provide Seawolf
    performance levels on a less-than-NAS-displacement platform. In
    recognition of the fact that hydrodynamic shaping and advanced
    control surfaces cannot be ``inserted'' once a submarine is
    built, the committee further believes the Navy should pursue a
    parallel, large-scale demonstrator that is not limited by form
    (hull and appendages) or by a single hull design to evaluate
    the potential to achieve higher levels of performance with
    either the NAS or smaller power plants. The committee is aware
    of the encouraging hydrodynamic and acoustic potential
    identified by a recent Electric Boat evaluation of
    incorporating a double hull around a contemporary submarine and
    believes this potential reinforces the benefits of constructing
    such a demonstrator.
        For this purpose, the committee recommends an additional
    $103.0 million in research and development funds and directs
    the Secretary of the Navy to issue a competitive solicitation
    for the demonstrator to the shipyards not currently involved in
    the design or future construction of the NAS. Furthermore, the
    committee directs the Secretary to transfer funds in the future
    years defense program accompanying the fiscal year 1998 budget
    for the Arsenal Ship demonstrator, which the committee
    recommends terminating in Title II of this report, to the
    submarine large-scale demonstrator.

    Nuclear aircraft carrier refueling overhauls

        The budget request contained $1,615.0 million for the
    refueling overhaul of the Nimitz nuclear aircraft carrier and
    $92.9 million in advance procurement for overhaul of a second
    carrier in fiscal year 2001.
        The committee understands that the Navy will not install
    the close-in weapons system on the Nimitz, as previously
    planned and budgeted. Therefore, the committee recommends
    $1,608.4 million, a corresponding reduction of $6.6 million.

                            Other Procurement, Navy

                                    Overview

        The budget request contained $2,825.5 million for Other
    Procurement, Navy in fiscal year 1998. The committee recommends
    authorization of $3,073.4 million for fiscal year 1998.
        The committee recommends approval of the request except for
    those programs adjusted in the following table. Unless
    otherwise specified, adjustments are without prejudice and
    based on affordability considerations.

                           Items of Special Interest

    Airborne mine countermeasures
        The budget request contained $20.2 million for airborne
    mine countermeasures, but did not include funding for Magic
    Lantern.
        The committee is aware of the successful Naval Reserve
    operational assessment of the Magic Lantern airborne mine
    detection system. The committee understands the system
    demonstrated the ability to automatically detect and classify
    contact mines from the surface to below the keel depth of any
    U.S. warship with an unprecedented probability of detection.
        The committee supports the Navy's decision to designate the
    Naval Reserve as the existing operational command for the laser
    airborne mine warfare mission. The committee is concerned,
    however, that if the capability exists only in the one East
    Coast Light Airborne Multi-Purpose System (LAMPS) squadron, as
    is presently the case, the Navy will not be optimizing the use
    of these very limited assets. The committee believes that, with
    minor modifications, existing Magic Lantern assets could be
    used to establish a capability in the West Coast LAMPS squadron
    comparable to that in its East Coast counterpart. A Magic
    Lantern capability in the West Coast squadron would provide for
    more flexible training and, more importantly, enhance the
    ability of the Reserves to draw qualified and trained personnel
    from both squadrons to support contingencies for extended
    periods.
        Therefore, the committee recommends an increase of $7.5
    million for: (1) equipping the West Coast squadron with two
    Magic Lantern systems; (2) procuring spares and support
    equipment for the West Coast Magic Lantern systems; (3)
    provisioning eight Reserve LAMPS aircraft with Magic Lantern
    engineering change proposals, including miniaturized airborne
    Global Positioning System receivers; and (4) converting the
    Magic Lantern adaptation system to the Magic Lantern deployment
    contingency configuration.
    AN/BPS-16 submarine navigation radar
        The budget request did not contain funding for the AN/BPS-
    16 submarine navigation radar.
        Consistent with its initiative over the last two years to
    upgrade the navigation radar on the Los Angeles-class submarine
    fleet, the committee recommends $9.0 million to initiate the
    backfit of the AN/BPS-16 radar on the TRIDENT submarine fleet.
    The AN/BPS-16 navigation radar redresses a severe safety and
    readiness problem associated with the high failure rate of the
    older BPS-15 radar. The routine failure of the older system
    forces the fleet to rely on a small, pleasure boat style
    commercial radar that does not meet standards for larger
    vessels. Installation of the AN/BPS-16 will provide TRIDENT
    submarines with significantly improved capability for safe
    operations while navigating into and out of ports and
    performing tactical surface operations at sea in adverse
    weather conditions.

    AN/SPS-73(V) surface search radar

        The budget request contained $1.7 million to procure 10 AN/
    SPS-73(V) surface search radars.
        The AN/SPS-73(V) surface search radar is the radar
    navigation system selected to replace the less-reliable AN/SPS-
    55, AN/SPS-64(V), AN/SPS-67(V)1 and LN-66 radars, many of which
    are over 30 years old. The AN/SPS-73(V) will replace these
    different radars with one system, reducing logistics management
    costs and saving approximately $42,000 per ship per year in
    maintenance costs. Although the Navy's procurement objective is
    550 systems, it has budgeted for only 44 systems in the future
    years defense program. To accelerate the introduction of this
    cost-effective system and enhance the navigation safety of the
    Navy's surface ships, the committee recommends an increase of
    $13.0 million for production and installation of approximately
    55 more systems.

    Computer aided submode training (CAST) lesson authoring system (CLASS)

        The budget request contained $26.8 million for AEGIS
    support equipment, but did not include any funding for CLASS to
    be expanded to ships or systems other than AN/UYQ-70-equipped
    AEGIS destroyers.
        CLASS is a commercial-off-the-shelf training system that
    operates with the Navy's existing CAST system, but adds multi-
    media capabilities such as video, audio, three-dimensional
    graphics, animation and interactive simulations. The committee
    understands that the CLASS is fully funded beginning in fiscal
    year 1999 for installation on AN/UYQ-70-equipped AEGIS
    destroyers, but the Navy does not plan to backfit this system
    on other AEGIS-equipped platforms or to expand it to other
    systems. Accordingly, the committee recommends an increase of
    $8.0 million for the purpose of backfitting CLASS on AEGIS
    cruisers and destroyers and to expand this technology to other
    systems such as cooperative engagement capability, joint
    maritime command information system, and global command and
    control system.

    Cooperative engagement capability (CEC)

        The budget request did not contain funding for CEC.
        The CEC significantly improves anti-air warfare (AAW)
    capability by integrating all battle group component AAW sensor
    information into a single, real-time depiction that allows one
    platform to target and engage a hostile air threat with
    information from another. CEC distributes sensor data from any
    ship or aircraft in the battle group to all others through a
    real-time, line-of-sight, high-data-rate distribution network.
    The committee notes that the Chief of Naval Operations has
    identified CEC as one of the top three fiscal year 1998
    unfunded procurement priorities. Therefore, the committee
    recommends $114.8 million to restore the Navy's CEC fielding
    plan by procuring and installing CEC shipsets for two aircraft
    carrier battle groups.

    DD-963 combat control upgrade

        The budget request contained $14.3 million for Navy
    tactical data systems, but did not include funding to upgrade
    DD-963 combat control systems with AN/UYQ-70 workstations and
    associated peripherals.
        The Spruance-class surface combatants operate with combat
    control and display systems, designed thirty years ago, that
    are obsolete, unreliable and expensive to maintain. Due to the
    obsolescence of these computer and display systems, the Navy
    must often ``cannibalize'' ships in non-deployed and overhaul
    status for spare parts. Moreover, the lack of modern
    technology, combined with the low reliability and frequent
    maintenance of these systems, require increased shipboard
    manning to keep these systems combat-ready. Accordingly, the
    committee recommends $10.0 million to upgrade the computers,
    consoles and associated equipment of two Spruance-class surface
    ships with AN/UYQ-70 workstations and associated peripherals.

    Integrated navigation, information, and ship control system

        The budget request did not contain funding for the
    integrated navigation, information, and ship control system.
        Congress authorized and appropriated $24.0 million in
    fiscal year 1997 for the procurement and installation of
    commercial-off-the-shelf (COTS) integrated navigation,
    information, and ship control systems for backfit on CG-47
    class cruisers. However, the committee understands that the
    Navy currently intends to use these funds to conduct a
    competition for the development of a machinery control system,
    notwithstanding the fact that the $24.0 million was provided
    for the procurement and installation of a suite of non-
    developmental ``smart ship'' systems like those installed on
    the U.S.S. Yorktown. The committee strongly opposes the Navy's
    intentions and directs the Secretary of the Navy to procure
    COTS systems--not develop new ones--for installation on CG-47
    class cruisers.

    Mobile remote emitter simulator (MRES)

        The budget request contained $4.9 million for weapons range
    support, but did not include funding to procure MRES systems.
        The MRES is a ground-based threat simulator system that
    provides in-flight electronic threat training to aircrews. The
    Navy currently operates outdated electronic combat simulator
    systems at two fixed sites on the east coast of the United
    States. The MRES system would provide both updated threat
    simulation and allow this training to be conducted at other
    locations. Therefore, to improve the quality and availability
    of electronic combat training, the committee recommends an
    increase of $9.5 million to procure two MRES systems for the
    Atlantic test range component of the Naval Air Warfare Center.

    Self-contained breathing apparatus (SCBA)

        The budget request contained $14.1 million for fire
    fighting equipment, but did not include funding to procure
    oxygen breathing apparatus used for shipboard firefighting.
        The committee notes that the Navy is attempting to replace
    antiquated oxygen-breathing apparatus used for shipboard
    firefighting with a more user-friendly and efficient system.
    The committee understands that in fiscal year 1996, the Navy
    successfully completed testing of a non-developmental,
    commercial off-the-shelf SCBA in the fleet and, as a result,
    recently directed that SCBAs be procured and installed on all
    Navy ships. Given the improved performance of these systems and
    their contribution to shipboard survivability, the committee
    recommends an additional $23.0 million to begin outfitting the
    fleet with SCBAs.

    Sonobuoys

        The budget request contained $54.8 million for the
    procurement of AN/SSQ-36, AN/SSQ-53E, AN/SSQ-62E and Signal
    Underwater Sound (SUS) sonobuoys. The budget request did not
    contain any funding for the AN/SSQ-57 or the AN/SSQ-110
    sonobuoys.
        The Navy formerly maintained the equivalent of a five-year
    stockpile of sonobuoys based on peacetime consumption rates.
    However, today's inventory has been reduced to only one and
    one-half to two times the annual peacetime consumption rate and
    the committee understands that the level of funding contained
    in the budget request will not allow the Navy to meet inventory
    requirements for the execution of even one major regional
    conflict. Furthermore, the committee notes that the Chief of
    Naval Operations identified additional sonobuoy procurement
    among the top ten unfunded procurement priorities for fiscal
    year 1998. To address this inventory shortage, the committee
    recommends an increase of $45.8 million. The committee expects
    this increase to be distributed as follows: $1.5 million to
    restore and stabilize the inventory of AN/SSQ-36s at required
    levels; $23.7 million to meet AN/SSQ-53 inventory shortfalls;
    $4.5 million to retrofit the current inventory of AN/SSQ-57
    sonobuoys to meet changing threat acoustic signatures; $8.6
    million to restore and stabilize the inventory of SSQ-62s; $5.0
    million to continue to upgrade the existing inventories of the
    AN/SSQ-110 with shallow-water capabilities and safety
    enhancements; and $2.5 million to restore and stabilize the
    inventory of the SUS sonobuoy.

    Surface ship sonar windows and domes

        The budget request did not contain funding for surface ship
    sonar windows and domes.
        In fiscal year 1996, Congress authorized and appropriated
    funds to ensure that essential support services and ongoing
    product improvement initiatives would continue for surface ship
    sonar windows and domes. However, the committee understands
    that the Department of the Navy has reprogrammed these funds
    for other purposes and has jeopardized the completion of a
    Navy-initiated product improvement. This product improvement
    employs a structural acoustic glass-reinforced plastic-and-
    rubber sandwich material system which, in tests thus far,
    demonstrates superior performance, lower life-cycle costs, and
    reduced manufacturing and procurement costs over the current
    rubber-only system. Accordingly, the committee recommends $6.0
    million to complete the ongoing product improvement initiative
    for the structural acoustic sandwich material system for
    surface ship sonar domes.

    Surface ship torpedo defense (SSTD)

        The budget request contained $344 thousand for SSTD but did
    not include funding for the procurement of countermeasure
    systems or acoustic devices.
        The SSTD system, which consists of the AN/SLQ-25A towed
    torpedo countermeasure, the AN/SLQ-25B torpedo countermeasure
    set, and the launched expendable acoustic device, enhances ship
    survivability against both advanced acoustic and non-acoustic
    homing torpedoes. The committee understands that the current
    program funds equipment for only 53 surface combatants, leaving
    over 200, including aircraft carriers, unprotected. Since the
    worldwide torpedo threat continues to proliferate, the
    committee recommends an increase of $12.6 million to add this
    capability to additional surface combatants and urges the
    Secretary of the Navy to adequately fund this program in future
    budget requests.

    TB-23 towed array

        The budget request contained $78.0 million for submarine
    acoustics, of which approximately $8.0 million is for the
    refurbishment and upgrade of 20 TB-23 towed arrays.
        The TB-23 is one of four towed arrays employed by
    submarines to passively detect other ships, thereby enhancing
    their ability to determine ship activity in an area of
    operations. The committee understands that the TB-29, the
    newest towed array of the four, is currently undergoing a
    program restructure due to the high cost of the first 10
    systems and, as a result, approximately 55 TB-23s will require
    refurbishment to fully outfit the Navy's attack and ballistic
    missile submarine fleets. Fifteen of these 55 systems will be
    refurbished with funds provided in fiscal year 1997, in
    addition to the 20 in the fiscal year 1998 budget request.
    Accordingly, the committee recommends an increase of $8.0
    million to refurbish and upgrade the remaining 20 TB-23s in
    order to restore the towed array inventory to needed readiness
    levels.

    WSN-7 ring laser gyro (RLG)

        The budget request contained $31.6 million for navigation
    equipment, including $12.3 million for the procurement of nine
    WSN-7 RLGs. The WSN-7 has been selected as the common RLG for
    all surface and submarine fleets.
        The committee recommends an increase of $18.0 million for
    procurement and installation of 18 additional WSN-7 RLGs. This
    increase would allow the Navy to significantly accelerate the
    replacement of high-maintenance-cost WSN-1, WSN-2, WSN-3, and
    WSN-5 ship navigation systems in the surface and submarine
    fleets with theWSN-7 RLG ship navigator. According to fleet
    commanders, this accelerated procurement would maximize cost savings
    and improve fleet performance.

                           Procurement, Marine Corps

                                    Overview

        The budget request contained $374.3 million for
    Procurement, Marine Corps in fiscal year 1998. The committee
    recommends authorization of $442.8 million for fiscal year
    1998.
        The committee recommends approval of the request except for
    those programs adjusted in the following table. Unless
    otherwise specified, adjustments are without prejudice and
    based on affordability considerations.

                           Items of Special Interest

    Communications and electronics infrastructure support
        The budget request contained $41.8 million for
    Communications and Electronics Infrastructure Support, of which
    $17.5 million was included for upgrades to base
    telecommunications infrastructure.
        The Commandant of the Marine Corps has designated
    communications upgrades for Marine bases as the number one
    unfunded priority for fiscal year 1998. These upgrades will
    vastly improve the telecommunications infrastructure at Marine
    Corps Air Stations (MCAS) Beaufort and Cherry Point, at Marine
    Corps Base (MCB) Quantico and Marine Corps Air Ground Combat
    Center (MCAGCC) Twenty Nine Palms with state-of-the-art fiber
    optic voice and data technology and ensure they are fully
    compatible with the digital Defense Messaging System.
    Additionally, the leased telephone system at MCAS Beaufort,
    which is presently at saturation level, will be replaced with a
    government-owned Integrated Services Digital Network-capable
    system. To support the Marine Corps' growing demands for
    modeling and simulation, telemedicine, optical disk imagery
    transmission and video teleconferencing, the committee
    recommends an increase of $42.6 million to be allocated as
    follows:

                            [In millions of dollars]

    MCAS Beaufort.....................................................   5.4
    MCAS Cherry Point.................................................  19.4
    MCB Quantico......................................................   8.8
    MCAGCC Twenty Nine Palms..........................................   9.0

    Javelin

        The budget request contained $42.1 million for procurement
    of 194 Javelin antitank missiles and 140 command launch units.
        The Javelin, which is jointly procured with the Army, is a
    man-portable, fire-and-forget, antitank weapon capable of
    defeating all known and projected armor threats. The committee
    believes that this improved warfighting capability is necessary
    for early entry Marine forces to achieve dominance on the
    battlefield and, therefore, recommends an increase of $17.0
    million for procurement of 186 additional missiles.

    Marine enhancement program

        The budget request did not contain funding for a Marine
    enhancement program.
        The committee recommends $10.0 million to be expended at
    the discretion of the Commandant of the Marine Corps for
    purposes of procuring emerging advanced technology equipment
    that would increase the warfighting effectiveness of the force
    or equipment that would eliminate identified deficiencies of
    currently-fielded items. Thecommittee directs the Commandant to
    provide a report to the congressional defense committees not later than
    March 31, 1998, that details the expenditure of these funds

                        Aircraft Procurement, Air Force

                                    Overview

        The budget request contained $5,817.8 million for Aircraft
    Procurement, Air Force in fiscal year 1998. The committee
    recommends authorization of $6,770.9 million for fiscal year
    1998.
        The committee recommends approval of the request except for
    those programs adjusted in the following table. Unless
    otherwise specified, adjustments are without prejudice and
    based on affordability considerations.

                           Items of Special Interest

    B-1 modifications
        The budget request contained $114.2 million for B-1
    modifications, but did not include funding to procure a digital
    data link for this aircraft.
        The committee notes that the Air Force Chief of Staff's
    fiscal year 1998 unfunded priority list included as the fifth
    highest priority a request for funding to provide a limited
    capability and to develop tactics and concepts for employment
    of a digital data link on the B-1 fleet. Such a data link
    allows the fighter and bomber fleets--the ``shooters''--to
    receive real-time, secure, and jam-resistant targeting
    information from aircraft such as the Airborne Warning and
    Control System or the Joint Surveillance and Target Attack
    Radar System--the ``sensors.'' This linked information improves
    an aircrew's situational awareness, operational coordination
    among shooter aircraft, and in-flight re-targeting of emerging
    higher priority targets. It also contributes to the positive
    identification of both airborne and ground forces, thereby
    contributing to the elimination of friendly fire. The committee
    endorses the requirement to include the B-1 on the Department's
    primary data link and recommends $24.0 million to install a
    stand-alone Joint Tactical Information Distribution System
    terminal and display on up to six B-1 aircraft for this
    purpose.
    B-2
        The budget request contained $174.1 million for the B-2
    bomber. These funds are requested for costs associated with
    additional software investment, technical orders, interim
    contractor support, aircrew training devices, peculiar support
    equipment, program management administration, and non-recurring
    costs for curtailment of the B-2 production line.
        Having held two hearings on the B-2 since the committee
    concluded its fiscal year 1997 authorization deliberations, the
    committee is convinced of the need to continue production of
    this bomber. No less than seven former secretaries of defense
    have recommended doing so, as have numerous other former senior
    leaders of the Air Force and the Congress. Likewise, current
    Air Force leaders privately acknowledge that they would welcome
    more B-2s in the bomber inventory, except that they are
    ``unaffordable.'' The committee rejects this ``unaffordable''
    assertion and strongly believes the United States can afford
    additional B-2s.
        Twenty-one B-2s does not constitute an adequate force level
    to deal with the many likely contingencies and crises over the
    next 30-40 years, and no other military systems in existence or
    on the drawing boards can adequately substitute for the
    capabilities the B-2 offers. As noted in testimony presented to
    the committee by the former air component commander in the
    Persian Gulf war, the B-2 is the only weapon system in the U.S.
    inventory free of range, survivability, and lethality
    limitations, and, as such, could well be the nation's only
    practical option for quickly projecting truly decisive power in
    future regional crises.
        On April 1, 1997, the B-2 reached its initial operational
    capability milestone. According to a statement issued by the
    commander of the Air Force's Air Combat Command, ``This is a
    significant milestone in ensuring the future of national
    defense. The combination of low observability, large payload
    capacity, bombing accuracy, and long range gives America a
    unique, unprecedented military capability. This combination
    allows the B-2 to penetrate sophisticated defenses and threaten
    an enemy's war-making capability. It gives the United States
    the capability to project power to any part of the globe within
    a matter of hours and deliver combat power with precision in
    support of warfighting commands.'' The committee agrees that
    the B-2's combination of range, payload, precision weapons
    delivery, and stealth make it uniquely capable of independently
    responding quickly and decisively from secure U.S. bases to
    future contingencies anywhere in the world--and thus justify
    its continued production. Accordingly, the committee recommends
    an additional $331.2 million for the B-2. This amount
    represents an increase of $353.0 million to initiate the
    eventual procurement of an additional nine B-2s coupled with a
    decrease of $21.8 million, which was requested for production
    curtailment costs. Of the $353.0 million added, $281.0 million
    is for reestablishment of those elements of the production line
    that have been previously laid away and $52.0 million is for
    advance procurement.

    C-130J

        The budget request contained $49.9 million for one C-130J
    aircraft. No funds were requested for advance procurement of C-
    130Js and no funds were requested for the Marine Corps tankers.
        The committee recommends an increase of $522.6 million for
    nine additional aircraft. Three of these are to be configured
    as tankers for the Marine Corps and six are for Air National
    Guard units, including one EC-130J variant.

    F-16 digital terrain system (DTS)

        The budget request did not contain funding for the F-16
    DTS. The DTS provides ground collision avoidance information to
    pilots, thereby contributing to safer aircraft operations at
    night and in low visibility.
        The committee understands that the DTS, which is currently
    in production to upgrade the F-16s owned by Norway, Denmark,
    the Netherlands, Belgium, and Taiwan has completed flight
    certification and been declared fully certified for use on Air
    Force F-16s. The committee further understands that the Air
    Force plans to purchase DTSs to equip its active, Guard, and
    Reserve F-16 fleets beginning in fiscal year 1999 and is in the
    process of modifying the F-16's operational flight program to
    accommodate the DTS integration. In order to initiate
    procurement of the F-16 DTS in fiscal year 1998, the committee
    recommends an additional $20.0 million.

    Global air traffic management (GATM)

         The budget request contained $20.6 million for the GATM
    upgrades.
         The committee is aware that the world is experiencing a
    tremendous growth in air traffic that has necessitated a
    significant change in the manner by which both commercial and
    military aircraft will be controlled and managed in the future.
    To handle this expected increase, a new management system,
    approved by the International Civil Aviation Organization
    (ICAO), is being designed to reduce the distance required
    between transiting aircraft and to allow pilots more freedom in
    selecting their routes and altitudes.
        Implementation of this new system, however, requires new or
    upgraded equipment for communications, global navigation,
    flight management, and collision avoidance. The committee
    understands the Air Force has already undertaken steps to
    ensure that future aircraft will include this equipment.
    However, the problem lies with upgrading aircraft currently in
    the fleet, especially airlift and tanker aircraft. Since the
    specific ICAO requirements have only recently been published,
    the Air Force was unable to include funding in the fiscal year
    1998 budget request for much of the equipment it needs to begin
    modifying existing aircraft to meet these requirements. In
    fact, the Air Force Chief of Staff has advised the committee
    that GATM equipment is the second highest priority for
    additional funding. Accordingly, the committee recommends an
    additional $67.7 million to procure GATM equipment.

    H-1 modifications

        The budget request contained $2.8 million for UH-1
    modifications, but none of these funds were for inclusion of an
    oil debris detection system (ODDS) as part of an upgrade to the
    aircraft's engine diagnostic system.
        As noted elsewhere in this report, the ODDS modification,
    which has been incorporated on all Army UH-1s, alerts aircrews
    of debris in engine and propeller gear boxes, thereby allowing
    flights to be terminated prior to a catastrophic engine
    failure. It also clears particles that routinely accumulate in
    engine oil and cause false impending engine failure alarms,
    resulting in unnecessary termination of aircraft missions as
    well as unnecessary and costly engine diagnostics.
    Consequently, the ODDS not only enhances aircrew safety and but
    also reduces operating and support costs. The committee is
    impressed by the results of the ODDS installation on Army UH-1s
    and recommends an increase of $800,000 for the installation of
    this system on the Air Force UH-1 fleet.

    Joint primary aircraft training system (JPATS)

         The budget request contained $65.4 million for JPATS,
    including 18 T-6A aircraft and associated ground-based training
    equipment.
        The JPATS, consisting of both the T-6A aircraft and a
    ground-based training system, will be used by both the Air
    Force and the Navy for primary pilot training. The T-6A will
    replace both the Air Force's T-37B and the Navy's T-34C fleets,
    providing safer, more economical and more effective training
    for future student pilots.
        The Air Force began procurement of the T-6A in fiscal year
    1995, and the Navy plans to begin procurement in fiscal year
    2000. The committee notes that the Air Force Chief of Staff
    included the acquisition of additional T-6As in his list of
    unfunded priorities for fiscal year 1998. Accordingly, the
    committee recommends an increase of$12.2 million for four
    additional aircraft. The committee understands that this action will
    reduce the fiscal year 1998 unit cost by $100,000 per aircraft and
    contribute to the accelerated reduction of Air Force primary pilot
    training direct operating costs, since the T-6A is approximately 30
    percent less expensive to operate than the T-37B.

    Predator unmanned aerial vehicle (UAV)

        The budget request contained $116.5 million for 15 Predator
    UAVs.
        The Predator was acquired as an advanced concept technology
    demonstration (ACTD) program in response to an urgent
    requirement identified by the Joint Chiefs of Staff (JCS) in
    1993 and is the first ACTD to make the transition to a
    production program. The committee is aware of the success of
    the Predator in a number of continental United States
    exercises, as well as two operational deployments to Bosnia,
    and supports the full number of systems validated by the JCS.
    However, the committee notes that the request does not include
    funds needed for attrition aircraft or for spares and,
    therefore, recommends $30.0 million for these purposes.

    RC-135

        The budget request did not contain funding for re-engining
    RC-135 reconnaissance aircraft.
        The committee notes that $145.0 million was authorized to
    re-engine six RC-135 aircraft in the National Defense
    Authorization Act for Fiscal Year 1997 (Public Law 104-106).
    The committee remains convinced the RC-135 will continue to be
    the workhorse of the manned special reconnaissance fleet well
    into the 21st century and is disappointed that, despite
    previous assurances to the contrary, continuation of this
    effort remains unfunded in the fiscal year 1998 budget.
    Nevertheless, the committee is persuaded by the General
    Accounting Office's analysis of the re-engining program, which
    concluded that the Department can expect to realize savings of
    over $1.5 billion with new engines compared to operating and
    maintaining the current TF-33 engines on these aircraft.
    Accordingly, the committee recommends an additional $52.0
    million to re-engine two RC-135 aircraft.

    Senior Year Electro-Optical System (SYERS)

        The budget request contained $141.5 million for continued
    procurement of spares and repair parts for the U-2 aircraft and
    sensors. Because the U-2 SYERS imagery satisfies a large
    percentage of theater commanders' imagery requirements, the
    committee is committed to ensuring the availability of this
    aircraft and the viability of its sensors. The committee
    understands that the request does not adequately fund either
    upgrades to existing components of or required additional spare
    parts for SYERS. Accordingly, the committee recommends an
    increase of $5.0 million for these purposes.
        Congress initiated and sustained for several years an
    upgrade to the SYERS imaging sensor which among other things
    would allow it to be carried in the ``Q-bay'' of the U-2, such
    that a radar sensor and the SYERS electro-optical sensor could
    be flown simultaneously. This initiative appeared to Congress
    to be well worth the small investment in SYERS, since in
    wartime this dual capability could free another U-2 aircraft to
    fly other missions.
        The committee has now learned that the aircraft fuselage
    may have to be modified in order to carry SYERS in the Q-bay.
    Specifically, a ``canoe'' would have to be added to allow the
    camera to image beyond 45 degrees. In view of this fact, the
    committee directs the Secretary of the Air Force to provide a
    report to the congressional defense and intelligence committees
    by March 15, 1998, on the need and the costs to design and
    procure the number of ``canoes'' necessary to allow SYERS and a
    radar sensor to flown simultaneously.

    Theater Airborne Warning System (TAWS)

        The budget request contained $67.1 million for defense
    airborne reconnaissance program modifications, but did not
    contain funding for TAWS, a medium-wave infrared (MWIR) sensor
    system capable of detecting and calculating the launch points
    of tactical ballistic missiles. TAWS is currently deployed on
    the Cobra Ball RC-135 reconnaissance aircraft.
        In the statement of the managers accompanying the
    conference report on H.R. 3230 (H. Rept. 104-724), the
    conferees urged the Air Force to proceed with a program to
    install TAWS on the Rivet Joint RC-135 aircraft, which is
    available in greater numbers than the Cobra Ball. Such a
    program would provide an option for early deployment of TAWS in
    support of improved theater ballistic missile defenses.
    However, the Department has opted instead to install this
    capability on the Airborne Laser (ABL).
        The committee understands that the ABL is not scheduled to
    reach initial operational capability until 2003. The long
    intervening period during which TAWS would remain only on the
    very few Cobra Ball aircraft would not meet the near-term need
    for a theater ballistic missile analysis and warning
    capability. Furthermore, the Air Force plans to acquire no more
    than seven ABL aircraft, a force structure too small to assure
    that TAWS would be available when and where needed.
        The committee believes this important mission is best
    satisfied by a reconnaissance aircraft. Therefore, the
    committee recommends an increase of $20.0 million to migrate
    the MWIR TAWS technology from the Cobra Ball RC-135 to the
    Rivet Joint RC-135 to enhance near-term deployment flexibility.

                       Ammunition Procurement, Air Force

                                    Overview

        The budget request contained $404.0 million for Ammunition
    Procurement, Air Force in fiscal year 1998. The committee
    recommends authorization of $437.0 million for fiscal year
    1998.
        The committee recommends approval of the request except for
    those programs adjusted in the following table. Unless
    otherwise specified, adjustments are without prejudice and
    based on affordability considerations.

                         Missile Procurement, Air Force

                                    Overview

        The budget request contained $2,557.7 million for Missile
    Procurement, Air Force in fiscal Year 1998. The committee
    recommends authorization of $2,389.2 million for fiscal year
    1998.
        The Committee recommends approval of the request except for
    those programs adjusted in the following table. Unless
    otherwise specified, adjustments are without prejudice and
    based on affordability considerations.

                           Items of Special Interest

    AGM-65 maverick modifications
        The budget request did not contain funding for AGM-65
    modifications.
        The committee understands that 12,000 early-generation
    models of this anti-tank weapon are approaching 20 years
    service life and require upgrading to further extend their
    longevity, particularly since the Maverick has been identified
    as a weapon to be employed by the Joint Strike Fighter. To
    alleviate this problem, the Air Force has completed the
    development of a reliability and maintainability upgrade to
    these missiles, but the committee further understands that
    funds to begin production of the upgrade are not anticipated
    until fiscal year 1999 or later. The committee is aware that
    the gap between the completion of testing and the beginning of
    production could significantly increase the cost of the
    upgrade, as well as unacceptably delay its fielding. Therefore,
    the committee recommends an increase of $11.0 million to
    eliminate any such gap with low-rate production and to ensure a
    smooth transition to full-rate production, which the committee
    assumes will occur in fiscal year 1999.

    AGM-130

        The budget request contained $1.5 million for AGM-130
    management administration and contractor support, but did not
    include funding to procure additional AGM-130 missiles.
        The AGM-130 is a precision-guided air-to-surface missile
    employed on the F-15E aircraft to strike targets from outside
    point defense ranges and is the F-15E's only 2,000-pound class
    weapon with this capability. The committee is aware that both
    the Department's Heavy Bomber Force Study and a separate study
    conducted by the Defense Science Board recommended that the Air
    Force retain 1,000 AGM-130 missiles in its inventory. In view
    of this fact, and to address the unfunded requirement
    identified by the Air Force Chief of Staff, the committee
    recommended an increase of $95.0 million in fiscal year 1997
    for an additional 250 missiles. Recognizing that the
    requirement for the AGM-130 still exceeds the number of
    missiles funded in prior years by over 200, the committee
    recommends an increase of $41.0 million for an additional 100
    missiles.

    Medium launch vehicle (MLV)

        The budget request contained $165.8 million for the MLV
    program.
        The Air Force has identified $14.8 million in excess prior
    year funds in this program resulting from lower-than-expected
    cost growth and launch failure recovery activities that are no
    longer required. Of this total, $5.0 million was recommended
    for rescission in H.R. 1469, the Fiscal Year 1997 Supplemental
    Appropriations Act. The committee notes that the remaining
    balance of these excess funds are available to meet fiscal year
    1998 MLV requirements and, consequently, recommends $156.0
    million, a $9.8 million reduction.

    Titan space boosters

        The budget request contained $555.3 million for Titan IV
    boosters and related equipment and launch support activities.
        The Air Force has identified $204.0 million in excess prior
    year funds in the Titan program. Of this total, $122.0 million
    was recommended for rescission in H.R. 1469, the Fiscal Year
    1997 Emergency Supplemental Appropriations Act. The committee
    notes that the remaining balance of these excess funds are
    available to meet fiscal year 1998 Titan IV requirements.
    Consequently, the committee recommends $473.3 million, a
    decrease of $82.0 million.

                          Other Procurement, Air Force

                                    Overview

        The budget request contained $6,561.3 million for Other
    Procurement, Air Force in fiscal year 1998. The committee
    recommends authorization of $6,574.1 million for fiscal year
    1998.
        The committee recommends approval of the request except for
    those programs adjusted in the following table. Unless
    otherwise specified, adjustments are without prejudice and
    based on affordability considerations.

                           Items of Special Interest

    Air Force satellite control network (AFSCN)
        The budget request contained $32.2 million for the AFSCN.
        The committee understands that $9.0 million was authorized
    and appropriated in fiscal year 1997 for an AFSCN hardware
    purchase to support a classified program. The committee has
    been informed, however, that the Air Force canceled this
    hardware purchase because of a delay in the classified program
    and a resulting shift in plans to support it. The committee
    notes that the funds for this purchase are now available to
    meet fiscal year 1998 AFSCN requirements and recommends $23.2
    million, a reduction of $9.0 million.
    Automated surface observation system (ASOS)
        The budget request contained $18.0 million for weather
    observation/forecast equipment but did not include funding for
    ASOS. ASOS is the only federally-sanctioned automated weather
    observation system and is being procured by the Federal
    Aviation Administration, the National Weather Service, and all
    of the military services.
        The committee understands that the Navy and Marine Corps
    have funded their planned systems but that there are unfunded
    requirements for a stand-alone ASOS at both Air Force and Army
    air combat training ranges. The committee believes that
    accurate and timely weather information is a matter of pilot
    safety and recommends an increase of $4.0 million to purchase
    20 ASOSs for these ranges. The committee further recommends
    that the Air Force, as executive agent for this system,
    identify the total remaining requirements for both services and
    fund these requirements in the future years defense program.
    Joint situational awareness system (JSAS)
        The budget request did not contain funding for the JSAS.
        The committee is aware of the significant progress made by
    the Air Force in providing theater-wide situational awareness
    to joint task force commanders through the JSAS. The JSAS has
    proven to be a highly-effective, low-cost, real-time, user-
    friendly intelligence fusion system and represents a building
    block for greatly expanded capabilities. The committee believes
    the Air Force should pursue integrating the JSAS into the
    Global Command and Control System and recommends an additional
    $6.3 million for this purpose.
    Radio equipment
        The budget request contained $12.8 million to procure new
    and upgrade existing Air Force radio equipment, including $12.2
    million to replace and upgrade high frequency (HF) radio
    communications systems with commercial-off-the-shelf equipment
    at 14 locations worldwide, a program known as Scope Command.
        The committee is pleased with the progress of the Scope
    Command program and notes that there is an opportunity to
    capitalize on this investment with the forthcoming
    implementation of the Global Air Traffic Management (GATM)
    system, discussed elsewhere in this report. The committee
    understands that GATM implementation will place renewed
    emphasis on HF communications to satisfy requirements for
    maintaining beyond-line-of-sight contact with aircraft, and,
    therefore, recommends an increase of $6.5 million to cost-
    effectively augment the ongoing Scope Command equipment upgrade
    to meet these requirements.

    Tactical signals intelligence support

        The budget request contained $4.1 million for tactical
    signals intelligence support.
        The committee fully supports the Department of Defense's
    efforts to coordinate intelligence data broadcasts to the
    warfighters and recommends an increase of $5.0 million to
    accelerate the procurement of hardware and software to fully
    implement the Integrated Broadcast Service technical/
    operational architecture.

                           Procurement, Defense-Wide

                                    Overview

        The budget request contained $1,695.1 million for
    Procurement, Defense-Wide in fiscal year 1998. The committee
    recommends authorization of $1,837.0 million for fiscal year
    1998.
        The committee recommends approval of the request except for
    those programs adjusted in the following table. Unless
    otherwise specified, adjustments are without prejudice and
    based on affordability considerations.

                           Items of Special Interest

    All-torso body armor
        The committee notes that the extraordinary effectiveness of
    modern all-torso body armor was demonstrated during Operation
    Provide Hope in Somalia when a group of 98 all-torso body
    armor-equipped Army Rangers surrounded by a much larger number
    of Somali militiamen took extremely heavy fire for many hours,
    involving direct hits on 78 to 80 percent of its personnel, and
    yet withdrew as a thoroughly combat-capable unit. The committee
    understands that some Rangers took as many as three hits on
    their all-torso body armor yet remained combat-effective,
    although essentially all of these hits were subsequently judged
    to likely have been fatal or disabling had the armor not been
    worn. It is unlikely that few, if any, Rangers in this
    firefight would have survived, if a large fraction of them had
    not remained combat-capable due to the effectiveness of their
    body armor.
        Subsequent Army studies and analyses indicate that more
    than 50 percent of all life-threatening wounds sustained in
    combat such as this firefight would be prevented by the use of
    such armor. Not unimportantly, these analyses indicate that the
    costs of procuring and employing such modern high-technology
    body armor are a small fraction of combat-related medical costs
    which would be avoided by use of this armor. Moreover, morale
    gains by infantrymen due to the combat effectiveness of body
    armor may also be expected to be a significant force-
    multiplier.
        For the above reasons, the committee recommends an increase
    of $30.0 million to procure state-of-the-art all-torso body
    armor of the quality to stop most shrapnel and small arms fire
    for Army, Marine Corps, and special forces infantrymen.
    Automated document conversion system (ADCS)
        The budget request did not contain funding for the ADCS.
        The committee notes that for the past five years the
    Department has conducted extensive testing of an ADCS and
    concluded that significant cost savings can be achieved by, for
    example, converting hard copy complex engineering drawings to
    an electronic format. These tests have also proven the
    flexibility of this system for converting electrical system
    schematics and contour maps as well. The committee understands
    that the latest document conversion test disclosed that the
    average savings of ADCS compared to computer-aided redrawing is
    50 percent and compared to hand-drawn work is 70 percent.
    Consequently, as it has for each of the past two fiscal years,
    the committee strongly supports the ADCS program and recommends
    $30.0 million for continued purchase of ADCS software.
    Information systems security
        The budget request contained $19.6 million for information
    systems security.
        As a result of its hearing on information warfare, where
    for the first time all of the Department of Defense's corporate
    information officers were present in one forum, thecommittee
    was pleased to learn that the global threat of information warfare is
    an issue which the Department has taken extremely seriously. However,
    the committee is concerned that the number of attempted intrusions into
    the Department's unclassified networks has been occurring with
    increasing frequency. While the Department is meeting the challenge
    with a well-organized system to protect against would-be intruders,
    detect those who attempt to intrude, and react to those that do
    intrude, the committee is convinced that much more needs to be done,
    especially at the worldwide locations of the theater Commanders-in-
    Chief (CINCs). Although the committee recognizes that there are plans
    to fully secure the CINCs' information links, it believes that these
    plans require expediting. Consequently, the committee recommends an
    increase of $50.0 million to implement network intrusion devices,
    firewalls, multi-level security assurance guards and other equipment in
    order to ensure the secure operation of these links as soon as it is
    possible to do so.

                      National Guard and Reserve Equipment

                                    Overview

        The budget request did not contain funding for National
    Guard and Reserve Equipment for fiscal year 1998. The committee
    recommends authorization of $700.4 million for fiscal year
    1998.

                           Items of Special Interest

    AC-130 gunship
        The committee has reviewed the Department of Defense's AC-
    130 gunship requirements study and believes the operational
    shortfalls identified are valid. The committee requests the
    Department provide a report to the congressional defense
    committees by March 31, 1998 on the potential cost
    effectiveness of using the Air National Guard to meet this
    shortfall.
    Army force wide digitization
        The committee notes that the recently-concluded Quadrennial
    Defense Review (QDR) findings included unqualified support for
    the Army's Force XXI digitization efforts and that the digital
    attack or armed scout helicopters will perform an important
    ``quarterback'' function in that battlefield scenario. The
    committee concurs with this analysis. Indeed, the committee
    recommends a total of $715.3 million for both AH-64 Longbow
    Apache digital attack and OH-58D Kiowa Warrior armed scout
    helicopters elsewhere in this report.
        Nevertheless, the committee is concerned that plans to
    replace AH-1 Cobras in the Army National Guard (ARNG) may not
    be adequately synchronized with Army-wide digitization plans.
    This may be due to the fact that the Army Aviation Plan has not
    been updated since the completion of the QDR.
        Accordingly, the committee expects the Secretary of the
    Army and the Director of ARNG Bureau to review and align AH-1
    Cobra replacement plans for the ARNG consistent with the QDR
    findings as they apply to the Army's digitized battlefield. The
    committee also expects the fiscal year 1999 budget request to
    reflect the results of this review as appropriate.

               Chemical Agents and Munitions Destruction, Defense

                                    Overview

        The budget request contained $620.7 million for Chemical
    Agents and Munitions Destruction, Defense for fiscal year 1998.
    The committee recommends authorization of $610.7 million for
    fiscal year 1998.
        The committee recommends approval of the request except for
    those programs adjusted in the following table. Unless
    otherwise specified, adjustments are without prejudice and
    based on affordability considerations.

                           Items of Special Interest

    Chemical agents and munitions destruction
        The budget request contained $620.7 million for the defense
    chemical agents and munitions destruction program, including
    $472.2 million for operations and maintenance, $66.3 million
    for research and development, and $82.2 million for
    procurement.
        Section 152 of the National Defense Authorization Act for
    Fiscal Year 1996 (Public Law 104-106), directed the Secretary
    of Defense to conduct an assessment of the chemical stockpile
    disposal program and to consider measures that could be taken
    to reduce program costs, while continuing to ensure maximum
    protection of the public and the environment. The results of
    the assessment were to be reported to the Congress with the
    submission of the fiscal year 1998 budget request. Section 142
    of the National Defense Authorization Act for Fiscal Year 1997
    (Public Law 104-201) further required that the Secretary of
    Defense conduct an assessment of alternative demilitarization
    technologies (other than incineration) that could be used for
    destruction of the chemical stockpile and report the results of
    this assessment to the Congress by December 31, 1997. Section
    8065 of the Omnibus Consolidated Appropriations Act for Fiscal
    Year 1997 (Public Law 104-208) directed that the Under
    Secretary of Defense (Acquisition and Technology) conduct a
    pilot program to identify and demonstrate not less than two
    alternatives to the baseline incineration process and appoint a
    program manager for these activities who would report directly
    to him.
        Based upon the results of a hearing which addressed all of
    the aforementioned concerns, the committee affirms its
    previously-held views that the risks of continued storage of
    the chemical weapons stockpile exceed those associated with
    demilitarization operations. Therefore, the committee believes
    that the demilitarization program should proceed expeditiously
    with the current baseline incineration program until such time
    as the evaluation of alternative technologies for destruction
    of the stockpile is concluded. The committee also notes that
    continued delays in the program will lead to further cost
    increases.
        However, the committee also agrees with the Department's
    decision to further develop chemical neutralization
    technologies for destruction of agents at the bulk-only
    chemical storage sites and with its plan for assessing the
    feasibility of alternative technologies for potential use at
    other chemical stockpile storage sites. The committee directs
    the Secretary of Defense to report to the Congress by December
    31, 1997, the status of that assessment and its potential
    impact on the costs and schedule for completion of destruction
    operations at the Pueblo and Lexington-Blue Grass storage
    sites.
        Of the $63.3 million requested for research and development
    activities, $40.8 million is for the non-stockpile chemical
    materiel project. The committee notes that the project is to be
    completed in the third quarter of fiscal year 2002, and
    believes that this represents too aggressive a schedule in view
    of the overall uncertainties surrounding the project. The
    committee expects that more time will be needed for the Army to
    prove that the proposed disposal systems will safely and
    effectively destroy all non-stockpile materiel and will be
    accepted by the affected states and communities. Accordingly,
    thecommittee recommends a reduction of $10.0 million for non-
    stockpile chemical materiel research and development.

                         Defense Export Loan Guarantees

                                    Overview

        The budget request contained $1.2 million for Defense
    Export Loan Guarantees, Defense for fiscal year 1998. The
    committee recommends authorization of $1.2 million for fiscal
    year 1998.

                             LEGISLATIVE PROVISIONS

                  Subtitle A--Authorization of Appropriations

               Sections 101-108--Authorization of Appropriations

        These sections would authorize the recommended fiscal year
    1998 funding levels for all procurement accounts.

        Section 121--Limitation on Obligation of Funds for the Seawolf
                               Submarine Program

        This section would prohibit the obligation of more than 50
    percent of the funds authorized and appropriated for the
    Seawolf Submarine until the Secretary of the Navy certifies
    that he would fully fund in the future years defense program
    accompanying the fiscal year 1999 budget request 50 percent of
    the resources estimated to be required for incorporation into
    each of the first four New Attack Submarines of the technology
    ``opportunities'' available for those vessels, such
    ``opportunities'' being those presented to the committee in
    testimony by the Assistant Secretary of the Navy (Research,
    Development, and Acquisition).

     Section 122--Report on Annual Budget Submission Regarding the Reserve
                                   Components

        This section would require the Secretary of Defense to
    submit an annual report to Congress that describes the measures
    taken within the Department to ensure that the reserve
    components are appropriately funded and lists the major weapons
    and items of equipment provided for these components. The
    section would also require the Secretary of Defense to display
    in all future years defense program updates the amounts
    programmed for the procurement of equipment for the reserve
    components.
             TITLE II--RESEARCH, DEVELOPMENT, TEST, AND EVALUATION

                                    OVERVIEW

        The budget request contained $35,934.5 million for
    research, development, test, and evaluation (RDT&E),
    representing a $658.9 million decrease from the amount
    authorized for fiscal year 1997.
        The committee recommends authorization of $37,273.7
    million, an increase of $1,339.2 million from the fiscal year
    1998 request.
        The committee recommendations for the fiscal year 1998
    RDT&E program are identified in the table below. Major issues
    are discussed following the table.

                                   Army RDT&E

                                    Overview

        The budget request for fiscal year 1998 contained $4,510.8
    million for Army RDT&E. The committee recommends authorization
    of $4,752.9 million, a increase of $242.1 million.
        The committee recommendations for the fiscal year 1998 Army
    RDT&E program are identified in the table below. Major changes
    to the Army request are discussed following the table.

                           Items of Special Interest

    Advanced field artillery tactical data system
        The budget request contained $39.0 million for the advanced
    field artillery tactical data system (AFATDS). The committee
    supports this vital fire control automation to digitally
    integrate command and control of artillery fire support and
    understands that additional funding is needed to complete
    software development and prevent delay in fielding this system.
    The committee recommends an increase of $12.0 million in PE
    23726A.
    All source analysis system
        The budget request contained $24.0 million for engineering
    development of the all source analysis system (ASAS). The
    committee notes that the ASAS is a critical Army tactical
    intelligence fusion effort essential to the success of the
    Army's Force XXI digitization initiative, and recommends an
    additional $3.5 million in PE 64321A to support the software
    upgrade program for ASAS.
    Armament enhancement initiative
        The budget request contained $40.3 million in PE 63639A for
    the armament enhancement initiative (AEI). The committee
    understands that the tank extended range munition-kinetic
    energy (TERM-KE) offers the potential of significantly improved
    offensive capability for the M-1 tank main armament system. The
    committee recommends $60.3 million for AEI, an increase of
    $20.0 million, to accelerate development of the TERM-KE.
    Army tactical missile system
        The budget request contained $1.3 million in PE 23802A for
    other missile product improvement programs. While the Army
    tactical missile system (ATACMS) is identified as a high
    priority modernization program for precision strike capability,
    no funds were included in the request for missile improvements.
    However, due to recent program restructuring, additional
    funding is required to complete the ATACMS block upgrade
    program. The committee supports the ATACMS program and
    recommends $3.2 million for ATACMS product improvement.
    Aviation advanced technology
        The budget request contained $7.1 million in PE 63801A for
    aviation advanced technology. The committee understands that
    the Army is exploring retinal display technology, a new
    development which revolutionizes the manner in which aircraft
    cockpit displays can be presented to military aircraft crews.
    Specifically, retinal display technology uses the human retina
    as the focal plane for images beamed into the eye, creating a
    high fidelity, full color image directly on the human visual
    system. Utilization of this technology would enable major
    improvements in aircraft cockpit design. The committee
    recommends $12.1 million, an increaseof $5.0 million for
    further development and integration of retinal display technology into
    the Army's aircrew integrated common helmet.

    Aviation advanced technology development

        The budget request contained $6.6 million for aircraft
    demonstration engines in PE 63003A. The committee is informed
    of the potential benefits of scramjet technology for future
    advanced missiles and recommends an increase of $8.0 million to
    develop this capability.

    Ballistics technology

        The budget request contained $33.3 million for ballistics
    technology in PE 62618A. The committee understands that liquid
    propellant technology offers a significant increase in
    capability for future artillery systems, and that additional
    funding is needed to support completion of the liquid
    propellant armament technology maturation program. The
    committee is also aware that the Army has placed a high
    priority on development of electric armament technology for the
    future tank and supports efforts to resolve fundamental issues
    including power generation and switching.
        The committee recommends $38.3 million for PE 62618A, an
    increase of $5.0 million for liquid propellant armament
    technology.

    Battlefield Combat Identification System (BCIS)

        The budget request contained $14.8 million for combat
    identification development. The committee continues to support
    the development of a battlefield combat identification system
    as a means of preventing friendly fire casualties. Recent
    advanced warfighting experiments have demonstrated the benefits
    of and requirement for better battlefield situation awareness.
        The committee supports the budget request of $14.8 million
    and urges the Secretary of the Army to maintain the high
    priority placed on development and procurement of a battlefield
    combat identification system and to ensure requested BCIS
    funding is used only to support that initiative.

    CH-47 improved cargo helicopter

        The budget request contained $2.6 million for aircraft
    modifications/product improvement programs in PE 23744A. The
    Chinook CH-47 helicopter is the Army's only heavy lift cargo
    helicopter. The committee notes that there is no program in the
    Army modernization plan for a new replacement helicopter and,
    therefore, strongly recommends that the Army continue the
    improved cargo helicopter (ICH) program which will provide
    essential upgrades and extend the Chinook service life by
    twenty years. The proposed modifications are projected to
    reduce Chinook operating and sustainment costs by more than 22
    percent. The committee recommends an increase of $20.0 million
    for the CH-47 ICH program.

    Comanche

        The budget request contained $282.0 million in PE 64223A
    for continued development of the Comanche helicopter.
        The committee notes that Comanche development began in 1982
    with the first planned initial operational capability (IOC)
    scheduled for 1994. The Department's most recent selected
    acquisition report (SAR) indicates that the planned date to
    begin engineering manufacturing development has been delayed to
    the end of fiscal year 2001, with the soonest possible IOC
    being December, 2007. While Comanche is reported to be one of
    the Army's highest priority programs, it is currently
    identified by the Army Chief of Staff as under-funded, calling
    into question the actual importance of Comanche to Army
    modernization.
        Results of recent warfighting experiments at the national
    training center strongly support the requirement for a modern
    armed reconnaissance helicopter in the digital battlefield. The
    committee supports the planned testing and engine development
    including production of a second Comanche prototype which will
    allow a robust demonstration and validation program and
    therefore recommends $322.0 million, an increase of $40.0
    million to accelerate the second prototype Comanche.

    Combat vehicle and automotive advanced technology

        The budget request contained $32.7 million for combat
    vehicle and automotive advanced technology. The committee is
    impressed by the advances reflected in the composite armored
    vehicle advanced technology demonstration and recommends an
    increase of $3.0 million in PE 63005A, including $2.0 million
    for the composite experience base program to strengthen
    materials initiatives, and $1.0 million to support the electric
    drive for survivability initiative.

    Combat vehicle and automotive technology

        The budget request contained $33.1 million in PE 62601A for
    combat vehicle and automotive technology. The committee
    understands that a number of combat vehicles are now carrying
    additional equipment weight which requires engines of greater
    horsepower density to maintain or improve combat performance.
    The high output diesel engine (HODE) would offer the potential
    of significant increases in horsepower for combat vehicles. The
    committee recommends an additional $1.0 million to support HODE
    testing by the Army's National Automotive Center (NAC).
        The budget request also contained $12.4 million for
    advanced automotive technology within PE 62601A. The committee
    notes that the program funding for fiscal year 1998 was
    projected last year to be $8.4 million, but was increased by
    $4.0 million to fund the advanced automotive technology
    necessary to support the National Automotive Center's
    Technology Demonstration III. The committee also recommends an
    additional $3.0 million to continue testing of commercial
    technologies critical to new vehicle development and vehicle
    upgrades, in the NAC's Technology Demonstration III program.
        The committee understands that new alternatives to common
    vehicle propulsion technology are being developed by the public
    and private sector that offer significant benefits to the
    military, such as reduced pollution, lower operating cost, and
    noise reduction. The committee supports a unified effort to be
    administered by the NAC to assess and develop promising
    alternative vehicle propulsion technologies such as natural
    gas, fuel cell power plant,electric drive, and other propulsion
    innovations and improvements, and recommends an increase of $7.0
    million for a joint effort using academic, industry and government
    resources to develop alternative propulsion.
        The committee recommends $44.1 million for combat vehicle
    and automotive technology in PE 62601A, an increase of $11.0
    million.

    Combat vehicle improvement programs

        The budget request contained $136.5 million for ground
    combat vehicles horizontal technology integration within PE
    23735A. Field emission flat panel display technology is of
    increasing importance as the Army incorporates digitization
    technology into its fleet of vehicles. The committee strongly
    supports development of this important technology and
    recommends an additional $2.0 million to integrate these
    displays into the Abrams tank. The committee also recommends an
    increase of $8.0 million to continue development of the AN/VVR-
    1 Laser Warning Receiver.
        The committee is aware of the successful development of
    Linebacker slew-to-cue technology and recommends an additional
    $10.1 million to complete development and integration of this
    capability into the Bradley vehicle. The committee recommends
    $156.6 million for combat vehicle improvement programs, an
    increase of $20.1 million.

    Countermine technology development and demonstration program

        The budget request contained $8.7 million in PE 62712A,
    $10.6 million in PE 63606A, and $15.1 million in PE 63619A for
    countermine technology.
        The committee is pleased with the increased emphasis that
    the Department has placed on the countermine program and with
    the Department's response to direction from the committee
    contained in the committee report on H.R. 3230 (H. Rept. 104-
    563). The committee notes the Department's March 1997 report
    ``Unexploded Ordnance Clearance: A Coordinated Approach to
    Requirements and Technology Development,'' and the Department's
    progress in establishing a requirements-driven research and
    development program for unexploded ordnance (UXO) clearance
    technology that is designed to coordinate and leverage
    technology advances in the areas of countermine, explosive
    ordnance disposal, humanitarian demining, active range
    clearance, and UXO environmental remediation. The Department's
    report addresses a total of $174.6 million contained with in
    the budget request for technology development to support UXO
    clearance, including $141.7 million for development of
    countermine technology, $7.5 million for explosive ordnance
    disposal, $17.7 million for humanitarian demining, $1.0 million
    for active range clearance, and $4.3 million for environmental
    UXO remediation. This represents an increase of $44.1 million
    above that provided for the countermine program in fiscal year
    1997.
        The committee is encouraged by measures the Department is
    taking to ensure focused oversight of operational requirements
    and coordination of the development of countermine and other
    UXO clearance technology and also notes the creation of the UXO
    Center of Excellence, a joint service activity which will
    coordinate technology activities in the five UXO clearance
    mission areas and provide a clearing house for UXO technology
    and information with industry, academia, other government
    agencies, and U.S. international partners.
        The committee recognizes that there are many areas of
    commonality, but also significant differences among the UXO
    clearance mission areas. The committee also recognizes that no
    single ``Silver Bullet'' technology exists that is likely to
    solve the UXO clearance problem and that a UXO clearance
    ``system of systems'' which makes use of a range of
    technologies will be required. The committee strongly urges the
    Department to continue a robust countermine and other UXO
    clearance research and development program which investigates,
    demonstrates, and evaluates emerging technologies and continues
    the development and fielding of those that show promise for
    improving countermine and other UXO clearance capabilities.
    Accordingly, the committee recommends an increase of a total of
    $11.0 million for the development of countermine technology,
    including $3.0 million in PE 62712A, $5.0 million in PE 63606A,
    and $3.0 million in PE 63619A. The committee directs that the
    Secretary of Defense provide to the Congressional defense
    committees an updated report on the development and fielding of
    UXO clearance technology with the submission of the Fiscal Year
    2000 budget request.

    Electromechanics and hypervelocity physics

        The budget request contained $45.6 million in PE 61104A for
    Army university and industry research centers. The committee
    recommends an increase of $1.9 million in the program for basic
    research in electromechanics and hypervelocity physics.

    Electronics and electronics devices

        The budget request contained $20.2 million for electronics
    and electronic devices, of which $2.2 million was for battery/
    individual power technologies within PE 62705A. Battery
    technology is increasingly important as the armed forces shift
    to digital technology. Continued innovation is necessary to
    provide more affordable power sources which will also be more
    portable, reusable and more efficient in order to meet the
    increasing power demands of new weapons systems and equipment.
    The committee strongly supports development of technologies
    such as advanced high-energy battery systems, low cost reusable
    and no-lead added alkaline cells and recommends that the
    Secretary of the Army continue these efforts.
        Up to 50 percent of the backpack weight carried by forward-
    deployed Army and special forces troops is comprised of
    electrical batteries to power the increasing number of
    electronic weapons and communication systems. No lightweight
    field battery recharging capability presently exists to enable
    the reuse of power sources to minimize the amount of batteries
    that must be carried to the field. The resultant additional
    weight in batteries thereby limits other essentials for field
    operations, such as food, weapons, ammunition and supplies.
        The committee is aware of research efforts sponsored by the
    Defense Advanced Research Projects Agency for the development
    of the PEP-100, a standard-combustion fuel-driven, man-portable
    thermophotovoltaic generator (TPV). TPV technology has
    demonstrated that it can provide up to 110 watts of power, and,
    if proven feasible, may supply a 12-man, 12-day patrol with a
    portable, quiet, low thermal signature electrical power
    generator.
        The committee recommends an increase of $5.0 million for
    further development and testing of a TPV generator to provide
    soldiers and special forces with a much-needed field battery
    recharging capability. The committee also recommends an
    additional $3.0 million for development of improved
    manufacturing technology.
        The committee recommends $28.2 million, an increase of $8.0
    million.

    Environmental quality technology

        The budget request contained $17.5 million for
    environmental quality technology within PE 62720A. The
    committee notes that no funding is specifically identified to
    continue the development of computer models to remediate
    training areas, or to continue support of the Radford
    Environmental Development and Management Program (REDMAP). The
    committee strongly supports these initiatives to enhance
    environmental quality and directs the Secretary of the Army to
    ensure that these efforts are adequately supported within the
    funding authorized for environmental quality technology
    research.
        The committee also supports continuation of the joint
    effort of the U.S. Army Environmental Center and the U.S.
    Department of Agriculture to demonstrate the efficacy and cost
    effectiveness of agriculturally based bioremediation to restore
    contaminated military and civilian sites in geographically
    isolated Pacific island ecosystems. In particular, the
    committee supports demonstration of phytoremediation,
    composting, wetlands, and other agriculturally based
    technologies to restore lands and related resources and
    recommends that an increase of $4.0 million to continue the
    existing Bioremediation Education Science and Technology
    program.
        Additionally, the committee recommends an increase of $4.9
    million for the continued development of a computer-based land
    management model to reduce time and costs for training area
    recovery.

    Family of heavy tactical vehicles

        The budget request contained no funding for engineering and
    manufacturing development for the family of heavy tactical
    vehicles (HTV). The committee understands that safety systems
    are being developed to protect HTV crew members from accidents
    involving impacts and rollovers. The committee recommends $1.3
    million to develop enhanced safety products for HTVs.

    Force XXI architecture

        The budget request contained $11.1 million for command,
    control, and communications systems engineering development in
    PE 64805A. The committee is aware of the Army emphasis on
    digitization for Force XXI and the high priority of its
    architecture development. The committee supports acceleration
    of the Army's highest priority unfunded requirement, and
    recommends an increase of $5.0 million.

    Healthcare information protection demonstration

        The budget request contained $9.6 million in PE 33140A for
    the Army's information systems security program.
        The committee understands that the use of advanced
    information and communication technology, which provides the
    ability to transfer patient information and medical histories
    among military and civilian health care providers, raises
    significant issues relative to the need to maintain the
    security and privacy of healthcare data for military personnel
    who may receive treatment in civilian and military healthcare
    facilities. The committee believes there is a need to establish
    an integrated and focused program for the development and
    demonstration of healthcare information security systems which
    would address these issues. The committee recommends an
    increase of $2.5 million in PE 33140A to initiate a
    demonstration program for military healthcare information
    protection that would be consistent with national healthcare
    and information protection initiatives. The committee directs
    the Secretary of the Army to report to the Congressional
    defense committees the program development plan, plan for
    evaluation of the demonstration, and funding requirements for
    the program with the submission of the fiscal year 1999 Defense
    budget request.

    Human factors engineering technology

        The budget request contained $14.3 million for human
    factors engineering technology. The committee understands that
    the Army is exploring the potential of emergency medical team
    coordination (MedTeams) to provide enhanced battlefield medical
    support and recommends an increase of $5.1 million in PE 62716A
    for development of the MedTeams capability.

    Information systems technology, information superiority, and
            information security

        The budget request contained approximately $10.3 billion
    for Department of Defense information systems and information
    technology, including $544.4 million for information systems
    and information technology research, development, test, and
    evaluation. Of that amount, $306.0 million was for information
    security research, development, test, and evaluation.
        The committee views with great interest the development of
    information systems technology and the increasing use of, and
    dependence on information systems in the Department of Defense
    and in the nation as a whole. Rapidly advancing information-
    based technologies and an increasingly competitive global
    environment have thrust information into center stage in
    society, government, and warfare. Increasingly, complex
    information systems are being integrated into traditional
    military operational disciplines such as mobility, logistics,
    command, control, communications, and intelligence, and
    increased emphasis is being placed on the use of the commercial
    information infrastructure.
        The committee believes that the application of information
    and information technology in our military forces, combined
    with the supporting infrastructure in the Department of
    Defense, and our national life will offer greatly increased
    capabilities, but also will require that the Administration
    begin to treat information technology as a strategic resource
    vital to our national security. Inherent in these new
    capabilities, information technology also creates potentially
    serious vulnerabilities that could be exploited by an
    adversary, as the military and other elements of national power
    become increasingly dependent upon information systems and
    information capabilities. The vulnerability of information
    infrastructures to attack and the linkage between information
    systems and the traditional critical infrastructures (such as
    the electrical power system) have increased the scope and
    potential of the information warfare threat.
        The promise of information technology as a key ``enabler''
    to achieve superiority on future battlefields, the
    vulnerabilities that information technology brings, and how
    theDepartment of Defense plans to protect against these vulnerabilities
    provided the focus for a committee hearing in March 1997. The committee
    also heard testimony on the findings and recommendations of the 1996
    Defense Science Board Task Force on Information Warfare-Defense. The
    task force report cited a robust information infrastructure as critical
    to the future effectiveness of U.S. military forces and the need for
    extraordinary action to deal with the present and emerging challenges
    of defending against possible information warfare attacks on the United
    States.
        The committee commends the efforts taken to develop and
    institutionalize the use of common information architectures
    within the Department of Defense, to improve policies and
    management practices, and to create a Department-wide
    environment that promotes interoperability and integration
    among the military services and defense agencies. The committee
    notes the efforts that are underway to protect and assure the
    integrity of the Defense and national information
    infrastructures. The committee also notes that the budget
    request for the information systems security program in PE
    33140G includes an increase of $56.6 million above the fiscal
    year 1997 funding level.
        The committee supports the maintenance of a robust
    information systems security research and development program.
    Accordingly, the committee recommends the following increases
    to the budget request:
              (1) $2.0 million in PE 63006A for tactical internet
            command and control protection;
              (2) $6.7 million in PE 65604A for information
            operations/warfare survivability analysis of command,
            control, communications, and computers/information
            electronic warfare systems;
              (3) $1.6 million in PE 33150A for development and
            application of information protection measures for the
            Army's component of the global command and control
            systems for the U.S. European Command; and
              (4) $2.7 million in PE 33140F for the Air Force
            information protection program.
        The committee directs the Secretary of Defense to report to
    the Congressional defense committees with the submission of the
    fiscal year 1999 budget, an assessment of the progress in the
    Department's information systems security program that
    addresses the current status of the program, specific actions
    being taken on the recommendations of the 1996 Defense Science
    Board Task Force on Information Warfare-Defense, and additional
    actions that should be taken to assure the increased security
    and integrity of the Defense information infrastructure. The
    report shall also address measures necessary to assure the
    integrity of those elements of the national information
    infrastructure and critical national infrastructure on which
    the Defense information infrastructure depends, and
    identification of any additional resources and legislative
    authority which may be required.

    Integrated family of test equipment

        The budget request contained $2.6 million in PE 64746A for
    automatic test equipment. The committee understands that
    additional funding is required to continue development and
    upgrading of the integrated family of test equipment (IFTE),
    including completion of the electro-optics test facility and
    software upgrades for the portable on-system repair tool. The
    committee recommends an increase of $2.3 million to continue
    the IFTE program.

    Joint service small arms program

        The budget request contained $4.8 million for the joint
    service small arms program within PE 63607A. The objective of
    this program is to demonstrate key technologies leading to more
    effective small arms weapons and munitions for all services,
    including such technology as the objective individual combat
    weapon (OICW). The committee supports this initiative and
    recommends an increase of $5.5 million to expedite development
    of the OICW. The committee notes the relevance of the Advanced
    Lightweight Anti-armor Weapon System (ALAWS) warhead technology
    to the Objective Crew Served Weapons System. The Defense
    Science Board 1996 Summer Study Task Force on Tactics and
    Technology for the 21st Century stated that there is a need for
    man-portable weapons to be capable of engaging a range of
    targets, from adversary soldiers to adversary armor.
    Accordingly, the committee recommends an additional $1.5
    million for continued warhead development.
        The committee recommends $11.8 million for the joint
    service small arms program, an increase of $7.0 million.

    Life support for trauma and transport

        The budget request contained $18.4 million in PE 62712E for
    military medical and trauma care technologies, $8.8 million in
    PE 62787A for combat casualty care technology, and $6.8 million
    in PE 63807A for medical systems advanced development.
        The Army's budget justification included $3.3 million for
    continued evaluation and refinement of sensors, surgical and
    evacuation technology, including the life support for trauma
    and transport (LSTAT) Pod and the advanced surgical suite for
    trauma casualties (ASTEC). Developed under a Defense Advanced
    Research Projects Agency project, the LSTAT pod is a single-
    patient, intensive care and life support capability that would
    be used to maintain life support and stabilization of
    battlefield casualties during their evacuation from the front
    line for higher echelon medical treatment. Four of these units
    are expected to complete air-worthiness testing and achieve
    Food and Drug Administration approval during fiscal year 1997.
    The Army is leading the joint service test program. The
    committee believes that the LSTAT pod represents a major
    advance in battlefield medical care and strongly supports an
    expedited development and evaluation process which would lead
    to early achievement of an initial operating capability and
    accelerated fielding of the system for battlefield use by all
    the services. Accordingly, the committee recommends an increase
    of $1.0 million in PE 62787A and $5.0 million in PE 63807A to
    accelerate the development program and the joint developmental
    and operational test of the LSTAT. The committee directs the
    Secretary of the Army to report to the Congressional defense
    committees the plan for completing the joint service test
    program and plans for fielding the LSTAT and other advanced
    battlefield life support and evacuation systems with the
    submission of the fiscal year 1999 Defense budget request.

    Logistics advanced technology

        The budget request contained $35.5 million for logistics
    advanced technology. The committee is aware of the increasing
    importance of suppression of infrared (IR) signature on
    thebattlefield. The committee recommends an increase of $2.0 million in
    PE 63001A for further development of IR suppression fabrics for combat
    uniforms.

    Missile/air defense product improvement

         The budget request contained $17.4 million for missile/air
    defense product improvement within PE 23801A. The Patriot
    system, which provided vital air defense during Operation
    Desert Storm, is being upgraded through enhanced communications
    and other system improvements to respond to the evolving air
    and cruise missile threat. The committee is also aware of
    efforts to develop block II modifications to the Stinger
    Missile to provide enhanced performance. The committee supports
    continuation of these initiatives and recommends $34.1 million,
    an increase of $10.0 million for Patriot PAC-3 missile upgrades
    and an increase of $6.7 million for Stinger block II
    modifications. The Secretary of the Army may use existing PAC-3
    missiles from inventory to support development of a cruise
    missile defense capability.

    Missile and rocket advanced technology

        The budget request contained $117.1 million for missile and
    rocket advanced technology in PE 63313A.
        The missile and rocket technology program included $1.0
    million for future missile technology. The committee is aware
    of potential cost and performance benefits for future missiles
    from the use of composite materials and structures and
    recommends an increase of $6.0 million for this program.
        The budget request included $57.7 million for the enhanced
    fiber optic guided missile (EFOG-M) program. Development of
    this technology has been plagued since its inception by
    technical problems and changing priorities. To date, only
    aircraft mounted captive carry testing of the sensor has been
    performed, and only surrogate missiles are planned during the
    remainder of the Advanced Concept Technology Demonstrator
    (ACTD) before committing to procure 300 user operational
    evaluation missiles. The Army has continued to develop EFOG-M,
    which requires operator control from launch until impact, even
    though it now states requirements for smart, fire and forget
    weapons based on modern technology. The committee recommends no
    funds for EFOG-M and directs the Secretary of the Army to
    restructure the ACTD program to require flight testing of
    prototype weapons before any missile production is approved.
        The committee recommends authorization of $65.4 million in
    PE 63313A, a decrease of $51.7 million.

    Missile defense battle integration center

        The budget request contained $5.0 million for the battle
    integration center (BIC). The Army is building a flexible
    distributed interactive simulation-based architecture which can
    operate in regimes of training, exercises and military
    operations, as well as providing support to advanced concept
    development. The committee understands that this effort has
    been identified as an Army priority, yet it is insufficiently
    funded. The committee recommends an increase of $14.0 million
    in PE 63308A to continue development of the BIC as an
    integrated battlelab with the capability to provide high
    fidelity representation of the modern battlefield.

    Munitions manufacturing technology

        The budget request contained $44.3 million in PE 78045A for
    the Army's manufacturing technology program. The current
    munitions research, development, and production base, which
    emphasizes the use of high volume, single purpose production
    lines and was built to fight the Cold War and needs to be
    reshaped to meet the requirements of the 21st Century.
    Achieving superiority on the 21st century battlefield within
    today's austere defense budget will require the development of
    munitions that are smart, light-weight, affordable, and capable
    of being produced in a reasonable time frame, at a reasonable
    cost, and in short production runs.
        The committee recommends an increase of $15.0 million for
    munitions manufacturing technology. This increase should be
    used to accelerate key munitions manufacturing technologies in
    composites, electronics, energetics, power supplies and metal
    parts that would reduce the cost of future munitions and permit
    both government and commercially owned munitions production
    facilities to produce research and development and production
    quantities of munitions concurrently, adapt design changes and
    product improvements quickly, and make short production runs
    feasible and cheaper. The committee encourages the Secretary of
    the Army to maintain the increased funding level for munitions
    manufacturing technology in the fiscal year 1999 budget
    request.

    Passive millimeter wave camera

        The budget request contained $3.5 million for ground combat
    identification technology in PE 62120A. The committee is aware
    that the passive millimeter wave camera technology is reaching
    maturity, and recommends an increase of $5.0 million.

    Persian Gulf illness clinical trials program

        The budget request included $74.7 million in PE 62787A for
    medical technology.
         The committee has been deeply concerned about the health
    problems experienced by veterans of the Persian Gulf War. The
    committee understands that although there are many ongoing
    studies investigating risk factors which may be associated with
    these health problems, there have been no studies which examine
    health outcomes and the effectiveness of the treatment received
    by the veterans. Testimony presented in hearings on Persian
    Gulf War illness and the medical literature indicate there are
    therapies, such as cognitive behavioral therapy, which have
    been effective in treating patients with symptoms similar to
    those seen in many Persian Gulf veterans. The committee
    recommends an increase of $4.5 million for the establishment of
    a program of multi-site cooperative clinical trials by the
    Department of Defense and the Department of Veterans Affairs to
    assess the effectiveness of protocols for treating veterans of
    the Persian Gulf War who suffer from ill-defined or undiagnosed
    conditions. Such protocols should include, but not be limited
    to, a multi-disciplinary treatment model, of which cognitive
    behavioral therapy is a component.

    Plasma energy pyrolysis system

        The budget request contained no funds for the plasma energy
    pyrolysis system (PEPS). The committee is aware that PEPS
    offers the potential to render hazardous waste, including
    medical and chemical, into an inert glass slag by-product. The
    committee recommends an increase of $8.7 million in PE 62720A
    to complete development and construction of a mobile PEPS unit
    to deal with environmental hazards.

    Projectile detection and cueing (PDCue)

        The committee continues to support the projectile detection
    and cueing (PDCue) program for Army evaluation in PE 62120A.
    The committee is aware that the Army Research Laboratory (ARL)
    will receive prototypes this fiscal year and plans to
    incorporate mobile HMMWV capability and deliver the system for
    evaluation under the Military Operations in Urban Terrain
    (MOUT) Advanced Concept Technology Demonstration program. To
    accelerate the program the committee recommends an increase of
    $2.5 million for PDCue within PE 62120A.

    Short-range unmanned aerial vehicle

        The budget request contained no funding for short-range
    unmanned aerial vehicles (UAV). The Department, based on lack
    of progress in the tactical unmanned aerial vehicle program,
    which is under close scrutiny for possible cancellation, has
    directed the Services to assess other solutions for UAV
    requirements. The Army has an unfulfilled, validated
    operational requirement for a short-range UAV. The committee
    directs the Secretary of Defense to initiate an Army
    acquisition program for the Department, to develop and procure
    a short-range UAV to fulfill the existing requirement.
    Performance specifications for a short-range UAV are to be as
    defined by the validated operational requirement. The UAV is to
    be equipped with the objective digital data link that is
    compatible with the Army's digital architecture for the future.
    The committee notes that historically, requirements changes and
    upgrading have been, in great part, the cause of many failed
    UAV programs. Therefore, the Department is directed to acquire
    a short-range UAV with minimum development to meet the existing
    validated operational requirement. Subsequent to IOC, as
    appropriate, block changes may be used to implement a pre-
    planned product improvement program.
        The committee notes that technology improvement since
    validation of the operational requirement may allow increased
    range beyond 100 kilometers. The committee directs that the
    range threshold be 100 kilometers with specified endurance,
    while the objective range shall be 200 kilometers.
        The committee recommends $5.0 million in PE 63003A to begin
    development of a short-range UAV for all services having the
    defined requirement. Such development should as much as
    practicable, use mature, existing air vehicle technology and
    include digitization of systems to be compatible with emerging
    digital force architecture.

    Telemedicine

        The budget request contained $10.7 million for advanced
    medical technology within PE 63002A.
        The committee endorses the Army's efforts to improve
    medical response and treatment of soldiers on the battlefield
    but notes, however, that no funds in the budget request were
    specifically identified under a separate project for
    telemedicine. The committee also recognizes the potential value
    of virtual reality emergency medical telemedicine (VREMT)
    efforts designed to improve diagnostics and treatment by combat
    medics. In addition to improving primary care on the
    battlefield, VREMT will also provide an exportable training
    capability. The committee recommends $16.5 million in PE
    63002A, an increase of $2.3 million for telemedicine technology
    and $3.5 million for VREMT.

    Weapons and munitions advanced technology

        The budget request contained $18.3 million for weapons and
    munitions advanced technology in PE 63004A. The committee
    supports this initiative which includes demonstration of a
    precision guided mortar munition that will be evaluated along
    with other new tactics and technologies to provide early entry
    forces the capability to defeat armored forces. The committee
    is aware of the potential benefits of electro-rheological
    fluids recoil for future artillery systems and recommends an
    increase of $5.0 million for associated research.
         The committee is also aware that plastic cased ammunition
    for military use as a service round has been preliminarily
    developed for 5.56mm ammunition. The committee is aware that
    plastic cased ammunition offers potential cost and weight
    savings compared to existing munitions and, therefore,
    recommends an increase of $3.0 million for development and
    certification of this innovative munitions technology.
        The committee recommends $26.3 million for weapons and
    munitions advanced technology, an increase of $8.0 million.

                                   Navy RDT&E

                                    Overview

        The budget request contained $7,611.0 million for Navy
    RDT&E. The committee recommends authorization of $7,947.0
    million, an increase of $336.0 million.
        The committee recommendations for the fiscal year 1998 Navy
    RDT&E program are identified in the table below. Major changes
    to the Navy request are discussed following the table.

                           Items of Special Interest

    Advanced anti-radiation guided missile
        The budget request contained no funds to continue the
    advanced anti-radiation guided missile (AARGM) demonstration
    program.
        AARGM is a Phase III Small Business Innovative Research
    (SBIR) program designed to develop and demonstrate an advanced
    dual-mode seeker on an existing high-speed anti-radiation
    missile (HARM) airframe. The committee has placed a high
    priority on the AARGM program, and believes that the technology
    demonstrated to date shows great promise for providing a
    significantly increased anti-radiation missile capability. The
    committee is concerned, however, that the high level of
    concurrency in the schedule for the AARGM development and
    demonstration results in increased risk to the program and that
    a more sequential development program may be warranted.
    Accordingly, the committee recommends an increase of $35.0
    million in PE 25601N to continue the AARGM program. The
    committee directs the Secretary of the Navy to conduct an
    independent assessment of the program plan, development and
    demonstration schedule, program execution, technical
    performance, and program risk, and report the results of the
    assessment to the Congressional defense committees by March 31,
    1998. The report should also include the Secretary's
    recommendations on revisions to the program schedule and the
    funding required to complete the program.
    Advanced deployable system
        The budget request contained $33.0 million in PE 64784N for
    continued development of the Advanced Deployable System (ADS),
    an element of the Integrated Undersea Surveillance System
    program. The request includes funds for the concept evaluation,
    program definition, and risk reduction phase of an ADS
    prototype and engineering and manufacturing development for
    production of the ADS.
        To meet the requirement for providing reliable detection of
    quieter threat submarines operating in the noisy and shallow
    waters of the world's littoral regions, a significantly
    improved information processing and data fusion capability is
    needed for support of ADS operations. The committee finds the
    budget request to be insufficient for development of these
    capabilities and inadequate to support the conduct of at-sea
    testing to validate performance in challenging littoral
    environments. Accordingly, the committee recommends an increase
    of $10.4 million for continued development and integration of
    automated detection and data fusion algorithms, rapid
    prototyping of information processing capabilities, and at-sea
    testing to validate the expected improvements in ADS
    performance.
    Advanced ranging source
        The budget request contained $16.9 million in PE 64261N for
    engineering and manufacturing development of acoustic search
    sensors.
        The committee recommends an increase of $4.0 million to
    accelerate the development of alternative shallow water-capable
    sound sources in the advanced extended echo ranging (AEER)
    program and ensure that unique acoustic technology is available
    for the advanced ranging source (ARS) and air deployed low
    frequency project (ADLFP) comparative program testing.
    Advanced submarine tactical electronic combat system
        The budget request contained $311.1 million in PE 64558N to
    continue engineering and manufacturing development for the New
    Attack Submarine (NSSN), including $95.8 million for NSSN
    combat system development.
        An integral part of the NSSN combat system is the advanced
    submarine tactical electronic combat system (ASTECS) and the
    integrated electronic support measures mast (IEM). The IEM
    combines communication, radar intercept, and precision
    direction finding capabilities in a single, low observable
    mast. As the precision sensor for the ASTECS, the IEM allows
    the combined system to address the full spectrum of advanced,
    complex radar, communication, and navigation systems that may
    be deployed by adversaries. Both ASTECS and IEM are planned for
    the NSSN, and the IEM for back-fit on SSN-688 and SSN-21 class
    submarines. The committee understands that budgetary
    constraints have resulted in the deferral of several critical
    elements of the IEM and ASTECS program: full implementation of
    IEM precision radar band direction finding; specific emitter
    identification, interception of frequency-agile and cellular
    communications, and international maritime satellite (INMARSAT)
    emissions; development of systems software for automatic data
    correlation, onboard training, and situational awareness; and
    back-fit of IEW. The committee believes these capabilities are
    essential and should be reinstated in the NSSN program.
    Accordingly, the committee recommends an increase of $17.0
    million in PE 64558N to restore the deferred elements of the
    ASTECS/IEM program, including repackaging the non-development
    initiative precision radar direction finding receiver and
    reducing the production cost of the IEM antenna group.
    Anti-submarine warfare systems development
        The budget request contained $22.9 million in PE 63254N for
    development of anti-submarine warfare systems.
        The committee recommends an increase of $3.8 million to
    complete demonstration/validation of sonobuoy geo-positioning
    system integration and transducer enhancements for improving
    the shallow water anti-submarine warfare effectiveness of the
    air deployed low frequency projector.
    AN/WLY-1 submarine acoustic intercept receiver
        The budget request contained $6.1 million in PE 11226N for
    operational systems development of improvements in the
    effectiveness and survivability of all classes of U.S.
    submarines, including continued development and testing of the
    AN/WLY-1 submarine countermeasure detection and control set.
        The AN/WLY-1 is the next generation of submarine acoustic
    intercept receivers and will significantly enhance a
    submarine's ability to respond to threat active sonar and
    acoustic homing torpedoes. Scheduled for initial fleet
    introduction in 2001, the AN/WLY-1 will be deployed on all new
    submarine classes (SSN-21 and NSSN) and will replace the
    current AN/WLR-9 acousticintercept receiver on existing SSN-
    688I submarines. The committee recommends an increase of $8.0 million
    to accelerate the introduction of the AN/WLY-1 in the fleet and back-
    fit on the SSN-688I submarine.

    Arctic oceanographic observation program

        The budget request contained $48.2 million in PE 62435N for
    applied research in oceanographic and atmospheric technologies.
        The committee understands that additional funding is
    required to support the second year of a four-year, cooperative
    science and technology program for the utilization of
    underwater acoustic techniques to determine ocean climate and
    acoustic characteristics in a large ocean basin. The committee
    recommends an increase of $3.0 million and encourages the
    Secretary of the Navy to include funds for completion of the
    program in the fiscal year 1999 Defense budget request.

    Arsenal ship and surface combatant-21 (SC-21)

        The budget request contained $103.0 million in PE 64310N
    and $47.2 million in PE 63763E for the Arsenal Ship program.
    The budget request also included $55.0 million in PE 64567N for
    the Navy's next generation surface combatant, SC-21.
        The Arsenal Ship is a joint Navy-Defense Advanced Research
    Projects Agency (DARPA) program to develop and demonstrate a
    ``proof-of-principle prototype strike warfare ship'' and a new
    paradigm for development and construction of Navy ships. The
    Arsenal Ship is envisioned as a stealthy, highly survivable,
    reduced manpower fire support ship, loaded with as many as 500
    vertical launch cells. Up to five additional Arsenal Ships
    could be procured beginning in fiscal year 2004 should the
    evaluation of the Arsenal Ship demonstrator prove successful.
    The cost of the Arsenal Ship demonstration program is
    approximately $520 million, and the Congressional Budget
    Office's estimate of the cost of a six Arsenal Ship program
    totals $3 billion, plus an additional $2 billion for the
    weapons load for the six ships. The committee understands that
    the Navy envisions the Arsenal Ship as a bridge to the SC-21
    and intends to use the Arsenal Ship demonstrator to evaluate
    various technologies that might be incorporated in SC-21.
        According to recent Navy briefings, the first variant of
    SC-21 will be a land attack destroyer, DD-21, a multi-mission
    ship with 128 vertical launch cells that places an overwhelming
    emphasis on fire support, small crew, reduced signature, and
    significantly reduced life cycle cost. Based on the results of
    the Navy's SC-21 cost and operational effectiveness analysis,
    DD-21 would represent the ``best balance'' of capability
    compared to other options considered. The cost for the SC-21 is
    estimated to be approximately $750.0 million through fiscal
    year 2003, and the Navy indicates that the first potential DD-
    21 construction contract award could be in fiscal year 2004.
    According to the Navy, development of SC-21 is to capitalize on
    the investments made in Arsenal Ship and in the Navy's Smart
    Ship programs.
        Both the House report (H. Rept. 104-563) and the statement
    of managers accompanying the conference report on H.R. 3230 (H.
    Rept. 104-724) agree that Arsenal Ship would be a major defense
    acquisition program and would have to satisfy the major
    acquisition program management issues, such as operational
    requirements validation and cost and operational effectiveness
    analysis. Committee hearings on the Navy's budget request for
    naval ship construction and research and development raised
    issues regarding the Arsenal Ship concept, the development
    schedules for the Arsenal Ship and the SC-21 program, and the
    ability for the lessons learned in the Arsenal Ship
    demonstration to feed into the SC-21 program. These issues have
    not been resolved, despite recent announcements that Arsenal
    Ship is to be merged into the SC-21 program, and the committee
    understands that there has been no change in the Arsenal Ship
    program.
        The committee believes that differences in ship size and
    mission capability between the Arsenal Ship and DD-21, as
    conceived, yield two separate development programs. The
    committee also believes that the overlapping schedules for the
    Arsenal Ship and the SC-21 program do not provide sufficient
    opportunity for the experience gained from the Arsenal Ship
    demonstrator to provide maximum benefit to design and
    construction of the DD-21. The committee further believes that
    the Navy's program, as outlined in the fiscal year 1998 budget
    request, would lead to two parallel, overlapping, and nearly
    simultaneous development programs for future surface
    combatants, each of which meets the criteria for a major
    defense acquisition program. The committee believes that two
    such programs are unaffordable, and that requirements for both
    programs have not yet been validated by the Department of
    Defense.
        The committee therefore recommends no funding for the
    Arsenal Ship in PE 64310N and PE 63763E in fiscal year 1998.
    The committee directs the Under Secretary of Defense
    (Acquisition and Technology) and the Secretary of the Navy to
    review the acquisition strategy for the SC-21 program and to
    determine whether or not a prototyping strategy is appropriate
    for the new surface combatant. The results of the review and
    plans to incorporate such a strategy in the development of SC-
    21 shall be reported to the Congressional defense committees
    with the submission of the fiscal year 1999 budget request.

    Automatic target recognition/optical correlation

        The budget request contained $34.2 million in PE 63609N for
    Navy conventional munitions development, $26.2 million in PE
    63601F for Air Force conventional weapons technology, and $4.8
    million in PE 63232D for automatic target recognition. The
    committee is aware progress is being made in the Director,
    Defense Research and Engineering (DDR&E) automatic target
    recognition (ATR) program and the development of ATR
    technologies for missiles, precision-guided weapons, and target
    cueing for surveillance systems. The DDR&E's January 1997
    report to the Congressional defense committees on optical
    correlation technology describes the progress that has been
    made in the potential weaponization of optical correlation
    technology for these purposes. The committee also understands
    that the Air Force is investigating the use of optical
    correlators for missile applications in its Optical Processor
    Enhanced Ladar program.
        The committee recommends an increase of $8.0 million in PE
    63609N for the development and demonstration of a miniature
    optical correlator for automatic target recognition and
    improved aimpoint selection for the Standard Missile, and an
    increase of $3.5 million in PE 63601F for the development and
    demonstration of a miniature optical correlator for automatic
    target recognition and aimpoint selection for the AGM-130. The
    committee expects the Air Force and the Navy to capitalize on
    current programs for the development of ATR technologyand the
    application of optical correlator technology and to coordinate their
    activities with the DDR&E's ATR program.

    Autonomous underwater vehicle and sonar development

        The budget request contained $48.2 million in PE 62435N for
    oceanographic and atmospheric technologies, including $17.5
    million for applied research in environmental influences on
    mine countermeasures systems and littoral oceanography.
        The committee recommends an increase of $10.0 million to
    continue applied research and exploratory development in
    technologies for advanced sensors and unmanned underwater
    vehicles applicable to mine countermeasures and other littoral
    operations.

    Battle force tactical trainer

        The budget request contained $59.0 million in PE 24571N for
    consolidated training systems development, including $2.9
    million for continued development of the battle force tactical
    training (BFTT) system.
        The committee understands that the BFTT system provides
    opportunities for fleet personnel to achieve and maintain
    combat readiness through coordinated, realistic, stressful,
    combat system team training, and permits the ship's combat
    system team to train on their own equipment while located at
    pier-side. The committee also recognizes that electronic
    surveillance systems aboard naval combatants are integral parts
    of ship and battle force combat systems and the information
    architecture required to conduct naval combat operations
    successfully. To take full advantage of the training capability
    represented by the BFTT system and permit fleet personnel to
    train using all aspects of their operational systems (including
    those that generate classified data), the committee believes
    that these electronic surveillance systems should interface
    with the BFTT system. Accordingly, the committee recommends an
    increase of $5.0 million for the integration of ship and battle
    force electronic surveillance systems into the BFTT system.

    Beach and surf zone obstacle clearance

        The budget request contained $41.6 million in PE 63782N for
    advanced development and demonstration of technology for
    shallow water mine counter-measures.
        The committee is aware of initial testing by the Air Force
    and the Navy that demonstrates the ability of GPU-5 gunpod,
    mounted on an air-cushion landing craft, to breach beach and
    surf zone obstacles safely, quickly, and decisively. The
    committee believes that the system, when proven by further
    testing, offers potential for a relatively low cost, highly
    effective obstacle clearance capability that could be fielded
    quickly to improve the capability of U.S naval and amphibious
    forces operating in the littoral. Accordingly, the committee
    recommends an increase of $750,000 to complete the additional
    testing required to prove the capability.

    Carbonate fuel cells

        The budget request contained $19.2 million in PE 63513N for
    development of shipboard systems non-propulsion machinery
    systems, components, and improvements for current and future
    surface fleet hull, mechanical, and electrical systems.
        The request included funding to continue the program that
    was initiated in fiscal year 1997 for design of a full scale
    ships service molten carbonate fuel cell power plant and
    demonstration of a 500 kilowatt molten carbonate fuel cell. The
    molten carbonate fuel cell demonstration program supports the
    development of high efficiency, dispersed, and environmentally
    friendly power plants for the next generation of surface
    combatants (SC-21) and fleet support vessels. To accelerate
    system and key component development and demonstration and the
    scale-up of the 500 kilowatt demonstrator to a full scale ships
    service electric power plant that could be considered for use
    on the SC-21 future surface combatant, the committee recommends
    an increase of $3.5 million. The committee encourages the
    Secretary of the Navy to include the additional funding
    required to maintain the accelerated schedule for development
    and demonstration of the full scale system in the Navy's budget
    request for fiscal year 1999.

    Commandant's warfighting laboratory

        The budget request contained $34.2 million in PE 63640M for
    the Commandant's warfighting laboratory (CWL) advanced
    technology demonstration.
        The Commandant and the Chairman, Joint Chiefs of Staff
    identified the CWL as a priority un-funded requirement to
    expand experimentation to meet future technologically advanced
    warfighting threats. These experiments and demonstrations focus
    on developing operational and warfighting concepts to enhance
    warfighting capabilities in the next century. Recent advanced
    warfighting experiments have, in particular, demonstrated the
    importance of information provided from relatively low cost
    unmanned aerial vehicles. The committee notes the early results
    from the CWL initiative, and recommends an increase of $24.8
    million for the CWL, including $5.0 million specifically to
    investigate the utility of low-cost close range unmanned aerial
    vehicles as defined by the current operational requirement.

    Composite engineered materials

        The budget request contained $1.7 million in PE 63725N for
    advanced development of materials, electronics and computer
    technologies.
        The committee continues to support the Navy's development
    and use of new and improved materials to address the growing
    backlog and cost of naval shore facility maintenance and
    repair. The committee therefore recommends an increase of $3.0
    million to complete the shore facilities materials program in
    cost-shared research on carbon fiber-reinforced, recycled
    thermoplastic engineered lumber.

    Cooperative engagement capability

        The budget request contained $139.2 million in PE 63658N
    for the cooperative engagement capability (CEC).
        As reflected in the House report (H. Rept. 104-563) on H.R.
    3230 and the statement of managers accompanying the conference
    report on H.R. 3230 (H. Rept. 104-724), the Congresshas
    recognized the CEC program as among the highest priority programs in
    the Navy and the Department of Defense. In testimony during the defense
    posture hearing on the fiscal year 1997 budget request, the Secretary
    of Defense singled out the CEC as a program of high priority that he
    had chosen to accelerate because of its great potential for linking
    units from more than one service together and greatly increasing their
    warfighting capability. The Congressional defense committees agreed
    with the priority established by the Secretary and recommended
    significant increases to the CEC program to accelerate the fielding of
    the capability to the fleet and to accelerate and expand joint service
    integration efforts.
        The committee notes that the Navy's fiscal year 1998 budget
    request for the CEC program is significantly less than
    projected in the fiscal year 1997 Future Years Defense Plan and
    budget justification, and results in a slip of over one year in
    the fielding of the capability to fleet units. The committee
    does not understand the Navy's failure to provide the funding
    required to maintain the accelerated fielding schedule for a
    program that has received such a high priority from the
    Secretary of Defense and from the Congress. The committee
    believes that the Navy has overemphasized programs for new
    naval ``platforms'', at the expense of the warfighting weapons
    systems that would make existing platforms more effective.
        The committee recommends a total increase of $50.0 million
    in PE 63658N for the CEC program: $15.0 million to continue the
    accelerated development of the low cost common equipment set,
    $5.0 million to support transfer of the CEC design and
    development agent to industry, $20.0 million to accelerate
    integration of the CEC into Navy E-2C and P-3 aircraft, $5.0
    million to initiate development of an integrated capability
    between CEC and the ship self defense program, and $5.0 million
    to accelerate joint service integration and demonstration of
    CEC with the Army's Patriot and the Marine Corps' Hawk air
    defense missile systems.

    Cryogenic electronics technology

        The budget request contained $76.7 million in PE 62234N for
    advanced development of materials, electronics and computer
    technologies, including $9.5 million for advanced
    multifunctional radio frequency system support technology, and
    $9.2 million in PE 62712E for development of cryogenic
    technologies.
        The committee understands that cryogenic electronics and
    high temperature superconductivity technology may offer the
    potential for achieving significant improvements in the ability
    of future radar systems to detect and track low-flying targets
    in clutter. The committee is aware that the Defense Advanced
    Research Projects Agency and the Office of Naval Research are
    demonstrating notable performance gains through the use of
    cryogenic electronics and high temperature superconductivity
    technology in analog and digital electronic components. The
    committee is also informed that the application of these
    technologies may permit the development of advanced RF
    receiver/exciter subsystems that could be common to a wide
    range of radar applications and could result in significant
    reductions in the cost of future radar systems. Accordingly,
    the committee recommends an increase of $3.0 million in PE
    62234N to continue the development of superconducting waveform
    generator and analog-to-digital converter technology.

    CVN-77 research and development

        The budget request contained $17.9 million in PE 64567N for
    aircraft carrier contract design for the CVN-77.
        The Navy has stated that CVN-77 will provide a transition
    from the Nimitz-class nuclear aircraft carrier to the next-
    generation CV(X). As such, CVN-77 is a candidate for
    development, evaluation, and incorporation of a range of
    advanced technologies and acquisition reform initiatives which,
    not only could result in lower life cycle costs, but could also
    set the standard by which further improvements in the
    application of advanced technologies and acquisition
    initiatives to the design and construction of the CV(X) will be
    measured. Accordingly, the committee recommends an increase of
    $17.0 million to accelerate the evaluation of maturing advanced
    technologies for potential incorporation in the design of CVN-
    77.

    CV(X) carrier systems development

        The budget request contained $90.2 million in PE63512N for
    future aircraft carrier research and development.
        The committee notes that this request represents an
    increase of $84.5 million above the amount appropriated for
    fiscal year 1997 and $88.4 million above that projected for
    fiscal year 1998 in the fiscal year 1997 Future Years Defense
    Plan. The increase is planned for advanced development of a
    range of advanced technologies for potential incorporation in
    the design and construction of the next-generation CV(X)
    aircraft carrier.
        The committee notes that the Joint Requirements Oversight
    Council approved a mission needs statement (MNS) for a New
    Tactical Aviation Sea-Based Platform for the 21st Century, the
    CV(X), in March 1996. The committee understands that among the
    potential alternatives that may compete with CV(X) in meeting
    the operational requirements of the MNS are the Mobile Offshore
    Base (MOB) and the Arsenal Ship, as well as land-based
    aircraft. The committee further understands that MOB studies in
    support of the CV(X) cost and operational effectiveness
    analysis have just been initiated. The committee also notes
    that the budget request includes funding for an Arsenal Ship
    demonstration that could lead to procurement of up to five
    Arsenal Ships. The committee is concerned that the issues
    raised in the committee report on H.R. 3230 (H. Rept. 104-563)
    and the statement of managers accompanying the conference
    report on H.R. 3230 (H. Rept. 104-724) relative to the need for
    validation of the Arsenal Ship operational requirement and
    performance analysis have not yet been addressed by the Navy.
        In view of the above, the committee believes that it is
    neither fiscally nor technically prudent to increase advanced
    carrier systems research and development for the CV(X) to the
    degree sought by the Navy. The committee believes that
    increased emphasis should be placed on the research and
    development program for the CNV-77, and elsewhere in this
    report, has recommended an increase to the research and
    development program for the CVN-77 aircraft carrier to provide
    a transition to the CV(X). The committee recommends that
    funding for carrier systems research and development for the
    CV(X) be held to the level originally projected for fiscal year
    1998 and recommends a decrease of $88.4 million

    E-2 eight-blade composite propeller system

        The budget request contained $64.9 million in PE 24152N for
    operational systems development of preplanned product
    improvements in E-2C aircraft and weapon system capabilities,
    including $39.4 million for E-2C mission system improvements.
        The committee is aware that the Navy is seeking solutions
    to operational limitations encountered with the propeller
    system used on E-2C and C-2A aircraft. The current propeller
    system incorporates technology developed in the 1950's and the
    1960's, is difficult and expensive to maintain, is no longer in
    production, and is a frequent cause of E-2C aircraft not being
    operationally ready. The committee is also aware of proposals
    to develop an eight-blade composite propeller for E-2C and C-2A
    aircraft that might also be retrofitted to Navy P-3 and C-130
    aircraft. The committee understands that the cost of developing
    and producing the new propeller system could be recovered in
    four to five years as a result of reduced operation and support
    costs for the aircraft. Accordingly, the committee recommends
    an increase of $10.0 million to initiate a 24 month program for
    development and demonstration of an eight-blade composite
    propeller system for the E-2C. The committee encourages the
    Secretary of the Navy to include the funds for completion of
    the development program in the fiscal year 1999 defense budget
    request.

    Extended range guided munition

        The budget request contained $37.8 million in PE 63795N for
    land attack systems technology.
        The committee strongly supports a naval surface fire
    support (NSFS) program which focuses on near term and far term
    improvements to naval fire support systems: development and
    demonstration of an extended range guided projectile (ERGM)
    which would incorporate advanced, low cost, global positioning
    system/inertial navigation system (GPS/INS) guidance
    technology; improvements in the existing Mk 45 5-inch naval
    gun; demonstration of the Army's tactical missile system
    (ATACMS) and other missile systems for NSFS applications; and
    development and demonstration of technologies to satisfy the
    Navy's long term requirements for advanced gun systems. The
    committee believes that the Navy must continue to place a high
    priority on the program and accelerate the fielding of near
    term capabilities to correct the existing shortfall in naval
    surface fire support capabilities. Accordingly, the committee
    recommends an increase of $15.1 million in PE 63795N to
    complete the development and commence integration of a fire
    control system to support the achievement of initial
    operational capability of the advanced 5''/62 caliber gun and
    the ERGM in DDG 81, planning and land-based testing of the 5''/
    62 gun, and risk reduction and testing of the ERGM projectile
    and propellant. Elsewhere in this report, the committee
    recommends increases to the NSFS program for a naval ATACMS,
    and advanced, miniaturized GPS/INS guidance and control.

    F/A-18E/F super hornet

        The budget request contained $317.0 million in PE 24136N
    for the F/A-18 fleet. The committee understands that $267.5
    million of this amount is for the F/A-18E/F Super Hornet and
    that funding for this program has increased $114.2 million over
    the amount forecast in the 1997 Future Years Defense Plan
    (FYDP).
        The committee has expressed great concern, described in
    detail elsewhere in this report, over the unaffordable pace of
    tactical aviation (TACAIR) modernization being pursued by the
    Department. Of the three most costly TACAIR programs in the
    Department's request--the Air Force F-22 Raptor, the Navy F/A-
    18E/F Super Hornet, and the Joint Strike Fighter--the Super
    Hornet was recently approved by the Department to enter
    production, even prior to final recommendations by the
    Quadrennial Defense Review and National Defense Panel.
        The committee is unaware of any justification to support
    such a large increase in this year's research and development
    request for the Super Hornet over the recently forecast funding
    level identified in the 1997 FYDP. Therefore, the committee
    recommends $202.8 million for the F/A-18 fleet, a decrease of
    $114.2 million for the F/A-18E/F.

    F/A-18F Tactical Reconnaissance

        The budget request contained no funding for developing the
    F-14 Tactical Air Reconnaissance Pod System (TARPS) Completely
    Digital (CD) capability.
        The committee understands that the Navy plans to replace
    the F-14 Tactical Air Reconnaissance Pod System (TARPS) with an
    electro-optical podded system for the F/A-18F Super Hornet. The
    committee has closely monitored the technical issues and
    difficulties experienced by the Marine Corps with the
    internally mounted Advanced Tactical Reconnaissance System
    (ATARS) for the F/A-18D. These issues, combined with the
    expected costs and extent of modifications to the F/A-18F if an
    internally mounted sensor were chosen, point to a podded
    reconnaissance capability as a more cost-effective and flexible
    approach for Navy fighter aircraft.
        Therefore, the committee supports the Navy's decision to
    develop a non-dedicated podded reconnaissance capability for
    the Super Hornet. The committee expects that the Navy will
    adhere to this decision and stresses that it will not favor any
    future request for development of an internally mounted F/A-18
    reconnaissance capability. The committee believes that the Navy
    should, to the extent possible, ensure that the TARPS
    development be transferable to the F/A-18F pod. To ensure that
    the latest technologies are provided to the user, the committee
    directs that the development and procurement of the F/A-18F
    podded system be awarded competitively.
         The committee has followed the TARPS digital imagery (DI)
    electro-optical (EO) improvements and is pleased with the
    results of this interim, but limited, capability. However, the
    committee believes there is a need to move to a production EO
    capability with a larger format backplane that provides both
    better resolution and a larger target area field-of-view, and
    understands that the TARPS CD development would provide such a
    capability at significantly less cost than a Navy purchase of
    the Advanced Tactical Airborne Reconnaissance System (ATARS).
        Based on the successful results from the interim DI
    efforts, the committee is convinced that CD will provide a cost
    effective EO tactical manned reconnaissance capability to
    replace the current film-based F-14 pods. Therefore, the
    committee recommends $5.0 million in PE 24136N for TARPS CD
    non-recurring engineering. The committee directs the Navy to
    move to TARPS CD production as expeditiously as possible.

    Free electron laser

        The budget request contained $32.3 million in PE 62111N for
    technologies applicable to surface and aerospace surveillance
    and weapons.
        The committee has supported the Navy's technology program
    for design, fabrication, and activation of a one kilowatt
    average power free electron laser that operates in the infrared
    spectrum, and the evaluation of the technology for potential
    ship self-defense applications. The committee recommends an
    increase of $9.0 million to continue the Navy's free electron
    laser program. The increase will support the next phase in the
    development of superconducting accelerator free electron laser
    technology to achieve higher power levels and to evaluate the
    utility of a high energy laser weapon for naval applications.

    Freeze-dried blood

        The budget request contained $18.3 million in PE 63706N for
    advanced development and demonstration of medical technology
    for care and treatment of Navy and Marine Corps personnel in
    operational theaters, including $3.6 million for advanced
    technology development related to blood and blood substitutes.
        The committee supports the Navy's program for the
    development of technologies for freezing red blood cells, the
    development of freeze-dried red blood cell units having
    extended shelf-life, and the development and clinical trial of
    improved frozen and freeze-dried blood platelet products that
    have enhanced storage capabilities, and recommends an increase
    of $2.5 million to accelerate these efforts.

    Ground proximity warning system (GPWS)

        The budget request contained $36.3 million in PE 64215N for
    standards development, but did not include funding to continue
    the integration of GPWS technology into Navy-Marine Corps
    helicopter fleets.
        Congress provided an increase of $2.0 million for fiscal
    year 1997 to continue development of the GPWS in anticipation
    of its fielding on Navy and Marine heavy lift helicopters. The
    committee notes that the Navy plans to use these funds to
    achieve production approval of the GPWS for the H-53 and H-46
    series helicopters. To continue this development effort, the
    committee recommends an increase of $4.0 million for
    integration of GPWS technology into the remaining Navy-Marine
    Corps helicopter fleet and urges the Navy to program the
    modification funding needed to complete the fleet-wide
    installation of this system.

    H-1 series modifications

        The budget request contained $18.5 million in Navy
    procurement for modifications to the H-1 series helicopter of
    which $18.3 million was planned for communications and
    navigation block upgrades. The budget request also contained
    $80.7 million in PE 64245N for development of future H-1
    upgrades.
         Subsequent to the submission of the budget request, the
    Navy determined a need to restructure its communications and
    navigation block upgrades and research and development plans
    for the H-1 series helicopters. The restructured program, which
    requires transferring funds from the aircraft procurement
    account to the research and development account, would improve
    commonality between the UH-1N and AH-1W helicopters through a
    new plan to design a common cockpit architecture and to procure
    common parts and software. The committee supports this
    initiative and recommends a reduction of $5.6 million in
    procurement for H-1 communications and navigation block
    upgrades and an increase of $5.6 million in PE 64245N for
    design of a common cockpit architecture.

    High frequency surface wave radar

        The budget request contained $87.3 million in PE 63792N in
    the Navy's advanced technology demonstration (ATD) program.
        The ATD program demonstrates high-risk/high-payoff
    technologies that could significantly improve the warfighting
    capabilities of the fleet and joint forces and provides the
    opportunity to identify and move emerging technologies quickly
    and efficiently from the laboratory to the fleet. The committee
    understands that the high frequency surface wave radar (HFSWR)
    has the potential for significantly improving over-the-horizon
    detection of cruise missiles and is also applicable to other
    over-the-horizon surveillance missions. Fiscal year 1997
    funding reductions forced the Navy to place the HFSWR ATD on
    hold after conducting two years of a three-year ATD, and no
    funds are included in the fiscal year 1998 budget request for
    completion of the demonstration. Because of the positive
    results achieved in the HFSWR ATD before it was halted and the
    potential increase in over-the-horizon surveillance capability
    that the technology would bring to the fleet, the committee
    recommends an increase of $4.0 million to complete the HFSWR
    ATD.

    Hull, mechanical, and electrical systems virtual laboratory initiative

        The Navy is considering revolutionary changes to its 21st
    century naval vessel fleet, such as SC-21 and CVX, that
    includes stealth, automation, power electronics building blocks
    and electric drive. While these synergistically linked
    technologies are ideal candidates for cross-discipline system
    evaluation in a synthetic environment, the Navy has no formal
    plan or funding for such a capability. The committee recognizes
    the success achieved by the other services and industry in the
    employment of simulation-based design of innovative
    technologies and believes that this capability would contribute
    significantly to cost-effectiveness and innovation in the
    development of hull, mechanical and electrical ship systems.
    The committee believes that a virtual laboratory concept that
    includes integrated product and process development capability,
    electronically linking government, academic and industrial
    partners, is a way to incorporate timely innovation, optimized
    system design and control acquisition and total ownership
    costs. This concept would provide a virtual test bed for
    performance evaluation and interface development as well as
    virtual prototyping of systems, components and subassemblies
    under simulated conditions. The committee directs the Secretary
    of the Navy to provide an assessment to the Congressional
    defense committees of such a virtual laboratory for hull,
    mechanical and electrical systems and if warranted, an
    implementation plan for this concept by June 1, 1998. The
    committee encourages the Navy to seek technical input from
    industry and other services laboratory programs as part of the
    assessment process.

    Integrated combat weapon system

        The budget request contained $18.3 million in PE 63502N for
    surface and shallow water mine countermeasures, including $5.2
    million for the Integrated Combat Weapon System (ICWS).
        The ICWS is a series of major incremental block upgrades to
    current mine countermeasures combat systems to provide MCM- and
    MHC-class ships an affordable and fully integrated combat
    weapons system. The committee recommends an increase of $10.3
    million to accelerate the transition of ICWS to a commercial-
    off-the-shelf, open systems architecture with increased
    commonality among operator stations, development and
    demonstration of improvements in system navigation and command
    and control, and early deployment of the ICWS full
    implementation system to the fleet.

    Integrated ship self defense test site

        The budget request contained $132.3 million in PE 64755N
    for the ship self defense program and $33.2 million in PE
    64759N, Major Test & Evaluation Investment. No funds were
    requested in either program element for the ship self defense
    set and support equipment required to activate the Navy's
    Integrated Ship Self Defense Engineering Center (ISDEC).
        In 1991, the Navy received approval to construct a land-
    based test facility at Wallops Island to integrate and test the
    ship self defense system (SSDS) and its related equipment. The
    decision was made after a comprehensive review of available
    test sites and their ability to support the engineering
    development, in-service engineering, training, testing, and
    other initiatives associated with the SSDS. Construction of the
    facility was completed in 1995. A December 1996 letter from the
    Office of the Chief of Naval Operations advised that ``program
    reductions have resulted in delays of two or more years for the
    procurement and installation of systems intended for ships and
    insufficient funding to operate and maintain the Wallops Island
    facility.''
        In view of the priority assigned to the cooperative
    engagement capability (CEC) and ship self defense programs, the
    committee does not understand the inability of the Department
    of the Navy to fund the installation of the required SSDS
    equipment set and related equipment required to activate the
    integrated SSDS test site. Such funding should have been an
    integral part of the program plan when approval for
    construction of the site was sought and given in 1991. The
    Navy's inability to provide the required funding is even more
    incomprehensible in view of the fact that the ship self defense
    and CEC programs that will use the site have been among the
    Navy's highest priority programs. These programs have been
    funded at an average funding level of approximately $400.0
    million annually since 1990, and have received significant
    annual funding increases from Congress. By failing to budget
    for the activation and operation of the ISDEC, the Navy has
    severely restricted its ability to perform testing and lifetime
    engineering support, in-service engineering, and engineering
    initiatives related to the CEC and SSDS systems.
        Accordingly the committee recommends an increase of $8.6
    million in PE 64759N to purchase the SSDS and related equipment
    required to activate the integrated land based test site at
    Wallops Island. The Secretary of the Navy is also directed to
    provide from available funds the $6.0 million that is required
    to refurbish and install an AN/SPS-48E air search radar at the
    site.

    Inter-cooled recuperated engine

        The budget request contained $49.7 million in PE 63573N for
    the Navy's advanced surface machinery program (ASMP), including
    $32.3 million for the inter-cooled recuperated (ICR) gas
    turbine engine. The ICR engine program is a cooperative
    development program between the United States, the United
    Kingdom, and France to develop and demonstrate an advanced fuel
    efficient gas turbine engine that would be the prime power
    plant for future ship applications.
        In the statement of managers accompanying the conference
    report on H.R. 3230 (H. Rept. 104-724), the conferees directed
    the Secretary of the Navy to review the results of
    developmental testing of the ICR engine and to provide a report
    of the progress made in resolving the problems previously
    encountered during early stages of the ICR engine development
    testing. The committee also notes that significant progress has
    been made and that the development program is proceeding in
    accordance with a two-phased recovery plan. The committee also
    understands that testing of the engine has demonstrated the
    ability to operate from 1 percent to 110 percent of the design
    power range and the ability to achieve a 21 percent annual fuel
    savings based on a DDG-51 Class operating profile.
        The committee is encouraged by the progress being made and
    by the indication that the ICR engine will be an advanced
    maritime power plant capable of the significant annual fuel
    savings and reduced operating costs that are the objective of
    the program, but notes that considerable development and
    testing must still be done to realize this goal. The committee
    also notes that the United States has borne the majority of the
    cost of the ICR engine program. The committee is aware of
    ongoing discussions between the Department of the Navy and its
    counterparts in the development program partnership regarding
    the conduct of land-based engine qualification testing,
    proposals for at-sea testing, and the funding required to
    support completion of the program. The committee believes that
    agreement on these issues will be key to ensuring the
    completion of the development program and the provision of an
    advanced, fuel-efficient power plant for future U.S. ships.
        The committee directs the Secretary of the Navy to conduct
    an assessment of the progress in the ICR engine program, future
    plans for engine testing and qualification, and the status of
    agreements with the United Kingdom, France, and other countries
    that are participating in the development program. The results
    of the assessment shall be reported to the Congress with the
    submission of the fiscal year 1999 defense budget request.

    Joint air to surface standoff missile/standoff land attack missile
            expanded response

        The budget request contained $9.6 million in PE 64312N and
    $203.3 million in PE 27325F for the Air Force/Navy Joint Air to
    Surface Standoff Missile (JASSM) program and $28.9 million in
    PE 64603N for the Navy's Standoff Land Attack Missile Expanded
    Response (SLAM ER) program.
        The JASSM program was established in the fiscal year 1996
    budget, following cancellation of the Tri-Service Stand-off
    Attack Missile (TSSAM), to develop a replacement for that
    system at the earliest possible date. In the statement of
    managers which accompanied the conference report on S. 1124 (H.
    Rept. 104-450), the conferees stressed the urgent need for the
    operational capability that would have been provided by the
    TSSAM and the expectation that theSecretary of Defense would
    establish a joint program in the Air Force and the Navy for development
    of a TSSAM replacement that would meet the requirements of both
    services.
        The committee notes recent proposals by the Navy to replace
    the joint program for JASSM with the Navy's SLAM-ER, prior to
    completion of the current program definition and risk reduction
    phase for JASSM. The committee considers such a proposal to be
    premature and not in the best interests of the joint program.
    The proposal is, however, one of the program alternatives that
    could be considered at the Milestone II review for entry of the
    JASSM program into engineering and manufacturing development in
    July 1998, if properly based on the technical progress in the
    program and risk reduction phase, cost and operational
    effectiveness analysis, and other factors that must be taken
    into account in that review.
        The committee has reviewed the Navy's SLAM-ER program and
    considers the development and procurement schedule excessively
    concurrent. The committee understands that on the basis of a
    single controlled flight test, the Navy has made a low rate
    initial production decision that will result in the procurement
    of approximately 19 percent of the total planned buy of SLAM-ER
    before the completion of development and operational testing.
    The committee further notes that flight test of a SLAM-ER with
    operational seeker will not be conducted until Development Test
    II. The committee believes that this decision is neither
    technically nor fiscally prudent. The committee directs the
    Secretary of the Navy to review the development and acquisition
    program for SLAM-ER and provide to the Congressional defense
    committees by December 31, 1997, and provide an assessment
    which addresses the concerns expressed by the committee.

    Joint standoff weapon system

        The budget request contained $71.5 million in PE 64727N for
    the joint standoff weapon system (JSOW). JSOW is a modular
    design that is being developed in three variants: a submunition
    dispenser, an anti-armor submunition dispenser, and a unitary
    warhead variant which will incorporate an imaging infrared
    seeker, data link and 500 pound blast fragmentation warhead.
    The committee understands that the submunition variant has
    completed development and initial operational testing with a
    success rate of over 96 percent and has been approved for low
    rate initial production with initial deliveries to the Navy for
    use in the F/A-18 in 1998. Initial procurement of the anti-
    armor submunition variant is scheduled for fiscal year 1999,
    however, current program funding levels would delay fielding of
    the unitary warhead variant until 2002. The committee
    recommends an increase of $9.0 million to accelerate the
    development and fielding of the unitary warhead variant.

    Joint strike fighter

        The budget request contained $448.9 million in PE 63800N
    for Navy portion of the Joint Strike Fighter (JSF) program.
        The committee is concerned that, although this request
    represents an increase of almost 100 percent in funding for
    Navy JSF participation over fiscal year 1997 levels, it is
    based on schedule, cost, and quantity objectives that no longer
    reflect the Department's plans for Navy tactical aircraft as
    outlined in the recently released Quadrennial Defense Review
    (QDR). The committee understands that the QDR proposes a major
    increase in Navy JSF aircraft quantities from the level
    anticipated in the 1997 Future Years Defense Plan (FYDP) and
    supports efforts to accelerate the Navy portion of JSF. The
    committee recommends an increase of $20.0 million and directs
    the Secretary of Defense to use the increase in funding to
    ensure that JSF meets all Navy requirements and to enable this
    program to support a significantly increased quantity of Navy
    JSF aircraft.
        The committee is also concerned that the 1997 FYDP does not
    reflect adequate funding within the JSF program to continue
    development of the alternative fighter engine (AFE) beyond the
    current demonstration/validation phase. The committee continues
    to believe that a fully developed and flight tested AFE is
    essential to reduce risk to the JSF program and to provide
    credible competition necessary for controlling program cost.
    Therefore, the committee directs the Secretary of Defense to
    provide a report to the Congressional defense committees no
    later than February 15, 1998, detailing the level of funding
    within the JSF program that is identified to fund full
    development and flight test of the AFE.

    Joint surveillance and target radar system integration

        The budget request contained $5.1 million in PE 64231N for
    the Joint Maritime Communications Information System (JMCIS)--
    Afloat. No funds were requested to include a capability within
    JMCIS to exploit the Joint Surveillance and Target Radar System
    (JSTARS) moving target indicator (MTI) data.
        The committee believes that there are compelling reasons
    for the Navy to acquire the ability to use the JSTARS radar
    surveillance system. The Navy currently has no means to detect
    and track, and locate moving targets, on a large scale, to
    contribute meaningfully to operations ashore. The Navy and
    Marine Corps aviation forces, future variants of the Tomahawk
    missile, shore fire-support systems, and amphibious forces will
    all require highly capable moving target indicator (MTI) radar
    support for situation assessment and targeting.
        Therefore, the committee recommends an increase of $10.0
    million to perform the tasks necessary to integrate JSTARS data
    into Navy and Marine ship and air platforms.

    Joint tactical combat training system

        The budget request contained $59.0 million in PE 24571N for
    consolidated training systems development, including $33.6
    million for continued development of the joint tactical combat
    training system (JTCTS). The JTCTS is a Navy-led, joint Air
    Force/Navy program for the development of fixed, transportable,
    and mobile range instrumentation for shore-based tactical air
    crew training and for deployable, at-sea naval expeditionary
    force training.
        The committee notes that the estimated cost of the program
    through fiscal year 1999 has grown over 70 percent in the last
    year, and that the budget request for fiscal year 1998 is $27.5
    million greater than proposed in the fiscal year 1997 Future
    Years Defense Plan. The committee understands that the increase
    results from inadequate estimates of development costs and
    program complexity, failure to clearly define the requirements
    of the development contract, and reductions in Air Force
    funding below that anticipated by the Navy. These factors have
    forced major contract restructure, economic inefficiencies in
    hardware and software development, and a significant extension
    in the development schedule. The committee believes that the
    JTCTSrequirement and program must be reassessed and a new
    system and program baseline established to bring the program under
    control.
        The committee directs the Secretary of the Navy, in
    coordination with the Secretary of the Air Force, to conduct an
    assessment of the JTCTS requirement and development program
    execution and to report the results of the assessment,
    revisions to the program baseline, and funding requirements and
    schedule for completion of the program to the Congressional
    defense committees by December 31, 1997. The committee believes
    that until the assessment is completed, no increase to the
    program is warranted, and therefore recommends a decrease of
    $27.5 million in PE 24571N.

    Light airborne multi-purpose system helicopter program

        The budget request contained $73.4 million in PE 64212N for
    other helicopter development.
        The Navy has embarked on a program to convert its existing
    fleet of LAMPS helicopters from the SH-60B configuration to the
    SH-60R configuration. The block II upgrade will enhance the
    anti-submarine warfare and anti-surface warfare capabilities of
    the LAMPS MK III in support of the naval battle group in
    littoral operations and in regional conflicts. The committee
    recommends an increase of $15.0 million to maintain the
    schedule for the block II upgrade and support the insertion of
    ruggedized, scaleable, commercial-off-the-shelf (COTS) avionics
    technology into SH-60R avionics. The committee understands that
    use of COTS avionics technology will yield significant savings
    in production costs during the conversion program and reduce
    overall system life-cycle costs.

    Light strike vehicle

        The budget request contained no funds for the light strike
    vehicle (LSV). The committee understands that there is an
    approved operational requirements document (ORD) for
    lightweight, high performance all-terrain vehicles for a number
    of critical missions, such as special operations and forward
    reconnaissance in conventional operations.
        The ORD requires an initial operational capability by
    fiscal year 2001. The committee is concerned that while the
    Commandant has emphasized the high priority of the V-22 Osprey
    to Marine combat capability, the Marine Corps currently has no
    viable ground vehicle that can be carried inside the Osprey.
    Current vehicles for these missions are reaching the end of
    their service life, are easily detected, and have limited
    mobility or are not internally transportable in the Osprey.
        Accordingly, the committee recommends $5.0 million in PE
    26624M to begin the development of the LSV for both the Marine
    Corps and Special Operations Forces, and directs the Secretary
    of the Navy to report to the Congressional defense committees
    by November 30, 1997 the plan to field this critical
    warfighting asset.

    Lightweight wide aperture array

         The budget request contained $61.1 million in PE 63504N
    for advanced submarine combat systems, including $10.5 million
    to continue the development of advanced flank array technology.
        The committee recommends an increase of $4.0 million to
    accelerate the development and application of fiber optic
    technology to low cost, lightweight hull array systems for
    current and next generation submarines.

    Littoral anti-submarine warfare technology demonstration

        The budget request contained $54.8 million in PE 63747N for
    undersea warfare advanced technology, including $30.9 million
    for shallow water surveillance advanced technology.
        The committee has expressed concerns about the potential
    threat of advanced diesel submarines operating in the shallower
    waters of the world's littoral regions and the challenge posed
    to U.S. surveillance and detection capabilities. In fiscal year
    1996, Congress provided additional funds for the development
    and demonstration of advanced technologies for shallow water
    anti-submarine warfare (ASW). These funds were subsequently
    used for the development, testing, and calibration of
    components of a mobile, high power broadband acoustic
    surveillance source that is based upon the adaptation of
    commercial-off-the-shelf (COTS) air-gun technology. The
    committee understands that this effort has been successfully
    completed and shows promise for filling a significant niche in
    the U.S. ASW shallow water surveillance capability. The
    committee, therefore, recommends an increase of $5.0 million
    for continued development, demonstration, and evaluation of the
    technology which, the committee understands, will permit
    decisions on proceeding further with the development of COTS
    air gun technology as an acoustic surveillance source.

    Marine Corps assault vehicles

        The budget request contained $60.1 million for the advanced
    amphibious assault vehicle (AAAV) in PE 63611M.
        The Marine Corps is developing the AAAV to be a high water
    speed, amphibious armored personnel carrier replacement for its
    current fleet of aging amphibious vehicles. The committee
    understands that additional funding is required for fabrication
    and testing of a second prototype which is needed to preserve
    the current schedule if any significant equipment failures
    occur. The committee strongly supports development of the AAAV
    and recommends an increase of $10.0 million for a second AAAV
    prototype.

    Marine Corps communications systems

        The budget request contained $38.3 million in PE 26313M for
    Marine Corps communications systems.
        The committee notes that the Commandant of the Marine Corps
    has identified critical unfunded requirements for development
    of a tactical hand held radio, a tactical remote sensor system,
    a Marine common hardware suite, and the tactical electronic
    reconnaissance processing and evaluation system. The committee
    recommends an additional $5.2 million for these programs.

    Marine Corps ground combat/supporting arms system

        The budget request contained $12.6 million in PE 26623M for
    Marine Corps ground combat/supporting system development.
        The committee recommends an increase of $4.3 million to
    integrate and test the AN/VVR-1 Laser Warning Receiver into the
    M1A1 Abrams tank. The committee also recommends an increase of
    $0.7 million as requested by the Commandant for the Marine
    enhancement program to support development of better clothing
    and other items for the individual Marine.

    Marine Corps ground combat/support system

        The budget request contained $36.5 million for PE 63635M,
    including funding for continued development of the joint Army/
    Marine Corps lightweight 155mm howitzer.
        The program has completed competitive selection of the
    prime contractor, and has entered the engineering and
    manufacturing development phase. The committee fully supports
    this program effort to field a much needed replacement for the
    aging and operationally deficient M198 howitzer and recommends
    an increase of $3.6 million.

    Marine mammal research program

        The budget request contained $366.3 million in PE 61153N
    for Navy Defense Research Sciences, including $137.1 million to
    support basic research in ocean sciences.
        The committee recommends an increase of $500,000 to
    continue the Navy's cooperative marine mammal research program.
    The committee directs the Secretary of the Navy to submit to
    the Congressional defense committees by March 1, 1998, a report
    on the research being conducted in the marine mammal research
    program and the technological implications of this research to
    Navy sonar requirements.

    Medical mobile monitor

        The budget request contained $18.3 million in PE 63706N for
    advanced development and demonstration of medical technology
    for care and treatment of Navy and Marine Corps personnel in
    operational theaters. No funds were requested to continue the
    program for advanced technology development and evaluation of
    the medical mobile monitor.
        The committee continues to believe that the Department must
    place high priority on the fielding of state-of-the-art, cost
    effective, medical care for U.S. forces. The development and
    demonstration of miniaturized, lightweight, rugged emergency
    medicine and medical information technology tools for use in
    forward units should lead to advances in critical medical care
    for the military services that could also be adopted by other
    Federal and civilian medical organizations that are required to
    provide medical care in remote and austere environments. The
    committee recommends an increase of $4.0 million to complete
    the program for development and demonstration of mobile medical
    monitor prototypes and to demonstrate the ability of the
    monitor to interface with existing military communications
    systems and medical information systems.

    Micro-electromechanical systems guidance and control

        The budget request contained $37.8 million in PE 63795N for
    land attack systems technology for naval ship-to-shore fire
    support.
        The committee has strongly supported a naval surface fire
    support (NSFS) program which focuses on near and long term
    improvements to naval fire support systems. The committee
    believes that advanced global positioning system/inertial
    navigation system (GPS/INS) guidance and control technology is
    essential to the NSFS program and to other precision guided
    munitions programs. The success of this program and the
    affordability and cost-effectiveness of advanced precision
    guided munitions can be significantly enhanced by micro-
    electromechanical systems (MEMS) technology used in the
    guidance and control unit. MEMS technology has the potential to
    significantly reduce the cost of the GPS/INS guidance and
    control for the Navy's extended range guided projectile (ERGM),
    the Army's low cost competent munition (LCCM), and other
    Department programs. The committee is informed of a recent
    successful demonstration of a MEMS-based advanced guidance and
    control unit for the ERGM in gun-fired tests at Yuma Proving
    Ground that demonstrated the promise of MEMS-based GPS/INS
    technology. Accordingly, the committee recommends an increase
    of $5.0 million in PE 63795N to continue the Navy's guidance
    and control risk reduction program, accelerate development and
    qualification of MEMS-based GPS/INS guidance and control, and
    ensure the early availability of the technology for ERGM
    program, LCCM, and other guided munitions, rocket and missile
    programs. The committee recommends that the Secretary of the
    Navy and the Secretary of the Army ensure that the development
    of MEMS-based GPS/INS guidance and control is coordinated
    closely between the two services.

    Mine countermeasures autonomous system technology

        The budget request contained $42.7 million in PE 62315N for
    mine countermeasures, mining, and special warfare technology.
        The committee understands that recent research, operational
    simulations, and evaluation of prototype hardware indicates
    that application of autonomous robotics surveillance and
    tactical oceanography system technologies could yield
    significant improvements in shallow water mine countermeasures.
    The committee believes that a partnership between academia, the
    Navy materiel development community, and the Navy operational
    community would be useful in evaluating the utility of such
    systems, developing tactics for their use, and then evaluating
    the operational results in at-sea tests of the systems and
    tactics. To support such a program, the committee recommends an
    increase of $3.0 million for research and development in
    autonomous system technologies for shallow water mine
    countermeasures.

    Molecular design material science

        The budget request contained $366.3 million in PE 61153N
    for Navy defense research sciences. The committee holds
    continuing interest in research in the synthesis and creation
    ofnew molecular structures at the atomic level and the
    potential that this research holds for developing new products for use
    in electronics, biomedical science, and many other military
    applications. The committee recommends an increase of $10.0 million to
    continue the program of basic research in molecular design materials
    science that was initiated in fiscal year 1994. The committee directs
    the Secretary of the Navy to conduct an assessment of the goals,
    objectives, and progress of the program, and future directions and
    funding requirements for the program, and to report the results of the
    assessment to the Congressional defense committees by March 15, 1998.

    National oceanographic partnerships program

        The budget request contained $48.2 million in PE 62435N for
    applied research in oceanographic and atmospheric technologies,
    including $5.0 million to continue the National Oceanographic
    Partnership Program.
        In the belief that a strong national oceanography program
    is essential to the long-term national security of the United
    States, and to other areas of U.S. national interest, the
    Congress established in section 282 of the National Defense
    Authorization Act for Fiscal Year 1997 (Public Law 104-201) the
    National Oceanographic Partnerships Program. The objective of
    the program is to coordinate and leverage all U.S.
    oceanographic efforts in the Navy, industry, and academia, and
    to encourage the sharing of resources, intellectual talent, and
    facilities in ocean science and education in order to ensure
    the superiority of the U.S. oceanography program. To maintain
    the momentum of the program and provide a bridge until
    additional funds for support of the program can be included in
    the budget requests of other participating agencies and
    departments, the committee recommends an increase of $16.0
    million in PE 62435N and $7.5 million in Navy operations and
    maintenance, as reflected in Title III of this report, to
    continue to support the development of federal, academic and
    industry oceanographic research partnerships under the program.
        The committee commends the Secretary of the Navy for his
    leadership of the National Ocean Research Leadership Council.
    The committee directs the Secretary of Defense to coordinate
    with the secretaries of Commerce, Energy, and Interior, the
    Director of the National Science Foundation, the Administrators
    of the National Aeronautics and Space Administration and the
    Environmental Protection Agency on funding levels required in
    future budget requests for continuation of the NOPP, and to
    provide a report to the Congressional defense committees by
    February 28, 1998 on the funding for the program in the fiscal
    year 1998 budget requests of these agencies and of the
    Department of Defense.

    National test and training range center initiative

        The committee understands that the Department of Defense
    has supported development of a capability in the Hampton Roads
    region for integration and transcontinental connectivity of
    military test and training ranges, which would result in a
    national test network architecture to support widely
    distributed combat systems integration and testing. The test
    center, under development by the Navy, would leverage resources
    from several existing government-sponsored high performance
    computing and high speed network programs, such as simulation-
    based design, synthetic theater of war, the National Science
    Foundation's partnership for advanced computing infrastructure,
    the high performance computing modernization program, and
    Defense Advanced Research Projects Agency distributed object
    computation test bed. The committee recognizes the potential of
    this technology in reducing the high cost of system
    acquisition, test, and training, while enhancing quality and
    stimulating advances in information technology and electronic
    commerce. The committee encourages enhanced support for the
    Navy's initiative.

    Naval biodynamics laboratory data bank

        The budget request contained no funding for the Naval
    Biodynamics Laboratory (NBDL).
        For nearly thirty years, the NBDL focused on the intensive
    test, study, and analysis of the human body's response to the
    trauma of crashes, and developed a national data bank of
    collective human crash response information based on
    approximately 3,500 crash tests using live human subjects. In
    1996, the NBDL ceased operations as a result of previous
    decisions to close the laboratory, but was not able to
    consolidate and safely store its research information in a
    consistent, useful data bank format. The committee believes
    that the effort spent in amassing the unique human response
    data by the NBDL should not be lost. Accordingly, the committee
    directs the Secretary of the Navy to develop a plan for
    establishing a national crash survival data bank that will
    safeguard the integrity of the data gathered by the NBDL and to
    submit a report on the plan and the funding required to
    establish the data bank with the fiscal year 1999 Defense
    budget request.

    Navy tactical missile system (NTACMS)

        The budget request contained $37.8 million in PE 63795N for
    development, demonstration, and validation of land attack
    systems technology for naval ship-to-shore fire support.
        The committee is aware of preliminary Navy studies
    indicating that the U.S. Army tactical missile system (ATACMS),
    when suitably marinized for employment by surface ships and
    submarines, would enhance the Navy's capability against many
    potential surface targets. The committee is further aware that
    a Navy version of ATACMS, called NTACMS, meets the requirement
    of the Naval Surface Fire Support Mission Need Statement (MNS)
    for a responsive and lethal fire support missile system. The
    committee is also aware of the successful demonstration in
    November 1996 at White Sands Missile Range of the firing of an
    ATACMS from a Navy Mark 41 Vertical Launch System launcher. The
    proposed NTACMS would adapt the ATACMS Block IA missile with
    the M74 submunition for naval use. In addition, the potential
    exists in the future to adapt other ATACMS warhead variants
    into NATACMS, including the Brilliant Anti-Tank (BAT) anti-
    armor submunition and hard target penetrator weapons. The
    committee recommends an increase of $20.0 million in PE 63795N
    for program definition and risk reduction activities to permit
    NTACMS to begin accelerated engineering and manufacturing
    development in fiscal year 1999.
        The committee considers it appropriate that demonstration,
    validation, and risk reduction for NTACM and the Land Attack
    Standard Missile (LASM) continue through fiscal year 1998. The
    committee is aware of competing claims regarding cost and
    effectiveness of the two systems that have been made by system
    proponents. The committee strongly believes, cautions, and
    expects that a through, objective, and independent cost and
    operational effectiveness analysis ofcompeting system
    alternatives will be required before the Navy proceeds with any
    development milestone decision for a land attack missile.

    P-3 maritime patrol aircraft modernization program

        The budget request contained $3.2 million in PE 64221N to
    continue upgrades to the P-3C aircraft system to enhance
    surface and surface tracking, classification, and attack
    capabilities.
        The committee notes the continuing disparity between the
    operational requirements of the regional commanders-in-chief
    and the Navy's plans for modernization of the P-3C fleet, and
    believes that the Navy must increase the priority given to the
    P-3C modernization program.
        The committee recommends an increase of $12.0 million to
    continue acceleration of the integration of anti-surface
    warfare improvement program (AIP) sensors to reduce operator
    workload, modernize the operator-machine interface, provide
    additional sensor integration/enhancements, improve/automate
    tactical planning aids, and provide for multi-sensor data
    correlation and fusion.

    Power electronic building blocks and power node control centers

        The budget request contained $46.9 million in PE 62121N for
    applied research in surface ship and submarine hull,
    mechanical, and electrical technology, logistics technology,
    and environmental protection for all Navy platforms and shore
    facilities. The request included $6.0 million to continue the
    development of power electronic building block for the rapid
    switching and control of shipboard high power electrical
    systems.
        The committee believes that this technology should be
    accelerated to provide the electric power system options for
    future shipboard designs that include electric drive and for
    meeting reduced manning goals through automation of ship
    systems. The committee also believes that the use of virtual
    prototyping for simulation and evaluation of advanced concept
    electrical systems should contribute to this effort. The
    committee recommends an increase of $6.0 million to accelerate
    the development and demonstration of power electronic building
    blocks, and an increase of $1.5 million to continue the
    development of power node control centers for advanced
    integrated electrical distribution system fault detection,
    switching, reconfiguration, and control of shipboard electrical
    systems.

    Precision targeting and location system

        The budget request contained no funds for global
    positioning system (GPS) interference precision targeting and
    location.
        The committee is aware of the potential vulnerability of
    GPS signals to collateral interference and intentional jamming.
    In fiscal year 1997, Congress authorized and appropriated $3.5
    million in PE 64270N for demonstration of a flyable prototype
    of a currently available technology capable of rapid, precision
    location of sources of GPS interference in order to assess the
    technical feasibility and utility of such a targeting system
    incorporated on operational aircraft and unmanned aerial
    vehicles. The committee recommends an increase of $2.8 million
    in PE 64270N to complete the demonstration.

    Project ``M''

        The budget request contained $39.7 million in PE 63508N for
    technologies for submarine and surface ship handling,
    machinery, and engineering systems.
        The committee recommends an increase of $5.0 million to
    continue the Navy's program for transition, development and
    demonstration of advanced quieting technology developed under
    the Defense Advanced Research Project Agency Project ``M.''

    Proton exchange membrane fuel cells

        The budget request contained $18.2 million in PE 63712N for
    environmental quality and logistics advanced technology.
        The committee understands that proton exchange membrane
    (PEM) fuel cell technology is rapidly maturing and has been
    successfully demonstrated in automotive and portable power
    applications. High power conversion efficiency, modularity,
    rugged operational characteristics and low environmental impact
    should make the PEM fuel cell well-suited for portable and on-
    site power generation. The committee believes that
    opportunities exist for the development and demonstration of
    PEM fuel cell technology for both military and civilian
    applications in a cost-shared, cooperative program involving
    government and industry that makes use of existing cooperative
    research and development agreements. The demonstration would
    permit the Department of the Navy and the civilian sector to
    gain experience with, and evaluate the power generation
    capability of a facility-level power plant that uses PEM fuel
    cell technology. Accordingly, the committee recommends an
    increase of $1.8 million to establish a cooperative, cost-
    shared demonstration of PEM fuel cell technology.

    Remote minehunting system

        The budget request contained $18.3 million in PE 63502N for
    surface and shallow water mine countermeasures, including $6.9
    million for the Remote Minehunting System (RMS) (V)3.
        RMS is a remotely operated system for detection and
    classification of sea mines that operates from surface
    combatant ships and provides the fleet with an organic means of
    finding and avoiding mined waters. The RMS prototype was
    successfully demonstrated in Exercise Kernel Blitz in March
    1995 and subsequently deployed in an overseas exercise in which
    the system again demonstrated great success in providing the
    force the ability to quickly assess and monitor the extent of
    the sea mine threat. The success of the demonstration has
    resulted in an accelerated program to deploy RMS to the fleet
    and the endorsement by the Chief of Naval Operations and the
    Chairman of the Joint Chiefs of Staff. The committee
    understands that an increase in funding would enable completion
    of a second engineering development model (EDM) of the RMS,
    including the over-the-horizon communication subsystem, and to
    support integration of the RMS in DDG-51 Flight IIA new ship
    construction and the AN/SQQ-89 undersea combat system.
    Development of the second EDM would permit the Navy to meet an
    aggressive program schedule and reduce program risk by allowing
    concurrent environmental and development testing. The committee
    recommends an increase of $7.9 million to accelerate the
    integration of the RMS capability on other ships of the fleet.

    Safety and survivability enhancements

        The budget request contained $263.9 million in PE 65864N,
    including $131.8 million for test and evaluation support at the
    Naval Air Warfare Center Weapons Division and $85.7 million for
    test and evaluation support at the Naval Air Warfare Center
    Aircraft Division.
        The committee believes that there is a high potential for
    the adaptation of commercial off-the-shelf non-developmental
    items (COTS NDI) that could improve operational safety and
    combat survivability in the Navy's operational commands. To
    that end, the committee has previously supported funding for
    the procurement, test, and evaluation by the Navy of COTS NDI
    that have high potential for contributing to safety of flight,
    fire fighting, damage control, emergency preparedness ashore,
    survival at sea, and chemical/biological warfare defense. The
    committee recommends an increase of $2.0 million to continue
    ongoing evaluations and expand the program to assess COTS NDI
    that are new to the industrial marketplace. The committee
    recommends that the Secretary of the Navy consider establishing
    a separate program line item for this activity in future budget
    requests.

    Second source qualification program for carbon fibers

        The budget request contained $76.7 million in PE 62234N for
    materials, electronics and computer technologies.
        The committee continues to monitor the Navy's efforts in
    materials applied research and development in support of
    aviation platform affordability, supportability, and mission
    performance. The committee recommends an increase of $2.0
    million to continue the program established in fiscal year 1997
    to address new materials processes such as resin transfer
    molding and to establish second source qualification procedures
    for carbon fibers for advanced composites used in several naval
    aircraft and for prepreg systems.

    Shipboard condition-based maintenance and damage assessment

        The budget request contained $46.9 million in PE 62121N,
    including $8.6 million for logistics and environmental quality
    technology.
        An objective of the Navy's logistics technology program is
    the development of diagnostic technologies that will enable the
    implementation of condition-based maintenance, rather than the
    traditional philosophy of time-based maintenance. The committee
    believes that advanced micro-electromechanical systems (MEMS)
    employed in damage-tolerant sensor networks show promise for
    meeting the Navy's goals for shipboard condition-based
    maintenance and damage assessment. Accordingly, the committee
    recommends an increase of $5.0 million in PE 62121N for the
    development of enabling MEMS and damage-tolerant sensor network
    technologies in preparation for the initiation of an advanced
    technology demonstration in fiscal year 1999.

    Ship self defense program

        The budget request contained $132.3 million in PE 64755N
    for the Navy's ship self defense program, including $14.1
    million for development of an infrared mode upgrade to the
    Rolling Airframe Missile (RAM) and improvements in RAM's
    capability against low-elevation targets. No funds were
    requested to continue development of the Phalanx close-in
    weapon system (CIWS).
        As a result of experience gained during tanker escort
    operations in the Persian Gulf that was confirmed during
    Operation Desert Storm, the Navy established an operational
    requirement for an advanced minor caliber gun system to provide
    close-in defense for surface ships against small surface craft,
    small low-flying aircraft, and helicopters. In May 1993,
    following extensive Congressional defense committee reviews,
    the Navy determined that adding a surface mode capability to
    CIWS would provide the most cost and operationally effective
    solution to address the operational requirement. In July 1993,
    the Navy announced that the RAM would replace Phalanx on major
    surface combatants, although development of the CIWS surface
    mode capability (Phalanx Block IB) would continue for use on
    other surface combatants and ships equipped with the CIWS.
    Currently, 369 CIWS systems are fielded on 222 U.S. Navy ships
    and 233 systems are fielded on foreign ships.
        The committee understands that the Navy intends to end the
    Phalanx Block IB upgrade following the completion of testing
    and will not procure the upgrade for the fleet, but does intend
    to field a low altitude or surface mode upgrade for the RAM
    systems that will be deployed on major surface combatants. Navy
    officials cited the need to reallocate fiscal year 1998 funding
    to higher priority programs as the reason for the Phalanx Block
    IB decision. The committee believes that the Navy's action
    would leave the majority of the Navy's ships without the close-
    in defense capability that the Navy previously convinced the
    Defense authorizing committees was required and that this
    decision reflects the Navy's continuing disregard of the
    requirements to provide adequate self defense for U.S. fleet
    ships, other than major combatants, that have been the focus of
    the ship self defense program.
        The committee directs the Secretary of the Navy to reassess
    the requirement for close-in defense of Navy surface ships and
    how the Navy will satisfy the requirements not only for major
    surface combatants, but also for other surface ships in the
    fleet. A report of the results of the assessment and the Navy's
    plan for meeting the requirement shall be submitted to the
    Congressional defense committees by February 28, 1998. No
    fiscal year 1998 funds may be obligated for the RAM upgrade
    program until thirty days after the Secretary's report is
    received by the committees.

    Submarine anti-submarine warfare defensive weapons

        The budget request contained $54.8 million in PE 63747N for
    advanced technology.
        The committee recommends an increase of $4.0 million to
    mature the development of hydrodynamics and propulsion
    technologies for the 6.25" torpedo vehicle and expand guidance
    and control technologies. The additional funds would accelerate
    the development and demonstration of technologies applicable to
    quick reaction anti-submarine weapons for close-range
    engagements and to defensive systems for protecting surface
    ships and submarines against torpedo attack.

    Submarine combat system multi-purpose processor (MPP)

        The budget request contained $42.3 million in PE 64503N for
    SSN-688 and TRIDENT modernization, including $33.5 million for
    submarine sonar improvement. However, the budget request did
    not contain funding for the MPP.
         To facilitate rapid improvements in submarine acoustic
    data processing, the Navy selected the MPP as the cornerstone
    of sonar upgrades for the existing SSN-688, 688I and TRIDENT
    submarines. At one-half the cost of legacy systems, the MPP
    provides the Navy with vastly improved processing power and the
    ability to integrate advanced software to existing hardware
    using an open operating system architecture. For fiscal year
    1997, the committee recommended an additional $11.0 million and
    Congress appropriated $7.0 million for advanced development and
    rapid introduction of the MPP into the U.S. submarine fleet. To
    continue this cost-effective initiative, the committee
    recommends an increase of $15.0 million.

    Surface ship torpedo defense system

         The budget request contained no funds to continue the
    Navy's surface ship torpedo defense (SSTD) program.
        In 1995, the Navy informed Congress that the SSTD program
    was being restructured to mitigate the risk and cost in
    development of an improved torpedo defense capability for Navy
    surface ships. The committee is encouraged by the recent
    successes in development of the launched expendable acoustic
    device (LEAD) and the multi-sensor torpedo recognition and
    alertment processor (MSTRAP) and the improvements in SSTD
    capability that these systems will provide when deployed to the
    fleet. However, the absence of funding for continuation of the
    SSTD program in fiscal year 1998 will halt further progress and
    will inhibit the ability of the Navy to capitalize on the
    results of the joint United States/United Kingdom
    demonstration/validation program. Accordingly, the committee
    recommends an increase of $9.8 million in PE 63506N to continue
    the SSTD development program and further enhance detection,
    classification, and localization of threat torpedoes and
    integrated improved soft kill capabilities that are being
    tested in the joint United States/United Kingdom programs.

    Surveillance towed array sensor system/low frequency active program

         The budget request contained $9.9 million in PE 24311N for
    the integrated surveillance system, including research and
    development support of the Surveillance Towed Array Sensor
    System (SURTASS) and for the integrated undersea surveillance
    system (IUSS).
        The committee understands that the SURTASS is a proven
    mobile, long-range underwater passive acoustic sensor systems
    and that the addition of the low frequency active (LFA)
    capability provides a significant increase in the capability of
    the system to detect quiet submarines operating in both deep
    ocean and shallow coastal littoral waters. In the statement of
    managers accompanying the conference report on H.R. 3230 (H.
    Rept. 104-724), the conferees agreed to increased funding for
    the SURTASS program which would:
              (1) continue development and integration of SURTASS
            twin line arrays, reduce the size of transmit arrays,
            continue fiber optic array development, expand
            frequency processing capabilities, and conduct at-sea
            testing of resulting developments;
              (2) sustain the low frequency active program and
            development of more reliable low frequency active
            transmitters; and
              (3) adapt SURTASS software algorithms for submarine
            sonar systems.
        The committee recommends an increase of $4.0 million in PE
    24311N to continue the development of fiber optic sensors for
    the SURTASS/LFA program.

    Visualization architecture technology for aviation test and evaluation

         The budget request contained $33.2 million in PE 64759N
    for the Navy's Major Test & Evaluation Investment program.
        The committee understands that increased funding is
    required for the visualization architecture and technology
    project to develop and improve data display technologies,
    provide enhanced situation awareness, and improve the ability
    of developmental and operational test personnel to assess
    complex, dynamic air combat testing and operations. The
    committee recommends an increase of $3.0 million, and expects
    the project to focus initially on improving aviation
    development and test capabilities at the Navy's Air Combat
    Environment Test and Evaluation Facility.

                                Air Force RDT&E

                                    Overview

        The budget request contained $14,451.4 million for Air
    Force RDT&E. The committee recommends authorization of
    $14,659.7 million, an increase of $208.4 million.
        The committee recommendations for the fiscal year 1998 Air
    Force RDT&E program are identified in the table below. Major
    changes to the Air Force request are discussed following the
    table and in the classified annex to this report.

                           Items of Special Interest

    ALR-69 radar warning receiver
        The budget request contained $25.6 million in PE 63270F for
    electronic combat technology. Included in this program are
    modernization efforts to improve the survivability of current
    technology combat aircraft in high radar threat environments.
        The committee notes that while efforts to date have
    successfully improved radar warning equipment for aircraft
    employed by active forces, the Air Force Reserve, Air National
    Guard, and Special Operations Forces aircraft have not received
    adequate development support to integrate these same
    survivability improvements. The committee recommends an
    increase of $14.0 million to accelerate these additional
    survivability improvement efforts.
    Autonomous free-flight dispenser system
        The budget request contained $41.2 million in PE 63605F for
    advanced weapons technology.
        The committee notes that the Department of Defense's
    increased emphasis in developing precision guided munitions
    (PGMs) with stand-off capability to enhance strike aircraft
    performance and survivability. Although the services are
    pursuing several PGM development programs to address specific
    requirements, the committee is aware of a previously tested
    glide-bomb PGM which, when modified with turbojet powered
    capability, could address a significant number of current
    precision weapon system requirements. The autonomous free
    flight dispenser-turbo (AFDS-T) has been successfully tested on
    U.S. strike aircraft in an unpowered configuration and a glide
    version is currently in production in Europe for allied
    aircraft. The committee believes that the AFDS-T offers both
    cost effective PGM capability as well as interoperability with
    allied forces and recommends an increase of $15.0 million to
    conduct sufficient verification testing to evaluate the
    capability of this weapon system and its suitability for U.S.
    forces.
    Bomber testing
        The budget request contained $389.3 million in PE 65807F
    for test and evaluation support of Air Force test ranges and
    facilities.
        The committee is aware of ongoing efforts to improve B-2
    bomber testing capability at the Bark Flight Test Facility and
    supports the expansion of this facility's capability to conduct
    testing of other Air Force bomber aircraft. The committee
    recommends an increase of $8.0 million to add test capability
    to this existing facility for B-1B, B-52, and other bomber or
    strike aircraft.
    Conventional ballistic missile
        The budget request contained $32.8 million in PE 63851F for
    intercontinental ballistic missile (ICBM) demonstration and
    validation activities.
        The committee notes that a number of ``rogue'' nations have
    constructed hardened, deeply buried facilities. Some of these
    facilities represent command and control structures and sites
    at which weapons of mass destruction are developed and stored
    and are therefore of great military significance. The
    destruction of these sites requires a weapon that can penetrate
    hardened structures or rock, while maintaining sufficient
    structural integrity to detonate. The committee further notes
    that the ability of the U.S. military to strike at these
    targets effectively without recourse to nuclear weapons is
    extremely limited.
        The committee believes that a conventionally armed ICBM has
    the potential to hold these targets at risk, in the near term,
    and at modest cost. This proposed capability is based on a
    combination of very high ICBM warhead terminal velocities,
    technologies that allow precision delivery, long range,
    relative invulnerability to enemy defenses, and the maturity of
    current ICBM technology.
        Therefore, the committee recommends $49.3 million for ICBM
    demonstration and validation activities, an increase of $16.5
    million. The additional funding is for the purpose of
    establishing a conventional ballistic missile advanced concept
    technology demonstration program. The funding is to be used to
    modify an existing reentry vehicle, complete flight test plans,
    and procure long lead items to support a flight test.

    Ejection seats

        The budget request contained $7.9 million in PE 63216N for
    aviation survivability and $17.2 million in PE 63231F for crew
    systems and personnel protection technology.
        The committee understands that improvements are needed in
    tactical aircraft ejection seat systems to provide adequate
    safety for air crews. The committee fully supports enhanced
    crew safety, and recommends an increase of $1.5 million in PE
    63216N and an increase of $2.0 million in PE 63231F for
    continued development of improvements in aircrew ejection seats
    and evaluation of alternative technologies leading to an
    injury-free ejection seat design.

    High speed anti-radiation missile

        The budget request contained $13.6 million for manned
    destructive suppression in PE 27136F.
        The committee believes that the high speed anti-radiation
    (HARM) missile provides a significant capability for
    suppression of enemy air defenses. The committee supports the
    HARM development and recommends an increase of $3.0 million to
    accelerate development of HARM F-16 interfaces and operational
    flight software.

    Joint strike fighter

        The budget request contained $458.1 million in PE 63800F
    for the Air Force portion of the Joint Strike Fighter (JSF). As
    mentioned elsewhere in this report, the committee is extremely
    concerned that the current pace of the Department's tactical
    aviation programs is both unaffordable and not coordinated with
    the emerging Quadrennial Defense Review (QDR). The committee
    notes that this request represents an increase of $27.0 million
    over the projected funding for JSF identified in the 1997
    Future Years Defense Plan and recommends $431.1 million, a
    decrease of $27.0 million.

    Minuteman safety enhanced reentry vehicle

        The budget request contained $137.9 million in PE 64851F
    for efforts to upgrade the Minuteman III intercontinental
    ballistic missile (ICBM) guidance and propulsion systems.
        The Minuteman guidance replacement program (GRP) is
    replacing 1960's vintage electronics with modern supportable
    technology. The program is proceeding through engineering and
    manufacturing development and the first of the upgraded
    guidance systems is expected to be delivered in 1999. The GRP
    also preserves the option to incorporate the Mk-21 safety
    enhanced reentry vehicle on the Minuteman III ICBM if
    Peackeeper ICBMs, which are now equipped with the Mk-21, are
    retired.
        The committee notes that the Mk-21 is the most modern,
    safest, and logistically supportable reentry vehicle in the Air
    Force inventory. It further notes that the Air Force is
    planning to replace the older Mk-12A reentry vehicle with the
    Mk-21 on 150 Minuteman III ICBMs. However, the actual design
    and development efforts for the hardware and software needed
    for the incorporation of the Mk-21 remain to be accomplished.
    Initial engineering tests will be accomplished with additional
    funding authorized and appropriated for fiscal year 1997. The
    committee believes that a continuation of this effort will
    reduce the risk of a potentially costly redesign and refit of
    the new guidance systems. To promote the timely completion of
    Mk-21 integration efforts, the committee recommends $152.9
    million for PE 64851F, an increase of $15.0 million.

    Pollution prevention

        The budget request contained $5.9 million for pollution
    prevention in PE 65854F.
        The committee is aware of an automated monitoring network
    demonstration for in-ground, real-time monitoring of aquifers
    that allows the user to accurately determine if the
    contaminated area is stable or requires costly remediation.
    This smart monitoring system is designed to completely replace
    expensive, time consuming and potentially dangerous collection
    and transporting of soil and groundwater samples for analysis.
    The Air Force requires additional funding to further evaluate
    the system by continuing to monitor current wells and to expand
    the demonstration to monitor for contaminants in the aquifer
    throughout the base. The committee supports improvements in
    environmental monitoring on military installations and
    recommends an increase of $5.0 million for this program.

    Protein-based ultra-high density memory

        The budget request contained $86.1 million in PE 62702F for
    command, control, and communications research.
        The committee understands that Air Force exploratory
    development in bioelectronics research has produced promising
    results that offer an alternative approach to data storage.
    Work to date has demonstrated that protein memory technology is
    feasible and potentially capable ofenabling significant
    increases in memory storage capacity. The committee recommends an
    increase of $3.0 million to continue protein-based memory research.

    Range improvement program

        The budget request contained $47.3 million for major test
    and evaluation investment in PE 64759F.
        The committee understands that the test range at Eglin Air
    Force Base is a national asset that provides important test and
    evaluation capabilities for the Department of Defense. It is
    also aware that the range needs improved instrumentation and
    other modernization to meet 21st century requirements. The
    committee supports improved test and evaluation and recommends
    an increase of $14.8 million for range modernization.

    Rocket propulsion research

        The budget request contained $48.1 million for rocket
    propulsion technology in the integrated high payoff rocket
    propulsion technology (IHPRPT) initiative programs.
        The IHPRPT represents the Department of Defense's principal
    technology effort to dramatically improve the performance of
    rocket systems and is leveraged through coordination and
    cooperation with industry and the National Aeronautics and
    Space Administration. The committee believes that the
    Department's strong leadership and commitment to this effort is
    essential to achieving this leverage, and is concerned that the
    requested level of funding may be insufficient to sustain
    critical research in materials and propellants. Therefore, the
    committee recommends an increase of $6.0 million to PE 62601F,
    $1.5 million be added to PE 63302F, and an increase of $1.0
    million to each for PE 62111N and PE 63217N for IHPRPT
    programs.

    Rocket system launch program

        The budget request contained $8.0 million in PE 65860F for
    the rocket system launch program (RSLP). The RSLP provides
    research, development, test, and evaluation support to the
    Department of Defense and other government agencies using
    excess ballistic missile assets.
        The committee continues to support the atmospheric
    interceptor technology (AIT) program, a primary technology base
    program within the Ballistic Missile Defense Office for
    advanced hit-to-kill interceptor technologies. Flight tests are
    needed in fiscal year 1998 for the AIT program to move ahead,
    but funding for these tests was not included in the AIT or RSLP
    budget requests. The committee understands that these flight
    tests may use experimental Advanced Solid Axial Stages
    boosters, the testing of which will help the RSLP program
    better meet future requirements. The committee recommends $33.0
    million for RSLP, an increase of $25.0 million, to support AIT
    flight tests in fiscal year 1998.

    Solar thermionics orbital transfer vehicle

        The budget request contained $40.8 million for advanced
    spacecraft technology in PE 63401F.
        The committee is aware that space power and thermal
    management technology is important to the goal of making future
    space-based systems more affordable. The committee also
    understands that the Air Force has initiated an orbital
    transfer vehicle program that will use thermionics technology
    to provide both electrical power and propulsion. The committee
    supports use of technological innovation to reduce the cost of
    space systems and recommends an increase of $20.0 million to
    support the orbital transfer vehicle program.

    Space and Missile Rocket Propulsion

        The budget request contained $16.2 million within PE 63302F
    for Space and Missile Rocket Propulsion.
        The committee remains concerned that the nation's space
    launch system is too unreliable and expensive and believes that
    exploration of potentially revolutionary launch technologies is
    fully justified. Improving the efficiency and responsiveness of
    U.S. launch capabilities is important to a wide range of
    military activities and to reducing infrastructure costs.
        The Scorpius space launch technology demonstration program
    embodies one promising approach to robust, inexpensive,
    scalable launch capabilities. It has been funded through seven
    small business innovative research awards by BMDO and Phillips
    Laboratory. The committee recommends an increase of $15.0
    million for continuation of the Scorpius program and that the
    funding for the Scorpius program be transferred from BMDO (PE
    63173C) to the Air Force (PE 63302F).
        The committee believes that military single-stage-to-orbit
    (SSTO) vehicles could also be important to future defense
    missions and could provide assured and very flexible access to
    space. The committee notes that the budget request contained no
    funding for the military spaceplane, however, the Air Force has
    expressed support for this program and indicates that it will
    be funded in fiscal year 1999. The committee recommends an
    increase of $15.0 million in PE 63302F to continue this
    program.

    Titan space launch vehicles

        The budget request contained $82.4 million in PE 35144F for
    research and development on Titan IVB boosters and related
    equipment.
        The Titan IVB uses upgraded strap-on solid rocket motors
    (SRMUs) to enable the Titan booster to meet increasing
    performance requirements. The Air Force determined that the
    SRMU needed to be requalified for use on the Titan IVB, if the
    program were to continue beyond 37 launches. The process of
    making this determination resulted in a significant lag in the
    obligation and expenditure of funding that was authorized in
    fiscal year 1996. Therefore, the committee recommends $67.4
    million, a reduction of $15.0 million to reflect this delay.

    Trusted rubix

        The budget request contained $5.3 million for the
    information systems security program in PE 33140F.
        The committee is aware that the advent of the information
    age has caused a greater reliance on computer-based systems
    and, accordingly supports the Department's efforts to improve
    computer security and to protect the defense information
    infrastructure from attack. The committee recommends an
    increase of $2.3 million for continued development of the
    Trusted Rubix multi-level security program.

                             Defense Agencies RDT&E

                                    Overview

        The budget request contained $9,361.2 million for Defense
    Agencies RDT&E. The committee recommends authorization of
    $9,914.1 million, an increase of $552.8 million.
        The committee recommendations for the fiscal year 1998
    Defense Agencies RDT&E program are identified in the table
    below. Major changes to the Defense Agencies request are
    discussed following the table.

                           Items of Special Interest

    Active structural control
        The budget request contained $82.6 million in PE 63764E for
    land warfare technology, including $29.0 million for technology
    for early entry forces.
        The committee understands that the helicopter active noise
    and vibration control (HANVC) program is demonstrating in a
    helicopter rotor control system the active structural control
    technology that was developed in the Defense Advanced Research
    Projects Agency advanced submarine technology program. The
    technology has the potential for significantly reducing the
    radiated noise and vibration produced by helicopters. The
    reduction in radiated noise and vibration could increase the
    survivability of helicopters on the battlefield and could also
    significantly reduce maintenance costs as well as crew and
    passenger discomfort. The committee recommends an increase of
    $6.6 million in PE 63764E for the HANVC program.
    Advanced concept technology demonstrations
        The budget request contained $121.1 million in PE 63750D
    for Advanced Concept Technology Demonstrations (ACTD). The
    committee is concerned that this represents more than a hundred
    percent increase for the fiscal year 1997 appropriation of
    $58.5 million. Although the Department has stated that ACTDs
    are used to apply mature technologies to meet urgent military
    requirements, the committee has found that ACTDs often use
    technology that is not mature and fail to address a validated
    urgent military requirement. Therefore, the committee questions
    the requirement for the requested funding increase and
    recommends $91.1 million, a decrease of $30.0 million in PE
    63750D.
    Advanced lithography program
        The budget request contained $32.0 million in PE 63739E for
    the Defense Advanced Research Projects Agency (DARPA) advanced
    lithography program.
        The committee notes the critical role played by lithography
    in the development of advanced microchip technology and the
    role of the microchip as the engine of the information
    technology revolution that is the foundation of modern
    warfighting. The DARPA advanced lithography program was
    established in response to Section 216 of the National Defense
    Authorization Act for Fiscal Year 1995 (Public Law 103-337) as
    a goal-oriented program to ensure the development of
    lithographic processes that would lead to superior performance
    electronics systems for the Department of Defense. The goal of
    the DARPA program to provide early research in high risk, high
    payoff technologies for the pattern transfer of highly complex
    patterns at sub 0.1 micron resolution, and focuses on the areas
    of maskless writing, new imaging materials, metrology, and
    exploitation of recent developments such as proximal probes and
    quantum structures. DARPA investments are used to demonstrate
    proofs of concept, with planned early transition to the
    services and industry for development of the prototype stage;
    and the DARPA strategy puts responsibility for research and
    development investments within five or six years of production
    in the hands of industry. The committee understands that DARPA
    is working with industry and the Navy to transition the DARPA
    program in x-ray lithography. To facilitate this transfer and
    ensure a smooth transition of the technology development
    program to industry and the Navy, the committee recommends an
    increase of $15.0 million. The committee also recommends an
    increase of $6.0 million for the support of ongoing long term
    nanofabrication and extreme ultraviolet lithography research
    aimed at the fabrication of nanoelectric structures.
    Advanced submarine technology program
        The budget request contained $69.1 million in PE 63763E for
    the Defense Advanced Research Projects Agency marine technology
    program. No funds were included for joint U.S./Russian
    submarine research and development.
        The committee recommends an increase of $3.0 million to
    enable the Director of DARPA to establish a U.S.-Russian
    cooperative program for research and development relevant to
    nuclear submarines. This initiative will capitalize on the
    trust and confidence created under DARPA-sponsored initiatives
    with the Russian submarine design bureaus and institutes of the
    Russian Academies of Science. The cooperative program should
    apply to technology in the areas of nuclear submarine
    architecture, ship automation and damage control, submarine
    hydrodynamics and hydroacoustics. The technical direction and
    scope of these initiatives will be coordinated with the
    Department of the Navy.
    Airborne information transmission
        The budget request contained $10.8 million in PE 35206D to
    continue testing and evaluation of the airborne information
    transmission (ABIT) system.
        The committee believes that all major airborne
    reconnaissance systems should have the ability to communicate
    and cooperatively operate sensor systems using wide-bandwidth,
    high data rate communications. Such a capability would allow
    real-time database sharing, cooperative target location, a long
    haul ``reach back'' capability to national processing
    facilities, and use/control of collection systems from platform
    to platform. The committee supports the Department's Common
    Data Link (CDL) and ABIT efforts to pursue these capabilities.
    Accordingly, the committee directs the Secretary of Defense to
    conduct a study on the costs, requirements, and benefits of
    adding wide-bandwidth data links on all major airborne
    reconnaissance/surveillance aircraft. The study should also
    provide costs for developing and installing this capability on
    the various aircraft. The results of this study shall be
    provided to the Congressional defense and intelligence
    committees by October 1, 1998.
        The committee notes the ongoing Air Force efforts to
    integrate ABIT capabilities on the RC-135 reconnaissance
    aircraft, and believes this effort should be the basis for all
    future manned reconnaissance interoperability efforts,
    including an ABIT capability on the joint surveillance target
    attack radar system aircraft. The committee recommends an
    increase of $3.0 million for the Air Force to lead this effort.
    Airborne overhead integrated task force (AOITF)
        The Department of Defense and the Intelligence Community
    have formed an integrated task force to investigate the costs
    and benefits of correlating airborne and overhead
    signalsintelligence data for improved target location capabilities. The
    task force has concluded the first phase of its work, unquestionably
    showing results that would provide high payoff for tactical forces at
    modest costs. Due to the timing of the task force's study, the
    administration could not address its findings and funding
    recommendations in the budget request.
        Based on the potential importance of this initiative for
    dominant battlefield awareness in several primary mission
    areas, the committee recommends an increase of $7.2 million in
    the PE 35206D, within Defense Airborne Reconnaissance Program
    for continuing AOITF investigations and developments.
    Additionally, the committee recommends an additional $2.3
    million in PE 31359A, within the General Defense Intelligence
    Program for required software improvements to the Joint
    Collection Management Tool program. Other actions are detailed
    in the classified annex to this report.
        The committee applauds the work of the task force and the
    decision to sustain it and ultimately transform it into a joint
    office to oversee implementation. The committee also fully
    endorses the task force's plan to examine the costs and
    benefits of cooperative processing in other, closely related
    areas.

    Airborne reconnaissance advanced development

        The budget request contained $4.5 million in PE 35206D for
    continued refinement of the joint airborne reconnaissance
    architecture standards. Included in this amount was funding for
    verifying compliance and interoperability of new upgrades and
    developments. The committee recommends $1.5 million for this
    effort, a decrease of $3.0 million.
        The budget request for PE 35206D also contained $3.0
    million for initiating development of the heavy fuel engine
    (HFE) for the tactical UAV. Department of Defense documentation
    duplicates justification for requesting an HFE within PE
    35204D. Additionally, the committee is aware that previous
    authorizations and appropriations for this effort have not been
    fully obligated or expended. Therefore, the committee
    recommends a decrease of $3.0 million in this program element.

    Airborne reconnaissance advanced development

        The budget request contained $9.6 million in PE 35206D for
    studies and advanced designs leading to possible future
    integration of the joint signals intelligence (SIGINT) avionics
    family (JSAF) collection systems on the Global Hawk unmanned
    aerial vehicle (UAV). It also contained $6.6 million for
    beginning development of systems to incorporate the JSAF prime
    mission equipment. The committee understands that this funding
    will not build systems, but only provide the necessary studies
    and initial design efforts to do so.
        The committee understands the Global Hawk is an advanced
    concept technology demonstration (ACTD) designed to validate
    the military utility of a high altitude, long endurance, wide
    area coverage UAV. There is no stated goal for a SIGINT
    demonstration in the ACTD, and as stated by Department
    witnesses, there is no Joint Requirements Oversight Council
    approval for such requirement. Additionally, since the military
    utility demonstration phase of this ACTD is scheduled to be
    completed in fiscal year 2000, there has been no determination
    that this air vehicle will be continued beyond the ACTD.
        Although the committee does not believe this vehicle will
    ever totally replace existing SIGINT systems, it does believe
    there may be a future utility for a focused Global Hawk SIGINT
    mission. However, the committee is not willing to authorize the
    expenditure of such large sums for studying such a future
    mission when the air vehicle has not yet flown, or proven its
    military utility and suitability for its primary imagery role.
    The committee is particularly sensitive to this issue when the
    Department is apparently willing to deny funding to upgrade
    critical operational SIGINT collection systems in order to fund
    demonstration systems. Accordingly, the Congress for fiscal
    year 1997 denied $10.0 million funding request in the Global
    Hawk program element for SIGINT development. The committee,
    however, has recently learned that the Department has an
    additional $4.0 million in fiscal year 1997 funds in the
    Defense Airborne Reconnaissance Program's advanced technology
    funding line for this same purpose.
        Therefore, the committee recommends a decrease of $16.2
    million in this program element for the purpose of advanced
    design for a SIGINT capability on Global Hawk. The committee
    will be willing to address this issue as a product improvement
    to an imagery-capable and militarily suitable air vehicle that
    has been demonstrated, proven, and approved for acquisition.
    The committee believes the fiscal year 1997 funds are
    sufficient to study not implement development of a future
    SIGINT application and agrees the funds should be expended for
    that purpose.

    Ballistic missile defense

        The budget request contained $2,589.1 million for research,
    development, test, and evaluation (RDT&E), procurement, and
    military construction of ballistic missile defense (BMD)
    systems within the Ballistic Missile Defense Organization
    (BMDO). The committee recommends changes to the request as
    summarized below:

                            [In millions of dollars]

    Support technologies(PE63173C)................................    $25.0
    Navy Theater Wide (PE63868C)..................................    150.0
    Navy Area Theater (PE64867C)..................................     22.0
    THAAD (PE64861C)..............................................     45.0
    National Missile Defense (PE63871C)...........................    474.0
    Cooperative Programs (PE63XXXC)...............................    123.1
    Joint Theater Missile Defense (PE63872C)......................    (18.7)
    UAV BPI (PE63870C)............................................    (12.9)
    Theater Missile Defense procurement...........................     384.6

        A detailed explanation of the recommended changes are
    provided below.
                Cooperative programs
        The budget request did not contain a separate program
    element (PE) for cooperative ballistic missile defense (BMD)
    programs. The committee continues to support cooperative
    ballistic missile defense programs with U.S. allies.
        The budget request for cooperative BMD programs with Israel
    contained $38.7 million for the Arrow Continuation Experiments/
    Arrow Deployability project (ACES/ADP) in PE 63872C, and $12.9
    million for the Unmanned Aerial Vehicle Boost Phase Intercept
    (UAV BPI) program in PE 63870C. The Israeli commitment to
    cooperative BMD development remains strong. The committee notes
    the accomplishments achieved to date by the U.S.-Israeli ACES/
    ADP project and recommends $48.7 million for the program, an
    increase of $10.0 million. The committee believes that
    additional funding will support efforts to deploy an Israeli
    ballistic missile defense capability while also providing
    valuable technological benefits to on-going U.S. TMD programs.
        The budget request contained $16.5 million within PE 63308A
    for the Tactical High Energy Laser (THEL) program. The
    committee is aware that the threat from tactical rockets and
    missiles is growing, as such systems proliferate world-wide.
    The U.S. and Israel are cooperating in an effort to respond to
    this threat by developing a high energy laser that can destroy
    tactical missiles in flight.
        The committee recommends a legislative provision (sec. 236)
    that would transfer the THEL program from the Secretary of the
    Army to the director of BMDO, and would authorize a total of
    $38.2 million for the THEL program. The committee directs the
    transfer of $16.5 million from PE 63308A to PE 63XXXC, a new
    program element that would consolidate cooperative ballistic
    missile defense programs under BMDO management. The committee
    also recommends an increase of $15.0 million to ensure
    completion of the first phase of the program to design, build,
    integrate and test the THEL advanced concept technology
    demonstrator and to begin developmental testing to validate
    THEL capabilities. The committee further directs the director
    of BMDO to provide the remaining $6.7 million required for the
    THEL program from BMDO administrative accounts.
        The budget request did not contain funding for two
    cooperative projects with Russia, the Russian-American
    Observation Satellite (RAMOS) and the Active Plasma Experiment
    (APEX). The committee recommends $30.0 million for the RAMOS
    and APEX projects. Recent events indicate some Russian interest
    in exploring the possibility of greater cooperation in this
    area. For example, at the recent Helsinki summit, Presidents
    Clinton and Yeltsin declared that they are prepared to explore
    integrated cooperative defense efforts in the area of early
    warning support for TMD activities, technology cooperation in
    areas related to TMD, and expansion of the ongoing program of
    cooperation in TMD exercises.
        The committee notes that expanded cooperation with Russia
    in the area of ballistic missile defense must be carefully
    considered and implemented only in a manner that does not
    jeopardize U.S. technological advantages or the development and
    deployment of U.S. BMD systems. The committee directs the
    Secretary of Defense to develop a plan for U.S.-Russian
    cooperative projects--identifying the costs and benefits
    associated with each project--and to submit this plan to the
    Congressional defense committees no later than February 1,
    1998.
        The committee believes that the effective management of
    cooperative BMD programs requires their consolidation in a
    separate program element. Therefore, the committee recommends a
    legislative provision (Sec. 232) that would establish the
    ``Cooperative Ballistic Missile Program'' as a separate program
    element within BMDO to support technical and analytical
    cooperative missile defense efforts between the U.S. and other
    nations.
        The committee recommends $123.1 million to support the
    cooperative programs in the new PE63XXXC. This amount includes
    the transfers of $38.7 million from PE 63872C, $12.9 million
    from PE 63870C, $16.5 million from PE 63308A, and an increase
    of $55.0 million over the amounts requested.
                Joint theater missile defense
        The budget request contained $542.6 million for the Joint
    Theater Missile Defense (JTMD) in PE 63872C.
        The Pacific Missile Range Facility (PMRF) provides an
    essential test range capability for Navy and other TMD
    programs. PMRF enhancements are needed to ensure that the range
    can support the full scope of TMD testing required in the
    future. The committee recommends an increase of $20.0 million
    for the purpose of upgrading the PMRF.
         The committee also directs the transfer of $38.7 million
    from PE 63872C to the new cooperative BMD PE 63XXXC to support
    the Israeli-U.S. effort to develop the Arrow ballistic missile
    defense system (project 2259). The details of this transfer are
    discussed elsewhere in this report.
        The committee recommends $523.9 million for the JTMD
    program.
                Medium extended air defense system (MEADS)
        The budget request contained $47.9 million in PE 63869C for
    the Medium Extended Air Defense System (MEADS).
        The Administration has identified the MEADS as a high
    priority Theater Missile Defense (TMD) initiative and as an
    important international cooperative development effort. While
    the committee supports MEADS, it does so with some reluctance
    since the Administration currently has no funding in fiscal
    year 1998 or the Future Years Defense Plan (FYDP) to continue
    MEADS development beyond the current project definition-
    validation phase. The Administration's apparent lack of long-
    term commitment to MEADS threatens both program stability and
    perceptions of U.S. reliability as a partner in current and
    future international cooperative programs. The committee's
    support for MEADS is dependent on the Administration's
    willingness to fund its continued development and the Secretary
    of Defense is urged to provide adequate funding for this
    development in the FYDP and to designate strongly MEADS as a
    core TMD program.
                Multilateralization of the Anti-Ballistic Missile Treaty
        The committee notes the Administration's decision to seek
    to expand beyond Russia the number of states party to the 1972
    U.S.-Soviet Anti-Ballistic Missile (ABM) Treaty to include
    three former republics of the Soviet Union.
        The committee is concerned with the Administration's
    contention that multilateralizing the ABM Treaty is not a
    substantive change to the treaty's terms and, therefore,
    Congressional approval is not required. In a report to Congress
    in November 1996, the Administration asserted that ``the
    resolution of succession questions has long been regarded as a
    function of the Executive Branch'' and that the notion of
    Congressional approval of any succession agreement ``would cast
    doubt on well-established principles of treaty succession.''
        The committee believes that the issue of whether or not
    multilateralization involves substantive changes to ABM Treaty
    has less to do with the question of which states are
    appropriate successors than with the rights accorded those
    states under the agreement reached. For example, the treaty
    allows the parties to deploy up to 100 ABM interceptors.
    However, the administration has stated that Russia will be
    granted exclusive rights to deploy the full complement of 100
    interceptors on its side. In other words, although the former
    Soviet states of Ukraine, Belarus, and Kazakhstan might become
    parties to the treaty, they would not be allowed to deploy ABM
    interceptors on their national territory. In the committee's
    view, this represents a modification to the rights of the
    states party to the ABM Treaty, and, therefore a substantive
    change to the treaty.
        Furthermore, the committee believes that the addition of
    multiple coequal parties to the ABM Treaty would substantively
    change the process by which treaty revisions to might be
    negotiated. Four parties, each of equal legal standing but with
    varying rights accorded under the treaty, would presumably have
    to agree unanimously to amend the treaty if the U.S. pursues
    such amendments. Such a process is substantively different than
    negotiating with one equal party.
        Deployment of an effective national missile defense capable
    of defending all fifty states, even against a limited ballistic
    missile threat, will likely require amendment of the treaty.
    With five parties where there were once only two, the treaty
    amendment process would be rendered much more difficult, and
    perhaps impossible. Thus, even while the Administration
    purports to be committed to an NMD deployment option, it
    simultaneously supports a change to the ABM Treaty that could
    render any such deployment option, short of abrogating the
    treaty, implausible.
        The committee believes that multilateralization represents
    a substantive change to the ABM Treaty, and, as such, that the
    Administration is required to submit any such proposal to
    Congress for appropriate review and approval.
                National missile defense
        The budget request contained $504.1 million for National
    Missile Defense (NMD) in PE 63871C, $324.7 million less than
    appropriated for fiscal year 1997. The Secretary of Defense
    recently informed the committee that NMD funding in the Future
    Years Defense Plan (FYDP) is inadequate to support the program
    and identified a fiscal year 1998 shortfall of $474.0 million,
    part of a total shortfall of at least $2.3 billion over the
    FYDP.
        The committee has consistently believed that proposed NMD
    budgets were inadequate to support the Administration's ``three
    plus three'' deployment readiness program. As early as 1994,
    the committee was informed by the BMDO that annual NMD funding
    of $600 million was required for a viable technology readiness
    program. BMDO reported then that annual funding in the range of
    only $450 million ``could seriously damage our NMD readiness
    strategy and would likely permit projected third world threats
    to the homeland to materialize prior to any viable NMD
    deployment capability.'' In 1995, BMDO informed the committee
    that a ``three plus three'' deployment readiness program would
    require annual development funding of $800 million to $850
    million. However, the Administration's annual funding requests
    have consistently fallen hundreds of millions of dollars short
    of the levels needed for a viable program. Even after the
    Administration provides additional outyear funding for NMD, the
    program schedule will be challenging and the committee is
    concerned that several factors may undermine the viability of
    even the Administration's option to deploy an NMD by 2003.
        First, the previous Under Secretary for Acquisition and
    Technology testified to the committee that no long lead
    procurement funding for NMD had been budgeted anywhere in the
    FYDP because no deployment decision had been made. The
    committee remains concerned that unless appropriate funds for
    long lead procurement, military construction, and deployment
    planning are programmed in fiscal year 1999, the option to
    deploy an NMD by 2003 will be unavailable. Accordingly, the
    committee directs the Director of BMDO to provide a report to
    the Congressional defense committees by February 1, 1998,
    detailing long lead procurement, military construction, and
    deployment planning, and any other acquisition activity that
    must be funded prior to a decision to deploy an NMD in order to
    ensure that deployment by 2003 could be achieved; the cost of
    these activities; and how BMDO intends to preserve a 2003
    deployment option if these activities are not funded in the
    fiscal year 1999 budget request.
        Second, the committee is concerned with persistent NMD
    program organizational difficulties, particularly the delays in
    establishing the NMD joint program office and awarding the lead
    system integrator contracts. The committee urges the Secretary
    to ensure that all management and contract difficulties are
    identified and addressed in an expedited manner in an effort to
    provide some long overdue stability to the program.
        Third, the committee notes that inadequate investments in
    test assets has increased technical and schedule risk for BMD
    programs, including NMD. A recent test failure, due to human
    error in the launch sequence of a NMD test vehicle, resulted in
    delays to the program because another booster and additional
    test targets were not available. The committee finds this kind
    of delay unacceptable for such a high priority program.
    Accordingly, the committee directs the Director of BMDO to
    report to the Congressional defense committees by February 1,
    1998, on the specific steps that are being taken, and those
    that should be taken but are not, to mitigate schedule risks
    and the potential for single point failures resulting from
    inadequate test assets.
        Finally, the committee notes that NMD battle management/
    command, control, and communications (BM/C3) funding has
    declined dramatically in each of the last two fiscal years.
    Effective BM/C3 is of central importance to the success of all
    ballistic missile defense efforts. While the committee is
    encouraged that reuse of theater missile defense BM/C3 software
    is being emphasized by BMDO as a means of speeding development
    and reducing risk and cost, NMD software development remains a
    significant challenge. The committee believes that BM/C3
    development and risk reduction efforts deserve priority
    attention and urges DOD to establish reuse of TMD BM/C3 as a
    significant evaluation criterion in future NMD system contract
    awards, consistent with system requirements.
        The committee believes that deployment of a national
    missile defense remains a national priority and recommends
    $978.1 million, an increase of $474.0 million.
                Navy area theater ballistic missile defense
        The budget request contained $267.8 million in PE 64867C
    for Navy Area Theater Ballistic Missile Defense (TBMD). The
    committee notes the program's recent missile intercept testing
    successes and supports Department efforts to accelerate this
    program. As with all current TMD programs, the committee
    believes that the Navy Area TBMD test program could be more
    effectively accelerated if sufficient threat representative
    missile targets and test component spares were available.
    Accordingly, the committee recommends $289.8 million, an
    increase of $22.0 million to provide additional test support.
                Navy theater-wide missile defense
        The budget request contained $194.9 million in PE 63868C
    for the Navy theater-wide missile defense system. The unfunded
    requirements list from the Chief of Naval Operations and
    communications from other offices in the Navy indicate that the
    theater-wide program is inadequately funded to support an
    accelerated development test plan. Moreover, there is a growing
    concern that the Department still has not thoroughly assessed
    the feasibility of accelerating the currently planned Navy
    theater-wide missile defense deployment date of fiscal year
    2008. Noting numerous Administration statements attaching high
    priority to TMD programs, the committee directs the Secretary
    of Defense to report to the Congressional defense committees no
    later than February 15, 1998, on the cost and technical
    feasibility of options for a more robust Navy theater-wide
    flight test program, the earliest technically feasible
    deployment date, and costs associated with such a deployment
    date. The committee recommends an increase of $344.9 million,
    an increase of $150.0 million, to support a more robust program
    schedule.
                Support technologies
        The budget request contained a total of $147.6 million in
    PE 63173C for BMD support technologies.
        The Atmoshperic Interceptor Technology (AIT) program is an
    ongoing effort that addresses technological challenges common
    to several BMD programs, including THAAD, the Navy theater-wide
    program, and the national missile defense effort by examining
    advanced hit-to-kill warhead technologies. The budget request
    included only $4.9 million for AIT, a reduction from $43.0
    million appropriated for fiscal year 1997. The committee
    supports AIT and recommends an increase of $25.0 million to
    continue more robust AIT development.
        The committee is concerned by a funding reduction of over
    $100.0 million for BMD support technologies from the fiscal
    year 1997 level. Reductions of this magnitude slow the
    development of critical and innovative technologies and are
    inconsistent with the Administration's assertion that the
    budget request supports an acceleration of theater missile
    defense programs. They also undermine the comprehensive
    technology effort needed to stay ahead of the evolving
    ballistic missile threat.
        The committee urges the Secretary of Defense to provide
    adequate funding for BMD support technologies and recommends
    $172.6 million, an increase of $25.0 million.
                Theater high altitude air defense
        The budget request contained $556.1 million for
    demonstration/validation and engineering and manufacturing
    development for the Theater High Altitude Air Defense (THAAD)
    system.
        The committee supports the THAAD program, believes it will
    provide U.S. military forces with critically needed protection
    against ballistic missile attack, and restates its support of
    THAAD as a core TMD system. Although the THAAD program has met
    numerous test objectives to date, the committee is concerned by
    recent test failures and supports the Department's prompt and
    comprehensive program reviews. However, the committee is
    disturbed by indications that the Department nonetheless plans
    to reduce prior year and fiscal year 1998 THAAD funding in
    order to use the funds for other purposes. Although
    identification of the causes of test failures is necessary
    before further testing, the committee believes that both the
    Administration's currently planned fielding date of 2006 may be
    indicative of a program constrained by funding and insufficient
    test opportunities.
        Independent reviews of THAAD have reaffirmed the program's
    planned design, operational requirement, and the successful
    completion of 28 of the 30 THAAD program objectives to date. In
    addition to the on-going review of THAAD, the committee
    believes that the test program will benefit from additional
    funding to provide reserve interceptor, missile, and target
    assets, as well as other back-up resources. A more robust test
    program will help to lower the risk of delays and lost
    opportunities resulting for unexpected anomalies and single-
    point failures.
        The committee recommends $601.1 million, an increase of
    $45.0 million in PE 64861C, to provide funds necessary for
    additional THAAD testing and to further mitigate risk in the
    flight test program. The committee strongly urges the
    Department not to reduce funding for THAAD in order to address
    shortfalls elsewhere in the FYDP and to use any prior or fiscal
    year 1998 THAAD funds deemed unavailable for obligation for
    their original purpose for further risk reduction in the test
    program.
                Theater missile defense demarcation
        The committee notes that the presidents of the United
    States and Russia, at the recent Helsinki summit, signed a
    joint statement concerning the 1972 Anti-Ballistic Missile
    (ABM) Treaty and the relationship of TMD systems to that
    treaty. The joint statement outlined the agreement reached last
    year between both sides at the Standing Consultative Commission
    (SCC) regarding lower-velocity TMD systems, which Russia
    refused to sign, and established parameters to be used as the
    basis for further negotiations on higher-velocity TMD systems.
        The committee is concerned with several elements of the
    joint Helsinki statement. First, it establishes limitations on
    TMD systems in the context of the ABM Treaty. The ABM Treaty,
    which prohibits a defense of U.S. national territory against
    strategic ballistic missiles, was never intended to apply to
    theater missile defense systems.
        Second, the Administration asserts that it has sought to
    negotiate an agreement with Russia that would ``clarify'' the
    distinction between permitted and prohibited missile defense
    capabilities. The agreement fails to achieve this
    clarification.
        The committee continues to accept the ``demonstrated
    standard'' identified in section 325 of the National Defense
    Authorization Act for Fiscal Year 1996 (Public Law 104-106),
    which makes no reference to interceptor speeds. Specifically,
    this provision established the principle that TMD interceptors
    could not be tested against a ballistic missile traveling
    farther than 3,500 kilometers or with a velocity greater than
    five kilometers per second. Interceptors tested against
    ballistic targets exceeding these parameters would be
    considered ABM-capable. This ``demonstrated standard'' was the
    only criterion supported by Congress for judging whether TMD
    interceptors were captured by the ABM Treaty.
        The U.S.-Russian Helsinki agreement would establish the
    ``demonstrated standard'' as the sole measure of treaty
    compliance for lower-velocity TMD systems, those with speeds of
    three kilometers a second or less. However, no agreement was
    reached on higher-velocity TMDsystems. While the Administration
    has issued public assurances that no U.S. TMD systems now under
    development will be restricted by the Helsinki agreement, it has also
    committed to negotiate with Russia on the higher-velocity systems. The
    Russian perspective on these impending negotiations is that limits on
    interceptor speed must be introduced, the U.S. cannot unilaterally
    declare its higher-velocity TMD programs to be in compliance with the
    ABM Treaty, and that compliance can only be established through
    negotiation
        Far from clarifying the distinction between permitted and
    prohibited systems, the Administration has apparently accepted
    an artificial distinction between lower- and higher-velocity
    TMD and has agreed to negotiations that may limit the
    performance of U.S. TMD systems. The committee opposes
    restrictions on higher velocity U.S. TMD systems, as well as
    negotiations that would compel any degradation of the
    capabilities embodied in U.S. TMD systems, present or future.
        Third, the agreement reached in Helsinki went beyond even
    the Administration's stated objective of clarifying ambiguities
    in the ABM Treaty. For instance, the joint statement notes that
    TMD deployments should be limited in ``number and geographic
    scope.'' Such a restriction could impose for the first time
    unacceptable restraints on where and how TMD systems might be
    deployed.
        Fourth, the joint statement notes U.S.-Russian agreement
    that no TMD deployment will be directed against the other
    party. This prohibition could deny new NATO members an
    important defensive benefit under Article V of the North
    Atlantic Treaty. Under such a restriction, Russia may object to
    U.S. TMD systems deployed in Western Europe or Asia intended to
    protect U.S. forces and allies. Such a restriction is likely to
    make it more difficult to build an allied consensus on the need
    for TMD.
        Finally, the language of the joint statement committing the
    sides to ``exchange detailed information annually on TMD plans
    and programs'' has the potential to provide Russia with
    sensitive information regarding U.S. TMD programs, as well as
    an opportunity to challenge U.S. TMD programs early in their
    development. Such exchanges must be carefully thought through
    and implemented only to the extent that they do not undermine
    U.S. national security objectives.
        The committee notes the Administration has stated that the
    Helsinki agreement on theater missile defense demarcation
    represents a substantive change to the ABM Treaty and its
    intention to submit the agreement to the Senate for its advice
    and consent. The committee believes that a full and thorough
    debate over the implications of the TMD demarcation agreement
    for U.S. security is long overdue.
                Theater missile defense of U.S. territories
        The committee supports highly effective theater missile
    defenses for the territories of the United States and urges the
    Secretary of Defense to take all appropriate steps to ensure
    that U.S. ballistic missile defense planning continues to be
    responsive to evolving threats to these territories.

    Chemical-biological defense program

        The budget request included a total of $530.9 million for
    the chemical-biological defense (CBD) program of the Department
    of Defense, including $320.8 million in research, development,
    test, and evaluation and $210.0 million in procurement.
        The committee has been advised of problems in manufacture
    and qualification of new production M-40 protective masks and
    is concerned about the impacts of these problems on the ability
    to meet acquisition objectives for the mask. The committee
    directs the Secretary of the Army to review the M-40 mask
    procurement program and provide a report to the Congressional
    defense committees by October 30, 1997, which addresses the
    results of that review and the actions to be taken to correct
    any problems discovered.
        The committee notes that the Counter Proliferation Review
    Committee's May 1997 Report states the Defense Advance Research
    Projects Agency (DARPA) biological warfare defense program will
    no longer be incorporated into the CBD program management and
    oversight structure. The Committee directs the Secretary of
    Defense to ensure that the DARPA biological warfare defense
    program is coordinated and integrated under the program
    management and oversight of the Department's CBD program.
        The committee understands that the Department's policies on
    anthrax vaccination of U.S. forces and support for Other than
    U.S. Forces are awaiting final approval, and that these
    decisions will impact total funding, vaccine production, and
    storage requirements. The committee also notes the impending
    award of a prime systems contract to develop new biological
    defense vaccines, pursue vaccine licensing, and produce
    stockpile vaccines to meet the Department's requirements.
        To address funding shortfalls in the budget request for the
    CBD program, the committee recommends an increase of $1.6
    million in PE 63384BP for vaccine advanced development, an
    increase of $858,000 in PE 64384BP for vaccine development and
    an increase of $5.0 million in PE63884 to support on-going
    development efforts in detectors, decontamination equipment,
    and protective equipment for the Chemical-Biological Quick
    Reaction Force and its components.
        The committee directs the Secretary of Defense to address
    the above issues as specific areas of interest in the next
    annual report to Congress on the NBC defense program.

    Central test and evaluation investment plan

        The budget request contained $131.4 million for the central
    test and evaluation investment plan (CTEIP) in PE 64940D.
        The committee notes the reduction in funding for CTEIP and
    supports Department initiatives to streamline and consolidate
    development test operations. However, the committee understands
    that additional funds are required to begin the preliminary
    design phase for the heavy vehicle test facility. An increase
    of $10.0 million will accelerate the development, by a full
    year, of this capability offering significant cost and schedule
    benefits for future heavy vehicle development programs.
        The committee is also concerned that anechoic research
    efforts of both the Air Force and Navy are insufficiently
    funded in the budget request. The committee recommends $142.9
    million, an increase of $1.5 million for CTEIP for the heavy
    vehicle test facility and an increase of $10.0 million to
    adequately support both service anechoic research programs.

    Commercial technology insertion programs

        The budget request contained $47.9 million in PE 63752D for
    insertion of commercial technology in military systems.
        The committee supports programs designed to reduce life
    cycle costs as well as enhance system reliability,
    maintainability and capability. However, the committee views
    this type of activity as integral to specific systems
    acquisition programs and not as a separate activity. The
    committee recommends no funds for PE 63752D and directs the
    Secretary of Defense to ensure that these initiatives are
    incorporated within the Department's dual use applications
    program.

    Conventional munitions demilitarization technology

        The budget request contained $12.3 million in PE 63104D to
    continue the program for development and demonstration of
    environmentally compliant technologies for the disposal and
    demilitarization of conventional munitions, explosives, and
    rockets.
        The committee is pleased that the Department of Defense has
    developed a joint explosives demilitarization program in
    accordance with the National Defense Authorization Act for
    Fiscal Year 1996 (Public Law 104-106) and the direction
    contained in the National Defense Authorization Act for Fiscal
    Year 1997 (Public Law 104-201), using an integrated management
    structure that follows the model of the large rocket motor
    demilitarization program. The committee notes that the Joint
    Demilitarization Program Report to the Congress, dated February
    1997, reflects a six-year investment plan that is based on
    requirements from the Joint Ordnance Commander's Group and
    includes a range of competitively selected resource recovery
    and demilitarization technologies. The committee understands
    that the joint explosives demilitarization program would
    balance technology maturation with disposal needs that address
    the highest priority demilitarization requirements. The
    committee believes that the program should lead to the fielding
    of safe, efficient, and environmentally acceptable technologies
    for disposal and demilitarization of the nation's stockpile of
    obsolete munitions, explosives, and rockets. To maintain the
    program at the funding level established in the enabling
    legislation, the committee recommends an increase of $3.0
    million, which should permit the acceleration of promising
    technologies and the evaluation of additional alternative
    technologies.

    Counter-proliferation analysis and planning system

        The budget request contained $58.3 million in PE 63160D for
    advanced development of counter-proliferation support
    technologies.
        The committee has been made aware of the counter-
    proliferation analysis and planning system (CAPS) and is
    supportive of its demonstrated performance as a counter-
    proliferation analysis and planning tool for the intelligence
    community and regional commanders-in-chief. The committee
    recommends an increase of $3.0 million in PE 63160D to
    accelerate the development of CAPS mission planning tools and
    develop the system architecture for mission-specific data bases
    and mission support.

    DarkStar

        The investigation of last year's crash of the first
    DarkStar unmanned aerial vehicle (UAV) and the experience of
    trying to field the Predator after its successful demonstration
    have revealed that reliability is an important issue for these
    advanced concept technology demonstrations (ACTDs). In
    principle, an ACTD is to demonstrate technology and should not
    expend much resources ensuring that the demonstrated system is
    ready for serial production. However, in practice, the
    Department of Defense has demonstrated a proclivity to move
    directly into production with ACTD configurations immediately
    after successful demonstrations. Taking production issues into
    account in designing systems for ACTDs, therefore, would appear
    to be prudent, especially in cases (such as the endurance UAVs)
    where a unit price cap is a determining factor in the success
    of the program. The DarkStar program office is currently
    examining high-payoff reliability improvement measures for the
    system. The committee directs Department to provide the results
    of this review and any actions taken by February 15, 1998.
        The committee also requests the Department to sponsor a
    study of the operational benefits of adding a moving target
    indicator (MTI) radar capability to the DarkStar, and the costs
    of doing so. This study should be coordinated with the program
    office of the Joint Mobile Target Engagement ACTD, assuming it
    gets underway in fiscal year 1998. The study should be
    submitted to the Congressional defense and intelligence
    committees by April 1, 1998.

    Defense airborne reconnaissance office

        The budget request included $21.5 million in PE 35209D for
    operation of the defense airborne reconnaissance office (DARO).
        The National Defense Authorization Act for Fiscal Year 1994
    (Public Law 103-160) directed the creation of an organization
    to oversee and coordinate the activities of the military
    services with respect to the development of airborne
    reconnaissance systems. While the committee continues to
    support oversight of service developmental efforts to ensure
    system interoperability and preclude unnecessary duplication of
    efforts, it believes defense reconnaissance system oversight
    and guidance would be more effectively accomplished by the
    Director of Military Intelligence (DMI) than it has been thus
    far by the DARO. The committee further believes that
    development and acquisition of reconnaissance systems would be
    more properly controlled by the military services rather than
    centrally directed by the Office of the Secretary of Defense.
        Therefore, the committee recommends a provision (sec. 907)
    that directs abolishment of the DARO, and transfer of required
    defense airborne reconnaissance program functions to the
    Director, Defense Intelligence Agency (DIA) under his
    authorities as Director of Military Intelligence (DMI) and
    Joint Military Intelligence Program (JMIP) Coordinator. The
    committee directs the Director, DIA to provide a transition
    plan, with a draft DMI DARP charter, to the Congressional
    defense and intelligence committees no later than the
    submission of the fiscal year 1999 President's budget.
        The committee recommends no funding for the DARO, and $7.5
    million for continued DARP management, a decrease of $14.0
    million.

    Digital terrain elevation data

        The budget request contained no funds in PE 35206D for
    developing a digital terrain elevation data (DTED) collection
    capability for aircraft.
        The stated requirements for DTED are very stringent and may
    cost the Department of Defense more than it can afford using
    current and planning collection methods. There are also
    indications that the Joint Warfare Capabilities Assessment for
    intelligence and reconnaissance casts doubt on the need for
    worldwide DTED at the currently required levels (3, 4, and 5).
    Instead, the committee believes it may be sufficient to have
    the surge capability to collect such data only when needed with
    an airborne system. However, no such DTED collection capability
    currently exists.
        Therefore, the committee, recommends $2.0 million in this
    PE for the Department to conduct an analysis to determine
    design trades from which to choose an airborne platform to
    perform fine DTED data collection. This analysis should
    determine whether an embedded system or a ``remove and
    replace'' configuration that could be installed as necessary on
    an airframe of opportunity makes the most sense. The committee
    requests that the results of this analysis be provided to the
    defense and intelligence committees no later than April 1,
    1998.

    DP-2 thrust vectoring system

        The budget request contained $82.6 million in PE 63764E for
    land warfare technology. The committee recommends an increase
    of $14.0 million to continue the DP-2 thrust vectoring system
    development and demonstration program.

    Endurance unmanned aerial vehicles

        The budget request contained $216.7 million in PE 35205D
    for endurance unmanned aerial vehicles (EUAV). The request for
    high altitude EUAVs contained $96.0 million for Global Hawk and
    $54.6 million for DarkStar, while $15.0 million was requested
    for the medium altitude UAV Predator.
        The committee notes that the Department initiated Advanced
    Concept Technology Demonstrations (ACTD) to develop and
    demonstrate the two high altitude EUAVs in 1995 in order to
    permit the rapid and affordable evaluation of advanced
    capabilities. The EUAV ACTD also included the specific
    requirement that the two EUAV candidates must prove the ability
    to be procured at a unit cost of $10.0 million or less before
    being selected to perform the EUAV mission. The committee
    understands that the Global Hawk is to provide continuous, all-
    weather, day/night, wide-area reconnaissance and surveillance
    in direct support of the joint forces commander. The DarkStar
    is intended to provide essentially the same capabilities, but
    is designed to employ stealth technology to operate in high
    threat environments.
        While the committee supports the need for determining the
    military utility of long-dwell UAVs for broad area coverage, it
    remains concerned about the two high altitude EUAVs. The
    concern is heightened by the recent DOD Inspector General
    report that states a lack of clear military worth of the
    current high altitude EUAV efforts. Further, the committee is
    concerned that current efforts are pushing the technologies
    involved and not specifically demonstrating proven/existing
    technologies (a major issue raised in the DOD IG report). The
    committee is also aware of system reliability and
    maintainability concerns and is concerned that it appears as
    though there is an apparent rush to this unproved UAV solution.
    In fact, the Department's own documentation shows that roughly
    39 percent of the airborne reconnaissance budget is going into
    proving UAVs--an extremely high percentage to demonstrate
    unproved capabilities that have marginally stated requirements.
        The EUAV ACTD management plan states that the number of
    Global Hawk and DarkStar EUAVs produced may be changed based on
    program status or user input. The committee understands that an
    adequate test program can be conducted with four Global Hawk
    air vehicles, four DarkStar air vehicles and two ground control
    stations, and strongly recommends that the Department complete
    the ACTDs, and user evaluations of the EUAV's military worth,
    before authorizing a high altitude EUAV acquisition program.
        The committee understands that the Department currently
    plans to suspend Global Hawk and DarkStar production after
    delivery of a total of five prototypes each in fiscal year 1997
    until both UAVs have been proven airworthy. The committee
    endorses this decision and recommends that all Global Hawk and
    DarkStar UAV assets remaining after completion of ACTD testing
    be transferred to the Air Force Air Combat Command for
    continued evaluation and user operational testing.
        The medium altitude EUAV, the Predator, was established as
    an ACTD in response to an urgent requirement identified by the
    Joint Chiefs of Staff (JCS) in 1993. The committee notes that
    while there have been some problems with this system, Predator
    is the first ACTD to complete transition to a production
    program. The success of the Predator in a number of continental
    United States exercises and two operational deployments to
    Bosnia has prompted the JCS to seek additional funding for
    Predator, including a number of pre-planned product improvement
    (P3I) upgrades to be included with production systems. Of the
    funds requested for fiscal year 1998, $4.4 million are
    designated for beginning development and integration of P3I
    upgrades. The committee recommends elsewhere in this report
    that additional procurement funding be provided to accelerate
    these upgrades.

    Facial recognition technology

        The budget request contained $29.1 million for the DOD
    counter-terror technical support (CTTS) program in PE 63122D.
        The CTTS is an interagency program for development and
    demonstration of surveillance, physical security, and
    infrastructure protection technology. The committee fully
    supports use of advanced technology to control access to
    critical facilities, and recommends an increase of $5.0 million
    for the development and demonstration of biometric access
    control technology, including the use of authentication
    software and the principal component method of facial
    recognition.

    Flat panel display initiative

        The budget request contained $37.0 million in PE 62708E for
    the development of the technology and manufacturing capability
    for high definition displays.
        In 1994, the President and the Department of Defense
    announced a five year Flat Panel Display Initiative and
    affirmed the commitment to establishing a viable domestic flat
    panel display industry. The objective of the program is to
    establish a domestic technical capability for development of
    advanced displays using multiple technological approaches,
    demonstrate themanufacturing capabilities required for high
    resolution military information display systems, and ensure the
    availability of advanced technology displays for use by defense
    agencies and the military services. The committee notes the success of
    the initiative in the development and demonstration of advanced
    technologies for high definition displays, in the increased level of
    participation in the program and funding provided by industry, and in
    the establishment of domestic capabilities for the manufacture of high
    definition displays. The ultimate success of the program will be a
    viable domestic flat panel display industry and proliferation of the
    application of flat panel display technology in the commercial sector
    and in the military services. The committee also notes, however, that
    the government's share of the program contained in the fiscal year 1998
    budget request for the Defense Advanced Research Project Agency is
    significantly below that originally projected when the initiative was
    announced to Congress in 1994. The committee believes that a stable
    funding level should be sustained until the completion of the original
    five year program. Such stability in funding is necessary in order to
    capitalize on previous investments in the development of high
    definition display technology and domestic manufacturing capabilities
    and to meet the government's stated commitment to support the
    establishment of domestic capabilities for manufacturing of flat panel/
    high definition displays and display substrates. Accordingly, the
    committee recommends an increase of $23.0 million to sustain the
    program at the fiscal year 1997 funding level. The committee also
    recommends that the program place increased emphasis on the
    demonstration of flat panel displays for various applications by the
    military services in order to facilitate the transition of the flat
    panel display program to the military services and their use of the
    technology for service applications.

    High altitude endurance unmanned aerial vehicle common ground segment

        The budget request contained $51.1 million in PE 35205D for
    the high altitude endurance (HAE) unmanned aerial vehicle (UAV)
    common ground segment (CGS), $9.0 million of which was for
    testing.
        The committee understands that $10.0 million of fiscal year
    1997 funds were authorized and appropriated for this same
    testing. The committee also understands that such testing was
    not completed due to the delays in both HAE advanced concept
    technology demonstrations. Therefore, the committee recommends
    $42.1 million, a decrease of $9.0 million.

    Joint robotics program

        The budget request contained $23.2 million in PE 63709D for
    the joint robotics program.
        The committee notes that vehicle teleoperation capability
    (VTC) technology is becoming mature and recommends an increase
    of $10.0 million to evaluate VTC technology.

    Joint wargaming simulation management office

        The budget request contained $71.3 million in PE 63832D for
    the Defense Modeling and Simulation Office activities to
    coordinate simulation policy within the Department of Defense,
    establish interoperability standards and protocols, promote the
    use of simulation within the military departments, and
    establish guidelines and objectives for coordination of
    simulation, wargaming, and training.
        The committee recommends $60.0 million, a reduction of
    $11.3 million. The committee believes that aggressive,
    innovative use of advanced modeling and simulation will be
    necessary if the Department of Defense is to modernize and
    perform its mission in the most cost-effective and timely
    manner, and will require that simulations be interoperable and
    reusable to the maximum extent possible. The committee
    understands that this is a key goal of the Department's
    Modeling and Simulation Master Plan. The committee also
    understands that the Department has successfully developed and
    demonstrated a high level architecture (HLA) for advanced
    modeling and simulation, which provides a necessary technical
    foundation for interoperability and reuse, and that the
    Department has a policy which requires HLA-compliance for all
    its simulations. The committee agrees with this initiative and
    intends to support only those investments in simulations which
    are HLA-compliant.

    Joint strike fighter

        The budget request contained $23.9 million in PE 63800E for
    continued development of the Joint Strike Fighter. The
    committee understands that defense-wide funding for this
    program has been transferred to the Navy and Air Force research
    and development accounts, and, therefore, recommends no funds
    be authorized in defense-wide research and development accounts
    for this program.

    Maritime technology program

        The budget request contained $37.4 million in PE 63746E to
    continue the maritime technology (MARITECH) program.
        This program is a five-year Defense Advanced Research
    Projects Agency (DARPA) initiative to preserve the U.S.
    shipbuilding industrial base by improvements in the industry's
    commercial competitiveness through the application of advanced
    technology. The committee notes the success of the MARITECH
    program to date. The program's two-phased acquisition strategy,
    which focuses in the near term on the development of
    internationally competitive commercial ship designs and
    construction strategies and in the long term on the development
    of advanced product and process technologies, has resulted in a
    significant increase in the level of activity and
    competitiveness of the U.S. shipbuilding industry. The
    committee recommends an increase of $4.0 million to support
    transition of the technologies developed under the program to
    the military services and to expand the opportunities for
    participation in the MARITECH program by the smaller,
    technologically innovative companies, that have participated in
    the DARPA program for development of advanced information
    technologies (such as simulation based design, virtual
    prototyping, and ship systems automation).

    Multi-function self-aligned gate array

        The budget request contained $122.0 million in PE 35204D
    for tactical unmanned aerial vehicles (UAV), including $34.5
    million for tactical control systems.
        The committee recommends an increase of $6.0 million to
    complete the UAV multi-function self-aligned gate array
    technology development and demonstration program.

    Next generation internet revolutionary applications

        The budget request contained $40.0 million in PE 62110E for
    the Defense Advanced Research Projects Agency (DARPA) component
    of the Next Generation Internet (NGI) program.
        NGI involves DARPA, the National Science Foundation (NSF),
    Department of Energy (DOE), National Institute of Science and
    Technology (NIST), and National Aeronautics and Space
    Administration (NASA) in a three-year, $100.0 million per year
    program to development and demonstrate the technologies,
    protocols, and standards for a very high speed, broad bandwidth
    NGI that will offer reliable, affordable, secure information
    delivery at rates thousands of times faster than today. The
    program has three goals: (1) develop the next generation
    network and connect universities and Federal research
    institutions with high speed networks that are 100 to 1000
    times faster than today's Internet; (2) promote experimentation
    with the next generation of networking technologies; and (3)
    demonstrate new applications that meet important national goals
    and missions.
        A fundamental objective for the NGI is to demonstrate a
    wide variety of nationally important applications that cannot
    be achieved over the current Internet infrastructure. Ideally,
    these applications will include federal agency mission,
    university and other public, and private sector applications.
    Potential application areas for the NGI include the following:
    health care (telemedicine, digital patient records, and
    emergency medical response team support), education (distance
    education, shared learning, and digital archives and
    libraries), scientific research (energy, earth systems,
    climate, and biomedical research), national security (high
    performance global communications and advanced information
    dissemination), environment (monitoring, prediction, warning,
    and response), government (delivery of government services and
    information to citizens and businesses), emergencies (disaster
    response and crisis management), design and manufacture
    (manufacturing engineering and virtual design), and information
    security (active and passive protection of defense and
    commercial information networks and information data bases).
    Many of these areas are of particular federal interest since
    they represent federal mission-critical applications that
    require advanced networking services and capabilities.
        The committee strongly endorses the NGI initiative. The
    committee supports the concept of the NGI initiative working
    with the applications communities--federal agencies, the public
    sector, academia, and private companies--to incorporate new and
    existing networking technologies and capabilities developed
    under the NGI into applications of importance to each community
    and which the community cannot achieve over the current
    Internet infrastructure, and the formation of cooperative
    ventures with regional consortia established for this purpose
    among federal agencies, local governmental authorities,
    industry, and academic institutions. The committee expects that
    such initiatives would leverage the application specific
    funding, knowledge, skills, and methods brought to the venture
    by the members of the regional consortium. Accordingly, the
    committee recommends an increase of $15.0 million to fund
    specific connectivity, functionality, services and software
    among the applications communities and regional consortia that
    will maximize the value of the infrastructure connectivity and
    services deployed by the NGI. The committee directs that
    competitive procedures shall be used for awarding all
    partnership grants and entering into all partnership contracts,
    cooperative agreements, and other transactions under the
    program, and encourages the establishment of cost-shared
    relationships where feasible.

    Pulsed fast neutron analysis technology demonstration

        The budget request contained no funds for continuation of a
    program for demonstration of the application of pulsed fast
    neutron analysis (PFNA) technology to the inspection of cargo
    and baggage at ports-of-entry for the presence of drugs,
    explosives, nuclear and chemical agents, and weapons of mass
    destruction.
        Proposals have been made for the development and
    operational field demonstration of a relocatable PFNA cargo
    inspection system, which would be based upon Defense Advanced
    Research Projects Agency (DARPA)'s completed demonstration of a
    fixed-site PFNA system; and a total of $11.2 million was
    appropriated for this purpose in fiscal years 1996 and 1997. In
    March 1997, the Technical Support Working Group initiated a
    contract for modification of the fixed-site PFNA demonstrator
    to a relocatable system for testing in a controlled operational
    environment. The committee understands, based on a recent
    General Accounting Office report, that PFNA system technology
    has not been adopted by the U.S. Customs Service because of
    concerns about cost, size, operations, and safety issues. The
    committee also understands that the fixed site system has not
    yet demonstrated the ability to detect chemical agents or
    special nuclear materials, that an additional $10.0 million
    will be required to complete system modification and the
    operational testing program, and that the Customs' Service has
    not indicated any funding support for the program or intent to
    field the system should operational testing be successful.
        The committee believes that the ability of fixed-site PFNA
    system to detect chemical agents and special nuclear materials
    must be demonstrated before the program proceeds to the design
    and engineering phase for a relocatable PFNA system, and
    recommends no additional funding for the PFNA program in fiscal
    year 1998. The committee directs the Secretary of Defense and
    the Secretary of the Treasury to conduct a joint assessment of
    the PFNA program which addresses Department of Defense and
    Department of the Treasury operational requirements for a PFNA
    cargo inspection system, demonstrated technical performance of
    the fixed-site PFNA inspection system, the ability of a
    relocatable PFNA inspection system to meet the operational
    requirements, the intention of each Department regarding the
    fielding of the PFNA inspection system, and recommendations and
    funding requirements for the completion of the testing program
    and fielding the system. The results of the assessment shall be
    provided to the Congress by December 31, 1997. Should the
    Secretary of Defense and the Secretary of the Treasury jointly
    recommend continuation of the program, the committee would
    encourage the reprogramming of fiscal year 1998 funds for that
    purpose.

    Response to threats of terrorist use of weapons of mass destruction

        The budget request contained $49.5 million to improve
    emergency response preparedness and coordination with state and
    local agencies through First Responder training, interagency
    exercises and technical assistance.
         The National Defense Authorization Act for Fiscal Year
    1997 (Public Law 104-201) directed the President to take
    immediate actions to enhance the capability of the Federal
    government to prevent and respond to terrorist incidents
    involving weapons of mass destruction, to provide enhanced
    support to improve the capabilities of state and local
    emergency response agencies to prevent and respond to such
    incidents at both the national and local level. The committee
    has reviewed the President's January 1997 report to the
    Congress, which provided hisassessment of those capabilities,
    and the Counterproliferation Program Review Committee's May 1997 report
    that provides the details of the Department of Defense role.
        The committee notes the actions taken to date by the
    Department of Defense to enhance emergency domestic
    preparedness and response to terrorist nuclear, biological, or
    chemical attacks under the counterproliferation support program
    and the CBD program. The committee notes the initial progress
    that has been made and that much remains to be done to extend
    the program to additional metropolitan areas and local
    jurisdictions.
                Chemical-biological response team
        Public Law 104-201 required the Secretary of Defense to
    establish and maintain at least one chemical-biological
    domestic terrorism rapid response team. The committee
    understands that the Department is establishing a Chemical-
    Biological Quick Reaction Force (CBQRF) and directs the
    Secretary of the Army, as executive agent for the domestic
    emergency response program, to ensure that the plans, programs,
    and budget of the CBQRF and its components are reviewed to
    ensure full coordination and integration of all DOD assets. The
    committee also directs the Assistant to the Secretary of
    Defense (Nuclear, Chemical, and Biological Defense Program) to
    ensure that all research, development, and acquisition efforts
    in support of the CBQRF and its components are fully integrated
    and coordinated within the Department's chemical and biological
    defense program.
        The committee understands that the Department of Defense is
    examining a new mission for the National Guard which would
    involve countering chemical and biological terrorism in the
    United States. The committee notes that the Army National Guard
    and the Army Reserve include a number of chemical defense units
    which could be employed in response to a chemical emergency and
    also notes that trained chemical incident response forces are
    present at the Army's chemical munitions storage sites. The
    committee believes that the availability of the National Guard
    chemical defense units to State authorities would make them
    particularly useful in response to a chemical or biological
    incident.
         The committee recommends an increase of $2.0 million in PE
    63122D to accelerate the development and evaluation of
    protective masks for emergency response forces that could be
    used in the evacuation of casualties and other personnel from a
    contaminated area.
         Elsewhere in this report the committee recommends an
    increase of $5.0 million to the Department's chemical and
    biological defense program to support on-going development
    efforts in detectors, decontamination equipment, and protective
    equipment for the CBQRF and its components.
                First responder training
        The committee understands that an interagency training
    strategy is being developed which would initially focus
    training under the domestic emergency response preparedness
    program on professional emergency response organizations in the
    27 cities and metropolitan areas identified by the Federal
    Bureau of Investigation as being at particularly high risk and
    that the DOD Office of Domestic Preparedness (collocated with
    the Army's Chemical-Biological Defense Command) has been
    assigned responsibility for development of the first responder
    training program. The program objective is to complete first
    responder training for 126 major metropolitan areas and cities
    within three years. The committee recommends that emphasis also
    be placed on training of local volunteer emergency first
    response organizations. The training program and priorities
    must be coordinated with State emergency management directors.
    The committee believes that support of the first responder
    training program would be an appropriate mission for the
    National Guard and should be considered by the Secretary of
    Defense and the involved governors. The committee also believes
    that in addition to the ``train the trainer'' approach being
    used in the existing program, an exportable training package
    should be developed that is oriented toward the training of
    volunteer emergency first responders. The committee recommends
    an increase of $7.0 million in PE 65160D to support the further
    development of the first responder training strategy and the
    development of an exportable training package suitable for use
    by volunteer emergency first response organizations.
                Exercise program
        During the committee's review of the budget request,
    several proposals were made for the establishment of major
    exercise and training facilities at the national or regional
    level. The committee endorses the use of training exercises to
    test and improve consequence management response capabilities,
    but believes that the exercise site requirements should be
    based on the training and exercise needs of the agencies to be
    exercised, site capabilities, frequency of use, and proximity
    to participating agencies. These considerations imply the need
    for an overall coordinated training exercise strategy similar
    to that developed for training by the Senior Interagency Group.
    The committee recommends an increase of $5.0 million in PE
    65160D to support the development of a training exercise
    strategy for domestic emergency response preparedness and
    support of pilot training exercises in accordance with that
    strategy.
         The committee directs the Secretary of Defense, in
    coordination with the Director of the Federal Emergency
    Management Agency and the Director of the Federal Bureau of
    Investigation, to provide an annual assessment of progress in
    the domestic emergency response preparedness program. The
    report should be submitted to the Congressional defense
    committees beginning with the fiscal year 1999 budget request
    and extending through fiscal year 2001.

    Reuse technology adoption program

        The budget request contained $105.5 million in PE 62301E
    for the Defense Advanced Research Projects Agency (DARPA)
    project for development of new information processing
    technology concepts that may lead to fundamentally new software
    and intelligent systems capabilities. No funds were requested
    to continue the Reuse Technology Adoption Program (RTAP).
        The committee notes the initial progress that has been made
    through the RTAP program in developing the software technology
    that would enable the use of software components, which were
    developed for a specific weapon system or applications, in
    other weapons systems and applications. If successful,
    development of this technology would result in increased
    productivity and reduced costs in the development of software-
    intensive systems by the military services and defense
    agencies. The committee recommends an increase of $4.5 million
    to continue the RTAP initiative. The committee directs the
    Secretary of Defense to make an assessment of the goals and
    objectives of the RTAP initiative, results of the program to
    date, andplans and funding requirements for the future, and to
    submit a report on the results of the assessment to the Congress by
    March 1, 1998.

    Safeguard

        The budget request contained $60.0 million in PE 62384BP
    for exploratory development of advanced technologies for
    chemical and biological defense in the areas of detection,
    identification and warning, contamination avoidance, individual
    and collective protection and decontamination.
        The committee recommends an increase of $10.8 million to
    continue the program, initiated by the Defense Advanced
    Research Projects Agency, for proof-of-concept demonstration
    and prototype development of multi-spectral sensors for
    detection of chemical agent precursors and agents from medium
    and high altitude platforms. The committee believes that the
    results of the program to date indicate the potential the
    technology has for stand-off detection and identification of
    chemical agents on the battlefield and for detection of the
    production of chemical agents and their precursor chemicals.

    Smart unattended undersea sensors

        The budget request contained $69.1 million in PE 63763E for
    the Defense Advanced Research Projects Agency marine technology
    program, including $21.9 million for development of sensor and
    sonar technologies, advanced ship mechanical systems, and
    advanced maritime platforms.
         The committee is aware that the proliferation of quiet
    diesel-electric submarines in the fleets of potentially hostile
    nations represents a significant threat to U.S. Naval forces
    operating in the shallower waters of the world's littoral
    regions, where environmental factors of acoustic propagation,
    reverberation and ambient noise degrade the capabilities of
    existing acoustic detection systems. While improvements are
    being made in active and passive acoustic sensors systems for
    surface ships and submarines, the committee believes that the
    development of smart unattended undersea sensors capable of
    detecting, classifying, and reporting the presence of threat
    submarines to a remote monitoring center could significantly
    improve the capability of the anti-submarine warfare system of
    systems. The committee understands that such sensors could be
    capable of both passive listening and active echo reception,
    and could exploit recent advances in computer chip technology,
    information processing, global positioning system navigation,
    and cellular communications. The committee recommends an
    increase of $4.0 million in PE 63763E for development and
    demonstration of the technology for smart unattended undersea
    sensors.

    Special operations intelligence systems development

        The committee is aware of the significant importance of
    mission familiarization for the special operation forces and
    the technology investments being made by joint Department of
    Defense activities.
        The Department, through its development of the Virtual
    Light Table, has displayed a highly effective, user friendly
    environment that is being adapted by the special operations
    forces for mission familiarization. This effort is intended to
    serve as a model for infusion of commercial technology into the
    DOD training environment. The committee views the Mission
    Familiarization Virtual Reality Project (MFVRP) as a
    cornerstone for greatly expanded mission familiarization and a
    new intelligence dissemination methodology. The committee
    recommends that the Special Operations Command pursue
    development of the MFVRP virtual reality technology and
    recommends an increase of $3.0 million in PE 1160405BB for this
    effort.

    Special technology support

        The budget request contained $11.8 million in PE 63704D,
    for various Deputy Assistant Secretary of Defense (Intelligence
    and Security) quick reaction intelligence support projects.
         The committee fully supports funding for the Department's
    efforts to quickly respond to unforeseen theater and unified
    command technical requirements. However, the committee believes
    the justifications provided for fiscal year 1998 indicate that
    much of the activities in this program do not fall within this
    category and ought to be pursued, if at all, by the services or
    other DOD technology development agencies.
         Therefore, the committee recommends an authorization of
    $9.8 million for this project, a decrease of $2.0 million.

    Strategic environmental research and development program (SERDP)

        The budget request contained $54.9 million in PE 63716D for
    Strategic Environmental Research and Development (SERDP).
        The Department has stated that the objective of SERDP is to
    improve DOD mission readiness by providing new knowledge, cost
    effective technologies, and demonstrations in the areas of
    environmental cleanup, compliance, conservation and pollution
    prevention. In times of increasingly constrained defense
    budgets, it is imperative that DOD efforts are focused on high
    priority, mission-relevant, defense unique, environmental needs
    that are not duplicated by the military services, other
    government agencies, or the private sector.
        The committee notes with particular interest that the
    fiscal year 1998 SERDP program includes projects whose
    objectives are the elimination of toxic materials and solvents
    from explosives and other energetic materials and the
    development of new insensitive materials which meet
    increasingly stringent environmental compliance regulations.
    The committee understands that these projects could lead to
    propellants and explosives that utilize environmentally
    compliant energetic materials for undersea, surface, and other
    weapon systems, and could result not only in higher weapon
    systems performance, but also in significant savings in overall
    life cycle costs. The committee recommends an increase of $3.0
    million to accelerate these activities under the SERDP.

    Tactical unmanned aerial vehicle

        The budget request contained $122.0 million for Tactical
    Unmanned Aerial Vehicles (TUAV) in PE 35204D, including $87.5
    million for the Outrider Advanced Concept Technology
    Demonstration (ACTD) program.
        The committee understands that the purpose of the Outrider
    ACTD is to assemble and demonstrate a significant new tactical
    reconnaissance military capability based on matureadvanced
    technology. The Defense Airborne Reconnaissance Office (DARO)
    established the Joint Tactical Unmanned Aerial Vehicle (JTUAV) program
    from two previously unsuccessful programs, the close range and the
    maneuver UAVs. The DARO conducted a competitive selection which
    evaluated nine candidates and awarded a twenty-four month contract for
    the Outrider JTUAV in May 1996. The ``best value'' selection was based
    on the ability to successfully develop and deliver six ACTD systems,
    each consisting of four air vehicles and a ground control station with
    associated equipment, within the 24 months schedule, and, in part on
    the winning contractor's successful flight demonstration of the Hellfox
    air vehicle. The committee is informed that Outrider ACTD is well
    behind schedule and experiencing serious performance problems. Its
    first flight, scheduled for November 1996, did not occur until March
    1997.
        The committee supports efforts to streamline the current
    acquisition process and enable demonstrated capability to
    transition quickly to production. However, the committee is
    extremely concerned that the Outrider ACTD appears to have
    circumvented important acquisition criteria and milestones,
    including the need for the program to address a validated
    military requirement. The Joint Chiefs of Staff Joint
    Requirements Oversight Council (JROC) has failed to formally
    validate a joint operational requirement for the JTUAV, which
    contradicts the Department's own guidance that ACTDs must
    address user requirements clearly enough to firmly establish
    operational utility and system integrity.
        The committee is fully aware of the technical problems that
    have plagued development of the Outrider UAV. Outrider is
    experiencing serious shortcomings that indicate that the
    program is not based on mature technology. The committee
    understands that the program is under special review by the
    Under Secretary of Defense for Acquisition and Technology, and
    is being considered for cancellation by the Department. The
    technical problems with the Outrider UAV, and recent
    observations/statements by the Director, DARO that the
    Department was ``going to cut its losses'' on the program
    appear to lend creditability to this notion. The committee
    recommends a decrease of $87.5 million, resulting in no funding
    for the outrider ACTD. To address urgent service requirments
    for tactical UAVs, the committee recommends an increase $10.0
    million to support a vertical takeoff and landing UAV
    competition that was recently initiated by the DARO. In
    addition, the committee recommends an increase of $11.5 million
    of the funds authorized be made available to provide a
    dedicated Predator UAV system and associated equipment,
    including at least two aircraft equipped with synthetic
    aperture radar and Ku-band link, for operational
    experimentation and testing of the common UAV Tactical Control
    System (TCS).
        To ensure a viable transition from the Outrider ACTD,
    elsewhere in the report the committee recommends an additional
    $10.0 million in operations and maintenance, Army, for
    operating currently owned Hunter UAVs. Finally, the committee
    believes there are a number of existing UAVs, including Hellfox
    (from which the Outrider was derived), the Prowler, and others
    that could satisfy the Army's tactical short range UAV
    requirement. Therefore, the committee recommends $20.0 million
    in aircraft procurement, Army, for acquiring an ``off-the-
    shelf'' tactical UAV with minimum development. The UAV selected
    is to be equipped with a digital data link that is compatible
    with the Army digital architecture for the future.
        In summary, the committee recommends a decrease of $66.0
    million for tactical UAVs. The committee directs the Secretary
    of the Army to provide a report to the Congressional defense
    committees outlining the short range UAV acquisition strategy
    no later than February 1, 1998. None of these funds may be
    obligated prior to submission of this report

    Three-dimensional microelectronics technology

         The budget request contained $192.2 million in PE 62712E
    for materials and electronics technology, including $56.8
    million for microelectronics device technologies.
        The committee understands that the development of micro-
    chip integrated circuit technology and the reduction of the
    size of the individual circuit elements on the micro-chip are
    progressing to the point that the length and density of the
    interconnects between the elements of the integrated circuits
    are becoming the limiting factor in processing speed and
    circuit density. Development of a three-dimensional electronics
    architecture with high lateral and vertical off-chip wiring
    densities could lead to further reductions in chip size,
    significantly increased performance, and reduced micro-chip
    costs. To achieve these goals, advances are required in the
    development of three-dimensional integrated circuit system
    architectures, advanced substrate materials, computer-aided
    design tools, and packaging technologies. The committee
    recommends an increase of $7.5 million in PE 62712E to
    accelerate the development of three-dimensional
    microelectronics technology and demonstration of three-
    dimensional microelectronics systems.

    Transfer of cooperative engagement capability operating frequency band

        Title VI of the Omnibus Budget Reconciliation Act of 1993
    (Public Law 103-66) requires the federal government to provide
    a span of radio frequencies aggregating not less than 200 Mhz
    for allocation to the public. To minimize negative impact on
    the federal government, the act requires that the spectrum to
    be reallocated must not be ``required for the present or
    identifiable future needs of the Federal Government'' and
    should not result in costs to the federal government that
    exceed the benefits gained. In February 1995, the National
    Telecommunications and Information Administration, U.S.
    Department of Commerce, recommended reallocation of 50 MHz from
    within the operating frequency band of the Navy's cooperative
    engagement capability (CEC) system. In the statement of
    managers accompanying the conference report on H.R. 3230 (H.
    Rept. 104-724), the conferees directed the Secretary of the
    Navy to prepare a detailed report on: (1) progress being made
    to resolve spectrum interference that would result from the
    reallocation of the CEC operating band, and (2) steps being
    taken to resolve interference between CEC and other fleet
    weapon systems and data links.
        According to the Department of Defense (DOD) and the
    General Accounting Office (GAO), this transfer could result in
    the loss of a total of 200 MHz (one-third of the CEC's usable
    operating frequencies) and could severely affect the
    operational capability of the CEC. DOD officials have also
    indicated to the GAO that current and future spectrum
    reallocations could significantly degrade the capabilities of
    many major weapons systems in addition to the CEC and could
    cost the Department hundreds of millions of dollars to modify
    systems and/or rent frequencies from the private sector or
    foreign governments. The committee is informed, however, that
    the full implications of the 1993 act are not yet known and
    that the Department is conducting a comprehensive analysis of
    spectrum requirements for critical systems in order to
    determine the extent that operational effectiveness of these
    systems could be affected by loss ofthe frequency spectrum. The
    committee also understands that a recent DOD study indicates that the
    Department's top level spectrum management for planning, policy, and
    oversight is diffused and weak and that there is no single high-level
    DOD point of contact for spectrum management.
        In response to H. Rept. 104-724, the Secretary of the Navy
    has reported that the Navy is working with the Federal
    Communications Commission (FCC) to minimize interference with
    civilian applications in the reallocated frequency band and the
    effect of the reallocation on CEC performance. The Secretary's
    report also states that the Navy's preferred technical option
    for resolution of interference between CEC and the LAMPS Mk III
    data link is moving the LAMPS data link to the Ku-band. Should
    the Navy choose this option for resolution of the problem, the
    committee expects that the funding required for the transfer
    will be included in the fiscal year 1999 defense budget
    request.
        The committee concurs with the steps taken by the Navy to
    address the issues raised in the House report, but believes
    that the problem should be addressed in a more comprehensive
    manner by the Secretary of Defense. The committee encourages
    the Secretary to assign responsibility for overall radio
    frequency spectrum management to a specific organization within
    the Department. The committee directs the Secretary to prepare
    a report to the Congress, in coordination with the Chairman of
    the FCC and the Secretary of Commerce, which addresses: (1)
    agreements on measures being taken to resolve the impact of the
    transfer of 50 Mhz from the radio frequency operating band of
    the cooperative engagement capability (CEC); (2) the impact of
    transfers of the federal radio frequency spectrum on other
    critical military systems; (3) how the DOD plans to modify the
    CEC and other critical systems, including estimated costs and
    schedule, to compensate for any operational degradation that
    might be caused by losses of the radio frequency spectrum due
    to such transfers; and (4) any unresolved issues in joint
    frequency spectrum management and impediments to the
    resolutions of these issues. The report shall be submitted to
    the Congress by March 31, 1998.

    United States imagery and geospatial system improvements

        The budget request contained $109.4 million in PE 35102BQ,
    for the national imagery and mapping agency's (NIMA)
    development, procurement and integration of an end-to-end
    imagery production capability for geospatial information.
        The Director of NIMA has officially embraced the Defense
    Science Board's (DSB) direction to move NIMA from production of
    products to the maintenance of geospatial information, a move
    the committee supports. One of the DSB's recommendation
    included trading off production of lower priority products and
    less critical functions in order to fund NIMA's more pressing
    technical needs, thereby allowing the agency to move more
    rapidly in implementing future technical capabilities. However,
    judging from the budget request, the committee does not believe
    NIMA's technology investment is sufficient to efficiently and
    effectively transition to these capabilities.
        Therefore, the committee recommends $124.4 million, an
    increase of $15.0 million for developing and fielding the
    modern imagery and mapping technologies.

    University research initiative (URI)

        The budget request contained $237.8 million in PE 61103D
    for the University Research Initiative. However, the committee
    understands that overall funding fiscal year 1998 URI has
    increased by $23.0 million above the amount forecast just
    months ago in the 1997 Future Years Defense Plan. Requested
    funding for URI includes $10.0 million for the defense
    experimental program to stimulate competitive research
    (DEPSCoR). The committee supports continuation of the DEPSCoR
    program to strengthen the infrastructure, enhance research, and
    develop human resources to assist the DEPSCoR states to become
    more competitive for regular research and training grants.
    Therefore, the committee recommends $20.0 million for DEPSCoR
    within URI funding. Although supportive of URI, the committee
    believes that the overall funding increase is unjustified in
    light of other critical underfunded priorities and recommends
    $224.8 million, a decrease of $13.0 million.

    Verification technology demonstration

        The budget request contained $83.4 million in PE 63711H for
    verification technology demonstration.
        The committee understands that the requested funding
    increase of $54.3 million is to initiate a new program for
    monitoring associated with the comprehensive test ban treaty
    (CTBT), and that this program was previously administered by
    the Air Force, with anticipated expenditures for fiscal year
    1998 of $29.0 million. The committee finds that the capability
    to conduct such activities, with regard to seismic events
    within the United States and its territories already exists
    within the U.S. Geological Survey (USGS), an agency of the
    Department of the Interior. Therefore, CTBT functions and
    obligations associated with seismic events occurring within the
    United States should be performed by the USGS, and a redundant
    technical capability should not be created within the
    Department of Defense. The committee recommends no funds for
    use by the Department of Defense for the purpose of
    establishing an independent capability to monitor, analyze, and
    report on domestic seismic events, as part of the CTBT
    functions or obligations.
        The committee, therefore, recommends $69.1 million, a
    decrease of $14.3 million in PE 63711H. Of the amount
    authorized, $11.0 million is recommended to be solely for
    seismic research and technology development. Additionally, of
    the amount authorized, the committee directs that not more than
    $20.0 million may be obligated until memoranda of agreement are
    signed between the Department of Defense and the U.S.
    Geological Survey delineating relationships associated with
    seismic sensing and CTBT monitoring.

    Wide bandgap semiconductors

        The budget request contained $101.9 million in PE 62173C
    for applied research for ballistic missile defense programs.
        The committee recognizes the potential of wide bandgap
    semi-conductors that operate at higher power, higher frequency
    and higher temperature and have the ability to operate in high
    radiation environments. The committee recommends an increase of
    $10.0 million in PE 62173C to continue the wide bandgap semi-
    conductor program for which funds were authorized and
    appropriated for fiscal year 1997. The committee directs that
    the program continue to involve industry and academia in
    applied research in gallium nitride and silicon carbide
    material growth, characterization, surface behavior and device
    development.

                             LEGISLATIVE PROVISIONS

                  Subtitle A--Authorization of Appropriations

                  Section 201--Authorization Of Appropriations

        This section would authorize Research, Development, Testing
    and Evaluation (RDT&E) funding for fiscal year 1998.

               Section 202--Amount For Basic And Applied Research

        This section would specify the amount authorized for fiscal
    year 1998 for technology base programs.

                   Section 203--Dual Use Technology Programs

        The budget request contained $225.0 million for
    continuation of the Dual Use Application Program (DUAP).
        The committee understands that the Department is attempting
    to structure the DUAP initiative to comply with the guidance
    provided in section 203 of the National Defense Authorization
    Act for Fiscal Year 1997 (Public Law 104-201). The committee
    remains concerned that this program establishes and enforces
    Department guidelines that control the expenditure of valuable
    development funds without linkage to service priorities, during
    a period when Department research and development funding is
    already inadequate to meet critical service requirements. While
    $185.0 million was made available for DUAP for fiscal year
    1997, the committee understands that none of these funds have
    been obligated to date. The committee, therefore, recommends no
    funds for DUAP. This provision would direct the Secretary of
    Defense to fund the DUAP initiative in the service research and
    development accounts.

        Subtitle B--Program Requirements, Restrictions, and Limitations

                 Section 211--Manufacturing Technology Program

        This section would amend section 2525 of title 10, United
    States Code, through fiscal year 2000, to establish a funding
    requirement for the manufacturing technology program of 0.25
    percent of the amount available for demonstration and
    validation, engineering and manufacturing development,
    operational systems development, and procurement programs of
    the Army, the Navy, the Air Force, and Defense Agencies, or the
    amount authorized by law for manufacturing technology projects
    of the military departments and defense agencies, whichever
    amount is greater. To ensure efficient implementation of the
    manufacturing technology program, the provision would provide
    the Secretary of Defense with the authority to transfer any of
    the funds made available to another military department or
    defense agency. The provision would require an annual report to
    the Congress through fiscal year 2000 which specifies the
    investment strategy for the manufacturing technology program
    and provides an assessment of program effectiveness; and would
    also require in the fiscal year 2000 report an assessment of
    the formula by which funding for the program is determined and
    any changes recommended in the formula, and recommendations for
    extension of the funding authority.
        The Department of Defense manufacturing technology program
    provides ``seed funding'' for the development of moderate to
    high risk materials, process, and equipment technology to
    enable production of advanced, high quality weapons systems
    with shorter lead times and reduced acquisition costs. The
    committee strongly supports the manufacturing technology
    program in the areas of electro-optics, advanced composites,
    electronics, metalworking, maritime applications, joining,
    advanced manufacturing, energetics, technology transfer, best
    manufacturing practices, advanced gear manufacturing, and
    others. To maintain the Department of Defense manufacturing
    technology program at the funding level needed to assure the
    availability of advanced manufacturing technology and processes
    for use in Defense acquisition programs, the Congress has
    provided annual increases to the budget request each year for
    the past several years. The funding authority that would be
    established by this provision is intended to stabilize the
    funding level and eliminate the uncertainty in annual funding
    that has reduced the effectiveness and efficiency of the
    program. The provision would also tie the funding level and
    advanced manufacturing technologies and processes being
    developed in the program to the manufacturing technology and
    process requirements of the various Defense acquisition
    programs in accordance with the purpose of the manufacturing
    technology program as stated in subsection 2525(b). In meeting
    the funding level needed to support the development of the
    manufacturing technologies required by the acquisition
    programs, the Department would have the alternatives of
    budgeting for the manufacturing technology development programs
    in the appropriate military departments and defense agency, or
    of funding the manufacturing technology program by a small
    percentage tax on the acquisition programs that will benefit
    from the technology.
        In recommending this provision, the committee reemphasizes
    the requirements of section 2525(d) of title 10, United States
    Code, for competitive procedures and cost-sharing in the
    awarding of grants and entering into contracts, cooperative
    agreements, and other transactions under the program.

     Section 212--Strategic Environmental Research and Development Program

        This section would direct the Secretary of Defense to
    submit a report by February 28, 1998 specifying (1) the
    defense-unique and mission-relevant aspect of each SERDP
    initiative, and (2) certifying that each initiative is not
    duplicative of environmentally related research, development
    and demonstration activities of other departments and agencies
    of the Federal, state and local governments, or of other
    organizations engaged in such activities.

                 Section 213--Tactical Unmanned Aerial Vehicles

        This section would direct that: (1) no funds be made
    available for the Outrider advanced concept technology
    demonstration program, (2) that $10.0 million be made available
    to carry out a competition for an unmanned aerial vehicle (UAV)
    capable of vertical takeoff and landing, and (3) that $11.5
    million be made available to provide a Predator UAV system to
    facilitate development of a common tactical control system.

     Section 214--Revisions to Membership of and Appointment Authority for
                   National Ocean Research Leadership Council

        This section would amend section 7902 of title 10, United
    States Code to provide that the President shall appoint members
    of the National Ocean Research Council who are not already
    government officers, to represent the views of the ocean
    industries, state governments, and academia, and such other
    views as the President considers appropriate. The section would
    also provide that the President may delegate the appointment
    authority to the head of a department.

       Section 215--Maintenance and Repair of Real Property at Air Force
                                 Installations

        This section would amend chapter 949 of title 10, United
    States Code by adding a new provision to permit the use of both
    research, development, test, and evaluation funds and
    operations and maintenance funds for maintenance and repair of
    real property at Air Force installations.

      Section 216--Expansion of Eligibility for the Defense Experimental
                   Program to Stimulate Competitive Research

        This section would make a technical correction to section
    257 of the National Defense Authorization Act for Fiscal Year
    1995 (Public Law 103-337) and would reauthorize the eligibility
    of the District of Columbia, Puerto Rico, Guam, and the United
    States Virgin Islands to participate in the Defense
    Experimental Program to Stimulate Competitive Research
    (DEPSCoR). It would also expand the definition of ``State'' to
    include the territories of American Samoa and the Commonwealth
    of the Northern Marianas Islands for purposes of the DEPSCoR.

         Section 217--Limitation on the Use of Funds for Adaptation of
    Integrated Defensive Electronic Countermeasures (IDECM) Program to F/A-
                       18E/F Aircraft and AV-8B Aircraft

        This section would limit the Secretary of the Navy to
    obligating no more than 50 percent of the amount authorized to
    be appropriated for development of the IDECM program for
    adaptation to the F/A-18E/F and AV-8B aircraft until the amount
    authorized to be appropriated for development of the IDECM
    program for adaptation to the F/A-18C/D aircraft is completely
    obligated.

    Section 218--Bioassay Testing of Veterans Exposed to Ionizing Radiation
                            During Military Service

        This section would direct the Defense Special Weapons
    Agency to make $300,000 available for the Nuclear Test
    Personnel Review Program, which conducts bioassay testing of
    veterans exposed to ionizing radiation during military service.

                 Subtitle C--Ballistic Missile Defense Programs

     Section 231--Budgetary Treatment of Amount Requested for Procurement
                     for Ballistic Missile Defense Programs

        The budget request incorporated a major change in funding
    policy for BMD programs by transferring all procurement for TMD
    programs from the centralized BMD account to the separate
    service procurement accounts. The committee is convinced that
    the Department, through this action, has placed its professed
    highest priority missile defense initiatives at risk by forcing
    them to compete with underfunded modernization programs of
    higher priority for each individual service. Additionally, in
    transferring fiscal year 1998 TMD procurement funding to the
    services, the Department did not issue any specific guidance
    that outyear funding for these programs was to be sustained or
    that TMD programs were to be considered as a service priority.
    Without such guidance, the committee believes that TMD
    procurement would suffer the same fate as other service
    modernization programs which continue to be restructured and
    have their schedules stretched due to funding shortfalls.
    Finally, despite testimony from the Department on the
    importance of TMD programs, the committee is disappointed to
    note that funding for all TMD programs is significantly reduced
    from the levels provided in fiscal year 1997.
        The committee is opposed to the proposed change in the TMD
    funding policy. This provision would direct the Secretary of
    Defense to transfer all fiscal year 1998 TMD program
    procurement funds back to the BMD procurement account. The
    provision would also require that all National Missile Defense
    program procurement funds be included in the BMDO procurement
    account. The committee considers procurement and fielding of
    TMD systems to be a priority congressional interest item and
    directs the Secretary to retain procurement for these programs
    within BMDO.

          Section 232--Cooperative Ballistic Missile Defense Programs

        This section would establish the ``Cooperative Ballistic
    Missile Defense Program'' within the Ballistic Missile Defense
    Organization, to support on-going and future technical and
    analytical cooperative efforts between the U.S. and other
    nations that contribute to U.S. missile defense capabilities.

    Section 233--Deployment Dates for Core Theater Missile Defense Programs

        The committee is disappointed by the Administration's lack
    of commitment to the timely deployment of theater missile
    defenses. While the Administration concedes that theater
    ballistic missiles constitute a clear and present danger to
    U.S. forces deployed abroad, Congressional efforts on behalf of
    the rapid development and deployment of TMD systems to meet
    this threat have been slowed by both Administration action and
    inaction.
        In the National Defense Authorization Act for Fiscal Year
    1996 (Public Law 104-106), Congress established first unit
    equipped (FUE) dates of fiscal year 2000 for Theater High
    Altitude Area Defense system (THAAD), fiscal year 2001 for the
    Navy Theater Wide system, fiscal year 1998 for Patriot Advanced
    Capability Configuration 3 (PAC-3), and fiscal year 1999 for
    the Navy Area Defense system. These dates were based on
    Congressional support for the early deployment of a TMD
    capability, but they were also based on the assumption of
    aggressive and streamlined management as well as robust
    funding.
        However, within weeks of the dates being approved by
    Congress and signed into law by the President, the
    Administration took budgetary and programmatic actions that had
    the effect ofdelaying each of these programs and their
    deployment dates. Compared to the legally directed dates, the
    Administration's plan delayed the THAAD deployment date by six years,
    the Navy Theater Wide system date by at least four years, PAC-3 by one
    year, and the Navy Area Defense system by two years.
        In presenting the fiscal year 1998 funding request earlier
    this year, the Department asserted that all TMD programs had
    been accelerated. Yet in the case of each of these TMD systems,
    the fiscal year 1998 request is lower than the amount Congress
    appropriated for fiscal year 1997. Despite the requirements of
    Public Law 106-104, the Administration target FUE dates for
    PAC-3 and Navy Area Defense remained fiscal year 1999 and 2001,
    respectively, the dates the Administration unilaterally
    established in 1996 contrary to the law. As noted elsewhere in
    this report, the Department has still not reviewed the Navy
    Theater Wide program to determine if accelerating the program
    from its currently anticipated deployment date of 2008 is
    feasible. And while Department of Defense announced in January
    that the THAAD FUE would be accelerated to 2004, the program's
    FUE was immediately slipped back to 2006 following a test
    failure.
        The committee continues to believe that a THAAD user
    operational evaluation system (UOES) can and should be deployed
    by fiscal year 2000 and FUE achieved by fiscal year 2004 at an
    acceptable risk given the high-value payoff associated with
    deployment of an operational THAAD capability. The committee
    also understands that BMDO is considering steps that could
    provide a more robust THAAD UOES capability, thus providing
    greater capability in the field at an earlier date, and
    strongly supports any such initiatives. Accordingly, this
    provision would require the Secretary of Defense to structure
    the THAAD program to achieve a THAAD UOES capability by fiscal
    year 2000 and FUE by fiscal year 2004.
        The committee reiterates its concern that the Department
    still has not defined the Navy Theater Wide program nor
    established a program schedule. The committee finds this lack
    of focus and commitment unacceptable and elsewhere in this
    report has directed the Secretary of Defense to report to the
    Congressional defense committees on the earliest feasible Navy
    Theater Wide deployment date. The committee reminds the
    Secretary of Defense of his obligation under current law and
    urges that the Navy Theater Wide program be structured to come
    as close as possible to achieving a UOES capability in fiscal
    year 1999 and FUE in fiscal year 2001.
        Congressional funding increases have helped to accelerate
    the Navy Area Defense system into engineering and manufacturing
    development and the PAC-3 program into procurement. The
    committee also notes the budget request does not propose to
    slip the deployment dates of these two systems further into the
    future. Given both programs' advanced state of development and
    the increasing likelihood that the currently programmed
    deployment dates will be met, this section would also repeal
    the dates specified in section 234 of the Defense Authorization
    Act for Fiscal Year 1996 (Public Law 104-106) for PAC-3 and the
    Navy Area Defense System.
        The committee remains committed to fielding effective TMD
    systems at the earliest feasible date and once again urges the
    Administration to support full funding and aggressive goal-
    oriented management for all of these critical systems.

      Section 234--Annual Report on Threat Posed to the United States by
      Weapons of Mass Destruction, Ballistic Missiles, and Cruise Missiles

        The committee believes that awareness of information and
    assessments concerning evolving threats to U.S. national
    security is essential to informed congressional debate and
    decision-making. To that end, the committee believes that a
    comprehensive description and assessment of the threats posed
    by weapons of mass destruction (WMD) and ballistic and cruise
    missiles to the U.S. and its allies would be an essential
    informational for Congress and the public.
        Therefore, this provision would direct the Secretary of
    Defense, in consultation with the Director of Central
    Intelligence, to prepare and submit to Congress by January 30,
    1998, and January 30 of each subsequent year, a report on
    threats posed to the U.S. and its allies by cruise missiles,
    ballistic missiles, and weapons of mass destruction, and the
    proliferation of such technologies. The report should be
    prepared in classified and unclassified form, to assure the
    most complete information and widest distribution possible.

     Section 235--Director of Ballistic Missile Defense Organization (BMDO)

        The committee believes that without appropriate senior
    leadership and a streamlined reporting chain, BMDO's ability to
    efficiently develop and deploy BMD systems is at risk.
    Therefore, this provision would requiring that the position of
    director of BMDO be filled by an officer of the armed forces of
    the United States with a rank of at least Lieutenant General or
    Vice Admiral. The committee believes that three star rank is
    essential to provide the BMDO director the stature within the
    Department of Defense commensurate with the job's
    responsibilities. The committee notes that the current director
    of BMDO is a Lieutenant General, and expects that the
    requirement established by this section will continue to be
    filled from within existing statutory authorizations for
    general and flag officers.
        The committee also recommends establishing a requirement
    that the director of BMDO report directly to the Secretary of
    Defense concerning all matters pertaining to the management of
    BMDO programs. Such streamlining will help overcome
    bureaucratic obstacles and allow issues to be promptly and
    definitively resolved.

             Section 236--Tactical High Energy Laser Program (THEL)

        This section would transfer the THEL program from PE 63308A
    to an new PE 63XXXC that would consolidate cooperative
    ballistic missile defense programs under Ballistic Missile
    Defense Organization management and would authorize $38.2
    million for THEL.
                      TITLE III--OPERATION AND MAINTENANCE

                                    OVERVIEW

                               Funding Priorities

        The Administration's fiscal year 1998 defense budget
    request provides the illusion that funding for readiness of the
    armed forces was increased over past year levels. The
    Administration's rationale for this operation and maintenance
    (O&M) funding increase is that the preservation of readiness is
    a major priority. However, a significant portion of the growth
    in the O&M budget results from inflationary adjustments,
    additional funding for contingency operations, and in working
    capital funds adjustments (mostly to cover prior year
    expenses). When these factors are taken into account, the net
    effect is that the President's budget request would not
    increase military readiness or increase the resources necessary
    to arrest the shortfalls that are beginning to impact on
    battlefield effectiveness and safety.
        In response, the committee's recommendations for fiscal
    year 1998 extend a significant priority to sustaining an
    acceptable level of readiness for our military forces and
    continuing reforms of the administration and infrastructure of
    the Department of Defense (DOD). Each of these areas is
    extensively discussed elsewhere in this report.
        The committee is convinced that reforming the business
    operations of the DOD is critical since only 36 percent of the
    O&M budget relates directly to force readiness. Although a
    portion of the remaining 64 percent contributes indirectly to
    mobilization capabilities, the majority is directly related to
    the overhead needed to maintain a large and somewhat
    inefficient defense bureaucracy. The committee believes that
    too much of the current defense budget finances an overly large
    defense infrastructure at the expense of resources necessary to
    maintain a ready and capable force. The table below shows a
    breakdown of the readiness related expenditures contained in
    the budget request:

                            [In millions of dollars]

    Land Forces...................................................  $3,523.2
    Air Operations................................................  21,306.3
    Ship Operations...............................................   7,431.0
    Special Operations............................................   1,169.4
    Drug Interdiction.............................................     652.6
                        --------------------------------------------------------------
                        ____________________________________________________

          Total...................................................  34,082.5

        The remaining $59.5 billion contained in the O&M budget
    request has been identified for activities other than training
    and operating military forces. Therefore, the committee
    believes there is ample room for effecting significant further
    efficiencies in the operations of the Department. The
    committee's recommendations in this area are detailed below.

                                   Readiness

        Over the past few years, the committee has closely
    monitored the state of military readiness of our nation's armed
    forces. Two years ago, the committee found that the military
    services were in the early stages of a long-term systemic
    readiness problem. In response, the Congress added additional
    funding to the Administration's budget requests to improve
    force readiness.
        In an effort to assess readiness improvements, the
    committee conducted an intensive scrutiny of U.S military units
    around the world that revealed, in fact, military readiness is
    not improving, and may be declining. This investigation
    included numerous interviews and committee hearings with all
    ranks; from major military commands to individual military
    units, non-commissioned officers, and family members. A
    consistent theme voiced by service members was that they could
    only maintain their readiness levels by sacrificing other
    critical areas such as procurement, modernization, and quality
    of life. A recurring statement by many interviewed was that
    they are doing more with less, and working harder and longer
    just to keep up with peacetime mission requirements. The
    committee believes that U.S. military members should not have
    to choose between readiness and maintenance of equipment,
    facilities and quality of life initiatives.
        The committee is concerned that as readiness levels
    decline, the quality of military life will erode to the point
    at which talented and dedicated Americans will question the
    desirability of a career in uniform. As an example, all of the
    military services may soon be facing a critical shortage of
    experienced mid-level pilots due to increased separations to go
    work for a commercial airline industry that is now hiring.
        The committee strongly believes that readiness is a
    perishable commodity. The committee understands that making the
    necessary changes to return U.S. military readiness to an
    acceptable level will be difficult, particularly as fewer and
    fewer resources are made available. The committee
    recommendations contained in this report reflect a concerted
    effort to pursue a number of targeted readiness initiatives to
    ensure that America maintains the best-trained, best-equipped,
    and most effective military in the world. Some of the readiness
    enhancements recommended by the committee are as follows:

                              [Dollars in millions]

    Depot-Level Maintenance and Repair............................    $515.0
    Maintenance and Repair of Real Property.......................     200.0
    Recruiting and Advertising....................................      22.9
    National Training Center......................................      60.2
    Force Protection Enhancements.................................      25.8
    Mobility Enhancement..........................................      25.0

         In addition to addressing the underfunding of key
    readiness accounts, the committee recommendations includes
    several legislative provisions intended to provide Congress
    with the necessary information to allow effective oversight of
    the readiness programs of the DOD. These initiatives include
    several provisions to increase timely andcurrent information on
    the management of readiness funding; provisions to enhance and protect
    training, particularly combat training; and a provision to improve
    readiness reporting by the DOD to address the disconnect between
    official readiness reports and the reality in the field.

                                     Reform

        After a series of hearings and in-depth reviews, the
    committee believes the DOD continues to support outmoded
    business practices which divert funding from underfunded higher
    priorities. The committee recommendations redirect funding from
    elements in the operation and maintenance budget associated
    with inefficient procedures, administrative overhead and excess
    infrastructure in order to support quality of life and
    readiness priorities.

                                Funding Overview

        The budget request contained $95,439.0 million for
    Operations and Maintenance and working Capital Funds,
    representing an increase of $3.5 billion from the amount
    authorized for Fiscal Year 1997.
        The committee recommended $94,849.8 million. The committee
    recommends approval of the request unless specified otherwise
    in the following table.

                           ITEMS OF SPECIAL INTEREST

                           Budget Request Reductions

                      Administration and Support Accounts

        Due to the necessity to address the shortfalls created by
    the revised budgetary scoring of the President's request,
    persistent underfunding of key operating accounts, and to
    ensure adequate funding of critical readiness accounts, the
    committee recommendation includes reductions in program growth
    in the administration and support accounts (Budget Activity 4)
    of the military departments as follows:

                            [In millions of dollars]

    Army..............................................................$210.0
    Navy.............................................................. 230.0
    Air Force......................................................... 100.0

        In addition, the committee believes that the support
    structure of the Department of Defense and the various Defense
    Agencies is disproportionate to needs of the military services.
    The report of the Quadrennial Defense Review (QDR) proposes a
    six percent reduction in this area by November 30, 1997.
    Therefore, the committee recommends reductions in
    administration and management funding for these accounts as
    follows:

                            [In millions of dollars]

    Office, Secretary of Defense...................................... $81.4
    Washington Headquarters Service...................................  42.6
    QDR savings....................................................... 168.4

        The committee is convinced these recommended reductions
    will not directly affect the readiness capabilities of our
    combat forces. The committee is mindful, however, that
    headquarters and other administrative support for the forces is
    important, but must be appropriately sized to be economically
    effective.

                                   Bulk Fuel

        The committee is concerned that the military departments
    have been overestimating their needs for bulk fuel. The General
    Accounting Office (GAO) estimated that in fiscal year 1996,
    fuel purchases by the services was $440 million below what was
    requested in the budget request, and in fiscal year 1997, GAO
    estimates the overestimation will total $183 million. The
    budget request for fiscal year 1998 includes funding to
    purchase 111 million barrels of bulk fuel. Of this total, the
    services plan to buy 109.5 million barrels from the Defense
    Fuel Supply Center (DFSC) and theremainder from commercial
    sources and from foreign governments. Based on actual DFSC sales data,
    the GAO estimates that DFSC will sell about 104.2 million barrels to
    the services in fiscal year 1998, a difference of 5.3 million barrels
    of bulk fuel, or $201.5 million. Because the over budgeting for bulk
    fuel seems to be a recurring practice, the committee recommends the
    following reductions:

                            [In millions of dollars]

    Army..............................................................  $8.6
    Navy..............................................................  42.5
    Air Force.........................................................  44.5

                        Advisory and Assistance Services

        The committee continues to be concerned with the increasing
    use of Advisory and Assistance Services (AAS) by the Department
    of Defense, which includes contracted experts and consultants,
    studies and evaluations, management support and technical
    services. The fiscal year 1998 budget request contains a total
    of $2,951.0 million for AAS, a 248 percent increase since 1992.
    In addition, the various service operation and maintenance
    accounts show significant growth from 1997 to 1998 for these
    services as follows: Department of the Army, 5.5 percent;
    Department of the Navy, 8.4 percent; the Marine Corps, 14.4
    percent; Department of the Air Force, 13 percent; and Defense
    Agencies, 15 percent.
        The committee believes that during this period of
    significant downsizing, the current level of funding and
    increases for these services are not justified. Therefore, the
    committee recommends the following reductions:

                            [In millions of dollars]

    Army.............................................................. $50.0
    Navy..............................................................  50.0
    Marine Corps......................................................   3.0
    Air Force.........................................................  50.0
    Air Force Reserve.................................................   0.3
    Air National Guard................................................   0.8
    Defense Agencies..................................................  50.0

        The committee directs the Secretary of Defense to ensure
    that, beginning with the budget request for fiscal year 1999,
    the Department provide in the justification materials provided
    to Congress a discussion on AAS that includes an identification
    of each of the military department's requirements for AAS, the
    previous two fiscal years' data on AAS expenditures for each
    military service and the Defense Agencies, and specific
    justification for any proposed increases.

                        Defense Support Services Reform

                                    Overview

        Reform is not a new issue for the Department of Defense
    (DOD). The Quadrennial Defense Review (QDR) is the latest of
    several studies, including the Defense Science Board,
    Commission on Roles and Missions, and the Bottom Up Review,
    that have attempted to address improving the efficiency of the
    DOD. Despite these studies, the committee is dissatisfied with
    the progress being made to challenge the inertia of ``business
    as usual.'' The committee believes that in this thirteenth year
    of declining defense budgets, combined with an environment of
    balanced budget agreements, and funding shortfalls in
    modernization, readiness and quality of life programs, DOD can
    no longer afford to further study reform.
        The committee notes that since 1990, DOD has eliminated
    eight Army divisions, 14 Air Force and Navy air wings, 216 Navy
    ships, and over 600,000 military personnel. Efforts to reduce
    the defense infrastructure supporting the remaining forces lags
    far behind. Despite the QDR's focus on shrinking the current
    annual infrastructure costs of $146 billion, little detail has
    been provided on how the Department intends to implement the
    QDR's recommended infrastructure reductions. These details are
    crucial, since failure to reduce operations and support
    infrastructure will have significantly adverse impacts on
    funding national defense priorities in the near future.
        Furthermore, the committee believes that the management and
    delivery of a number of support services remain outmoded and
    inefficient in comparison to equivalent activities in the
    private sector. For example, DOD's supply system is roughly
    twice as expensive to administer than comparable private sector
    systems. As a further example, the military departments often
    pay the DOD transportation command upwards of 200 percent more
    than the commercial carriers charged DOD to provide similar
    transportation services. For these compelling reasons, the
    committee recommendation directs a number of reforms within
    DOD.

        Contracting Out Firefighter and Security Activities at Military
                                 Installations

        The General Accounting Office, Defense Science Board, and
    Department of Defense (DOD) have stated that section 2465 of
    title 10, United States Code, which prohibits the consideration
    of Department of Defense firefighter and security guard
    functions from outsourcing to the private sector, is an
    impediment to providing efficient and cost-effective fire
    fighting and security support at defense installations and have
    called for its repeal. However, the committee is concerned that
    absent a clear definition of what fire fighting functions,
    security guard functions, and the related personnel are
    essential to providing a safe and secure environment for our
    military service members, a repeal of this section could
    negatively impact national security.
        Therefore, the committee directs the Secretary of Defense
    to provide a plan to the House Committee on National Security
    and the Senate Committee on Armed Services by December 31, 1997
    that includes the following:
              (1) A listing of both the fire fighting and security
            guard functions that are considered inherently
            governmental and the reasons why, and
              (2) An implementation plan for outsourcing fire
            fighting and security guard functions, should section
            2465 of title 10, United States Code be repealed.

                  Criminal Investigations and Board on Audits

        The committee commends the Department of Defense (DOD)
    criminal investigative services on their efforts to increase
    coordination and reduce duplication of resources through the
    Board on Investigations and Regional Fraud Working Groups. The
    committee believes that DOD should create a Board on Audits
    that would allow DOD to more effectively handle the increasing
    workload from the Chief Financial Officers Act and the changing
    accounting systems, and reduce duplication of effort through
    improved sharing of knowledge and resources among the service
    department's audit agencies. Therefore, the committee directs
    the Secretary of Defense to finalize the working guidance for
    the operation of both boards no later than December 31, 1997.
    The committee believes that DOD is best served by a productive
    and coordinated effort between the military departments and the
    DOD Office of Inspector General.

            Defense Reutilization and Marketing Service Improvements

        The committee is concerned that items in the Department of
    Defense (DOD) inventory are not assigned the proper
    demilitarization when purchased or provided to the Defense
    Reutilization and Marketing Service (DRMS) for disposal. An
    April 1997 report by the DOD Inspector General (Coding
    Munitions List Items Report No. 97-130) revealed that 52
    percent of items sampled were assigned improper
    demilitarization codes when they were purchased. In addition, a
    Congressionally mandated study on consolidating DOD's supply
    centers, submitted in November 1996, also highlighted coding
    inconsistencies. This report recommended improving the coding
    system by establishing a standard code to use when an item is
    purchased and when it is sent to DRMS.
        Improper coding can lead to unnecessary costs due to
    excessive levels of demilitarization and a loss in DRMS sales.
    More importantly, improper coding can result in the sale of
    sensitive military hardware that should have been
    demilitarized. As a result, these coding problems are not only
    costly but present a threat to national security. The committee
    believes that DOD's reluctance to develop an automated system
    for demilitarization codes will seriously delay correction of
    this problem. Therefore, the committee directs the Secretary of
    Defense to provide a report, by December 31, 1997, to the House
    Committee on National Security and the Senate Committee on
    Armed Services on efforts to:
              (1) Identify and correct miscoded inventory items;
              (2) Develop an automated system that standardizes the
            demilitarization codes across DOD, from the purchase to
            surplus of an item;
              (3) Dedicate funding for an automated system during
            the five year defense plan; and
              (4) Implement an automated system during the five
            year defense plan.

                    Defense Supply and Logistics Management

        The current costs of the Department of Defense (DOD) supply
    system are significantly greater than the private sector, even
    after taking into account the need to maintain a wartime
    capacity. The committee believes that DOD's supply management
    and work processes are ideal business re-engineering
    candidates, given the extensive commercial market for these
    services and the recent improvements in private sector
    practices. In doing so, the committee encourages DOD to revise
    the way it provides supply services by making extensive use of
    such commercial options as consolidation, outsourcing,
    particularly prime vendor and virtual prime vendor deliveries
    for most repairable and consumable items. The use of prime and
    virtual prime vendors provide the benefit of lowering
    distribution, warehousing, and inventory costs, which reduces
    the customer rates in the supply and distribution business
    areas of the working capital funds.
        The committee understands that savings, estimated from
    DOD's current initiatives (i.e., ``lean logistics'' and
    ``velocity logistics'') to reduce the number of inventoried
    spare parts and associated storage costs, have been included in
    the military services' Operation and Maintenance (O&M) budgets.
    Therefore, the committee directs the Secretary of Defense to
    report to the House Committee on National Security and the
    Senate Committee on Armed Services by March 1, 1998, on the
    savings achieved due to reforms in spare parts inventories and
    logistic operations the savings estimated in fiscal years 1998-
    2003 from these reforms and an assessment of the risks to
    readiness associated with relying on projected savings.

                Definition of Mission Essential Support Services

        The committee continues to be frustrated by the lack of a
    clear definition of the support services and functions that are
    essential to the strategic mission of the Department of Defense
    (DOD), otherwise known as inherently governmental functions.
    The committee is particularly concerned that the military
    departments appear to have different definitions and a
    different, and often changing, understanding of the
    relationship between inherently governmental and commercial
    activities. For example, between fiscal years 1994 and 1996,
    the Department of the Air Force, without changing their role or
    mission, redefined roughly 194,000 personnel from the
    commercial activities to inherently governmental categories.
        The committee directs the Secretary of Defense, in
    consultation with the secretaries of the military departments,
    to provide by March 1, 1998, a report to the House Committee on
    National Security and the Senate Committee on Armed Services
    containing the following information:
              (1) A Department of Defense-wide definition for each
            of following categories; inherently governmental; core;
            national defense-exempted; and exempted from
            outsourcing for other reasons;
              (2) A listing of all functions and activities that
            are considered inherently governmental and the reasons
            why;
             (3) A listing of all commercial activities, indicating
            whether the activity is core or non-core including a
            justification for core activities;
             (4) A listing of all support services, functions and
            activities that have both a core and a non-core
            element; and
             (5) A listing of all commercial activities that are
            exempted for other reasons and the reasons why.
        In addition, the committee directs the Secretary of the Air
    Force to provide a report to the House Committee on National
    Security and the Senate Committee on Armed Services, by March
    1, 1998, providing an explanation for the shift of personnel,
    between fiscal years 1994 and 1996, in the Air Force commercial
    activities to the inherently governmental category, a listing
    of the specific functions that were changed to inherently
    governmental and an explanation why.

                         Extensively Studied Functions

        The committee is aware that within the military services,
    there is little consistency for outsourcing non-inherently
    governmental base operations functions and services.
    Specifically, the military services conduct A-76 studies on
    activities that are similar, if not exactly the same, as
    extensively studied and outsourced functions in their own
    service or in the other military services. This practice not
    only unnecessarily duplicates effort, it is costly. The
    committee believes that by developing standard ``templates''
    based on previous A-76 studies of similar functional areas, the
    military services would save time and resources in outsourcing
    these functions. The following chart illustrates the percentage
    of base operations support activities that were outsourced in
    fiscal year 1996, an average of 50 percent or more within the
    military services.

                                  [In percent]
    ------------------------------------------------------------------------
                                          Air               Marine
          Base Operating Activity        Force     Army   Corps \1\    Navy
    ------------------------------------------------------------------------
    Laundry and Dry Cleaning..........      100       85        81        94
    Custodial Services................      100       88        82        86
    Refuse Collection & Disposal
     Services.........................       96       84        67        81
    Food Services.....................       88       88        42        39
    Office Equipment Maintenance and
     Repair...........................      100       75        18       100
    Contractor-Operated Parts Stores &
     Civil Engineering Supply Stores..      100       71       100      \2\
    ------------------------------------------------------------------------
    \1\ Marine Corps figures are as of July 1996; all others are as of the
      end of fiscal year 1996.
    \2\ Not reported.

     Note.--Percentages represent the portion of the workforce that is
      outsourced for a given function.

     Source: GAO analysis of services' commercial activities inventory
      databases.

             Multi-Service Contracting of Base Operations Functions

        The National Performance Review and the 1995 report of the
    Commission on Roles and Missions indicated that expanding the
    Department of Defense (DOD) efforts in contracting out multiple
    services under a single contract (multi-service contracts)
    would achieve significantly greater savings than single
    contracts. Since 1977 DOD has entered into only a handful of
    such contracts, primarily for base operation support services.
    However, little information exists on how these contracts work,
    what services are best delivered under such a program, and what
    are the actual savings to the military installation. For
    example, the Army recently determined that the multi-service
    contract at Fort Irwin, California was too cumbersome to
    administer.
        The committee directs that the General Accounting Office
    review the opportunities and problems with multi-service
    contracts and provide a report of its findings to the
    Congressional defense committees by March 1, 1998. The review
    should identify the characteristics of selected multi-service
    contracts, what are the lessons learned from past and current
    DOD multi-service contracts, what are the cost and efficiency
    gains achieved in multi-service contracts in contrast to a
    single service contract, what are the implications for small-
    business, and what DOD functions are best suited for multi-
    service contracts.

                       Oversight of Outsourced Functions

        The committee is aware that the Department of Defense (DOD)
    has increased efforts to maximize efficiencies and improve
    services by planning to study for outsourcing, more than
    100,000 civilian positions between fiscal years 1998 and 2003.
    The committee has several concerns regarding these efforts.
        DOD is pursuing opportunities to outsource services and
    functions currently provided by military personnel. The
    committee questions the savings estimates from such outsourcing
    since the military personnel performing these services will be
    retained and contractor costs will be incurred. In addition,
    the committee is concerned that services and functions that are
    currently used to train military personnel will be outsourced.
        A recent report by the General Accounting Office indicates
    that DOD does not have the adequate personnel or resources to
    conduct or manage new contracts for the planned outsourcing
    efforts. For example, the United States Army Forces Command had
    about thirty staff dedicated to administering the commercial
    activities program during the 1980s. By mid-1996, this staff
    had dropped to three.
        Furthermore, the committee is concerned that recent
    outsourcing efforts do not include studies on whether it would
    be more cost effective to return currently outsourced functions
    and services to the public sector. Without this review, DOD
    cannot ensure that it is receiving the best service for the
    taxpayer.
        Therefore, the committee directs the Secretary of Defense
    to review the planned outsourcing efforts and report his
    findings to the Congressional defense committees by March 1,
    1998. The report should address the following questions:
              (1) What function and services performed by military
            personnel has DOD planned to study for outsourcing
            between fiscal years 1998 and 2003?
              (2) What is the methodology used in determining the
            public costs when reviewing the outsourcing of a
            function or service performed by military personnel?
              (3) What is the adequate level of staff support
            required for ongoing and future outsourcing studies?
              (4) What is the adequate staff support necessary to
            monitor the resulting contracts?
              (5) What are the opportunities for centralizing the
            personnel and resources into one office that will
            provide defense-wide outsourcing support?
              (6) What are the competitive costs and savings from
            the planned outsourcing studies?
              (7) What studies are planned to review the return of
            outsourced services and functions to the public sector?

        Procurement and Electronic Commerce Technical Assistance Program

        Over the past few years, the acquisition community has
    instituted several reforms aimed at streamlining and removing
    barriers to the federal acquisition process. The passage of the
    Federal Acquisition Streamlining Act of 1994 (Public Law 103-
    335) and the Federal Acquisition Reform Act of 1996 (Division D
    of Public Law 104-106), along with administrative actions taken
    by the Executive Branch to streamline the acquisition process
    have helped to fundamentally change the federal acquisition
    system. However, despite these reforms, little has changed for
    the DOD programs that support small business, particularly the
    Electronic Commerce Resource Centers (ECRC) and the Procurement
    Technical Assistance Centers (PTAC).
        Recent findings by the DOD Office of Inspector General
    (OIG) (Electronic Commerce Resource Centers, Report No. 97-090
    and Department of Defense Procurement Technical Assistance
    Cooperative Agreement Program, report No. 97-007) argue that
    the ECRC ``has not been efficient or cost effective in
    promoting'' the use of electronic commerce or electronic data
    interchange technologies between small businesses and
    government organizations. The DOD-OIG also states that PTAC is
    not complying with its authorizing language in section 2415 of
    title 10, United States Code, regarding the requirement to
    award grants based on the comparative ranking of applicants and
    equitably distribute grants across the Defense Contract
    Administration Service regions. Finally, the OIG concluded that
    both ECRC and PTAC functions overlap with services provided
    elsewhere in the government. For these reasons, the committee
    believes the programs should be consolidated to improve service
    delivery and ensure the future of the program is consistent
    with the fundamental changes sweeping the Federal acquisition
    system.

                      United States Transportation Command

        Despite the creation of USTRANSCOM, numerous studies,
    including those by USTRANSCOM, have reported that traffic
    management processes within the Department of Defense (DOD)
    remain fragmented, duplicative, and inefficient, primarily due
    to the lack of integrated and standard business practices.
    Personnel in each transportation component continue to perform
    similar and duplicative functions, resulting in different
    component staff separately negotiating rates and processing
    claims often related to the same shipment.
        The committee is aware that USTRANSCOM is reviewing options
    to improve the management of customer requirements and billing
    through contracted studies and the Joint Mobility Control
    Group. The committee believes that the current transportation
    management issues require more aggressive solutions and
    encourages the use of standardized business practices that
    utilize leading edge technologies. In doing so, the committee
    believes that USTRANSCOM services will improve, transportation
    and financing systems will be easier to understand, and scarce
    resources will be used more efficiently throughout USTRANSCOM.
    As a result, the committee directs the Secretary of Defense to
    reduce the workyears in USTRANSCOM to 66,238, or 1,000 workers
    below the current fiscal year 1997 levels.
        The committee is also aware that DOD transportation costs
    are significantly higher than the private sector. According to
    a 1996 General Accounting Office (GAO) study, USTRANSCOM
    charged its customers as much as 200 percent more than the
    private contractor billed for its services. In the GAO study,
    DOD explained that this difference was largely due to the cost
    of maintaining an additional mobilization or readiness
    infrastructure. Separating the mobilization from the peacetime
    transportation costs would improve visibility over the true
    cost of providing peacetime transportation, and facilitate DOD
    efforts to maximize the most efficient business practices,
    whether public or private. Therefore, the committee directs the
    Secretary of Defense to provide the House Committee on National
    Security and the Senate Committee on Armed Services a report,
    by March 1, 1998, containing the following:
              (1) A description of the charges and services
            provided through the working-capital funds to satisfy
            transportation requirements in support of war, national
            emergency, or contingency operations; and
              (2) A description of the changes and services
            provided through the working capital funds in support
            of peacetime transportation requirements.

                              Environmental Issues

                      Air Force Plant #3, Tulsa, Oklahoma

        The committee is aware of the desirability of expediting
    the environmental cleanup of Air Force Plant #3, located in
    Tulsa, Oklahoma, so that the land on which the plant is located
    may be expeditiously conveyed and subsequent re-use and
    redevelopment accelerated. In view of recently identified
    increased funding requirements for the cleanup of environmental
    contamination at this site, the committee directs the Secretary
    of the Air Force to expedite cleanup of this site to the
    maximum extent practicable. In addition, the Secretary of the
    Air Force is directed to submit a revised obligation and
    cleanup schedule for the facility no later than November 15,
    1997.

                               Compliance Funding

        The committee remains concerned about the expenditure of
    funding for environmental compliance activities. Theoretically,
    such funds are supposed to be used exclusively for those
    environmental activities necessary to ensure that the
    Department of Defense complies with all applicable
    environmental laws and regulations. However, anecdotal
    evidence, as well as preliminary assessments made by the
    General Accounting Office, suggest that there is considerable
    migration of funding into and out of compliance accounts once
    such funds are appropriated and obligated as operations and
    maintenance funding at the installation level. A recent study
    by the General Accounting Office suggests that the Department
    of Defense and the Environmental Protection Agency both lack
    the necessary data relative to environmental compliance
    activities to conduct appropriate oversight. In recognition of
    this deficiency, in 1994 the Under Secretary of Defense
    (Comptroller) established a working group to revise the manner
    in which the department budgets for and reports execution of
    environmental quality programs, including compliance,
    conservation and pollution prevention programs. In 1996, the
    Deputy Under Secretary of Defense (Environmental Security)
    established new policies for classifying compliance projects
    and obtaining data.
        Nevertheless, Department of Defense officials concede that
    they are unable to provide budget execution data breakdowns by
    project and environmental area (such as compliance or pollution
    prevention) and that, even where such data does exist, it is
    not sufficiently standardized or accurate enough to permit
    meaningful cross-service or aggregate comparisons. Therefore,
    the Secretary of Defense is directed to develop a standardized
    data accumulation system for environmental compliance
    activities of the Department of Defense. This all inclusive
    system should be designed to yield contract, project and
    installation specific data for all environmental compliance
    activities, including those under $300,000 in value. Data
    accumulated pursuant to such a system should be standardized
    among the military departments, should employ standardized,
    common accounting procedures, and should yield data that will
    permit the tracking of compliance funding from budget request
    to authorization and appropriation to obligation and
    expenditure. The aim is to develop an easily accessible data
    base by which complete and accurate compliance information may
    be assembled and analyzed. The committee directs the Secretary
    of Defense to submit to Congress a report by no later than
    December 31, 1997, on the development and implementation of
    this compliance data system.

               Environmental Cleanup at the Washington Navy Yard

         Demolition, construction and renovation activities
    conducted at Department of Defense facilities are potentially
    subject to a variety of environmental strictures, depending on
    conditions at contaminated sites. Environmental cleanup of
    contaminants found and military installations is regulated
    under a variety of laws, including the Solid Waste Disposal
    Act, the Toxic Substances Control Act, the National
    EnvironmentalPolicy Act, and the Comprehensive Environmental
    Response, Compensation and Liability Act.
        The committee is concerned with the Navy's plan to relocate
    the Naval Sea Systems Command to the Washington Navy Yard.
    Since the preliminary assessment of environmental contamination
    at the yard may not adequately take into account the nature and
    extent of pollutants. The Navy Yard has been used for most of
    its long history as an industrial weapons production facility,
    and the installation has been heavily contaminated with heavy
    metals, polychlorinated biphenyls, and other hazardous
    substances. The contamination at the Navy Yard is such that the
    installation was assigned a hazard ranking score by the
    Environmental Protection Agency of 52. A score of 28.5 is all
    that is required for designation as a Superfund site, and the
    Environmental Protection Agency anticipates making a decision
    whether to propose the installation for inclusion on the
    National Priorities List as a Superfund site in the fall of
    1998.
        In recognition of these circumstances, the committee urges
    the Department of the Navy to be prudent in undertaking
    demolition, construction and renovation of facilities at the
    Navy Yard in anticipation of the relocation of the Naval Sea
    Systems Command. The committee directs the Navy to comply with
    all pertinent environmental laws and ensure the full protection
    of human health and the environment for construction workers
    and military and civilian personnel as it conducts relocation-
    related activities at the Navy Yard. The committee is not
    opposed to the relocation of the Naval Sea Systems Command but
    does not want to have money obligated for that purpose until
    the Secretary of the Navy provides assurance that funds for
    that purpose will not be wasted.

            Exploring Options to Reduce Environmental Cleanup Costs

        The committee is concerned about the growing costs
    associated with environmental remediation of active and former
    military installations and believes that the Department of
    Defense (DOD) should explore the development of policies which
    will help minimize costs while accomplishing cleanup
    objectives. The committee also believes that the DOD should
    undertake an initiative involving policy makers with
    scientific, industry and community leaders involved in the
    remediation field, to identify opportunities for more efficient
    cleanup and to consider the use of risk-management and risk-
    based corrective action approaches to create more
    environmentally acceptable endpoints and greater incentives for
    innovation in environmental cleanups. The committee is
    particularly interested in expediting remediations, successful
    land transfer and recycling on closed bases and encourages the
    DOD to pursue development of a policy product incorporating the
    input of scientific, industry and community leaders that
    facilitates increased land transfer and acceleration of the
    overall cleanup process.

                         Performance Based Contracting

        One of the approaches to environmental cleanup of
    Department of Defense installations that has the potential to
    generate considerable cost savings concerns performance-based
    contracts. In contrast to traditional ``cost-plus'' contracts,
    performance-based contracts involve measuring contractor
    performance for the purpose of determining the award or fee in
    terms of the attainment of performance milestones, such as the
    demolition of contaminated buildings or the installation of a
    pump and treat system. In effect, contractor performance is
    measured against the achievement of a prescribed, outcome-
    oriented result, but the methodology by which those results are
    to be attained is left to the contractor. The appeal in such an
    approach is that it encourages contractors to use smart
    business practices in contract performance and alleviates often
    cumbersome requirements related to the manner of performance.
    In some cases, however, results-oriented performance milestones
    may be unacceptable to regulators, who desire to prescribe the
    manner in which work under the contract must be done.
    Performance-based environmental contracts employed by the
    Department of Energy have shown promise in terms of cost
    savings and accelerating the time it takes to cleanup sites,
    and the committee believes they have the same potential for the
    Department of Defense.
        Although the Department states that it presently uses
    performance-based contracts in its environmental cleanup
    activities, it is difficult to assess the extent to which
    performance-based contracting is now being employed. There is
    no commonly accepted definition of what constitutes a
    performance-based contract, despite some guidance from the
    Office of Federal Procurement Policy. Further, there is no
    readily available data concerning the number, kind and dollar
    value of environmental cleanup contracts that might be
    characterized as performance-based, so it is difficult to
    meaningfully gauge the present and future value of such
    contracts as a more cost effective means of cleaning up
    contaminated sites. Therefore, the Secretary of Defense is
    directed to submit to the House Committee on National Security
    and the Senate Committee on Armed Services a report, no later
    than December 31, 1997, including the following matters:
              (1) A uniform definition of what constitutes a
            performance-based contract for environmental cleanup
            activities, and how that definition differs from
            traditional ``cost-plus'' contracts;
              (2) The number of performance-based environmental
            cleanup contracts in excess of the simplified
            acquisition threshold now being employed in each of the
            military departments;
              (3) The kinds of cleanup activities covered by such
            contracts and whether there are certain kinds of risks
            and site characteristics that are favorably or ill
            suited to the use of such contracts;
              (4) An assessment of the extent to which such
            performance-based contracts have the potential to
            generate cost savings in the cleanup of contaminated
            sites if employed on a broader scale than is the case
            currently; and
              (5) An assessment of the effectiveness of joint
            Department of Defense-Environmental Protection Agency
            efforts to identify and reduce or eliminate regulatory
            barriers to the use of performance-based contracts or
            other outcome-oriented approaches to environmental
            cleanup.
        The committee anticipates that the results of this report
    will permit a determination about the true potential of
    performance-based contracts to become a widely employed
    technique by which cleanup of contaminated sites may be
    accelerated at lower cost to the government than present
    contracting practices permit.

                              Intelligence Matters

                         Budget Justification Materials

        The Congressional Budget Justification Books (CBJBs) for
    the National Foreign Intelligence Program (NFIP) and the
    Congressional Justification Books (CJBs), for the Joint
    Military Intelligence Program (JMIP) and Tactical Intelligence
    and Related Activities (TIARA) represent the official
    documentation provided yearly by the intelligence Community
    Management Staff (CMS) and the Department of Defense to the
    Congress on the President's intelligence budget request. These
    documents provide the official budget numbers, by program, with
    which Congress evaluates the President's proposed intelligence
    program and renders decisions on individual programs and policy
    matters.
        However, the committee is concerned that the current budget
    documents lack several critical components necessary for the
    Congress to ensure the proper alignment of funding within the
    funding appropriations categories. Clear identification of each
    project; its specific budget request numbers; the appropriation
    category (e.g. Other Procurement, Defense-wide; RDT&E, Navy;
    etc.); the budget request line number, and, if a research and
    development project, the Program Element number is essential to
    this task. Further, the committee requires a detailed
    accounting of all program reprogramming and reallocation
    actions, where unallocated cuts were taken, identification of
    total program costs (such as aircraft or spacecraft and
    association ground station costs, including system engineering
    and systems integration costs and operations support).
    Therefore, the committee directs the CMS and the Department to
    provide this specific data in all future budget justification
    documents.
        Finally, the committee is also concerned that past and
    current budget justification documents have not consistently
    shown all direct and associated funds requests for intelligence
    programs. Research and development costs in the Defense
    Cryptologic Program, for example, are not identified
    specifically with the programs that are the direct
    beneficiaries. Also, operations and maintenance costs are often
    carried in a service's total obligation authority and not
    specifically identified in the CBJBs. The committee cannot
    fully understand the magnitude of budgetary actions without
    fully and clearly understanding all the costs of a program.
        Therefore, the committee directs that in future CBJBs and
    CJBs all direct and associated costs, in each budgetary
    category (e.g. procurement, research and development,
    operations and maintenance, military construction, etc.), be
    clearly and completely provided in each program request.

        Command and Control, Communications, Computers and Intelligence
                          Integrated Architecture Plan

        The budget request contained $3.6 million for the Command
    and Control, Communications, Computers and Intelligence (C4I)
    Integrated Architecture Plan (CIAP).
        CIAP provides the Commanders in Chief (CINCs) in-depth
    analysis of region-centric intelligence issues resulting in
    regional intelligence support plans, resource programming and
    operational architecture designs. The committee has been very
    supportive of this effort, and is concerned that it is once
    again underfunded jeopardizing the completion of CIAP plans for
    several of the regional CINCs. The committee believes these
    plans provide a unique analytical basis for future intelligence
    decisions, and that intelligence funding will be most
    effectively programmed and expended with such analysis.
        Therefore, the committee recommends a total of $9.3 million
    for the CIAP efforts, an increase of $5.7 million.

                  Defense Space Reconnaissance Program (DSRP)

        The committee believes there is no longer a need to
    maintain the (DSRP), a program within the Joint Military
    Intelligence Program (JMIP). The Defense Support Program Office
    (DSPO), operated by DSRP funds, was established to provide an
    overt coordination mechanism for providing National
    Reconnaissance Office (NRO) system capabilities to military
    users. Since the NRO is now declassified, the committee
    believes that there is no longer a need to maintain this
    special DSRP liaison function.
        Therefore, the committee directs that, effective October 1,
    1998, the DSRP be abolished, and all funds properly apportioned
    to the services, defense agencies and the NRO. The committee
    further directs that, no later than February 1, 1998, the
    Assistant Secretary of Defense (Command & Control,
    Communications, Computers, and Intelligence) and the Director,
    NRO provide the defense and intelligence authorizing committees
    a joint plan, including the transfer of funding, for
    transitioning the functions of the DSPO and the DSRP.

                      Foreign Instrumentation Intelligence

        The budget request contained no funding or personnel
    billets in the Joint Military Intelligence Program (JMIP) for
    Foreign Instrumentation Intelligence (FISINT) analysis.
        The committee is concerned about the significant reduction
    in the number of weapons-specific FISINT analysts. While some
    decline in this capability may have been justified following a
    decline in Russian missile test activities, it is not
    consistent with the corresponding increase in missile
    developments and testing by other nations. Numerous countries
    that did not retain such weapons capabilities during the bi-
    polar Cold War era are now able to obtain or indigenously
    develop high technology missiles and components. Many of these
    weapons could be used to threaten U.S. and allied forces. The
    committee is convinced that weapons FISINT analyst levels have
    dropped too far as important analysis of weapons systems have
    been postponed, and gaps in U.S. understanding of new weapon
    systems are widening.
        Therefore, the committee recommends that of the positions
    realized as result of the abolishment of the Defense Airborne
    Reconnaissance Office elsewhere in this report, ten military
    personnel and five civilian personnel should be made available
    to the Director, Defense Intelligence Agency, under his
    authorities as the Defense General Intelligence Applications
    Program Coordinator, to rebuild weapons FISINT analysis
    capabilities. The Director, DIA will allocate these billets to
    the National SecurityAgency, the National Aerospace
    Intelligence Center, the Missiles and Space Intelligence Center, and
    the Office of Naval Intelligence as required.

                    Imagery and Geospatial System Production

        The budget request contained $541.8 million for continued
    operations of National Imagery and Mapping Agency's (NIMA)
    Geospatial System Production and Customer support.
        The Director of NIMA has officially stated that, because of
    the large operations and maintenance cost of older production
    equipment, the Agency will completely phase out the legacy
    Digital Production System (DPS) by the year 2000. Although the
    overall NIMA operations and maintenance budget decreases
    slightly in fiscal year 1998, very little of this decrease is
    due to a reduction in legacy system funding. The committee
    notes that migration away from DPS began in fiscal year 1997,
    and a more significant decline in funding should result in
    fiscal year 1998.
        Therefore, the Committee recommends $501.4 million for this
    activity, a decrease of $40.0 million.

                      Intelligence System Interoperability

        The budget request contained $196.6 million for Command and
    Control, Communications, Computer Intelligence (C4I) support
    system development and interoperability, and for establishing a
    virtual intelligence analysis environment. The systems
    identified within this request are contained within the
    National Foreign Intelligence Program (NFIP), the Joint
    Military Intelligence Program (JMIP) and the Tactical
    Intelligence and Related Activities (TIARA) aggregation, and
    include the following programs:
              (1) Joint Intelligence Virtual Architecture;
              (2) Joint Deployable Intelligence Support System
            (JDISS)
              (3) All Source Analysis System (ASAS);
              (4) Joint Maritime Communications Information System
            (JMCIS);
              (5) Combat Intelligence System (CIS);
              (6) Analysis System (IAS); and
              (7) JDISS-Special Operations Command Research,
            Analysis, and Threat Evaluation System (SOCRATES).
        The committee supports the Department's efforts to provide
    an interoperable intelligence dissemination architecture and a
    ``virtual'' analytical environment with which analysts world-
    wide can collaborate. However, the committee believes the
    various projects reflected in the President's request do not
    have the necessary direction and control to require the sharing
    of developments and to ensure that duplication of effort is
    minimized, as demonstrated by a review of the budget
    justification documents.
        Further, the committee believes that the systems stated
    above can be broken down into the basic components of 1) a high
    powered workstation with communications; 2) an operating
    environment that, by direction of the Assistant Secretary of
    Defense (C3I) must be Defense Intelligence Infrastructure (FII)
    and Common Operating Environment (COE) compliant; and 3) a set
    of applications software. While the common stated goal of the
    above systems is to provide support to analysts and operators,
    the program managers of these systems rarely, if ever, work
    together to achieve common goals by sharing ideas and
    developments.
        Therefore, the committee is convinced of the need to
    establish a management focal point within the Department that
    would involve includes representation from each of the service
    and agency system program offices. The mission for this
    organization would be to provide oversight, integration, and
    development of collaborative applications for the associated
    C4I systems. The function of this organization should not be to
    dictate specific service or agency hardware solutions or unique
    software applications, but to provide for the development of
    common applications, act as a conduit for sharing analytical
    ideas and processes, and to ensure world-wide interoperability
    via standards. The committee does not support the concept of
    centralizing funding for these efforts, since these systems are
    the responsibilities of the various services and agencies.
        Therefore, the committee directs that no more than 50
    percent of the funds authorized for the above systems be
    obligated or expended, until the Assistant Secretary of Defense
    (C3I) provides the defense and intelligence authorizing
    committees with a plan for creating a management focal point
    within the Department with a charter encompassing the goals
    outlined.

                    Interferometric Synthetic Aperture Radar

        The budget request contained $23.2 million to continue
    development of the Interferometric Synthetic Aperture Radar
    (IFSAR) mission to collect Digital Terrain Elevation Data
    (DTED) level 2 information. The IFSAR mission is scheduled to
    fly on the Space Shuttle in the 2000 timeframe. The IFSAR
    mission itself will cost $163.3 million, with $98.4 million for
    follow-on analysis.
        The committee continues to believe that there are other,
    more cost-effective alternatives to the IFSAR mission for
    collecting DTED level 2 data. One such alternative appears to
    be an algorithm developed by commercial industry that allows
    DTED level 2 data to be derived from the European Resource
    Satellites (ERS-1 and -2). The Canadian RADARSAT also appears
    to be able to satisfy this requirement. Additionally, new
    processes for aircraft with SAR capabilities hold great
    potential. Therefore, the committee recommends cancellation of
    the IFSAR mission and a corresponding reduction of $23.2
    million in the National Imagery and Mapping Agency budget.

                       Joint Planning and Program Review

        The budget request contained $6.6 million for Defense
    Intelligence Agency (DIA) general support to the defense
    community. This request included funding for moving DIA
    elements within the Pentagon and to leased space due to anti-
    terrorism and force protection direction from the Office of the
    Secretary of Defense.
        The committee supports new DIA efforts, within this
    project, to provide intelligence assessments, intelligence
    inputs to Defense Planning Guidance, and other intelligence
    support functions. The committee hopes that these efforts are
    indeed havingan impact on defense planning and programming. The
    committee further notes that the budget justification materials assert
    that these DIA assessments have ``determined shortfalls in current
    high-cost reconnaissance and surveillance programs and identified/
    prioritized specific near-term solutions, which resulted in great
    savings across Future Year Defense Plan (FYDP).'' Therefore, the
    committee requests that the Director of DIA provide the defense and
    intelligence committees a report on these assessments before the fiscal
    year 1998 conference.
        Further, the Committee does not believe there is adequate
    justification in the request for a 35 percent increase in
    funding for moving personnel. Therefore, the committee
    recommends a limitation on the obligation of $2.0 million of
    the request until the Department provides the committee with a
    detailed explanation and rationale for the increased costs
    incurred by the DIA for these forced moves.

             National Imagery and Mapping Agency Civilian Personnel

        The budget request contained $680.3 million for running the
    National Imagery and Mapping Agency's (NIMA) mapping and
    geospatial information operations, including funding for 6,389
    civilian personnel positions.
        The Director of NIMA has stated that NIMA's Digital
    Production System (DPS) will no longer be operational by the
    year 2000, and that NIMA's primary role in mapping will evolve
    to that of maintaining information databases instead of
    producing imagery and other intelligence products. If realized,
    this approach should result in a greater decline in required
    personnel over the current mandatory downsizing reductions,
    since the majority of NIMA personnel currently support the
    development of intelligence products. The committee supports
    the effort to move away from DPS, however, the committee
    believes that NIMA has failed to properly take into account the
    effect this plan will have on personnel levels. Therefore, the
    committee recommends a decrease of $15.0 million in civilian
    personnel funds to accelerate the downsizing of NIMA's
    personnel consistent with the DPS phase out.
        Further, personnel costs account for more than half of
    NIMA's operations and maintenance request and consequently,
    more than half of its budget. The committee believes that NIMA
    must drastically reduce its workforce and become more efficient
    if it is to be able to fulfill its mission in the information
    age. Therefore, the committee directs the Director of NIMA to
    submit a personnel plan to the Congressional defense and
    intelligence committees containing a forecast of the required
    personnel levels over the Future Years Defense Program given
    NIMA's new direction in the geospatial arena. This plan should
    include an assessment of the types of skills required in the
    future versus what NIMA now possesses, a breakdown per year of
    the types of personnel positions that shows how NIMA's
    demographics will change as the agency moves to its required
    skill mix, an assessment of whether cartographer personnel
    slots can be transformed into imagery analyst slots and the
    potential for retraining cartographers into imagery analysts,
    and an assessment of the challenges and obstacles facing the
    agency in achieving the necessary personnel reductions,
    including suggested remedies for such obstacles. The committee
    requests that an interim plan be submitted by August 1, 1997,
    with a final plan to be provided by December 1, 1997.

              National Imagery and Mapping Agency Mission Support

        The budget request contained $147.6 million for National
    Imagery and Mapping Agency (NIMA) facilities management.
        As NIMA consolidates facilities, the committee expects to
    see a marked decline in mission support costs. Such a decline
    is not apparent in the budget request justification materials.
    Therefore, the committee recommends a decrease of $10.0
    million. Further, the committee requests that the Director of
    NIMA submit a facilities plan that lays out locations and
    functions of all current facilities, and describes NIMA's
    strategy to consolidate and reduce its facility holdings. The
    committee requests that an interim plan be submitted by August
    1, 1997, with a final plan to be provided by December 1, 1997.

                     Tactical Unmanned Aerial Vehicle (UAV)

        The budget request contained $2.2 million in the Army
    Operations and Maintenance account for continued operation of
    one-to-two Hunter UAV systems currently owned by the U.S. Army.
    This request was not, however, reflected in the Army's Tactical
    Intelligence and Related Activities (TIARA) request.
        The committee understands that the Army is operating at
    least 2 full Hunter systems and has recently sent a partial
    system to the Navy. The remaining systems are in storage. With
    the cancellation of Hunter procurement, the cancellation of the
    Maneuver UAV, and the delay in the Outrider Advanced Concept
    Technology Demonstration, the committee is concerned with the
    need to satisfy near-term Army tactical UAV requirements. The
    committee believes the best short-term solution is for the Army
    to operate the systems it currently owns. Therefore, the
    committee recommends an additional $10 million in the Army's
    Tactical Intelligence and Related Applications aggregation for
    operation of additional Hunter UAVs to satisfy Army tactical
    reconnaissance requirements and to refine tactical UAV
    operational procedures. The committee does not authorize
    additional or attrition Hunter air vehicle purchases, nor does
    it authorize technical improvements to the air vehicle or its
    electronic systems. Finally the committee notes that this is a
    Congressional interest item and directs that the Army receive
    prior defense and intelligence committee approval before
    redistributing these funds for any purpose other than that
    authorized above.

                          Tactical Information Program

        The budget request contained $5.2 million in Operations and
    Maintenance, Air Force, partly for operation of the Integrated
    Broadcast Service (IBS) executive agency by the Air
    Intelligence Agency (AIA).
        The committee believes the budget request does not
    adequately fund the increased operational demands levied on AIA
    as a result of the decision by the Assistant Secretary of
    Defense (C3I) to direct the Air Force to manage the development
    of the IBS data broadcast program. Therefore, the committee
    recommends an increase of $4.0 million for this purpose.
    Elsewhere in this report, the committee recommends a reduction
    of$3.0 million from PE 0304111F, R-169 and $1 million from
    Other Procurement, Air Force, line 113, as an offset for this increase.

                                Tactical Support

        The budget request contained $9.9 for continued support to
    the Tactical Exploitation of National Capabilities (TENCAP)
    programs, to provide management support to intelligence
    processes, and for funding contingency operations for Operation
    Southern Watch.
        Elsewhere in this report, the committee has recommended
    reductions to the TENCAP programs, as it believes the
    utilization of space has become more commonplace, and therefore
    requires less specialized management support. Additionally, the
    committee does not believe a funding increase for Operation
    Southern Watch is justified.
        Therefore, the committee recommends $8.7 million for this
    effort, a reduction of $1.2 million.

                     Morale, Welfare, and Recreation Issues

                Deferred Payment Programs of Military Exchanges

        Section 337 of the National Defense Authorization Act for
    Fiscal Year 1996 (Public Law 104-106) required the Secretary of
    Defense to seek to enter into an agreement with a commercial
    banking institution under which such institution would finance
    and operate the deferred payment programs of the Army and Air
    Force Exchange Service (AAFES) and the Navy Exchange Command
    (NEXCOM). That section further required the use of competitive
    procedures in the awarding of a contract for the financing and
    operation of these deferred payment programs. To date, no
    request for proposals has been published in the Commerce
    Business Daily or otherwise been made public, due in large part
    to the complexities of combining the debt and servicing aspects
    of two separate deferred payment programs into requirements for
    a single solicitation. Therefore, the committee directs the
    Secretary of Defense to consider entering into separate
    agreements with commercial financial institutions for the
    existing AAFES and NEXCOM deferred payment programs. If no
    request for proposals for the financing and operation of AAFES'
    and NEXCOM's combined deferred payment programs is issued by
    July 1, 1997, the Secretary is directed to issue a separate
    requests for proposals for the financing and operation of
    AAFES' and NEXCOM's separate deferred payment programs. The
    Secretary of Defense is further directed to submit a report to
    the congressional defense committees, no later than December
    31, 1997, on the status of the request(s) for proposals,
    including the anticipated date for award of the contract(s) and
    an assessment of the cost savings to the government or
    increased revenues likely to be generated for the military
    exchange systems as a result of commercial financing and
    operation of deferred payment programs.

        MWR Reimbursement from Closure of Foreign Military Installations

        The 1988 Base Realignment and Closure Act (title II of the
    Defense Authorization Amendments and Base Closure and
    Realignment Act, Public Law 100-526) and the 1990 Base
    Realignment and Closure Act (title XXIX of the National Defense
    Authorization Act for Fiscal Year 1991, Public Law 101-510)
    contemplate the transfer of formerly used American military
    installations overseas back to the host country once the need
    for our use of such bases has ceased. In cases where these
    installations are closed and transferred to the host country
    for reuse, the Department of Defense frequently receives
    reimbursement from the host foreign country for improvements
    made to the installation. Current law requires that that
    portion of the proceeds paid to the Department of Defense
    attributable to improvements to the installation made with
    commissary funds or nonappropriated funds must be deposited
    into a Treasury account established for the purpose of
    acquiring, constructing and improving commissaries and
    facilities for nonappropriated fund instrumentalities.
        Recent testimony before the committee suggests that,
    despite the requirements of the law, funds paid to the
    Department of Defense upon the closure and transfer to the host
    country of foreign military installations are not being
    deposited into the Treasury account or are otherwise not being
    made available for use by commissaries and nonappropriated fund
    instrumentalities. Therefore, the committee directs the
    Secretary of Defense to submit a report to the Committee on
    National Security of the House of Representatives and the
    Committee on Armed Services of the Senate, no later than
    December 31, 1997, explaining in detail the following:
              (1) The number of foreign installations closed within
            the last five calendar years (1992 to the present) in
            which the United States Government and/or the
            Department of Defense received financial or in kind
            payment from the host country for or in connection with
            improvements made to the property by the United States;
              (2) The total dollar value of payments made to the
            United States and/or the Department of Defense, and the
            fair market value of any in kind contributions from
            foreign countries to the United States and/or the
            Department of Defense, for or in connection with
            improvements made to military installations transferred
            back to the host country;
              (3) The total amount equal to the depreciated value
            of the investment made on such military installations
            with commissary and nonappropriated funds;
              (4) The total amount deposited annually for the last
            five calendar years into the Treasury account
            established for the benefit of commissaries and
            nonappropriated fund activities; and
              (5) The total amount of funds spent from that account
            for commissary and nonappropriated fund instrumentality
            projects, and a description of the projects for which
            such funds were expended.
        The committee anticipates that the data provided in this
    report will establish whether remedial legislation is required
    in order to secure full compliance with the law.

                   Pentagon Concessions Committee Activities

        The committee is concerned that there are nonappropriated
    fund activities of the Department of Defense that operate
    without adequate congressional oversight and coordination. In
    particular, certain of the nonappropriated fund activities
    conducted at the Pentagon Reservation pursuant to authorization
    from the Department of Defense's Concessions Committee appear
    to be at odds with congressional guidance issued in the past.
    Although the activities conducted under the auspices of the
    Concessions Committee began in 1943 with a $325,000 start-up
    loan from the Army Exchange Service (now the Army and Air Force
    Exchange Service (AAFES)), these activities generated sales in
    excess of $27 million in fiscal year 1996. Evidence received by
    the committee suggests that oversight of these activities by
    the Director, Administration and Management, Office of the
    Secretary of Defense, has not been sufficient to ensure
    consonance with congressional resale policy guidance.
        Given the annual sales volume of these activities, better
    management oversight may have the potential to yield increased
    dividends to MWR programs and an enhanced MWR benefit for
    service members. Therefore, the committee directs the
    Comptroller General to perform a comprehensive review of all
    Concessions Committee operations. The review should include a
    detailed financial and management audit, including an
    assessment of procurement practices and policies. In addition,
    a breakout of the source and amount of appropriated funds
    provided in support of these activities should be included. The
    review should also include an evaluation of the relationship
    between sales, revenues, and the size of the dividend to
    morale, welfare and recreation activities from Concession
    Committee activities. An assessment also should be made of
    whether Pentagon Reservation concession activities should be
    included within the Department's on-going exchange integration
    study and whether Concession Committee activities should be
    formally subsumed within and subordinated to AAFES or one of
    the other exchange systems. The Comptroller General is directed
    to provide a report resulting from the foregoing review to the
    congressional defense committees no later than March 1, 1998.

                   Report on Black Marketing of Beer in Korea

        The committee is aware that black marketing of American
    made products sold at commissaries, exchanges and other resale
    facilities in Korea remains a serious problem. Military
    commanders have a duty to try to eliminate illegal activity,
    and the committee strongly supports such efforts. However, at
    the same time, command efforts to restrict opportunities for
    black marketing by reducing the number of points of sale for
    products like beer that have been the subject of black
    marketing have the effect of reducing earnings generated by
    resale activities. Reduced earnings in turn result in a smaller
    dividend paid in support of local morale, welfare and
    recreation (MWR) programs. Therefore, the committee directs the
    Secretary of the Army to submit a report to Congress, no later
    than December 31, 1997, explaining specifically what action has
    been taken to limit black marketing of beer at Army
    installations in Korea and the reasons therefor, and how the
    Army intends to ensure funding continuity for MWR programs in
    Korea despite a decreased MWR program dividend because of
    reduced local beer sales. The report should include an
    explanation of changes in the amount of appropriated and
    nonappropriated fund support in order to ensure provision of
    the same level of benefit for MWR programs in Korea.

                    Report on Tobacco Sales at Commissaries

        In November 1996, the Department of Defense required the
    Defense Commissary Agency (DECA) to sell tobacco products at
    commissaries at the same price charged at military exchanges.
    The committee is concerned that the Department of Defense's
    strategy to generate revenue through the sale of tobacco
    products at increased prices at commissaries may not be working
    as planned. Preliminary data suggest that tobacco product sales
    at commissaries are down significantly for the first four
    months of fiscal year 1997. Moreover, grocery volume and total
    sales at commissaries are down, although not as much, for the
    same period.
        Therefore, the committee directs the Secretary of Defense
    to submit a report to the Committee on National Security of the
    House of Representatives and the Committee on Armed Services of
    the Senate detailing the effect upon tobacco sales volume and
    revenue from the decision to raise prices at commissaries. The
    report should include a comparative analysis of tobacco sales
    from the time tobacco prices were raised through the end of
    fiscal year 1997 with tobacco sales figures from the two
    preceding fiscal years. The report should also include a
    detailed explanation of the use to which the revenue from
    tobacco sales at commissaries is being put. This explanation
    should indicate how much revenue is being allocated as
    increased dividends for MWR activities and what use has been
    made of the remaining revenue, as well as the amount of any
    handling charge allocated to DECA. Finally, the report should
    include a recommendation whether DECA should receive some
    percentage of the proceeds from tobacco sales at commissaries
    as a way to improve DECA's financial situation. The report
    should be submitted no later than February 1, 1998.

       Uniform Health Benefit Program for Nonappropriated Fund Employees

        Section 349 of the National Defense Authorization Act for
    Fiscal Year 1995 (Public Law 103-337) required the Department
    of Defense, by not later than October 1, 1995, to take such
    steps as necessary to provide a uniform health benefits program
    for its nonappropriated fund employees. By letter dated April
    2, 1997, the Department notified Congress of its preliminary
    determination to adopt the health benefits plan currently
    provided by the Army and Air Force Exchange Service (AAFES) as
    the uniform health benefit plan for all nonappropriated fund
    employees. The committee is concerned, however, that the
    Department does not intend to subject the initial contract for
    the uniform plan to a competitive bidding process. Although the
    AAFES plan is fully funded and the most generous of the health
    benefit plans presently being offered by nonappropriated fund
    instrumentalities within the Department of Defense, companies
    other than the one administering the AAFES plan may be able to
    provide the same level of benefit at a lower cost than is
    charged for coverage under the AAFES plan. Therefore,the
    committee directs the Secretary of Defense to initiate a competitive
    bidding process for the contract to provide uniform health benefits for
    nonappropriated fund employees.

                  Defense Commissary Agency Produce Purchasing

        The Defense Commissary Agency (DECA) has historically
    purchased its produce for sale in commissaries, as well as for
    installation mess halls and other dining facilities, from local
    produce growers. However, a recent study conducted by the Hay
    Group for DECA suggests that DECA could achieve considerable
    annual savings in its produce purchasing by buying produce from
    a ``prime vendor'' or single, large produce seller that has the
    facilities and capability to sell DECA produce and service all
    installations within a given region. The committee is concerned
    that a decision by DECA to purchase its produce from a large
    regional produce vendor might have undesirable consequences.
    Service members might not receive the freshest, locally grown
    produce. Produce is a perishable commodity, and produce that
    must be shipped distances to localities may begin to decay.
    Moreover, large produce vendors may not have the same quality
    standards or service ethic as local produce growers. In short,
    produce quality, freshness and variety may decline under a
    prime vendor arrangement. Therefore, the committee directs the
    Secretary of Defense to submit a report to the Committee on
    National Security of the House of Representatives and the
    Committee on Armed Services of the Senate explaining the
    financial considerations associated with a decision to
    undertake a prime vendor contract for the purchase of produce,
    and the advantages and disadvantages in terms of delivery
    logistics, produce quality, freshness and selection associated
    with such a change in practice. The report should also detail
    the effect of the change to a prime vendor arrangement upon
    small, local produce growers and businesses and should explain
    how DECA intends to take into account the interests of these
    concerns should it go forward with a prime vendor contract. The
    report should be submitted no later than October 31, 1997, and
    DECA may not to award any so called ``prime vendor'' contract
    for the purchase of produce for commissaries and installation
    dining facilities until at least 90 days after the report has
    been submitted to Congress.

                                  Other Issues

                                Army After Next

        The committee notes with interest the success of the
    initial efforts of the Army's ``Army After Next'' program. With
    the support of the committee in the National Defense
    Authorization Act for Fiscal Year 1997 (Public Law 104-201),
    the Army was able to conduct several highly productive
    wargaming exercises aimed at determining the future strategic
    environment for the employment of land forces and the
    technologies, operational concepts and military organizations
    that may be required. The committee welcomes the support for
    this important and cost-effective program that has been
    expressed by the Secretary of Defense and Chief of Staff of the
    Army, and encourages the other military services to undertake
    similar efforts.
        At the same time, the committee remains concerned about the
    direction of the Army's future modernization and innovation
    efforts, which at the least remain hamstrung by inadequate
    budgets. The process of fielding the next-generation ``Force
    XXI'' Army will not be complete within the active Army until
    well after the year 2020. And one lesson apparent from the
    successful Force XXI exercises at the National Training Center
    is the need to move more rapidly not merely to digitize current
    land systems but to develop more lethal, mobile and deployable
    systems for the future.
        Therefore, the committee directs that, of the amounts
    authorized for Operations and Maintenance, Army, Force-Related
    Training, Special Activities under Budget Activity 3, $7.0
    million be made available to conduct further analysis for the
    ``Army After Next'' program. The committee also recommends that
    the Army establish a stable funding profile for the program. In
    addition to allowing United States Army Training and Doctrine
    Command to investigate the possibilities of more radical
    change, both in strategic and operational requirements for land
    combat, than envisioned under the Force XXI, the program
    provides an important hedge should Force XXI funding be reduced
    due to overall defense budget shortfalls. The committee
    continues to consider the small amount of funding required to
    conduct ``Army After Next'' analysis as a wise investment to
    ensure the Army's modernization program is responsive to future
    threats.

                             Army Aviation Training

        The committee is concerned that currently, there are
    approximately 700 Army aviation pilots that were given initial
    pilot training on the Army's older aircraft systems and have
    now been assigned to units that operate only updated aircraft
    systems. As these pilots are not trained on the new aircraft
    systems, and the receiving units do not have the training funds
    to upgrade these individuals, the Army is unable to fully
    utilize these personnel. Therefore, the committee recommends an
    increase of $14.0 million to the Army's operation and
    maintenance account to support the Army's training plan to
    alleviate the excess number of ``non-modernized aviators.''
    This funding will greatly increase combat readiness by
    providing the Army highly trained aviators in the newer
    modernized aircraft systems.

                       Army Civilian Personnel Management

        A recent General Accounting Office (GAO) report entitled
    ``Army Force Structure'' (NSIAD-97-66), determined that the
    Army is unable to ensure that its personnel are being used
    efficiently or even assess what risks would be assumed by
    eliminating civilian positions due to the weakness in its
    institutional force requirements process. This weakness has
    also been identified by the Army Audit Agency. GAO considers
    this problem to be sufficiently significant that it has
    recommended its designation as a ``material weakness'' under
    the Federal Manager's Financial Integrity Act, which would
    require the Army to develop a corrective action plan with
    milestones for completion.
        The committee is similarly concerned that current Army
    downsizing and reductions-in-force are not based upon
    prioritized workload based staffing requirements. Therefore,
    the committee directs the Secretary of the Army to provide a
    report to the House Committee on National Security and the
    Senate Committee on Armed Services not later than March 31,
    1998, on efforts to correct the Army's weakness in its force
    requirements determination process. The committee also
    recommends that the Army Materiel Command automated workload
    management system demonstration project be completed by January
    1, 1998 and the results included in the above report.

                         Army Depot Maintenance Funding

        The committee is alarmed by the declining trend in funding
    for depot-level maintenance and repair within the Department of
    the Army. The Army funded 79 percent of total depot maintenance
    and repair requirements in fiscal year 1996, 65 percent in
    fiscal year 1997, and the budget request for fiscal year 1998
    allows for only 58 percent of requirements. The committee
    believes this declining trend is unacceptable, and if
    continued, could seriously affect the readiness of the Army's
    combat weapons systems.
        Therefore, the committee directs the Secretary of the Army
    to provide to the Congressional defense committees by December
    1, 1997, a report explaining how the Army plans to reverse the
    declining trend in funding for depot-level maintenance and
    repair, and an assessment of the readiness implications of
    funding this account at less than 80 percent of requirements.

                    Automatic Document Conversion Technology

        The committee believes that there is the potential for
    significant savings from automatic document conversion software
    for use in weapons systems engineering drawing digitization,
    and that the department should increase it efforts to digitize
    all weapons engineering drawings by the year 2000. Therefore,
    the committee recommends the addition of $10.0 million for
    engineering drawings and document storage and retrieval to be
    directly managed by the Defense Logistics Agency. The committee
    directs that not less than one half of these funds must be used
    toward development of a systems solution for document
    conversion, studies, analysis and integration.

                         Budget Justification Materials

        The committee continues to be concerned with receiving the
    Department of Defense budget justification materials being
    received in a timely or useful manner to support Congressional
    oversight and decision-making. The justification materials,
    particularly for the operation and maintenance accounts, are
    currently provided to the Congress late in the committee's
    review process, often precluding the ability to conduct
    thorough and in depth analysis of the President's budget
    request. Although an extensive amount of material is eventually
    provided, much of it is in formats that conflict between the
    individual services making it difficult to assess trends in
    similar functions. As an example, the data concerning depot
    maintenance for the Air Force is located in a different budget
    activity than found in the Army or the Navy. The complexity of
    the multiple displays of budget information also makes locating
    information on a specific subject difficult and time consuming.
    In particular, details on the allocation of outsourcing and
    efficiency savings are either not provided or scattered
    throughout several tables.
        Therefore, the committee directs the Secretary of Defense
    to convene a working group, consisting of representatives of
    the military departments and the appropriate defense agencies,
    to develop a single Department of Defensewide standard
    formulation for the display of budget justification materials
    provided to Congress. The committee urges this working group to
    consider eliminating repetitive and redundant budget displays
    and directs that budget justification materials provided to
    support the fiscal year 1999 budget request confirm to the
    maximum extent practicable with a new department-wide
    standardized format.

              Computer Crimes and Information Technology Security

        Although highlighted in the Quadrennial Defense Review, the
    committee is concerned by the modest support from the
    Department of Defense (DOD) leadership for improving
    information security for non-classified systems. The committee
    is aware that in response to concerns raised in the National
    Defense Authorization Act for Fiscal Year 1997 (Public Law 104-
    201), several computer investigations training, computer
    forensics laboratory, and hardware and software improvement
    programs are under development. To ensure consistency of such
    training and system improvements throughout DOD and build on
    the efforts of the Air Force and Navy, the committee directs
    the Secretary of Defense to establish a standard training
    program, open to participation by members of all relevant
    programs in the military departments and defense agencies. This
    standard program should provide the necessary training,
    forensic laboratory, and hardware and software support to
    strengthen DOD's capabilities to identify, respond, and protect
    information system vulnerabilities. The committee recommends
    that of the funds authorized for Operations and Maintenance for
    fiscal year 1998, $9.8 million should be made available to
    support these programs.

              Contractor Operated Civil Engineering Supply Stores

        The committee continues to be concerned with actions taken
    by the Department of the Air Force concerning the operation of
    Contractor Operated Civil Engineering Supply Stores (COCESS).
    As mentioned in the committee report on H.R. 3230, the Fiscal
    Year 1997 Defense Authorization bill (H. Rep. 104-563), the
    committee believes that COCESS is an important centralized
    supply store function located on military installations to
    provide off-the-shelf parts and supplies, similar to the
    commercial equivalent of a hardware store. At a time when there
    is a great emphasis on outsourcing the supply and service
    functions that are not inherently governmental, the committee
    supports current efforts to consider the desirability of
    contracting out base engineering supply stores.
        The committee is aware of recent efforts to change the
    existing COCESS contracts on several Air Force installations
    that would include the COCESS functions in larger, multi-
    service, installation-wide service contracts. The committee
    believes that such efforts to combine existing functions that
    are already performed by the private sector (such as COCESS)
    may not be in the best interest of the government and could
    result in the exclusion of small businesses in these areas.
        Therefore, the committee directs the Secretary of the Air
    Force to not combine COCESS functions with other service
    functions when considering multi-function service contracts
    until a thorough analysis is conducted, including an economic
    analysis, assessing the merits of combining these services to
    increase efficiencies at Air Force installations. Further, the
    committee directs the Secretary of the Air Force to not change
    the current operation of any COCESS, or to permit any
    combinations of supply and services functions in upcoming
    procurements, that would violate or circumvent the tenants of
    any current COCESS contractual agreement.

          Department of Defense Next Generation Weather Radar-Doppler

        The committee believes that the Department of Defense (DOD)
    Next Generation Weather Radar-Doppler (NEXRAD) weather radars
    are an integral part of the National Weather Service (NWS)
    weather radar coverage system, and that steps need to be taken
    to ensure that DOD NEXRADs function as fully committed elements
    of the national weather radar network at the same standards,
    quality, and availability as NWS operated NEXRADs. The
    committee recognizes the importance of fully operational
    NEXRADs for NWS forecasters to accurately monitor, forecast,
    and issue severe weather warnings.
        Therefore, the committee urges the Secretary of Defense to
    consider increasing local stocks of NEXRAD spare parts to
    correspond with both the types and quantity of NWS spare part
    requirements provide additional common support equipment to be
    used during maintenance processes to test and repair NEXRAD
    systems provide additional operator training to correspond to
    NWS training requirements and establish a NEXRAD mobile
    maintenance system. In addition, the committee recommends that
    the Secretary of Defense, in consultation with the
    Administrator of the National Oceanic and Atmospheric
    Administration, consider the relocation of radar product
    generators for all NEXRADs from the field locations to the
    locations of the unit control positions. The committee believes
    that these recommendations will provide the same operational
    standards for DOD NEXRADs as the NWS operated NEXRADs.
        In addition, the committee recommends that the Secretary of
    Defense enlist the National Research Council of the National
    Academy of Sciences to conduct a comprehensive study of DOD
    NEXRADs to compare availability and performance as compared to
    NWS NEXRADs, and to include the feasibility and benefits of
    transferring all DOD NEXRADS to the Department of Commerce.

     Emergency Communications Services for Members of the Armed Forces and
                                 Their Families

        The committee notes that, as of the end of fiscal year
    1997, the Department of Defense (DOD) will no longer provide
    direct financial assistance to the American Red Cross for the
    delivery of emergency communications services. The committee
    believes that the emergency communications services provided to
    the DOD by the American Red Cross are very important to
    military readiness and to the quality of life for military
    service members and their families. Therefore, the committee
    urges the DOD to make every effort in maintaining its long
    standing, close relationship with the American Red Cross and is
    pleased that DOD and the American Red Cross are currently
    engaged in discussions that are intended to lead to the
    continued delivery of emergency communications services for the
    armed forces.

                             Flying Hour Shortfalls

        The committee is alarmed by recent reports of significant
    shortfalls in the Navy and Air Force flying hour programs. The
    committee has learned that during fiscal year 1997, the Navy is
    reporting a funding deficit of $107.0 million and the Air Force
    reports a deficit of $171.0 million in their flying hour
    programs. Compounding this problem, and adding to the
    committee's concerns, is that fact that the Secretary of
    Defense recently informed the committee that the budget request
    for fiscal year 1998 underfunds the Navy flying hour program by
    $350.0 million and the Air Force program by $200.0 million. The
    committee finds these trends unacceptable and believes they
    raise serious questions about the validity of the services
    budget formulation process for these programs.
        The military services have explained to the committee that
    a significant portion of the shortfalls result from
    unanticipated higher costs for aircraft parts, failures in
    revised repair initiatives, and errors in the calculation of
    their requirements. As an example, the Navy estimate for
    aircraft repair parts in the fiscal year 1997 budget request
    was 25 percent below the actual costs experienced to date. The
    Air Force reported that F-15C/D aircraft are experiencing a 50
    percent increase in engine changes. In addition, when the Air
    Force changed the source of repair for F-15E engines, they
    failed to include relevant costs in their fiscal year 1997
    budget request. Both of the services report that repair parts
    usage is greatly exceeding program expectations due to aging of
    their aircraft. The committee believes that anticipating aging
    aircraft repair parts requirements and providing the necessary
    internal management for one of the services' most important
    combat programs should be a top priority for the Secretary of
    the Navy and the Secretary of the Air Force.
        As mentioned elsewhere in this report, the committee
    understands that the services, and particularly fighter
    aviation units, are working harder then ever before. This is
    not a new phenomenon, as these units have been stressed for the
    last several years. From interviews with aviation personnel and
    testimony before the committee, the committee understands that
    flying units are extensively using ``work arounds'' to solve
    the problems of aircraft breakdowns and parts shortages. The
    committee has also heard reports of maintenance personnel
    working long hours to take parts from one aircraft to place on
    another just to meet operational requirements. The committee
    does not understand how the service budgeting systems did not
    recognize and compensate for the impact of the extremely high
    aircraft operational rates in the past two years.
        As these budgeting errors have only recently come to light,
    and at a time when overall funding is being strictly rationed
    to identified needs, the committee fears that any funds
    provided to overcome these shortfalls may not address the true
    underlying problem. Therefore, the committee directs the
    Secretary of the Navy and the Secretary of the Air Force to
    conduct a comprehensive review of its current and future years
    active and reserve component flying hour programs and provide
    to the Congressional defense committees by December 1, 1997, a
    report outlining actions taken to correct these budgeting
    errors.

         Impending Change in Air Force Supply Management Activity Group

        The committee understands that the Air Force is planning to
    combine its three wholesale supply support divisions into one
    division and implement a new way of computing the surcharge
    associated with the purchase, warehousing, handling, and
    management of repair parts. A major impact of this change will
    be to revise the manner in which parts surcharges are computed
    and applied. The new procedures provide that condemnations and
    the associated replenishment spare purchases will be charged to
    the items within the appropriate commodity group rather than
    being spread over all items. The committee is concerned that
    while this change may better align costs with end items, no
    preplanning has occurred with the depot maintenance business
    activity group and that items having high condemnations, such
    as engines, will have a significant cost growth. While the cost
    impact of this change is not known at this time, sales prices
    have already been set for fiscal year 1998 with the depot
    maintenance customers. Any increases in costs will result in
    losses to the depot maintenance activity group. Those losses
    will drive outyear price increases to recoup the loss. The
    committee believes this change should be postponed until fiscal
    year 1999 to allow time for determining the appropriate cost
    impact and adjusting the sales prices to recover the costs of
    this change.

                        Logistics Augmentation Programs

        The Department of the Army's Logistics Civil Augmentation
    Program (LOGCAP) uses a civilian contractor to provide
    logistics and engineering services to deployed forces. LOGCAP
    is used to provide much of the support to U.S. troops deployed
    in support of the Bosnia peacekeeping mission and was also used
    extensively to support operations in Somalia, Rwanda, Haiti,
    Saudi Arabia, Kuwait, and Italy. The General Accounting Office
    (GAO) in a report issued this year entitled, Contingency
    Operations, Opportunities to Improve Use of Contractor Support
    Services (GAO/NSIAD-97-63), stated that both the Air Force and
    the Navy have previously relied on the Army's LOGCAP for
    support during deployment operations.
        Notwithstanding their successful prior use of the Army's
    program, the Air Force and the Navy have developed similar
    contingency support programs. In August 1995, the Navy awarded
    a contract for a similar program called the Navy Emergency
    Construction Capabilities Program, and in early 1997, the Air
    Force awarded a contract for a program called the Air Force
    Contract Augmentation Program. The committee is concerned about
    the need for more than one contract for these type of services,
    particularly as it relates to the potential for duplication of
    effort and unnecessary expense of separate individual
    contingency support programs.
        In order to determine whether the Department of Defense's
    need for civilian augmentation support during operations is met
    most effectively and efficiently through individual programs or
    some other means such as one service acting as a single manager
    for the others, the committee directs the Secretary of Defense
    to provide a report to the Congressional defense committees by
    March 1, 1998, that studies the need for individual service
    contingency support programs. The study should address the cost
    effectiveness and the command and control implications of
    having multiple support contractors in a joint command
    environment, and should specify the reasons, if any, why a
    single service manager program would be unworkable.

                        Military Affiliate Radio System

        Last year, the committee expressed its support for ``the
    continuation and expanded use by all services'' of the Military
    Affiliate Radio System (MARS). MARS is a low-cost Department of
    Defense (DOD) sponsored program that provides DOD and the armed
    forces with an auxiliary and emergency communications
    capability as an adjunct to normal communications. It also
    relies on thousands of highly-trained, volunteer radio
    communications personnel to relay morale and quasi-official
    communications traffic for the armed forces and U.S. government
    civilian personnel stationed abroad. The committee reiterates
    its support for a robust MARS program and notes with concern a
    decline in the use of the system resulting from the development
    of advanced communications modes (e.g., satellites). The
    committee notes that advanced modes of communication may not
    always be available or cost-effective, and that failing to
    exploit MARS resources more aggressively could result in the
    loss of this relatively inexpensive auxiliary communications
    capability.
        In the past, MARS has demonstrated its ability to provide
    limited emergency communication support to non-DOD federal
    entities. The committee supports the continuation of such
    efforts as a way of helping to ensure that a trained and
    qualified reserve of MARS operators remains available to DOD in
    the event of a national emergency. To this end, the committee
    directs the Secretary of Defense to submit a report by December
    31, 1997 identifying how DOD is utilizing the MARS system and
    recommending ways in which it can be expanded. Specifically,
    the report should:
              (1) Explain DOD oversight of the program, identify
            how the individual service programs are currently
            organized and configured, and discuss possible mission
            expansion, contraction, or adjustments;
              (2) Identify ways to improve the reliability of the
            MARS system;
              (3) Recommend ways to integrate MARS resources in
            support of other government agencies, identifying
            options for interfacing and linking MARS with regular
            DOD communications resources and with other emergency
            communications resources and systems;
              (4) Propose ways to better organize, train, and
            utilize MARS personnel resources;
              (5) Identify necessary adjustments and realignments
            to the structure, staffing, and grade levels throughout
            the MARS program;
              (6) Provide an estimate of the costs to DOD of
            obtaining MARS-type services commercially or ``in-
            house'' using other active DOD personnel and identify
            the cost savings to the Department through the use of
            MARS; and
              (7) Identify the level of funding that will be
            required to institute each of the recommendations.

                      Mobility Infrastructure Enhancement

        To improve deployment and mobility of military forces and
    supplies through continued investments in en-route
    infrastructure, the committee recommends an additional $25.0
    million within Operation and Maintenance, Defense-wide, for
    improvement projects including ammunition loading areas, cargo
    staging areas, pier and port facilities, rail-heads, aerial
    port facilities, fuel systems repairs, and identification
    technology to improve intransit visibility. The committee
    directs the Secretary of Defense to provide to the
    Congressional defense committees, prior to the allocation of
    these funds, a report listing the proposed enhancement
    projects. The committee urges the Secretary of Defense to seek
    the views of the Commander in Chief, U.S. Transportation
    Command, in determining how these funds should be applied.

                            Non-BRAC Caretaker Costs

        The committee notes that the Army's budget request
    contained a new program called Non-BRAC (Base Realignment and
    Closure) Caretaker funding. The committee understands that this
    program is designed to reduce the maintenance and repair costs
    for buildings no longer used and are scheduled for demolition.
    The Army requested $102.0 million for this program with the
    intention of using these funds to make safe and ``board up''
    these unneeded buildings. The committee commends the Army for
    attempting to reduce the cost of unused facilities, but
    questions the method by which funding for this program was
    calculated. By using a raw square footage of unused floor space
    times an amount estimated per foot for the cost of closing up
    and securing buildings, the committee believes this program to
    be over funded. Therefore, the committee recommends a reduction
    of $51.0 million.

                        Repair and Maintenance Projects

        It has come to the committee's attention that the military
    departments are proposing large individual renovation projects
    to be accomplished with real property maintenance and repair
    funds. For example, in the fiscal years 1998 and 1999 budget
    requests, the Navy proposes large, comprehensive renovations of
    two buildings at the United States Naval Academy at $31.5
    million and $35.2 million respectively. The committee is
    concerned that renovation projects of this size unfairly
    compete with what the committee considers the norm for repair
    and maintenance projects. In addition, the budget justification
    materials for these proposals do not provide the level of
    detail that should be provided for high value, complex
    projects. The committee does not specifically question the
    validity of these projects, but feels that projects of this
    size and complexity should be in the military construction
    budget request. The committee also understands that there is a
    question concerning the definition of a repair and maintenance
    project versus a military construction project and addresses
    this issue elsewhere in the report. Therefore the committee
    recommends, without prejudice, no funds for these two projects
    and recommends that they be re-submitted in a future military
    construction budget request.

          Renovation of Building for Defense Accounting Service Center

        Section 373 of the National Defense Authorization Act for
    Fiscal Year 1997 (Public Law 104-201) authorized the Secretary
    of Defense to transfer operation and maintenance funds to the
    General Services Administration (GSA) for the renovation of
    Building One, Fort Benjamin Harrison, Indiana, which is owned
    by GSA, and is in use by the Defense Finance and Accounting
    Service. Section 373 also requires that the transfer of funds
    is contingent on an agreement between the Department of Defense
    (DOD) and the GSA that provides for the full reimbursement by
    GSA to DOD for any funds transferred. The committee notes that
    for fiscal year 1997, $9.0 million was authorized for this
    project and the budget request for fiscal year 1998, contained
    $45.0 million. The committee is concerned that, to date, an
    agreement has not been reached between DOD and GSA. In
    addition, the committee questions whether high value, complex,
    multi-phase renovation projects should be included in the
    operation and maintenance budget request and believes that
    these types of renovations should more properly be included in
    the military construction budget.
        Therefore, absent the required agreement between DOD and
    GSA, and because of the committee's concerns for using
    operation and maintenance funding for large, complex renovation
    projects, the committee recommends, without prejudice, no funds
    for this renovation project and recommends that after the
    agreement is finalized, it be re-submitted in a future military
    construction budget request.

                         Shatter Resistant Window Film

        The committee notes that the majority of the more than 200
    serious injuries resulting from the bombing of the Khobar
    Towers complex in Dhahran, Saudi Arabia on June 25, 1996 were
    caused by shattered window glass. Many of these injuries could
    have been avoided if the Air Force had acted on a
    recommendation of a vulnerability assessment of this complex
    completed in January of 1996, which recommended that a shatter
    resistant window film coating be applied to all glass facing
    the perimeter of the complex.
        The committee believes that the Department of Defense
    should make every effort to complete the application of shatter
    resistant window film at all appropriate installations to
    lessen the chances of serious injuries resulting from shattered
    glass due to hostile actions or from weather related incidents.

                              Travel Reengineering

        The committee has several concerns regarding the Department
    of Defense (DOD) travel re-engineering study. First, DOD has
    not complied with section 356 of the National Defense
    Authorization Act for Fiscal Year 1996 (Public Law 104-106).
    Under section 356, the Secretary of Defense was directed to:
              (1) establish pilot studies to evaluate options to
            improve the DOD travel process at not more than six
            military installations, and
              (2) one year after the studies begin provide Congress
            a report on the implementation of and the evaluation
            criteria used for the pilot studies.
    Although the Department conducted travel re-engineering pilot
    studies, these studies did not comply with section 356. DOD has
    also not provided a report on the implementation of these
    pilots. Instead, without providing Congress the opportunity to
    review the options for re-engineering the Defense travel
    process, DOD is planning to issue a request for proposal (RFP)
    for a re-engineered travel system.
        The committee is also concerned that the planned RFP links
    the software development of an automated travel system to
    travel agent services. This arrangement combines requirements
    and expertise that are not related or linked in the commercial
    sector. In addition, this combination potentially prejudices
    the contracting system against medium-size and small travel
    agencies, creating a process that restricts fair competition in
    the travel industry.
        Therefore, the committee directs the Secretary of Defense
    to cease all action on the planned RFP until 30 days after DOD
    provides to the House Committee on National Security and the
    Senate Committee on Armed Services:
              (1) The report requested in section 356 of National
            Defense Authorization Act for Fiscal Year 1996 (Public
            Law 104-106); and
              (2) A report demonstrating that there are no adverse
            effects from the RFP on small and medium-size travel
            agencies.

                             LEGISLATIVE PROVISIONS

                  Subtitle A--Authorization Of Appropriations

                 Section 301--Operation and Maintenance Funding

        This section would authorize $92.6 billion in operations
    and maintenance funding for the Armed Forces and other
    activities and agencies of the Department of Defense.

                       Section 302--Working Capital Funds

        This section would authorize $2.3 billion for Working
    Capital Funds of the Department of Defense.

                   Section 303--Armed Forces Retirement Home

        This section would authorize $80.0 million from the Armed
    Forces Retirement Trust Fund for the operation of the Armed
    Forces Retirement Home, including the U.S. Soldiers' and
    Airman's Home and the Naval Home.

     Section 304--Transfer From National Defense Stockpile Transaction Fund

        This section would authorize the Secretary of Defense to
    transfer not more than $150.0 million from the amounts received
    from sales in the National Defense Stockpile Transaction Fund
    to the operation and maintenance accounts of the military
    services.

        Section 305--Refurbishment and Installation of Air Search Radar

        This section would authorize $6.0 million for the
    refurbishment and installation of the AN/SPS-48E air search
    radar for the Ship Self Defense Systems at the Integrated Ship
    Defense Systems Engineering Center, Walllops Island, Virginia.

                    Section 306--Refurbishment of M1A1 Tanks

        This section would authorize $35.0 million for the
    refurbishment of M1A1 tanks at the Anniston Army Depot under
    the Department of the Army's Abrams Integrated Management XXI
    (AIM XXI) program if the Secretary of Defense determines that
    the program is cost effective. The Department of the Army is
    currently validating the cost effectiveness of the AIM XXI
    program at the National Training Center, Fort Irwin,
    California. If this program is successfully validated, the
    committee expects the Army to provide adequate funding in
    fiscal year 1999 and beyond to continue the AIM XXI program.

     Section 307--Procurement and Electronic Commerce Technical Assistance
                                    Program

        This section would authorize $15.0 million for a single
    program that consolidates the Procurement and Technical
    Assistance Centers and the Electronic Commerce Resource
    Centers. The committee recommendation would provide $15.0
    million in addition to the $18.0 million in prior-year
    unobligated balances remaining in the ECRC program, for a total
    of $33.0 million in available fiscal year 1998 funding.

       Section 308--Availability of Funds for Separation Pay for Defense
                             Acquisition Personnel

        This section would authorize $100.0 million to fund
    separation pay incentives for defense acquisition personnel in
    the event that a targeted buyout authority is provided to the
    Secretary of Defense.
        The committee expects the Secretary of Defense to make
    these funds available to the military departments, Defense
    Agencies, and responsible for offering the separation pay
    incentives.

                     Subtitle B--Military Readiness Issues

                                    Overview

        Based on testimony provided to the committee and in field
    interviews with hundreds of military personnel of all ranks and
    in all services, it is clear to the committee that today's
    operating motto of ``doing more with less'' is incompatible
    with maintaining a highly-motivated, well-trained, quality
    military force able to execute the demands of the National
    Military Strategy. This reality is the result of declining
    defense budgets, a smaller force structure, fewer personnel and
    aging equipment laboring under a higher pace of operations.
        The committee is concerned about the extent to which the
    military services must strip people, parts, equipment and funds
    from non-deployed units to fill shortfalls in deploying units.
    This shell game leaves non-deployed units ill-prepared to
    maintain combat skills and increases the burden on those left
    behind who must work longer and harder to maintain operations
    at home station.
        The committee is very disturbed about the loss of combat
    proficiency being reported from the military services' training
    centers. Degraded combat training, driven in large part by
    funding shortfalls and inadequate time to accomplish needed
    training at home station due to deployments in support of
    contingency operations, strikes at our military forces' ability
    to fight and win high-intensity wars quickly, decisively and
    with minimum casualties.
        Exacerbating the committee's concerns are efforts underway
    by some of the military services which appear to erode training
    standards and requirements, as a means to address resource
    shortfalls and the need to free up funds for modernization
    priorities. For example, starting in fiscal year 1998, the Army
    plans to require units scheduled for training at the National
    Training Center (NTC) to pay for this training out of funds
    budgeted for home station training. The committee believes that
    this proposal wouldresult in less home station training for
    these units which, as noted above, has been identified by the services'
    training centers as a significant cause of degraded combat proficiency.
    Further, the Army, in briefings to the committee on this matter, has
    conceded that starting in fiscal year 1998, units scheduled for
    training at the NTC will not be as well prepared as in the past. The
    committee finds this troubling, particularly in light of a statement by
    Army Chief of Staff, General Dennis Reimer, in a characterization of
    the NTC as ``. . . a cornerstone of our training program, and a
    cornerstone of our readiness program.'' Additionally, the NTC has
    recently begun to reduce NTC live fire exercises by one-third--from
    three to two. The committee believes that such actions are short-
    sighted and short-change critical high intensity combat training and
    diminish the ability of combat units to take full advantage of training
    at the NTC.
        As another example, the committee understands the Marine
    Corps is currently revising its aviation training program.
    While the committee recognizes the importance of periodically
    reviewing training standards and requirements in light of
    operational considerations, it is concerned that this review
    may also be driven by the realities of under manning, spare
    parts shortages and aging aircraft which cannot support the
    current level of training. The committee believes that when
    training requirements and standards are changed, the risks
    associated with such changes should be fully understood and the
    military services should not redefine or rationalize training
    standards and requirements as a means of addressing resource
    shortfalls. The committee urges the Secretary of Defense and
    secretaries of the military departments to ensure that units
    are afforded the resources and time at home station to
    accomplish critical combat training.
        The committee commends efforts to maintain warfighting
    skills for units deployed to operations other than war, such as
    the Army's establishment of gunnery ranges in Hungary for units
    stationed in Bosnia. Notwithstanding the limitations of such
    efforts, the committee strongly encourages the Department and
    the military services to maximize combat training opportunities
    for units deployed in support of operations other than war to
    minimize the degradation of combat skills and time needed upon
    redeployment to regain combat proficiency.
        The committee continues to be concerned over the disconnect
    which exists between official readiness reports and the
    readiness reality in the field. While senior military and
    civilian leaders assert that the readiness of military forces
    is as good as it ever has been, reports from military personnel
    in the field depict a much different picture. This disconnect
    exists partly because the existing reporting system fails to
    capture many indicators which would allow for a more
    comprehensive readiness assessment. The committee finds it
    particularly frustrating, however, that as early as 1994, the
    General Accounting Office in its October report entitled,
    ``Military Readiness: DOD Needs to Develop a More Comprehensive
    Measurement System'' (GAO/NSIAD-95-29) identified additional
    readiness indicators that would provide a comprehensive
    assessment. Unfortunately, the Department of Defense (DOD) has
    yet to integrate these indicators into the formal readiness
    reporting system.
        The committee notes that in June 1994, the Defense Science
    Board (DSB) issued a report which stated that the DSB Task
    Force on Readiness ``. . . will continue to meet quarterly, or
    on call of the Secretary of Defense, to review the status of
    the recommendations and/or address other readiness issues as
    directed.'' It is the committee's understanding that this has
    not occurred. While the committee recognizes the increased
    focus on readiness issues by the Department with the
    establishment of the Senior Readiness Oversight Council (SROC),
    the SROC is, nevertheless, an internal mechanism to track
    readiness. Given the disconnect between official readiness
    reports and the reality out in the field, the committee
    believes that a standing senior group of outside advisors
    charged with providing independent assessments of readiness
    issues is warranted. The committee urges the Secretary of
    Defense to resurrect the DSB Task Force on Readiness or similar
    senior body of outside advisors to be available to the
    Secretary and the Congress to review readiness issues that
    arise.
        Finally, severely constrained defense budgets are leading
    to the underfunding of many defense accounts resulting in the
    movement of funds from readiness related accounts to fill
    funding shortfalls. While movements of funds between budget
    appropriations accounts are subject to reprogramming actions,
    transfers within budget activities are rarely visible in a
    timely manner. The committee has had a long-standing concern
    over the extent to which funds provided for training,
    maintenance and other key readiness accounts are being diverted
    to cover shortfalls elsewhere. For instance, according to the
    DOD, in fiscal year 1996, the Army shifted $144.8 million from
    depot maintenance to cover costs of operations in Bosnia. The
    Navy shifted $208.5 million from ship depot maintenance to fund
    a range of activities including contingency operations, ship
    supplies and underfunded flying hour requirements.
        Therefore, the committee's recommendation addresses several
    of these concerns and are detailed below.

         Section 311--Expansion of Scope of Quarterly Readiness Reports

        This section would expand the Quarterly Readiness Report
    required by section 361 of the National Defense Authorization
    Act for Fiscal Year 1996 (Public Law 104-106) to include data
    and analysis on additional readiness indicators which would
    provide a more comprehensive readiness assessment. The
    committee is concerned with what it views as a growing
    disconnect between the readiness picture presented by
    ``official'' readiness reports and reality out in the field. In
    visits to military installations across the country and in
    recent hearings before the committee, personnel from all
    military services and from all ranks expressed significant
    concern over many issues affecting readiness, including
    operating tempo, increased deployments, the effects of under
    manning, an eroding quality of life, morale, the impact of
    peacekeeping operations, and the increasing use of training
    funds for other purposes. None of these factors are measured by
    the Status of Resources and Training System (SORTS)--the
    foundation for senior level readiness assessments.
        More than three years ago, the committee identified the
    need to develop a comprehensive readiness assessment system. At
    the request of this committee, the General Accounting Office
    (GAO) conducted a review of the adequacy of the current
    readiness reporting system to provide a comprehensive readiness
    assessment as well as to provide predictive indicators of
    change. As a result of that review, the GAO provided to the
    Department of Defense (DOD) specific indicators cited by
    military commanders as being critical to readiness assessments
    but not included in SORTS. The Departmentagreed that it needed
    a more comprehensive readiness measurement system and contracted with
    the Logistics Management Institute (LMI) to assess the GAO's indicators
    to determine which of the 29 recommended by the GAO have the greatest
    potential value for DOD decision makers charged with maintaining high
    readiness. The LMI assessment, completed in October 1994, concluded
    that 19 of the 29 indicators offered high or medium value for readiness
    assessments. That is, those indicators could allow DOD to measure
    factors that cause changes in readiness, provide early notice of any
    adverse changes, provide the opportunity to improve readiness, and
    detect trends that may affect future readiness.
        While the committee recognizes that efforts are being made
    by DOD to enhance readiness assessments through the Joint
    Monthly Readiness Reviews, the Senior Readiness Oversight
    Council, and more recently with efforts aimed at developing a
    Readiness Baseline, it is concerned by the lack of progress the
    DOD has made to integrate the GAO and LMI recommended
    indicators into official readiness reports.
        Given recent reports of declining ``unofficial'' readiness
    indicators, the committee believes that immediate steps must be
    taken to ensure that DOD and the military services have a
    comprehensive readiness assessment system. This section would
    compel the DOD to act expeditiously to integrate these
    important indicators into readiness reports, providing
    comprehensive, and thereby, more accurate information, to
    decision makers on the true current state of readiness.

     Section 312--Limitation on Reallocation of Funds Within Operation and
                           Maintenance Appropriations

        This section would require the Secretary of Defense to
    notify the Congressional defense committees prior to
    reallocating operation and maintenance funds above a certain
    threshold and to follow procedures currently used when
    transferring funds between appropriations accounts.

       Section 313--Operation of Prepositioned Fleet, National Training
                         Center, Fort Irwin, California

        This section would provide funding associated with the
    operation of the preposition fleet of equipment used by Army
    units during training rotations at the National Training Center
    (NTC). The committee is very concerned with the Department of
    the Army's decision to change the way unit rotations to the NTC
    are funded. Currently, the Army provides funding to the
    National Training Center from a central account to defray the
    costs associated with units' use of pre-positioned equipment at
    the NTC. Under a new Army proposal, starting in fiscal year
    1998, units scheduled to go to the NTC would have to pay for
    the use of the pre-positioned equipment out of the funds
    provided for home station training.
        The NTC is the only U.S.-based training facility where Army
    maneuver units can train against a dedicated opposing force in
    an environment which most closely approximates high intensity
    combat. It is the premier training event for Army armored and
    mechanized units. The committee is troubled by reports that a
    lack of training resources and time for home station training
    is resulting in units arriving at the NTC less prepared than
    they used to be and, consequently, unable to achieve the same
    level of proficiency by the time they leave. The committee is
    concerned that this policy change will exacerbate this problem
    by putting a further strain on the resources available for
    units to accomplish home station training.
        The committee believes that the Army policy change relating
    to NTC rotations funding will have the result of diminishing
    home station training, would adversely impact the ability of
    units to reach needed levels of proficiency, and degrade the
    NTC training experience--the best training currently available
    for high intensity combat. The committee recommendation would
    also provide additional funding to ensure that the Army has
    sufficient funding for NTC rotations as it has in the past. The
    committee expects the Army to continue funding unit rotations
    at the NTC as it has previously.

     Section 314--Prohibition of Implementation of Tiered Readiness System

        This section would prohibit the implementation of any
    tiered readiness system which would change military service-
    specific methods of determining the priority for allocating
    funding, personnel, equipment, equipment maintenance, and
    training resources to military units--and the associated level
    of readiness of those units that result from those priorities--
    as they existed on October 1, 1996. Should the Secretary of
    Defense determine that a tiered readiness system would be in
    the national interest of the United States, this section would
    require the Secretary to provide a report on the rationale for
    that determination, and a request for enactment of legislation
    to implement such a system.
        Tiered readiness concepts call for maintaining certain
    portions of U.S. military forces at lower levels of readiness
    based on their likelihood of being called to respond to a
    military crisis and deployment timelines. Units identified to
    be maintained in lower tiers of readiness would be manned,
    equipped, and trained to a level sufficient only to achieve
    that lower level of readiness.
        From testimony before the committee and from interviews
    with service members of many military units, the committee
    understands that currently, in order to meet deployment
    standards and a high operations tempo, military units have had
    to strip non-deploying units of key officers, non-commissioned
    officers, and maintenance personnel due to shortages in key
    military occupational specialties. Under a tiered readiness
    concept, personnel would be eliminated from the force in order
    to achieve cost savings exacerbating the personnel management
    problems and creating higher personnel tempo for those
    remaining active duty personnel. The committee is deeply
    concerned that, at some point, such a readiness system would
    lead to an untenable situation from the standpoint of
    maintaining a quality, highly motivated all-volunteer force.
        During the Quadrennial Defense Review (QDR), an assessment
    was made to determine whether ``tiering'' of the force would
    meet strategy requirements and result in savings. The
    conclusion of the assessment was that such tiering would
    increase the risk to national security at the gain of only
    modest savings, and would limit the flexibility required to
    execute current war plans.
        The committee strongly believes that the military services
    have, over time, developed readiness systems that are
    specifically tailored to their individual requirements.These
    existing systems already represent a form of tiering in that resources
    are allocated on a priority basis to military units that are expected
    to enter into combat first. The committee believes that any further
    tiering of readiness must be carefully assessed to insure that United
    States military strategy can be accomplished at all times. The tiering
    of military forces solely for fiscal gains would be a short sighted
    strategy that largely ignores the demanding reality of the need to
    maintain ready military forces able to fight and win decisively and
    with minimal casualties in any future contingency.

        Section 315--Reports on Transfers From High Priority Readiness
                                 Appropriations

        This section would extend through November 1, 2000, the
    requirement for the Secretary of Defense to report semi-
    annually on transfers from high-priority readiness accounts in
    compliance with section 362 of the National Defense
    Authorization Act for Fiscal Year 1996 (Public Law 104-106).
    This provision would also expand the number of readiness
    accounts to be considered in the report.

    Section 316--Report on Chairman, Joint Chiefs of Staff Exercise Program
                       and Partnership for Peace Program

        This section would require the Secretary of Defense to
    report by January 15, 1998, on both past and planned joint
    training exercises sponsored by the Chairman, Joint Chiefs of
    Staff (CJCS) Exercise Program and the Partnership for Peace
    (PFP) program. The report would include the type, description,
    duration, objectives, the percentage of service-unique training
    accomplished, and an assessment of the training value of each
    CJCS and PFP exercise.
        In spite of a significant reduction in force structure and
    personnel since 1989, the October 1995 Defense Science Board
    Task Force on Quality of Life report pointed out that the
    number and scope of joint level exercises has continued to
    increase. In June 1995, the General Accounting Office (GAO)
    issued a report entitled ``Military Capabilities: Stronger
    Joint Staff Role Needed To Enhance Joint Military Training''
    (GAO/NSIAD-95-109) that noted a large number of the joint
    exercises conducted in 1995 had little training value, with
    nearly 75 percent conducted for reasons other than training,
    such as a show of military presence in a region or to foster
    relationships with other nations. In testimony before the
    committee, witnesses pointed to the continued growth in the
    number and scope of CJCS sponsored military exercises as a
    significant contributor to increased operation and personnel
    tempos.
        The committee is concerned that the number of exercises
    under the CJCS Exercise Program and the military service's
    participation in the PFP program is exceeding the ability of
    the services to meet these requirements in what is already a
    high paced operational environment. Admiral Paul Reason,
    Commander of U.S. Atlantic Fleet, noted in testimony before the
    committee, ``Too many unified CINCs are competing for the same
    scarce assets.'' That many of these exercises may have little
    or no joint training value compounds the committee's concerns.
    Therefore, to address operation and personnel tempo concerns
    and reduce the number of joint exercises, the committee also
    recommends a reduction of $xx in funding for the CJCS Exercise
    Program.

         Section 317--Quarterly Reports on Execution of Operation and
                           Maintenance Appropriations

        This section would require the Secretary of Defense to
    report quarterly on the execution of the operation and
    maintenance budget.

                         Subtitle C--Civilian Personnel

     Section 321--Pay Practices When Overseas Teachers Transfer to General
                               Schedule Positions

        This section would provide the Secretary of Defense
    authority to adjust a Department of Defense Dependents Schools
    educator's salary up to 20 percent when that person is moved
    from a position under the Teaching Position (TP) pay system to
    a position under the General Schedule (GS) pay system.
    Currently, when an overseas educator moves from a TP position
    to a GS position, that individual's salary is increased 20
    percent based on a GS work year being roughly 20 percent longer
    in actual work days than a TP work year. However, some TP
    educators, such as principals and assistant principals, work a
    longer school year than teachers. When these individuals are
    moved to a GS position, a 20 percent salary adjustment is
    excessive given that the increase in actual work days may be
    significantly less than 20 percent.

      Section 322--Use of Approved Fire-Safe Accommodations by Government
                         Employees on Official Business

        This section would require that each government agency
    ensure that not less than 90 percent of the commercial-lodging
    room nights for employees of that agency be booked at approved
    accommodations. This provision would also require that each
    government agency establish explicit procedures to meet this
    requirement.

                       Subtitle D--Depot-Level Activities

       Section 331--Extension of Authority for Aviation Depots and Naval
         Shipyards to Engage in Defense Related Production and Services

        This section would extend through fiscal year 1999, the
    authority provided by section 1425 of the National Defense
    Authorization Act for Fiscal Year 1991 (Public Law 101--510)
    for naval shipyards and aviation depots of all the services to
    bid on defense-related production and services.

    Section 332--Exclusion of Certain Large Maintenance and Repair Projects
     From Percentage Limitation on Contracting for Depot-Level Maintenance

        This section would exclude from the restrictions contained
    in section 2466 title 10, United States Code, an aircraft
    carrier or a submarine repair or overhaul project that
    represents five percent or more of the total amount made
    available to the Department of the Navy for depot-level
    maintenance and repair. When there is a large single
    maintenance project, such as the complex overhaul of a nuclear
    aircraft carrier or a submarine, the size of the project alone
    can cause an unintended imbalance in the mix of workload
    between the public and private sector. Under current law, not
    more than 40 percent of the total funds allocated to a military
    service for depot-level repair and maintenance may be expended
    for work in the private sector. The committee is concerned that
    a large single project should not cause inadvertent disruptions
    in the mandated percentages.

     Section 333--Restrictions on Contracts for Performance of Depot-Level
                  Maintenance and Repair at Certain Facilities

        This section would establish a definition of depot-level
    maintenance and repair that would require the inclusion of all
    interim contractor support (ICS) and contractor logistics
    support (CLS) to be included in determining the restrictions as
    set forth in section 2466 of title 10, United States Code, also
    known as the ``60/40 rule.'' The committee understands that
    including ICS and CLS would have no effect on current contracts
    for depot level maintenance. The provision would also restrict
    the Secretary of Defense, or the secretary of a military
    department, from entering into a contract for the performance
    of depot-level maintenance and repair at any facility that was
    approved in 1995 for closure under the Defense Base Closure and
    Realignment Act (BRAC) of 1990 (part A of title XXIX, Public
    Law 101-510), unless the following requirements are met:
              (1) The secretary concerned certifies to Congress
            that all of the other maintenance and repair facilities
            of that service are at 80 percent capacity as defined
            by the BRAC commission in 1995;
              (2) The secretary concerned certifies to Congress
            that the total cost of the proposed contract would be
            less than if the depot-level maintenance or repair were
            accomplished in facilities owned and operated by the
            Department of Defense;
              (3) All of the data which is used to determine the
            total costs are available for examination; and
              (4) None of the depot-level maintenance and repair
            work proposed under the contract was considered to be a
            core logistics capability of the military department
            concerned prior to July 1, 1995.
        The committee believes that to fully comply with the
    recommendations of the 1995 BRAC to close several depot
    facilities and to consolidate core depot-level maintenance to
    the remaining government-owned facilities or to the private
    sector, these restrictions are necessary. The Committee fully
    supports the BRAC recommendations and believes that elimination
    of excess capacity permits significantly improved utilization
    of the remaining DOD depots and reduces DOD operating costs.

         Section 334--Core Logistics Functions of Department of Defense

        This section would amend section 2464 of title 10, United
    States Code, to clarify that it is essential for national
    defense that the Department of Defense (DOD) maintain a core
    logistics capability that is government-owned and government-
    operated. This section would require the Secretary of Defense
    to identify those logistics activities necessary to maintain a
    core logistics capability that would include the capability,
    facilities, and equipment to maintain and repair those weapons
    systems necessary to meet the requirements of the National
    Military Strategy. This section would also require the
    maintenance and repair of all new weapons systems purchased by
    the DOD, that are identified as requiring a core logistics
    capability, in government-owned and government-operated
    facilities within four years of initial operational capability.

          Section 335--Centers of Industrial and Technical Excellence

        This section would direct the Secretary of Defense to
    establish Centers of Industrial and Technical Excellence at
    existing Department of Defense (DOD) maintenance and repair
    depots to encourage the reengineering of industrial processes,
    the adoption of best business practices, and to enable public-
    private partnerships for the performance of depot-level
    maintenance and repair.

     Section 336--Personnel Reductions, Army Depots Participating in Army
                        Workload and Performance System

        This section would prohibit any reduction in force of any
    civilian employees at the five Army maintenance depots
    participating in the demonstration and testing of the Army
    Workload and Performance System (AWAPS), until a report is
    provided by the Secretary of the Army certifying that the AWAPS
    is fully operational and the manpower audits being performed by
    the General Accounting Office, the Army Audit Agency, and the
    Army Inspector General have been completed.

                      Subtitle E--Environmental Provisions

     Section 341--Revision of Membership Terms for Strategic Environmental
           Research and Development Program Scientific Advisory Board

        This section would amend section 2904(b)(4) of title 10,
    United States Code, to provide that appointments for members of
    the Strategic Environmental Research and Development Program
    (SERDP) Scientific Advisory Board be for terms of not less than
    two nor more than four years. The provision would effectively
    allow the staggering of terms for board members to permit
    greater continuity of service among members in the event
    unexpected vacancies arise.

      Section 342--Amendments to Authority to Enter Into Agreements With
      Other Agencies in Support of Environmental Technology Certification

        This section would expand the authority conferred upon the
    Secretary of Defense by section 327 of the National Defense
    Authorization Act for Fiscal Year 1997 (Public Law 104-201) to
    enter into cooperative agreements with state and local
    governmental agencies for the purpose of certifying promising
    environmental technologies by authorizing the Secretary to
    enter into agreements with Indian tribes. This expanded
    authority would be useful to the Department of Defense in those
    cases in which environmental activities occur on land where
    Indian tribes have jurisdictional authority. The provision
    would also remove the restriction in current law that the
    technologies being evaluated for certification be limited to
    those with applicability to environmental restoration. Thus,
    technologies with application for pollution prevention,
    environmental compliance, and safety and occupational health
    could be evaluated.

          Section 343--Authorization to Pay Negotiated Settlement for
     Environmental Cleanup at Former Department of Defense Sites in Canada

        This section would authorize the Secretary of Defense to
    pay the Government of Canada up to $100 million in annual
    payments over a ten year period. These payments would be
    pursuant to a bilateral agreement between the United States and
    Canada in which the United States agreed to pay cleanup costs
    associated with the operation by the United States of various
    military installations in Canada.

      Section 344--Modifications of Authority to Store and Dispose of Non-
                     Defense Toxic and Hazardous Materials

        Currently, section 2692 of title 10, United States Code,
    prohibits the Department of Defense from storing or disposing
    any toxic or hazardous material, including munitions and
    hazardous materials used in conjunction with space launch
    programs, that is not owned by the Department of Defense. With
    the increasing frequency of multinational military training
    operations, and because the Department of Defense operates
    certain sites in connection with other federal agencies that
    employ hazardous materials, there are occasions in which it is
    in the interest of the Department of Defense and the nation to
    temporarily store toxic or hazardous materials on military
    installations, despite the fact that such materials are not
    owned by the Department of Defense. This section would permit
    the storage or disposal of toxic and hazardous materials not
    owned by the Department of Defense when those materials are
    used in connection with an activity of the Department, in
    connection with a service performed for the benefit of the
    Department, in order to assist law enforcement agencies, or in
    connection with the use of a defense facility. Nothing in the
    changes made by this section is intended to affect the
    authorities and requirements regarding the storage, treatment
    and disposal of hazardous materials under the Comprehensive
    Environmental Response, Liability and Compensation Act, the
    Resource Conservation and Recovery Act, the Toxic Substances
    Control Act or the Federal Water Pollution Control Act.

    Section 345--Revision of Report Requirement for Navy Program to Monitor
                        Ecological Effects of Organotin

        This section would amend section 333 of the National
    Defense Authorization Act for Fiscal Year 1997 (Public Law 104-
    201) to delay and alter the reporting requirements established
    in that section. Since enactment of the law, the Navy and the
    Environmental Protection Agency have determined that a program
    to monitor organotin concentration in certain estuaries and
    near-coastal waters of the United States is not required,
    obviating the reporting requirements related to monitoring
    programs. Instead, the Navy would be required to include in its
    report an assessment of the present and future requirement for
    the use of organotin in antifouling paints on Navy ships. In
    recognition of this additional requirement, the date for
    submission of the report pursuant to section 333 would be
    delayed until October 30, 1997.

     Section 346--Partnerships for Investment in Innovative Environmental
                                  Technologies

        This section would authorize the Secretary of Defense to
    enter into partnerships with private sector entities in order
    to demonstrate and validate innovative environmental
    technologies. The secretary would be authorized to enter into
    partnerships only if the secretary determines that the
    technology has the clear potential to be of significant value
    to the Department of Defense in carrying out its environmental
    activities. Information about such partnerships would be
    included in the Department's annual report to Congress, and the
    authority provided by this section would expire three years
    from the date of enactment of the National Defense
    Authorization Act for Fiscal Year 1998.

         Section 347--Pilot Program to Test Alternative Technology for
      Eliminating Solid and Liquid Waste Emissions During Ship Operations

        This section would authorize the Secretary of the Navy to
    establish a pilot program to demonstrate ``plasma arc''
    technology for treating solid and liquid waste aboard Navy
    ships. The technology would consist of a compact, stationary,
    high alumina refractory hearth, plasma arc melter system that
    would incinerate solid and hazardous wastes generated during
    ship operations. The secretary would be required to determine,
    in advance of establishment of the pilot program, that plasma
    arc technology has the potential to be of significant benefit
    to the Navy in reducing or eliminating waste disposal problems
    aboard Navy vessels. The pilot program, which would operate for
    one year, would seek to demonstrate whether the technology is
    valid, cost effective, and capable of complying with
    environmental laws and regulations. Upon completion of the
    pilot program, the Secretary of the Navy would be required to
    submit a report to Congress detailing the findings of the
    program and recommending whether plasma arc technology should
    be implemented on a larger scale on naval vessels and at naval
    port facilities.

      Subtitle F--Commissaries and Nonappropriated Fund Instrumentalities

    Section 361--Reorganization of Laws Regarding Commissaries, Exchanges,
              and other Morale, Welfare, and Recreation Activities

        This section would reorganize chapter 147 of title 10,
    United States Code, so that the chapter deals exclusively with
    provisions of law relating to commissaries, exchanges, and
    other morale, welfare and recreation activities. Certain
    sections of the current chapter 147 not addressing this subject
    would be transferred to other chapters of title 10, and other
    sections now found in chapter 147 that do concern commissaries,
    exchanges, and other morale, welfare and recreation activities
    would be redesignated to provide a logical organization of the
    chapter.

    Section 362--Merchandise and Pricing Requirements for Commissary Stores

        This section would amend section 2486 of title 10, United
    States Code, to restrict the categories of merchandise that may
    be sold in commissaries. Section 2486 currently limits the
    categories of merchandise sold in commissaries to those
    enumerated in the statute, and this section would permanently
    limit the categories of items to those now listed in the
    statute, unless new categories are prescribed by the Secretary
    of Defense, following advance notice to Congress and a waiting
    period of 90 legislative days. In addition, this section would
    require that no change in the current commissary surcharge
    could occur without a prior authorization in law. Finally, this
    section would provide that the Secretary of Defense may not
    make any change in pricing policies without advance notice to
    Congress and a waiting period of 90 legislative days. This
    section would thus prevent consignment sales of exchange items
    in commissaries without prior notice to Congress and would
    prevent variable pricing based on surcharge adjustments. A
    report to Congress detailing merchandise categories now sold on
    consignment would be required within 30 days of the date of the
    enactment of the National Defense Authorization Act for Fiscal
    Year 1998.

      Section 363--Limitation on Noncompetitive Procurement of Brand-Name
                Commercial Items for Resale in Commissary Stores

        This section would amend section 2486(e) of title 10,
    United States Code, to make more rigorous the standard for
    determining brand name commercial items that may be sold by
    commissaries. In order to qualify as a brand name commercial
    item which commissaries may procure noncompetitively for
    resale, current law requires that the item be regularly sold
    outside of commissary stores under the same brand name by which
    the commercial items will be sold in commissary stores. This
    section would establish that, in determining whether a brand
    name commercial item is regularly sold outside of commissary
    stores, the Secretary of Defense shall consider only sales of
    the item on a regional or national basis by multi-store
    commercial grocery or retail chains. So called ``discount
    brands'' that frequently are not sold by major commercial
    grocery or retail store chains would not qualify as brand name
    commercial items under the standard that would be established
    by this section.

     Section 364--Transfer of Jurisdiction over Exchange, Commissary, and
    Morale, Welfare and Recreation Activities to Under Secretary of Defense
                                 (Comptroller)

        This section would amend section 135 of title 10, United
    States Code, to transfer administrative responsibility within
    the Department of Defense for the areas of exchange,
    commissary, and nonappropriated fund instrumentalities
    regarding morale, welfare and recreation activities from the
    Under Secretary of Defense for Personnel and Readiness to the
    Under Secretary of Defense (Comptroller). Many of the
    responsibilities associated with the management and operation
    of exchanges, commissaries and the nonappropriated fund
    instrumentalities of the morale, welfare and recreation system
    involve first and foremost, financial management decisions. For
    this reason, transferring administrative responsibility for
    these programs to the Under Secretary of Defense (Comptroller)
    is appropriate.

    Section 365--Public and Private Partnerships to Benefit Morale, Welfare
                           and Recreation Activities

        This section would permit the Secretary of Defense to
    authorize nonappropriated fund instrumentalities to enter into
    leases, licensing agreements, concession agreements and other
    contracts with private persons and state or local governments
    involving real and personal property under the control of such
    nonappropriated fund instrumentalities in order to facilitate
    the provision of facilities, goods, or services to authorized
    patrons. In order to enter into leases or contracts,
    nonappropriated fund instrumentalities would be required to
    determine that the use of the property subject to the lease or
    contract would contribute to the provision of goods, services
    or facilities for a morale, welfare and recreation activity and
    that the lease or contract would not be inconsistent with or
    adversely affect the mission of the Department of Defense or
    the nonappropriated fund instrumentality concerned. Use of the
    facilities, goods or services provided under this section would
    be restricted to authorized patrons of the nonappropriated fund
    instrumentality that is a party to the lease or contract. Funds
    generated by money rentals would be restricted to use at the
    installation at which the property covered by the lease or
    contract is located.

         Section 366--Treatment of Certain Amounts Received by Defense
                               Commissary Agency

        This section would provide that amounts received by the
    Defense Commissary Agency (DECA) from certain sources be
    deposited in the surcharge account. The surcharge account is
    used by DECA for capital construction and other improvements to
    commissaries. Amounts received by DECA that would be deposited
    in the surcharge account would include funds from the sale of
    recyclables, the disposal of excess property, license fees,
    royalties, incentive allowances, management and other fees, and
    funds received from nonappropriated fund instrumentalities. The
    authorization concerning funds received from nonappropriated
    fund instrumentalities would permit proceeds from the sale of
    exchange-owned tobacco products at commissaries to be deposited
    into the surcharge account.

      Section 367--Authorized Use of Appropriated Funds for Relocation of
                         Navy Exchange Service Command

        This section would provide that the Navy Exchange Service
    Command (NEXCOM) shall not be required to reimburse the United
    States for appropriated funds allotted to NEXCOM during fiscal
    years 1994, 1995, and 1996 for costs incurred in connection
    with the relocation of NEXCOM headquarters to Virginia Beach,
    Virginia and for the lease of headquarters space.

                           Subtitle G--Other Matters

      Section 371--Assistance to Local Educational Agencies That Benefit
      Dependents of Members of the Armed Forces and Department of Defense
                               Civilian Employees

        This section would authorize $35.0 million for educational
    assistance to local education agencies where the standard for
    the minimum level of education within the state could not be
    maintained because of the large number of military connected
    students or the effects of base realignments and closures. The
    Department of Education impact aid program provides
    supplementary funds to eligible school districts nationwide.
    The committee believes that the Department of Education bears
    the principal responsibility for providing support for the
    education needs of the nation's children, and, therefore, does
    not support additional assistance beyond what is authorized in
    this section.

                Section 372--Continuation of Operation Mongoose

        This section would authorize the continuation of Operation
    Mongoose through fiscal year 2003. Operation Mongoose is a
    program that coordinates the identification, prevention, and
    prosecution of fraudulent actions within Department of Defense
    (DOD). The section would also establish the Undersecretary of
    Defense (Comptroller) as the executive agent for this program
    and would require a report on the activities of the operation.
        The committee commends the Department's efforts to improve
    the integrity of its financial management systems while
    reducing waste, fraud, and abuse. However, the committee
    believes that these efforts can be improved. First, the
    committee supports the acceleration of transportation and
    vendor pay reviews. To further this effort, the committee
    directs the Secretary of Defense and the secretaries of the
    military departments to provide all data requested by Operation
    Mongoose on an expedited basis. In addition, the program should
    expand its use of the Board of Investigations and its Regional
    Working Groups for investigating crimes identified through
    Operation Mongoose.
        In addition, the committee directs the Secretary of Defense
    to provide a report to the House Committee on National Security
    and the Senate Committee on Armed Services by December 31,
    1997, on the activities reviewed by Operation Mongoose, the
    savings or costs avoidance identified by activity, the number
    of cases referred for investigation, and the number of cases
    investigated by the investigating agency.

    Section 373--Inclusion of Air Force Depot Maintenance as Operation and
                       Maintenance Budget Activity Group

        This section would require the Secretary of the Air Force,
    beginning in fiscal year 1999, to identify funding for depot
    maintenance in a discreet subactivity group.

    Section 374--Programs to Commemorate 50th Anniversary of Marshall Plan
                              and Korean Conflict

        This section would authorize the Secretary of Defense, to
    begin to plan, coordinate, and execute a program to commemorate
    the 50th anniversary of the Marshall Plan and the Korean
    Conflict.
        The Marshall Plan's goal was to create lasting peace in
    Europe through broad acceptance of democratic values, the
    achievement of prosperity through free markets and cooperation
    and interdependence among nations. This provision would allow
    for the Department of Defense to commemorate the Marshall Plan
    by the observance of the 50th anniversary of the Senate's
    approval on March 13, 1948, the House's approval on March 31,
    1948, and President Truman's April 3, 1948 signing of the
    Economic Cooperation Act.
        The committee recognizes the success of the efforts by the
    Department of Defense to commemorate World War II and expects
    the Department to make preparations for an appropriate
    commemoration of the Korean Conflict. A criticism of the
    preparation for the commemoration of World War II was that
    preparation started late which made it extremely difficult to
    properly coordinate key events with all interested parties.
    This meant that some deserving veterans organizations were
    excluded or were notified with such little notice that
    participation was limited. This provision would provide the
    long lead time necessary to properly plan and coordinate major
    activity with the Korean Conflict allies, interested federal,
    state and local governments and public officials, veteran
    groups, private citizens and other interested parties. The
    committee believes this provision would help ensure that our
    nation properly honors the sacrifices of men and women who
    fought in the Korean Conflict, as well as the sacrifices and
    contributions made by their families.

     Sec 375--Prohibition on Use of Special Operations Command Budget for
                             Base Operation Support

        This section would amend section 167(f) of title 10, United
    States Code to prohibit the use of funds provided for the
    Special Operations Command for base operations support expenses
    incurred at military installations. The committee notes that
    Congress established the Special Operations Command, including
    a separate major force budget program (MFP-11), to correct
    serious deficiencies in special operations capabilities and to
    ensure special operations combat readiness. The committee
    believes that using MFP-11 funds for base operations support is
    in conflict with the original intent for these funds.

      Section 376--Continuation and Extension of Demonstration Program to
                     Identify Overpayments Made to Vendors

        This section would reauthorize, through fiscal year 1998,
    section 354 of the National Defense Authorization Act for
    Fiscal Year 1996 (Public Law 104-106) which provides for a
    demonstration program to identify overpayments made to vendors.
    Preliminary data from this demonstration project indicates
    there are a significant number of Department of Defense
    overpayments made to vendors with a potentially high cost to
    the taxpayers. The committee believes that based on these
    initial findings, the program should be continued for another
    fiscal year to develop a better understanding of the magnitude
    of this problem.

    Section 377--Applicability of Federal Printing Requirements to Defense
                           Automated Printing Service

        This section would clarify that the Defense Automated
    Printing Service (DAPS) shall comply with chapter 5 of title
    44, United States Code regarding printing services. The
    committee has learned that DAPS, formerly known as the Defense
    Printing Service, is violating section 501 of title 44, United
    States Code. According to this statute, all government printing
    has to be procured by or through the Government Printing
    Office. Although DAPS provides printing services to the
    military departments and defense agencies, there is no statute
    that allows DAPS to provide printing services to non-Department
    of Defense federal agencies.
        The committee has learned, however, that DAPS has recently
    solicited other agencies to provide printing and duplication
    services, and the DAPS world wide web page specifically
    solicits intra-government printing services. Furthermore,
    notifications have been sent to federal agencies indicating
    that DAPS and General Services Administration will be merging
    their printing and duplication services. All of these actions
    violate title 44, United States Code. The committee directs the
    Secretary of Defense to cease all such activity and fully
    comply with current statute.

    Section 378--Base Operations Support for Military Installations on Guam

        This section would prohibit the use of nonimmigrant aliens
    (as defined in section 101(a)(15)(H)(ii) of title 8, United
    States Code) for any base operations support contract to be
    performed on Guam.

                          MILITARY PERSONNEL OVERVIEW

        Based on extensive hearing testimony from military
    personnel holding the rank of general through sergeant and from
    military spouses, as well as committee staff visits to more
    than 50 major units and commands, at more than 30 installations
    in the United States and Europe, combined with feedback from
    officer, non-commissioned officer, and military spouse focus
    groups, the committee believes that significant personnel and
    quality of life problems exist across the force. Moreover, the
    committee believes that the President's fiscal year 1998
    defense budget request fails to adequately address those
    problems, and contains initiatives, such as continued
    reductions in active end strength, that will exacerbate the
    difficult conditions under which most of the military personnel
    in the armed forces already labor. Those conditions place
    military people under immense stress because of a pervasive
    requirement to ``do more with less'' in the face of record
    operational tempo levels, and because of significant personal
    financial challenges brought on by the continuing inadequacy of
    pay and allowances for a military force that is now 65 percent
    married.
        The message the committee has heard from commanders,
    sergeants and military spouses was very clear: People are
    overworked and, absent any relief from the financial stress or
    operations tempo, it is only a matter of time before
    significant retention and recruiting problems will occur. The
    message troubles the committee, not only because it was
    repeated with remarkable consistency across the force, but also
    because it warns that the quality of military life is perceived
    to have eroded over a wide range of programs.
        After close examination, the committee believes that the
    President's military personnel budget request, at best, is
    inadequate to provide the forces needed to achieve the current
    national military strategy, support the current operations
    tempo of the force, and preserve the quality of the people so
    important to the future of a smaller force. Nor is the
    committee reassured by the preliminary findings of the
    Quadrennial Defense Review (QDR) that conclude the future
    military missions of the nation can be accomplished with
    155,000 fewer uniformed personnel. Until the committee fully
    understands that the QDR outcomes were strategy and mission
    based, not budget based, it will continue to be highly
    skeptical of any proposals by the Department of Defense that
    have the effect of requiring fewer personnel to continue doing
    more missions with reduced resources. For this reason, the
    personnel initiatives proposed in the budget request, as well
    as those projected by the QDR, would seem to make worse or
    ignore the already significant ``people'' problems. For
    example, despite assurances from senior Department of Defense
    officials that the drawdown was just about over, the
    President's budget request proposes Navy and Air Force manpower
    levels a total of 13,400 personnel below the end-strength
    floors required by law. Even worse, future years' defense
    budgets--based on a suspect rationale that the services have
    found economies and efficiencies that can be achieved without
    hurting readiness--project additional personnel reductions.
        As in past years when the defense budget request
    underfunded recruiting and Congress had to step in to add over
    $100.0 million, the President's fiscal year 1998 budget request
    again contains significant shortfalls in recruiting funding--
    more than $160.0 million according to the chiefs of the
    military services. This funding shortfall only heightens the
    committee's deep concerns that the military services are
    already on a slippery slope of eroding recruit quality in order
    to meet increasingly difficult accession requirements. For
    example, the Army, faced with a potential shortfall of 14,000
    recruits from its fiscal year 1997 accession requirement and a
    drop in recruit quality to 88 percent high school diploma
    graduates, seven percent below its objective, took several
    extraordinary measures to meet the crisis, including reducing
    its goal for high school diploma graduates to 90 percent from
    95 percent. Since traditionally Army recruiting difficulties
    have been the precursor of problems in the other services, the
    committee fears that the inadequate action proposed by the
    defense budget request to address recruiting problems will
    jeopardize the quality of the force and put at risk future
    combat capability.
        The budget request also largely ignored the distressing
    financial needs being experienced by the men and women of the
    armed forces. An enduring picture of these needs emerged during
    committee staff visits to the field last fall and was
    emphatically reinforced during committee hearings. Senior
    enlisted witnesses and spouses of military members provided
    compelling testimony that a pay increase was the highest
    priority need for all members, but particularly for the
    enlisted force. Despite the clear evidence of the financial
    pain among military personnel, and unlike an election-year
    effort to provide a pay raise greater than the minimum
    prescribed by law, the President's fiscal year 1998 budget
    reverted to the ``by-law'' formula by requesting a 2.8 percent
    increase. This ``by-law'' formula--one-half of a percent below
    the Employment Cost Index (ECI)--insures that the gap between
    military and civilian pay will continue to grow from 13.5
    percent in fiscal year 1998 to over 15 percent in 2001. The
    budget request justified the pay raise decrease by citing the
    legal nexus that limits military pay increases to the increase
    allowed for federal civilian employees. The committee does not
    believe that it is healthy to allow the pay gap to
    systematically increase year after year.
        The committee also believes that while reforms to both the
    basic allowance for subsistence (BAS) and basic allowance for
    quarters (BAQ) proposed in the budget request were well
    intentioned, the Department's inability to commit sufficient
    funding to the reforms compelled an implementation strategy
    that not only failed to protect income levels of military
    members, but also pitted portions of the armed forces against
    one another. For example, the proposed BAS reform called for
    reducing military family incomes to fund additional BAS to
    unmarried enlisted members. Moreover, the BAS reform did
    nothing to correct long standing inequities and unfairness in
    the compensation of military personnel deployed to austere
    locations and on ships at sea during contingencies and when
    training. The loss of income to families resulting from such
    deployments was a major theme of military members and their
    families in communications with and testimony before the
    committee. Additionally, the proposed BAQ reform did nothing to
    reduce out-of-pocket housing costs for service members, thereby
    reneging for the second year in a row on a three-year old
    commitment that the Secretary of Defense launched as a highly
    publicized, top priority, six-year initiative. During fiscal
    year 1997, Congress had to step in to ensure that the
    Department kept its commitment by increasing BAQ by 4.6
    percent, 1.6 percent above the increase proposed by the
    President.
        To the detriment of more than 120,000 federal employees who
    also have volunteered to serve as members of the reserve
    components, the President's budgetrequest sought so-called
    savings by eliminating the military income of most Federal employees
    who performed military duty during required annual training. In an
    environment when the nation is increasing its reliance on the reserve
    components in order to offset the increasing operations tempo of the
    active forces, and when the Department of Defense ought to be seeking
    ways to provide incentives to reservists, this apparent effort to
    reinvent government seems peculiarly counterproductive and
    shortsighted. Moreover, rather than setting an example of how an
    employer should support the National Guard and Reserve, this
    Presidential initiative sends the message that reservists do not
    deserve any special consideration. For these reasons, the committee
    believes this budget proposal has serious negative implications for
    combat readiness in the reserves and private sector employer
    cooperation programs.
        Finally, the committee finds that for the second year in a
    row, the President's budget request significantly under-funded
    the Defense Health Program (DHP). The General Accounting Office
    (GAO) estimated the shortfall to be between $424.0 million and
    $471.0 million. In response to Congressional concerns over this
    serious shortfall, the Administration plans to submit a budget
    amendment to add $274.0 million to the DHP. The committee is
    concerned that the proposed budget amendment still leaves
    considerable gaps in the funding level of the Defense Health
    Program that could result in a considerable degradation of this
    important quality of life program.
        Given a continuing commitment to curbing the erosion of
    quality of life for military members and their families, the
    committee has acted to reverse the major shortfalls in the
    Administration's fiscal year 1998 military personnel budget
    request. To that end the committee initiatives would:
              (1) Mandate that future military pay raises be based
            on the full Economic Cost Index (ECI) and not on ECI
            minus 0.5 percent;
              (2) Require the Secretary of Defense to implement a
            system of pay and allowances that would prevent the
            loss of income for military personnel when they are
            deployed or serving under field conditions at home
            station and would authorize $50.0 million to facilitate
            the initiative. The requirement is supported by a
            restructured deployment pay system including a new
            hardship duty pay, an increased family separation pay,
            and more flexible rules for payment of Basic Allowance
            for Subsistence;
              (3) Initiate a major reform of the housing allowances
            that would increase allowances in high cost areas and
            ensure that military personnel experience the same
            amount of out-of-pocket costs regardless of location;
              (4) Continue reducing ``out of pocket'' housing costs
            toward the goal of having military personnel absorb no
            more than 15 percent of the cost of adequate housing;
              (5) Reaffirm that the defense budget request must
            provide sufficient numbers of personnel to conduct
            current national military missions by retaining the
            statutory floors on active end strength;
              (6) Direct a series of reforms to improve recruiter
            performance and reduce recruit attrition and increase
            the funding for recruiting advertising by $22.9 million
            over the amount requested in the budget;
              (7) Retain military leave for Federal civilians in
            the selected reserve and restore the $85.0 million cut
            from reserve component budgets by the President in the
            name of savings; and
              (8) Restore $274.0 million to the Defense Health
            Program, direct a plan for expanding the TRICARE Prime
            (HMO) option and propose improvements to the TRICARE
            program designed to ensure beneficiary access to
            quality health care providers.
              (9) Direct the Secretary of Defense to report to
            Congress on the feasibility of extending a mail-order
            pharmacy program to all Medicare eligible beneficiaries
            who do not live near a military medical treatment
            facility.
        The committee believes that funding these initiatives is
    essential to protecting the quality of life of those service
    members and their families who continue to serve. Given the
    many priority programs competing for funding within a limited
    budget, the committee is electing to suspend the authority for
    early retirement during fiscal year 1998 to provide $185.0
    million to offset the increases cited above. The committee
    believes that a one-year suspension of the early retirement
    program is appropriate given:
              (1) The committee's continuing commitment to preserve
            the active duty end-strength floors needed to support
            two major regional contingencies;
              (2) That the QDR reductions are proposed for the
            post-2003 time frame; and
              (3) Congress never intended early retirement to be a
            permanent authority.
        In addition, the committee believes that action is required
    to addresses issues which have emerged as a result of the
    committee's ongoing examination of sexual misconduct in the
    military. Specifically, the committee directs a review of the
    ability of the military criminal investigative services to
    investigate crimes of sexual misconduct, and mandate a series
    of reforms to drill sergeant selection and training.
        The committee also directs the establishment of an
    independent panel to assess reforms to military basic training.
    The need for such reform comes from mid-level military leaders
    who report that many graduates from basic training do not
    possess the physical fitness, skill in basic military tasks,
    discipline and acculturation to service values needed for the
    actual job and readiness requirements of operational units.
    Included in the review would be a determination of the merits
    of gender-integrated or gender-segregated basic training as a
    method to attain the basic training objectives established by
    each service.
                   TITLE IV--MILTARY PERSONNEL AUTHORIZATIONS

                             LEGISLATIVE PROVISIONS

                           Subtitle A--Active Forces

                  Section 401--End Strengths for Active Forces

        This section would authorize end strengths for the active
    forces as indicated in the table below:

                                            FY 98 END STRENGTH--ACTIVE FORCES
    ----------------------------------------------------------------------------------------------------------------
                                        Fiscal year 1997            Fiscal year 1998        Change from fiscal year
                                   ---------------------------------------------------------------------------------
                Service                                                                        1998
                                     Authorized    Program      Request    Recommendation    request    1997 program
    ----------------------------------------------------------------------------------------------------------------
    Army..........................      495,000      495,000      495,000        495,000             0            0
    Navy..........................      406,900      402,013      390,802        395,000         4,198       (7,013)
    Marine Corps..................      174,000      174,000      174,000        174,000             0            0
    Air Force.....................      381,100      381,087      371,577        381,000         9,423          (87)
                                   ---------------------------------------------------------------------------------
          Total...................    1,457,000    1,452,100    1,431,379      1,445,000        13,621       (7,100)
    ----------------------------------------------------------------------------------------------------------------

        The authorized end strengths for fiscal year 1998 are those
    prescribed by law as the minimum necessary to support two major
    regional contingencies. By taking this action, the committee
    rejects the President's budget request which sought to reduce
    end strengths in the Navy by 4,200, and in the Air Force by
    9,400, below the statutory minimum manpower levels.
    Furthermore, the committee recommends an increase over the
    budget request of $5.0 million in the Navy's active military
    personnel account and $32.5 million in the Air Force's active
    military personnel account to offset the cost of maintaining
    end strength in accordance with Congressional mandates on end
    strength floors.
        The committee's rationale for continuing to maintain the
    end-strength floors is founded on the following:
              (1) As long as the national military strategy calls
            for this nation to fight and win two nearly
            simultaneous major regional contingencies (MRC), and
            until the committee is convinced that the national
            military strategy can be carried out with fewer
            personnel than authorized here, the committee believes
            that significant manpower reductions should not be
            undertaken;
              (2) The Department of Defense has an extremely poor
            record in predicting actual manpower requirements. For
            example, neither the manpower requirements for, nor the
            intensity, duration, frequency and numbers of
            operations other than war were accurately forecast by
            the Bottom Up Review. As a result, the readiness of the
            armed forces to train and maintain themselves to
            successfully fight high intensity warfare has suffered.
            In addition, the men and women in uniform and their
            families are being required to pay an increasingly
            higher price because an undermanned force is repeatedly
            asked to do more with less. There is no reason to
            believe that the manpower requirements emerging from
            the Quadrennial Defense Review will be any more
            accurate about assessing the manpower implications of
            operations other than war. Until the committee is
            convinced that such requirements have been factored
            into the manpower equations, or until there is a
            reduction in manpower-intensive operations other than
            war, the committee believes that reducing military
            manpower only would serve to exacerbate already serious
            readiness and personnel shortfalls;
              (3) The committee believes that the President's
            budget request for fiscal year 1998 is a budget-driven
            attempt to ``jump start'' the manpower cuts presaged by
            the QDR. Those cuts are not insignificant--90,000
            active duty military, 65,000 reservists, and 160,000
            civilians. So far the principal rationale provided by
            the Department for reducing manpower has been that it
            seeks economies, efficiencies and savings. The
            committee believes that without a change in strategy or
            operational requirements such ``green-eye shade'' logic
            is insufficient rationale for cutting people. If the
            Department of Defense wishes to reduce people to
            achieve savings, the civilian and military leadership
            must be able to articulate clearly and explicitly the
            reasons why such reductions make sense from a strategy
            and operations tempo perspective; and
              (4) Despite a specific legal requirement to fully
            fund the mandated end strength floors until Congress
            authorized the Department of Defense to drop below
            them, the President's budget request ignored the
            requirement, presumed that Congress would lift the end
            strength floors, and took the associated personnel
            ``savings'' for use in other parts of the budget.

                           Subtitle B--Reserve Forces

                Section 411--End Strengths for Selected Reserve

        This section would authorize end strengths for the selected
    reserve as indicated in the table below:

                                          FY 98 END STRENGTH--SELECTED RESERVE
    ----------------------------------------------------------------------------------------------------------------
                                        Fiscal year 1997            Fiscal year 1998        Change from fiscal year
                                   ---------------------------------------------------------------------------------
                Service                                                                        1998
                                     Authorized    Program      Request    Recommendation    request    1997 program
    ----------------------------------------------------------------------------------------------------------------
    ARNG..........................      366,758      366,758      366,516        366,516             0         (242)
    USAR..........................      215,179      215,254      208,000        208,000             0       (7,254)
    USNR..........................       96,304       95,898       94,294         94,294             0       (1,604)
    USMCR.........................       42,000       42,000       42,000         42,000             0            0
    ANG...........................      109,178      109,178      107,377        107,377             0       (1,801)
    USAFR.........................       73,311       73,311       73,431         73,431             0          120
    Coast Guard...................        8,000        8,000        8,000          8,000             0            0
                                   ---------------------------------------------------------------------------------
          Total...................      910,730      910,399      899,618        899,618             0      (10,781)
    ----------------------------------------------------------------------------------------------------------------

     Section 412--End Strengths for Reserves on Active Duty in Support of
                                  the Reserves

        This section would authorize the end strengths of the
    reserves on active duty in support of the reserves as indicated
    in the table below. These end strengths are included within the
    total end strengths authorized for the selected reserve above.

                      FY 98 END STRENGTH--RESERVES ON ACTIVE DUTY IN SUPPORT OF RESERVES (AGR/TAR)
    ----------------------------------------------------------------------------------------------------------------
                                       Fiscal year 1997            Fiscal year 1998         Change from fiscal year
               Service            ----------------------------------------------------------------------------------
                                    Authorized    Program      Request    Recommendation  1998 Request  1997 Program
    ----------------------------------------------------------------------------------------------------------------
    ARNG.........................       22,798       22,798       22,310         22,310             0          (488)
    USAR.........................       11,729       11,804       11,500         11,500             0          (304)
    USNR.........................       16,603       16,626       16,136         16,136             0          (490)
    USMCR........................        2,559        2,559        2,559          2,559             0             0
    ANG..........................       10,403       10,403       10,616         10,616             0           213
    USAFR........................          655          655          963            748          (215)           93
                                  ----------------------------------------------------------------------------------
          Total..................       64,747       64,845       64,084         63,869          (215)         (976)
    ----------------------------------------------------------------------------------------------------------------

       Section 413--End Strengths for Military Technicians (Dual Status)

        This section would authorize military technician end
    strength as indicated in the table below and would require
    future defense budget requests to include a legislative
    provision specifically detailing the end strength of the dual-
    status military technicians to be authorized.

                                 FY 98 END STRENGTH--MILITARY TECHNICIANS (DUAL STATUS)
    ----------------------------------------------------------------------------------------------------------------
                                                                                             Change from fiscal year
                                                  Fiscal year  Fiscal year  Fiscal year 98 -------------------------
                       Service                     97 program   98 request  recommendation      1998         1997
                                                      (DS)         (DS)          (DS)         request      program
    ----------------------------------------------------------------------------------------------------------------
    ARNG........................................       23,125       22,991         23,125           134            0
    USAR........................................        5,503        5,205          5,503           298            0
    ANG.........................................       22,853       22,574         22,853           279            0
    USAFR.......................................        9,802        9,622          9,802           180            0
                                                 -------------------------------------------------------------------
          Total.................................       61,283       60,392         61,283           891            0
    ----------------------------------------------------------------------------------------------------------------

        The National Defense Authorization Act for Fiscal Year 1997
    (Public Law 104-201) provided that dual-status military
    technicians would be authorized and accounted for as a separate
    category of Department of Defense civilian employee; and
    further provided that reductions in military technician end
    strength must be directly related to force structure
    reductions.
        In consonance with the changes made in fiscal year 1997,
    the end strengths authorized above provide only for dual-status
    military technicians. The authorizations do not include or
    provide for non-dual status technicians who the committee
    believes should be funded in the same manner as other federal
    civilian employees who are not military technicians. The
    committee notes that the President's budget request provides
    funding for the following numbers of non-dual status
    technicians: Army National Guard, 2259; Army Reserve, 1296; Air
    National Guard, 394; Air Force Reserve, none. Furthermore, the
    committee notes that the President's budget request sought
    reductions in military technician end strength but did not
    provide the required details about corresponding force
    structure reductions as required by law. Therefore, the end
    strengths authorized would establish military technician end
    strengths at fiscal year 1997 levels.

    Section 414--Increase in Number of Members in Certain Grades Authorized
               to Serve on Active Duty in Support of the Reserves

        This section would authorize increases in the grades of
    reserve members authorized to serve on active duty or on full-
    time national guard duty for the administration of the reserves
    or the national guard. The provision would authorize 30
    additional majors, 5 additional E-9s, and 10 additional E-8s in
    the Air Force. The provision would also authorize 16 additional
    colonels and 15 additional E-9s in the Army National Guard, and
    nine additional colonels and six additional E-9s in the Army
    Reserve.

                  Subtitle C--Authorization of Appropriations

      Section 421--Authorization of Appropriations for Military Personnel

        This section would authorize $69,539,862,000 to be
    appropriated for military personnel, an increase of $66.1
    million from the budget request.
                       TITLE V--MILITARY PERSONNEL POLICY

                           ITEMS OF SPECIAL INTEREST

                        Family Life Assistance Programs

        The committee believes that military families face growing
    challenges in an environment where high operations tempo,
    frequent deployments and long separations create unusual
    stress. This stress too frequently manifests itself adversely
    in such actions as child abuse. The committee believes that the
    military services should continually be seeking better ways to
    reduce child abuse and its related ill effects. The committee
    has learned of efforts being made by a nationwide consortium of
    educational organizations focused on the needs of children and
    families to demonstrate and evaluate, in connection with the
    Army Chaplain's School, an assistance program for families
    affected by child abuse. The program is designed to be
    facilitated by military chaplains, but depends heavily on
    parent-leadership and mutual support assistance for its
    effectiveness. The committee urges the Department of Defense
    and the Department of the Army to review this program for
    possible testing at military installations.

                   Increased Support for Military Recruiting

        Recruiting sufficient numbers of high quality people to
    serve in the armed services remains one of the most difficult
    challenges facing the Department of Defense. The committee
    views with alarm the Army's inability to meet its recruiting
    goals and the resulting Army decision to reduce the accession
    goal for new recruits with a high-school degree to 90 percent
    of those enlisted from the current 95 percent. The committee is
    also concerned that this reduction in the quality standards for
    Army recruits presages similar trends in the other services.
    The committee, therefore, recommends an increase in funding for
    recruiting advertising of $22.9 million over the amount
    requested in the budget. The additional advertising funding
    would be apportioned: Army: $7.0 million; Navy: $7.0 million;
    Air Force: $4.5 million; Marine Corps: $4.4 million.

      Investigation of the Deaths of Military Personnel by Self-inflicted
                                     Causes

        In response to concerns about how the services handled the
    investigations of the deaths of military personnel from self-
    inflicted causes, Congress, in the National Defense
    Authorization Act for Fiscal Year 1994, (Public Law 103-160),
    mandated several actions, including a Department of Defense
    review of the procedures used by the military departments for
    investigating such deaths. That review by the Department of
    Defense Inspector General reported in February 1996 a range of
    investigative shortcomings, as well as recommendations for
    improvements in investigative training, policy and procedures.
    In addition, the then-House Armed Service Committee found in
    March 1994, as part of its investigation into alleged suicides
    by military personnel, that some of the military services were
    inept in their dealings with families of the deceased and
    needlessly uncooperative in releasing information requested by
    the families of the deceased. Finally, the Department's
    Advisory Board on the Investigative Capability of the
    Department of Defense reported in 1995 that to the extent it
    found problems in investigations avoiding self-critical
    analysis, it found them in non-criminal investigations; and
    also that commander-directed investigations were the most
    common but least protected from improper command influence.
        Notwithstanding these previous findings and
    recommendations, the committee remains concerned that the
    military services may not have adequately implemented the
    recommended corrective actions. In particular, the committee
    has heard concerns about the services' ability to carry out
    self-critical, impartial, unbiased, complete death
    investigations in cases where service leadership may have been
    involved in the circumstances leading to a death from self-
    inflicted causes. In addition, the committee continues to hear
    reports of family members of the deceased having to go to
    extraordinary lengths to obtain a full report of the
    circumstances surrounding the death.
        For these reasons, and to ensure that past recommendations
    for corrective action are being implemented, the committee
    urges the Department of Defense to undertake an independent
    review of the current military service procedures for
    investigating the deaths of military personnel from self-
    inflicted causes.

                  Joint Recruiting Information Support System

        The committee is concerned that, despite the high priority
    that the Department of Defense attached to effective military
    recruiting, the Department is more than 18 months behind
    schedule in fielding the Joint Recruiting Information Support
    System (JRISS) which promises to greatly assist a frequently
    overextended recruiting force. The committee believes that such
    a delay is in part due to the fact that JRISS funding has been
    decentralized to the training and recruiting accounts of each
    of the military services and that services have repeatedly used
    these accounts as reprogramming sources to support contingency
    operations. In addition, the committee notes that the
    President's fiscal year 1998 budget request underfunded this
    important program by as much as $57.0 million in the
    procurement and operations and maintenance accounts. For these
    reasons, the committee believes that increased Department
    commitment is essential to put this program back on track.
    Therefore, the committee directs the Secretary of Defense to
    consolidate budgeting and funding execution of the JRISS system
    at the Department level, and to provide the House Committee on
    National Security and the Senate Committee on Armed Services a
    report by June 30, 1998, detailing its plan and funding program
    to ensure the full, expeditious fielding of the JRISS.

                         Military Identification Cards

        The committee is aware that the identification cards issued
    active component service members are a different color from the
    cards issued to reserve component service members. The
    committee notes that reserve component members have expressed
    concern that the color coded identification cards have resulted
    in prejudicial treatment of reservists that is not in keeping
    with good order and discipline. The committee recommends that
    the Secretary of Defense develop a universal identification
    card that includes a non-visual identifier, such as a bar code.
    Such a card would identify the benefits and privileges
    authorized to the card holder while protecting reserve
    component members from prejudicial treatment.

             Military Occupational Specialties (MOS) Consolidations

        The committee is concerned about the elimination and
    consolidation of military occupational specialties (MOS) which
    have occurred in at least two of the military services. These
    actions, used as a management tool to accomplish personnel
    downsizing and generate savings, have resulted in skill
    shortages and imbalances, particularly in the maintenance
    fields. The committee learned through visits to military
    installations and interviews with service members that MOS
    consolidations have negatively impacted the ability of units to
    maintain equipment to standard. The committee directs the
    Secretary of Defense to report to the House Committee on
    National Security and the Senate Committee on Armed Services,
    no later than March 1, 1998, on the extent to which such
    eliminations and consolidations have occurred, the impact of
    these eliminations and consolidations on readiness, and any
    recommendations or actions being implemented to address the
    concerns identified above.

    Retention of Military Leave for Federal Civilian Employees Who Perform
                                  Reserve Duty

        The committee is disturbed to learn that the President's
    budget request proposed to terminate a long-standing
    recruiting, retention and readiness incentive for the reserve
    components--the ability of 120,000 federal civilian employees
    who are members of the reserve components to take military
    leave from their federal civilian jobs without penalty to train
    during the required annual military training period. Even more
    disturbing to the committee is the fact that without apparent
    consultation with the military leadership and without analysis
    of the potential implications, the Department's reserve
    component military personnel accounts were reduced by $85.0
    million on the presumption that Congress would agree with the
    proposed amendment.
        Such presumption is misplaced. The committee believes for a
    number of reasons that this budget proposal is misguided, will
    not achieve any real savings, and will cause reductions in
    readiness and retention. First, despite repeated Administration
    claims of the importance of reserve personnel to the military,
    the President's initiative would penalize a federal workforce
    that not only ably serves government in a day-to-day capacity,
    but also has volunteered to go beyond what most citizens are
    willing to do by serving the nation as well in a uniformed
    capacity. Second, the initiative would single out and penalize
    60,000 military technicians. These full-time employees,
    required to be members of the reserve components as a condition
    of their employment, have been deemed by both the Department of
    Defense and the Congress to be critical to reserve component
    unit readiness and to providing active units relief from high
    operations tempo. Third, rather than setting an example of how
    an employer should support the National Guard and Reserve, this
    proposal would send an unequivocal message to the employers of
    America that reservists do not deserve special consideration.
        For these reasons, the committee rejects the President's
    proposal and restores $85.0 million to the military personnel
    accounts of the reserve components, as follows: Army National
    Guard, $33.2 million; Army Reserve, $20.4 million; Air National
    Guard, $11.0 million; Air Force Reserve, $8.2 million; U.S.
    Naval Reserve, $8.5 million; U.S. Marine Corps Reserve, $3.7
    million. As a partial source for the restoration, the committee
    recommends a reduction in operations and maintenance funding
    for the Youth Conservation Corps ($1.7 million), Starbase ($2.0
    million), Civil-Military Innovative Readiness Training ($8.0
    million) and reserve support to the commanders-in-chief of the
    combatant commands ($2.0 million), as well as a $13.0 million
    reduction in personnel funding for the Department directed
    reserve component support to the total force program.

                    Sexual Misconduct in the Armed Services

        The committee understands and appreciates the fact that the
    vast majority of members of the armed forces of the United
    States serve with distinction, dedication and integrity, often
    under arduous circumstances. As a result, the committee is very
    concerned that recent allegations of serious abuses of
    authority and criminal sexual misconduct by some individuals at
    U.S. military training facilities and installations around the
    world impugn the hard work and honor of the devoted men and
    women who proudly serve our country. Such misconduct and abuse
    by even a few individuals is unacceptable in our military; it
    undermines the espirit d'corps, morale and readiness necessary
    for the United States to field an effective fighting force
    prepared to defend its interests around the world.
        In light of the recent allegations of sexual misconduct and
    their adverse impact on the reputation and morale of our
    dedicated service members, the committee strongly urges the
    Secretary of Defense to take all appropriate steps necessary to
    ensure that allegations of abuse of authority or sexual
    misconduct are promptly and thoroughly investigated by each
    military service. Furthermore, the committee urges the
    Secretary to ensure that effective reporting mechanisms and
    adequate training methods are identified, implemented and fully
    enforced to prevent such abuses of authority and sexual
    misconduct, and that proven allegations are addressed promptly
    in an appropriate and equitable manner. The men and women who
    serve in our armed forces deserve to be treated with the utmost
    respect and dignity, and they deserve a work environment that
    is free from criminal misconduct and abusive practices.

                             LEGISLATIVE PROVISIONS

                      Subtitle A--Officer Personnel Policy

    Section 501--Limitation on Number of General and Flag Officers Who May
                  Serve in Positions Outside Their Own Service

        Five Department of Defense studies between 1988 and 1996
    consistently validated a requirement for no more than 233
    general and flag officer positions in joint headquarters and
    organizations external to the military services--about 16
    percent of all general and flag officer positions validated by
    those studies. With seeming disregard for the study results,
    the actual number of general and flag officers assigned to
    joint and external positions during those same years always
    exceeded 240, grew to as many as 280, and consistently required
    26 to 27 percent of the total general and flag officers
    authorized to be on active duty. Given the tight statutory
    constraints on the total number of general and flag officers
    who may be on active duty and notwithstanding the continuing
    emphasis on jointness, the committee believes that it is
    ultimately detrimental to the military services for the
    Department of Defense and the Joint Staff to assign to external
    positions both numbers and percentages of general and flag
    officers that are greatly inexcess of validated requirements.
    To the extent that the unconstrained tasking and assignment of general
    and flag officers to fill external positions continue, the military
    services will feel compelled to seek increases in the statutory limits
    on general and flag officers. For example, the dominant rationale
    provided by the Marine Corps in its most recent effort to secure
    additional general officers was the need for general officers to fill a
    growing number of joint positions. Additionally, in order to fill
    adequately both the external requirements and internal service
    requirements, the military services recently considered seeking an
    increase of as many as 54 general officers over the current statutory
    limit of 944. Again, increased external requirements was a significant
    driver of the proposed increase.
        The committee believes that the number of general and flag
    officers serving on active duty in external positions must be
    tightly controlled and tied directly to the number of general
    and flag officers available to fill both external and internal
    requirements. Therefore, the committee recommends a provision
    (Section 501) that would limit the number of general and flag
    officers serving in external assignments to no more than 24.5
    percent of the total number of such officers authorized by
    Congress.
        The committee recognizes that a 24.5 percent limit, while
    based on the Department's historical assignment practices, is a
    number that could be adjusted as a result of the outcomes of
    the Quadrennial Defense Review (QDR). Given the committee's
    desire for tight controls on general and flag officers, the
    committee expects that the Department would make
    recommendations for the adjustment of that 24.5 percent limit
    when the Department submits its anticipated post-QDR general
    and flag officer study, and that the Department would explain
    its strategy for review and validation of additional external
    general and flag officer requirements prior to the services
    being required to fill them.

     Section 502--Exclusion of Certain Retired Officers from Limitation on
                        Period of Recall to Active Duty

        This section would exclude retired military chaplains,
    health care professionals and officers serving on the American
    Battle Monuments Commission from counting against the statutory
    limits on the period of time that recalled retirees may serve
    on active duty.

     Section 503--Clarification of Officers Eligible for Consideration by
                                Selection Boards

        This section would clarify that officers serving on active
    duty and in the reserve components may be excluded from
    consideration from promotion to the next higher grade if they
    are on a promotion board report, even if that report had not
    yet been approved by the President.

        Section 504--Authority to Defer Mandatory Retirement for Age of
                         Officers Serving As Chaplains

        This section would permit service secretaries to defer the
    retirement of officers serving as chaplains until age 68 if,
    during the period of deferment, the chaplains served in direct
    support of units and installations, and, in rare cases, beyond
    age 68 for the needs of the service, as determined by a service
    secretary. In addition, the section would permit the chief or
    deputy chief of chaplains of each service to serve until age
    68, but not beyond. Under current law, retirement of all
    chaplains is required at age 62. The section would also
    authorize the Navy's chief and deputy chief of chaplains to be
    selected from among officers on the retired list.

                     Subtitle B--Reserve Component Matters

           Section 511--Individual Ready Reserve Activation Authority

        Under current law, the President may involuntarily recall
    to active duty, at times other than during war or national
    emergency, up to 200,000 reservists for up to 270 days from
    units of the Selected Reserve. This authority is known as the
    Presidential Selective Reserve Call-up (PSRC). However, under
    PSRC, individuals who are members of the Individual Ready
    Reserve (IRR) cannot be recalled to active duty.
        During Operation Desert Storm, the lack of authority to
    recall members of the IRR as part of the PSRC compelled the
    mobilization of portions of late-deploying selected reserve
    units in order to fill manpower shortfalls in early deploying
    units. This strategy had two major disadvantages. First, unit
    cohesion of the later deploying units was damaged. Second, the
    military services, particularly the Army, faced the significant
    challenge of having to rebuild the late deploying units upon
    their mobilization.
        This section would build on the lessons learned from
    Operation Desert Storm by authorizing the President, under
    PSRC, to recall up to 30,000 members of a new category of the
    IRR that would be created by this section. The new category of
    the IRR would consist of those personnel, in the military
    skills designated by the Secretary of Defense, who had
    volunteered prior to leaving active duty to become part of this
    new IRR category. Such volunteers could remain in the new IRR
    category for no longer than 24 months and could be provided
    such benefits (less pay and training) as the Secretary of
    Defense deemed appropriate.

       Section 512--Termination of Mobilization Income Insurance Program

        Operations Desert Shield and Desert Storm involved the
    largest activation and deployment of reserve component forces
    since the Korean War with more than 246,000 national guardsmen
    and reservists from all the armed forces serving on active
    duty. Post war surveys indicated that 45 percent of the
    officers and 55 percent of the enlisted personnel reported
    income losses while activated. Following an extended
    examination of the issues and a survey suggesting that
    reservists would participate in a premium-based voluntary
    income insurance program, the Secretary of Defense proposed a
    program for the ready reserve that was included in section 512
    of the National Defense Authorization Act for Fiscal Year 1996
    (Public Law 104-106).
        Two problems were encountered during implementation. First,
    adverse selection occurred when the insurance enrollment period
    coincided with the notification of units that were subject to
    activation in support of operations in Bosnia. Second, a three
    percent participation rate by reservists was inadequate to
    maintain program solvency. As a result, the program was
    immediately bankrupted and left with an unfunded liability of
    $72.0 million.
        In post-implementation reviews designed to understand what
    went wrong, the Department of Defense Inspector General and the
    United States General Accounting Office concluded during a
    coordinated review that the structure of the current program
    was actuarially unsound. In addition, they determined that the
    Department of Defense Board of Actuaries hadwarned the
    Secretary of Defense in an August 9, 1996 memorandum that an extension
    of the mission in Bosnia may endanger the fiscal solvency of the
    program right away. The committee is severely disappointed that the
    Assistant Secretary of Defense for Reserve Affairs was aware of the
    warning and failed to inform the Congress of the consequences of
    continuing to implement the program as originally planned.
        The committee does not believe it is practical to modify
    the current program to make it actuarially sound. Accordingly,
    this section would terminate the ready reserve mobilization
    income insurance program. The provision would also specify that
    all benefit payments that are due will be paid in full.
        The committee recognizes that many reservists experience
    financial hardships when they are involuntarily called to
    active duty. The committee remains receptive to new proposals
    from the Secretary of Defense to provide protection against the
    loss of income by activated reservists. If the Secretary
    desires to submit a new legislative proposal, the committee
    recommends that the proposal be accompanied by analysis of
    alternative plans to allow comparison with the Secretary's
    recommended plan. The alternative plans should include a
    mixture of voluntary and mandatory programs with varying
    premium levels.

     Section 513--Correction of Inequities in Medical and Dental Care and
        Death and Disability Benefits for Reserve Members Who Incur or
                    Aggravate an Illness in the Line of Duty

        Section 702 of the National Defense Authorization Act for
    Fiscal Year 1996 (Public Law 104-106) authorized for reservists
    the same death and disability benefits as active duty members
    when the reservist's death or disability occurred in an off-
    duty period between successive inactive duty training periods
    performed at locations outside the reasonable commuting
    distance from the member's residence. This section would
    authorize the same coverage for a reservist required to remain
    overnight prior to the commencement of inactive duty training.

       Section 514--Time-in-Grade Requirements for Reserve Commissioned
                  Officers Retired During the Drawdown Period

        This section would authorize the secretaries of the
    military departments to reduce the required time in grade for a
    reserve officer to retire in the highest grade held from three
    to not less than two years. The provision would limit the
    number of officers in a grade approved for retirement to two
    percent of the active status reserve strength for that armed
    force in that grade. The provision would expire on September
    30, 1999.

       Section 515--Authority to Permit Non-Unit Assigned Officers to be
        Considered by Vacancy Promotion Board to General Officer Grades

        This section would authorize the Secretary of the Army to
    consider officers not assigned to units of the selected reserve
    to compete for promotion to brigadier general and major general
    within the same promotion board process.

       Section 516--Grade Requirement for Officers Eligible to Serve on
                         Involuntary Separation Boards

        This section would reduce the grade required for officer
    separation board members in the reserve components from 0-6 and
    above to 0-5 and above.

     Section 517--Limitation on Use of Air Force Reserve AGR Personnel for
                       Air Force Base Security Functions

        The committee has learned that the Secretary of the Air
    Force sought in the fiscal year 1998 budget request an increase
    of 215 in the end strength of the reserves on active duty in
    support of the reserves (AGRs). The increase was to provide
    base security at four Air Force Reserve bases in the United
    States. Use of the AGRs for this security mission would have
    replaced 72 Air Reserve technicians and 136 Department of
    Defense civilians now providing the base security at those four
    bases. The committee does not understand the Secretary's
    rationale for seeking additional AGRs for U.S. base security
    purposes. First, the use of AGR's is more costly than continued
    use of a mixed civilian and technician security force. The
    average AGR costs at least $7,000 to $10,000 more than the
    average civilian employed in the security force at the four
    bases. Second, although it acknowledged to the General
    Accounting Office that it has 6,900 fewer security police than
    are needed to meet its active duty wartime requirements, the
    Air Force has decided not to fill those requirements because
    these personnel would not be deployed and would only be
    required to provide security at fixed bases in the United
    States. Such a shortfall, the Air Force told the General
    Accounting Office, could be compensated for in a number of
    ways, including hiring civilian security guards. This latter
    reasoning seems to directly contradict the Air Force Reserve
    proposal to add AGRs--full time, uniformed military personnel--
    to provide security at bases in the United States. For these
    reasons, this section would prohibit the Secretary of the Air
    Force from utilizing AGRs for base security at United States
    bases until six months after the Secretary has provided a
    report to the House Committee on National Security and the
    Senate Committee on Armed Services. The provision would require
    the report to address the rationale and cost effectiveness of
    such utilization of AGRs compared to the use of Department of
    Defense civilians or contractor personnel, as well as a plan
    for the re-employment, conversion to AGR status, or retirement
    of the current non-AGR workforce. The restrictions proposed to
    be established by this section on the use of AGR's for base
    security in the United States would not prohibit the proposed
    use of 13 AGR's as part of the deployable force protection unit
    being established by the Air Force.

                        Subtitle C--Military Technicians

      Section 521--Authority to Retain on the Reserve Active-Status List
      Until Age 60 Military Technicians in the Grade of Brigadier General

        This section would restore the authority that existed prior
    to the enactment of the Reserve Officer Personnel Management
    Act (ROPMA) that permitted the Secretaries of the Army and Air
    Force to retain brigadier general military technicians on the
    active-status list up to age 60.

                Section 522--Military Technicians (Dual Status)

        The National Defense Appropriations Act for Fiscal Year
    1996 (Public Law 104-61) and the National Defense Authorization
    Act for Fiscal Year 1996 (Public Law 104-106) enacted
    provisions defining the term ``military technician'' which were
    not completely consistent with one another. This section would
    remove the inconsistencies by defining a military technician
    (dual status) as a federal civilian employee who is hired in
    accord with titles 5 or 32, United States Code, and who, as a
    condition of federal civilian employment, must maintain
    military membership in the selected reserve, and who also must
    be assigned to a position as a technician in the administration
    and training of the selected reserve, or to a position in the
    maintenance and repair of supplies or equipment issued to the
    selective reserve or armed forces. The section would also
    require that, unless exempted by law, all military technicians
    hired on or after December 1, 1995, (the date of enactment of
    Public Law 104-61) would be required to maintain military
    membership in the selected reserve unit by which they are
    employed as a military technician, or in a unit they are
    employed as a military technician to support. Finally, the
    section would require the Secretary of Defense, in coordination
    with the Director of the Office of Personnel Management, to
    develop a legislative proposal for the National Defense
    Authorization Act for Fiscal Year 1999 that would establish or
    clarify statutory guidelines in title 5, United States Code,
    for the hiring, management, separation, and retirement of Army
    and Air Force Reserve military technicians (dual status).

               Section 523--Non-Dual Status Military Technicians

        In recognition of the important direct readiness
    contributions being made by military technicians (dual status),
    the National Defense Authorization Act for Fiscal Year 1996
    (Public Law 104-106) established special rules and protections
    that set military technicians (dual status) apart from other
    federal civilian employees in the Department of Defense. In
    addition, the act established hiring restrictions that were
    designed, in part, to reduce the numbers of military
    technicians who never were members of the selected reserve, or
    for one reason or another after being hired subsequently became
    disqualified from selected reserve membership. The committee
    understands that at present there are approximately 3,800 such
    so-called non-dual status technicians, many of whom are
    performing clerical and administrative functions. In addition,
    the committee is disturbed to learn that contrary to the
    reductions in non-dual status technicians contemplated by the
    National Defense Authorization Act for Fiscal Year 1996 (Public
    Law 104-106), the number of non-dual status technicians in the
    Army Reserve has grown from almost 800 in fiscal year 1996 to
    nearly 1,300 in fiscal year 1997. This section would address
    that growth by capping the numbers of non-dual status
    technicians permitted in each of the reserve components in
    fiscal year 1998, and require the service secretaries in future
    years to reduce the number of non-dual status technicians by at
    least 10 percent per year. Furthermore, the section would
    require the Secretary of Defense to submit, by March 31, 1998,
    a plan for eliminating non-dual status technicians. In
    developing the plan, the Secretary would be required to
    consider elimination or consolidation of functions or
    positions, contracting out of functions, conversion of
    technicians and technician positions to non-technician
    competitive federal positions or employees, and the use of
    incentives to facilitate the directed reductions.

      Subtitle D--Measures to Improve Recruit Quality and Reduce Recruit
                                   Attrition

               Section 531--Reform of Military Recruiting Systems

        This section would require the Secretary of Defense to
    undertake a series of department-wide reforms to:
              (1) Improve data collection and analysis of the
            reasons for new recruit attrition as part of an effort
            to undertake targeted measures to control that
            attrition;
              (2) Create incentives for recruiters to improve the
            qualification screening of prospective recruits;
              (3) Assess the trends in the use of waivers to permit
            the enlistment of persons with otherwise disqualifying
            conditions; and
              (4) Ensure the prompt separation from the military
            services of new recruits who are unable to complete
            basic training.

      Section 532--Improvements in Medical Prescreening of Applicants for
                                Military Service

        A General Accounting Office review of matters related to
    the 30 percent attrition of all military personnel during first
    terms of enlistment concluded that attrition could be reduced
    through better medical prescreening of applicants for military
    service. The committee strongly concurs with the findings of
    the review. Therefore, this section would direct the Secretary
    of Defense to undertake a number of reforms, to include:
              (1) Requiring each applicant for military service to
            provide the name of the applicant's medical insurer,
            the names of past medical providers, and a release to
            obtain the applicant's medical records;
              (2) Revising the questions asked of applicants to tie
            the questions more directly to conditions that most
            frequently result in medical separations;
              (3) Assigning to a contractor or agency other than
            the Military Entrance Processing Command (MEPCOM) the
            responsibility for evaluating medical conditions of
            recruits that are missed during MEPCOM's accession
            processing; and
              (4) Requiring all applicants for military service be
            tested for use of illegal drugs at the MEPCOM station.

           Section 533--Improvements in Physical Fitness of Recruits

        This section would direct the Secretary of Defense to
    undertake a range of measures to improve the level of physical
    fitness of new recruits prior to the start of basic training,
    including the use of incentives, monetary and otherwise, for
    new recruits in the delayed entry program to voluntarily
    participate in supervised conditioning activities. This section
    would permit the use of Department of Defense military fitness
    facilities for this purpose, as well as the use of military
    medical facilities if the new recruit is injured during the
    supervised conditioning activities.

                  Subtitle E--Military Education and Training

        Section 541--Independent Panel to Review Military Basic Training

        This section would require the establishment of a panel to
    review the basic training programs of the Army, Navy, Air Force
    and Marine Corps and to make recommendations for improvements
    to these programs.
        The committee believes that such reform is necessary based
    on what it has heard in recent visits to military installations
    as well as on the strong, unequivocal statements of non-
    commissioned officers and field commanders of all services in
    most of the field locations visited by the committee staff last
    fall. These mid-level military leaders expressed concern that
    graduates of the services' basic training programs were
    emerging without the physical fitness, skill in basic military
    tasks, discipline, and acculturation to service values needed
    for the actual job and readiness requirements of an operational
    unit. In the minds of many who shared their views, such
    insufficiently prepared basic training graduates represented
    significant burdens, not assets, to units already overburdened
    by high operations tempo and constrained resources.
        Therefore, this section directs the panel on military basic
    training to review the course objectives, structure, and length
    of each of the military services' basic training programs. With
    regard to the review of the basic training programs, the panel
    should focus on two key questions:
              (1) Do the services' basic training programs produce
            graduates who are adequately trained to ensure that
            they report to operational units with an appropriate
            level of skills, physical conditioning and military
            socialization to meet unit requirements and operational
            readiness?
              (2) Given the demographics, education and background
            of new recruits, are the basic training systems and
            objectives most efficiently and effectively structured
            and conducted to produce graduates who meet service
            needs?
        This section also would require the panel to review the
    basic training policies for each of the military services with
    regard to the issue of gender-integrated basic training. As
    part of this review, the panel should focus on the historical
    as well as the current rationales for integrating or
    segregating basic training, particularly with regard to the
    relevance of the rationales and their consideration of the
    impact on readiness. In focusing on the historical rationale,
    the panel should determine and evaluate the reasons the Air
    Force and Navy chose to integrate basic training, as well as
    the Army's rationale for implementing an integrated basic
    training initiative in 1976, then abruptly disestablishing this
    initiative in 1982. The panel should also assess the degree to
    which different standards have been established or implemented,
    and determine whether basic training performance standards are
    based on military readiness. Additionally, the panel should
    compare the attrition rates and readiness and morale of gender-
    integrated basic training units with gender-segregated basic
    training units.
        This section would require the panel to submit its
    completed evaluation of the gender-integrated and gender-
    segregated basic training programs, along with recommendations
    for changing or improving the current programs, within one year
    of the panel's establishment. It also would require Congress,
    based on the panel's recommendations, to consider whether to
    require by law that the military services conduct gender-
    segregated basic training.

       Section 542--Reform of Army Drill Sergeant Selection and Training
                                    Process

        The committee believes that because drill sergeants perform
    one of the most crucial, as well as one of the most difficult
    missions in the Army, standards for entrance into and
    graduation from training must be rigorous. As a part of a
    review of the initial entry training system in the Army,
    committee members heard first-hand a range of recommendations
    from drill sergeants, drill-sergeant instructors, and drill-
    sergeant trainees about needed reforms to improve the selection
    and training processes of drill sergeants. Building on those
    recommendations, this section would require the Secretary of
    the Army to institute a number of reforms, including:
              (1) Chain-of-command assessments of the suitability
            and qualifications of all drill sergeant candidates;
              (2) Psychological screening of all drill sergeant
            candidates;
              (3) Revision of the drill-sergeant trainee evaluation
            system to expand assessments of qualifications and
            suitability to include ``whole-person'' evaluations;
            such revisions could include the use of drill sergeant
            trainee peer evaluations and subjective evaluations
            from instructors in the drill sergeant course;
              (4) Providing all drill sergeant trainees prior to
            graduation with opportunities to work with actual new
            recruits in initial entry training; and
              (5) Revision of the military personnel records system
            to permit certain persons, under conditions prescribed
            by the Secretary, to leave drill sergeant training
            without penalty or stigma on the person's future
            military career.
        This last reform stems from the committee's view that it
    takes more than being a good soldier--professionally competent,
    well motivated, and dedicated to the task at hand--to be a good
    drill sergeant, and that an inability to meet all the higher
    standards required of a drill sergeant should not prevent good
    soldiers from continuing to make professional contributions to
    the Army. The section would also require the Secretary of the
    Army to provide the House Committee on National Security and
    the Senate Armed Services Committee a report by March 31, 1998
    of the reforms initiated, or the Secretary's rationale for not
    undertaking the prescribed measure.

    Section 543--Requirement for Candidates for Admission to United States
                    Naval Academy to Take Oath of Allegiance

        This section would codify what now is implemented by
    policy--that persons seeking admission to the United States
    Naval Academy take and subscribe to an oath of allegiance to
    the United States as a requirement for admission. The change
    would make the requirement for an oath consistent in law for
    all three service academies.

      Section 544--Reimbursement of Expenses Incurred for Instruction at
              Service Academies of Persons from Foreign Countries

        The committee believes that the Secretary of Defense has
    forgotten his responsibility for sound fiscal stewardship in
    connection with the attendance of international students at the
    U.S. service academies. Current law authorizes up to 40
    international students at any one time to attend full-time each
    of the respective service academies and requires that the
    foreign country sponsoring a student reimburse the U.S.
    government for the cost of the instruction, as well as any pay,
    allowances and emoluments the U.S. provides to the student. The
    reimbursement requirement can be waived in whole or in part by
    the Secretary of Defense. The committee is shocked to learn
    that of the 115 international students from 39 countries who
    are enrolled in 1997 at the service academies, the Secretary of
    Defense has waived the full cost of attendance for 106students.
    This extravagant use of waivers requires the Department of Defense to
    expend $7.2 million annually, including $4.2 million in operations and
    maintenance funding and $3.0 million in military personnel funding. The
    committee believes this disregard for sound fiscal practice must be
    ended and that foreign governments must share a larger burden of
    sending their citizens to the service academies. Therefore, the
    committee directs the Secretary of Defense to re-negotiate current
    agreements with the nations who have students in attendance at the
    service academies. As an incentive to those negotiations, the committee
    recommends a reduction in fiscal year 1998 of $4.2 million in Defense-
    wide Operations and Maintenance accounts and a $1.0 million reduction
    in the amounts authorized for military personnel in the Army, Navy and
    Air Force. In addition, this section would constrain the Secretary of
    Defense's waiver authority for international students entering the
    service academies after the date of enactment to no more than 25
    percent of the per-person cost of attendance by an international
    student, but would permit the Secretary, in exceptional cases, to waive
    more than 25 per cent of the cost for up to five international students
    at each of the service academies. Furthermore, the committee directs
    the Secretary of Defense to provide a report no later than April 30,
    1998, to the House Committee on National Security and the Senate
    Committee on Armed Services detailing the results of the required
    negotiations. If there is not substantial improvement in the
    reimbursement rates for international students at the service
    academies, the committee will consider further constraints on the
    program.

              Section 545--United States Naval Postgraduate School

        This section would amend the current authority governing
    admittance of civilians to the Naval Postgraduate School and
    create new authority to admit enlisted personnel to the school.
    Thus, the section would authorize the Secretary of the Navy to
    admit civilians on a space available basis, with reimbursement
    being required either on an in-kind basis or on a cost-
    reimbursable basis. In addition, the section would authorize
    enlisted members to attend courses on a space available basis.

         Section 546--Air Force Academy Cadet Foreign Exchange Program

        The President's budget request sought authority for the
    Secretary of the Air Force to establish an exchange program at
    the Air Force Academy whereby up to 24 academy cadets could
    receive up to a semester of instruction at foreign military
    academies. In turn, on a one-for-one-basis, the Air Force
    Academy would accept students from the foreign military academy
    for up to a semester of instruction. This section would
    authorize the exchange program but would limit the program to
    more than 10 exchanges per year and the academy's annual
    expenditure on the program to $50,000. The limitations reflect
    committee concerns that the Secretary of Defense has liberally
    waived the reimbursement requirements for international
    students attending each of the service academies. The result is
    that the Department of Defense has borne most of the costs of
    international student attendance. While the committee agrees
    with the intent of this new Air Force Academy exchange program,
    the committee believes that this new program should first
    demonstrate an ability to operate on a basis of foreign
    governments providing comparable levels of support as are
    provided by the Air Force.

        Section 547--Training in Human Relations Matters for Army Drill
                               Sergeant Trainees

        This section would require the Secretary of the Army to
    expand the human relations instruction now provided to drill
    sergeant trainees to at least two days of instruction. This
    instruction could include such topics as instructor-trainee
    relationships, leadership styles, professional conduct, lawful
    and unlawful discrimination, sexual harassment and misconduct,
    team building and counseling. In developing this instruction,
    the committee directs that the Secretary use the capabilities
    and expertise of the Defense Equal Opportunity Management
    Institute, and also recommends the Secretary review the human
    relations training program used by the Air Force in training
    its Military Training Instructors.

     Section 548--Study of Feasibility of Gender-Segregated Basic Training

        This section would require each of the military service
    secretaries to submit a report to the Senate Committee on Armed
    Services and the House Committee on National Security, within
    180 days after the date of enactment, on gender-segregated
    basic training. The report should address the feasibility,
    implications and cost of conducting segregated basic training
    and for requiring drill sergeants of basic training units to be
    the same sex as the recruits in those units.

                  Subtitle F--Military Decorations and Awards

     Section 551--Study of New Decorations for Injury or Death in Line of
                                      Duty

        This section would require the Secretary of Defense, in
    cooperation with the secretaries of the military departments
    and the Secretary of the Treasury with regard to the Coast
    Guard, to determine the appropriate name, policy, award
    criteria, and design for two new decorations. The new
    decorations would recognize the services of members of the
    armed forces who are killed or wounded under non-combat
    conditions and United States civilian nationals who are killed
    or wounded while serving in an official capacity with a United
    States armed force. The provision would require the Secretary
    to submit a legislative proposal to establish the two
    decorations and a recommendation concerning the need for the
    new decorations to the House Committee on National Security and
    the Senate Committee on Armed Services not later than July 31,
    1998.

     Section 552--Purple Heart to be Awarded Only to Members of the Armed
                                     Forces

        This section would limit eligibility for the award of the
    Purple Heart to members of the armed services. The provision
    would become effective after the end of the 180-day period
    beginning on the date of enactment.

       Section 553--Eligibility for Armed Forces Expeditionary Medal for
       Participation in Operation Joint Endeavor or Operation Joint Guard

        This section would require the Secretary of Defense to
    designate participation by service members in Operation Joint
    Endeavor or Operation Joint Guard in the Republic of Bosnia
    andHerzegovina as sufficient to meet the requirements for award of the
    Armed Forces Expeditionary Medal.

         Section 554--Waiver of Time Limitations for Award of Certain
                        Decorations to Specified Persons

        This section would waive the statutory time limitations for
    the award of military decorations to provide for the award of
    those decorations to individuals who have been recommended for
    award of the decorations by the secretaries of the military
    departments.

                           Subtitle G--Other Matters

        Section 561--Suspension of Temporary Early Retirement Authority

        The committee believes that the pace of the drawdown has
    sufficiently slowed to allow a one-year suspension of the
    authority to retire service members under the temporary early
    retirement authority. The committee recognizes that future use
    of the authority may be required to shape the force structure
    and facilitate additional possible reductions in manpower
    levels resulting from the Quadrennial Defense Review.
    Additionally, the committee believes that funding within
    military personnel accounts should be allocated to directly
    address the urgent quality of life concerns expressed by the
    service members who will continue to serve. Accordingly, this
    section would suspend the authorization for the early
    retirement program during fiscal year 1998.

    Section 562--Treatment of Educational Accomplishments of National Guard
                         ChalleNGe Program Participants

        The committee notes that the services restrict the
    accession of individuals who possess general education
    development (GED) certificates, to include participants in
    National Guard ChalleNGe programs. The committee believes that
    participants in the National Guard ChalleNGe program who
    achieved GED certificates as a result of the program have
    demonstrated the necessary commitment and discipline to serve
    successfully on active duty in the armed services.
        Accordingly, this section would deem a GED certificate
    achieved as a result of the individual's participation in a
    National Guard ChalleNGe program the same as a high school
    diploma for the purpose of determining the eligibility of the
    person for enlistment in the armed forces.

     Section 563--Authority for Personnel to Participate in Management of
                          Certain Non-Federal Entities

        This section would authorize service secretaries to approve
    on a case-by-case basis the limited service of military and
    civilian personnel in their official capacities as directors,
    trustees, or officers of a military welfare society, such as
    Army Emergency Relief, or other designated entities. Such
    entities include bodies that regulate international athletic
    competition and the athletic programs of the service academies,
    educational accreditation organizations that evaluate the
    service academies and other schools of the armed forces, and
    organizations that regulate and support military health care.
    Compensation for such service would be prohibited, as would
    involvement in the day-to-day operations of the entities.

               Section 564--Crew Requirements of WC-130J Aircraft

        This section would require the Secretary of the Air Force
    to study the manpower requirements for the WC-130J aircraft
    engaged in aerial weather reconnaissance and eyewall
    penetration of tropical cyclones. The provision would require a
    report to the House Committee on National Security and the
    Senate Committee on Armed Services upon completion of the
    study. The provision also would preclude navigator and other
    manpower requirements of units engaged in eyewall penetration
    of tropical cyclones from being reduced below the requirements
    established as of October 1, 1997 until the end of a six-month
    period after the submission of the report.

              Section 565 and Section 566--Civil-Military Programs

        The National Defense Authorization Act for Fiscal Year 1996
    (Public Law 104-106) terminated the authority of the Department
    of Defense to conduct civil-military cooperative action
    programs, an authority that had been enacted in October 1992.
    Congress took the action based on a belief that many of the
    programs being conducted under the civil-military cooperative
    action program had minimal military readiness or training
    value. In recognition of the fact that some military mission
    training undertaken to accomplish valid unit training
    objectives could have an incidental benefit to non-Department
    of Defense entities, the Congress created a limited authority
    in the National Defense Authorization Act for Fiscal Year 1996
    (Public Law 104-106) to permit military units, under certain
    strict criteria, to conduct valid training that would have an
    incidental benefit to non-department entities. The committee,
    therefore, was chagrined to learn that many of the programs
    formerly conducted under the civil-military cooperative program
    were still being funded by the Department of Defense under a
    slightly revised name: The Department of Defense Civil-Military
    Innovative Readiness Training Programs. Even more disturbing to
    the committee was the directive issued by one service
    headquarters that civil-military and community support programs
    would be the number one operational and training priority for
    that service's reserve component at all times other than
    mobilization. To ensure support for the directive and service
    objectives, officers appearing before command selection boards
    were being asked to submit a resume of their personal community
    support and civil-military program involvement. Although that
    service directive was canceled following committee questions
    about it, the committee believes that a review of the
    Department and service civil-military and community support
    programs is needed. Therefore, section 565 would require the
    Comptroller General to conduct such a review. In ordering this
    Comptroller General review, the committee's intent is not to
    quell or deter projects which meet the criteria established by
    Public Law 104-106. Rather, the committee's intent is that
    current and future training efforts that meet the criteria
    established in law should continue apace. In addition, section
    566 would prohibit promotion and selection boards from using
    involvement in civil-military and community support programs as
    a special criteria to evaluate the fitness of members of the
    armed forces for promotion, commandor other competitive
    selection. Finally, the committee recommends a reduction of $8.0
    million in the funding requested for the Department of Defense Civil-
    Military Innovative Readiness Training.

        Section 567--Continuation of Support to Senior Military Colleges

        The section would require that the Secretary of Defense
    continue support to the senior military colleges (Texas A&M
    University, Norwich University, The Virginia Military
    Institute, The Citadel, Virginia Polytechnic Institute and
    State University, and North Georgia College and State
    University) in three principal ways: 1) Retention of the long-
    standing commitment by the Army to provide active duty service
    for all graduates of the colleges who desire it and who are
    recommended for it by their respective professors of military
    science; 2) Participation by the active duty personnel assigned
    to the Reserve Officers' Training Corps (ROTC) detachments at
    each college in the leadership, academic and military
    development of the corps of cadets, beyond ROTC programs; and
    3) Continued operation of the ROTC program at each of the
    colleges.

     Section 568--Restoration of Missing Persons Authorities Applicable to
    Department of Defense as in Effect Before Enactment of National Defense
                     Authorization Act For Fiscal Year 1997

        This section would restore provisions pertaining to U.S.
    prisoners of war, those missing in action, and unaccounted for
    persons that were enacted in the National Defense Authorization
    Act for Fiscal Year 1996 (Public Law 104-106) and subsequently
    repealed by the National Defense Authorization Act for Fiscal
    Year 1997 (Public Law 104-201). Specifically, the section would
    expand the scope of current law by:
              (1) Making it applicable to Department of Defense
            civilians and contractors accompanying armed forces in
            the field;
              (2) Establish a 48-hour suspense for the commander's
            initial report of a missing person's status;
              (3) Require the theater component commander's
            involvement in the initial assessment of a missing
            person's status;
              (4) Require the status of persons who were last known
            alive to be reviewed every 3 years for 30 years
            following initial report;
              (5) Re-establish criminal penalties for the knowing
            and willful withholding of information from a missing
            person's file;
              (6) Restore the requirement that a status review
            board (when making determinations of death) must
            provide a description of the location of body, if
            recovered, and, if body not identifiable, a
            certification by ``a practitioner of an appropriate
            forensic science that the body recovered is that of the
            missing person;'' and
              (7) Restore the ability of certain persons to request
            status reviews of a limited number of Korean War cases.

    Section 569--Establishment of Sentence of Confinement for Life Without
                             Eligibility for Parole

        This section would add a new article to the Uniform Code of
    Military Justice. The new article would establish a court-
    martial punishment of confinement for life without parole. This
    new punishment could be adjudged for any offense for which
    confinement for life is now an authorized punishment. Under
    current law, any accused who receives a punishment of
    confinement for life may be considered for parole. The section
    would also provide that a sentence of life without parole may
    only be set aside or modified by the action of the convening
    authority, secretary concerned, or other person authorized to
    act under normal post-trial review procedures, by court
    decision during appellate review, or by presidential pardon.
    Punishment of confinement for life without parole would apply
    to offenses committed after the date of enactment of the
    National Defense Authorization Act for Fiscal Year 1998.

      Section 570--Limitation on Appeal of Denial of Parole for Offenders
                             Serving Life Sentence

        This section would amend section 952 of title 10, United
    States Code, to reflect a change in parole procedures for
    individuals convicted by court-martial who receive a punishment
    of confinement for life. In the case of a person serving a
    sentence of confinement for life who is denied parole, only the
    President or the Secretary concerned would be empowered to
    grant parole on appeal of that denial. This authority would not
    be delegable to subordinate officials.

        Section 571--Establishment of Public Affairs Branch in the Army

        This section would establish Public Affairs as a special
    branch of the Army. The committee expects that as a special
    branch, the Army will access, promote, manage, and assign
    officers and enlisted personnel of the branch in the same ways
    that it does for the other special branches like the Corps of
    the Army Medical Department, the Judge Advocate General's
    Corps, and Chaplains.
              TITLE VI--COMPENSATION AND OTHER PERSONNEL BENEFITS

                           ITEMS OF SPECIAL INTEREST

          Armed Forces Health Professions Scholarship Program (AFHPSP)

        The President's request contained two provisions that would
    allocate $96.4 million to the AFHPSP during fiscal year 1998 to
    offset the potential expense to individual scholarship
    recipients caused by an Internal Revenue Service (IRS) ruling
    that the scholarships are taxable as personal income.
        The committee is troubled that an IRS ruling can have the
    effect of diminishing the effectiveness of a federal program
    that must subsequently be revitalized by spending additional
    tax revenue. The committee notes that section 747 of the
    National Defense Authorization Act for Fiscal Year 1997 (Public
    Law 104-201) expressed the Sense of the Congress that the
    Secretary of Defense and the Secretary of the Treasury should
    work together to find a solution that results in the continued
    exclusion of AFHPSP scholarships from gross income. The
    committee is disappointed that an agreement could not be
    reached, and further, that there is no evidence that the
    Secretary of the Defense and the Secretary of the Treasury
    personally engaged on this matter when it became clear that an
    agreement could not be reached between officials at a lower
    management level.
        Accordingly, the committee recommends rejection of the two
    provisions included in the President's request. The committee
    is opposed to the use of tax revenue to reverse the affect of
    an IRS ruling in this matter. Before alternative solutions are
    considered, the committee requires a joint statement by the
    Secretary of Defense and the Secretary of the Treasury
    explaining why AFHPSP scholarships must be considered taxable.

             Communication of Retirement Benefits to New Accessions

        The committee is distressed about recent disclosures that
    recruiting materials have for decades failed to provide
    specific information about the total spectrum of retirement
    benefits, or worse, misrepresented the level of benefit that
    was authorized. The committee appreciates the anger felt by
    many retirees who viewed the commitments made by recruiters
    when they entered active duty as promises; promises that the
    retirees now know will not be kept.
        The committee considers this an intolerable situation that
    must be corrected. The committee is aware of initiatives within
    the Department of Defense to improve the documents used to
    communicate future retirement benefits to recruits.
    Accordingly, the committee directs the Secretary of Defense to
    report to the House Committee on National Security and the
    Senate Committee on Armed Services, not later than January 9,
    1998, the full extent of the review of these matters conducted
    by the Secretary, a detailed account of the actions taken and
    anticipated, a projection as to when all actions will be
    complete, and an assessment as to why the Secretary believes
    that his plan will provide a lasting solution to the problem.
        Additionally, the committee believes that an option should
    be considered to guarantee benefits by including the retirement
    benefits explanation document as part of the enlistment
    contract. Accordingly, the Committee directs the Secretary to
    include his assessment of such an option within the report.

                      Study of Certain Compensation Issues

        The committee is concerned about the effectiveness and
    efficiency of bonus and pay programs for aviation service,
    nuclear trained service members, and sea duty.
        The Navy, Marine Corps, and the Air Force have experienced
    decreasing retention among aviators as the airline industry has
    increased hiring. Since the cost of training a fully qualified
    experienced fighter pilot is estimated to exceed $6.0 million,
    the committee believes that an effective bonus is essential to
    protecting this valuable resource. The committee is aware of
    discontent about the structure of compensation for flying
    duties among enlisted and non-aviator crew members. A long term
    retention problem also exists with nuclear qualified service
    members in the Navy. The Navy has operated a series of
    retention bonuses to attract and retain the highly skilled
    officers and enlisted members needed to safely and effectively
    operate the Navy's nuclear power plants. The President's budget
    request included a provision to increase the maximum legislated
    amounts for the full range of bonuses and pay for nuclear
    trained service members. Finally, the committee is aware of
    discontent with the level of sea pay and interest within the
    Department of the Navy to restructure the program to give
    greater incentives for service members to volunteer for sea
    duty.
        In each case, inflation and changing retention conditions
    and attitudes have eroded the effectiveness of these three
    compensation programs. Accordingly, the committee directs the
    Secretary of Defense, in coordination with the secretaries of
    the military departments, to study the effectiveness of the
    compensation systems used to recruit and retain officers and
    enlisted members in aviation service, Navy nuclear duties, and
    sea duty. The Secretary should submit a report with the
    findings and recommendations resulting from this study to
    include three comprehensive legislative proposals to address
    the long-term compensation needs within each area of concern to
    the House Committee on National Security and the Senate
    Committee on Armed Services not later than March 31, 1998.

                           Tax Deferred Savings Plan

        The committee notes that the military services are
    considering a proposal to augment the current military
    retirement system by permitting military members on active duty
    to elect to participate in a tax deferred savings plan. The
    plan being considered would limit member contributions to a
    maximum of five percent of the member's basic pay and would not
    include matching payments by the government. The committee
    encourages the Secretary of Defense to report to the
    Congressional defense committees his assessment of the program
    structure he recommends for adoption and any alternative plans
    that were considered in the review process, the potential for
    implementation, the contribution of the program to sustaining
    the value of the military retirement benefit, and the merits of
    the proposal as a tool for shaping and managing the force.

                             LEGISLATIVE PROVISIONS

                         Subtitle A--Pay and Allowances

            Section 601--Increase in Basic Pay for Fiscal Year 1998

        This section would provide a 2.8 percent military pay raise
    as proposed in the President's budget request. Following an
    encouraging fiscal year 1997 budget request that for the first
    time in four years included a pay raise that kept pace with
    inflation, the committee is disappointed that the President's
    budget request for fiscal year 1998 reverted back to the ``by
    law'' model for military pay raises. The 2.8 percent pay raise
    is one half of one percent below the rate of pay increases in
    the private sector as measured by the Employment Cost Index
    (ECI).

    Section 602--Annual Adjustment of Basic Pay and Protection of Member's
                Total Compensation While Performing Certain Duty

        The committee is concerned that the ``by law'' model
    employed by the Department of Defense to set military pay
    raises systematically fails to provide the protection against
    inflation needed to retain the quality people that serve in the
    military today. The decrease to military pay raises described
    in the discussion of section 601 results from the legislative
    link between military and federal civilian pay increases.
        The committee is also concerned that service members are
    routinely subjected to reductions in income when they
    participate in training exercises. The committee is
    recommending provisions in this bill to respond to that
    concern. These provisions would authorize additional management
    flexibility in the payment of Basic Allowance for Subsistence,
    establish a new authority for hardship duty pay, and increase
    family separation pay. The committee believes that these
    provisions would provide commanders the tools necessary to pay
    deployed service members more efficiently and achieve savings
    that can be used to protect the level of income of service
    members participating in training exercises.
        Accordingly, this section would repeal the legislative link
    between military and federal civilian pay raises and would
    require military pay raises to be independently calculated
    using the Employment Cost Index. The provision would also
    mandate that a service member's total compensation not be
    reduced while assigned to duty away from the member's permanent
    duty station or while assigned to duty under field conditions
    while at the member's permanent duty station. The provision
    would authorize an exception to allow total compensation to be
    reduced during periods of such duty when the reductions were
    unrelated to the duty being performed. The committee is
    committed to ending the financial hardships imposed on members
    and their families when the basic allowance for subsistence
    (BAS) is terminated during training conducted under field
    conditions. Accordingly, the committee authorizes $50.0 million
    to pay BAS during training under field conditions and directs
    the Secretary of Defense to distribute the funds to the
    services according to the priorities established by the
    Secretary.

    Section 603--Use of Food Cost Information to Determine Basic Allowance
                                for Subsistence

        The committee is concerned that the termination of Basic
    Allowance for Subsistence (BAS) during deployment under field
    conditions or assignment to sea duty results in financial
    hardship for enlisted service members. The committee believes
    that service members should not suffer a lower level of income
    when deployed than when they are serving at their home station.
    Accordingly, this section provides the Secretary of Defense
    greater flexibility to continue to pay BAS when rations in kind
    are available. The provision would also index the annual growth
    in subsistence allowance to increases in the cost of the
    moderate food plan of the U.S. Department of Agriculture and
    repeal the current process of increasing the Basic Allowance
    for Subsistence at the same rate as the military pay raise.
        The committee believes that the additional flexibility for
    paying BAS that would be provided by this section would allow
    the Secretary of Defense to maintain income levels for deployed
    service members, restore equity in compensation between
    different groups of deployed forces, and manage compensation
    programs for deployed forces more efficiently.
        The committee does not intend that this reform of the BAS
    be interpreted as an opportunity to reconsider the tax
    treatment of the allowance. The committee firmly believes that
    the BAS must remain non-taxable.

     Section 604--Consolidation of Basic Allowance for Quarters, Variable
               Housing Allowance, and Overseas Housing Allowances

        The committee is concerned that the current housing
    allowance system comprised of the Basic Allowance for Quarters
    and the Variable Housing Allowance, and based on service member
    expenditures, is inefficient and rife with inequities. The
    committee is also disappointed that the President's budget
    request did not include increases in housing allowances above
    the level of the pay raise. This is the second year that the
    budget request failed to keep the Secretary of Defense's
    promise to continue a six year program included in the fiscal
    year 1996 budget request to reduce the out-of-pocket housing
    costs to the Congressionally established standard of 15 percent
    for military members and their families.
        Accordingly, this section would consolidate the Basic
    Allowance for Quarters and the Variable Housing Allowance and
    would authorize $35.0 million to reduce out-of-pocket housing
    costs. The new allowance would be based on the cost of adequate
    housing for civilians with comparable income levels residing in
    the same area as military personnel. The section would index
    the annual growth in housing allowances to increases in the
    national average monthly cost of housing and repeal the current
    process of increasing the Basic Allowance for Quarters at the
    same rate as the military pay raise. The provision would also
    incorporate the authorities for overseas station housing
    allowance and family separation housing allowance and would
    protect service members from reductions in the rate of overseas
    station allowance not attributable to fluctuations in foreign
    currency rates, so long as the member's housing costs have not
    been reduced.
        The committee does not intend that this reform of housing
    allowances be interpreted as an opportunity to reconsider the
    tax treatment of military housing allowances. The committee
    firmly believes that the housing allowances must remain non-
    taxable. The committee does intend that the portion of the new
    Basic Allowance for Housing which represents the amount
    previously characterized as the Basic Allowance for Quarters
    will continue to be reported as earned income for earned income
    tax credit purposes.

               Subtitle B--Bonuses and Special and Incentive Pays

      Section 611--One-Year Extension of Certain Bonuses and Special Pay
                         Authorities for Reserve Forces

        This section would extend the authority for the selected
    reserve reenlistment bonus, the selected reserve enlistment
    bonus, the selected reserve affiliation bonus, the ready
    reserve enlistment and reenlistment bonus, and the prior
    service enlistment bonus until September 30, 1999.

      Section 612--One-Year Extension of Certain Bonuses and Special Pay
    Authorities for Nurse Officer Candidates, Registered Nurses, and Nurse
                                  Anesthetists

        This section would extend the authority for the nurse
    officer candidate accession program, the accession bonus for
    registered nurses, and the incentive special pay for nurse
    anesthetists until September 30, 1999.

     Section 613--One-Year Extension of Authorities Relating to Payment of
                         Other Bonuses and Special Pays

        This section would extend the authority for the aviation
    officer retention bonus, special pay for health care
    professionals who serve in the selected reserve in critically
    short wartime specialties, reenlistment bonus for active
    members, enlistment bonuses for critical skills, special pay
    for enlisted members of the selected reserve assigned to
    certain high priority units, special pay for nuclear qualified
    officers extending the period of active service, and nuclear
    career accession bonus to September 30, 1999. The provision
    would also extend the authority for repayment of educational
    loans for certain health professionals who serve in the
    selected reserve and the nuclear career annual incentive bonus
    until October 1, 1999.

        Section 614--Increase in Minimum Monthly Rate of Hazardous Duty
                       Incentive Pay for Certain Members

        This section would increase the amount paid to service
    members engaged in certain hazardous duties to $150 a month.
    This section would also increase the minimum amount paid to
    service members engaged in non-aviator aircrew duties and air
    weapons controller aircrew duties to $150 a month, and would
    increase the amount paid to service members engaged in free
    fall parachute jumping to $225 a month. To provide for the
    increases, the committee recommends an increase of $33.6
    million in the services' military personnel accounts over the
    amount in the budget request.

       Section 615--Availability of Multiyear Retention Bonus for Dental
                                    Officers

        This section would amend section 301d of title 37, United
    States Code, to give the Secretary of Defense discretionary
    authority to provide multi-year contracts to dental officers,
    particularly critical specialists. These contracts would
    obligate dentists for up to four years and would enhance
    retention and management of the dental corps. The provision
    would require that dentists with a specialty in oral and
    maxillofacial surgery with at least eight years of service be
    automatically eligible for these contracts.

       Section 616--Increase in Variable and Additional Special Pays for
                            Certain Dental Officers

        This section would amend section 302b(a) of title 37,
    United States Code, to increase special pay for dental officers
    with eight or more years of service. Retention of dental
    officers remains a readiness concern for the military services.
    Retention of dentists is decreasing for every dental officer
    year group. Aggregate retention is 26 percent at 10 years of
    service and 13 percent at 20 years, compared to the Army's
    ideal force profile which calls for 40-50 percent retention at
    10 years and 30-35 percent retention at 20 years. In addition,
    the expected length of service was 7.4 years in 1996, down from
    11.8 years in 1982.

    Section 617--Special Pay for Duty at Designated Hardship Duty Locations

        The committee is concerned about inequities in the
    compensation of service members when serving in locations that
    present quality of life hardships. Furthermore, the committee
    believes that service members should not suffer a lower level
    of income when deployed or permanently assigned to hardship
    locations. Accordingly, this section would establish a hardship
    duty pay for service members serving in locations that present
    quality of life hardships up to a maximum of $300 a month. The
    committee intends that this hardship pay be varied, at the
    discretion of the Secretary of Defense, by location, grade,
    years of service, or other factors to recognize the level of
    hardships at different locations and the frequency and duration
    of hardships experienced by individual service members over the
    course of a military career.
        The committee believes that the payment of hardship duty
    pay in coordination with the flexibility authorized in this
    bill to pay the Basic Allowance for Subsistence when deployed,
    would give the Secretary the compensation tools needed to
    ensure that deployed service members are compensated in a fair
    and equitable manner.

                Section 618--Selected Reserve Reenlistment Bonus

        This section would restructure the payment options
    available to the secretaries of the military departments for
    the selected reserve reenlistment bonus and would extend the
    period of eligibility for the bonus from members with less than
    10 years total military service to members with less than 14
    years service.

      Section 619--Selected Reserve Enlistment Bonus for Former Enlisted
                                    Members

        This section would restructure the payment options
    available to the secretaries of the military departments for
    the selected reserve enlistment bonus for former enlisted
    members and would extend the period of eligibility for the
    bonus from members with less than 10 years total military
    service to those with less than 14 years service.

      Section 620--Special Pay or Bonuses for Enlisted Members Extending
                             Tours of Duty Overseas

        This section would authorize the payment of a bonus as an
    alternative to a monthly special pay to enlisted members who
    extend their tours of duty overseas.

         Section 621--Increase in Amount of Family Separation Allowance

        This section would increase the amount of family separation
    allowance paid to service members to $100 a month. To provide
    for the increase, the committee recommends an increase of $25.4
    million in the services' military personnel accounts over the
    amount in the budget request.

       Section 622--Change in Requirements for Ready Reserve Muster Duty
                                   Allowance

        This section would authorize the payment of the muster duty
    allowance not later than 30 days after the service member
    performs the duty.

                Subtitle C--Travel and Transportation Allowances

      Section 631--Travel and Transportation Allowances for Dependents of
                       Member Sentenced by Court-Martial

        This section would remove the restrictions on authorizing
    travel and transportation allowances to a dependent of a
    service member who receives certain court-martial sentences.

                       Section 632--Dislocation Allowance

        This section would establish grade-based rates for
    dislocation allowances and would index the annual growth of
    dislocation allowances to increases in the national average
    monthly cost of housing.

        Subtitle D--Retired Pay, Survivor Benefits, and Related Matters

        Section 641--Time in Which Certain Changes in Beneficiary Under
                       Survivor Benefit Plan May Be Made

        This section would remove the requirement that service
    members may change the beneficiary for the Survivor Benefit
    Plan from a former spouse to a spouse within one year of the
    date of remarriage. The committee notes that this provision
    does not change any of the other requirements with which the
    service member must comply before such a change of beneficiary
    could be selected.

                           Subtitle E--Other Matters

       Section 651--Definition of Sea Duty for Purposes of Career Sea Pay

        This section would authorize duty on a ship-based staff to
    be designated as sea duty for the purpose of qualifying for
    career sea pay.

       Section 652--Loan Repayment Program for Commissioned Officers in
                           Certain Health Professions

        This section would amend chapter 109 of title 10, United
    States Code, to establish an education loan repayment program
    for specific health professions. The program would allow the
    military departments to repay health professionals' education
    loans in return for active-duty service obligations. The
    program would serve as an incentive for improving the direct
    accession of fully-trained health care specialists needed in
    chronically understaffed specialties.

     Section 653--Conformance of NOAA Commissioned Officers Separation Pay
           to Separation Pay for Members of Other Uniformed Services

        This section would remove the limitations on the amount of
    separation pay that may be paid to commissioned officers of the
    National Oceanic and Atmospheric Administration (NOAA) and
    would exclude that portion of separation pay withheld for
    income taxes from the amount that must be repaid before
    becoming eligible for disability payments from the Department
    of Veterans Affairs. This section would conform the separation
    pay authority for NOAA commissioned officers with the
    separation pay authority for members of the armed services.

       Section 654--Reimbursement of Public Health Service Officers for
                               Adoption Expenses

        This section would authorize officers of the Commissioned
    Corps of the Public Health Service to receive reimbursement for
    adoption expenses in the same manner as members of the armed
    forces.

      Section 655--Payment of Back Quarters and Subsistence Allowances to
         World War II Veterans Who Served as Guerrilla Fighters in the
                                  Philippines

        The committee believes that World War II veterans who were
    captured by Japanese forces in the territory of the
    Philippines, escaped from captivity, and served as guerilla
    fighters in the Philippines are deserving of special
    consideration regarding the payment of quarters and subsistence
    allowances during the period when they served as guerilla
    fighters. Accordingly, this section would authorize the payment
    of quarters and subsistence allowances to qualified individuals
    who served as guerilla fighters during the period from January
    1942 through February 1945.

      Section 656--Space Available Travel for Members of Selected Reserve

        This section would provide authority for members of the
    Selected Reserve and their accompanying dependents to receive
    transportation on Department of Defense aircraft on a space
    available basis under the same terms and conditions that apply
    to active duty members of the armed forces and their
    dependents.

    Section 657--Study on Military Personnel At, Near, or Below the Poverty
                                      Line

        This section would direct the Secretary of Defense to
    conduct a study of members of the armed forces and their
    dependents who subsist at, near, or below the poverty line. The
    Secretary would be required to submit the findings of the study
    to the Congress not later than 180 days after the date of
    enactment of this act.

    Section 658--Implementation of Department of Defense Supplemental Food
            Program for Military Personnel Outside the United States

        Section 653 of the National Defense Authorization Act for
    Fiscal Year 1995 (Public Law 103-337) authorized a supplemental
    food program for military members and civilian employees of the
    armed services and their families assigned to overseas
    locations. The provision specified that the Secretary of
    Agriculture would provide the funding to support the program
    and the Secretary of Defense would administer the program. The
    committee notes that the program has never operated as intended
    because funding has never been provided.
        The committee urges the Secretary of Defense, in
    cooperation with the Secretary of Agriculture, to resolve the
    funding problem. In the interim, this section would authorize
    the Secretary of Defense to use funds appropriated to the
    Department of Defense to carry out the supplemental food
    program pending receipt of funding from the Secretary of
    Agriculture. Additionally, the section would, not later than 90
    days from the date of enactment of this act, require the
    Secretary of Defense to submit to the Congress a plan for
    implementing the program.
                       TITLE VII--HEALTH CARE PROVISIONS

                                    OVERVIEW

        The committee is concerned that for the second consecutive
    year the President's budget request did not provide adequate
    funding for the Defense Health Program (DHP). The General
    Accounting Office (GAO) estimated the shortfall for fiscal year
    1998 to be between $424.0 million and $471.0 million. More
    disturbing is the fact that GAO estimated that the health
    program costs for fiscal years 1998 to 2003 could be $8.4
    billion greater than estimated by the Department of Defense.
        In response to Congressional concern that the DHP was once
    again used as a funding source for under-funded defense
    programs, the committee understands that the Administration
    plans to submit a budget amendment to increase the DHP by
    $274.0 million. The committee is very concerned that the
    proposed budget amendment, which has not yet been received by
    Congress, still would not provide for full funding of the
    Defense Health Program.
        The committee understands that the funding shortfall in the
    proposed budget amendment is due in part because the Department
    does not provide a cost-growth factor for technology and
    intensity of treatment. According to the GAO, the Health Care
    Financing Administration and the Institute for Defense Analysis
    consider that a cost growth factor of about one or two percent
    for technology and intensity of treatment is a reasonable
    factor for the Department to apply in estimating the Defense
    Health Program budget.
        The committee further understands that the President's
    budget request contained a $98.0 million reduction in the DHP,
    an assumed level of savings from the application of utilization
    management techniques. The committee is concerned that a
    reduction of this magnitude is not adequately justified. The
    GAO concluded that the Department ``did not have managed care
    program performance data to permit a more reliable estimate
    and, in the absence of such data, did not derive the
    utilization management savings assumption from a formal
    methodology or analysis.'' The GAO also explained that the
    introduction of utilization management generally can be
    expected to generate one-time savings, not continuous
    additional savings as assumed in the future year defense plan.
        In addition to using faulty assumptions to generate
    ``savings'' in the Defense Health Program, the President's
    budget request leaves gaps in the DHP budget by not fully
    funding certain programs required by law, such as the Uniformed
    Services University of the Health Science.
        The consistent under-funding of the Defense Health Program
    reflects a serious lack of commitment by the Department to a
    key quality of life issue which service members consistently
    rank as a top concern. The DHP provides crucial health care
    services to millions of men and women who honorably serve or
    have served our country. The committee again strongly urges the
    Secretary of Defense to ensure that the DHP is fully funded in
    fiscal year 1999 and the future year defense plan.

                           ITEMS OF SPECIAL INTEREST

              CHAMPUS as a Second-Payer to Other Health Insurance

        The committee is concerned over the Department's recent
    policy change in the way the Civilian Health and Medical
    Program of the Uniformed Services (CHAMPUS) provides
    reimbursement for health care services after third-party
    insurers have paid their share of the service coverage. The
    committee understands that CHAMPUS has decided to apply its 115
    percent billing limit policy to payments made by other health
    insurance. Since many other health insurers reimburse providers
    at levels in excess of 115 percent of the CHAMPUS maximum
    allowable charge (CMAC), CHAMPUS now rarely pays any remaining
    cost to the beneficiary not covered by the other health
    insurance. This change is unfair to beneficiaries who have
    other health insurance and is seen as a further erosion in
    benefits promised to members who made a commitment to serve
    their country.
        While the committee understands that the new policy is
    consistent with Medicare policy, the committee also understands
    that the Department of Defense does not have the same ability
    to enforce its requirement that health care providers charge
    CHAMPUS beneficiaries no more than 115 percent of the CMAC
    rate. While Medicare can impose significant fines on providers
    who violate the Medicare laws, the Department has no similar
    authority. Therefore, the committee strongly urges the
    Secretary of Defense to establish mechanisms for enforcing the
    requirement that health care providers charge CHAMPUS
    beneficiaries no more than 115 percent of the CMAC rate, or
    that it continue to pay for health care services when paying as
    a second payer to other health insurance under the Department's
    previous policy.

                            Pacific Medical Network

        The committee authorizes $5.0 million in procurement to
    extend the Pacific Medical Network (PACMEDNET) prototype
    capability from Hawaii to the Korean peninsula and other remote
    Pacific areas to enhance military readiness and improve the
    quality of health care in the Pacific theater. This effort will
    ensure that military members and their families stationed in
    the Pacific will have access to state-of-the-art medical
    expertise and information no matter where in the world medical
    experts are physically located.

                                TRICARE Program

        The committee is concerned about several aspects of the
    Department of Defense's TRICARE managed health care program.
    The committee is most concerned that substantial changes are
    being made to the TRICARE program without benefit of a
    comprehensive evaluation of the program, as was directed by
    section 717 of the National Defense Authorization Act for
    Fiscal Year 1996 (Public Law 104-106). Moreover, the committee
    is concerned by a General Accounting Office finding that the
    Department does not have a full understanding of the cost
    implications of the numerous program changes. Such frequent,
    significant and potentially costly changes to this complex
    program makes it very difficult to gain a full understanding of
    the effectiveness of the program--to accurately measure its
    successes, failures and need for modification.
        While the committee is pleased with many of the preliminary
    findings of a survey of enrollees of TRICARE Prime, the HMO
    option--that enrollees are most satisfied with the quality of
    medical care they receive through TRICARE Prime, their access
    to care through Primeand the convenience of the plan--the
    committee believes it is critical for a full evaluation of the program
    to be conducted, particularly before significant programmatic changes
    are made. Therefore, the committee recommends that the Department hold
    the program stable while it conducts a thorough, independent evaluation
    of the program's ability to improve beneficiary access to quality
    health care in a cost-effective manner.
        Stabilizing the program for the period of time needed to
    conduct an extensive evaluation would permit the Department to
    focus on internal programmatic improvements such as the
    portability of enrollment, computer systems support and the
    transfer of patient record information to ensure more
    appropriate continuity of care and service for beneficiaries.
    Additionally, such an evaluation could address concerns being
    raised by many health care providers that the TRICARE program
    imposes too many administrative burdens on providers, and that
    TRICARE reimbursement rates are not adequate in some areas to
    attract quality providers. The committee believes that holding
    the program stable for the duration of this evaluation would
    permit full analysis of these issues so that valid
    recommendations for major design changes to improve the program
    could then be incorporated into any new or existing contract.
        While the committee lauds the Department's effort to
    implement capitated budgeting, the committee is concerned that
    this effort has not been fully evaluated on a limited basis to
    determine whether this concept would result in measurable
    improvements to the program. The committee believes that a key
    to successful use of capitated budgeting is the strict
    enforcement of access standards to ensure that access to care
    is not hampered. Without strict enforcement measures, military
    treatment facilities may be inclined to enroll more
    beneficiaries into TRICARE Prime at the military facility than
    the facility can effectively accommodate. As a result, the
    primary objective of the TRICARE program--improving access to
    care--may be difficult, if not impossible, to meet. Therefore,
    while the committee believes that the concept of alternative or
    revised financing appears to have merit, the committee
    continues to believe that efforts to introduce such financing
    mechanisms should be sufficiently tested in only one or two
    TRICARE regions prior to full implementation.

                  Vietnam Repatriated Prisoner of War Program

        The committee recommends an increase of $1.0 million in the
    Defense Health Program authorization to support the Vietnam
    Repatriated Prisoner of War Program (RPOW) at the Center of
    Prisoner of War Studies at the Naval Operational Medicine
    Institute in Pensacola, Florida. The committee understands that
    the RPOW program, a longitudinal study that has been ongoing
    for 24 years, is the only repository for prisoner of war case
    studies available in the United States and, as such, has
    provided a tremendous collection health data on former Navy,
    Marine Corps and Air Force prisoners of war (POWs).
    Furthermore, the program provides annual physical examinations
    to former Navy and Marine Corps POWs who are not eligible for
    medical care through the military health services system. The
    committee applauds the Naval Operational Medicine Institute for
    its efforts in this very worthwhile program.

                             LEGISLATIVE PROVISIONS

                        Subtitle A--Health Care Services

      Section 701--Expansion of Retiree Dental Insurance Plan to Include
       Surviving Spouse and Child Dependents of Certain Deceased Members

        This section would amend section 1076c(b)(4) of title 10,
    United States Code, to allow the survivors of members who died
    while on active duty to participate in the Retiree Dental
    Insurance Plan.

     Section 702--Provision of Prosthetic Devices to Covered Beneficiaries

        This section would amend section 1077(a) of title 10,
    United States Code, to allow for prosthetic devices to be
    provided to CHAMPUS beneficiaries for significant conditions,
    as determined by the Secretary of Defense.

                          Subtitle B--TRICARE Program

       Section 711--Addition of Definition of TRICARE Program to Title 10

        This section would amend section 1072 of title 10, United
    States Code, to include a definition of the TRICARE Program.

       Section 712--Plan for Expansion of Managed Care Option of TRICARE
                                    Program

        This section would require the Secretary of Defense to
    prepare a plan for expanding the managed care option of
    TRICARE--TRICARE Prime--into areas located outside the
    catchment areas of military treatment facilities where the
    Department determines it is cost effective to do so.
        The committee understands that there are certain rural
    areas where it would be difficult to establish a provider
    network to support TRICARE Prime. However, certain locations
    outside catchment areas may be ideal for this option due to the
    size of the beneficiary population at the location, as well as
    the existence of sufficient civilian health care provider
    networks.
        This section also would require the Secretary of Defense to
    evaluate the feasibility and cost-effectiveness of providing a
    health care stipend or a reduction in CHAMPUS cost-sharing
    requirements to active-duty members stationed in areas where it
    is not cost-effective or feasible to establish a managed-care
    option because there are few or no civilian health care
    provider networks in existence.

              Subtitle C--Uniformed Services Treatment Facilities

       Section 721--Implementation of Designated Provider Agreements for
                    Uniformed Services Treatment Facilities

        This section would amend section 722(c) of the National
    Defense Authorization Act for Fiscal Year 1997 (Public Law 104-
    201) to clarify the implementation date of the designated
    provider program of the Uniformed Services Treatment Facilities
    (USTFs). This provision would allow for the USTFs to begin
    delivery of health care services as a designated providerwithin
    six months of signing the new designated provider agreement with the
    Department of Defense, or upon implementation of TRICARE in the USTFs
    region, whichever date is later.

                   Section 722--Limitation on Total Payments

        This section would clarify the limitation on total program
    payments established in section 726(b) of the National Defense
    Authorization Act for Fiscal Year 1997 (Public Law 104-201).

            Section 723--Continued Acquisition of Reduced-Cost Drugs

        This provision would allow the Uniform Services Treatment
    Facilities to continue to purchase pharmaceuticals under the
    preferred pricing levels applicable to government agency
    purchases.

       Subtitle D--Other Changes to Existing Laws Regarding Health Care
                                   Management

     Section 731--Waiver or Reduction of Copayments Under Overseas Dental
                                    Program

        This section would amend section 1076a(h) of title 10,
    United States Code, to waive the dental copayment requirements
    for family members of active-duty members stationed overseas
    when they receive host-nation dental care under the Overseas
    Dental Program. The waiving of the cost-sharing requirements
    will afford family members the same level of dental benefit
    overseas that is available when they are stationed stateside.
    Additionally, this provision would eliminate a difficult
    administrative requirement to apply and track the application
    of cost shares. As a result, host-nation providers would be
    more likely to treat beneficiaries since they would no longer
    be required to perform these cumbersome administrative
    procedures.

      Section 732--Premium Collection Requirements for Medical and Dental
                               Insurance Programs

        This section would amend section 1076b(b) and 1076c(c) of
    title 10, United States Code, to change the premium method
    prescribed for the Selected Reserve Dental Program and the
    Retiree Dental Program. Title 10 currently directs the
    Secretary of Defense to deduct and withhold the premium for
    coverage by the dental plan from the basic pay of a reservist
    or the retired pay of a retired member.
        The Defense Finance and Accounting Service (DFAS) does not
    currently have the capability to deduct premium costs from the
    basic pay of selected reservists or the retired pay of retirees
    and indicates that that capability will not be available for
    two years. As a result, in order for the Department of Defense
    to meet the October 1, 1997 prescribed start date for these
    programs, the premium collection procedures need to be amended.
        The committee is concerned that DFAS does not yet have the
    capability to collect the premiums for these programs as
    directed by the current law. When the Selected Reserve Dental
    Program was established in the National Defense Authorization
    Act for Fiscal Year 1996, (Public Law 104-106) the committee
    understood that DFAS was in the process of preparing to
    implement this capability based on the congressional directive
    that premiums be withheld from the basic pay of the reserve
    member, as well as a requirement for the Department to
    establish procedures for retired service members to pay the
    annual enrollment fee for TRICARE Prime by allotment. However,
    the committee understands that DFAS still has no mechanism in
    place for withholding program premiums from either the basic
    pay of reserve members or the retired pay of military retirees,
    or for allowing retirees to pay their TRICARE enrollment fees
    by allotment. As a result, this provision also would require
    the Secretary of Defense to submit a plan for the timely
    implementation of the necessary capabilities within the DFAS.

    Section 733--Consistency Between CHAMPUS and Medicare in Payment Rates
                                  for Services

        This section would amend section 1079(h) of title 10,
    United States Code, to provide for greater consistency between
    CHAMPUS reimbursement rates for health care services and
    Medicare reimbursement rates.
        The committee has learned that in some cases CHAMPUS rates
    are below Medicare reimbursement rates, and that providers
    often are reluctant to serve CHAMPUS beneficiaries in these
    cases. This provision would require the CHAMPUS rates to be
    consistent with Medicare, except in those cases where the
    Secretary of Defense determines that higher CHAMPUS
    reimbursement rates are needed to ensure access to care. Also,
    with the consent of the health care provider, this section
    would allow the Secretary to authorize payments below the
    Medicare rate.

    Section 734--Use of Personal Services Contracts for Provision of Health
                Care Services and Legal Protection for Providers

        A recent opinion by the Department of Justice has
    determined that fee-basis physicians--part-time employees who
    provide medical qualification examinations to military-service
    applicants at Military Entrance Processing Command stations--
    are not covered by the government malpractice liability
    coverage that covers civil service employees. This section
    would clarify that personal services contract employees
    providing health care services, including fee-basis physicians,
    are covered by the same malpractice litigation rules as other
    Department of Defense health care providers. The section would
    also enable the Secretary of Defense the authority to provide
    for reasonable attorney's fees in any litigation in which
    government attorneys do not provide representation.

     Section 735--Portability of State Licenses for Department of Defense
                           Health Care Professionals

        This section would amend section 1094 of title 10, United
    States Code, to authorize members of the armed forces licensed
    to practice medicine and other health professions to practice
    such professions in any state, the District of Columbia, or a
    territory or possession of the United States while performing
    authorized duties for the Department of Defense.
        All military health professionals are required to maintain
    current professional licenses that authorize them to provide
    health services independently as health professionals. The
    licenses allow them to provide health care in military
    treatment facilities in any state, but they will not allow them
    to provide health services outside military treatment
    facilities for any purpose, not even for rendering services to
    military beneficiaries. This provision would remove the
    licensing obstacle that prevents military health professionals
    from practicing outside militaryfacilities, consistent with the
    Public Health Service Act (section 254f(e) of title 42, United States
    Code), that allows Public Health Service members licenses in one state
    to provide professional services in any state.

       Section 736--Standard Form and Requirements Regarding Claims for
                              Payment for Services

        This section would amend section 1106 of title 10, United
    States Code, to eliminate the requirement for non-participating
    providers who provide services to Civilian Health and Medical
    Program of the Uniformed Services (CHAMPUS) beneficiaries to
    submit claims for payment for services on behalf of the
    beneficiary. This requirement has had the unintended effect of
    impeding access to care for military beneficiaries.

                Section 737--Medical Personnel Conscience Clause

        This section would require the Secretary of Defense to
    establish a uniform policy with regard to a conscience clause
    for abortion and family planning services. Under this policy,
    medical personnel who, for moral, ethical, or religious
    reasons, object to performing an abortion or to providing
    family planning services will not be required to perform such
    procedures unless their refusal to do so poses life-threatening
    risks to the patient.

                           Subtitle E--Other Matters

    Section 741--Continued Admission of Civilians as Students in Physician
             Assistant Training Program of Army Medical Department

        This section would amend chapter 407 of title 10, United
    States Code, to permanently continue a demonstration program
    established by the National Defense Authorization Act for
    Fiscal Year 1995 (Public Law 103-337) that authorized the
    Secretary of the Army to allow students from civilian
    accredited institutions of higher education to attend physician
    assistant training at the Academy of Health Sciences at Fort
    Sam Houston, Texas, in return for the provision of certain
    academic services from the civilian institution.
        The demonstration program, which has helped improve health
    care services to medically under-served areas of Texas, was
    initiated by the late Representative Frank Tejeda. The
    continuation of this worthwhile program is dedicated in his
    honor.

        Section 742--Emergency Health Care in Connection with Overseas
      Activities of On-Site Inspection Agency of the Department of Defense

        This section would amend chapter 152 of title 10, United
    States Code, to authorize the Secretary of Defense to pay for
    emergency health care services obtained by a military member,
    civilian employee, or contractor employee of the On-Site
    Inspection Agency while on permanent or temporary duty in a
    former Soviet Union or former Warsaw Pact state.

       Section 743--Comptroller General Study of Adequacy and Effect of
             Maximum Allowable Charges for Physicians under CHAMPUS

        This section would require the Comptroller General of the
    United States to study the adequacy of the CHAMPUS
    reimbursement rates and the effect of these rates on the
    participation of physicians in CHAMPUS.
        The committee has received numerous complaints from
    beneficiaries and providers that physicians are no longer
    serving CHAMPUS beneficiaries because providers are not being
    reimbursed in a timely manner, and they are not receiving
    adequate reimbursement to tolerate such delays. The committee
    is concerned that beneficiary access to care not be denied
    because of slow reimbursement procedures or low reimbursement
    rates. This study is intended to identify possible remedies for
    improving access to care.

        Section 744--Comptroller General Study of Department of Defense
                               Pharmacy Programs

        This section would require the Comptroller General of the
    United States to evaluate the pharmacy programs of the
    Department of Defense. The study would examine the merits and
    feasibility of establishing a uniform formulary for military
    treatment facility pharmacies and civilian contractor
    pharmacies.
        The committee has received complaints from beneficiaries
    about being unable to receive certain prescribed medications at
    certain military pharmacies. The committee is concerned that
    many military facilities are severely reducing pharmacy
    formularies as a cost-saving measure. In some cases, these
    efforts may simply result in the shifting of costs from the
    individual facility to the Defense Health Program since
    beneficiaries may be forced to use TRICARE contractor
    pharmacies at an increased cost to both the Department of
    Defense and the beneficiary. This study is intended to identify
    solutions for providing for more uniform, cost-effective
    pharmacy programs.

        Section 745--Comptroller General Study of Navy Graduate Medical
                               Education Program

        This section would require the Comptroller General of the
    United States to evaluate recommendations made by the Medical
    Education Policy Council of the Navy Bureau of Medicine and
    Surgery to restructure the Navy's graduate medical education
    program. The provision would prohibit the Navy from making any
    changes to its graduate medical education program until the
    evaluation is completed and a report on the findings of the
    evaluation is submitted to Congress. The provision requires the
    report to be submitted by March 1, 1998.

     Section 746--Study of Expansion of Pharmaceuticals by Mail Program to
           Include Additional Medicare-Eligible Covered Beneficiaries

        This section would require the Secretary of Defense to
    provide a report to Congress, within six months of enactment of
    this act, on the feasibility, advisability and cost of
    extending the current mail-order pharmacy program for Medicare-
    eligible beneficiaries operating in areas affected by base
    closures to all Medicare-eligible beneficiaries who do not
    reside near a military medical treatment facility.
        Medicare-eligible retirees who live near a military medical
    facility may obtain prescription drugs from that facility.
    However, a large percentage of these beneficiaries reside
    outside of the 40-mile catchment area of a military medical
    facility. These beneficiaries either must drive long distances
    to receive their prescription drugs or pay full retail prices
    to fill their prescriptions. The committee received testimony
    from the General Accounting Office that a mail-order pharmacy
    program for Medicare-eligible retirees and their families who
    do not live near a military medical treatment facility would
    fill a significant gap in the medical coverage of military
    Medicare-eligible beneficiaries since Medicare generally does
    not provide a pharmacy benefit.
        The Department of Defense and Congress currently are
    evaluating various options for ensuring the continued, full
    medical coverage of Medicare-eligible military beneficiaries.
    The committee has long supported efforts to enact legislation
    that would require the Health Care Financing Administration,
    the agency that manages the Medicare program, to reimburse the
    Department of Defense for health care services provided to
    Medicare-eligible military beneficiaries (a concept known as
    ``Medicare subvention''). Currently, the committee is
    participating in a joint House and Senate task force effort to
    enact a Medicare subvention demonstration program. The Medicare
    subvention proposal under discussion, which if enacted would be
    part of legislation other than the National Defense
    Authorization Act, would require the Department to provide
    certain ``in-kind'' services, such as a pharmacy benefit.
    Therefore, in light of this requirement, and while efforts to
    evaluate other benefit options are ongoing, the committee
    believes the Department should fully evaluate the feasibility
    and desirability of establishing a mail-order pharmacy program
    to ensure that all Medicare-eligible military beneficiaries
    have access to inexpensive prescription drugs.
      TITLE VIII--ACQUISITION POLICY, ACQUISITION MANAGEMENT, AND RELATED
                                    MATTERS

                           ITEMS OF SPECIAL INTEREST

                        Cost Accounting Standards Board

        On June 25, 1996, the chairmen of the committees on
    National Security and Government Reform and Oversight directed
    the General Accounting Office (GAO) to conduct a study
    analyzing and assessing the mission of the Cost Accounting
    Standards Board in light of acquisition reform. The study was
    due at the end of calendar year 1996.
        To date, the study has not been initiated or submitted to
    the committees. Therefore, the committee reiterates its
    interest in the GAO proceeding with the study, as prescribed in
    the June 25, 1996 correspondence, and submitting
    recommendations to the committees on National Security and
    Government Reform and Oversight no later than the end of this
    calendar year or as soon as practicable thereafter.

                Management Responsibility for Acquisition Policy

        In the report on H.R. 1530, the fiscal year 1996 Defense
    authorization bill (H. Rept. 104-131), the committee noted that
    the Department's current organizational structure may have
    unnecessarily bifurcated the functional responsibility for
    development and implementation of acquisition policy. The
    committee remains concerned that this arrangement has led to
    confusion over who within the Department is charged with
    determining the scope, pace and overall direction of
    acquisition reform policy. The committee is further concerned
    over recent efforts to diminish the role and responsibility of
    the Deputy Under Secretary of Defense (Acquisition Reform)
    position, which remains vacant. The committee understands that
    the responsibility for entire functions, such as electronic
    commerce, have been proposed for transfer to other
    organizations, diluting the focus and effectiveness of this
    office.
        The committee remains convinced that acquisition reform
    still needs an internal advocate within the Department to
    advance, both internally and externally, the recent reform
    initiatives and to continue to move forward with other reforms
    where appropriate. Such an advocate should be afforded the
    necessary functional responsibility, bureaucratic clout, access
    to senior decision makers and staff resources to continue to
    guide the Department down the path of aggressive reforms in the
    acquisition system. The committee remains concerned that recent
    steps by the Under Secretary of Defense for Acquisition and
    Technology may be undermining this goal and strongly urges the
    Secretary to take immediate action to ensure that the
    acquisition reform function remains an effective component of
    the Office of the Secretary of Defense.

              Training and Education of the Acquisition Workforce

        In 1990, the committee conducted a thorough assessment on
    the quality and professionalism, as well as the education and
    training, of the defense acquisition workforce. The committee's
    year long review resulted in the Defense Acquisition Workforce
    Improvement Act (DAWIA), enacted as part of the Fiscal Year
    1991 National Defense Authorization Act for Fiscal Year 1991
    (Public Law 101-510). This landmark legislation was aimed at
    creating a professional acquisition corps within each military
    service-an issue of concern to this day.
        In the past, inadequate training of program management and
    procurement personnel frequently contributed to the systemic
    deficiencies in the defense acquisition system. Today, such
    training is essential to the prompt and effective
    implementation of recent acquisition reform legislation and
    administrative directives. The breadth and depth of these
    efforts are dependent upon ensuring that those involved in the
    process are fully trained and educated and have incorporated
    this knowledge in their day-to-day activities. Indeed, new
    procedures and authorities are dependent on the ability of the
    workforce to master new skills such as market research, capital
    planning and budgeting, and commercial item acquisition.
        The committee recognizes that a number of initiatives aimed
    at improving the education and training of the acquisition
    workforce already have been undertaken. These initiatives
    include: the establishment of the Defense Acquisition
    University's Acquisition Reform Communications Council,
    utilization of the Federal Acquisition Institute, the creation
    of the DOD Deskbook, the establishment of a Commercial
    Advocates Forum, and the development of the National Council of
    Acquisition Professionalism. Most of these new resources are
    non-traditional methods of education and training-allowing for
    increased distance learning and improved real time access to
    new materials. The committee encourages the continued, and
    expanded, use of such new and innovative methods of training
    the workforce-methods that go beyond the traditional classroom
    training (e.g. at specified locations which often requires
    extensive travel and time away from the job).
        Furthermore, the committee believes that a number of other
    steps could be taken to enhance the education and training of
    the workforce. For example, greater involvement in curriculum
    development by the private sector, in coordination with the
    Defense Acquisition University, would add useful and important
    perspectives to the development of education and training
    materials provided to the workforce. In addition, limited
    training and education opportunities are often cited as an
    important obstacle to the goal of ensuring that both the
    government and industry acquisition personnel are fully
    informed of the continuing changes in acquisition policy.
    Greater use of innovative and non-traditional educational tools
    available in the private sector has the potential to be of
    great assistance to the Department in addressing this problem.
        Finally, given the significant reductions in the overall
    size of the acquisition workforce endorsed by the committee, it
    is even more critical that acquisition reform changes be fully
    integrated throughout the Department. The sweeping procedural
    changes inherent to these reforms should invariably lead to
    process, organizational and structural reforms, many of which
    should lead to the elimination of existing acquisition
    positions. Therefore, in allocating limited acquisition
    workforce education and training resources, the committee
    strongly urges the Department to ensure that such resources
    arefocused on positions that will continue to remain relevant following
    the mandated reductions and restructuring.

                             LEGISLATIVE PROVISIONS

                         Subtitle A--Acquisition Policy

        Section 801--Case-by-Case Waivers of Domestic Source Limitations

        Section 810 of the National Defense Authorization Act for
    Fiscal Year 1997 (Public Law 104-201) extended the Secretary of
    Defense the authority to waive application of the domestic
    course limitations of section 2534 of title 10, United States
    Code, if he determines that such limitations ``would impede the
    reciprocal procurement of defense items under a memorandum of
    understanding providing for reciprocal procurement of defense
    items that is entered into under section 2531'' and also
    determines that that country does not discriminate against
    U.S.-produced defense products.
        Shortly following enactment of this law, the committee
    requested clarification from the Department as to how this
    expanded waiver authority would implemented. The committee
    received a written response from the Director of Defense
    Procurement stating that ``We plan to implement the McCain
    amendment by permitting case-by-case waivers based on written
    determinations by the Military Departments.'' The response also
    transmitted the planned changes to the Defense Federal
    Acquisition Regulations Supplement implementing this policy.
        Therefore, the committee was surprised and offended in
    receiving word that the Under Secretary of Defense for
    Acquisition and Technology, a few weeks before his scheduled
    departure from that office, issued a determination dated April
    7, 1997 invoking a blanket waiver of all limitations under
    section 2534 for all countries with which the United States has
    memoranda of understanding. This action stands in direct
    contradiction and violation of the position communicated to the
    committee on how the Department intended to implement the
    expanded waiver authority.
        Accordingly, the committee recommends a provision (sec.
    801) that would amend section 2534 of title 10, United States
    Code, to ensure that the waiver authority contained within this
    section can only be exercised on a case-by-case basis and not
    in a blanket manner. The committee specifically intends and
    directs that this provision render null and void the
    ``Determination and Waiver'' signed by the Under Secretary of
    Defense for Acquisition and Technology and dated April 7, 1997.
        Finally, the committee is concerned that this episode may
    place in doubt its ability to consider future provisions of law
    affording the Secretary of Defense discretion in exercising
    waivers and other mechanisms of legal convenience. Without some
    assurance that the Department's representations to the
    committee can be trusted and that deviations to such
    representations require, at minimum, an obligation on behalf of
    the Department to extend the committee prior notice or
    consultation, the committee will be hard pressed but to pursue
    the most restrictive course of action in considering future
    legislation.

     Section 802--Expansion of Authority To Enter Into Contracts Crossing
     Fiscal Years to All Severable Services Contracts Not Exceeding a Year

        This section would expand the authority of the Secretary of
    Defense or the Secretary of a military department to enter into
    severable service contracts which begin in one fiscal year and
    end in the next fiscal year.

        Section 803--Clarification of Vestiture of Title Under Contracts

        This section would establish in statute the title vesting
    provisions currently used by the Department of Defense in
    contractual agreements involving certain forms of contract
    financing.

         Section 804--Exclusion of Disaster Relief, Humanitarian, and
       Peacekeeping Operations From Restrictions on Use of Undefinitized
                                Contract Actions

        This section would amend section 2326 of title 10, United
    States Code to add disaster relief, humanitarian, and
    peacekeeping operations to the types of operations for which
    the head of an agency may waive the limits on the use
    undefinitized contracts.

     Section 805--Limitation and Report on Payment of Restructuring Costs
                            Under Defense Contracts

        This section would codify in title 10, United States Code,
    the policy restrictions contained in section 8115 of the
    Omnibus Appropriations Act for Fiscal Year 1997 (Public Law
    104-208) relating to the allowability of restructuring costs
    under defense contracts and requiring a determination by the
    Secretary of Defense that the proposed business combination
    will lead to savings that are at least twice the amount of the
    costs allowed. This section would also consolidate the
    requirements of section 818 of the National Defense
    Authorization Act for Fiscal Year 1995 into a new title 10,
    United States Code, provision.

        Section 806--Authority Relating to Purchase of Certain Vehicles

        This section would amend section 2253 of title 10, United
    States Code by increasing the limit on the cost of purchase of
    right hand drive vehicles from $15,000 to $30,000.

                  Section 807--Multiyear Procurement Contracts

        This section would require that no future multiyear
    procurement contract may be entered into by the Secretary of
    Defense unless such contract is specifically authorized by law
    in an act other than an appropriations act. This section would
    also codify various requirements that the Secretary of Defense
    must meet in order to either enter into or terminate a
    multiyear procurement contract.

               Section 808--Domestic Source Limitation Amendments

        This section would amend section 2534 of title 10, United
    States Code, to add shipboard work stations to the list of
    naval vessel components required to be procured from domestic
    sources. This section would also make permanent the expired
    requirement to procure certain valves and machine tools from
    domestic sources.

      Section 809--Repeal of Expiration of Domestic Source Limitation for
                        Certain Naval Vessel Propellers

        This section would amend section 2534 of title 10, United
    States Code, to make the existing limitation on the procurement
    of naval vessel propellers permanent.

                           Subtitle B--Other Matters

      Section 821--Repeal of Certain Acquisition Reports and Requirements

        This section would repeal a number of miscellaneous
    acquisition related reporting requirements.

      Section 822--Extension of Authority for use of Test and Evaluation
                      Installations by Commercial Entities

        This section would amend section 2681 of title 10, United
    States Code, to extend the expiration of existing authority
    allowing Department of Defense test and evaluation facilities
    to make excess capacity available to the commercial sector.

      Section 823--Requirement to Develop and Maintain List of Firms Not
                         Eligible for Defense Contracts

        This provision would require the Secretary of Defense to
    develop and maintain a list of firms that have been designated
    ineligible for Department of Defense (DOD) contracts because
    they are owned or controlled by governments of countries that
    support terrorism. This required list would be used to prevent
    firms on the list from performing as subcontractors on DOD
    contracts. The Department of Defense would provide a copy of
    the list to each firm that submits a bid in response to a DOD
    solicitation. Such firms responding to DOD solicitations would
    not use a firm on the list for equipment, parts, or services in
    the performance of a DOD contract.
        Under section 2327(a) of title 10, United States Code, a
    firm responding to a DOD solicitation must disclose if it is
    owned or controlled by the government of a foreign country that
    the Secretary of State has determined to repeatedly support
    acts of international terrorism. Under section 2327(b), the
    Department of Defense cannot award a contract to such a firm.
    However, this provision only applies to prime contractors. If a
    subcontractor of a firm performing on a DOD contract is owned
    by a foreign country that supports international terrorism,
    section 2327 does not prohibit their performance as a
    subcontractor.
        The committee notes that such treatment of subcontractors
    owned by governments that support terrorism is inconsistent
    with the spirit of section 2327 of title 10. The committee
    believes that foreign governments that support international
    terrorism must in no way stand to benefit from Department of
    Defense contracts.
          TITLE IX--DEPARTMENT OF DEFENSE ORGANIZATION AND MANAGEMENT

                           ITEMS OF SPECIAL INTEREST

                      Armed Services Patent Advisory Board

        The committee is aware that the Armed Services Patent
    Advisory Board is responsible for coordinating security reviews
    of patent applications to determine if they contain sensitive
    technical information, the public release of which would be
    detrimental to national security. In performing this function,
    the Board fulfills the role assigned to the Department of
    Defense under chapter 17 of title 35, United States Code. The
    Patent Advisory Board is an unfunded program and as such, is
    staffed with personnel from the legal offices of the military
    departments.
        However, the committee notes that the Defense Technology
    Security Administration (DTSA) carries out near the same
    technology security review function when reviewing export
    license applications to determine if the technologies involved
    would harm national security if exported to foreign entities.
    In fact, the Defense Technology Security Administration and the
    Patent Advisory Board confer with many of the same technical
    experts at field activities of the military departments. The
    DTSA staff possesses technical knowledge that enable it to
    prescreen items before resorting to military field activities
    for analyses. A DTSA review can therefore be more expeditious
    than reviews coordinated by the Patent Advisory Board, since
    Board personnel are primarily legal staff members with limited
    knowledge of defense technologies.
        Therefore, the committee directs the Secretary of Defense
    to terminate the Armed Services Patent Advisory Board and
    transfer its functions to the Defense Technology Security
    Administration. While the committee recognizes that as an
    unfunded program the Board's termination would not necessarily
    result in cost savings, the committee believes that transfer of
    the security review function to the Defense Technology Security
    Administration would result in more expeditious and thorough
    reviews.

                         Defense Acquisition Workforce

        In the 104th Congress, the committee addressed specific
    concerns with the size and number of acquisition organizations
    and positions relative to the declining Department of Defense
    (DOD) budget and modernization program. Many of the acquisition
    reforms initiated by the committee were intended to ultimately
    reduce costs both to the private sector as well as the federal
    government. Full implementation of acquisition reforms can, and
    should, also result in fundamental changes and reductions in
    the structure of the Department's acquisition organizations.
    Specifically, it was the intent of the committee in relieving
    the Department from the burden of administering various
    antiquated and restrictive federal procurement laws that
    substantially fewer acquisition personnel would be required.
        In seeking to establish a balance between the Department's
    diminished modernization program and the Department's
    acquisition bureaucracy, the committee supported moderate
    reductions in acquisition personnel in section 906 of the
    National Defense Authorization Act for Fiscal Year 1996 (Public
    Law 104-106) and section 902 of the National Defense
    Authorization Act for Fiscal Year 1997 (Public Law 104-201).
    The committee understands that in implementing these
    reductions, the Department exceeded the Congressional mandates
    in fiscal year 1996 and plans to do so again in fiscal year
    1997.
        In addition to seeking overall reductions in personnel, the
    committee sought to engage the Department in determining the
    appropriate structure and organization of its future
    acquisition system. Section 906 of the National Defense
    Authorization Act for Fiscal Year 1996 (Public Law 104-106)
    required the Department to examine consolidation and
    reorganization options and report to Congress on its
    recommendations. Unfortunately, the report provided by the
    Department demonstrated no real effort to consider the various
    organizational and management options identified by the law
    and, not surprisingly, failed to propose any significant
    alterations to the current acquisition structure.
        The committee notes the 1995 Commission on Roles and
    Missions (CORM) sharply criticized the Department's acquisition
    organizations for maintaining redundant staffs and facilities
    for many types of common acquisition support activities.
    Therefore, the committee rejects the Department's conclusion in
    its report to Congress pursuant to section 906 of the National
    Defense Authorization Act for Fiscal Year 1996 (Public Law 104-
    106) that it has adequately assessed and implemented options
    for restructuring its acquisition organizations for the
    purposes of improved efficiency.
        The committee strongly disagrees with the Department's
    assertion that increased downsizing of the workforce would
    place at risk the ability of the Department to equip combat
    forces and modernize against future threats. Rather, the
    committee regards the disproportionate size of the defense
    acquisition personnel workforce and infrastructure relative to
    the dramatically reduced procurement accounts as a serious
    drain upon current and future resources. The committee believes
    that the Department's continued refusal to restructure and
    streamline acquisition infrastructure will result in the
    squandering of resources urgently needed to offset
    modernization, readiness and quality of life shortfalls.

                         Defense Boards and Commissions

        The committee is aware the Department of Defense (DOD) has,
    in response to Presidential Executive Order 12838,
    ``Termination and Limitation of Federal Advisory Committees,''
    reduced discretionary boards and commissions by almost one-
    third since 1993. In compliance with section 1054 of the
    National Defense Authorization Act for Fiscal Year 1996 (Public
    Law 104-106), the Department of Defense submitted a report to
    Congress on the merits of remaining DOD boards and commissions.
    The Department failed, however, to propose any significant
    further elimination of its advisory committees. The committee
    notes the current 53 discretionary and statutorily established
    boards and commissions, to include the Advisory Group on
    Electron Devices, Armed Forces Epidemiological Board, and
    Inland Waterways Users Board, will cost an estimated $16.2
    million in fiscal year 1997. The committee is concerned that
    many of the Department's statutory and discretionary boards and
    commissions may have outlived their original purpose.

                             Defense Reorganization

        The post Cold War global security environment has witnessed
    dramatic reductions in the size and capability of the U.S.
    military force structure while the organizational composition
    of the Department of Defense, especially at the management
    level, has remained largely unchanged. Since 1987, the Army has
    lost eight active divisions, the Navy has decommissioned three
    carriers and over 200 ships, and the Air Force has cut 12
    active and five reserve tactical wings. Notably, 1997 active
    duty personnel levels are equivalent to 1950 pre-Korean War
    levels. Meanwhile, from 1985 to 1996, the Office of the
    Secretary increased its staff 40 percent, military department
    headquarters continue to maintain redundant staffs, and, in
    spite of a 70 percent drop in procurement accounts since 1985,
    the Department's acquisition infrastructure has remained
    largely static.
        The committee maintains that the Department currently has
    sufficient authority to reorganize and restructure itself but
    has demonstrated little willingness to pursue such reforms. Not
    since the passage of the Goldwater-Nichols Department of
    Defense Reorganization Act of 1986 (Public Law 99-433) has the
    defense establishment undergone significant scrutiny and
    reform.
        To address these disturbing trends, the committee undertook
    a number of initiatives during the 104th Congress to encourage
    and compel the Department to focus on these matters and arrive
    at its own options and solutions. The committee deliberately
    chose not to legislate specific prescriptive remedies on the
    belief that the Department was better suited to develop such
    detail on its own. Therefore, the committee provided the
    Department with broad guidance and, where possible, relief from
    existing statutory limitations and dictates on organizational
    matters. To the committee's continuing disappointment, the
    Department's response to these efforts has ranged from passive
    resistance to outright defiance of statutory direction. After
    two years of attempting a preferred approach of cooperation and
    collaboration, the committee finds itself no further along in
    effecting the necessary change in the Department's management
    and organizational structure.
        The committee reaffirms its commitment to pursuing
    meaningful management reform of the Department of Defense and
    intends to make this goal a principal focus of its oversight
    and legislative activities for the remainder of this Congress.

           Management Headquarters and Headquarters Support Personnel

        The committee continues to be concerned with the size and
    cost of the Department's management headquarters and
    headquarters support activities. The committee believes the
    Department needs to further examine the structure and size of
    its management headquarters and headquarters support activities
    to eliminate unnecessary duplication, outdated modes of
    organization, and wasteful inefficiencies.
        The committee notes with concern that the Department has
    yet to submit the report and recommendations required by
    section 904 of the National Defense Authorization Act for
    Fiscal Year 1997 (Public Law 104-201). While the Quadrennial
    Defense Review (QDR) has cited reducing and streamlining
    management headquarters and headquarters support activities as
    a priority, it has postponed implementation of reductions until
    another internal study reviews the issue and makes
    recommendations to the Secretary of Defense by August 29, 1997.
        The committee is encouraged with the QDR's assertion that
    the reduction of layers of oversight at headquarters and
    operational commands and elimination of management and support
    personnel will yield 10,000 military and 14,000 civilian
    positions. The committee concurs with the need to drawdown
    unnecessary infrastructure and supports the Department in this
    regard.
        The committee is aware of several organizations that have
    not been reported by DOD as management headquarters or
    headquarters support, but appear to be performing those
    functions. These organizations include the Air Force Studies
    and Analyses Agency, U.S. Army's Forces Command Field Support
    Activity, Air Combat Command's Studies and Analyses Squadron,
    and the U.S. Atlantic Command's Information Systems Support
    Group. Furthermore, the committee understands only a portion of
    the headquarters staffs of the DOD Inspector General and some
    Defense Agencies are reported by DOD as being management
    headquarters or headquarters support. For example, none of the
    headquarters of the numbered air forces are currently reported
    (although they were in the past), and the Navy's Program
    Executive Offices apparently have not been reported in spite of
    the DOD directive requiring their inclusion.
        The committee understands the Department will address the
    inadequacies of the current definition of management
    headquarters and headquarters support activities in its August
    29, 1997 report to the Secretary. Accordingly, the committee
    expects the aforementioned inconsistencies will be addressed in
    the August report.

                             LEGISLATIVE PROVISIONS

     Section 901--Limitation on Operation and Support Funds for the Office
                          of the Secretary of Defense

        The committee in the 104th Congress passed a series of
    measures designed to improve the organization of the Office of
    the Secretary of Defense (OSD). The basis of the committee's
    action was concern with the expanding and evolving scope of OSD
    staff responsibilities at the expense of the primary role of
    enhancing the Secretary's decision making ability. While active
    duty forces were cut 33 percent over the last ten years and
    have been required to adapt innovative resource management
    techniques, OSD increased its size by 40 percent. The committee
    continues to be concerned with OSD's unwillingness to modify
    its excessive management structure in spite of the overwhelming
    fiscal pressures facing the rest of the Department. The
    committee believes OSD has deliberately avoided any downsizing
    effort and has elected not to lead the Department by example.
        The committee notes with concern the Department's non-
    compliance with section 901 of the National Defense
    Authorization Act for Fiscal Year 1996 (Public Law 104-106)
    requiring a report on specific plans for improving
    organizational efficiency and effectiveness of the Office of
    the Secretary. The committee was disappointed to learn the
    Quadrennial Defense Review (QDR) postponed consideration of OSD
    reorganization pending an internal review panel. The committee
    believes the Department has been provided ample time to comply
    with section 901 and fails to support the rationale behind
    delaying these important issues. Specifically, the QDR states
    the Task Force on Reform will commence its examination of OSD
    in the spring of 1997 and will report its findings by November
    30, 1997, almost two years after the law required.
        The committee strongly believes OSD should reduce its size
    and report to Congress pursuant to section 901 of the National
    Defense Authorization Act for Fiscal Year 1996 (Public Law 104-
    106). The committee recognizes OSD is not implementing
    personnel reductions at a rate sufficient to achieve the
    statutory requirement by October 1, 1997, as specified in
    section903 of the National Defense Authorization Act for Fiscal
    Year 1997 (Public Law 104-201). Accordingly, the committee recommends a
    provision (sec. 901) that would reduce the funding associated with the
    operation and support activities of the Office of the Secretary of
    Defense by 20 percent, as reflected within section 301 of this bill,
    and would restrict the obligation of 10 percent of authorized funding
    until the Department conforms to the statutory requirement to provide
    reports as required by section 901 of the National Defense
    Authorization Act for Fiscal Year 1996 (Public Law 104-106) and section
    904 of the National Defense Authorization Act for Fiscal Year 1997
    (Public Law 104-201).

             Section 902--Components of National Defense University

        This section would modify the definition of the National
    Defense University by adding the Information Resources
    Management College, and would also clarify the authority of the
    Secretary of Defense to hire professors, lecturers and
    instructors for the Information Resources Management College.

     Section 903--Authorization for the Marine Corps University to Employ
                              Civilian Professors

        This section would authorize the Secretary of the Navy to
    employ civilian professors at any of the seven colleges within
    the Marine Corps University whose principal course of
    instruction is 10-months or more long.

         Section 904--Center for the Study of Chinese Military Affairs

        Section 904 would mandate the establishment of a Center for
    the Study of Chinese Military Affairs at the National Defense
    University. This center would provide a focus for academic
    study to develop understanding of Chinese political, security
    and military strategy; military operational art; tactical and
    organizational doctrine; and similar and related subjects. The
    center is intended to provide senior Department of Defense
    officials and the broader policy-making community with
    independent analysis of these issues.
        The committee emphasizes that the success of the center in
    fulfilling its mandate would be dependent upon the quality of
    its leadership and scholarship and its ability to operate in a
    manner removed from political influence of any kind. The
    center's director must be a distinguished scholar and possess
    the management skills necessary to shape the center's research
    toward a cohesive end. The director also must serve as a strong
    advocate for the center's academic independence.
        The center's prime mission would be to provide detailed
    analysis of Chinese military affairs. However, the center also
    should balance this requirement with the requirement to place
    military affairs in context. Consequently, the committee urges
    the that the center take a comprehensive ``net assessment''
    approach to its research. The committee also directs that the
    center publish a report summarizing its research and the
    conclusions of that research not later than December 31, 1998
    and following on an annual basis in succeeding years. This
    report should also provide a summary analysis of current and
    projected Chinese military capabilities and their relationship
    to Chinese strategic goals.
        The committee believes a key strategic question for the
    United States in the coming century will be the role played by
    an increasingly powerful China in military and security
    affairs. The committee regards the center as an important tool
    for developing a deeper understanding of the factors shaping
    the answer to that question. Therefore, the committee directs
    that, of the amounts available to the Secretary of Defense for
    Defense-wide operation and maintenance, excluding funds
    otherwise available for the operations of the National Defense
    University and with no offsetting reduction in funds available
    to the National Defense University, the Secretary shall make
    $5.0 million available for the center.

                 Section 905--White House Communications Agency

        This section would limit funding for the White House
    Communications Agency (WHCA) to an amount slightly below fiscal
    year 1997 levels. The committee has been concerned that WHCA's
    functions and activities have been greatly expanded beyond its
    initial mission of providing telecommunications support to the
    President.
        The limitations proposed by this section are intended to
    ensure compliance with the National Defense Authorization Act
    for Fiscal Year 1997 (Public Law 104-201) which requires the
    Secretary of Defense, starting in fiscal year 1998, to ensure
    that support services provided on a nonreimbursable basis by
    the White House Communications Agency be limited to the
    provision of telecommunications support to the President, Vice
    President, and related elements. The act also requires the
    Secretary of Defense to report to Congress at the end of each
    quarter of fiscal year 1997 on the non-telecommunication
    support services that were provided by the White House
    Communications Agency to the President during the preceding
    quarter. The Secretary of Defense provided the first of these
    statutorily required reports on May 13, 1997. The report
    indicates the total cost of non-telecommunications support
    services provided by the White House Communications Agency
    during the first quarter of fiscal year 1997 was approximately
    $2.2 million.
        This section would limit WHCA operation and maintenance
    funds to $55.0 million for fiscal year 1998. The budget
    justification documents provided to the committee inadequately
    support an increase over the fiscal year 1997 level. Further,
    limiting WHCA operation and maintenance to $55.0 million
    represents a reduction from the fiscal year 1997 level by an
    amount equivalent to the cost of non-telecommunication support
    services. The committee notes that the White House can still
    continue to receive non-telecommunication support services from
    WHCA as needed on a reimbursable basis.
        The committee further believes there is no justification
    for non-telecommunication support services to be provided to
    the President by military personnel assigned to the White House
    Communications Agency, as non-telecommunication support
    services can be just as effectively provided by civilian
    personnel. Therefore, the committee directs the Secretary of
    Defense to conduct a review of the services and functions of
    the White House Communications Agency to determine which of
    those services and functions must be conducted by military,
    instead of civilian, personnel for national security reasons.
    The committee further directs the Secretary to provide a report
    to the congressional defense committees no later than December
    31, 1997 incorporating the results of the review and
    incorporating a plan to use civilian personnel to provide those
    WHCA services and functions that do not require performance by
    members of the armed services.

      Section 906--Revision to Required Frequency for Provision of Policy
                         Guidance for Contingency Plans

        This section would amend section 113(g)(2) of title 10,
    United States Code, to permit policy guidance for contingency
    plans to be given every two years or more frequently as needed,
    rather than annually.

     Section 907--Termination of the Defense Airborne Reconnaissance Office

        This section would abolish the Defense Airborne
    Reconnaissance Office (DARO), and transfer specified management
    responsibilities for the defense airborne reconnaissance
    program to the Director, Defense Intelligence Agency (DIA)
    under his authorities as Director of Military Intelligence
    (DMI) and Joint Military Intelligence Program (JMIP)
    Coordinator. The Director, DIA would be further required to
    provide a transition plan, with a draft DMI DARP charter, to
    the Congressional defense and intelligence committees no later
    than the submission of the fiscal year 1999 President's budget.
        Since creation, the DARO has failed to successfully develop
    new unmanned aerial vehicles, except for Predator, which was
    under development prior to formation of the DARO. DARO-managed
    UAV acquisition programs have been marred with program delays,
    cost escalation, technical problems and in general, failure to
    provide the services with this critical new capability.
    Therefore, this provision is intended to return UAV system
    acquisition responsibility to the appropriate military
    services, while retaining overall airborne reconnaissance
    coordination and oversight responsibility within the Department
    of Defense.
                          TITLE X--GENERAL PROVISIONS

                             Counterdrug Activities

                                    Overview

        The budget request for Department of Defense Fiscal Year
    1998 drug interdiction and counterdrug activities contained
    $652.6 million, plus $156.0 for operational tempo which is
    included within the operating budgets of the military services.
    This represents a net decrease of $154.4 million from the
    fiscal year 1997 appropriated level of $807.0, and an increase
    of $5.6 million for operational tempo from the fiscal year 1997
    appropriated level of $150.4.
        The committee recommends an authorization for fiscal year
    1998 defense counterdrug activities as follows:

                            [In thousands of dollars]

    FY98 Drug Interdiction & Counterdrug Request..................  $652,582
        Dismantling Cartels.......................................    54,306
        Source Nation Support.....................................   166,763
        Detection and Monitoring..................................   124,686
        Law Enforcement Agency Support............................   223,589
        Demand Reduction..........................................    83,238
    Recommended Decreases:
        National Imagery & Mapping Agency (Project #1401).........       800
        Non-Intrusive Inspection Systems (Project #1403)..........     4,611
    Recommended Increases:
        Gulf States Counterdrug Initiative (Project #7406)........     4,000
        Multi-Jurisdictional Task Force (Project #7408)...........     1,000
        Optionally Piloted Air Vehicle (PE #305889D)..............     2,500
        Southwest Border Fence Project............................     7,000
    Recommendation................................................   661,671

                           Items of Special Interest

    C-26 aircraft photo reconnaissance upgrade

        The budget request does not contain funding for the Common
    Airborne Imagery Processing System (CAIPS) and electro optical
    (EO) sensors for the Air National Guard C-26 aircraft.
        The committee understands that the procurement of EO
    sensors and CAIPS would allow the National Guard to upgrade the
    current chemical-based imagery capability to a digital system
    which could provide near-real time photo-quality imagery to
    requesting law enforcement agencies. Accordingly, the committee
    urges the Department to evaluate this reconnaissance capability
    and consider funding the C-26 upgrade from within the fiscal
    year 1998 National Guard program.

    Gulf states counterdrug initiative

        The committee continues to support the Gulf States
    Counterdrug Initiative (GSCI) and is concerned that the budget
    request of $1.1 million does not adequately support the funding
    requirements of this program. The committee understands that
    this funding level does not include sufficient system training
    costs or the sustainment of command, control, communications
    and computer (C4) capabilities for the states of Alabama,
    Georgia, Louisiana and Mississippi.
        Therefore, the committee recommends an authorization of
    $5.1 million, an increase of $4.0 million over the requested
    amount to support these program improvements. The committee
    maintains that none of these funds should be utilized for
    construction or other infrastructure-related costs; rather,
    funds authorized for this program should continue to be used in
    support of training, on-site support and maintenance of the C4
    network and software system. Further, the committee encourages
    the designation of non-Department of Defense (DOD) funds for
    additional operations and maintenance (O&M) and procurement
    costs identified by law enforcement agencies to sustain the
    GSCI information system.

    Mapping, charting and geodesy

        The budget request contained $8.4 million for continued
    National Imagery and Mapping Agency (NIMA) support to the
    Defense Intelligence Counterdrug Program's (DICP) mapping,
    charting and geodesy (MC&G) requirements.
        The committee has taken action elsewhere in this report
    intended to modernize and streamline NIMA MC&G operations. This
    action would encourage NIMA to move more rapidly toward
    privatization and use of geospatial data maintenance rather
    than developing paper map products.
        Therefore, the committee recommends an authorization of
    $7.6 million for this effort, a decrease of $0.8 million.

    Mexican, Caribbean and South American initiative

        The committee continues to support the essential role of
    the Department of Defense (DOD) in reducing the flow of illegal
    drugs into the United States. To accomplish this mission,
    Congress has charged the DOD to act as the single lead federal
    agency for the detection and monitoring of aerial and maritime
    transit of illegal drugs into the United States. In addition,
    DOD is to integrate appropriate command, control,
    communications, and technical assets of the federal government
    into an effective communications network. According to the DOD
    Counterdrug Program, the Department supports foreign law
    enforcement agencies and military governments by providing
    initial detection and monitoring, intelligence, operational
    planning assistance, training in tactical procedures and
    equipment maintenance, infrastructure improvements, and
    logistics/communications support. In this capacity, Congress
    granted authority to DOD through section 1004 of the National
    Defense Authorization Act for FiscalYear 1991, as amended
    (Public Law 101-510) and sections 517 and 506(a)(2)(A) of the Foreign
    Assistance Act of 1961, as amended.
        Section 1031 of the National Defense Authorization Act for
    Fiscal Year 1997 (Public Law 104-201) expanded DOD authority to
    provide equipment and maintenance for the Government of Mexico
    to aid in its counterdrug activities. This support was granted
    conditionally as a short-term, limited means of enhancing
    Mexico's counterdrug capabilities and was not intended to
    replace or circumvent the established foreign assistance
    authorities or resources of the Department of State. However,
    the committee is aware of a provision included in the
    Administration's legislative proposal that would expand current
    DOD authority to include support for not only Mexico, but
    Colombia, Peru and selected Caribbean countries; would increase
    the amount of support to $150.0 million over five years; and
    would expand the nature of support to include lethal equipment
    to enhance the interdiction capability of the recipient
    nations.
        The committee acknowledges the recent success achieved by
    participating nations in their combined efforts to stem the
    production and transfer of illegal drugs. Specifically, U.S.
    and regional forces under Operation Laser Strike successfully
    interfered with narcotrafficking along air routes in the Andean
    region and have caused the price of coca to plummet. Analysis
    suggests that the narcotraffickers may have adjusted to this
    initiative and have begun to transit cocaine along the rivers
    of the Andean region and the Amazon basin, particularly in
    Peru. Based upon this presumption, the Administration's
    proposal outlined above is focused on an enhanced riverine
    interdiction plan. While the committee supports the
    Administration's strategy to pursue a program which capitalizes
    upon the achievements of Operation Laser Strike, the current
    proposal is inappropriately resourced and uncoordinated among
    the U.S. and regional governments and militaries.
        The committee is also concerned with the proposed expansion
    of DOD authority to provide funds for a foreign assistance
    program from within the Department's counterdrug account.
    Although the committee continues to support the mission
    established by the DOD Counterdrug Program, it believes that
    the direct provision of material and assistance to foreign
    nations is not a proper utilization of the unique capabilities
    offered by DOD. Rather, the Administration's initiative should
    be authorized and resourced more appropriately as a part of the
    International Narcotics Control Program of the Department of
    State. While the proposed legislation advocates a coordinated
    management effort between the Departments of Defense and State,
    the lack of coordination thus far between the two agencies has
    manifested itself in a major disconnect over strategic planning
    between U.S. Southern Command (SOUTHCOM) and the relevant U.S.
    embassies. Given the absence of overall integration in planning
    among those responsible for the implementation of the program,
    the committee questions the Administration's long-term
    commitment to this ambitious riverine strategy.
        The committee also notes with concern the assumptions made
    by the Administration in developing the enhanced riverine
    interdiction plan. Although it seems plausible, there has been
    no threat assessment to confirm that narcotraffickers have in
    fact shifted their transit routes to the rivers in a magnitude
    that would justify such an expansion of DOD authorities and
    resources. The relevant U.S. embassies and SOUTHCOM have not
    contributed to the proposal a coordinated lessons-learned
    evaluation of problems encountered and solutions developed as a
    result of previous riverine operations in the region, nor does
    the plan include an outcome-based reporting system to measure
    the program's success. Further, the committee understands that
    the Administration's proposal is based upon the presumed
    existence of clear roles and missions within the respective
    nations' institutions. On the contrary, long-standing rivalries
    are certain to hamper the efforts of the host country military
    and national police forces without the establishment of direct
    counterdrug authorities to foster interagency cooperation.
        In addition, the committee is aware of concerns raised by
    the General Accounting Office (GAO) in a February 1997 report
    entitled ``Drug Control: Long-Standing Problems Hinder U.S.
    International Efforts'' (GAO/NSIAD-97-75). The report concluded
    that despite legislation mandating end-use monitoring, past
    history has shown that the United States has been unable to
    ensure that equipment given to Mexico, Colombia and Peru has
    been used by the host nations as intended upon delivery. The
    committee is concerned with the transfer of equipment,
    especially lethal equipment, to unstable governments struggling
    against ``narcoguerrillas'' and other insurgent factions. Also,
    given the pervasive influence of powerful drug lords over all
    levels of government in the proposed participating countries,
    the threat of corruption affecting the use of counterdrug
    equipment needs to be more fully addressed by the
    Administration. The committee notes the existence of corruption
    exhibited most recently in Mexico with the arrest of General
    Jesus Gutierrez Rebollo, the former Mexican ``drug czar,'' and
    by testimony implicating the involvement in drug trafficking of
    several other high-ranking Mexican military leaders.
        In light of these concerns, the committee strongly urges
    the Administration to reevaluate its enhanced interdiction
    plan. Should a threat assessment justify the need for an
    ambitious riverine effort, coordination between the Departments
    of Defense and State needs to preempt any planning at the
    SOUTHCOM/U.S. embassy country team level.

    Non-Intrusive Inspection Systems

        The budget request contained $4.6 million for continued
    development of non-intrusive inspection systems, technologies
    that enhance the capability to detect narcotics in cargo
    container and trucks at U.S. ports of entry.
         The committee remains concerned that the agencies involved
    with the development of narcotics detection technologies
    disagree on the types of systems which need to be developed and
    ultimately deployed. According to an April 1997 study by the
    General Accounting Office entitled ``Terrorism and Drug
    Trafficking: Responsibilities for Developing Explosives and
    Narcotics Detection Technologies'' (GAO/NSIAD-97-95), a
    detailed procurement methodology has yet to be determined
    despite near completion of narcotics detection technology
    development. The Office of National Drug Control Policy
    (ONDCP), responsible for the coordination and recommendation of
    counterdrug technology programs; the U.S. Customs Service,
    required to deploy the systems developed by the Department of
    Defense (DOD); and the Office of Management and Budget (OMB),
    involved in the oversight of Customs' technology plans, are all
    currently working to resolve differences in technology
    development and deployment. At the request of ONDCP, these
    agencies are preparing a five-year technology plan for the
    development of non-intrusive inspection systems and currently
    estimate a January 1998 completion date of this report.
        Since December of 1994, DOD has spent about $30.0 million
    to develop technologies which have not been deployed as a
    result of concerns with the operational suitability of the
    systems. Based upon this experience, the committee recommends
    limiting DOD's development efforts until better funding
    priorities have been established by the relevant federal
    agencies.Therefore, the committee denies the $4.6 million
    funding request for non-intrusive inspection system research and
    development.

    Optionally piloted air vehicle

        The budget request contained no funding for the ``Owl''
    Optionally Piloted Air Vehicle (OPV).
         The committee believes development of this multi-
    functional aircraft will provide a unique, low-profile,
    airborne observation platform, providing an inexpensive, long-
    dwell reconnaissance capability for counterdrug and law
    enforcement agencies. The committee understands that funding
    for this aircraft would be provided by a federal/private
    industry partnership. The majority of funding is to be provided
    by the private industry partners.
         Therefore, pending the commitment of private industry
    funds, the committee recommends $2.5 million for this project
    in program element 0305889D.

    Southwest border fence project

        The committee continues to support the Southwest border
    road, fence and lighting project in East San Diego County,
    California. The committee notes the need for a reinforced fence
    along the fourteen miles of international border east of the
    Pacific Ocean, and the construction of second and third fences,
    with roads between the fences, to improve border security in
    this designated high intensity drug trafficking area (HIDTA).
    The committee commends the efforts of the California National
    Guard and the Joint Task Force Six (JTF-6) in allocating
    sufficient resources for this national priority from within
    their respective counterdrug budgets. While the construction of
    a triple fence is currently funded from within the immigration
    control budget, the committee wishes to ensure the efficient
    execution of this project.
         Therefore, the committee recommends an increase of $7.0
    million to facilitate completion of the Southwest border fence
    project from within the law enforcement agencies support
    component of the Department of Defense Counterdrug Plan.

    Tracker aircraft

        The budget request contained $10.0 million for operation of
    five specially configured tracker aircraft.
         The committee believes the tracker aircraft mission is
    more properly aligned with similar missions funded within the
    Defense Intelligence Counterdrug Program (DICP) of the Joint
    Military Intelligence Program (JMIP).
         Therefore, the committee recommends the funding request
    for project code 7410, but directs that this amount be
    transferred to O&M, Air Force, within the DICP. Further, the
    committee directs that future funding requests for this program
    be properly identified within the DICP.

                                 Other Matters

                  Implementation of Whistleblower Protections

        The committee is aware of existing concerns over unintended
    consequences resulting from the implementation of section 1034
    of title 10, United States Code, providing for the protection
    of individuals who engage in whistleblower communications with
    Members of Congress, the Department of Defense Inspector
    General, and any Department of Defense audit, inspection,
    investigation, law enforcement organizations, or chain of
    command communications. Of particular concern are indications
    that the definition of protected communication in the statute
    may be overly broad and result in the extension of protections
    in a manner that needlessly dilutes available investigative and
    other resources. Therefore, the committee directs the
    Department of Defense Inspector General to provide the House
    National Security Committee and the Senate Armed Services
    Committee with a report by March 1, 1998 that examines the
    current statutory framework governing the protection of
    whistleblower activity, assesses the effectiveness of the
    implementation of these provisions and makes any
    recommendations for modifications that the Inspector General
    finds appropriate.

               Intelligence Shortcomings During Persian Gulf War

        The Director of Central Intelligence (DCI) has acknowledged
    that both during and after the Persian Gulf war:
              (1) The intelligence community failed to adequately
            alert U.S. military forces to the presence of Iraqi
            chemical weapons at the Khamisiyah storage facility;
              (2) This failure was the result of avoidable errors
            and oversights in processing and analyzing information;
              (3) The demolition of Khamisiyah in the aftermath of
            the Persian Gulf war on March 4, 1991, by U.S. forces
            who were unaware of the presence of Iraqi chemical
            weapons stored at the facility, may have inadvertently
            exposed U.S. troops to chemical agents.
         Furthermore, a study released by the Director of Central
    Intelligence on April 9, 1997, acknowledges ``that intelligence
    support associated with Operations Desert Shield and Desert
    Storm--particularly in the areas of information distribution
    and analysis--should have been better. Key issues include
    problems with multiple databases; limited sharing of
    `sensitive' but vital information; and incomplete searches of
    files while preparing lists of known or suspect CW
    facilities.'' The study makes a number of general
    recommendations for avoiding similar intelligence failures in
    the future such as ensuring that intelligence analysts remain
    increasingly careful to avoid ``tunnel vision'' in crafting
    their judgments.
         The committee agrees that these shortcomings in
    intelligence analysis and distribution must be corrected so
    that similar intelligence failures do not occur in the future.
    To that end, the committee directs the Secretary of Defense and
    the Director of Central Intelligence to submit a report, not
    later than March 1, 1997, to the House Committee on National
    Security, the Senate Committee on Armed Services, the House
    Permanent Select Committee on Intelligence and the Senate
    Select Committee on Intelligence describing the actions to be
    taken to implement the study's recommendations for avoiding
    future situations like those surrounding the Khamisiyah issue.
    The report should identify the specific steps planned for
    training analysts, reorganizing data bases, and sharing
    sensitive information on a broader basis. It also should
    outline other steps that will be taken to improve intelligence
    analysis and distribution, explain how broadlythese
    improvements are being made across functional and regional issue areas,
    and indicate when these steps will be implemented.

               Resolution of Commercial Disputes in Saudi Arabia

         The committee notes that during the 1980's a number of
    commercial disputes arose from contracting activity between
    American companies, and ministries and agencies of the Saudi
    Arabian government. The companies in question claimed they were
    due tens of millions of dollars for work performed for the
    Saudis. After years of unsuccessful attempts by these companies
    to resolve the claims, the Fiscal Year 1994 Department of
    Defense Appropriations Act (Public Law 103-139) established a
    process by which the Department of Defense was to monitor
    progress toward the resolution of these disputes and report to
    Congress on their status. The committee understands that as of
    April 1997, a number of these claims remained unresolved.
    Therefore, the committee directs the Secretary of Defense,
    after consultation with the Secretary of State and the
    Secretary of Commerce, to conduct a review updating information
    concerning resolution of commercial disputes between U.S.
    companies and entities of the Saudi Arabian government. The
    committee further directs the Secretary to provide a report to
    the congressional defense committees no later than December 31,
    1997 incorporating the results of the review and including a
    comprehensive listing of claims that were identified as yet
    unresolved. The report shall also identify the circumstances as
    to why these claims have not been resolved.

                             LEGISLATIVE PROVISIONS

                         Subtitle A--Financial Matters

                        Section 1001--Transfer Authority

         This section would permit the transfer of amounts of
    authorizations made available in Division A of the bill for any
    fiscal year to any other authorization made available in
    Division A upon determination by the Secretary of Defense that
    such a transfer would be in the national interest.

                Section 1002--Incorporation of Classified Annex

         This section would incorporate the classified annex
    prepared by the Committee on National Security into the
    National Defense Authorization Act for Fiscal Year 1998.

    Section 1003--Authority for Obligation of Unauthorized Fiscal Year 1997
                             Defense Appropriations

         This section would authorize certain fiscal year 1997
    programs that received appropriations but no authorization.

     Section 1004--Authorization of Supplemental Appropriations for Fiscal
                                   Year 1997

         This section would extend authorization to those items
    appropriated by the fiscal year 1997 emergency supplemental
    appropriations legislation.

         Section 1005--Increase in Fiscal Year 1996 Transfer Authority

         This section would increase transfer authority for fiscal
    year 1996 to $3.1 billion to facilitate transfers of
    authorization necessary to support contingency operations.

                     Section 1006--Fisher House Trust Fund

         This section would authorize the expenditure of funds from
    the Fisher House trust fund.

     Section 1007--Flexibility in Financing Closure of Certain Outstanding
                Contracts for Which a Small Final Payment is Due

         This section would permit the Secretary of Defense to
    establish an account to transfer funds into for the purpose of
    making small final payments on certain outstanding contracts
    for which funds appropriated for that purpose have expired.

                    Subtitle B--Naval Vessels and Shipyards

     Section 1021--Relationship of Certain Laws to Disposal of Vessels for
    Export from the Naval Vessel Register and the National Defense Reserve
                                     Fleet

         This section would amend three separate titles of the
    United States Code in order to permit the sale of obsolete
    vessels that are presently contaminated with polychlorinated
    biphenyl compounds (PCBs).
        Under current law, the Toxic Substances Control Act
    (section 2601 of title 15, United States Code, et. seq.)
    prohibits the manufacture, processing, distribution in commerce
    or use of any non-totally enclosed PCB after January 1, 1977.
    Obsolete Navy vessels, as well as those in the National Defense
    Reserve Fleet which is administered by the Maritime
    Administration (MARAD), contain PCBs in their wiring system
    that meet the definition of being non-totally enclosed. In
    order to facilitate the sale and scrapping of such vessels as
    targets by the Navy, this section would first amend section
    7305 of title 10, United States Code, so that the sale of a
    vessel no longer qualifies as a restricted export for disposal
    purposes under the Toxic Substances Control Act. Second, this
    section would amend section 7306 of title 10, United States
    Code, to provide that the sinking of a vessel for military
    purposes does not qualify as a prohibited export or disposal of
    that vessel under the Toxic Substances Control Act. Third, and
    in order to allow MARAD to resume the practice of selling
    vessels in approved foreign markets, this section would amend
    section 510 of the Merchant Marine Act, 1936 (codified at
    section 1160 of title 46 App., United States Code), to provide
    that the sale of a vessel from the National Defense Reserve
    Fleet for export does not qualify as a distribution in commerce
    or an export for disposal under the Toxic Substances Control
    Act. Before an obsolete vessel could be sold or otherwise
    disposed, PCBs contained in transformers, capacitors, or in
    hydraulic or heat transfer fluids would have to be removed.
    Finally, this section would amend the National Maritime
    Heritage Act (section5405 of title 16, United States Code) to
    make certain technical corrections and to extend by two years (until
    2001) the deadline for the disposal of obsolete vessels from the
    National Defense Reserve Fleet. This deadline extension will permit the
    expeditious scrapping of obsolete vessels without flooding the
    international scrap market.

    Section 1022--Authority to Enter into a Long-Term Charter for a Vessel
      in Support of the Surveillance Towed Array Sensor (SURTASS) Program

        This section would authorize the Secretary of the Navy to
    enter into a contract in accordance with section 2401 of title
    10, United States Code, for the charter of the vessel RV CORY
    CHOUEST through fiscal year 2003 in support of the SURTASS
    program.

     Section 1023--Transfer of Two Specified Obsolete Tugboats of the Army

        This section would allow the Secretary of the Army to
    transfer two obsolete tugboats to the Brownsville Navigation
    District, Brownsville, Texas.

     Section 1024--Naming of a DDG-51 Class Destroyer the U.S.S. Thomas F.
                                    Connolly

         This section would express the sense of Congress that the
    Secretary of the Navy should name one of the ships of the DDG-
    51 class of destroyers the U.S.S. Thomas F. Connolly in honor
    of Vice Admiral Connolly, an architect of the modern United
    States Navy. Cited for bravery during World War II, Vice
    Admiral Connolly also guided the construction of today's
    nuclear aircraft carriers and advocated the development of the
    F-14 fleet defense aircraft.

     Section 1025--Congressional Review Period with Respect to Transfer of
                          the Ex-U.S.S. Midway (CV-41)

        This section would allow for a 30 calendar day
    congressional review period with respect to the transfer of the
    decommissioned aircraft carrier ex-U.S.S. Midway (CV-41).

                      Subtitle C--Counter-Drug Activities

     Section 1031--Prohibition on Use of National Guard for Civil-Military
      Activities Under State Drug Interdiction and Counterdrug Activities
                                      Plan

         This section would amend section 112 of title 32, United
    States Code, to further clarify authority for federal support
    of national guard drug interdiction and counterdrug activities.
    While the committee continues to recognize the valuable
    contributions of the national guard to the Department of
    Defense (DOD) counterdrug program, the committee notes with
    concern that community outreach programs, in direct
    contravention of congressional direction, have been funded as a
    component of the annual national guard state drug interdiction
    and counterdrug activities plans.
        The committee stands by the decision to repeal the
    authority for civilian outreach programs as intended in section
    571 of the National Defense Authorization Act for Fiscal Year
    1996 (Public Law 104-106). This section specifically terminated
    DOD authority for programs currently funded within the fiscal
    year 1997 National Guard State Plans, such as Sports Clinics,
    Just Say No Puppet Show, AmeriCorps, Kids 'N Kops Day, Adopt a
    School, DARE, Jr. Police Cadets, Operation Snowball, The Parent
    Project, Teen Spirit Youth Camp, Big Brothers & Sisters, MADD,
    Leadership Development Camps, Hooked on Fishing and Fitness for
    Life. While these programs are of continuing importance in the
    fight against substance abuse, they are significantly removed
    from the national security mission of the Department of Defense
    and, therefore, inappropriate to fund from within the defense
    budget. The committee encourages the development of appropriate
    non-DOD sources of funding for these outreach programs.
    Therefore, the committee directs that funds for these
    community-based activities, estimated at $8.0 million for
    fiscal year 1998, be reprioritized to meet more critical demand
    reduction needs of the national guard within the Governor's
    State Plans for fiscal year 1998.
         The committee endorses the Department's demand reduction
    strategy involving active duty and reserve forces, DOD civilian
    employees and National Guard members--one of the most effective
    elements of the DOD Counterdrug Program. The drug deterrence
    and testing program; coupled with the drug education, training
    and awareness support, continue to increase military readiness
    by successfully reducing drug use in the armed forces and the
    DOD civilian community. Further, the committee notes that drug
    demand reduction programs established prior to the
    authorization of the various civil-military programs in the
    National Defense Authorization Act for Fiscal Year 1993 (Public
    Law 102-484), including the Young Marines Programs and other
    priority programs of DOD and the military services, should
    continue operations as proposed in the fiscal year 1998 budget
    request.

           Subtitle D--Miscellaneous Report Requirements and Repeals

      Section 1041--Repeal of Miscellaneous Obsolete Reports Required by
                        Prior Defense Authorization Acts

        This section would repeal miscellaneous provisions of law
    that have expired or are obsolete.

    Section 1042--Repeal of Annual Report Requirement Relating to Training
           of Special Operations Forces with Friendly Foreign Forces

         This section would amend section 2011 of title 10, United
    States Code, to repeal the requirement that the Department of
    Defense prepare an annual report relating to training of United
    States Special Operations Forces with the forces of friendly
    foreign governments.

                           Subtitle E--Other Matters

      Section 1051--Authority for Special Agents of the Defense Criminal
           Investigative Service to Execute Warrants and Make Arrests

        This section would provide the Secretary of Defense with
    the authority to authorize special agents of the Defense
    Criminal Investigative Service (DCIS) to execute and
    servewarrants and other process issued under the authority of the
    United States. The section also would permit the Secretary of Defense
    to authorize DCIS special agents to make warrantless arrests in cases
    in which an offense against the United States is committed in the
    presence of special agents and in the case of felonies cognizable under
    the laws for which such special agents have sufficient probable cause.
    The authority of a DCIS agent under this section could only be
    exercised in accordance with guidelines approved by the Attorney
    General of the United States.

      Section 1052--Study of Investigative Practices of Military Criminal
               Investigative Organizations Relating to Sex Crimes

        This section would require the Secretary of Defense to
    provide for an independent review of the military criminal
    investigative organizations and their ability to effectively
    investigate allegations of criminal sexual misconduct in the
    armed services. The review would address several specific
    issues:
              (1) The need for greater organizational independence
            from the military department chains of command;
              (2) The adequacy of agent training relating to the
            investigation of sex crimes, including training on the
            proper conduct of subject and witness interviews;
              (3) The screening, recruitment and hiring of agents;
              (4) The number of allegations of agent misconduct in
            the investigation of sex crimes;
              (5) The procedures for administrative identification
            (known as ``titling'') of individuals suspected of
            committing sex crimes; and
              (6) The accuracy and timeliness of reporting sex
            crimes to the Department of Justice's National Crime
            Information Center. A report to Congress would be due
            upon completion of the review.
        In light of the numerous allegations of sexual misconduct
    in the military services, the committee believes it is
    important for the military criminal investigative organizations
    to ensure that agents are properly trained for conducting
    investigations into these most personal crimes in a responsible
    and appropriate manner. Further, the committee is concerned
    over allegations by some of the recent victims and subjects
    that investigators used coercive or inappropriate tactics
    during the investigative interview process. The review directed
    by this provision would help determine how well prepared the
    military criminal investigative organizations are with regard
    to investigating sexual misconduct. It also should identify
    areas for improvement to ensure these personal cases are
    handled in the most professional and appropriate manner.

                Section 1053--Technical and Clerical Amendments

        This section would make a number of technical and clerical
    amendments.

                     Section 1054--Display of POW/MIA Flag

        This section would expand the dates on which the POW/MIA
    flag must be flown, as well as the locations where it must be
    flown on the prescribed dates. In addition, the section would
    repeal existing law that terminates the requirement to display
    the POW/MIA flag upon the President's determination that the
    fullest possible accounting has been made of all members of the
    Armed Forces and civilian employees of the United States who
    have been identified as prisoner of war or missing in action in
    Southeast Asia.
        The committee recommends this action because thousands of
    Americans remain missing or unaccounted for as a result of all
    conflicts that the U.S. has fought in, not just the one in
    Southeast Asia. Furthermore, the committee believes that not
    only is it fitting to signify the Nation's continuing
    commitment to fully account for all the missing and unaccounted
    for from past U.S. wars, but it is also proper to signify a
    permanent national commitment to fully account for those
    Americans who in future wars may be captured, unaccounted for,
    or listed as missing.

    Section 1055--Certification Required Before Observance of Moratorium on
                 Use by Armed Forces of Antipersonnel Landmines

        This section would require that, before proceeding with the
    implementation of a ban on the military use of antipersonnel
    landmines, the Secretary of Defense must provide Congress with
    a certification that such implementation would not adversely
    impact U.S. military combat capabilities.

      Section 1056--Protection of Safety-Related Information Voluntarily
                            Provided by Air Carriers

        This provision would authorize the Secretary of Defense to
    withhold from public release voluntarily-provided air carrier
    safety-related information if the Secretary determines that
    release of that information would inhibit the provision of such
    information, and that such information aids in fulfilling the
    Secretary's safety oversight responsibilities under section
    2640 of title 10, United States Code. Section 2640 of title 10,
    United States Code prohibits the Secretary of Defense from
    entering into a contract with an air carrier for the
    transportation of members of the armed forces unless that
    carrier meets certain requirements. Included are requirements
    that the carrier meet government safety standards and pass DOD
    technical inspections to become and remain eligible for DOD
    business.
        The committee is aware that access to a carrier's internal
    records, information, and data is essential to determining
    whether the carrier meets DOD safety and quality standards. In
    that regard, carriers must have confidence that company
    information is protected from public release. The Department of
    Defense reports that carriers have been increasingly reluctant
    to provide information beyond the minimum required for
    regulatory compliance for fear that such information would be
    subject to public release when requested by a third party under
    the Freedom of Information Act. Similar information held by the
    Federal Aviation Administration and the National Transportation
    Safety Board previously received statutory protection from
    public release. This provision would provide the same level of
    protection for information that was voluntarily provided to the
    Department of Defense.

    Section 1057--National Guard ChalleNGe Program to Create Opportunities
                               for Civilian Youth

        This section would provide the Secretary of Defense, acting
    through the Chief of the National Guard Bureau, authority to
    conduct a program known as the National Guard ChalleNGe
    Program. ChalleNGe is a 22-week, quasi-military, residential
    program for drug-free, 16- to 18-year old high school dropouts
    who are unemployed and not currently involved with the legal
    system. ChalleNGe, which operates in separate state programs,
    seeks to improve the life skills and potential for employment
    or military service of its participants through military-based
    training, supervised work experience, and post graduation
    mentoring. This section would authorize the Department of
    Defense to provide up to $50.0 million in funding to support
    the program. The section would also limit the Department of
    Defense share of the costs of operating a program in each state
    to 75 percent in fiscal year 1998--with that share decreasing
    by five percent a year, to 60 percent in fiscal year 2001.
    Finally, the section would increase by $30.0 million the $20.0
    million requested in the Department of Defense budget request.
    To pay for the increase, the committee reallocates to the
    ChalleNGe program the $15.0 million that it had intended to add
    to the Army National Guard military personnel accounts for
    initial entry and military skill training. In addition, the
    committee recommends a reduction in the amounts requested in
    the budget for Army and Air National Guard operations and
    maintenance funding by $7.5 million each.

      Section 1058--Lease of Non-Excess Personal Property of the Military
                                  Departments

        This section would require the military departments to
    compete any lease in excess of one year for personal property
    valued over $100,000 and notify the Congress 45 days prior to
    entering into such a lease. The committee is aware that
    military department non-excess assets have been leased sole
    source for extended periods of time apparently below market
    value. While the committee recognizes the need for the military
    departments to manage their own equipment inventories, the
    committee is concerned that lease arrangements should fully
    appreciate the public interest to recoup defense dollars where
    possible.

         Section 1059--Commendation of Members of the Armed Forces and
          Government Civilian Personnel Who Served During the Cold War

        This section would commend the members of the armed forces
    and government civilian employees who served the nation during
    the Cold War, and would express the gratitude of the Congress
    for their service and sacrifices that contributed to the
    victory in the Cold War.
      TITLE XI--COOPERATIVE THREAT REDUCTION WITH STATES OF FORMER SOVIET
                                     UNION

                                    OVERVIEW

        The budget request contained $382.2 million for cooperative
    threat reduction (CTR) activities, representing an increase of
    $31.3 million over the amounts appropriated for fiscal year
    1997. The request includes $63.0 million for core conversion
    and chemical weapons production facility elimination in Russia,
    and expanded defense and military contact programs throughout
    the former Soviet states. Funding for these programs was not
    included in last year's CTR budget request, but was authorized
    separately in Title XIV of the National Defense Authorization
    Act for Fiscal Year 1997 (Public Law 104-201).
        The Administration is also seeking $210.0 million within
    the request for destruction and dismantlement, $100.7 million
    for fissile materials and nuclear weapons safety and storage,
    $41.0 million for reactor core conversion in Russia, and $30.5
    million for other program support, which includes expanded
    defense and military-to-military contacts.
        The committee recommends a total of $284.7 million for CTR
    activities in fiscal year 1998, a reduction of $97.5 million
    from the budget request. The committee recommends the request
    of $77.9 million for strategic offensive arms elimination
    activities in Russia; $76.7 million for strategic nuclear arms
    elimination in Ukraine; $7.0 million for fissile materials
    storage containers in Russia; and $57.7 million for a fissile
    material storage facility in Russia. The committee recommends
    the following reductions to the budget request: chemical
    weapons destruction ($41.0 million); reactor core conversion
    ($41.0 million); nuclear weapons storage security ($12.5
    million); defense and military contacts ($1.0 million); and
    other program support ($2.0 million). The discussion below
    provides additional rationale for these reductions as well as
    other matters of interest and concern to the committee.

                           ITEMS OF SPECIAL INTEREST

                      Arms Elimination Projects in Russia

        The budget request contained $77.9 million for strategic
    offensive arms elimination projects in Russia representing a
    significant increase from the fiscal year 1997 appropriated
    amount of $52.0 million.
        The committee reiterates its support for the accelerated
    dismantlement and destruction of strategic offensive weapons in
    Russia under the terms of the START I Treaty. To this end, the
    committee notes that the Department intends to obligate 115
    percent of the appropriated fiscal year 1997 amount for
    strategic offensive arms elimination programs in Russia in
    accordance with section 1502 of the National Defense
    Authorization Act for Fiscal Year 1997 (Public Law 104-201).
        The request includes $50.0 million for new commitments made
    last October by former Secretary of Defense Perry, who pledged
    additional assistance to Russia as part of the Administration's
    effort to encourage Russian ratification of the START II
    Treaty. The new commitments pledged by Secretary Perry and
    identified by the Department to the committee would be directed
    toward accelerating Russian strategic offensive force
    reductions to START II levels. While the committee is
    supportive of CTR efforts that would directly assist Russia in
    the elimination of its strategic offensive forces, the
    committee believes that Russia should share in the cost of
    these reductions. However, the Russian Duma has not yet given
    its support to START II ratification and is unlikely to do so
    anytime soon. In addition, at the recent Helsinki summit, the
    United States agreed to postpone for several years the 2003
    START II deadline for elimination of treaty-covered strategic
    systems in another attempt to encourage Russian ratification
    and to ease the near-term fiscal requirements on Russia for
    eliminating strategic systems. The Russians have asserted that
    they lack the fiscal resources to meet START II's reduction
    timelines. However, Russia continues to invest resources in the
    production of additional land-based and sea-based strategic
    offensive arms. For these reasons, the committee recommends a
    provision (sec. 1105) that would prohibit the obligation or
    expenditure of these funds for START II-related elimination
    activities until 30 days after the President certifies to
    Congress that these expenditures are in the national security
    interest and that the Russians have agreed to share the cost of
    such elimination activities. Moreover, the committee directs
    the Secretary of Defense to submit to the Congressional defense
    committees, within 15 days of the date of the above
    certification, a report on the specific cost-sharing
    arrangements that have been agreed to with Russia.

                      Arms Elimination Projects in Ukraine

        The budget request contained $76.7 million for strategic
    nuclear arms elimination projects in Ukraine, a 63 percent
    increase over the fiscal year 1997 appropriated level.
        This increase would fund a new project to eliminate
    additional land-based intercontinental ballistic missiles,
    associated silos and launch control centers, and supporting
    infrastructure. The committee supports these additional efforts
    and approves the requested amount for strategic nuclear arms
    elimination in Ukraine.

                           Auditing of CTR Assistance

        Under section 1206 of the National Defense Authorization
    Act for Fiscal Year 1996 (Public Law 104-106), the Department
    of Defense is required to submit to Congress an annual report
    on CTR assistance. The committee notes that the most recent
    report reflected an improvement in how the Department tracks
    the provision of CTR assistance, although the report was
    submitted almost one year late. The committee welcomes the
    increased number of annual audits and examinations conducted by
    the Department and expects that this level of effort will
    continue.
        The committee also notes that recent press reports indicate
    Russian officials have been imposing duties and ``taxes'' on
    the provision of U.S. assistance, some of which has reportedly
    been used to ``pay off'' local officials and to cover various
    ``overhead'' costs. In particular, the committee is concerned
    by reports that equipment deliveries are being taxed and that
    the CTR program has been a source of funding for inappropriate
    Russian activities. In light of these reports, the committee
    recommends a provision (sec. 1109) that would require the
    Secretary of Defense to submit a report to Congress by
    September 31, 1997 providing a detailed explanation of whether
    and how the CTR program has been used to support such
    activities and what actionsthe Department has taken and is
    prepared to take to ensure that CTR assistance is not ``taxed'' or
    misused by Russia.

                          Chemical Weapons Destruction

        The budget request contained $55.4 million for chemical
    weapon destruction activities, including $20.0 million for the
    dismantlement and conversion of a chemical weapons production
    facility, at Volgograd, to non-weapons use.
        Last year, the committee denied the request for $2.2
    million in funding to initiate dismantlement of the facility at
    Volgograd. In so doing, the committee noted its concern about
    establishing a precedent for a new U.S. commitment and program
    regarding the destruction of Russia's declared chemical weapons
    stockpile despite Russia's ability to destroy such facilities
    on its own. The budget request reflects a substantial increase
    in funding. However, formal cost estimates of the dismantlement
    work at Volgograd have not yet been accomplished. Moreover, the
    Department has indicated that the $20.0 million requested for
    this activity may be used for other ``Volgograd-like projects''
    involving chemical or biological weapons production facilities
    elsewhere in Russia.
        In addition, the committee notes that the Congress has
    previously disapproved the use of CTR funds for defense
    conversion purposes such as envisioned in the Volgograd
    project. Such activities are currently funded through the
    Department of State.
        Because of continuing concerns over U.S. involvement in
    this project and the uncertainty over the eventual cost and
    scope of this activity, the committee reiterates its belief
    that Russia should proceed with the destruction of chemical
    weapons production facilities on its own. Consequently, the
    committee denies the request for this project.
        The budget request also contained $35.4 million for the
    design and construction of a chemical weapons destruction
    facility to be built in Russia. Most of the technology
    development for the chemical weapons destruction process is
    expected to be completed by the end of fiscal year 1997.
    Accordingly, the budget request for this purpose is
    significantly less than the fiscal year 1997 appropriated level
    and is directed toward the design of the destruction facility.
    However, because no specific site has yet been chosen for the
    facility, actual design costs have not been reliably
    determined.
        In addition, the committee has a number of other concerns
    regarding this project. First, the ultimate cost of the
    facility may be as high as $800.0 million, a cost which the
    committee views as prohibitive. A more accurate cost estimate
    based on a one-third completed design is still unavailable and
    is not anticipated by the Department to be available until
    January 1999. The General Accounting Office (GAO) has reported
    that the U.S. share of these costs remains undefined and
    potentially large, and the United States has not agreed to cap
    its financial contribution. Indeed, the budget request for
    fiscal year 1999 for chemical weapons destruction projects in
    Russia is approximately $150.0 million, an increase of 270
    percent over the fiscal year 1998 request. Although detailed
    cost and program information is supposed to be contained in the
    Department's long-term program plan, which is required to be
    submitted to Congress annually at the same time as the
    President's budget request, the latest plan has only just been
    received. Consequently, the committee is unable to fully
    evaluate the long-term fiscal implications of this project.
        Second, the committee is concerned over Russia's ability to
    fulfill whatever financial commitment it makes to this project.
    Although Russia has committed the equivalent of $24.0 million
    for chemical weapons destruction in fiscal year 1997, none of
    these funds have been expended. Russia's chemical weapons
    destruction plan was rejected by the Federation Council--
    Russia's upper house of parliament--in January of this year. In
    April 1997, the State Duma--Russia's lower house of
    parliament--refused to ratify the Chemical Weapons Convention
    (CWC), only one day after the U.S. Senate had approved it. The
    Chairman of the Duma's Foreign Affairs Committee, Vladimir
    Lukin, explained the refusal by stating, ``It's simple: There's
    a lack of cash.'' Foreign financing to date for this project is
    extremely limited. While the United States has said it will
    finance a share of the costs of building the facility only, the
    Russians insist that associated infrastructure must be financed
    and built as well. Without an agreement on this matter, it is
    unlikely that construction can proceed.
        Third, the facility is designed to destroy only 14 percent
    of Russia's declared chemical weapons stockpile and will take
    more than 10 years to accomplish even this modest task. It has
    been estimated that Russia would need to construct six
    additional sites to meet the time frames required by the CWC
    for the destruction of the rest of its declared chemical
    weapons stockpile.
        Fourth, the committee disagrees with the United States'
    retreat from its prior insistence that the facility be used to
    destroy air munitions--the types of chemical munitions that are
    more threatening to U.S. interests--and has agreed to Russian
    demands that nerve agent contained in artillery shells be
    destroyed first. Because of their deteriorating condition,
    these artillery munitions are more of a Russian environmental
    concern than a U.S. or allied security concern.
        Finally, the committee is concerned by unclassified reports
    that Russia is continuing to develop chemical weapons,
    including three new and particularly lethal nerve agents. Such
    activity is clearly at variance with the commitments Russia
    assumed when it signed the CWC and suggests that U.S.
    assistance to dismantle older chemical weapons while Russia
    continues to produce newer ones amounts to a subsidy of a
    lethal Russian chemical weapons modernization program.
        The committee believes there are higher priority CTR
    programs with potentially greater benefits to U.S. security.
    The Department apparently shares this view, as it notified the
    Congress that it would transfer $7.8 million of fiscal year
    1997 funds obligated for this project to strategic offensive
    arms elimination programs. The committee also notes that as of
    May 1997, more than $70.0 million in previously appropriated
    funds for this project remained unobligated, almost twice the
    amount actually disbursed. Consequently, the committee
    recommends a reduction of $21.0 million for this project and
    does not endorse proceeding with actual construction of the
    facility. The committee also recommends a provision (sec. 1106)
    that would prohibit the obligation or expenditure of fiscal
    year 1998 funds for chemical weapons facility planning and
    design until the Secretary notifies the Congress that the
    following conditions have been met:
              (1) that Russia has approved a chemical weapons
            destruction plan that commits it to sharing the
            financial costs of this program;
              (2) that the United States has agreed to cap its
            financial contribution;
              (3) that an agreement has been reached resolving the
            issue of who will pay for construction of
            infrastructure and facilities associated with the
            destruction facility and required by Russia; and
              (4) that a specific site has been chosen for
            construction of the facility.

                       Fissile Material Storage Facility

        The budget request contained $57.7 million for fissile
    material storage activities in Russia. In particular, the funds
    requested are to be used to support the design and construction
    of a storage facility at Mayak to house materials from
    dismantled strategic nuclear weapons. The committee continues
    to support efforts to ensure the safe and secure storage of
    fissile materials in Russia.
        However, the committee notes that significant uncertainties
    remain regarding the Mayak facility. The project is
    approximately two years behind schedule and further delays are
    possible in light of Russia's uncertain commitment to funding
    its share of the costs. Although the United States has informed
    Russia that the U.S. share of Mayak costs will be capped at
    $275.0 million, the projected budget request for fiscal year
    1999 reflects a significant increase in funding, including
    funds for preliminary work on a second fissile material storage
    facility in Russia, although the requirement for another such
    facility is unclear. Significantly, a recent GAO report
    (``Weapons of Mass Destruction: Status of the Cooperative
    Threat Reduction Program,'' GAO/NSIAD-96-222, September 1996)
    notes, ``The draft CTR multiyear plan acknowledges that the
    program cannot measure the impact of CTR fissile material
    storage projects--such as Mayak--on CTR program objectives''
    because the Department lacks the necessary information to make
    such a determination. Due to the Department's delay in
    submitting the latest annual CTR program plan as required, the
    committee cannot fully evaluate the long-term fiscal
    implications of this project.
        The most significant uncertainty is the lack of any
    transparency agreements that would allow the United States to
    verify the quantity and type of fissile materials stored at
    Mayak and the irreversibility of the dismantlements. The
    committee believes such agreements are essential to ensuring
    that the facility is being used for its intended purpose and
    that materials stored there are not capable of being used in
    the construction of additional weapons. Prior efforts to
    negotiate transparency arrangements with Russia have been
    unsuccessful. To date, Russia has not declared the specific
    type and quantity of fissile material that will be stored at
    Mayak. As the previously-cited GAO report noted, ``Until a
    detailed transparency arrangement is agreed upon, the United
    States does not know exactly how it will be able to insure that
    Mayak is being used as intended. A failure to reach such an
    agreement in the future would force the United States to choose
    between curtailing support for the facility--after investing
    many tens of millions of dollars--and compromising on its
    access rights.''
        Negotiations are expected to resume later this year, and
    the Department has notified the committee of Russia's declared
    commitment to agree to transparency measures. However, the
    committee believes that continuing to fund this activity in
    advance of a formal agreement that clarifies and codifies U.S.
    rights weakens the U.S. negotiating position.
        Based on the above concerns, the committee conditions its
    approval of the budget request for this project on the
    conclusion of a written agreement with Russia acknowledging
    that the U.S. share of the ultimate cost of the Mayak facility
    will be capped at $275.0 million. Moreover, the committee
    recommends a provision (sec. 1107) that would prohibit the
    obligation of fiscal year 1998 funds for Mayak until a
    transparency agreement with Russia is signed. Finally, the
    committee directs that unobligated prior-year funds not be
    obligated or expended on this project until 15 days after the
    Secretary provides the Congressional defense committees with a
    status report on the issues and uncertainties noted above.

                        Nuclear Reactor Core Conversion

        The budget request included $41.0 million for nuclear
    reactor core conversion projects in Russia to support the
    elimination of Russian plutonium production by 2000, an
    important U.S. non-proliferation objective. The requested
    amount is more than four times the amount appropriated for
    fiscal year 1997 and is intended to begin preparations for
    conversion work. However, to date no implementing agreement has
    been negotiated with Russia's Ministry of Energy (Minatom) to
    allow this work to proceed. Consequently, the $10.0 million
    appropriated in fiscal year 1997--which Congress authorized be
    transferred to the Secretary of Energy--is unable to be
    obligated until such an agreement is concluded. Reiterating its
    support for the goal of eliminating Russian plutonium
    production, the committee believes responsibility for this core
    conversion project more properly resides within the Department
    of Energy (DOE), which initially began this effort in fiscal
    year 1996 as a pilot project. For these reasons, the committee
    denies the request for fiscal year 1998 Department of Defense
    funds to pursue this project, but has added $10.0 million for
    core conversion to the appropriate DOE account.

                   Nuclear Weapons Storage Security In Russia

        The budget request contained $36.0 million for projects
    designed to ensure the safe storage of nuclear weapons and
    materials from dismantled strategic nuclear systems. However,
    in March 1997 the Department informed Congress that the Russian
    Ministry of Defense has reevaluated its requirement for
    supercontainers to enhance the security of Russian nuclear
    weapons during transit. As a result, the Department proposes to
    reallocate $12.5 million in fiscal year 1996 CTR funds for
    other ``higher priority'' weapons storage security projects.
    Because these previously appropriated funds are now available
    to augment other weapons storage security activities, the
    committee recommends a reduction in the fiscal year 1998 budget
    request of $12.5 million.
        The committee reiterates its support for efforts to ensure
    the safe and secure storage of fissile materials and recommends
    this reduction without prejudice. However, the committee is
    concerned over Russia's unwillingness to allow the United
    States access to certain storage sites. This raises questions
    about the U.S. ability to ensure that equipment provided is
    used solely for its stated purpose.
        In its March 1997 notification to Congress of intent to
    obligate fiscal year 1997 funds, the Department noted that
    ``DOD will not be able to perform audits and examinations of
    some portions of the assistance provided under these
    agreements,'' but intends to impose other restrictions to
    ensure that the assistance ``remains under the control of the
    Russian Government.'' The committee is concerned that these
    arrangements may be insufficient to guard against the improper
    use of CTR assistance. Accordingly, the committee recommends a
    provision (sec. 1108) that would limit the obligation and
    expenditure of fiscal year 1998 funds until a formal agreement
    is reached with Russia on a mutually-acceptable arrangement for
    conducting audits and examinations; that agreement is provided
    by the Secretary to the Congressional defense committees; and
    15 days have elapsed from the date the agreement is received.

                             Other Support Programs

        The budget request contained $1.0 million for defense and
    military contacts with Belarus. In light of the recent
    Presidential de-certification of Belarus as eligible for CTR
    funds on the basis of human rights violations, the committee
    denies this request. In addition, the committee notes that, as
    of May 1997, the Department had obligated only $80.3 million of
    the $117.3 million in prior-year funds notified to Congress for
    CTR projects in Belarus. The committee expects that the
    Department will not obligate the remaining $37.0 million for
    projects in Belarus as long as Belarus remains ineligible for
    additional CTR assistance.

                                Program Overhead

        The budget request contained $20.5 million for management
    and administrative costs, project development, and audits and
    examinations. In light of the reductions in various CTR
    programs noted above, and the logical reduction in associated
    administrative costs, the committee recommends a reduction of
    $2.0 million for these activities. The committee notes that the
    Department unilaterally reduced the appropriated level of
    fiscal year 1997 program support by more than $300,000 to cover
    the costs of other higher priorities.

                      Prohibition of Specified Activities

        The committee reiterates its belief that funding for CTR
    activities should be directed toward facilitating the safe
    transportation, storage, and elimination of weapons of mass
    destruction, their delivery vehicles, and components, and for
    programs and activities deigned to prevent proliferation. The
    committee does not support CTR funding for activities outside
    these basic purposes. For this reason, the committee recommends
    a provision (sec. 1103) that would maintain a prohibition on
    the use of CTR funds for peacekeeping-related activities,
    housing, environmental restoration, job retraining, and defense
    conversion.

                             LEGISLATIVE PROVISIONS

      Section 1101--Specification of Cooperative Threat Reduction Programs

        This section would specify the kinds of programs to be
    funded under this title.

               Section 1102--Fiscal Year 1998 Funding Allocations

        This section would allocate fiscal year 1998 funding for
    various CTR purposes and activities.

        Section 1103--Prohibition on Use of Funds for Specified Purposes

        This section would prohibit the use of CTR funds for
    specified activities, including peacekeeping-related, housing,
    environmental restoration, job retraining, and defense
    conversion purposes.

     Section 1104--Prohibition on Use of Funds Until Specified Reports are
                                   Submitted

        This section would prohibit obligation or expenditure of
    fiscal year 1998 CTR funds until 15 days after various reports
    are submitted to Congress.

         Section 1105--Limitation on Use of Funds Until Submission of
                                 Certification

        This section would prohibit the obligation or expenditure
    of fiscal year 1998 CTR funds for certain START II-related
    strategic offensive arms elimination programs until the
    President certifies that such expenditures are in the national
    security interest and the Russians have agreed to share the
    cost of these activities. It would also direct the Secretary of
    Defense of submit a report on the specific cost-sharing
    arrangements.

      Section 1106--Use of Funds for Chemical Weapons Destruction Facility

        This section would prohibit the obligation or expenditure
    of funds for chemical weapons destruction purposes until the
    Secretary of Defense notifies Congress that certain cost-
    sharing and site agreements have been reached with Russia.

       Section 1107--Limitation on Use of Funds for Storage Facility for
                            Russian Fissile Material

        This section would prohibit the obligation or expenditure
    of funds for a storage facility for Russian fissile material
    until the Secretary of Defense notifies Congress that certain
    cost-sharing and transparency agreements have been reached with
    Russia.

     Section 1108--Limitation on Use of Funds for Weapons Storage Security

        This section would prohibit the obligation or expenditure
    of funds for weapons storage security in Russia until the
    Secretary of Defense notifies Congress that an agreement has
    been reached with Russia regarding audits and examinations.

     Section 1109--Report to Congress on Issues Regarding Payment of Taxes
      or Duties on Assistance Provided to Russia Under Cooperative Threat
                               Reduction Programs

        This section would require the Secretary of Defense to
    submit a report to Congress on attempts by Russia to tax
    assistance provided under the CTR program.

     Section 1110--Limitation on Obligation of Funds for a Specified Period

        This section would amend title 10, United States Code to
    limit the use of all appropriated funds for CTR purposes to a
    period of three years.

                      Section 1111--Availability of Funds

        This section would make fiscal year 1998 CTR funds
    available for obligation for three years.
                  TITLE XII--MATTERS RELATING TO OTHER NATIONS

                                    OVERVIEW

        Through investigations, hearings, analysis and careful
    study, the committee has concluded that there is a lack of
    connectivity between defense commitments as an element of the
    foreign policy of the United States and the military forces and
    resources required to execute these policies in an effective
    manner. The effects of inconsistency in policy, exacerbated by
    an insufficient and overtaxed military establishment, diminish
    the position of the United States as a geopolitical leader in a
    chaotic and dangerous world. The committee is concerned that
    the increasing number and scope of deployments of U.S. forces
    in support of U.S. policies abroad, combined with declining
    defense budgets, will erode rather than enhance the security of
    the United States.

                      African Center for Security Studies

        The committee report on H.R. 1530, the fiscal year 1996
    Defense Authorization bill (H. Rept. 104-131), directed the
    Secretary of Defense to develop an African Center for
    Securities Studies patterned after the George C. Marshall
    Center for European Security Studies located in Germany. This
    center would provide a capability to offer advanced study and
    training in civil-military relations, the building of
    democratic institutions, and related courses to members of the
    United States military and to the militaries and defense
    civilian personnel of African nations. The committee directed
    the secretary to provide the Congressional defense committees
    with an implementation plan by December 1, 1995. In March 26,
    1996 correspondence to the committee, the Department advised
    that the development of the required plan was underway but was
    not complete and that the plan should be completed and
    forwarded to the Congressional defense committees by mid summer
    of 1996. The plan has not yet been received. The committee
    fails to understand why the Secretary has not yet responded to
    the committee's direction. The Committee remains interested in
    monitoring the implementation of U.S. foreign policy and
    security interests in Africa and fully expects the directed
    plan to be received no later than November 1, 1997. Of the
    funds authorized for Operations and Maintenance for fiscal year
    1998, $5.0 million should be made available to support
    implementation of the plan.

                          Arms Control Implementation

        The fiscal year 1998 budget request contained $315.1
    million for arms control implementation programs, representing
    a 12 percent increase over the fiscal year 1997 budget request
    and a 27 percent increase over the fiscal year 1997
    appropriated level.
        The budget request is based in large part on planning
    assumptions regarding when various arms control treaties will
    enter into force. These assumptions have changed repeatedly, as
    the entry into force of several treaties--including the Open
    Skies Treaty, START II, and the Comprehensive Test Ban Treaty
    (CTBT)--has been delayed.
        The committee notes that the Chemical Weapons Convention
    (CWC), which was recently ratified by the United States but has
    not been ratified by Russia, entered into force on April 29,
    1997. This treaty places additional inspection obligations on
    the United States requiring an increase in funding for CWC
    activities. However, some of the requested increase in funding
    is directed toward support for the 1990 Bilateral Destruction
    Agreement (BDA) with Russia that is separate from the CWC.
    Because the Russians have refused to implement this agreement,
    the committee recommends a reduction of $4.1 million for BDA-
    related activities.
        As has been the case in the past, delays in the entry into
    force of other treaties will likely allow some reduction in the
    amount of funding authorized for these arms control
    implementation programs. For example, the committee believes
    that planning assumptions regarding the entry into force of the
    Open Skies Treaty are overly optimistic. Accordingly, the
    committee recommends a reduction of $1.7 million for Open Skies
    treaty implementation activities.
        In addition, the budget request would almost double the
    amount of funding for research and development (R&D) activities
    related to monitoring, implementation, compliance, and
    technical support for the CTBT over the fiscal year 1997
    appropriated level. The committee is not convinced that such a
    significant increase is warranted given that the treaty has not
    yet been submitted to the Senate for its advice and consent and
    that U.S. ratification is not assured. Moreover, current DOD
    planning assumes that the treaty will not enter into force
    until late 1999. In addition, some of the specific projects
    supported by the R&D request appear to involve the procurement
    of items and are not strictly ``research and development''
    activities. Finally, the committee has concerns over proposed
    DOD operation of seismic monitoring stations currently operated
    by the U.S. Geological Survey. Although the Department has
    expressed its intention to conclude agreements that delineate
    the obligations of each party responsible for a treaty station,
    no such agreements have yet been negotiated. Consequently, the
    committee directs elsewhere in this report that $13.3 million
    of the R&D budget request be fenced until 15 days after the
    Secretary of Defense notifies the Congressional defense
    committees that the necessary agreements have been concluded.
    Moreover, the committee directs the Secretary to provide the
    House National Security Committee and Senate Armed Services
    Committee with a detailed report no later that September 31,
    1997 on how the Department intends to use these CTBT-related
    research and development funds.
        Finally, the committee notes that Russia has yet to ratify
    the START II Treaty. To encourage Russian ratification, the
    Administration agreed at the March 1997 Helsinki summit to
    postpone the START II deadline for elimination of certain
    strategic offensive arms from 2003 to 2007. The committee
    understands this step constitutes a substantive amendment to
    the START II Treaty and that the administration intends to
    submit such changes to the Congress for approval. However, the
    committee notes that members of Russia's lower house of
    parliament, or Duma, have indicated subsequent to the Helsinki
    summit that Russian ratification of the treaty has been
    deferred indefinitely. As a result of the agreed slippage in
    START II elimination deadlines and the unlikely prospect for
    ratification in the near-term, the committee recommends a
    reduction to the budget request of $5.4 million, for a total
    authorization of $303.9 million.

       Defense Logistics Cooperation with the People's Republic of China

        The committee is aware that the Department of Defense is
    engaged in a broad range of activities to promote and enhance
    U.S. military relations with the Chinese People's Liberation
    Army (PLA) through a policy of comprehensive engagement. Some
    of the Department's activities with the Chinese government and
    the PLA have included frequent and regularexchanges on the
    topics of U.S. military strategy, regional security issues and the
    transfer of U.S. high-technology to China. In particular, the committee
    is concerned that the Department has chosen to advance U.S.-Chinese
    military relations by engaging the PLA in detailed discussions and
    briefings about advanced defense logistics techniques, infrastructure,
    and battlefield employment concepts. The committee's concern arises
    from the fact that China's long-term strategic ambitions remain unclear
    to U.S. policymakers and to the governments of the Asia-Pacific region.
    The committee also observes that the PLA's force modernization
    priorities suggest an intent to create a force capable of projecting
    and sustaining military power beyond China's borders.
        Therefore, the committee urges the Department to reconsider
    U.S. military-to military activities with the PLA that could
    further enhance the ability of the PLA to project and sustain
    military power beyond China's borders. The committee also
    expects to be kept fully informed of all future meetings,
    exchanges other DOD contacts with Chinese defense entities and
    PLA officials for the purpose of discussion on defense
    logistics or other military support subjects.

        The Khobar Towers Bombing and Force Protection in Southwest Asia

        In the wake of the Khobar Towers bombing in Saudi Arabia in
    June 1996, the committee notes that several issues related to
    force protection remain unresolved. Specifically, questions
    regarding the overall authority and responsibility for force
    protection issues prior to the terrorist attack remain
    unanswered. Moreover, although the Administration has elevated
    its emphasis on force protection, it is unclear whether the
    proper balance has been struck between mission and risk. In
    fact, concerns have been expressed, including within the
    military chain of command, that force protection is being
    overemphasized to the detriment of mission readiness and that
    the requirements of greater force protection may impede the
    ``freedom of movement'' in theater necessary for U.S. forces
    deployed abroad to fulfill their missions.
        The committee welcomes the increased attention being given
    to force protection issues. Although no level of force
    protection is likely to be completely effective in deterring
    attack from dedicated terrorists, it is appropriate continually
    to reassess the effectiveness of force protection measures and
    the balance between mission and risk. The committee is
    encouraged by the Department's establishment of a directorate
    for force protection issues (J34) and notes that teams from the
    services and the Defense Special Weapons Agency are conducting
    a series of on-site vulnerability assessments at facilities
    where U.S. forces are deployed abroad. Notwithstanding these
    initiatives, the committee is concerned by reports that
    critical vulnerabilities at several sites in the Persian Gulf
    region persist.
        With regard to the Khobar Towers bombing, the committee is
    concerned that so much of the Department's focus has revolved
    around the question of personal culpability for the tragedy. In
    spite of continued requests, the committee has not yet been
    briefed on the findings of the report prepared by Air Force
    Lieutenant General James Record (ret.) on this issue. Neither
    has the Department informed the committee about the results of
    the reassessment of the Record report's conclusions undertaken
    by Air Force officials, reportedly at the insistence of the
    Office of the Secretary of Defense.
        While the issue of personal accountability is important,
    the committee believes that significant organizational,
    operational, and intelligence shortcomings contributed to the
    lack of preparedness for the bombing. As the committee's August
    1996 report on the bombing concluded, and the report of the
    Downing Task Force subsequently confirmed, these shortcomings
    included the lack of timely and accurate tactical intelligence,
    short rotation tours for senior personnel including key
    security officers, and the implications of treating a long-term
    operation (Operation Southern Watch) as a ``temporary''
    contingency mission.
        The committee believes that providing effective force
    protection to U.S. forces deployed abroad also requires an
    ability to work cooperatively with host countries to ensure
    that necessary force protection actions are taken in a timely
    manner. The issue of host country sensibilities and how to work
    with host governments to provide adequate levels of force
    protection for U.S. forces is assuming greater importance in
    light of the expanding nature of U.S. foreign deployments and
    the increased threat of terrorist attacks. In the Khobar Towers
    tragedy, it is unclear whether specific guidance was provided
    from senior level military and civilian officials to theater
    commanders regarding coordination and cooperation with Saudi
    government officials on force protection issues. The committee
    is still looking for answers to the questions of whether such
    guidance was provided, who provided it (and to whom), and
    whether the guidance was revised in the wake of the November
    1995 Riyadh bombing.
        In order to better understand what happened at Khobar
    Towers and to prevent similar tragedies from occurring in the
    future, the committee directs that the Secretary of Defense
    provide a classified report to the House National Security
    Committee and the Senate Armed Services Committee outlining the
    following:
              (1) The guidance that was provided to theater
            commanders prior to the Riyadh bombing regarding how to
            approach force protection issues with the Saudis,
            including what specific guidance was provided, by and
            to whom, and when;
              (2) Whether the guidance was revised in the wake of
            the Riyadh bombing and, if so, how; and
              (3) A detailed explanation of the roles of the Air
            Force, U.S. Central Command (USCENTCOM), the Joint
            Chiefs of Staff, and the Office of the Secretary of
            Defense in providing guidance and support for the force
            protection mission to all deployed U.S. forces abroad--
            with special attention to the forces deployed in the
            USCENTCOM area of responsibility--and how their
            respective responsibilities have changed since the
            Khobar Towers bombing.
        The above report should be provided no later than September
    31, 1997.

                           Strategic Force Reductions

        The committee notes that the Quadrennial Defense Review
    (QDR) endorsed maintaining U.S. strategic nuclear forces at
    Strategic Arms Reduction Treaty I (START I) levels until Russia
    ratifies the START II Treaty. Despite the QDR's confirmation of
    current policy, the National Defense Panel has advocated
    unilateral U.S. nuclear force reductions to the levels
    specified in the START II Treaty. Moreover, and contrary to the
    QDR, Department of Defense officials also recently expressed
    interest in steps that could result in unilateral U.S.
    reductions.
        The committee believes that strategic nuclear forces remain
    central to U.S. national security, and any proposal to alter
    the nation's nuclear force structure must be considered on its
    own merits. The committee certainly does not believe that
    unilateral reductions to nuclear forces should be considered
    simply to generate savings for the military services to use to
    address program shortfalls, no matter how acute.
        Moreover, the committee believes that unilaterally reducing
    nuclear force structure below START I levels, prior to Russia's
    ratification of START II, would be counterproductive from an
    arms control standpoint. Because mutual obligation is the basis
    of all arms control agreements, unilateral reductions could
    undermine standing agreements and future negotiations.
    Unilateral U.S. nuclear force reductions would reduce Russian
    incentives to approve the START II Treaty by sending an
    unambiguous signal that U.S. reductions will occur with or
    without reciprocal Russian action. The committee continues to
    believe that any reductions to U.S. nuclear forces should be
    based on calculations of national security interest and
    implemented only in a mutual and balanced manner with Russia.

                             LEGISLATIVE PROVISIONS

     Section 1201--Reports to Congress Relating to United States Forces in
                                     Bosnia

        The committee notes with concern the Administration's
    unilateral decision to extend the participation of U.S. ground
    forces in the Bosnia peacekeeping mission. This extension was
    made without appropriate prior consultation with the Congress
    and in contravention of the President's stated pledge to end
    U.S. participation in the peace implementation force (IFOR)
    mission after one year. The extended U.S. military presence is
    part of a follow-on international ``Stabilization Force''
    (SFOR) that is expected to remain in Bosnia until June 1998.
        The committee is concerned with the Administration's stated
    reasons for extending the U.S. military ground presence and
    questions whether the declared intention to withdraw in June
    1998 is realistic or credible. The committee is also troubled
    with the escalating costs of the Bosnia operation--which now
    exceed $6.0 billion; the increased requirements Operation Joint
    Guard places on the U.S. armed forces in a time of declining
    defense budgets and resources; and the effect of the prolonged
    deployment to Bosnia on overall military readiness.
        The committee commends the professionalism demonstrated by
    U.S. forces in Bosnia in helping to enforce the military
    provisions of the Dayton peace agreement. As a result of their
    efforts, the military tasks required by the Dayton accord--i.e,
    the separation of the warring parties, the cantonment or
    destruction of heavy weapons, and the transfer of territories--
    have been completed. What remains to be accomplished is the
    civilian and humanitarian rebuilding of Bosnia, a task that
    SFOR is supposed to facilitate. Unfortunately, this task is
    much more difficult, especially when, in the words of former
    Secretary of Defense William Perry last November, ``the
    conditions for peace still do not exist in Bosnia.''
        The Administration's contention that U.S. forces can be
    withdrawn in June 1998 is based on an assessment that the
    conditions for a stable peace in Bosnia will have taken hold by
    then. The committee finds this assumption overly optimistic in
    light of recent events, including the fourth postponement of
    municipal elections originally scheduled for September 1996;
    the heightened incidences of ethnic tension and violence
    between Bosnia's ethnically divided communities; and the
    deferment for one year of a final decision on the status of
    Brcko--located in the hotly-disputed corridor connecting the
    eastern and western halves of the Republica Srpska.
        Because the current SFOR mission focuses on ensuring the
    conditions for an effective rebuilding and rehabilitation of
    Bosnia's civilian infrastructure, the prospects for ``mission
    creep'' loom large. In particular, the tasks of keeping civil
    order, ensuring freedom of movement, supporting the war crimes
    tribunal, and providing security for municipal elections all
    carry the potential for mission creep. This potential has been
    substantially enlarged as a consequence of the difficulties
    noted above. The committee is concerned over the potential for
    mission creep and notes that there has been no accurate or
    timely information provided to the Congress regarding the types
    of civilian humanitarian and rebuilding activities that U.S.
    troops participating in the Bosnia SFOR are conducting.
        In addition, the committee is concerned that the
    Administration's fiscal year 1998 budget estimate for Bosnia
    operations is based on expectations of near-term political
    stability that are unlikely to be met. The Administration has
    planned and budgeted for a smaller and lighter ``Deterrence
    Force'' (DFOR) to replace SFOR approximately at the start of
    the fiscal year and the lower operating costs resulting from
    this transition. However, under more realistic political
    projections, the planned reduction of the U.S. ground component
    from 8,500 soldiers to approximately 5,000 soldiers appears
    unlikely and, in the committee's judgment, unwise if U.S.
    forces are exposed to undue and increased risk. In fact,
    additional tanks have been added to the current SFOR in
    response to increased tensions. The committee also notes that
    NATO and U.S. Army Europe are reportedly preparing contingency
    plans to maintain the SFOR well past the date previously
    forecast for the transition to the DFOR.
        The apparent military response to deteriorating conditions
    in Bosnia suggests that the Administration's plans and funding
    for the operation of U.S. ground forces in Bosnia are
    unrealistic, and make the likelihood of a supplemental funding
    request for fiscal year 1998 very probable. Based upon past
    history, the committee is concerned that readiness funding for
    U.S. forces will again be jeopardized.
        Because of the above concerns, the committee recommends a
    provision (sec. 1201) that would require the Secretary of
    Defense to submit to the Congressional defense committees two
    reports identifying all tasks carried out by U.S. SFOR troops
    in Bosnia during the previous quarter that are more
    appropriately conducted by civilian organizations, the reasons
    why U.S. troops were used to conduct the activities, and the
    justification for relying on military forces rather than
    civilian organizations or infrastructure to execute these
    tasks. The reports should also identify the numbers of troops
    involved in each of the activities and whether other SFOR
    troops participated. The first report is to be transmitted to
    Congress no later than December 1, 1997. The second report is
    to be transmitted no later than March 1, 1998.
        In addition, the provision would prohibit the expenditure
    of more than 60 percent of funds authorized to be appropriated
    for the operations of U.S. ground forces in Bosnia until the
    President transmits a report to Congress on the political and
    military conditions in Bosnia and the costs associated with a
    continued U.S. military presence. The report is to be submitted
    no later than December 31, 1997. The committee strongly
    believes that the report should be submitted in a timely
    fashion in order to avoid the need to consider any supplemental
    appropriations request under an imminent threat of curtailed
    and canceled regular training programs. The committee also
    believes that the Administration should speak frankly to the
    Congress and the American people regarding the political and
    military situation in Bosnia and the Administration's plans
    regarding any continued role for U.S. ground forces there.

      Section 1202--One-Year Extension of Counterproliferation Authorities

        This section would extend the authority through fiscal year
    1998 for the Department of Defense to provide support to the UN
    Special Commission on Iraq (UNSCOM) under the Weapons of Mass
    Destruction Control Act of 1992.

     Section 1203--Report on Future Military Capabilities and Strategy of
                         the People's Republic of China

        This section would require that the Secretary of Defense
    prepare a report on the future pattern of military
    modernization of the People's Republic of China. The report is
    similar to one directed in the National Defense Authorization
    Act for Fiscal Year 1997 (Public Law 104-201), but expands the
    scope of research and the time period to be considered.

     Section 1204--Temporary Use of General Purpose Vehicles and Nonlethal
      Military Equipment under Acquisition and Cross Servicing Agreements

        This section would amend section 2350(1) of title 10,
    United States Code, to permit the Department of Defense utilize
    general purpose vehicles and other nonlethal military equipment
    under acquisition and cross servicing agreements. Such
    authority should facilitate United States contingency military
    operations by clarifying the conditions under which the
    Department may enter into an acquisition and cross servicing
    agreement and more precisely defining the provisions of the
    United States Munitions List that should apply under such
    conditions.
                DIVISION B--MILITARY CONSTRUCTION AUTHORIZATIONS

                                    PURPOSE

        The purpose of Division B is to provide military
    construction authorizations and related authority in support of
    the military departments during fiscal year 1998. As approved
    by the committee, Division B would authorize appropriations in
    the amount of $9,123,748,000 for construction in support of the
    active forces, reserve components, defense agencies for fiscal
    year 1998.

                         MILITARY CONSTRUCTION OVERVIEW

        The military construction authorization request for fiscal
    year 1998 was introduced by request as H.R. 909 on March 4,
    1997.
        The Department of Defense requested authorization of
    appropriations of $4,705,338,000 for fiscal year 1998 for
    military construction, including $2,060,854,000 for activities
    associated with base closure and realignment, and
    $3,668,410,000 for family housing construction and support. The
    committee recommends $5,187,875,000 for military construction,
    including $2,060,854,000 for activities associated with base
    closure and realignment, and $3,935,873,000 for family housing
    construction and support for fiscal year 1998.
        The committee remains concerned about the condition of the
    Nation's military installations and is particularly troubled by
    the continuing underinvestment by the Administration in
    military facilities and infrastructure. The budget request for
    fiscal year 1998 and the preliminary submission of the budget
    request for fiscal year 1999 indicate a continuing pattern of
    significant deterioration in the funding programmed by the
    Administration for military construction despite the evident
    requirement. In constant dollars, the budget request is 25
    percent less than the Administration sought for fiscal year
    1996 and 28 percent lower than the program authorized by
    Congress for that fiscal year.
        The committee noted one year ago the findings of the
    Defense Science Board Task Force on Quality of Life which
    reported that 62 percent of barracks and dormitories are
    unsuitable and 64 percent of military family housing units are
    in a similar condition. The typical military family housing
    unit was built 38 years ago and the typical barracks was
    constructed in the early 1950s. Yet, the Administration's
    budget request proposes, from current spending levels, a 20
    percent reduction for the construction of troop housing and a
    32 percent reduction in funds available for the development and
    construction of military family housing.
        Former Secretary of Defense William J. Perry, in his March
    1996 Annual Report to the President and the Congress, indicated
    that ``deteriorated facilities undermine readiness.'' At the
    onset of the defense build-up in the early 1980s, the majority
    of military facilities were over 25 years old. Currently, the
    average age of U.S. military facilities is 45 years. The rate
    of facilities recapitalization and modernization for the
    military services averages nearly 70 years, far below the
    standards established by private industry or other segments of
    the public sector, such as public universities.
        To alleviate some of the facilities shortfall, the
    committee recommends an increase in new budget authority for
    these programs of $750,000,000. Approximately 64 percent of
    that amount is dedicated to the continuing emphasis of the
    committee upon improvements to military housing and
    enhancements to other facilities that support the quality of
    life for military personnel and their families. The committee
    recommends an additional $472,263,000 for military construction
    that directly supports improvements in the quality of life for
    military personnel. Included in that amount is $269,763,000 for
    the construction, replacement, or improvement of military
    family housing, $116,700,000 for troop housing construction,
    $21,430,000 for child development centers, and $74,600,000 for
    other quality-of-life facilities, such as physical fitness
    centers and education facilities.
        A tabular summary of the authorizations provided in
    Division B for fiscal year 1998 follows:

        A tabular summary of the military construction projects
    included with the authorization of appropriations for fiscal
    year 1998 for the BRAC II , BRAC III, and BRAC IV accounts
    follows:

                                TITLE XXI--ARMY

                                    SUMMARY

        The budget request contained $595,277,000 for Army military
    construction and $1,291,937,000 for family housing for fiscal
    year 1998. The committee recommends authorization of
    $706,027,000 for military construction and $1,349,337,000 for
    family housing for fiscal year 1998.

                           ITEMS OF SPECIAL INTEREST

                    Improvements of Military Family Housing

        The committee recommends that, within authorized amounts
    for improvements of military family housing and facilities, the
    Secretary of the Army execute the following projects:
    $8,300,000 for Whole Neighborhood Revitalization (32 units) at
    Fort Wainwright, Alaska; $14,200,000 for Whole Neighborhood
    Revitalization (214 units) at Fort Riley, Kansas; $8,500,000
    for Whole Neighborhood Revitalization, Phase IV (86 units) at
    Fort Campbell, Kentucky; $5,400,000 for Whole Neighborhood
    Revitalization (56 units) at the United States Military
    Academy, New York; and $8,000,000 for Whole Neighborhood
    Revitalization (98 units) at Fort Belvoir, Virginia.

                              Planning and Design

        The committee directs that, within authorized amounts for
    planning and design, $3,100,000 be used by the Secretary of the
    Army to conduct planning and design activities for the
    construction of the National Ground Intelligence Center,
    Charlottesville, Virginia.

                             LEGISLATIVE PROVISIONS

        Section 2101--Authorized Army Construction and Land Acquisition
                                    Projects

        This section contains the list of authorized Army
    construction projects for fiscal year 1998. The authorized
    amounts are listed on an installation-by-installation basis.
    The state list contained in this report is intended to be the
    binding list of the specific projects authorized at each
    location.

                          Section 2102--Family Housing

        This section would authorize new construction and planning
    and design of family housing units for the Army for fiscal year
    1998.

          Section 2103--Improvements to Military Family Housing Units

        This section would authorize improvements to existing units
    of family housing for fiscal year 1998.

              Section 2104--Authorization of Appropriations, Army

        This section would authorize specific appropriations for
    each line item contained in the Army's budget for fiscal year
    1998. This section also provides an overall limit on the amount
    the Army may spend on military construction projects.

       Section 2105--Correction In Authorized Uses of Funds, Fort Irwin,
                                   California

        This section would correct the authorized use of funds
    authorized for appropriation in prior years for a military
    construction project at Fort Irwin, California. The provision
    would permit the use of previously authorized funds to
    construct a heliport at Fort Irwin to support the National
    Training Center.
                                TITLE XXII--NAVY

                                    SUMMARY

        The budget request contained $530,606,000 for Navy military
    construction and $1,255,437,000 for family housing for fiscal
    year 1998. The committee recommends authorization of
    $675,806,000 for military construction and $1,377,219,000 for
    family housing for fiscal year 1998.

                           ITEMS OF SPECIAL INTEREST

     Co-Composting Facility, Naval Education and Training Center, Newport,
                                  Rhode Island

        The committee notes the proposal by local municipalities in
    the vicinity of the Naval Education and Training Center,
    Newport, Rhode Island, to construct and operate a co-composting
    facility for joint use with the Department of the Navy on
    unimproved real property which would be conveyed to a local
    municipality by the Department for this purpose. The committee
    directs the Secretary of the Navy to conduct a study of the
    feasibility of joint use of such a facility, including an
    assessment of the economic benefit to the Department of the
    Navy and environmental considerations. The Secretary shall
    submit a report on the Department's findings, including any
    recommendations, to the congressional defense committees no
    later than January 1, 1998.

                    Improvements to Military Family Housing

        The committee recommends that, within authorized amounts
    for improvements to military family housing and facilities, the
    Secretary of the Navy execute the following projects:
    $4,193,000 for Whole House Revitalization (120 units) at Naval
    Air Warfare Center China Lake, California; $7,700,000 for Whole
    House Revitalization (64 units) at Public Works Center Great
    Lakes, Illinois; $12,390,000 for Whole House Revitalization
    (123 units) at Naval Air Warfare Center Patuxent River,
    Maryland; $11,300,000 for Whole House Revitalization (155
    units) at Marine Corps Air Station Cherry Point, North
    Carolina; and $4,919,000 for Whole House Revitalization (100
    units) at Naval Shipyard Bremerton, Washington.

        Prepositioned Equipment Maintenance Facilities, Blount Island,
                             Jacksonville, Florida

        The committee is aware of the completion of the study
    required by section 317 of the National Defense Authorization
    Act for Fiscal Year 1994 (Public Law 103-160) on the cost and
    operational effectiveness of co-locating afloat prepositioning
    maintenance facilities for the Department of the Army and the
    Marine Corps. The committee notes the conclusion of the
    analysis that the Army and the Marine Corps should maintain and
    operate separate, but complementary, prepositioning facilities
    in Charleston, South Carolina, and Blount Island, Jacksonville,
    Florida, respectively. The committee further notes that the
    facilities maintained by the Marine Corps at Blount Island are
    leased and acknowledges the estimates provided to the committee
    that ownership of those facilities could save the Department of
    the Navy between six and seven million dollars annually. The
    committee recognizes that the Secretary of Defense, upon the
    recommendation of the Secretary of the Navy, has provided a
    waiver of the current moratorium on land acquisition to permit
    the Navy to determine the costs of ownership, to conduct an
    environmental assessment, and to make other related studies.
    The committee notes its support for the decision of the
    Secretary of Defense.

                             LEGISLATIVE PROVISIONS

        Section 2201--Authorized Navy Construction and Land Acquisition
                                    Projects

        This section contains the list of authorized Navy
    construction projects for fiscal year 1998. The authorized
    amounts are listed on an installation-by-installation basis.
    The state list contained in this report is intended to be the
    binding list of the specific projects authorized at each
    location.

                          Section 2202--Family Housing

        This section would authorize new construction and planning
    and design of family housing units for the Navy for fiscal year
    1998.

          Section 2203--Improvements to Military Family Housing Units

        This section would authorize improvements to existing units
    of family housing for fiscal year 1998.

              Section 2204--Authorization of Appropriations, Navy

        This section would authorize specific appropriations for
    each line item in the Navy's budget for fiscal year 1998. This
    section also provides an overall limit on the amount the Navy
    may spend on military construction projects.

     Section 2205--Authorization of Military Construction Project at Naval
        Air Station, Pascagoula, Mississippi, for Which Funds Have Been
                                  Appropriated

        This section would authorize $4,900,000 to extend the west
    quaywall at Naval Air Station, Pascagoula, Mississippi, for
    which funds were previously appropriated pursuant to the
    Military Construction Appropriations Act, 1997 (Public Law 104-
    196).
                             TITLE XXIII--AIR FORCE

                                    SUMMARY

        The budget request contained $495,782,000 for Air Force
    military construction and $1,083,362,000 for family housing for
    fiscal year 1998. The committee recommends authorization of
    $638,447,000 for military construction and $1,171,643,000 for
    family housing for fiscal year 1998.

                           ITEMS OF SPECIAL INTEREST

          Disposal of Real Property, Hancock Field, Syracuse, New York

        The committee notes the pending disposal by the Department
    of the Air Force to the General Services Administration of a
    parcel of real property consisting of 14.9 acres, with
    improvements, at Hancock Field, Syracuse, New York, which is no
    longer required for use by the 152nd Air Control Group of the
    New York Air National Guard. The committee understands that no
    federal agency holds a potential interest in the property. The
    committee encourages the Secretary of the Air Force to work in
    cooperation with the Administrator of General Services to
    include the condition of the improvements to real property and
    demolition as a part of the assessment of the appraisal and
    valuation of the property for sale, if available, to the County
    of Onondaga, New York.

                    Improvements to Military Family Housing

        The committee recommends that, within authorized amounts
    for improvements of military family housing and facilities, the
    Secretary of the Air Force execute the following projects:
    $10,500,000 for family housing improvements (147 units) at
    Travis Air Force Base, California; $5,100,000 for family
    housing improvements (50 units) at Dover Air Force Base,
    Delaware; $9,700,000 for family housing improvements, phase IX
    (64 units) at Andersen Air Force Base, Guam; $8,900,000 for
    family housing improvements (147 units) at Cannon Air Force
    Base, New Mexico; $4,600,000 for family housing improvements
    (60 units) at Tinker Air Force Base, Oklahoma; $10,500,000 for
    family housing improvements (98 units) at Shaw Air Force Base,
    South Carolina; and $5,500,000 for family housing improvements
    (42 units) at Fairchild Air Force Base, Washington.

      Inter-Departmental Land Transfer, Bellows Air Force Station, Hawaii

        The committee notes the proposed transfer of certain lands
    at Bellows Air Force Station, Hawaii, from the administrative
    jurisdiction of the Department of the Air Force to the
    jurisdiction of the Department of the Navy for use by the
    Marine Corps for training activities. The committee understands
    that both military departments are currently assessing the
    costs and liabilities expected to accrue to both the Air Force
    and the Navy in the operation of the training area. The
    committee urges the military departments to expedite this
    transfer. The committee directs the Secretary of the Air Force
    and the Secretary of the Navy to report jointly to the
    congressional defense committees on issues relating to the
    proposed transfer including, but not limited to, an assessment
    of the costs and liabilities of each of the military
    departments in the management and operation of the training
    area, environmental effects of the proposed use of the lands
    for training purposes, and a proposed date for the transfer of
    jurisdiction from the Air Force to the Navy. The secretaries
    shall submit their report to the congressional defense
    committees no later than November 15, 1997.

                             LEGISLATIVE PROVISIONS

     Section 2301--Authorized Air Force Construction and Land Acquisition
                                    Projects

        This section contains the list of authorized Air Force
    construction projects for fiscal year 1998. The authorized
    amounts are listed on an installation-by-installation basis.
    The state list contained in this report is intended to be the
    binding list of the specific projects authorized at each
    location.

                          Section 2302--Family Housing

        This section would authorize new construction and planning
    and design of family housing units for the Air Force for fiscal
    year 1998.

           Section 2303--Improvements to Military Family Housing Units

        This section would authorize improvements to existing units
    of family housing for fiscal year 1998.

            Section 2304--Authorization of Appropriations, Air Force

        This section would authorize specific appropriations for
    each line item in the Air Force's budget for fiscal year 1998.
    This section also would provide an overall limit on the amount
    the Air Force may spend on military construction projects.

        Section 2305--Authorization of Military Construction Project at
          McConnell Air Force Base, Kansas, for Which Funds Have Been
                                  Appropriated

        This section would authorize $6,700,000 for a consolidated
    education center at McConnell Air Force Base, Kansas, for which
    funds were previously appropriated pursuant to the Military
    Construction Appropriations Act, 1997 (Public Law 104-196).
                          TITLE XIV--DEFENSE AGENCIES

                                    SUMMARY

        The budget request contained $673,633,000 for defense
    agencies military construction and $37,674,000 for family
    housing for fiscal year 1998. The committee recommends
    authorization of $613,233,000 for military construction and
    $37,674,000 for family housing.

                             LEGISLATIVE PROVISIONS

        Section 2401--Authorized Defense Agencies Construction and
    Land Acquisition Projects
        This section contains the list of authorized defense
    agencies construction projects for fiscal year 1998. The
    authorized amounts are listed on an installation-by-
    installation basis. The state list contained in this report is
    intended to be the binding list of the specific projects
    authorized at each location.

               Section 2402--Military Housing Planning and Design

        This section would authorize the Secretary of Defense to
    carry out planning and design activities with respect to the
    construction or improvement of military family housing units in
    the amount of $50,000.

          Section 2403--Improvements to Military Family Housing Units

        This section would authorize the Secretary of Defense to
    make improvements to existing units of family housing for
    fiscal year 1998 in an amount not to exceed $50,000,000.

                   Section 2404--Energy Conservation Projects

        This section would authorize the Secretary of Defense to
    carry out energy conservation projects.

        Section 2405--Authorization of Appropriations, Defense Agencies

        This section would authorize specific appropriations for
    each line item in the Defense Agencies' budget for fiscal year
    1998. This section also would provide an overall limit on the
    amount the Defense Agencies may spend on military construction
    projects.

      Section 2406--Correction in Authorized Use of Funds, McClellan Air
                             Force Base, California

        This section would correct the authorized use of funds
    authorized for appropriation in prior years for a military
    construction project at McClellan Air Force Base, California.
    The provision would permit the use of previously authorized
    funds to construct an aeromedical clinic addition at Andersen
    Air Force Base, Guam, and an occupational health clinic
    facility at Tinker Air Force Base, Oklahoma.

     Section 2407--Modification of Authority to carry out Fiscal Year 1995
                                    Projects

        This section would amend the table in section 2401 of the
    Military Construction Authorization Act for Fiscal Year 1995
    (division B of Public Law 103-337) to provide for full
    authorization of military construction projects to support
    chemical weapons and munitions destruction at Pine Bluff
    Arsenal, Arkansas, and Umatilla Army Depot, Oregon.
          TITLE XXV--NORTH ATLANTIC TREATY ORGANIZATION INFRASTRUCTURE

                                    SUMMARY

        The budget request contained $176,300,000 for the NATO
    infrastructure fund (NATO Security Investment Program) for
    fiscal year 1998. The committee recommends $166,300,000.

                             LEGISLATIVE PROVISIONS

        Section 2501--Authorized NATO Construction and Land Acquisition
                                    Projects

        This section would authorize the Secretary of Defense to
    make contributions to the North Atlantic Treaty Organization
    security investment program in an amount equal to the sum of
    the amount specifically authorized in section 2502 of this bill
    and the amount of recoupment due to the United States for
    construction previously financed by the United States.

              Section 2502--Authorization of Appropriations, NATO

        This section would authorize appropriations of $166,300,000
    as the U.S. contribution to the NATO security investment
    program.
                TITLE XXVI--GUARD AND RESERVE FORCES FACILITIES

                                    SUMMARY

        The budget request contained $172,886,000 for fiscal year
    1998 for guard and reserve facilities. The committee recommends
    authorization for fiscal year 1998 of $327,208,000 to be
    distributed as follows:

    Army National Guard ....................................     $45,098,000
    Air National Guard .....................................     137,275,000
    Army Reserve
        ....................................................      69,831,000
    Air Force Reserve
        ....................................................      40,561,000
    Naval and Marine Corps Reserve .........................      34,443,000
                        --------------------------------------------------------
                        ____________________________________________________
        Total ..............................................     327,208,000

                           ITEMS OF SPECIAL INTERESTS

       Budget Process to Support the Validation of Military Construction
                    Requirements for the Army National Guard

        The committee notes the increase in the requested level of
    funding for military construction for the support of the Army
    National Guard (ARNG) contained in the budget request for
    fiscal year 1998. The committee recognizes and remains
    concerned about the often unsafe, undersized, deteriorating,
    and inefficient facilities which do not adequately support the
    operational, training, and maintenance requirements meeting the
    federal mission of the Army National Guard. The committee,
    however, is deeply concerned about the budget and planning
    process utilized by the Department of the Army to assess and
    prioritize facilities requirements for the Army National Guard.
        The committee has reviewed the report on ARNG
    infrastructure requirements submitted by the Secretary of the
    Army as directed by House Report 104-563, the report to
    accompany the National Defense Authorization Act for Fiscal
    Year 1997, as well as recent trends in the long-term planning
    for ARNG military construction program. While the committee is
    pleased to note that the Future Years Defense Program (FYDP)
    for fiscal year 1998 through fiscal year 2003 contains a 119
    percent increase in funding programmed for ARNG military
    construction, the committee also notes with serious concern
    that 60 percent of the military construction projects in the
    previous FYDP, which the Congress did not authorize for fiscal
    year 1997, no longer are in the immediate budget plans of the
    Army National Guard.
        The committee is concerned about the significant
    instability in the ARNG budget and planning process. The
    committee strongly urges the Secretary of the Army to undertake
    a comprehensive review of the budget and planning process of
    the Department of the Army as it concerns the validation and
    funding of military construction requirements for the federal
    mission of the Army National Guard and to take the necessary
    measures to ensure that the Army National Guard adheres to an
    integrated department-wide budget and planning process that
    defines critical installation shortfalls and facilities
    requirements.
        The committee authorizes the budget request of $45,098,000
    for military construction for the ARNG.

                             LEGISLATIVE PROVISIONS

       Section 2601--Authorized Guard and Reserve Construction and Land
                              Acquisition Projects

        This section would authorize appropriations for military
    construction for the guard and reserve by service component for
    fiscal year 1998. The state list contained in this report is
    intended to be the binding list of the specific projects
    authorized at each location.

    Section 2602--Authorization of Military Construction Projects for Which
                          Funds Have Been Appropriated

        This section would authorize $5,900,000 for the Army
    National Guard for additions and alterations to an aviation
    support facility at Hilo, Hawaii, and $4,800,000 for the Naval
    Reserve for a bachelor enlisted quarters at Naval Air Station,
    New Orleans, Louisiana, for which funds were previously
    appropriated pursuant to the Military Construction
    Appropriations Act, 1997 (Public Law 104-196).

     Section 2603--Army Reserve Construction Project, Salt Lake City, Utah

        This section would authorize the Secretary of the Army to
    accept financial or in-kind contributions from the State of
    Utah for land acquisition, site preparation, relocation, and
    other costs in connection with the construction of a reserve
    center and organization maintenance shop in Salt Lake City,
    Utah.
            TITLE XXVII--EXPIRATION AND EXTENSION OF AUTHORIZATIONS

                             LEGISLATIVE PROVISIONS

     Section 2701--Expiration of Authorizations and Amounts Required To Be
                                Specified by Law

        This section would provide that authorizations for military
    construction projects, repair of real property, land
    acquisition, family housing projects and facilities,
    contributions to the North Atlantic Treaty Organization
    infrastructure program, and guard and reserve projects will
    expire on October 1, 2000 or the date of enactment of an Act
    authorizing funds for military construction for fiscal year
    2001, whichever is later. This expiration would not apply to
    authorizations for which appropriated funds have been obligated
    before October 1, 2000 or the date of enactment of an Act
    authorizing funds for these projects, whichever is later.

    Section 2702--Extensions of Authorizations of Certain Fiscal Year 1995
                                    Projects

        This section would provide for selected extension of
    certain fiscal year 1995 military construction authorizations
    until October 1, 1998, or the date of the enactment of an Act
    authorizing funds for military construction for fiscal year
    1999, whichever is later.

     Section 2703--Extension of Authorizations of Certain Fiscal Year 1994
                                    Projects

        This section would provide for selected extension of
    certain fiscal year 1994 military construction authorizations
    until October 1, 1998, or the date of the enactment of the Act
    authorizing funds for military construction for fiscal year
    1999, whichever is later.

     Section 2704--Extension of Authorizations of Certain Fiscal Year 1993
                                    Projects

        This section would provide for selected extension of
    certain fiscal year 1993 military construction authorizations
    until October 1, 1998, or the date of the enactment of the Act
    authorizing funds for military construction for fiscal year
    1999, whichever is later.

     Section 2705--Extension of Authorizations of Certain Fiscal Year 1992
                                    Projects

        This section would provide for selected extension of
    certain fiscal year 1992 military construction authorizations
    until October 1, 1998, or the date of the enactment of the Act
    authorizing funds for military construction for fiscal year
    1999, whichever is later.

     Section 2706--Extension of Availability of Funds for Construction of
                     Over-the-Horizon Radar in Puerto Rico

        This section would provide for an extension of authority to
    construct a relocatable over-the-horizon radar at Naval Station
    Roosevelt Roads, Puerto Rico authorized by the Defense
    Appropriations Act, 1995 (Public Law 103-335) until October 1,
    1998, or the date of the enactment of the Act authorizing funds
    for military construction for fiscal year 1999, whichever is
    later.

                          Section 2707--Effective Date

        This section would provide that Titles XXI, XXII, XXIII,
    XXIV, and XXVI of this bill shall take effect on October 1,
    1997, or the date of the enactment of this Act, whichever is
    later.
                        TITLE XXVIII--GENERAL PROVISIONS

                           ITEMS OF SPECIAL INTEREST

     Force Protection for Overseas Facilities From Chemical and Biological
                                    Weapons

        The committee is concerned about the adequacy of force
    protection for military installations and facilities abroad and
    is particularly concerned about the condition and ability of
    overseas facilities to contribute effectively to the protection
    of military personnel in the event of contingencies involving
    the use of chemical or biological munitions. The committee
    directs the Secretary of Defense to conduct a study of overseas
    military installations and facilities, with a particular
    emphasis on facilities in the Republic of Korea, and the
    capacity of those facilities to respond effectively to an
    attack in which chemical or biological munitions are used. The
    study should include an assessment of the military construction
    required to enhance and improve overseas facilities for the
    protection of military personnel from chemical and biological
    attack. The Secretary shall submit a report on the Department's
    findings, including any recommendations, to the congressional
    defense committees by March 1, 1998.

       Military Construction in the Republic of Korea and Burdensharing
                    Support for United States Forces, Korea

        The committee recognizes the critical facilities shortfalls
    at United States military installations in the Republic of
    Korea, particularly those that affect readiness and the living
    conditions for military personnel. The committee fully supports
    the $97,525,000 contained in the budget request for overseas
    military construction in the Republic of Korea. The committee
    provides authorization for military construction projects for
    the Department of the Army at Camp Casey, Camp Castle, Camp
    Humphreys, Camp Red Cloud, and Camp Stanley and for the
    Department of the Air Force at Kunsan Air Base and Osan Air
    Base. The committee is satisfied that these military
    construction projects begin to address significant shortfalls
    at installations which are central to current U.S. and Korean
    defense planning. The committee further notes, however, that
    these investments are tied to stationing requirements that may
    not be indicative of a long-term, post-reunification U.S.
    military presence on the Korean peninsula.
        The committee also recognizes the progress made by the
    United States in recent years to improve bilateral
    burdensharing arrangements with the Korean government. However,
    the committee believes that the current level of burdensharing
    provided is insufficient given the conditions of facilities in
    Korea and the importance of those facilities to the mutual
    defense effort. The committee notes the expiration in 1998 of
    the Special Measures Agreement (SMA), the framework for current
    burdensharing arrangements with the Republic of Korea. The
    committee urges the Secretary of Defense to work cooperatively
    with the Secretary of State to improve the level of
    burdensharing in the follow-on agreement to the current SMA.
    Within the context of negotiations with the Government of
    Korea, the committee encourages the Secretary of State to
    ensure that any future negotiated agreement provide for
    adequate and reasonable residual value payments for military
    facilities and installations returned to the Republic of
    Korea.The committee expects that such residual value would include the
    cost of investment by the United States in such facilities and
    installations.

               Withdrawals of Public Lands for Military Purposes

        The committee stresses the importance to military training
    and readiness of adequate ranges and maneuver areas. The
    committee notes the requirement in the Military Lands
    Withdrawal Act of 1986 (Public Law 99-606) that mandates the
    preparation by November 6, 1998 of draft environmental impact
    statements and applications for the continued withdrawal from
    the public domain of the lands comprising the ranges, maneuver
    areas, and other training areas covered by that Act for which
    the appropriate secretary of a military department intends to
    seek continued or renewed withdrawal of those lands. The
    committee urges the appropriate military departments to
    complete by that date the requirements for Bravo-20 Bombing
    Range, Nevada; Nellis Air Force Range, Nevada; Barry M.
    Goldwater Air Force Range, Arizona; McGregor Range, New Mexico;
    Fort Greely Maneuver Area and Fort Greely Air Drop Zone,
    Alaska; and the Fort Wainwright Maneuver Area, Alaska, so that
    continued or renewed withdrawal of those lands for military
    purposes may be considered by Congress in a timely and
    expeditious manner without potential disruption of training
    activities at those sites.

                             LEGISLATIVE PROVISIONS

     Subtitle A--Military Construction Program and Military Family Housing
                                    Changes

     Section 2801--Use of Mobility Enhancement Funds for Unspecified Minor
                                  Construction

        This section would authorize the use of funds made
    available for mobility enhancement for unspecified minor
    construction. Under the provision, mobility enhancement funds
    could not be used for unspecified minor construction if the
    cost of the construction project would exceed $1,500,000.

    Section 2802--Limitation on the Use of Operation and Maintenance Funds
                          for Facility Repair Projects

        This section would clarify the definition of repair of
    facilities using operations and maintenance funds.

        Section 2803--Leasing of Military Family Housing, United States
                        Southern Command, Miami, Florida

        This section would amend section 2828 of title 10, United
    States Code, to authorize the Secretary of the Army to lease
    not more than eight housing units in the vicinity of Miami,
    Florida, for key and essential personnel, as determined by the
    Secretary, for which the annual rental of such units would
    exceed the expenditure limitations established by law. This
    section would establish certain new expenditure limitations
    relating to such housing units.

     Section 2804--Use of Financial Incentives Provided as Part of Energy
                   Savings and Water Conservation Activities

        This section would clarify the ability of the military
    departments to accept financial incentives or rebates for
    specific energy and water conservation activities.

    Section 2805--Congressional Notification Requirements Regarding Use of
    Department of Defense Housing Funds for Investments in Nongovernmental
                                    Entities

        This section would provide for a 30-day notice-and-wait
    requirement on requests to use funds appropriated or otherwise
    made available under the authority of subchapter IV of chapter
    169 of title 10, United States Code, as a cash contribution by
    the Department of Defense toward the investment cost in any
    project entered into under those authorities.

            Subtitle B--Real Property and Facilities Administration

     Section 2811--Increase in Ceiling for Minor Land Acquisition Projects

        This section would increase the maximum limit for minor
    land acquisitions from $200,000 to $500,000.

        Section 2812--Administrative Expenses for Certain Real Property
                                  Transactions

        This section would authorize the secretary of a military
    department to accept reimbursement from non-federal entities
    for the cost of certain real estate services and transactions,
    including real estate exchanges, grants, and licenses, done at
    the request of, and for the benefit of, those entities.

     Section 2813--Disposition of the Proceeds From the Sale of Air Force
                          Plant 78, Brigham City, Utah

        This section would provide that the proceeds from the sale
    of Air Force Plant 78, Brigham City, Utah, by the Administrator
    of General Services shall be available to the Secretary of the
    Air Force for facility maintenance, repair, or environmental
    restoration at other industrial plants of the Department of the
    Air Force.

                Subtitle C--Defense Base Closure and Realignment

    Section 2821--Consideration of Military Installations as Sites for New
                               Federal Facilities

        This section would require the head of a federal agency to
    consult with the Secretary of Defense on the availability of
    federal property or facilities at a military installations to
    be closed or realigned prior to acquiring non-federal real
    property for a new or replacement federal facility of any type.

     Section 2822--Prohibition against Conveyance of Property at Military
                Installations to State-Owned Shipping Companies

        This section would prohibit the Secretary of Defense from
    conveying, by sale, lease, or other method, any portion of real
    property to be disposed under the Defense Base Closure and
    Realignment Act of 1990 (part A of title XXIX of Public Law
    101-510) to a state-owned shipping company. The section would
    also require the Secretary, as a condition on each conveyance
    of real property, that the property may not be subsequently
    conveyed to a state-owned shipping company. The section would
    provide for a reversionary interest of the United States in
    such property in the event of a conveyance to, or use by, a
    state-owned shipping company.

                     Subtitle D--Land Conveyances Generally

                            Part I--Army Conveyances

      Section 2831--Land Conveyance, James T. Roker Army Reserve Center,
                                Durant, Oklahoma

        This section would authorize the Secretary of the Army to
    convey, without consideration, a parcel of real property with
    improvements in Durant, Oklahoma to Big Five Community
    Services, Incorporated. The property is to be used for
    educational purposes. The cost of any surveys necessary for the
    conveyance shall be borne by Big Five Community Services,
    Incorporated.

            Section 2832--Land Conveyance, Fort A.P. Hill, Virginia

        This section would authorize the Secretary of the Army to
    convey, without consideration, a parcel of unimproved real
    property at Fort A.P. Hill, Virginia, to Caroline County,
    Virginia. The property is to be used for a waste transfer
    station. The costs of any surveys necessary for the conveyance
    shall be borne by the County.

      Section 2833--Expansion of Land Conveyance, Indiana Army Ammunition
                          Plant, Charlestown, Indiana

        This section would amend section 2858 of the Military
    Construction Authorization Act for Fiscal Year 1996 (division B
    of Public Law 104-106) to provide for the additional conveyance
    of 500 acres of real property to the State of Indiana.

       Section 2834--Modification of Land Conveyance, Lompoc, California

        This section would modify the purpose of the conveyance
    authorized by section 834(b)(1) of the Military Construction
    Authorization Act, 1985 (Public Law 98-407). The modification
    would permit the real property to be conveyed by the Secretary
    of the Army to the City of Lompoc, California, to be used for
    educational or recreation purposes.

    Section 2835--Modification of Land Conveyance, Rocky Mountain Arsenal,
                                    Colorado

        This section would permit the Administrator of General
    Services to enter into a negotiated sale of 815 acres of real
    property at Rocky Mountain Arsenal, Colorado, to Commerce City,
    Colorado.

      Section 2836--Correction of Land Conveyance Authority, Army Reserve
                        Center, Anderson, South Carolina

        This section would correct the name of the conveyee in the
    conveyance authorized by section 2824 of the Military
    Construction Authorization Act for Fiscal Year 1997 (division B
    of Public Law 104-201). The correction would permit the
    conveyance to be made by the Secretary of the Army to the Board
    of Education, Anderson County, South Carolina.

           Section 2837--Land Conveyance, Fort Bragg, North Carolina

        This section would authorize the Secretary of the Army to
    convey, without consideration, a parcel of unimproved real
    property at Fort Bragg, North Carolina, to the Town of Spring
    Lake, North Carolina. The property is to be used for improved
    access to a waste treatment facility and to permit economic
    development. The cost of any surveys necessary for the
    conveyance shall be borne by the Town.

      Section 2838--Land Conveyance, Gibson Army Reserve Center, Chicago,
                                    Illinois

        This section would authorize the Secretary of the Army to
    convey, without consideration, a parcel of real property with
    improvements in Chicago, Illinois, to the Lawndale Business and
    Local Development Corporation. The cost of any surveys
    necessary for the conveyance shall be borne by the Lawndale
    Business and Local Development.

              Section 2839--Land Conveyance, Fort Dix, New Jersey

        This section would authorize the Secretary of the Army to
    convey, without consideration, a parcel of real property with
    improvements at Fort Dix, New Jersey, to the Borough of
    Wrightstown, New Jersey. The property is to be used for
    educational and economic purposes. The cost of any surveys
    necessary for the conveyance shall be borne by the Borough.

                           Part II--Navy Conveyances

        Section 2851--Correction of Lease Authority, Naval Air Station,
                             Meridian, Mississippi

        This section would correct the name of the conveyee in the
    conveyance authorized by section 2837 of the Military
    Construction Authorization Act for Fiscal Year 1997 (division B
    of Public Law 104-201). The correction would permit the
    conveyance to be made by the Secretary of the Navy to the
    County of Lauderdale, Mississippi.

                        Part III--Air Force Conveyances

           Section 2861--Land Transfer, Eglin Air Force Base, Florida

        This section would authorize the Secretary of
    Transportation to transfer, without reimbursement, to the
    administrative jurisdiction of the Secretary of the Air Force a
    parcel of real property with improvements at Cape San Blas,
    Gulf County, Florida, previously withdrawn for use as the
    location of a lighthouse. The Secretary of the Air Force would
    incorporate the property as part of Eglin Air Force Base,
    Florida.

      Section 2862--Study of Land Exchange Options, Shaw Air Force Base,
                                 South Carolina

        This section would amend section 2874 of the Military
    Construction Authorization Act for Fiscal Year 1996 (division B
    of Public Law 104-106) to require the Secretary of the Air
    Force to conduct a study to identify real property suitable for
    exchange to affect the land exchange at Shaw Air Force Base,
    South Carolina, authorized pursuant to that law.

        Section 2863--Land Conveyance, March Air Force Base, California

        This section would authorize the Secretary of the Air Force
    to convey a parcel of real property at March Air Force Base,
    California, to Air Force Village West, Incorporated, of
    Riverside, California. As consideration for the parcel to be
    conveyed the Corporation shall pay to the United States an
    amount equal to the fair market value of the real property as
    determined by the Secretary. The section would also make
    technical modifications to section 835 of the Military
    Construction Authorization Act, 1985 (Public Law 98-407).

                           Subtitle E--Other Matters

    Section 2881--Repeal of Requirement to Operate Naval Academy Dairy Farm

        This section would amend/repeal section 810 of the Military
    Construction Authorization Act of 1968 (Public Law 90-110)
    which prohibits the Department of the Navy from taking any
    action to close, dispose, or phase out the operation of the
    Naval Academy Dairy Farm.

            Section 2882--Long-Term Lease of Property, Naples, Italy

        This section would permit the Secretary of the Navy to
    enter into a long-term lease, not to exceed twenty years, for
    structures and real property relating to a regional hospital
    complex in Naples, Italy, that the Secretary determines to be
    necessary for purposes of the Naples Improvements Initiative.

     Section 2883--Designation of Military Family Housing at Lackland Air
      Force Base, Texas, in Honor of Frank Tejeda, a Former Member of the
                            House of Representatives

        This section would authorize the Secretary of the Air Force
    to designate military family housing developments to be
    constructed at Lackland Air Force Base, Texas, in honor of the
    late Frank Tejeda, a Representative in Congress from the State
    of Texas.
                  TITLE XXIX--SIKES ACT IMPROVEMENT AMENDMENTS

                             LEGISLATIVE PROVISIONS

        Section 2902--Definition of Sikes Act for Purposes of Amendments

        This section would clarify references to the Sikes Act.

                Section 2903--Codification of Short Title of Act

        This section would codify the short title of the Sikes Act.

           Section 2904--Integrated Natural Resource Management Plans

        This section would amend the Sikes Act to require the
    Secretary of Defense to prepare and implement integrated
    natural resource management plans on all appropriate military
    installations, including installations of the guard and reserve
    forces.

      Section 2905--Review for Preparation of Integrated Natural Resource
                                Management Plans

        This section would direct the Secretary of each military
    department to review, within nine months of the date of
    enactment of this title, each military installation under the
    jurisdiction of the Secretary concerned to determine the
    applicability and appropriateness of integrated natural
    resources management plans to those installations. The section
    would require the Secretary of Defense to report to Congress on
    the findings of the Secretaries of the military departments.
    The section also would provide for a schedule to initiate
    implement integrated natural resource management plans on
    military installations where appropriate.

                    Section 2906--Annual Reviews and Reports

        This section would require the Secretary of Defense and the
    Secretary of the Interior to submit annual reports to Congress
    regarding the implementation of integrated natural resource
    management plans.

       Section 2907--Transfer of Wildlife Conservation Fees from Closed
                             Military Installations

        This section would permit fees charged for the purpose of
    wildlife conservation at military installations scheduled to be
    closed to be transferred to another military installation to be
    used for the same purpose.

       Section 2908--Federal Enforcement of Integrated Natural Resource
                 Management Plans and Enforcement of Other Laws

        This section would clarify the responsibility of the
    Secretary of Defense for enforcement, on military
    installations, of federal law relating to the conservation of
    natural resources. This section would not affect the
    enforcement authorities of the Secretary of the Interior for
    the same purpose.

               Section 2909--Natural Resource Management Services

        This section would require the Secretary of Defense to
    provide a sufficient number of professionally trained natural
    resource management and law enforcement personnel to perform
    the duties required by this title.

                           Section 2910--Definitions

        This section would define terms used in this title.

                      Section 2911--Cooperative Agreements

        This section would clarify that cooperative agreements
    between and among the Department of Defense, the various
    States, local governments, non-governmental organizations, or
    other private parties, which are entered into to implement an
    integrated natural resource management plan, shall be funded on
    a cost-sharing basis.

                  Section 2912--Repeal of Superseded Provision

        This section would repeal certain reporting requirements
    and definitions of terms which would be superseded by enactment
    of this title.

                       Section 2913--Clerical Amendments

        This section would make various technical and clerical
    changes to the Sikes Act.

                 Section 2914--Authorizations of Appropriations

        This section would authorize appropriations for programs on
    public lands related to the implementation of this title for
    fiscal year 1998 through fiscal year 2000.
     DIVISION C--DEPARTMENT OF ENERGY NATIONAL SECURITY AUTHORIZATIONS AND
                              OTHER AUTHORIZATIONS

          TITLE XXXI--DEPARTMENT OF ENERGY NATIONAL SECURITY PROGRAMS

                                    PURPOSE

        Title XXXI would authorize appropriations for the national
    security programs of the Department of Energy (DOE) for fiscal
    year 1998, including management and operations of programs for
    research, development, and production in support of the armed
    forces, the production of strategic and critical materials for
    the armed forces, the protection of critical materials,
    materials and information necessary for national defense,
    management of defense radioactive wastes, environmental
    management, naval nuclear propulsion, and other military
    applications of nuclear energy.

                                    OVERVIEW

        The fiscal year 1998 budget request for DOE national
    security programs totaled $13.6 billion. Of the total amount
    requested, $3.6 billion was for weapons activities, $5.0
    billion for environmental restoration and waste management,
    $2.2 billion for defense fixed asset acquisition, $1.0 billion
    for environmental management privatization, $1.6 billion for
    other defense activities, and $190.0 million for defense
    nuclear waste disposal. The committee recommends $11.0 billion,
    a decrease of $2.6 billion. The following table summarizes the
    request and the committee recommendations:

                           ITEMS OF SPECIAL INTEREST

    Accelerated Strategic Computing Initiative and Control of Supercomputer
                                   Technology

        The budget request contained $204.8 million for the
    Accelerated Strategic Computing Initiative (ASCI) and $151.5
    million for stockpile computations and modeling. The committee
    recommends funding these two programs within the stockpile
    stewardship program at the requested level. While the committee
    believes that the continued viability of these two programs is
    critical to the Department of Energy's ability to certify the
    reliability of our nation's nuclear stockpile, it is disturbed
    by reports that U.S. manufactured supercomputers have been
    transferred to the premier Russian nuclear weapons laboratories
    without the required government export licenses. In fact, a
    company that recently admitted transferring supercomputers
    without an export license to a Russian nuclear weapons
    laboratory is a DOE contractor on the accelerated strategic
    computing initiative.
        Supercomputers can be used to enhance and maintain a
    nuclear device by processing complex computer simulations to
    determine the effect of modifications of the device. The U.S.
    government requires exporters to apply for licenses to export
    supercomputers to such Russian nuclear facilities so the
    government can review the prospective transfer and determine
    the appropriateness of the computer in question for its stated
    end-use, the history of the facility in question, and the risk
    the computer would be diverted to prohibited end-uses. It is
    the stated policy of the U.S. government to deny such exports
    for use in proliferation-related activities such as research
    on, or development, design, manufacture, construction, testing,
    or maintenance of any nuclear explosive device or components
    and subsystems of such a device. The use of U.S. supplied
    supercomputers in such proliferation-related activities could
    have detrimental effects on U.S. national security. The
    committee expects the Department of Energy to take a more
    assertive role in the export control of sensitive technologies
    that have nuclear proliferation implications. The Department of
    Energy should take the lead in the preventing hazardous
    transfers of nuclear technologies to countries and end-users of
    proliferation concern. Therefore, the committee directs the
    Secretary of Energy to implement the necessary policy and
    programmatic changes to ensure that the Department is able to
    effectively track and assess the flow of specific technologies
    with nuclear applications to countries of proliferation
    concern. The committee recommends elsewhere in this title
    additional reporting requirements for the Department and the
    ASCI contractors to ensure the protection of this program.

     Chemistry and Metallurgy Research Facility at the Los Alamos National
                                   Laboratory

        The budget request contained $15.7 million for the
    incremental component of the construction upgrades at the
    Chemistry and Metallurgy Research Facility at Los Alamos
    National Laboratory. The total project cost has been estimated
    at $174.0 million. The committee has been advised by the
    Department that construction has been suspended as the result
    of a preliminary review indicating that work was being
    performed outside theauthorized scope and that an investigation
    has been initiated. The committee is further concerned with reports of
    high cost and apparent overruns during the first phase of this project.
    Because of the uncertainty and the likely need for substantial
    revisions in the estimates of the total project cost, the committee
    does not recommend funding of the incremental request. The committee
    adopts this position, without prejudice, and upon receipt of additional
    information and the results of the investigation will reevaluate the
    budget request for incremental funding for this project in this fiscal
    year.

                           Defense Asset Acquisition

        The budget request contained $2.2 billion for defense asset
    acquisition. The committee rejects the recommendation of
    Department to establish a new defense asset acquisition
    account. This proposal would have consolidated construction
    projects for all DOE national security programs into one
    account. The committee believes that this proposal would
    unnecessarily complicate its ability to ascertain appropriate
    funding levels from year to year in what are clearly distinctly
    different programs. The committee also rejects the Department's
    proposal to fully fund construction projects in the year they
    are first requested. Not only does the Department's proposal
    request full funding for projects which are being requested for
    the first time in this fiscal year but also for projects which
    have been authorized in prior years. The Department's proposal
    would require an additional fiscal year 1998 authorization of
    $1.5 billion above the funds requested in fiscal year 1997 for
    this purpose. The committee recommends authorization of the
    fiscal year 1998 incremental funding component for each of the
    authorized construction projects in weapons activities,
    environmental management, and other defense activities
    accounts.

             Defense Environmental Restoration and Waste Management

        The budget request contained $5.0 billion for the
    activities of the Office of Environmental Restoration and Waste
    Management. The committee recommends an authorization of $5.3
    billion.
        The committee also recommends transferring $743.6 million
    from the subaccount entitled ``environmental restoration'' to
    the closure fund for the purpose of accelerating the closure of
    the Rocky Flats Environmental Site and the Fernald
    Environmental Management Project. This action would allow the
    consolidation of management and funding activities for these
    sites into one account at the level requested in the budget.
    The committee recommends transferring $45.2 million from the
    operations and maintenance account within the stockpile
    management program to the closure fund. This transfer of $45.2
    million represents the costs associated with the provision of
    security at the Rocky Flats Site and the Fernald site. The
    committee believes that this consolidation of all activities
    and the costs associated with those activities will provide
    greater control and accountability. The committee is further
    designating these sites as ``closure sites'' pursuant to the
    provisions of section 3143 of the National Defense
    Authorization Act for Fiscal Year 1997 (Public Law 104-201).
    The committee believes that the Department should consider, as
    part of its fiscal year 1999 budget request, the continued
    consolidation of all national security funding for these two
    sites into the closure fund. The committee is disappointed that
    the Department chose to include only $15.0 million in the
    closure fund in fiscal year 1998.
        The committee further recommends an increase of $102.0
    million for the closure account. Of this amount, the committee
    recommends allocating $69.9 million to the Rocky Flats site and
    $32.1 million to the Fernald site. The committee strongly
    supports the efforts of the adjacent communities to close these
    two sites within the next ten years. The committee intends to
    assure through appropriate funding levels that this goal is
    achieved. The committee is persuaded that the overall savings
    to the Department by accelerating the clean up at these sites
    will be measured in the billions of dollars.
        The committee also recommends that of the funds authorized
    within the subaccount entitled ``waste management'', an
    additional $40.0 million be allocated to the Savannah River
    site to allow the consolidated incineration facility to operate
    at full capacity, as originally intended, to assure that the
    Defense Waste Processing Facility operates at its designed
    capacity, and that the site has sufficient funds to accelerate
    the disposal of transuranic waste. At the funding level
    requested, only periodic burning and treatment of benzene
    produced in support of the high level waste vitrification
    effort is possible. These additional funds will allow the full
    time incineration of other low and mixed radioactive wastes,
    meet the site treatment plan commitment, and mitigate the use
    of the E-Area low level waste vault. Finally, the committee
    urges the Department to assess the cost savings that may be
    available if it is able to successfully develop a spent fuel or
    high level waste storage cask system using high density
    concrete. Of the funds authorized in section 3102 of this
    title, no more than $3.0 million may be made available for this
    demonstration project.
        The committee recommends reducing the budget request for
    the subaccount entitled ``program direction'' by $100.0
    million. The committee recommends reducing support service
    contractors, training and other related expenses by $60.0
    million and federal employment expenses, including salaries and
    travel, by 15 percent or $40.0 million. Despite reductions to
    this account in each of the last two fiscal years, the
    Department has failed to significantly reduce federal
    employment levels as directed by this committee, particularly
    at DOE headquarters. Instead, the Office of Environmental
    Restoration and Waste Management has chosen to transfer federal
    employees and their headquarters function to the field and to
    detail individuals to the Environmental Protection Agency. This
    action occurred despite protestations from site managers who
    were not requesting additional employees.
        With respect to the detailing of employees to the
    Environmental Protection Agency, the committee is concerned
    that scarce DOE funds are being spent on activities which are
    unrelated or only tangentially related to the Department's core
    remediation effort. The committee notes that the Office of
    Environmental Restoration and Waste Management currently has
    staffing levels that are almost 20 percent above the levels
    recommended by the Department as part of its own Strategic
    Alignment Initiative.
        Finally, the committee recommends reducing the budget
    request for the subaccount entitled ``technology development''
    by $75.0 million. The committee does not support the
    Department's proposal to create a new technology deployment
    initiative office. Based on the supporting documentation
    provided to the committee, it appears thatthis program is
    really not a program to deploy innovative technology, but rather an
    effort to accelerate remediation efforts by using existing commercially
    available technology. This appears to be the case at several sites,
    particularly at Fernald. The committee notes that the Department has
    chosen to reduce the level of funding for this account below last
    year's request. The Department apparently agrees with the committee
    that this office has been unable to execute a program which was
    intended to develop and deploy new remediation technology in a timely
    manner.
        The committee remains concerned that the fundamental
    problems that have resulted in expenditures of over $2.0
    billion for technology development over the last several years,
    with very little actual field deployment, have yet to be
    corrected. With the transition to fixed priced contracts over
    the next several years, the role of technology development will
    necessarily shift to the private sector. With the proper profit
    incentives included in these contracts, the private sector
    will, on its own, develop the technologies needed to fulfill
    the terms of the contracts. The Department should consider
    these facts in preparing its fiscal year 1999 budget request.

             Enhanced Surveillance Program at the Production Plants

        The budget request contained $60.0 million to implement the
    Enhanced Surveillance Program (ESP) within the weapons
    stockpile management account. The committee recommends $75.0
    million, an increase of $15.0 million. The ESP, involving the
    four production plants and the three laboratories, is designed
    to develop new technologies for detecting degradation in aging
    weapons components in order to ensure, reliability, safety,
    effectiveness, and performance of existing weapons beyond their
    planned service life. While the committee recognizes that this
    is a complex-wide initiative, it expects that the additional
    resources provided by this increase will be directed to the
    production plants, particularly those engaged in pit
    disassembly activities and monitoring of limited life
    components. For example, if the Pantex Plant does not receive
    additional funds for enhanced surveillance activities, it will
    not be prepared, from an engineering and process development
    standpoint, to perform its stockpile life extension mission.

                          Inertial Confinement Fusion

        The budget request contained $217.0 million for inertial
    confinement fusion (ICF) operating program. The committee
    recommends $217.0 million, the amount requested. Within the
    total committee recommendation, $26.1 million shall be made
    available for the University of Rochester's Laboratory for
    Laser Energetics, an increase of $2.5 million.
        The committee notes that many non-governmental
    organizations have questioned the need and the cost of the
    Department of Energy's National Ignition Facility (NIF). The
    committee also notes that currently the Department is in
    litigation over its Programatic Environmental Impact Statement
    on Stockpile Stewardship and Management. The committee urges
    the Secretary to ensure that the defense program office manages
    the NIF construction project in a manner that does not make
    irreversible commitments of resources to construction until the
    outstanding environmental process issues are addressed in the
    district court.
        Peer review is a fundamental element of analyzing,
    developing and understanding the answers to the complex
    scientific, engineering and technical issues that go into
    determining whether or not to continue the substantial
    investments required in any facility such as the NIF. The
    committee directs the Secretary to request the National Academy
    of Sciences to continue to review, operating in full compliance
    with applicable law, the scientific and programmatic issues
    surrounding the NIF.

      Infrastructure and Manufacturing Improvements at Weapons Production
                                     Sites

        The budget request contained $588.0 million for
    infrastructure programs within the core stockpile management
    program. The committee recommends $623.0 million, an increase
    of $35.0 million. This increase would assist the production
    sites in successfully completing the transition from older,
    excess-capacity facilities to smaller, more efficient units.
    The committee is concerned that the Department has failed to
    address basic infrastructure problems, such as roof repairs,
    steam and condensate piping upgrades, power deficiencies,
    obsolete smoke detectors, and fire alarm control panels at the
    Pantex plant. Pantex is the central facility where the
    mechanics of the stockpile life extension program (SLEP) will
    be performed for every weapon in the enduring stockpile. A
    degraded Pantex places the success of the SLEP into question.
        The committee also believes that substantial long-term cost
    savings will accrue to the Department if it is able to
    accelerate the downsizing initiative currently underway at the
    Kansas City plant. With this acceleration, the Department will
    need to purchase and install new manufacturing equipment to
    enhance the expected efficiencies that should occur. The
    committee expects that the remainder of the increase, would be
    applied to address the manufacturing problems at these two
    sites through implementation of the Advanced Design and
    Production Technologies (AdaPT) program and the Process
    Development Program (PDP).

                    Initiatives for Proliferation Prevention

        The budget request contained $234.6 million for activities
    related to the prevention of weapons proliferation within the
    office on nonproliferation and national security. The committee
    recommends $205.0 million, a reduction of $29.6 million from
    the request. The committee recommends that this reduction be
    applied against the Initiatives for Proliferation Prevention
    program. The committee remains unconvinced of the merits of
    this program and other programs whose goal is to promote long
    term stability within the states of the Former Soviet Union.
    The committee is further concerned by reports that nearly half
    the aid intended for Russian scientists is being siphoned off
    by duties, regional taxes, overhead charges and suspected
    payoffs.

                     Laboratory Review of Missile Defenses

        In House Report 104-563 accompanying the National Defense
    Authorization Act for Fiscal Year 1997 (Public Law 104-201),
    the committee required the directors of each of the nuclear
    weapons laboratories to submit a report that assessed ballistic
    missile defense expertise and problem solving capabilities
    within their respective organizations. The laboratories have a
    long-standing role in nonproliferation, counter-proliferation,
    and conventional defense activities, and a history of
    significant contributions to missile defense programs. The
    committee required this most recent assessment of the
    laboratories' capabilities to determine if greater laboratory
    involvement could strengthen the U.S. Ballistic Missile Defense
    (BMD) program. Options for greater involvement by the nuclear
    weapons laboratories ranged from the use of supercomputing and
    modeling capabilities, which can provide simulation tools to
    support risk reduction in BMD system development and
    deployment, to the use of the laboratories' Strategic Target
    System for Theater Missile Defense and National Missile Defense
    test and evaluation.
        As a result of this study, the committee recommends,
    elsewhere in this title, the establishment of a new program
    office that will integrate the existing BMD weapons laboratory
    expertise with the Department of Defense Ballistic Missile
    Defense Organization (BMDO). This new program office would be
    chaired on a rotating basis by the laboratory directors. Office
    staff would be assigned specific-problem solving tasks in
    response to requests for assistance by the BMDO. Of the funds
    available for core stockpile stewardship in fiscal year 1998,
    the committee recommends that $50.0 million be made available
    to implement this program. The committee believes that the
    laboratories have resources and expertise that can be of great
    use to the Department of Defense not only in the areas noted
    above, but also in areas such as metallurgy, acoustics and
    component analysis. The committee believes that if the
    laboratories are successful in solving the problems related to
    the BMD program in a cost effective way, then it is likely that
    this program will be expanded in future years to such areas as
    submarine development and component analysis.

          Management and Organization of DOE's Nuclear Weapons Program

        Section 3140 of the National Defense Authorization Act for
    Fiscal Year 1997 (Public Law 104-201) directed the Department
    to conduct a study of the current management structure of the
    nuclear weapons program, including an analysis of the functions
    performed at headquarters, the operations offices, and the
    applicable area and site offices. The study made a number of
    recommendations designed to improve the management operations
    within the weapons programs. These recommendations were made as
    a result of conclusive evidence assembled by the authors of the
    report that significant management problems existed between
    headquarters and the field offices and that there were too many
    employees at both locations. The report concluded that these
    excess employees create work not only for themselves but for
    others as well, undermining attempts to establish disciplined
    staffing processes. The report recommended that DOE
    ``streamline and reduce headquarters and field staffing--
    federal employees and contractors by a least 20-30 percent.''
        The committee is concerned over the possible confusion and
    inefficiencies that may result from the existing organizational
    arrangement. While the committee received a letter from the
    Department on June 4, 1997 explaining the actions taken to
    date, these actions were long overdue in light of the serious
    nature of the report's findings. It remains to be seen whether
    the actions proposed will in fact address the fundamental
    problems outlined in the report. Therefore, the committee
    directs the Secretary of Energy to provide a follow-up report
    to the congressional defense committees by October 15, 1997, on
    the status of the corrective action being taken. Upon receipt
    of this follow-up report, the committee intends to schedule a
    series of hearings to examine the state of the nuclear weapons
    complex, its future missions, and its organizational structure.

             Materials Protection, Control, and Accounting Program

        The committee recognizes that the development and
    implementation of the Materials, Protection, Control, and
    Accounting Program for fissile materials in Russia addresses
    important national security interests of the United States.
    Because fissile materials will remain in Russia for 20 to 40
    years before disposition can be safely implemented and
    completed, the security of these fissile materials during all
    aspects of storage and disposition is of considerable
    importance to U.S. national security. Out of the unexpended
    balances in the Nonproliferation and National Security account,
    the Department is urged to allocate up to $3.0 million for the
    implementation of a nuclear materials safety management program
    modeled after the best lessons-learned from the joint U.S.-
    Russian disposition activities. The committee recognizes the
    Amarillo National Resource Center for Plutonium for its leading
    work within the Department on joint U.S.-Russian efforts in the
    area of nuclear materials safety management. Finally, the
    committee recommends that the Department develop a
    comprehensive nuclear materials safety management program
    budget for fiscal year 1999.

                                 Naval Reactors

        The budget request contained $632.5 million for naval
    reactors. The committee recommends $678.5 million, an increase
    of $43.0 million, to allow the orderly completion of the
    prototype inactivation work. This increase would prevent delays
    in the A1W-A defueling; expedite related data retrieval from
    the plant's core; prevent delays in the inactivation of the
    Windsor site and the D1G and S3G reactor plants at the
    Kesselring site; and allow planned remediation efforts to
    continue on schedule at the naval reactor facility in Idaho.

                                 Nuclear Energy

        The budget request contained $81.0 million for nuclear
    energy activities, including $25.0 million for nuclear
    technology research and development and $50.0 million for the
    international nuclear safety program. The committee recommends
    $47.0 million, a decrease of $34.0 million. The former
    activity, which involves electrometallurgical research, was
    funded in fiscal year 1997 by DOE's civilian technology office
    and not through an authorization within this committee's
    jurisdiction. The committee continues to believe this research
    should not be funded within DOE'snational security
    authorization and, therefore, recommends $12.0 million be authorized
    for this purpose. The committee does not intend to fund this program in
    future years. The international nuclear safety program has in the past
    been carried out by the Agency for International Development using
    foreign assistance funds. The committee believes these activities
    should be funded in the foreign assistance budget. Accordingly, the
    committee recommends $25.0 million be authorized for this purpose.
    Again, the committee does not intend to fund this program in future
    years within DOE's national security authorization. Within line items
    entitled Nuclear Security and the Chornobyl Shutdown Initiative, the
    committee recognizes the United States commitment to its G-7
    obligations. However, the committee believes these programs are
    essentially civilian programs and should be funded from the foreign
    assistance accounts. The committee recommends $10.0 million for
    plutonium core conversion, which was funded last year through the
    Department of Defense.

                          Operation of F and H Canyons

        The budget request contained $492.3 million for operations
    and maintenance within the nuclear material and facility
    stabilization account at the Savannah River Site. The committee
    recommends $533.3 million, an increase of $41.0 million over
    the amount requested, to allow for the operation of both the F-
    canyon and the H-canyon facilities at the site and to maintain
    the unique capability for the stabilization of aluminum clad
    spent nuclear fuel. The committee believes that the long-term
    storage and direct disposal of spent nuclear fuel, currently in
    wet storage or being shipped to the site, presents significant
    risks and costs that can be more appropriately addressed by
    using the reprocessing capability of the canyons.

                                 Privatization

        The budget request contained $1.0 billion for the defense
    environmental management privatization initiative. The
    committee does not recommend funding for this initiative. The
    committee recognizes that this is an important initiative of
    the Department, and it accepts the premise that the remediation
    effort undertaken to date at many of the former nuclear weapons
    defense sites has been overly costly and, to a large degree,
    ineffective. The committee further understands and supports the
    desire to reduce costs and to improve efficiencies through the
    use of performance-based fixed price contracts. However, the
    committee is not persuaded that the privatization proposal has
    been properly developed at this point and to the extent
    required, considering the amount of money being requested, the
    technical complexity of many of the projects, the large margin
    of error in the cost estimates, the Department's poor track
    record of successful project completion, and the lack of
    suitable staff and procedures to oversee the contracting
    process and the contractors' activities.
        The committee believes it should defer further
    consideration of this initiative until the Department's fiscal
    year 1999 budget request. While the committee provided funding
    for a limited privatization initiative in fiscal year 1997, it
    did so based on the assumption that the Department would be
    able to support its continuation based upon a rigorous analysis
    of projected cost savings that would accrue to the government.
    The committee directed the Department to provide that report to
    the committee no later than December 31, 1996. The Department
    has not submitted the required report nor has it provided the
    level of documentation to support a request of this magnitude.
    The committee is not persuaded by estimates of cost savings
    where the comparisons are between traditional non-competitive
    management and operating contracts and ``privatized''
    contracts.
        The committee believes that several additional comments are
    warranted. It is important to note that DOE's privatization
    initiative is not a divestiture, which generally involves the
    sale of government-owned assets or functions. For all practical
    purposes, DOE's activities are already privatized, in that the
    private sector contractors already conduct DOE's programs at
    its major sites.
        What sets the proposed privatization initiative apart from
    DOE's traditional approach is the attempt to shift the
    responsibility for financing, and much of the risk, to the
    contractor. Thus, under the Department's proposal, private-
    sector contractors would be responsible for the funding,
    construction and operation of the ``privatized'' facility. At
    the time the facility is completed, DOE would begin paying the
    contractor for the services provided. In fact, as presently
    contemplated by DOE, virtually no expenditures of the
    government's funds would occur until fiscal year 2003, when
    outlays of between $1.0 and $2.0 billion would begin. From the
    limited cost estimates available, the projects that are being
    requested in fiscal year 1998 are expected to result in
    construction costs exceeding $2.8 billion and operating costs
    exceeding $5.8 billion.
        At least one of the projects chosen for privatization, the
    tank waste remediation project, is perhaps the most technically
    complex, risky, and expensive environmental remediation project
    in the DOE program. DOE has spent about $2.5 billion on this
    project alone since 1989 and its life-cycle cost is estimated
    to be $36.0 billion. DOE has estimated that the ``privatized''
    approach for a portion of the $36.0 billion project would
    result in a cost of $9.6 billion. Using DOE's traditional
    noncompetitive management and operations approach, the same
    project is estimated to cost $13.6 billion. However, a recent
    General Accounting Office (GAO) study determined that both
    estimates were based on a range of values with a margin of
    error of plus or minus 40 percent. That is, the cost of the
    privatized approach could range from $5.8 billion to $13.4
    billion and the noncompetitive approach, from $8.0 billion to
    $18.6 billion. Because of the large margin of error in these
    cost estimates, GAO concluded that the ``privatization approach
    could be more costly.''
        At least eight of the other projects being proposed for
    privatization suffer from even less analysis and more
    uncertainty regarding cost savings. In many of these cases, DOE
    obtained an estimate from its existing management and operating
    contractor and apparently arbitrarily reduced it by anywhere
    from 10 percent to 35 percent. In several cases, it is clear
    that the funding is not required this fiscal year because the
    contracts could not be executed. In fact, in the case of the
    tank waste remediation project discussed above, it is clear
    that DOE may not even obligate in fiscal year 1998 the funds
    that were authorized and appropriated for this project in
    fiscal year 1997. The rationale and justification for a request
    of an additional $427.0 million in fiscal year 1998 for this
    project alone is lacking. In other cases, it is apparent that
    projects were chosen which were not of the highest priority nor
    were required by compliance agreements. It appearsthat these
    projects were simply chosen because they would not result in outlays
    during the next five years. It is clear to the committee that deferral
    of this program for one budget cycle will not result in any irreparable
    harm or in any way affect the safety of the nuclear weapons complex.
    The committee strongly suggests that the Department consider obtaining
    outside independent assessments as to the life-cycle costs for these
    projects before continuing to recommend their privatization. Finally,
    DOE has cited several examples of successful privatization projects.
    Two of these involve the ``privatizing'' of a laundry facility for
    contaminated worker clothing. Another involves the remediation effort
    at Pit 9 near Idaho Falls which is now the subject of a contract
    dispute and which could result in a doubling of the original contract
    price of $179.0 million for this one-acre site out of 88 acres that
    need to be cleaned up. The committee believes there is substantially
    more complexity in managing the tank waste remediation project than in
    building a laundry.
        The committee's concern is amplified by the knowledge that
    of the 80 projects initiated in the last 16 years, only 15 have
    been completed, most of which were behind schedule and over
    budget. After billions of dollars had been invested, 31 of
    these projects were terminated before completion.
        In rejecting the blanket approval of the privatization
    initiative, the committee is not suggesting that it is
    abandoning the effort to develop a successful and cost
    effective remediation program across the DOE complex,
    particularly at the Hanford tank waste site. In the case of the
    Hanford site, the committee recognizes that a substantial
    investment by the Department is required for many years,
    regardless of the method chosen to finance the effort or the
    scope of the effort. Accordingly, the committee recommends
    elsewhere in this title a funding level sufficient to allow
    this remediation effort to continue on schedule. The committee
    believes that the $170.0 million authorized for fiscal year
    1997 and which remains unobligated, added to the $54.0 million
    which is being paid out this year to the prospective bidders
    from fiscal year 1996 funds for the cost of bid preparation,
    coupled with the $70.0 million authorized elsewhere in this
    title, should be more than sufficient to allow the remediation
    effort to continue, whether the project uses private capital or
    annual appropriations. In doing so, the committee recommends
    that the Department provide substantial and detailed
    documentation to the congressional defense committees 30 days
    prior to the execution of a contract. The committee will
    require that a compelling case be made before it will accept a
    proposal of the scope currently being proposed. The committee
    believes that the Department should assess the cost and the
    need to construct two low-level waste treatment facilities that
    will for all practical purposes be performing identical
    functions. The committee recommends that the Department
    evaluate very carefully the long term advantages and the
    disadvantages of privatization to the United States, the State
    of Washington, the stakeholders and the contractor or
    contractors before it renews its proposal to seek private
    sector financing for an activity this complex and this
    expensive.
        As noted above, the committee remains concerned that many
    of the Department's projects have been mismanaged, leading to
    cost overruns, delays, and in some cases, project failures. The
    committee believes that the Department's excessive red tape,
    bureaucracy, and an unclear chain of command make it difficult
    if not impossible to manage a large complex project like the
    one at Hanford. Regardless of the ultimate method chosen for
    financing this project, the committee believes that the
    Department should immediately seek to correct these basic
    management deficiencies.

                     Program Direction for Defense Programs

        The budget request contained $303.5 million for the program
    direction function within the office of Defense Programs. The
    committee recommends $208.5 million, a reduction of $95.0
    million. Program direction provides funds for all federal
    personnel-related expenses, capital equipment, travel, outside
    contractual services, and the community assistance program at
    Los Alamos. The committee further recommends that this
    reduction be obtained by reducing support services, training
    and other related expenses by $70.0 million. The committee
    recommends that the remaining reductions be obtained by
    reducing federal employment, including salaries and travel
    costs, by 15 percent or $25.0 million.

         Recurring General Provision Relating to Availability of Funds

        The committee does not recommend the inclusion of a
    provision which would provide that amounts authorized to the
    Department of Energy for operating expenses or for plant and
    capital equipment remain available until expended. This change
    is consistent with the approach adopted by the committee with
    respect to Department of Defense authorization and
    appropriations accounts. This change would allow greater
    financial accountability and would allow a better analysis of
    uncosted balances carried over in future fiscal years.

                 Stockpile Life Extension Program at Y-12 Plant

        The budget request contained $1.8 billion for core
    stockpile management. Within this program, the committee
    recommends an additional $35.0 million for the stockpile life
    extension program. Recent risk reduction analysis has indicated
    a need for additional funding in fiscal year 1998 to support
    near-term W87 workload activities at DOE's Y-12 plant and to
    provide additional resources at that plant for future stockpile
    extension activities.

                              Technology Transfer

        The budget request contained $60.0 million for technology
    transfer. The committee recommends $52.5 million, a reduction
    of $7.5 million from the amount requested. Funding is not
    provided for projects under the program entitled ``Partnership
    for a New Generation of Vehicles.'' The committee believes
    that, if this program is meritorious, funding in future years
    should be requested within other non-defense programs of the
    Department of Energy. Of the remaining amount made available
    for technology transfer, the committee recommends $10.0 million
    for the American Textiles Partnership project, an increase of
    $4.5 million above the amount requested for this activity.

    Transfer of Funds Associated with Security at Rocky Flats Site and the
                                  Fernald Site

        The committee, as noted above, in the discussion on the
    Defense Environmental Management Program recommends
    transferring $45.2 million from the operations and maintenance
    account within the stockpile management program to the closure
    fund. The transfer of $45.2 million represents the costs
    associated with the provision of security at the Rocky Flats
    site and the Fernald site. The committee understands that the
    Department has no objection to this transfer from the stockpile
    management account. The committee believes that this
    consolidation of all activities and the costs associated with
    those activities will provide greater control and
    accountability. The committee also believes that this transfer
    more accurately reflects the programmatic responsibility for
    those costs and the provision of those activities. The
    committee believes those costs should be borne by the
    environmental restoration and waste management program. The
    committee urges the Department to assess other areas and costs
    which are not clearly related to the weapons activities
    accounts and to consider a realignment in the fiscal 1999
    budget request.

                               Tritium Production

        The committee continues to support the Department of
    Energy's dual-track strategy for determining the most reliable
    and cost-effective method for the production of tritium for
    national security, however, it did not receive the
    Administration's proposal for legislative changes to certain
    underlying statutory provisions affecting tritium production
    until after the conclusion of the hearing process on the
    Department's annual authorization. These proposed changes are
    significant and, in some cases, seek to address issues such as
    the sale of power generated from commercial tritium production
    facilities which may involve matters within the jurisdiction of
    another committee. The committee will seek to address these
    technical, policy and jurisdictional issues during the
    remainder of this Congress.

                        Worker and Community Transition

        The budget request contained $70.5 million for Worker and
    Community Transition. The committee recommends $22.0 million.
    The committee further recommends that this program be
    terminated at the end of fiscal year 1999.
        The worker and community transition program was created
    pursuant to section 3161 of the National Defense Authorization
    Act for Fiscal Year 1993 (Public Law 102-484). This Act
    established requirements and objectives to guide the Department
    in its efforts to restructure the private contractor workforce
    following the end of the cold war. The build-up in contractor
    employment within the Department, especially across the defense
    nuclear weapons complex, accelerated during the late 1980s and
    reached its peak at the end of fiscal year 1992, when the
    Department employed over 148,000 contractor employees. With the
    end of the cold war, the Department recognized that the weapons
    production mission would need to be reduced and that its
    primary mission would shift toward environmental management.
    Section 3161 was designed to minimize the impacts on workers
    and communities during this transition.
        Since the enactment of section 3161, the Department has
    spent over $609.0 million to provide benefits to contractor
    employees separated in workforce restructuring and downsizing
    efforts. In addition, approximately $150.0 million has been
    provided to communities affected by the downsizing. Payments to
    displaced workers took the form of enhanced severance payments,
    relocation allowances, educational benefits, and enhanced
    retirement benefits.
        The committee recommends that the provisions contained in
    section 3161 be phased out by the end of fiscal year 1999. This
    recommendation is based on a number of factors. First, most of
    the separations have now occurred. At the end of fiscal year
    1998, the DOE contractor employment levels will be at 100,000.
    Second, with DOE's movement to fixed price contracts,
    administration and determination of employment levels will be
    within the purview of the contractor, not the government.
    Third, much of the upcoming work will be dictated by
    environmental compliance agreements and not by nuclear weapons
    production demands. Separations that occur to a large extent in
    the future will have nothing to do with the end of the cold
    war. However, if the weapons complex requires a similar or
    significant downsizing at some point in the future, Congress
    can, at that time, develop remedies appropriate to those
    situations. Fourth, the program has come under significant
    scrutiny by the DOE Inspector General and the U.S. General
    Accounting Office (GAO) for questionable payments and
    ineffective administration. For example, the Inspector General
    reported that during the first restructuring at the Fernald
    weapons plant, of the 255 separations effective in fiscal year
    1994, all but 14 of the positions had been refilled within one
    year by either previous employees or ones with similar skills--
    a 95 percent rehire rate. Moreover, the 255 separated employees
    were provided severance payments based on their length of
    service, medical benefits, outplacement support, and retirement
    benefits at a cost of $2.9 million. Similarly, a subsequent
    restructuring plan for fiscal years 1995 and 1996 was uncovered
    by the Inspector General at that same site. Had it not been
    stopped, it would have cost an additional $12.9 million for
    workforce restructuring that would have provided little or no
    benefit to the Department. Audits of worker and community
    transition programs at DOE sites at Mound, Pinellas, Oak Ridge,
    and Rocky Flats, and Las Vegas likewise revealed questionable
    or unnecessary expenditures.
        In addition, a recent GAO report found that the benefits
    paid to these private sector workers varied widely from site to
    site and virtually always exceeded payments available to
    federal workers. The committee notes that similar programs are
    not available to private contractor employees who lose their
    jobs when defense facilities like shipyards or aircraft
    manufacturers downsize. While the committee is sympathetic to
    any contract worker who is displaced, it believes that this
    program has largely met its original goal of minimizing the
    effects of post-cold war downsizing on workers and local
    communities through expenditures exceeding $750.0 million.

                             LEGISLATIVE PROVISIONS

              Subtitle A--National Security Program Authorization

                        Section 3101--Weapons Activities

         This section would authorize DOE weapons activity funding
    for fiscal year 1998.

          Section 3102--Environmental Restoration and Waste Management

         This section would authorize funds for DOE defense
    environmental restoration and waste management activities for
    fiscal year 1998.

                     Section 3103--Other Defense Activities

         This section would authorize funds for DOE other defense
    activities for fiscal year 1998.

                  Section 3104--Defense Nuclear Waste Disposal

         This section would authorize funds for defense nuclear
    waste disposal activities of the Department for fiscal year
    1998.

                    Subtitle B--Recurring General Provisions

                          Section 3121--Reprogramming

         This section would prohibit the reprogramming of funds in
    excess of 102 percent of the amount authorized for the program,
    or in excess of $1.0 million above the amount authorized for
    the program until the Secretary of Energy has notified the
    congressional defense committees and a period of 30 calendar
    days has elapsed after the date on which the notification is
    received.

                 Section 3122--Limits on General Plant Projects

         This section would limit the initiation of ``general plant
    projects'' authorized by the bill if the current estimated cost
    for any project exceeds $2.0 million. However, if the Secretary
    of Energy finds that the estimated cost of any project will
    exceed $2.0 million, the congressional defense committees must
    be notified of the reasons for the cost variation. The
    committee notes that the Department was required pursuant to
    the provisions of section 3122 of the National Defense
    Authorization Act for Fiscal Year 1997 (Public Law 104-201) to
    submit a report to support increasing the threshold for general
    plant projects. The committee has not received that report and
    has accordingly not been able to consider the Department's
    views.

                 Section 3123--Limits on Construction Projects

        This section would permit any construction project to be
    initiated and continued only if the estimated cost for the
    project does not exceed 125 percent of the higher of: (1) the
    amount authorized for the project, or (2) the most recent total
    estimated cost presented to the Congress as justification for
    such project. To exceed such limits, the Secretary of Energy
    must report in detail to the congressional defense committees
    and the report must be before the committees for 30 legislative
    days. This section would also specify that the 125 percent
    limitation would not apply to projects estimated to cost under
    $5.0 million.

                     Section 3124--Fund Transfer Authority

         This section would permit funds authorized by the bill to
    be transferred to other agencies of the government for
    performance of work for which the funds were authorized and
    appropriated. The provision would permit the merger of such
    funds with the authorizations of the agency to which they are
    transferred. This section would also limit to no more than five
    percent the amount of funds that may be transferred between
    accounts in the Department of Energy that were authorized
    pursuant to this act.

         Section 3125--Authority for Conceptual and Construction Design

         This section would limit the Secretary of Energy's
    authority to request construction funding until the Secretary
    has certified a conceptual design has been completed, except in
    the case of emergencies.

    Section 3126--Authority for Emergency Planning, Design and Construction
                                   Activities

        This section would permit, in addition to any advance
    planning and construction design otherwise authorized by the
    bill, the Secretary of Energy to perform planning and design
    utilizing available funds for any Department of Energy national
    security program construction project whenever the Secretary
    determines that the design must proceed expeditiously to
    protect the public health and safety, to meet the needs of
    national defense, or to protect property.

    Section 3127--Funds Available for all National Security Programs of the
                              Department of Energy

        This section would authorize, subject to section 3121 of
    this bill, amounts for management and support activities and
    for general plant projects to be made available for use, when
    necessary, in connection with all national security programs of
    the Department of Energy.

     Section 3128--Authority Relating to Transfer of Defense Environmental
                                Management Funds

         This section would provide the manager of each field
    office of the Department of Energy with the limited authority
    to transfer defense environmental management funds from a
    program or project under the jurisdiction of the office to
    another such program or project.

       Subtitle C--Program Authorizations, Restrictions, and Limitations

      Section 3131--Ballistic Missile Defense National Laboratory Program

        This section would establish a program within the DOE
    weapons laboratories for the purpose of assisting the
    Department of Defense in the testing and development of a
    ballistic missile defense program.

                           Subtitle D--Other Matters

     Section 3141--Plan for Stewardship, Management, and Certification of
                   Warheads in the Nuclear Weapons Stockpile

        This section would require the Secretary of Energy to
    report annually on the Department's plan for the Stockpile
    Stewardship and Management Program. This report would be
    submitted in both a classified and unclassified form and
    provided in lieu of a number of other reporting requirements
    which have become redundant. The report required by this
    section is a consolidation of previous reporting requirements.

             Section 3142--Repeal of Obsolete Reporting Requirement

        This section would repeal a number of obsolete reporting
    requirements.

        Section 3143--Revisions to Defense Nuclear Facilities Workforce
                        Restructuring Plan Requirements

        This section would modify and repeal selected provisions of
    section 3161 of the National Defense Authorization Act for
    Fiscal Year 1993 (Public Law 102-484). Section 3161 provided
    authority to the Secretary of Energy to make severance payments
    to private contractor employees whose positions were being
    eliminated as the result of the end of the cold war and the
    downsizing of the nuclear weapons complex. This provision also
    granted authority to the Secretary to make grants to
    communities which had been affected by the downsizing. The
    modifications to section 3161 would eliminate the authority of
    the Department to make assistance grants effective upon
    enactment, and would eliminate the authority to make severance
    payments after September 30, 1999. The modifications to section
    3161 would also make it clear that this section does not apply
    to federal employees.

        Section 3144--Extension of Authority for Appointment of Certain
                Scientific, Engineering, and Technical Personnel

        This section would extend the authority of the Secretary of
    Energy to appoint certain scientific, engineering, and
    technical personnel to positions within the Department without
    regard to the provisions governing the appointments in the
    competitive service, classification schedules, and pay rates
    contained in title 5, United States Code.

       Section 3145--Report on Proposed Contract for Hanford Tank Waste
                             Vitrification Project

        This section would require prior notice to the
    congressional defense committees before entering into a
    contract for the Hanford tank waste vitrification project. The
    section would also require the submission of a detailed report
    describing the activities to be carried out under the contract,
    a description of the contractual and financial aspects of the
    contract, and an analysis of the cost to the United States of
    the proposed contract over the life of the project.

      Section 3146--Limitation on Conduct of Subcritical Nuclear Weapons
                                     Tests

        This section would require the submission of a detailed
    report on the manner in which funds available to the Secretary
    for fiscal years 1996 and 1997 to conduct subcritical tests
    were used. The committee has authorized over $100.0 million for
    the conduct of these tests during this and the previous fiscal
    year. At the present time, despite substantial support by this
    committee for the conduct of such tests, no such tests have
    occurred. The Department has again requested substantial
    additional sums for fiscal year 1998 for the conduct of such
    tests and there are indications that the funds contained in the
    budget request may be insufficient to perform the planned
    activities. While the committee strongly supports these tests,
    it is concerned that over $100.0 million has apparently been
    spent without a single test having been completed. The
    committee is aware that the costs for the actual tests may be a
    relatively small part of the overall costs of this program,
    however it is concerned that the Department has potentially
    utilized the amounts authorized for the subcritical tests on
    other activities. Therefore, the committee expects this report
    to detail by site and by detailed line activities, the
    expenditures attributable to this program and to submit this
    report prior to utilizing funds authorized for fiscal year
    1998.

    Section 3147--Limitation on Use of Certain Funds Until Future Use Plans
                                 are Submitted

        This section would limit the ability of the Secretary of
    Energy to spend funds authorized for the office of Policy and
    Management within the Defense Environmental Management program
    until the draft future use plans and the final future use plans
    required under section 3153 (f) of the National Defense
    Authorization Act for Fiscal Year 1997 (Public Law 104-201) are
    submitted. The committee understands that the Department has
    yet to initiate a program that would allow for the timely
    compliance with this requirement. The committee remains
    concerned that many of the reportingrequirements are not being
    completed on time and hopes this action will encourage the adherence to
    the statutory deadlines.

       Section 3148--Plan for External Oversight of National Laboratories

        This section would require the Secretary of Energy to
    develop a plan for the external oversight of the national
    laboratories. The plan would provide for the establishment of
    an external oversight committee comprised of representatives of
    industry and academia for the purpose of making recommendations
    to the Secretary of Energy and to the congressional defense
    committees on the productivity of the laboratories and on the
    excellence, relevance, and appropriateness of the research
    conducted at the laboratories. The plan also would provide for
    the establishment of a competitive peer review process for
    funding basic research at the laboratories.

                 Section 3149--University-Based Research Center

        This section would require the Secretary of Energy to
    establish a university-based research center to coordinate the
    collaboration among national laboratories, universities and
    industry in support of scientific and engineering advancement
    in key Department of Energy defense program areas.

                  Section 3150--Stockpile Stewardship Program

        This section would provide that, as a matter of U.S.
    policy, the stockpile stewardship program shall be conducted
    consistent with U.S. national security requirements and in
    conformity with the Non-Proliferation Treaty and the
    Comprehensive Test Ban Treaty when and if that treaty enters
    into force. The stockpile stewardship and management program
    has been undertaken to ensure the safety, security,
    effectiveness, and reliability of the U.S. nuclear weapons
    stockpile.

       Section 3151--Reports on Advanced Supercomputer Sales to Certain
                                Foreign Nations

        This section would require companies that participate in
    the Accelerated Strategic Computing Initiative (ASCI) of the
    Department of Energy to report each sale of computers that
    operate at a speed of over 2,000,000 theoretical operations per
    second (MTOPS) to countries designated as Tier III countries.
    The ASCI contractor would be required to submit these reports
    to the Secretary of Defense and the Secretary of Energy on a
    quarterly basis. On an annual basis, the Secretary of Energy
    would be required to report to Congress on all computer sales
    reported by ASCI companies under this provision during the
    previous year.
       TITLE XXXII--DEFENSE NUCLEAR FACILITIES SAFETY BOARD AUTHORIZATION

                             LEGISLATIVE PROVISIONS

                          Section 3201--Authorization

        This section would authorize $17.5 million for the
    operation of the Defense Nuclear Facilities Safety Board, as
    provided in the budget request.

        Section 3202--Plan for Transfer of Functions of Defense Nuclear
            Facilities Safety Board to Nuclear Regulatory Commission

        This section would require the Defense Nuclear Facilities
    Safety Board (DNFSB) to develop a plan, in consultation with
    the Secretary of Energy and the Nuclear Regulatory Commission
    (NRC), for the transfer the DNSFB's functions to the NRC.
                    TITLE XXXIII--NATIONAL DEFENSE STOCKPILE

                             LEGISLATIVE PROVISIONS

                Section 3301--Authorized Uses of Stockpile Funds

        This section would authorize $73.0 million from the
    National Defense Stockpile Transaction Fund for the operation
    and maintenance of the National Defense Stockpile for fiscal
    year 1998. This provision would also permit the use of
    additional funds for extraordinary or emergency conditions
    after a notification to Congress.

     Section 3302--Disposal of Beryllium Copper Master Alloy From National
                               Defense Stockpile

        This section would authorize the Department of Defense to
    dispose of all beryllium copper master alloy from the National
    Defense Stockpile, contingent upon certification by the
    National Defense Stockpile Manager that any disposal of this
    material will not adversely affect the strategic and critical
    material needs of the United States.

    Section 3303--Disposal of Titanium Sponge in National Defense Stockpile

        This section would authorize the Department of Defense to
    dispose of 34,800 short tons of titanium sponge contained in
    the National Defense Stockpile. The committee is aware that
    titanium, needed for critical components of defense weapons
    systems, has become increasingly difficult to obtain. The
    committee believes that releasing titanium sponge would help
    reduce the cost of defense weapons systems. Estimates provided
    to the committee indicate that the authority for the disposal
    of titanium sponge provided by this section will take
    approximately eleven years to execute.

     Section 3304--Conditions on Transfer of Stockpiled Platinum Reserves
                                for Treasury Use

        This section would establish conditions for the transfer of
    platinum contained in the National Defense Stockpile to the
    United States Treasury for minting of platinum coins.

       Section 3305--Restrictions on Disposal of Certain Manganese Ferro

        This section would repeal section 3304 of the National
    Defense Authorization Act for Fiscal Year 1996 (Public Law 104-
    106) which placed restrictions on the disposal of Manganese
    Ferro from the National Defense Stockpile. The committee
    believes these restrictions prohibit the Department of Defense
    from disposing of high grade Manganese Ferro. The provision
    would allow the disposal of less than high grade Manganese
    Ferro for remelting only by a domestic ferroalloy producer
    unless the President determines that a domestic ferroalloy
    producer is not available to acquire the material.

        Section 3306--Required Procedures for Disposal of Strategic and
                               Critical Materials

        This section would amend section 6(b) of the Strategic and
    Critical Materials Stock Piling Act (section 98e(b) of title
    50, United States Code) to clarify the procedures used by the
    Department of Defense for the sale of materials from the
    National Defense Stockpile.
                     TITLE XXXIV--NAVAL PETROLEUM RESERVES

                             LEGISLATIVE PROVISIONS

                 Section 3401--Authorization of Appropriations

        This section would authorize $117.0 million for fiscal year
    1998 for the Naval Petroleum Reserves.

      Section 3402--Price Requirement on Sale of Certain Petroleum During
                                Fiscal Year 1998

        This section would require the Secretary of Energy to sell
    petroleum produced for the Naval Petroleum Reserves at
    established prices.

     Section 3403--Termination of Assignment of Navy Officers to Office of
                     Naval Petroleum and Oil Shale Reserves

        This section would repeal section 2 of Public Law 96-137
    which requires the Secretary of the Navy to assign naval
    officers to the office of Naval Petroleum and Oil Shale
    Reserves. This requirement was established at the time the
    Naval Petroleum Reserves were transferred from the Department
    of Defense to the Department of Energy (DOE). DOE is in the
    process of selling the major oil producing property in the
    reserves, NPR-1 Elk Hills, which is scheduled to be completed
    early in 1998. As there will be a substantial reduction in
    requirements for U.S. Navy participation in the reserves with
    this sale, the committee believes the continued assignment of
    naval officers to DOE is no longer needed.
                      TITLE XXXV--PANAMA CANAL COMMISSION

                             LEGISLATIVE PROVISIONS

         Subtitle A--Authorization of Expenditures From Revolving Fund

        This subtitle would grant the Panama Canal Commission (the
    Commission) authority to make expenditures from the Panama
    Canal Commission Revolving Fund within existing statutory
    limits. The Commission operates as a wholly-owned government
    corporation and is supervised by a nine member supervisory
    board, commonly referred to as the Panama Canal Commission
    Board of Directors. The Commission does not draw from U.S.
    taxpayer funds for the operation of the Canal, but receives
    funding to cover its operating, administrative and capital
    improvement expenses from tolls and other revenue collected.
    The Commission's total operating costs including depreciation
    and interest payments in fiscal year 1998 are estimated to be
    $673.8 million.

              Subtitle B--Facilitation of Panama Canal Transition

                     Section 3511--Short Title; References

        This section would establish the Act as the ``Panama Canal
    Transition Facilitation Act of 1997.''

             Section 3512--Definitions Relating to Canal Transition

        This section would define terms used throughout the Act
    which are related to the transfer of the Canal under the Panama
    Canal Treaty of 1977 and related agreements.

        Part I--Transition Matters Relating to Commission Officers and
                                   Employees

      Section 3521--Authority for the Administrator of the Commission to
     Accept Appointment as Administrator of the New Panama Canal Authority

        This section would provide Congressional consent for the
    Administrator of the Panama Canal Commission to serve
    simultaneously as the Administrator of the Panama Canal
    Authority (PCA), which is the body expected to be created this
    year under Panamanian law to operate the Canal after December
    31, 1999. The PCA is expected to be active before the 1999
    transfer in drafting, reviewing and adopting regulations that
    will be put in place at the time of transfer, as well as
    performing other important administrative functions. Allowing
    the Administrator of the Commission to also serve as
    Administrator of the PCA, prior to the actual transfer, is
    designed to facilitate the smooth coordination and continuation
    of the Canal's administrative and operating systems by Panama
    after the transfer on December 31, 1999.
        This section would also exempt the Administrator from
    selected ethics provisions which could interfere with his
    expected functions during the transition, given the special
    circumstances of the transfer of the Panama Canal on December
    31, 1999. These exemptions would grant very limited authority
    for the Administrator to receive payment from the government of
    Panama for per diem and reimbursement of various expenses
    related to his Panama Canal Authority service. Absent
    congressional consent, either the appointment to the position
    or the receipt of compensation by the Administrator could be
    considered a violation of the Emoluments clause of the United
    States Constitution. New subsection (d) would exempt the
    Administrator from the registration and other requirements of
    the Foreign Agents Registration Act of 1938, as amended (22
    U.S.C. 611 et seq.). New subsection (e) would exempt the
    Administrator from coverage of certain criminal conflict-of-
    interest statutes. Generally, these rules are applicable to
    government employees who later represent or are otherwise
    involved with foreign entities. In this case, however, when the
    principal functions of a federal agency are being transferred
    to a foreign government, normal application of those rules
    would interfere with the expected functions of the
    Administrator as he continues his service with the PCA.

            Section 3522--Post-Canal Transfer Personnel Authorities

        This section would authorize exemptions to post-employment
    ethics rules for Commission employees who continue their Canal
    employment with the Panama Canal Authority (PCA) after December
    31, 1999. Without these exemptions, these employees would be
    prohibited from direct contact with the United States
    Government on Canal-related matters, which would needlessly
    hinder any working relationships between federal agencies and
    the PCA.
        This section would also provide Congressional consent for
    current Canal employees who are military retirees or members of
    reserve components of the armed forces to continue employment
    after December 31, 1999, with the Panama Canal Authority.
    Otherwise, each employee so situated would individually have to
    gain consent of the Secretary of State and the Secretary of the
    concerned military component. Blanket authority is appropriate
    to allow these employees to continue in their jobs if they have
    the opportunity to do so.

          Section 3523--Enhanced Authority of Commission to Establish
               Compensation of Commission Officers and Employees

        This section would revise the Commission's compensation
    authorities to no longer mandate a minimum two percent annual
    pay adjustment under certain circumstances. It would also,
    through a savings provision, guarantee that current levels of
    basic pay will be maintained.

       Section 3524--Travel, Transportation and Subsistence Expenses for
      Commission Personnel No Longer Subject to Federal Travel Regulations

        This section would exempt the Commission, beginning on
    January 1, 1999, from the requirements of the Federal Travel
    Regulations, so that it can develop streamlined travel
    regulations which are more business-like, will better
    facilitate the dissolution of the Commission and will be more
    suitable for adoption by Panama.

          Section 3525--Enhanced Recruitment and Retention Authorities

        This section would give the Commission authority for
    recruitment and retention incentives similar to those in place
    for other federal agencies. The Commission's current
    authorities are limited to narrow classes of employees, and
    cannot be used to attract and retain Panamanian citizens for
    most positions. The section would also allow education benefits
    to be offered as part of a recruitment or retention package,
    when determined to be necessary by the Commission.

             Section 3526--Transition Separation Incentive Payments

        This section would give the Commission authority for a
    limited and specialized transition separation incentive
    program, geared towards facilitating the critical succession
    planning necessary for an orderly transition. The program would
    differ from general government-wide separation incentive
    programs in several respects.
        First, there would be no requirement to eliminate
    positions, as the purpose of the program is not related to
    downsizing. Second, the Commission would be allowed to make the
    offers during two three-month windows of time, for three months
    immediately after enactment of this bill and from October
    through December 1998. Third, the general authority would be
    for payments of $25,000 or less, but the Commission would be
    authorized, for especially critical positions, to offer up to
    50 percent of basic pay. The latter special authority may be
    used for no more than two incentive payments.
        The requirements imposed on the Commission would be similar
    to those applicable to federal agencies generally: a strategic
    plan must be submitted to the Congress, an amount equal to
    fifteen percent of basic pay must be remitted to the Civil
    Service Retirement and Disability Fund for each payment made,
    and recipients of a separation incentive payment who are
    reemployed by the United States Government within five years
    must repay the amount in full to the United States Treasury.

                    Section 3527--Labor-Management Relations

        This section would establish guidelines for the resolution
    of labor disputes, including pay and working conditions,
    between the Commission and the exclusive representative for any
    bargaining unit of employees of the Commission during the
    period beginning on the date of the enactment of this section
    and ending on the date the canal transfers to the Republic of
    Panama. This section also would provide a time limit of 45 days
    for the Federal Mediation and Conciliation Service to conclude
    its efforts, measured from the date on which either party
    requests the assistance. This section would also provide a time
    limit of 90 days for a decision by the Federal Services
    Impasses Panel, measured from the date on which its services
    are requested. Both time limits may be altered by mutual
    agreement of the parties. If the Impasses Panel fails to issue
    a decision within 90 days, then the efforts of the Panel are
    terminated and the Chairman of the Panel would be directed to
    determine the matter by a drawing between the last offer of the
    Panama Canal Commission and the last offer of the exclusive
    representative. The offer chosen would become the binding
    resolution of the matter.
        This provision is intended to provide reasonable bounds of
    time for the mediation and impasse resolution processes, given
    the amount of time left for the agency to develop and implement
    changes which are important for the transfer of the Canal to
    Panama.

    Section 3528--Availability of Panama Canal Revolving Fund for Severance
    Pay for Certain Employees Separated by the Panama Canal Authority after
                              Canal Transfer Date

        This section would provide authority for the Commission to
    transfer funds (derived from Canal revenues) to the Panama
    Canal Authority at treaty end to cover service with the
    Commission (i.e., periods of employment before December 31,
    1999) for employees who may be separated from Canal service
    after December 31, 1999. This authority will facilitate an
    agreement to have funds committed for this purpose and to
    address employee concerns that the Panama Canal Authority will
    have the funds in place to make severance payments for the
    employees' years of service with the United States Government.

    Part II--Transition Matters Relating to Operation and Administration of
                                     Canal

    Section 3541--Establishment of Procurement System and Board of Contract
                                    Appeals

        This section would grant special authority for the
    Commission to issue its own ``Canal'' procurement regulation
    for the purpose of facilitating Panama's adoption and
    continuous use of that regulation beyond 1999. The Commission
    will be required to develop, in consultation with the
    Administrator of the Office of Federal Procurement Policy, an
    independent and comprehensive procurement system that preserves
    the fundamental operating principles and procedures of the
    Federal Acquisition Regulation, while adapting its details and
    form for use by Panama after December 31, 1999.
        This section would further enable the Commission to waive
    the application of U.S. procurement statutes in its new
    regulation, except for certain listed statutes and those laws
    relating to civil rights, labor standards, or environmental
    protection. This authority would permit the new regulation to
    be ``delinked'' from U.S. laws and references to them that,
    were they to remain in the regulation, would hinder the ability
    of Panama to adopt the body of rules for its own use.
        This section would also authorize the formation of a Panama
    Canal Board of Contract Appeals, which would be empowered to
    decide all contract appeals and bid protests. The Board would
    be established and would function, with narrow exceptions, in
    accordance with the Contracts Disputes Act. The Board would
    constitute a forum for the expert, expeditious and transparent
    resolution of contract disputes that can be adopted and
    preserved by Panama as part of the Canal's comprehensive
    procurement system. Currently, these functions are handled,
    respectively, by the U.S. Army Corps of Engineers Board of
    Contract Appeals and the General Accounting Office, neither of
    which will be available to the Republic of Panama after
    December 31, 1999.

           Section 3542--Transactions with the Panama Canal Authority

        This section would allow United States Government agencies
    to sell services to the Panama Canal Authority if they choose
    to do so. Currently, many federal agencies provide services to
    the Commission on a reimbursable basis. This provision would
    enable those agencies to continue providing those services (or
    establish new services) to the new Panama Canal Authority on a
    reimbursable basis if they choose to do so.
        This section would also allow the Commission to provide in-
    kind services to the Panama Canal Authority during the
    remaining years of the Commission's existence. This authority
    would allow the Commission to provide fuller assistance to
    Panama in this critical period of intensive work on the
    regulations that will govern the Canal after December 31, 1999,
    as well as numerous other administrative responsibilities. As
    with all of its expenses, funding for this in-kind assistance
    would be derived from Canal revenues.

        Section 3543--Time Limitations for Filing of Claims for Damages

        This section would shorten the time periods applicable to
    the filing of vessel accident claims from two years to one
    year, as well as shorten the period for filing a civil action
    from one year to six months following the final administrative
    determination with respect to the claim. These shortened
    periods would facilitate the faster disposition of the final
    business of the agency, while not significantly affecting the
    due process afforded claimants.

                     Section 3544--Tolls for Small Vessels

        This section would allow the Commission to charge a fixed
    minimum toll for yachts and other small craft, rather than
    basing tolls strictly on the tonnage of those vessels. Before
    the Commission could implement a fixed minimum toll for small
    vessels, it would be required to first comply with its usual
    rulemaking process for adjusting tolls.

          Section 3545--Date of Actuarial Evaluation of FECA Liability

        This section would advance the date in current law for a
    Department of Labor actuarial determination from December 31,
    1999, to March 31, 1998 to allow for better advance financial
    planning by the Commission to liquidate the FECA liability or
    obligation.

                         Section 3546--Notaries public

        This section would authorize the Commission to appoint
    notaries public, similar to the authority provided to U.S.
    embassies in section 4221 of title 22, United States Code, and
    to military attorneys in section 1044a and 1044b of title 10,
    United States Code.

                       Section 3547--Commercial Services

        This section would authorize the Commission to conduct and
    promote commercial activities related to the management,
    operation or maintenance of the Panama Canal, consistent with
    the Panama Canal treaty of 1977 and related agreements.

        Section 3548--Transfer from President to Commission of Certain
       Regulatory Functions Relating to Employment Classification Appeals

        This section would remove the President from
    responsibilities relating to position classification appeals.
    This step is required to complete the change intended by
    section 3530 of the National Defense Authorization Act for
    Fiscal Year 1997 (Public Law 104-201), which removed the
    President from responsibilities for the administration of the
    Panama Canal Employment System, and reconfigured that system.

                   Section 3548--Enhanced Printing Authority

        This section would provide the Commission with more
    flexibility in meeting its printing production needs by
    eliminating the authority of the Joint Committee on Printing
    and the Public Printer over the printing of annual reports, and
    paper and envelope contracts. This change would allow the PCC
    to operate its printing plant in a manner which best suits its
    needs, including the use of timely local procurements when
    appropriate.

               Section 3549--Technical and Conforming Amendments

        This section would carry out various technical and
    conforming amendments.
                      TITLE XXXVI--MARITIME ADMINISTRATION

                             LEGISLATIVE PROVISIONS

       Section 3601--Authorization of Appropriations for Fiscal Year 1998

        This section would authorize $109.0 million for fiscal year
    1998, as requested in the President's budget, for the United
    States Maritime Administration. Of the funds authorized, $70.0
    million would be for operations and training programs, $35.0
    million would be for the costs, as defined in section 502 of
    the Federal Credit Reform Act of 1990, of loan guarantees
    authorized by Title XI of the Merchant Marine Act, 1936, as
    amended (46 App. U.S.C. 1271 et seq.), and $4.0 million would
    be for administrative expenses related to these loan guarantee
    commitments.

     Section 3602--Repeal of Obsolete Annual Report Requirement Concerning
     Relative Cost of Shipbuilding in the Various Coastal Districts of the
                                 United States

        This section would repeal the obsolete requirement for an
    annual report on the relative cost of shipbuilding in the
    various coastal districts contained in section 213 of the
    Merchant Marine Act, 1936, as amended (46 App. U.S.C. 1271 et
    seq.). The report was intended to monitor geographical cost
    factors associated with constructing or reconditioning
    comparable vessels in U.S. shipyards for the purpose of
    determining whether regional cost differential payments under
    the construction differential subsidy program (CDS) were
    appropriate. The CDS program has not been funded since 1962,
    and there is no indication that the cost differential would
    ever be justified.

      Section 3603--Provisions Relating to Maritime Security Fleet Program

        This section would amend section 656 (h)(1)(A) of the
    Merchant Marine Act, 1936, as amended (46 App. U.S.C. 1271 et
    seq.) to clarify that it does not restrict the operation or
    entry of U.S. flag self-propelled tankers in the domestic
    trades. The amendments made to section 656 by the Maritime
    Security Act of 1996 (Public Law 104-239) were intended to
    prevent carriers that receive payments under the Act from using
    those payments to compete unfairly with other carriers which do
    not receive government payments in these domestic trades. They
    were not intended, however, to affect tanker services provided
    by existing vessels in the trade or to discourage the
    employment of U.S. flag liner vessels under the terms of the
    Act by the those owners who operate both tankers and liner
    vessels.
        This section would also repeal the requirement that U.S.
    flag vessels wait for a period of three years, after they have
    been documented under the U.S. flag, before they are eligible
    to carry preference cargo. This change to current law would
    only apply to vessels which are included under an operating
    agreement entered into pursuant to the terms of the Maritime
    Security Act of 1996. The committee recommendation would ensure
    that vessel operators who choose to re-flag their vessels and
    enter into an operating agreement are not inhibited or
    disadvantaged in the operation of their vessels.

      Section 3604--Authority to Utilize Replacement Vessels and Capacity

        This section would amend section 653 (d) of the Merchant
    Marine Act, 1936, as amended (46 App. U.S.C. 1271 et seq.) to
    authorize a U.S. flag operator to utilize a foreign flag
    replacement vessel for the carriage of preference cargo if its
    U.S. flag vessel is activated by the Secretary of Defense under
    the terms of an Emergency Preparedness Agreement or other
    primary sealift readiness program approved by the Secretary of
    Defense. Current law restricts the use of replacement vessels
    to U.S. flag operators who are receiving payments under the
    Maritime Security Act (Public Law 104-239). This amendment
    would expand that authority to other U.S. flag operators
    provided they have entered into a primary sealift readiness
    agreement that is approved by the Secretary of Defense.

       Section 3605--Authority to Convey National Defense Reserve Vessel

         This section would authorize the Secretary of
    Transportation to convey a surplus National Defense Reserve
    Fleet vessel to the Artship Foundation, a non-profit
    organization located in Oakland, California.
                               DEPARTMENTAL DATA

        The Department of Defense requested legislation, in
    accordance with the program of the President, as illustrated by
    the correspondence set out below:

                  DEPARTMENT OF DEFENSE AUTHORIZATION REQUEST

                                 Department of Defense,
                                     Office of General Counsel,
                                        Washington, DC, March 12, 1997.
    Hon. Newt Gingrich,
    Speaker of the House of Representatives,
    Washington, DC.
        Dear Mr. Speaker: The Department of Defense proposes the
    enclosed draft of legislation, ``To authorize appropriations
    for fiscal years 1998 and 1999 for military activities of the
    Department of Defense, to prescribe military personnel
    strengths for fiscal years 1998 and 1999, and for other
    purposes.''
        This legislative proposal is part of the Department of
    Defense legislative program for the 105th Congress and is
    needed to carry out the President's budget plans for fiscal
    years 1998 and 1999. The Office of Management and Budget
    advises that there is no objection to the presentation of this
    proposal to the Congress and that its enactment would be in
    accord with the program of the President.
        This bill provides management authority for the Department
    of Defense and makes several changes to the authorities under
    which we operate. These changes are designed to permit a more
    efficient operation of the Department of Defense.
        Enactment of this legislation is of great importance to the
    Department of Defense and the Department urges its speedy and
    favorable consideration.
                Sincerely,
                                                      Judith A. Miller.
        Enclosures.
                                    ------

                  MILITARY CONSTRUCTION AUTHORIZATION REQUEST

                                 Department of Defense,
                                     Office of General Counsel,
                                     Washington, DC, February 14, 1997.
    Hon. Newt Gingrich,
    Speaker of the House of Representatives,
    Washington, DC.
        Dear Mr. Speaker: Enclosed is proposed legislation to
    authorize construction at certain military installations for
    Fiscal Year 1998, and for other military construction
    authorizations and activities of the Department of Defense.
    This legislative proposal is needed to carry out the
    President's Fiscal Year 1998 budget plan.
        The draft proposal would authorize appropriations in Fiscal
    Year 1998 for new construction and family housing support for
    the Active Forces, Defense Agencies, NATO Security Investment
    Program, and Guard and Reserve Forces. It also establishes the
    effective dates within the military construction program and
    includes construction projects resulting from base realignment
    and closure actions. Additionally, the Fiscal Year 1998 draft
    legislation includes General Provisions.
        The Office of Management and Budget advises that there is
    no objection to the presentation of this proposal to Congress,
    and that its enactment would be in accord with the program of
    the President.
                Sincerely,
                                                      Judith A. Miller.
        Enclosure.
                                    ------

                               COMMITTEE POSITION

        On June 12, 1997 the Committee on National Security, a
    quorum being present, approved H.R. 1119, as amended, by a vote
    of 51 to 3.

                      COMMUNICATIONS FROM OTHER COMMITTEES

                              House of Representatives,
                                         Committee on Commerce,
                                         Washington, DC, June 16, 1997.
    Hon. Floyd Spence,
    Chairman, Committee on National Security, House of Representatives,
            Washington, DC.
        Dear Mr. Chairman: It is my understanding that on June 11,
    1997, the Committee on National Security ordered reported H.R.
    1119, the National Defense Authorization for Fiscal Year 1998.
    During the markup of this legislation, the Committee on
    National Security adopted a number of provisions which fall
    within the jurisdiction of the Commerce Committee. These
    provisions include the following:
              Sec. 344--Modifications of Authority to Store and
            Dispose of Nondefense Toxic and Hazardous Materials;
              Sec. 601--Increase in Basic Pay for Fiscal Year 1998;
              Sec. 602--Annual Adjustment of Basic Pay and
            Protection of Member's Total Compensation While
            Performing Certain Duty;
              Sec. 603--Use of Food Cost Information to Determine
            Basic Allowance for Subsistence;
              Sec. 604--Consolidation of Basic Allowance for
            Quarters, Variable Housing Allowance, and Overseas
            Housing Allowances;
              Sec. 612--One-Year Extension of Certain Bonuses and
            Special Pay Authorities for Nurse Officer Candidates,
            Registered Nurses, and Nurse Anesthetists;
              Sec. 613--One-Year Extension of Authorities Relating
            to Payment of Other Bonuses and Special Pays;
              Sec. 614--Increase in Minimum Monthly Rate of
            Hazardous Duty Incentive Pay for Certain Members;
              Sec. 617--Special Pay for Duty at Designated Hardship
            Duty Locations;
              Sec. 621--Increase in Amount of Family Separation
            Allowance;
              Sec. 631--Travel and Transportation Allowances for
            Dependents of Member Sentenced by Courts-martial;
              Sec. 632--Dislocation Allowance;
              Sec. 651--Definition of Sea Duty for Purposes of
            Career Sea Pay;
              Sec. 654--Reimbursement of Public Health Service
            Officers for Adoption Expenses;
              Sec. 735--Portability of State Licenses for
            Department of Defense Health Care Professionals;
              Sec. 1021--Relationship of Certain Laws to Disposal
            of Vessels for Export from the Naval Vessel Register
            and the National Defense Reserve Fleet;
              Sec. 3143--Revisions to Defense Nuclear Facilities
            Workforce Restructuring Plan Requirements;
              Section 3144--Extension of Authority to Appoint
            Scientific Personnel;
              Title XXXII--Defense Nuclear Facilities Safety Board;
            and
              Sec. 3402--Price Requirement on Sale of Certain
            Petroleum During Fiscal Year 1998.
        Recognizing the need to bring this legislation before the
    House expeditiously, the Commerce Committee agrees not to seek
    a sequential referral of the bill based on the provisions
    listed above. By agreeing not to seek a sequential referral,
    the Commerce Committee does not waive its jurisdiction over the
    provisions listed above or any other provisions of the bill
    that may fall within its jurisdiction. In addition, the
    Commerce Committee reserves its right to seek conferees on any
    provisions within its jurisdiction which are considered in the
    House-Senate conference.
        I want to thank you and your staff for their assistance in
    providing the Commerce Committee with an opportunity to review
    the text of H.R. 1119. I would appreciate your assistance in
    including this letter as a part of the National Security
    Committee's report on H.R. 1119 and as part of the record
    during consideration of this bill by the House.
                Sincerely,
                                                  Tom Bliley, Chairman.
                                    ------

                              House of Representatives,
                      Committee on Education and the Workforce,
                                         Washington, DC, June 16, 1997.
    Hon. Floyd Spence,
    Chairman, Committee on National Security, House of Representatives,
            Washington, DC.
        Dear Mr. Chairman: Thank you for working with me in your
    development of H.R. 1119, the National Defense Authorization
    Act, specifically Section 3143, Revisions to Defense Nuclear
    Facilities Workforce Restructuring Plan Requirements and
    Section 374, Programs to Commemorate 50th Anniversary of
    Marshall Plan and Korean Conflict. As you know, these
    provisions are within the jurisdiction of the Education and the
    Workforce Committee.
        While we did not seek sequential referral of H.R. 1119, the
    Committee does hold an interest in preserving its future
    jurisdiction with respect to issues raised in the
    aforementioned provisions, and its jurisdictional prerogatives
    should the provisions of this bill or any Senate amendments
    thereto be considered in a conference with the Senate. We would
    expect to be appointed as conferees on these provisions should
    a conference with the Senate arise.
        Again, I thank you for working with me in developing the
    amendments to H.R 1119 and look forward to working with you on
    these issues in the future.
                Sincerely,
                                               Bill Goodling, Chairman.
                                    ------

                              House of Representatives,
                  Committee on Government Reform and Oversight,
                                         Washington, DC, June 16, 1997.
        Hon. Floyd Spence,
    Chairman, Committee on National Security, House of Representatives,
            Washington, DC.
        Dear Mr. Chairman: The Committee on Government Reform and
    Oversight agrees to waive jurisdiction over the following
    provisions in H.R. 1119, the National Defense Authorization
    Act, that fall within the legislative jurisdiction of the
    Committee on Government Reform and Oversight:
              Section 321--Pay for Overseas teachers;
              Section 332--Fire Safe accommodations for government
            employees;
              Section 374--Programs to commemorate the 50th
            anniversary of the Marshall Plan and Korea;
              Section 563--Authority for personnel participation in
            management of certain non-federal entities;
              Section 821 (e), (f)--Repeal of certain acquisition
            requirements and reports;
              Section 1055--Display of POW/MIA flag;
              Section 1059--Commendation for those who served in
            the Cold War;
              Section 2813--Disposition of proceeds from AF Plant
            #78, Brigham City, Utah;
              Section 2821--Consideration of installations as sites
            for new federal facilities;
              Section 3521--Authorization for Administrator of
            Panama Canal Commission to accept appointment as
            Administrator of Panama Canal Authority;
              Section 3524--Travel, transportation, and subsistence
            expenses for PCC personnel; and
              Section 3541--Establishment of procurement system and
            board of contract appeals.
        As you know, House Rule X, Establishment and Jurisdiction
    of Standing Committees, grants the Government Reform and
    Oversight Committee wide jurisdiction over government
    management issues including matters related to Federal civil
    service, procurement policy and property disposal. This
    Committee also oversees all commemorative legislation. This
    waiver is not intended or designed to limit our jurisdiction
    over any future consideration of related matters.
        Mr. Chairman, we appreciate your consultation with the
    Government Reform and Oversight Committee to ensure that these
    provisions address the legislative goals of both Committees as
    well as the American taxpayer. I look forward to working with
    you on this and other issues throughout the 105th Congress.
                Sincerely,
                                                  Dan Burton, Chairman.
                                    ------

                              House of Representatives,
                                        Committee on Judiciary,
                                         Washington, DC, June 13, 1997.
    Hon. Floyd Spence,
    Chairman, Committee on National Security, House of Representatives,
            Washington, DC.
        Dear Mr. Chairman: I am writing to you concerning H.R.
    1119, the Department of Defense Authorization for FY 1998-99. I
    understand that your committee has completed its markup of this
    bill.
        Prior to the markup you kindly made this committee aware of
    several provisions which fall within our Rule X jurisdiction.
    Specifically:
              1. language relating to the trademark concerning the
            50th anniversary of the Marshall Plan;
              2. language relating to the coverage of National
            Guard Challenge Program personnel who shall be
            considered to be employees of the United States for
            purposes of liability; and
              3. language relating to procurement in the Panama
            Canal Zone.
        We have reviewed these provisions, and due to the
    Leadership's desire to proceed in an expeditious manner are
    willing to waive our clear right to a sequential referral of
    these provisions. We, of course, do not waive our jurisdiction
    in any way over the underlying subject matter.
        I appreciate the comity between our two committees.
                Sincerely,
                                               Henry J. Hyde, Chairman.
                                    ------

                              House of Representatives,
                          Committee on International Relations,
                                         Washington, DC, June 16, 1997.
    Hon. Floyd Spence,
    Chairman, Committee on National Security, House of Representatives,
            Washington, DC.
        Dear Mr. Chairman: I understand that on Thursday, June 12,
    1997, the Committee on National Security ordered favorably
    reported H.R. 1119, the National Defense Authorization Act for
    Fiscal Year 1998. The bill includes a number of provisions that
    fall within the legislative jurisdiction of the Committee on
    International Relations pursuant to Rule X(k) of the House of
    Representatives.
        The specific provisions within our committee's jurisdiction
    are: (1) Title XI--Cooperative Threat Reduction With States of
    Former Soviet Union; (2) Title XII, Matters Relating to Other
    Nations--(Sections 1201(b), 1202, and 1204).
        Pursuant to Chairman Solomon's announcement that the
    Committee on Rules will move expeditiously to consider a rule
    for H.R. 1119 and your desire to have the bill considered on
    the House floor this week, and in recognition that both of our
    staffs have been consulting on these provisions, the Committee
    on International Relations will not seek a sequential referral
    of the bill as a result of including these provisions, without
    waiving or ceding now or in the future this committee's
    jurisdiction over the provisions in question. I will seek to
    have conferees appointed for these provisions during any House
    Senate conference committee.
        I would appreciate your including this letter as a part of
    the report on H.R. 1119 and as part of the record during
    consideration of the bill by the House of Representatives.
        With best wishes.
                Sincerely,
                                          Benjamin A. Gilman, Chairman.
                                    ------

                              House of Representatives,
                                        Committee on Resources,
                                         Washington, DC, June 13, 1997.
    Hon. Floyd Spence,
    Chairman, Committee on National Security, House of Representatives,
            Washington, DC.
        Dear Mr. Chairman: Thank you for your letter regarding
    provisions in H.R. 1119, the National Defense Authorization Act
    for Fiscal year 1998, which are within the jurisdiction of the
    Committee on Resources. These provisions are:
              Section 214 (National Ocean Research Leadership
            Council) Sections 601 (pay raise), 602 (annual
            adjustment of pay), 603 (use of food cost for BAS), 604
            (consolidation of BAQ, VHA and OHA), 613 (one year
            extension of bonuses and special pay), 614 (increase in
            hazardous duty incentive pay), 617 (special pay for
            hardship duty), 621 (increase in family separation
            allowance), 631 (travel and transportation allowance
            for dependents), 632 (dislocation allowance), 651
            (definition of sea duty) [as these provisions affect
            the NOAA Corps] and 653 (separation pay for the NOAA
            Corps) Section 1021 (amendment to National Maritime
            Heritage Act) Title XXIX (Sikes Act)
        Because of the continued cooperation and consideration you
    have afforded me and my staff in developing these provisions, I
    will not seek a sequential referral of H.R. 1119 based on their
    inclusion in the bill. Of course, this waiver does not
    prejudice any future jurisdictional claims over these
    provisions or similar language. I also reserve the right to
    seek to have conferees named from the Committee on Resources on
    these provisions, should a conference on H.R. 1119 or a similar
    measure become necessary.
        Once again, it has been a pleasure to work with you and Jim
    Schweiter, Phil Grone, Michael Higgins and Jean Reed of your
    staff. I look forward to seeing H.R. 1119 enacted soon.
                Sincerely,
                                                   Don Young, Chairman.
                                    ------

                              House of Representatives,
                Committee on Transportation and Infrastructure,
                                         Washington, DC, June 13, 1997.
    Hon. Floyd Spence,
    Chairman, Committee on National Security, House of Representatives,
            Washington, DC.
        Dear Mr. Chairman: Thank you for your letter of June 9,
    1997, and the information you have provided on H.R. 1119, the
    National Defense Authorization Act for Fiscal Year 1998. As
    your letter acknowledges, there are several provisions in the
    introduced version of the bill and in proposed amendments to it
    that are within the jurisdiction of the Committee on
    Transportation and Infrastructure.
        The Committee recognizes the importance of H.R. 1119 and
    the need to move the legislation expeditiously. Therefore,
    while we have jurisdiction over a number of the bill's
    provisions and have a valid basis for seeking a sequential
    referral, I do not intend to seek such a referral. This is, of
    course, based on our mutual understanding that (1) nothing in
    this legislation or my decision not to seek a sequential
    referral waives, reduces or otherwise affects the jurisdiction
    of the Committee on Transportation and Infrastructure, (2)
    agreements worked out by our respective staffs will be effected
    without the need for floor amendments by this Committee; and
    (3) proposed provisions relating to exclusion of uncontaminated
    property from listing requirements and ``war risk'' aviation
    insurance are not included in the reported bill. In addition,
    the Committee reserves the right to seek to be included as
    conferees on any matter within its jurisdiction if this
    legislation goes to a House-Senate conference.
        Pursuant to Rule X, clause 1(q) of the Rules of the House
    of Representatives, Committee on Transportation and
    Infrastructure has jurisdiction over measures relating to
    transportation and infrastructure matters, including the Coast
    Guard, public buildings and occupied or improved grounds of the
    United States, oil and other pollution of navigable waters, and
    civil aviation. Accordingly, our Committee has a jurisdictional
    interest in various provisions in H.R. 1119 and in those
    proposed amendments there to that we have reviewed.
        The following topics, addressed through specific references
    in your letter, are either in the introduced bill or are
    reflected in proposed amendments as the bill goes to markup and
    relate to matters within or affecting the jurisdiction of the
    Committee on Transportation and Infrastructure:
              Personnel compensation and related matters affecting
            the U.S. Coast Guard (USCG) and the transfer of certain
            USCG real property at Eglin AFB.
              Displays of POW/MIA flags at federal buildings.
              Reporting requirements regarding ecological effects
            of organotin.
        While not reflected in our letter, we are aware of two
    additional provisions relating to matters within or affecting
    our jurisdiction:
              Storage and disposal of no Defense toxic and
            hazardous materials.
              Exclusion of uncontaminated real property front
            listing requirements of section 120 of the
            Comprehensive Environmental Response, Compensation, and
            Liability Act of 1980 (CERCLA).
        With regard to the provision on the storage and disposal of
    nondefense toxic and hazardous materials, I understated the
    Committee will include report language to assure that nothing
    in the provision affects authorities and requirements under
    CERCLA or the Federal Waker Pollution Control Act.
        I understand that a provision amending section 120 of
    CERCLA regarding exclusions from listing requirements was
    considered but will not be included in the legislation. Working
    with the Commerce Committee, our Committee plans to move
    legislation reauthorizing and reforming CERCLA. As CERCLA
    reform discussions proceed, I would be pleased to give further
    consideration to proposed amendments to section 120.
        I also understand that a provision to extend the so-called
    ``war risk'' aviation insurance program was considered but will
    not be included in the legislation. Since this matter is solely
    within the jurisdiction of this Committee and we plan to move
    legislation addressing this issue in the coming months, we
    would object to inclusion of such a provision in H.R. 1119.
        Of course, if additional amendments relating to the
    jurisdiction of the Committee on Transportation and
    Infrastructure are adopted during your markup, we reserve the
    right to exercise our jurisdictional prerogatives. In that
    regard, I would appreciate your continued cooperation in
    keeping us informed of any such amendments.
        I would also appreciate your including your letter and this
    response in your Committee Report.
        Thank you again for your cooperation in this matter. I look
    forward to continuing to work with you on H.R. 1119 and other
    markers of mutual interest to our Committees.
        With kindest regards, I am
                Sincerely,
                                                 Bud Shuster, Chairman.
                                    ------

                              House of Representatives,
                                Committee on National Security,
                                          Washington, DC, June 9, 1997.
    Hon. Bud Shuster,
    Chairman, Committee on Transportation and Infrastructure, House of
            Representatives, Washington, DC.
        Dear Mr. Chairman: In the next few days, the Committee on
    National Security will mark up H.R. 1119, the National Defense
    Authorization Act for Fiscal Year 1998. The following
    provisions in the bill fall within the legislative jurisdiction
    of the Committee on Transportation and Infrastructure:
              (1) Section 344--Modification of authority to store
            and dispose of nondefense toxic and hazardous
            materials;
              (2) Section 345--Revision of Navy report on
            organotin;
              (3) Section 601--Pay raise;
              (4) Section 602--Annual adjustment of basic pay;
              (5) Section 603--Use of food cost for BAS;
              (6) Section 604--Consolidation of BAQ, VHA, and OHA;
              (7) Section 613--One year extension of bonuses and
            special pays;
              (8) Section 614--Increase in hazardous duty incentive
            pay;
              (9) Section 617--Special pay for hardship duty;
              (10) Section 621--Increase in family separation
            allowance;
              (11) Section 631--Travel & transportation allowances
            for dependents;
              (12) Section 651--Definition of sea duty;
              (13) Section 1055--Display of POW/MIA flag; and
              (14) Section 2861--Land transfer, Eglin AFB, Florida.
        The Committee on National Security acknowledges the
    jurisdictional claim of the Committee on Transportation and
    Infrastructure with respect to these provisions. Nevertheless,
    I ask that your committee waive any request for sequential
    referral with respect to the sections described above so that
    the House can consider H.R. 1119 without undue delay.
        Thank you for your cooperation in this matter, and I look
    forward to receiving your letter in reply. That letter will be
    included in this committee's report on the bill.
                Sincerely,
                                             Floyd D. Spence, Chairman.
                                    ------

                              House of Representatives,
                                Committee on Veterans' Affairs,
                                         Washington, DC, June 13, 1997.
    Hon. Floyd Spence,
    Chairman, Committee on National Security, House of Representatives,
            Washington, DC.
        Dear Mr. Chairman: According to information provided by
    your staff, H.R. 1119, the National Security Authorization Act
    for 1998, includes two provisions that change laws within the
    jurisdiction of the Committee on Veterans' Affairs. Those
    provisions are found at section 723 of the bill (pertaining to
    acquisition of reduced-cost pharmaceuticals) and section 1054
    (pertaining to display of the POW-MIA flag at certain
    government buildings).
        In order to expedite consideration of H.R. 1119, the
    Committee on Veterans' Affairs waives the right it would have
    under the House Rules to seek a referral of this measure to the
    Committee for consideration of these provisions.
        Thank you for your courtesy in bringing these matters to my
    attention.
                Sincerely,
                                                   Bob Stump, Chairman.
                                    ------

                                  FISCAL DATA

        Pursuant to clause 7 of Rule XIII of the Rules of the House
    of Representatives, the committee attempted to ascertain annual
    outlays resulting from the bill during fiscal year 1998 and the
    four following fiscal years. The results of such efforts are
    reflected in the cost estimate prepared by the Director of the
    Congressional Budget Office under section 403 of the
    Congressional Budget Act of 1974, which is included in this
    report pursuant to clause 2(l)(3)(C) of House Rule XI.

                      Congressional Budget Office Estimate

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

                                                         June 13, 1997.
    Hon. Floyd Spence,
    Chairman, Committee on National Security, House of Representatives,
            Washington, DC.
        Dear Mr. Chairman: The Congressional Budget Office has
    prepared the enclosed cost estimate for H.R. 1119, the National
    Defense Authorization Act for Fiscal Year 1998.
        If you wish further details on this estimate, we will be
    pleased to provide them.
                Sincerely,
                                                       June E. O'Neill.

                   Congressional Budget Office Cost Estimate

        Summary: H.R. 1119 would authorize appropriations for 1998
    for the military functions of the Department of Defense (DoD)
    and the Department of Energy (DOE). It also would prescribe
    personnel strengths for each active duty and selected reserve
    component of the U.S. armed forces. Assuming appropriation of
    the authorized amounts, CBO estimates that enacting H.R. 1119
    would result in additional discretionary spending of $264
    billion over the 1998-2002 period. The bill would increase
    direct spending by $1 million in 1998 and by $5 million over
    the five-year period; therefore, pay-as-you-go procedures would
    apply. The bill would also authorize asset sales from materials
    in the defense stockpile; receipts from these sales would
    average about $14 million a year. H.R. 1119 contains one
    intergovernmental mandate as defined in the Unfunded Mandates
    Reform Act of 1995 (UMRA). However, CBO estimates that the
    costs to comply with the mandate would be well below the
    threshold established in the act ($50 million annually,
    adjusted for inflation). UMRA excludes from application of that
    act legislative provisions that are necessary for the national
    security. CBO has determined that all other provisions in H.R.
    1119 either fit within this exclusion or do not contain
    mandates as defined by UMRA.
        Estimated Cost to the Federal Government: The estimated
    budgetary impact of H.R. 1119 is shown in Table 1, assuming
    that the bill will be enacted by October 1, 1997.

    Authorizations of appropriations

        The bill would authorize specific appropriations totaling
    $268 billion in 1998 for operation and maintenance,
    procurement, research, development, test and evaluation
    (RDT&E), nuclear weapons programs, and other DoD programs (see
    Table 2). These costs would fall within budget function 050
    (national defense). The estimate assumes that the amounts
    authorized will be appropriated for 1998. Outlays are estimated
    based on historical spending patterns.

         TABLE 1.--BUDGETARY IMPACT OF H.R. 1119 AS ORDERED REPORTED BY THE HOUSE COMMITTEE ON NATIONAL SECURITY
                                        [By fiscal year, in millions of dollars]
    ----------------------------------------------------------------------------------------------------------------
                          Category                          1997      1998      1999      2000      2001      2002
    ----------------------------------------------------------------------------------------------------------------
                                        SPENDING SUBJECT TO APPROPRIATIONS ACTION

    Spending Under Current Law:
        Budget Authority \1\............................   265,635         0         0         0         0         0
        Estimated Outlays...............................   267,316    91,187    36,212    15,718     6,515     2,997
    Proposed Changes:
        Authorization Level.............................         0   268,490        14        14         0         0
        Estimated Outlays...............................         0   175,777    55,012    20,281     8,956     3,660
    Spending Under H.R. 1119:
        Authorization Level \1\.........................   265,635   268,490        14        14         0         0
        Estimated Outlays...............................   267,316   266,964    91,224    35,999    15,471     6,657

                                             ASSET SALES AND DIRECT SPENDING

    Asset Sales \2\
        Estimated Budget Authority......................         0       -14       -14       -14       -14       -14
        Estimated Outlays...............................         0       -14       -14       -14       -14       -14
    Direct Spending:
        Estimated Budget Authority......................         0         1         1         1         1         1
        Estimated Outlays...............................         0         1         1         1         1         1
    Total Asset Sales and Direct Spending:
        Estimated Budget Authority......................         0       -13       -13       -13       -13       -13
        Estimated Outlays...............................         0       -13       -13       -13       -13      -13
    ----------------------------------------------------------------------------------------------------------------
    \1\ The 1997 level is the amount appropriated for programs authorized by the bill.
    \2\ Based on criteria established in the 1998 budget resolution, CBO has determined that proceeds from the asset
      sales in this bill should be counted in the budget totals for purposes of Congressional scoring. Under the
      Balanced Budget Act, however, proceeds from asset sales are not counted in determining compliance with the
      discretionary spending limits or pay-as-you-go requirement.

    Note: Costs of the bill would fall under budget function 050 (national defense), except for certain other items
      as noted.

        In addition, H.R. 1119 would authorize specific
    appropriations for other budget functions:
              $117 million for the Naval Petroleum Reserve
            (function 270).
              $70 million for the Maritime Administration (function
            400).
              $80 million for the Armed Forces Retirement Home
            (function 700).
              $14 million in 1998, 1999, and 2000 to fund Sikes Act
            programs (function 300).
        The bill also contains implicit authorizations of
    appropriations for other military programs, primarily for
    military personnel costs, some of which extend beyond 1998.
    Table 3 contains estimates for the authorized amounts and the
    related outlays. In addition to the costs covered by the 1998
    authorizations in the bill, these provisions would add an
    estimated $4.2 billion in costs over the 1999-2002 period that
    would have to be covered by appropriations in those years. The
    following sections describe the estimated authorizations shown
    in Table 3 and provide information about CBO's cost estimates.
        Endstrength. The bill would authorize endstrengths for
    active and reserve components for 1998 at a cost of more than
    $68 billion. Endstrengths for active-duty personnel would total
    about 1,445,000--about 13,600 more than in the Administration's
    request but about 7,100 below the level estimated for 1997.
    DOD's reserve endstrengths would be authorized at about
    891,600--the same level requested by the Administration, but
    about 10,800 less than the estimated 1997 level.
        Also, the bill would authorize an endstrength of 8,000 in
    1998 for the Coast Guard Reserve, which is the same as the 1997
    level and about 400 reservists more than the Administration's
    request; this authorization would cost about $67 million and
    would fall under budget function 400 (transportation).
        Compensation and Benefits. H.R. 1119 contains several
    provisions that would affect military compensation and
    benefits.
        Pay Raises. Section 601 would authorize a 2.8 percent
    increase in the rate of basic pay for fiscal year 1998 at a
    cost of $1,034 million. Current law links pay raises for
    military personnel to those for civilian employees of the
    federal government. Starting in 1999, section 602 would make
    the pay raise provisions for military personnel independent of
    those for civilians and tie them directly to increases in the
    Employment Cost Index. As a result, military pay raises would
    be 0.5 percent higher than under current law, with additional
    costs growing to $998 million in 2002.

      TABLE 2.--SPECIFIC AUTHORIZATIONS IN THE NATIONAL DEFENSE AUTHORIZATION ACT, 1998, AS ORDERED REPORTED BY THE
                                          HOUSE COMMITTEE ON NATIONAL SECURITY
                                        [By fiscal years, in millions of dollars]
    ----------------------------------------------------------------------------------------------------------------
                               Category                               1998      1999      2000      2001      2002
    ----------------------------------------------------------------------------------------------------------------
    Military Personnel:
        Authorization Level.......................................    69,540         0         0         0         0
        Estimated Outlays.........................................    66,200     3,023       209         0         0
    Operation and Maintenance:
        Authorization Level.......................................    92,897         0         0         0         0
        Estimated Outlays.........................................    69,617    18,274     2,879       971       410
    Procurement:
        Authorization Level.......................................    46,315         0         0         0         0
        Estimated Outlays.........................................     9,310    13,633    11,886     6,099     2,424
    Research, Development, Test, and Evaluation:
        Authorization Level.......................................    37,276         0         0         0         0
        Estimated Outlays.........................................    17,998    13,964     3,473       931       448
    Military Construction and Family Housing:
        Authorization Level.......................................     9,133         0         0         0         0
        Estimated Outlays.........................................     3,066     2,814     1,706       888       288
    Atomic Energy Defense Activities:
        Authorization Level.......................................    10,969         0         0         0         0
        Estimated Outlays.........................................     7,984     2,985         0         0         0
    Other Accounts:
        Authorization Level.......................................     2,293        14        14         0         0
        Estimated Outlays.........................................     1,256       376       248       127       110
    General Transfer Authority:
        Authorization Level.......................................         0         0         0         0         0
        Estimated Outlays.........................................       280       -60      -120       -60       -20
                                                                   -------------------------------------------------
    Total:
        Authorization Level.......................................   268,423        14        14         0         0
        Estimated Outlays.........................................   175,712    55,010    20,281     8,956     3,660
    ----------------------------------------------------------------------------------------------------------------

        Expiring Authorities. Several sections would extend for one
    year certain payment authorities that are scheduled to expire
    at the end of 1998. In some cases, renewing authorities for one
    year results in costs over several years because payments are
    made in installments. Payment of enlistment and reenlistment
    bonuses for active duty personnel would cost $148 million in
    1999. The cost of extending special payments for aviators and
    nuclear-qualified personnel would total $53 million in 1999.
    Payment authorities for enlistment and reenlistment bonuses for
    the Selected and Ready Reserve would cost $33 million in 1999.
    Authorities to make special payments to nurse officer
    candidates, registered nurses, and nurse anesthetists would
    increase costs by $12 million in 1999.
        Basic Allowance for Housing. Section 604 would consolidate
    several different allowances into a single payment called the
    Basic Allowance for Housing (BAH). The new allowance would
    incorporate the Basic Allowance for Quarters (BAQ), the
    Variable Housing Allowance, the Overseas Station Allowance, and
    the Family Separation Housing Allowance. The total funding
    available for the new BAH in fiscal year 1998 would equal
    funding for its components in 1997 with an increase of 2.8
    percent.
        In addition to consolidating current allowances, section
    604 would increase certain housing benefits. The bill would
    increase housing payments to reservists, maintain housing
    allowances in cases where a member's new permanent duty station
    was in a low-cost area, and authorize funds to reduce out-of-
    pocket housing costs. CBO estimates that the adjustments to
    housing allowances would cost about $160 million in 1998 and
    similar amounts in subsequent years.
        Basic Allowance for Subsistence. Section 603 would amend
    provisions governing increases in the Basic Allowance for
    Subsistence. Instead of increasing at the same rate as basic
    pay, the BAS would be indexed to the cost of the moderate food
    plan of the Department of Agriculture. In 1998, BAS would
    increase by 2.5 percent, an incremental cost of $48 million.
        Hazardous Duty Pay. Section 614 would increase the minimum
    monthly rates for certain allowances for hazardous duty. CBO
    estimates that the increases would cost $32 million in 1998.
        Compensation During Contingencies. Under current law, BAS
    payments are suspended when service personnel are deployed to
    exercises or training under field conditions. Section 602 would
    guarantee that a service member's total pay would not decrease
    when performing that kindof duty. Continuation of BAS payments
    during these periods would cost $28 million in 1998.

    TABLE 3.--ESTIMATED AUTHORIZATIONS OF APPROPRIATIONS FOR SELECTED PROVISIONS IN H.R. 1119 AS ORDERED REPORTED BY
                                        THE HOUSE COMMITTEE ON NATIONAL SECURITY
                                        [By fiscal years, in millions of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                  Category                                 1998     1999     2000     2001     2002
    ----------------------------------------------------------------------------------------------------------------
    Endstrengths:
        Department of Defense:
            Estimated Authorization Level..............................   68,249        0        0        0        0
            Estimated Outlays..........................................   64,837    3,303      205        0        0
        Coast Guard Reserve:
            Estimated Authorization Level..............................       67        0        0        0        0
            Estimated Outlays..........................................       65        2        0        0        0
    Compensation and Benefits (DoD):
        Military Pay Raise in 1998:
            Estimated Authorization Level..............................    1,034        0        0        0        0
            Estimated Outlays..........................................      982       45        3        0        0
        Change in Formula for Pay Raises:
            Estimated Authorization Level..............................        0      186      441      710      998
            Estimated Outlays..........................................        0      177      427      694      981
    Expiring Authorities:
        Enlistment/Reenlistment Bonuses (Active):
            Estimated Authorization Level..............................        0      148       51       35       33
            Estimated Outlays..........................................        0      141       56       36       33
        Aviation and Nuclear Special Pay:
            Estimated Authorization Level..............................        0       53       23       23       17
            Estimated Outlays..........................................        0       51       24       23       17
        Enlistment/Reenlistment Bonuses (Reserve):
            Estimated Authorization Level..............................        0       33       27       18       13
            Estimated Outlays..........................................        0       31       27       18       13
        Special Pay for Nurses:
            Estimated Authorization Level..............................        0       12        0        0        0
            Estimated Outlays..........................................        0       11        1        0        0
        Basic Allowance for Housing:
            Estimated Authorization Level..............................      160      165      171      178      184
            Estimated Outlays..........................................      152      164      170      177      183
        Revised Basic Allowance for Subsistence:
            Estimated Authorization Level..............................       48       49       51       52       53
            Estimated Outlays..........................................       46       49       51       52       53
        Hazardous Duty Pay:
            Estimated Authorization Level..............................       32       32       32       32       32
            Estimated Outlays..........................................       30       32       32       32       32
        Compensation During Contingencies:
            Estimated Authorization Level..............................       28       29       30       30       31
            Estimated Outlays..........................................       27       29       30       30       31
        Family Separation Allowance:
            Estimated Authorization Level..............................       25       25       25       25       25
            Estimated Outlays..........................................       24       25       25       25       25
        Bonus and Special Pay for Dentists:
            Estimated Authorization Level..............................       15       15       15       15       15
            Estimated Outlays..........................................       14       15       15       15       15
        Dislocation Allowance:
            Estimated Authorization Level..............................       10       10       10       10       10
            Estimated Outlays..........................................       10       10       10       10       10
        Suspension of Temporary Early Retirement Authority:
            Estimated Authorization Level..............................     -185        0        0        0        0
            Estimated Outlays..........................................      -37      -37      -37      -37      -37
        Other Compensation:
            Estimated Authorization Level..............................        3        0       -5       -5       -5
            Estimated Outlays..........................................        3        0       -5       -5       -5
        Cap on Military Personnel:
            Estimated Authorization Level..............................      108        0        0        0        0
            Estimated Outlays..........................................      103        5        0        0        0
        Military Health Care Programs:
            Estimated Authorization Level..............................        6        6        6        6        6
            Estimated Outlays..........................................        5        6        6        6        6
        Long-Term Charter of a Naval Vessel:
            Estimated Authorization Level..............................        7        7        8        8        8
            Estimated Outlays..........................................        6        7        8        8        8
        Pay of Former Teachers:
            Estimated Authorization Level..............................    (\1\)       -1       -1       -1       -2
            Estimated Outlays..........................................    (\1\)       -1       -1       -1       -2
    Total Authorizations of Appropriations:
        Estimated Authorization Level..................................   69,607      769      884    1,136    1,418
        Estimated Outlays..............................................   66,265    3,764    1,047    1,083   1,363
    ----------------------------------------------------------------------------------------------------------------
    \1\ Less than $500,000.

    Note.--For every item in this table except one, the 1998 impacts are included in the amounts specifically
      authorized to be appropriated in the bill. Those amounts are shown in Table 2. Only the authorization of
      endstrength for the Coast Guard Reserve is additive to the amounts in Table 2.

        Family Separation Allowances. Section 621 would increase
    monthly allowances that are paid to members when their
    dependents cannot be accommodated at a new station, when the
    member is serving on a ship, or when the member is on temporary
    duty (TDY) status. The increase in rates from $75 to $100 would
    raise costs by $25 million in 1998.
        Special Pay for Dentists. Section 615 would establish a new
    multiyear retention bonus for dentists. The new bonus would be
    limited to certain dental specialties and service grades and
    would cost about $1 million in 1998. Section 616 would increase
    the amount of variable and additional special pay for dentists.
    Additional costs of the new pay rates would total $14 million
    in 1998.
        Dislocation Allowance. The dislocation allowance (DLA), a
    payment for miscellaneous expenses incurred during a permanent
    change of station, is currently equivalent to two and one-half
    months of BAQ. H.R. 1119 would separate DLA from the housing
    allowance and would establish new monthly rates based on grade
    and number of dependents. The higher rates of DLA would cost
    about $10 million in 1998.
        Suspension of Temporary Early Retirement Authority. Through
    1999, current law allows the military departments to offer
    early retirement to selected service members having fewer than
    20 years of service. Individuals who take this option receive
    payments equivalent to their retirement annuity from military
    personnel accounts until they qualify for payments from the
    military retirement fund. DoD must budget for the full value of
    these payments in the year a service member retires. Funds to
    cover personnel slated to take early retirement in 1998 total
    $185 million. The suspension of early retirement authority
    provided in section 561 would yieldthat amount in discretionary
    savings.
        Other Changes in Military Compensation. The bill contains
    other provisions that would affect military compensation, but
    which have little or no budgetary impact. One provision would
    create an incentive for individuals to extend tours of duty at
    specific locations designated by the Secretary of Defense. CBO
    estimates that the costs of the bonus would be more than offset
    by savings from lower relocation and operational travel costs.
    Net savings would total about $1 million in 1998 and $4 million
    annually thereafter. Another provision would reduce accession
    costs through improved medical screening of recruits. Once
    implemented, this program should save about $5 million per
    year. Third, grade changes in the Army and Air Force Reserves
    would increase their military personnel budgets by about $4
    million per year. The net effect of these provisions would be
    to raise costs by about $3 million in 1998, but to reduce them
    by about $5 million a year annually starting in 2000.
        Cap on the Military Personnel Authorization. The bill would
    explicitly authorize appropriations for military personnel of
    $69,540 million in 1998. Because the estimated costs of other
    sections of the bill fall short of this level, this section has
    the effect of adding $108 million to the other 1998 costs
    identified in Table 3.
        Military Health Care Programs. Two provisions of H.R. 1119
    would have a measurable budgetary effect on military health
    care programs. Section 731 would raise health care costs by
    nearly $3 million a year by allowing DoD to waive or reduce
    copayments for dependents in the overseas dental insurance
    program. CBO assumes that at least half of the 108,000
    dependents overseas would benefit from this provision. CBO
    assumes that those dependents would use dental services at the
    same rates as similar individuals residing in the United
    States. The estimate is based on data from the American Dental
    Association on average prices and use of dental services.
        Section 733 would raise health care costs by about $4
    million in 1998 by requiring that, to the extent practicable,
    DoD payment rates to private providers be equal to comparable
    rates under Medicare. Currently, DOD's rates are lower than
    Medicare's for 60 procedures. CBO's estimate is based on
    information from DoD as to the frequency of these procedures
    and the payment rates.
        Other provisions could have budgetary effects, but CBO
    cannot estimate the impacts on the federal budget. For example,
    a provision authorizing Tricare contractors to use the Federal
    Supply Schedule in purchasing pharmaceuticals for covered
    military beneficiaries could reduce their costs. Any such
    savings could be passed along to DoD in the form of lower
    prices for the Tricare contracts. However, many providers
    receive discounts on wholesale prices for drugs, which they
    negotiate independently. CBO cannot measure savings from this
    provision because insufficient data are available to compare
    the current federal schedule and the prices Tricare contractors
    now pay for drugs.
        Long-Term Charter of a Naval Vessel. The bill would
    authorize the Secretary of the Navy to charter through 2003 the
    vessel RV Cory Chouest. The charter is an operating lease that
    would cost about $7 million in 1998 and a total of $46 million
    through 2003. The estimate is based on information provided by
    the Navy and the owner of the vessel.
        Pay of Former DoD Teachers. Current law requires that, when
    teachers in DOD's overseas schools transfer to General Schedule
    positions, their pay be increased by 20 percent. Section 321
    would allow the Secretary of Defense to increase pay by less
    than 20 percent. This provision would reduce costs because some
    individuals would receive an increase of less than the 20
    percent required under current law. Savings would be less than
    $500,000 in 1998, but they would increase to about $2 million
    in 2002.
        Panama Canal Commission. Title XXXV would authorize the
    Panama Canal Commission to spend any sums available to it from
    operating revenues or Treasury borrowing for operation,
    maintenance, and improvement of the canal in fiscal year 1998.
    For budgetary purposes, this spending is considered
    discretionary. CBO estimates that 1998 collections will be $748
    million and that spending will be $716 million, resulting in
    net outlays of -$32 million.
        Other provisions of this title, which would facilitate the
    transfer of the Panama Canal to the government of Panama in
    1999, would have no effect on the federal budget.

    Direct spending and asset sales

        H.R. 1119 contains provisions that would affect direct
    spending in 1998 and thus would subject the bill to pay-as-you-
    go procedures under section 252 of the Balanced Budget and
    Emergency Deficit Control Act of 1985 (see Table 4). The
    provisions would allow DoD to spend certain reimbursements and
    make certain changes affecting military retirement. In
    addition, the bill would provide for the sale of materials from
    the National Defense Stockpile. Based on criteria established
    in the 1998 budget resolution, CBO has determined that proceeds
    from the asset sales in this bill should be counted in the
    budget totals for purposes of Congressional scoring. Under the
    Balanced Budget Act, however, proceeds from asset sales are not
    counted in determining compliance with the discretionary
    spending limits or pay-as-you-go requirement.

                                 TABLE 4.--ASSET SALES AND DIRECT SPENDING IN H.R. 1119
                                    [By fiscal year, outlays in millions of dollars]
    ----------------------------------------------------------------------------------------------------------------
                               Category                               1998      1999      2000      2001      2002
    ----------------------------------------------------------------------------------------------------------------
                                                     ASSET SALES \1\
    Stockpile Sales:
        Estimated Budget Authority................................       -14       -14       -14       -14       -14
        Estimated Outlays.........................................       -14       -14       -14       -14       -14
                                                     DIRECT SPENDING

    Utility Rebates
        Estimated Budget Authority................................         1         1         1         1         1
        Estimated Outlays.........................................         1         1         1         1         1
                                          TOTAL DIRECT SPENDING AND ASSET SALES

        Estimated Budget Authority................................       -13       -13       -13       -13       -13
        Estimated Outlays.........................................       -13       -13       -13       -13      -13
    ----------------------------------------------------------------------------------------------------------------
    \1\ Based on criteria established in the 1998 budget resolution, CBO has determined that proceeds from the asset
      sales in this bill should be counted in the budget totals for purposes of Congressional scoring. Under the
      Balanced Budget Act, however, proceeds from asset sales are not counted in determining compliance with the
      discretionary spending limits or pay-as-you-go requirement.

        Stockpile Sales. The bill would authorize DoD to sell
    34,800 short tons of titanium sponge and all beryllium copper
    master alloy in the National Defense Stockpile. CBO estimates
    that these sales would generate receipts of about $14 million a
    year through 2002. Provisions to restrict the sale of manganese
    ferro and to place conditions on the transfer of stockpile
    platinum reserves to Secretary of the Treasury would have no
    budgetary impact because those provisions would not affect
    annual sales or prices.
        Property Transactions. Section 2812 would allow DoD to
    accept and spend reimbursements for certain administrative
    expenses that it incurs during property transactions. This
    provision would result in no net spending because any increase
    in outlays would be offset by an increase in receipts.
        Spending of Financial Incentives. Section 2804 would allow
    DoD to spend cash rebates from electric and water utilities.
    Under current law these funds are deposited in the Treasury.
    The direct spending from this provision would total about $1
    million annually.
        Military Retirement. Several provisions would affect direct
    spending through changes to laws governing military retirement.
    Those provisions would have little or no impact because few
    beneficiaries would be affected.
              Section 502 would allow the Secretary of Defense to
            recall certain officers to active duty for longer than
            the 12 months allowed in current law.
              Section 504 would allow Secretaries of the military
            departments to defer the retirement of the Chief of
            Chaplains or the Deputy Chief of Chaplains until the
            officer turns 68 years of age.
              Section 514 would allow DoD to reduce from three
            years to two years the time-in-grade that certain
            reserve officers must have to retire at a higher grade.
              Section 521 would allow DoD to retain military
            technicians in the grade of brigadier general on the
            active-status list until the officer reaches the age of
            60.
              Section 641 would allow a retiree to change the
            beneficiary under the Survivor Benefit Plan from a
            former spouse to current spouse at any time after the
            beneficiary remarries.
        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 enactment of H.R.
    1119 would result in $1 million in direct spending in fiscal
    year 1998.
        Estimated impact on State, local, and tribal governments:
    H.R. 1119 contains one intergovernmental mandate as defined in
    the Unfunded Mandates Reform Act of 1995 (UMRA). However, CBO
    estimates that the costs to comply with the mandate would be
    well below the threshold established in the act ($50 million
    annually, adjusted for inflation). UMRA excludes from
    application of that act legislative provisions that are
    necessary for the national security. CBO has determined that
    all other provisions in H.R. 1119 either fit within this
    exclusion or do not contain intergovernmental mandates as
    defined by UMRA.
        Section 735 would exempt health care professionals from
    state licensure requirements in states where they perform
    authorized Department of Defense activities as long as they
    possess a current license from at least one other state. Since
    this provision would preempt state laws governing health care
    licensure, it would be considered a mandate as defined in the
    Unfunded Mandates Reform Act of 1995.
        Health care professionals currently do not need additional
    licenses if they are practicing solely in military facilities.
    Enactment of this provision would allow these individuals to
    practice in civilian hospitals with which DoD has cooperative
    agreements without obtaining a medical license in that state as
    they must do now. Based on discussions with representatives
    from the Department of Defense and medical associations, CBO
    estimates that such cooperative agreements may become more
    common in the future. Depending upon the degree to which
    military doctors are assigned to civilian hospitals, states
    could lose between $500,000 and $1,000,000 annually in license
    fees.
        A number of the bill's other provisions--such as those
    pertaining to land conveyances, certain grant programs,
    educational assistance to schools districts, and Panama Canal
    fees--would affect state, local, or tribal governments. Most of
    these provisions would benefit state, local, and tribal
    governments in some way, and none would impose any significant
    costs on those entities.
        Estimated impact on the private sector: The Unfunded
    Mandates Reform Act excludes from application of the act
    legislativeprovisions that are necessary for the national
    security. CBO has determined that all of the provisions of this bill
    either fit within that exclusion or do not contain private-sector
    mandates as defined by UMRA.
        Estimate prepared by: Federal Cost: The estimates for
    defense programs were prepared by Valerie Barton (military
    retirement), Shawn Bishop (health programs), Kent Christensen
    (military construction, operation and maintenance, and other
    defense), Jeannette Deshong (military and civilian personnel),
    and Raymond Hall (procurement, RDT&E, stockpile sales, and
    atomic energy defense activities).
        Kathy Gramp prepared the estimates for the Naval Petroleum
    Reserve, and Deborah Reis prepared the estimates for the Panama
    Canal Commission and Maritime Administration.
        Impact on State, Local, and Tribal Governments: Karen McVey
    and Leo Lex.
        Impact on the Private Sector: Neil Singer.
        Estimate approved by: Robert A. Sunshine, Deputy Assistant
    Director for Budget Analysis.

                            Committee Cost Estimate

        Pursuant to clause 7(a) of Rule XIII of the Rules of the
    House of Representatives, the committee generally concurs with
    the estimate as contained in the report of the Congressional
    Budget Office.

                           Inflation Impact Statement

        Pursuant to clause 2(l)(4) of rule XI of the Rules of the
    House of Representatives, the committee concludes that the bill
    would have no significant inflationary impact.

                               Oversight Findings

        With respect to clause 2(l)(3)(A) of rule XI of the Rules
    of the House of Representatives, this legislation results from
    hearings and other oversight activities conducted by the
    committee pursuant to clause 2(b)(1) of rule X.
        With respect to clause 2(l)(3)(B) of rule XI of the Rules
    of the House of Representatives and section 308(a)(1) of the
    Congressional Budget Act of 1974, this legislation does not
    include any new spending or credit authority, nor does it
    provide for any increase or decrease in tax revenues or
    expenditures. The bill does, however, authorize appropriations.
    Other fiscal features of this legislation are addressed in the
    estimate prepared by the Director of the Congressional Budget
    Office under section 403 of the Congressional Budget Act of
    1974.
        With respect to clause 2(l)(3)(D) of rule XI of the Rules
    of the House of Representatives, the committee has not received
    a report from the Committee on Government Reform and Oversight
    pertaining to the subject matter of H.R. 1119.

                       Constitutional Authority Statement

        Pursuant to Rule XI, clause 2(l)(4) of the Rules of the
    House of Representatives, the committee finds the authority for
    this legislation in Article I, Section 8 of the United States
    Constitution.

                         Statement of Federal Mandates

        Pursuant to section 423 of Public Law 104-4, this
    legislation contains no federal mandates with respect to state,
    local, and tribal governments, nor with respect to the private
    sector. Similarly, the bill provides no federal
    intergovernmental mandates.

                                Roll Call Votes

        In accordance with clause 2(l)(2)(B) of rule XI of the
    Rules of the House of Representatives, roll call and voice
    votes were taken with respect to the committee's consideration
    of H.R. 1119. The record of these votes is attached to this
    report.
        The committee ordered H.R. 1119 reported to the House with
    a favorable recommendation by a vote of 51-3, a quorum being
    present.

             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):

                          TITLE 10, UNITED STATES CODE

              * * * * * * *

                        Subtitle A--General Military Law

                PART I--ORGANIZATION AND GENERAL MILITARY POWERS

    Chap.                                                               Sec.

    1.   Definitions..............................................       101
         * * * * * * *
    23.  Miscellaneous Studies and Reports........................ [471] 481
         * * * * * * *

                   PART IV--SERVICE, SUPPLY, AND PROCUREMENT

    131. Planning and Coordination................................      2201
         * * * * * * *
    [147. Utilities and Services..................................     2481]
    147. Commissaries and Exchanges and Other Morale, Welfare, and
        Recreation Activities.....................................      2481
         * * * * * * *
    152. Issue of Supplies, Services, and Facilities.............[2540] 2541
         * * * * * * *

                PART I--ORGANIZATION AND GENERAL MILITARY POWERS

    Chap.                                                               Sec.

    1.  Definitions...............................................       101
         * * * * * * *
    23. Miscellaneous Studies and Reports......................... [471] 481
         * * * * * * *

                        CHAPTER 2--DEPARTMENT OF DEFENSE

              * * * * * * *

    Sec. 113. Secretary of Defense

      (a) * * *
              * * * * * * *
      (g)(1) * * *
      (2) The Secretary of Defense, with the approval of the
    President and after consultation with the Chairman of the Joint
    Chiefs of Staff, shall provide [annually] to the Chairman
    written policy guidance for the preparation and review of
    contingency plans. Such guidance shall be provided every two
    years or more frequently as needed and shall include guidance
    on the specific force levels and specific supporting resource
    levels projected to be available for the period of time for
    which such plans are to be effective.
              * * * * * * *

    Sec. 115. Personnel strengths: requirement for annual authorization

      (a) * * *
              * * * * * * *
      (g) Congress shall authorize for each fiscal year the end
    strength for military technicians (dual status) for each
    reserve component of the Army and Air Force. Funds available to
    the Department of Defense for any fiscal year may not be used
    for the pay of a military technician (dual status) during that
    fiscal year unless the technician fills a position that is
    within the number of such positions authorized by law for that
    fiscal year for the reserve component of that technician. This
    subsection applies without regard to section 129 of this title.
    In each budget submitted by the President to Congress under
    section 1105 of title 31, the end strength requested for
    military technicians (dual status) for each reserve component
    of the Army and Air Force shall be specifically set forth.

    Sec. 115a. Annual manpower requirements report

      (a) * * *
              * * * * * * *
      (h) In each such report, the Secretary shall include a
    separate report on the Army and Air Force military technician
    programs. The report shall include a presentation, shown by
    reserve component and shown both as of the end of the preceding
    fiscal year and for the next fiscal year, of the following
    (displayed in the aggregate and separately for military
    technicians (dual status) and non-dual status military
    technicians):
              (1) * * *
              * * * * * * *
              [(3) Within each of the numbers under paragraph (1),
            the numbers of military technicians who are not
            themselves members of a reserve component (so-called
            ``single-status'' technicians), with a further display
            of such numbers as specified in paragraph (2).]

    Sec. 116. Annual operations and maintenance report

      (a) * * *
      (b) In this section:
              (1) * * *
              (2) The term ``major repair work'' means, in the case
            of any ship to which [such subsection] subsection (a)
            is applicable, any overhaul, modification, alteration,
            or conversion work which will result in a total cost to
            the United States of more than $10,000,000.
              * * * * * * *

                    CHAPTER 3--GENERAL POWERS AND FUNCTIONS

              * * * * * * *

    Sec. 129c. Medical personnel: limitations on reductions

      (a) * * *
              * * * * * * *
      (e) Definition.--In this section, the term ``medical
    personnel'' means--
              (1) the members of the armed forces covered by the
            term ``medical personnel'' as defined in section
            [115a(g)(2)] 115a(e)(2) of this title; and
              (2) the civilian personnel of the Department of
            Defense assigned to military medical facilities.
              * * * * * * *

                 CHAPTER 4--OFFICE OF THE SECRETARY OF DEFENSE

              * * * * * * *

    Sec. 135. Under Secretary of Defense (Comptroller)

      (a) * * *
              * * * * * * *
      (c) The Under Secretary of Defense (Comptroller) shall advise
    and assist the Secretary of Defense--
              (1) * * *
              * * * * * * *
              (4) in establishing and supervising the execution of
            policies and procedures relating to the expenditure and
            collection of funds administered by the Department of
            Defense; [and]
              (5) in establishing uniform terminologies,
            classifications, and procedures concerning matters
            covered by clauses (1) through (4)[.]; and
              (6) in the areas of exchange, commissary, and
            nonappropriated fund instrumentalities regarding
            morale, welfare, and recreation activities.
              * * * * * * *
      (f) The Under Secretary of Defense (Comptroller) shall be
    responsible for investigating evidence of fraud, waste, and
    abuse uncovered as a result of the Department of Defense
    program (known as Operation Mongoose) established to identify
    and prevent fraud, waste, and abuse within the Department of
    Defense, particularly fraud, waste, and abuse regarding finance
    and accounting matters. The program shall continue through
    fiscal year 2003.
              * * * * * * *

                         CHAPTER 6--COMBATANT COMMANDS

              * * * * * * *

    Sec. 167. Unified combatant command for special operations forces

      (a) * * *
              * * * * * * *
      (f) Budget.--(1) In addition to the activities of a combatant
    command for which funding may be requested under section 166(b)
    of this title, the budget proposal of the special operations
    command shall include requests for funding for--
              [(1)] (A) development and acquisition of special
            operations-peculiar equipment; and
              [(2)] (B) acquisition of other material, supplies, or
            services that are peculiar to special operations
            activities.
      (2) Funds provided for the special operations command as part
    of the budget for the special operations command under
    paragraph (1) may not be used to cover base operation support
    expenses incurred at a military installation.
              * * * * * * *

     CHAPTER 8--DEFENSE AGENCIES AND DEPARTMENT OF DEFENSE FIELD ACTIVITIES

              * * * * * * *

               SUBCHAPTER I--COMMON SUPPLY AND SERVICE ACTIVITIES

    Sec.
    191.  Secretary of Defense: authority to provide for common performance
              of supply or service activities.
         * * * * * * *
    195.  Defense Automated Printing Service: applicability of Federal
              printing requirements.
              * * * * * * *

    Sec. 195. Defense Automated Printing Service: applicability of Federal
                        printing requirements

      The Defense Automated Printing Service shall comply fully
    with the requirements of chapter 5 of title 44 relating to the
    production and procurement of printing, binding, and blank-book
    work.

              SUBCHAPTER II--MISCELLANEOUS DEFENSE AGENCY MATTERS

    Sec.
    201.  Certain intelligence officials: consultation and concurrence
              regarding appointments; evaluation of performance.
         * * * * * * *
    203.  Director of Ballistic Missile Defense Organization.
              * * * * * * *

    Sec. 203. Director of Ballistic Missile Defense Organization

      (a) Grade.--The position of Director of the Ballistic Missile
    Defense Organization--
              (1) may only be held by an officer of the armed
            forces on the active-duty list; and
              (2) shall be designated under section 601 of this
            title as a position of importance and responsibility to
            carry the grade of general or admiral or lieutenant
            general or vice admiral.
      (b) Line of Authority to Secretary of Defense.--The Director
    of the Ballistic Missile Defense Organization reports directly
    to the Secretary of Defense and (if so directed by the
    Secretary) the Deputy Secretary of Defense, without intervening
    review or approval by any other officer of the Department of
    Defense, with respect to all matters pertaining to the
    management of ballistic missile defense programs for which the
    Director has responsibility (including matters pertaining to
    the status of those programs and the budgets for those
    programs).

                       CHAPTER 9--DEFENSE BUDGET MATTERS

    Sec.
    221.  Future-years defense program: submission to Congress; consistency
              in budgeting.
         * * * * * * *
    224.  Ballistic missile defense programs: amounts for procurement.
              * * * * * * *

    Sec. 224. Ballistic missile defense programs: amounts for procurement

      (a) Requirement.--Any amount in the budget submitted to
    Congress under section 1105 of title 31 for any fiscal year for
    procurement for the National Missile Defense program or for any
    system that is part of the core theater missile defense program
    shall be set forth under the account of the Department of
    Defense for Defense-wide procurement and, within that account,
    under the subaccount (or other budget activity level) for the
    Ballistic Missile Defense Organization.
      (b) Core Theater Ballistic Missile Defense Program.--For
    purposes of this section, the core theater missile defense
    program consists of the systems specified in section 234 of the
    Ballistic Missile Defense Act of 1995 (10 U.S.C. 2431 note).
              * * * * * * *

       CHAPTER 18--MILITARY SUPPORT FOR CIVILIAN LAW ENFORCEMENT AGENCIES

              * * * * * * *

    Sec. 382. Emergency situations involving chemical or biological weapons
                        of mass destruction

      (a) * * *
              * * * * * * *
      (g) Relationship to Other Authority.--Nothing in this section
    shall be construed to restrict any executive branch authority
    regarding use of members of the armed forces or equipment of
    the Department of Defense that was in effect before [the date
    of the enactment of the National Defense Authorization Act for
    Fiscal Year 1997] September 23, 1996.
              * * * * * * *

                 CHAPTER 20--HUMANITARIAN AND OTHER ASSISTANCE

    Sec.
    401.  Humanitarian and civic assistance provided in conjunction with
              military operations.
         * * * * * * *
    406.  Use of Cooperative Threat Reduction program funds: limitation.
              * * * * * * *

    Sec. 406. Use of Cooperative Threat Reduction program funds: limitation

      (a) In General.--In carrying out Cooperative Threat Reduction
    programs during any fiscal year, the Secretary of Defense may
    use funds appropriated for those programs only to the extent
    that those funds were appropriated for that fiscal year or for
    either of the two preceding fiscal years.
      (b) Definition of Cooperative Threat Reduction Programs.--In
    this section, the term ``Cooperative Threat Reduction
    programs'' means the following programs with respect to states
    of the former Soviet Union:
              (1) Programs to facilitate the elimination, and the
            safe and secure transportation and storage, of nuclear,
            chemical, and other weapons and their delivery
            vehicles.
              (2) Programs to facilitate the safe and secure
            storage of fissile materials derived from the
            elimination of nuclear weapons.
              (3) Programs to prevent the proliferation of weapons,
            components, and weapons-related technology and
            expertise.
              (4) Programs to expand military-to-military and
            defense contacts.
              * * * * * * *

             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 Defense Intelligence Agency, National Reconnaissance
              Office, and National Imagery and Mapping Agency.
              * * * * * * *

                CHAPTER 22--NATIONAL IMAGERY AND MAPPING AGENCY

              * * * * * * *

                      SUBCHAPTER I--MISSIONS AND AUTHORITY

              * * * * * * *

    Sec. 445. Protection of agency identifications and organizational
                        information

      (a) Unauthorized Use of Agency Name, Initials, or Seal.--
    [(1)] Except with the written permission of the Secretary of
    Defense, no person may knowingly use, in connection with any
    merchandise, retail product, impersonation, solicitation, or
    commercial activity in a manner reasonably calculated to convey
    the impression that such use is approved, endorsed, or
    authorized by the Secretary of Defense, any of the following:
              [(A)] (1) The words ``National Imagery and Mapping
            Agency'', the initials ``NIMA'', or the seal of the
            National Imagery and Mapping Agency.
              [(B)] (2) The words ``Defense Mapping Agency'', the
            initials ``DMA'', or the seal of the Defense Mapping
            Agency.
              [(C)] (3) Any colorable imitation of such words,
            initials, or seals.
      [(2)] (b) Injunctive Relief.--Whenever it appears to the
    Attorney General that any person is engaged or about to engage
    in an act or practice which constitutes or will constitute
    conduct prohibited by [paragraph (1)] subsection (a), the
    Attorney General may initiate a civil proceeding in a district
    court of the United States to enjoin such act or practice. Such
    court shall proceed as soon as practicable to a hearing and
    determination of such action and may, at any time before such
    final determination, enter such restraining orders or
    prohibitions, or take such other action as is warranted, to
    prevent injury to the United States or to any person or class
    of persons for whose protection the action is brought.

              * * * * * * *

                 CHAPTER 23--MISCELLANEOUS STUDIES AND REPORTS

    Sec.
    481.  Race relations, gender discrimination, and hate group activity:
              annual survey and report.
    482.  Quarterly readiness reports.
    483.  Reports on transfers from high-priority readiness appropriations.
    484.  Quarterly reports on execution of operation and maintenance
              appropriations.
              * * * * * * *

    [Sec. 482. Quarterly readiness reports

      [(a) Requirement.--Not later than 30 days after the end of
    each calendar-year quarter, the Secretary of Defense shall
    submit to the Committee on Armed Services of the Senate and the
    Committee on National Security of the House of Representatives
    a report on military readiness. The report for any quarter
    shall be based on assessments that are provided during that
    quarter--
              [(1) to any council, committee, or other body of the
            Department of Defense (A) that has responsibility for
            readiness oversight, and (B) the membership of which
            includes at least one civilian officer in the Office of
            the Secretary of Defense at the level of Assistant
            Secretary of Defense or higher;
              [(2) by senior civilian and military officers of the
            military departments and the commanders of the unified
            and specified commands; and
              [(3) as part of any regularly established process of
            periodic readiness reviews for the Department of
            Defense as a whole.
      [(b) Matters To Be Included.--Each such report shall--
              [(1) specifically describe identified readiness
            problems or deficiencies and planned remedial actions;
            and
              [(2) include the key indicators and other relevant
            data related to the identified problem or deficiency.
      [(c) Classification of Reports.--Reports under this section
    shall be submitted in unclassified form and may, as the
    Secretary determines necessary, also be submitted in classified
    form.]

    Sec. 482. Quarterly readiness reports

      (a) Quarterly Reports Required.--Not later than 30 days after
    the end of each calendar-year quarter, the Secretary of Defense
    shall submit to the Committee on Armed Services of the Senate
    and the Committee on National Security of the House of
    Representatives a report on military readiness. The report for
    a quarter shall contain the information required by subsections
    (b) (d), and (e).
      (b) Readiness Problems and Remedial Actions.--Each report
    shall specifically describe--
              (1) readiness problems or deficiencies identified
            using the assessments considered under subsection (c);
              (2) planned remedial actions; and
              (3) the key indicators and other relevant information
            related to the identified problem or deficiency.
      (c) Consideration of Readiness Assessments.--The information
    required under subsection (b) to be included in the report for
    a quarter shall be based on readiness assessments that are
    provided during that quarter--
              (1) to any council, committee, or other body of the
            Department of Defense--
                      (A) that has responsibility for readiness
                    oversight; and
                      (B) whose membership includes at least one
                    civilian officer in the Office of the Secretary
                    of Defense at the level of Assistant Secretary
                    of Defense or higher;
              (2) by senior civilian and military officers of the
            military departments and the commanders of the unified
            and specified commands; and
              (3) as part of any regularly established process of
            periodic readiness reviews for the Department of
            Defense as a whole.
      (d) Comprehensive Readiness Indicators.--Each report shall
    also include information regarding each military department
    (and an evaluation of such information) with respect to each of
    the following readiness indicators:
              (1) Personnel strength.--
                      (A) Individual personnel status.
                      (B) Historical and projected personnel
                    trends.
              (2) Personnel turbulence.--
                      (A) Recruit quality.
                      (B) Borrowed manpower.
                      (C) Personnel stability.
              (3) Other personnel matters.--
                      (A) Personnel morale.
                      (B) Medical and dental readiness.
                      (C) Recruit shortfalls.
              (4) Training.--
                      (A) Training unit readiness and proficiency.
                      (B) Operations tempo.
                      (C) Training funding.
                      (D) Training commitments and deployments.
              (5) Logistics--equipment fill.--
                      (A) Deployed equipment.
                      (B) Equipment availability.
                      (C) Equipment that is not mission capable.
                      (D) Age of equipment.
                      (E) Condition of nonpacing items.
              (6) Logistics--equipment maintenance.--
                      (A) Maintenance backlog.
              (7) Logistics--supply.--
                      (A) Availability of ordnance and spares.
      (e) Unit Readiness Indicators.--Each report shall also
    include information regarding the readiness of each unit of the
    armed forces at the battalion, squadron, or an equivalent level
    (or a higher level) that received a readiness rating of C-3 (or
    below) for any month of the calendar-year quarter covered by
    the report. With respect to each such unit, the report shall
    separately provide the following information:
              (1) The unit designation and level of organization.
              (2) The overall readiness rating for the unit for the
            quarter and each month of the quarter.
              (3) The resource area or areas (personnel, equipment
            and supplies on hand, equipment condition, or training)
            that adversely affected the unit's readiness rating for
            the quarter.
              (4) If the unit received a readiness rating below C-1
            in personnel for the quarter, the primary reason for
            the lower rating, by reason code and definition.
              (5) If the unit received a readiness rating below C-1
            in equipment and supplies on hand for the quarter, the
            primary reason for the lower rating, by reason code and
            definition.
              (6) If the unit received a readiness rating below C-1
            in equipment condition for the quarter, the primary
            reason for the lower rating, by reason code and
            definition.
              (7) If the unit received a readiness rating below C-1
            in training for the quarter, the primary reason for the
            lower rating, by reason code and definition.
      (f) Classification of Reports.--A report under this section
    shall be submitted in unclassified form. To the extent the
    Secretary of Defense determines necessary, the report may also
    be submitted in classified form.

    Sec. 483. Reports on transfers from high-priority readiness
                        appropriations

      (a) Annual Reports.--Not later than the date on which the
    President submits the budget for a fiscal year to Congress
    pursuant to section 1105 of title 31, the Secretary of Defense
    shall submit to the Committee on Armed Services and the
    Committee on Appropriations of the Senate and the Committee on
    National Security and the Committee on Appropriations of the
    House of Representatives a report on transfers during the
    preceding fiscal year from funds available for each covered
    budget activity.
      (b) Quarterly Reports.--Not later than 30 days after the end
    of each quarter of a fiscal year, the Secretary of Defense
    shall submit to the congressional committees specified in
    subsection (a) a report on transfers, during that fiscal year
    quarter, from funds available for each covered budget activity.
      (c) Matters To Be Included.--In each report under subsection
    (a) or (b), the Secretary of Defense shall include for each
    covered budget activity the following:
              (1) A statement, for the period covered by the
            report, of--
                      (A) the total amount of transfers into funds
                    available for that activity;
                      (B) the total amount of transfers from funds
                    available for that activity; and
                      (C) the net amount of transfers into, or out
                    of, funds available for that activity.
              (2) A detailed explanation of the transfers into, and
            out of, funds available for that activity during the
            period covered by the report.
      (d) Covered Budget Activity Defined.--In this section, the
    term ``covered budget activity'' means each of the following:
              (1) The budget activity groups (known as
            ``subactivities'') within the Operating Forces budget
            activity of the annual Operation and Maintenance, Army,
            appropriation that are designated as follows:
                      (A) All subactivities under the category of
                    Land Forces.
                      (B) Land Forces Depot Maintenance.
                      (C) Base Support.
                      (D) Maintenance of Real Property.
              (2) The Air Operations budget activity groups (known
            as ``subactivities'') within the Operating Forces
            budget activity of the annual Operation and
            Maintenance, Navy, appropriation that are designated as
            follows:
                      (A) Mission and Other Flight Operations.
                      (B) Fleet Air Training.
                      (C) Aircraft Depot Maintenance.
                      (D) Base Support.
                      (E) Maintenance of Real Property.
              (3) The Ship Operations budget activity groups (known
            as ``subactivities'') within the Operating Forces
            budget activity of the annual Operation and
            Maintenance, Navy, appropriation that are designated as
            follows:
                      (A) Mission and Other Ship Operations.
                      (B) Ship Operational Support and Training.
                      (C) Ship Depot Maintenance.
                      (D) Base Support.
                      (E) Maintenance of Real Property.
              (4) The Expeditionary Forces budget activity groups
            (known as ``subactivities'') within the Operating
            Forces budget activity of the annual Operation and
            Maintenance, Marine Corps, appropriation that are
            designated as follows:
                      (A) Operational Forces.
                      (B) Depot Maintenance.
                      (C) Base Support.
                      (D) Maintenance of Real Property.
              (5) The Air Operations and Combat Related Operations
            budget activity groups (known as ``subactivities'')
            within the Operating Forces budget activity of the
            annual Operation and Maintenance, Air Force,
            appropriation that are designated as follows:
                      (A) Primary Combat Forces.
                      (B) Primary Combat Weapons.
                      (C) Air Operations Training.
                      (D) Depot Maintenance.
                      (E) Base Support.
                      (F) Maintenance of Real Property.
              (6) The Mobility Operations budget activity group
            (known as a ``subactivity'') within the Mobilization
            budget activity of the annual Operation and
            Maintenance, Air Force, appropriation that is
            designated as Airlift Operations.
      (e) Termination.--The requirements specified in subsections
    (a) and (b) shall terminate upon the submission of the annual
    report under subsection (a) covering fiscal year 2000.

    Sec. 484. Quarterly reports on execution of operation and maintenance
                        appropriations

      (a) Report Required.--Not later than 60 days after the end of
    each quarter of a fiscal year, the Secretary of Defense shall
    submit to the Committee on Armed Services and the Committee on
    Appropriations of the Senate and the Committee on National
    Security and the Committee on Appropriations of the House of
    Representatives a report containing budget execution data for
    each budget activity group (known as a ``subactivity'') within
    the annual operation and maintenance appropriations for the
    period covered by the report. A report shall cover all
    preceding quarters of the fiscal year involved.
      (b) Manner of Presenting Data.--The budget execution data
    required under subsection (a) shall be displayed for the fiscal
    year involved in the same manner used in the operation and
    maintenance tables contained in the budget justification
    document entitled ``O-1 Exhibit'' submitted to Congress in
    support of the budget of the Department of Defense, as included
    in the budget of the President submitted under section 1105 of
    title 31.
      (c) Required Information.--The following information shall be
    provided for each budget activity group:
              (1) Amounts authorized to be appropriated.
              (2) Amounts appropriated.
              (3) Direct obligations.
              (4) Total obligational authority.
              (5) Amounts related to unbudgeted contingency
            operations.
              (6) Direct obligations related to unbudgeted
            contingency operations.
              * * * * * * *

                               PART II--PERSONNEL

              * * * * * * *

       CHAPTER 36--PROMOTION, SEPARATION, AND INVOLUNTARY RETIREMENT OF
                        OFFICERS ON THE ACTIVE-DUTY LIST

              * * * * * * *

                           SUBCHAPTER II--PROMOTIONS

              * * * * * * *

    Sec. 619. Eligibility for consideration for promotion: time-in-grade
                        and other requirements

      (a) * * *
              * * * * * * *
      (d) A selection board convened under section 611(a) of this
    title may not consider for promotion to the next higher
    [grade--] grade any of the following officers:
              (1) [an] An officer whose name is on a promotion list
            for that grade as a result of his selection for
            promotion to that grade by an earlier selection board
            convened under that section[; or].
              (2) An officer who is recommended for promotion to
            that grade in the report of an earlier selection board
            convened under that section, in the case of such a
            report that has not yet been approved by the President.
              [(2) an] (3) An officer of the Marine Corps who is an
            officer designated for limited duty and who holds a
            grade above major.
              * * * * * * *

                            CHAPTER 39--ACTIVE DUTY

              * * * * * * *

    Sec. 688. Retired members: authority to order to active duty; duties

      (a) * * *
              * * * * * * *
      (e) Limitation of Period of Recall Service.--(1) A member
    ordered to active duty under subsection (a) may not serve on
    active duty pursuant to orders under that subsection for more
    than 12 months within the 24 months following the first day of
    the active duty to which ordered under that subsection.
      (2) Paragraph (1) shall not apply to the following officers:
              (A) A chaplain who is assigned to duty as a chaplain
            for the period of active duty to which ordered.
              (B) A health care professional (as characterized by
            the Secretary concerned) who is assigned to duty as a
            health care professional for the period of active duty
            to which ordered.
              (C) An officer assigned to duty with the American
            Battle Monuments Commission for the period of active
            duty to which ordered.
              * * * * * * *

                               CHAPTER 40--LEAVE

              * * * * * * *

    Sec. 708. Educational leave of absence

      (a) * * *
              * * * * * * *
      (c)(1) While on a leave of absence under this section, a
    member shall be paid basic pay but may not receive [basic
    allowance for quarters or basic allowance for subsistence]
    basic allowance for housing under section 403 of title 37,
    basic allowance for subsistence under section 402 of such
    title, or any other pay and allowances to which he would
    otherwise be entitled for such period.
              * * * * * * *

       CHAPTER 41--SPECIAL APPOINTMENTS, ASSIGNMENTS, DETAILS, AND DUTIES

    Sec.
    711.  Senior members of Military Staff Committee of United Nations:
              appointment.
         * * * * * * *
    721.  General and flag officers: limitation on appointments,
              assignments, details, and duties outside an officer's own
              service.
              * * * * * * *

    Sec. 721. General and flag officers: limitation on appointments,
                        assignments, details, and duties outside an
                        officer's own service

      (a) Limitation.--An officer described in subsection (b) may
    not be appointed, assigned, or detailed for a period in excess
    of 90 days to a position external to that officer's armed force
    if, immediately following such appointment, assignment, or
    detail, the number of officers described in subsection (b)
    serving in positions external to such officers' armed force for
    a period in excess of 90 days would be in excess of 24.5
    percent of the total number of such officers.
      (b) Covered Officers.--The officers covered by subsection
    (a), and to be counted for the purposes of the limitation in
    that subsection, are the following:
              (1) Any general or flag officer counted for purposes
            of section 526(a) of this title.
              (2) Any general or flag officer serving in a joint
            duty assignment position designated by the Chairman of
            the Joint Chiefs of Staff under section 526(b) of this
            title.
              (3) Any colonel or Navy captain counted for purposes
            of section 777(d)(1) of this title.
      (c) External Positions.--For purposes of this section, the
    following positions shall be considered to be external to an
    officer's armed force:
              (1) Any position (including a position in joint
            education) that is a joint duty assignment for purposes
            of chapter 38 of this title.
              (2) Any position in the Office of the Secretary of
            Defense, a Defense Agency, or a Department of Defense
            Field Activity.
              (3) Any position in the Joint Chiefs of Staff, the
            Joint Staff, or the headquarters of a combatant command
            (as defined in chapter 6 of this title).
              (4) Any position in the National Guard Bureau.
              (5) Any position outside the Department of Defense,
            including any position in the headquarters of the North
            Atlantic Treaty Organization or any other international
            military command, any combined or multinational
            command, or military mission.
      (d) Assignments, Etc. For Periods in Excess of 90 Days.--For
    purposes of this section, the appointment, assignment, or
    detail of an officer to a position shall be considered to be
    for a period in excess of 90 days unless the appointment,
    assignment, or detail specifies that it is made a period of 90
    days or less.
      (e) Waiver During Period of War or National Emergency.--The
    President may suspend the operation of this section during any
    period of war or of national emergency declared by Congress or
    the President.
              * * * * * * *

                  CHAPTER 47--UNIFORM CODE OF MILITARY JUSTICE

              * * * * * * *

                        SUBCHAPTER VII--TRIAL PROCEDURE

    Sec. Art.

    836. 36.  President may prescribe rules.
         * * * * * * *
    856a. 56a. Sentence of confinement for life without eligibility for
              parole.
              * * * * * * *

    Sec. 856a. Art. 56a. Sentence of confinement for life without
                        eligibility for parole

      (a) For any offense for which a sentence of confinement for
    life may be adjudged, a court-martial may adjudge a sentence of
    confinement for life without eligibility for parole.
      (b) An accused who is sentenced to confinement for life
    without eligibility for parole shall be confined for the
    remainder of the accused 's life unless--
              (1) the sentence is set aside or otherwise modified
            as a result of--
                      (A) action taken by the convening authority,
                    the Secretary concerned, or another person
                    authorized to act under section 860 of this
                    title (article 60); or
                      (B) any other action taken during post-trial
                    procedure and review under any other provision
                    of subchapter IX;
              (2) the sentence is set aside or otherwise modified
            as a result of action taken by a Court of Criminal
            Appeals, the Court of Appeals for the Armed Forces, or
            the Supreme Court; or
              (3) the accused is pardoned.

                           SUBCHAPTER VIII--SENTENCES

              * * * * * * *

    Sec. 858b. Art. 58b. Sentences: forfeiture of pay and allowances during
                        confinement

      (a)(1) A court-martial sentence described in paragraph (2)
    shall result in the [forfeiture of pay and (if adjudged by a
    general court-martial) allowances due that member] forfeiture
    of pay, or of pay and allowances, due that member during any
    period of confinement or parole. The forfeiture pursuant to
    this section shall take effect on the date determined under
    section 857(a) of this title (article 57(a)) and may be
    deferred as provided in that section. The pay and allowances
    forfeited, in the case of a general court-martial, shall be all
    pay and allowances due that member during such period and, in
    the case of a special court-martial, shall be two-thirds of all
    pay due that member during such period.
              * * * * * * *

      SUBCHAPTER XII--UNITED STATES COURT OF APPEALS FOR THE ARMED FORCES

              * * * * * * *

    Sec. 943. Art. 143. Organization and employees

      (a) * * *
              * * * * * * *
      (c) Status of [certain] Certain Positions.--(1) Attorney
    positions of employment under the Court of Appeals for the
    Armed Forces are excepted from the competitive service. A
    position of employment under the Court that is provided
    primarily for the service of one judge of the court, reports
    directly to the judge, and is a position of a confidential
    character is excepted from the competitive service.
    Appointments to [such positions] positions referred to in the
    preceding sentences shall be made by the court, without the
    concurrence of any other officer or employee of the executive
    branch, in the same manner as appointments are made to other
    executive branch positions of a confidential or policy-
    determining character for which it is not practicable to
    examine or to hold a competitive examination. Such positions
    shall not be counted as positions of that character for
    purposes of any limitation on the number of positions of that
    character provided in law.
              * * * * * * *

                  CHAPTER 48--MILITARY CORRECTIONAL FACILITIES

              * * * * * * *

    Sec. 952. Parole

      (a) The Secretary concerned may provide a system of parole
    for offenders who are confined in military correctional
    facilities and who were at the time of commission of their
    offenses subject to the authority of that Secretary.
      (b) In a case in which parole for an offender serving a
    sentence of confinement for life is denied, only the President
    or the Secretary concerned may grant the offender parole on
    appeal of that denial. The authority to grant parole on appeal
    in such a case may not be delegated.
              * * * * * * *

    Sec. 954. Voluntary extension; probation

      The Secretary concerned may provide for persons who were
    subject to [this] his authority at the time of commission of
    their offenses a system for retention of selected offenders
    beyond expiration of normal service obligation in order to
    voluntarily serve a period of probation with a view to
    honorable restoration to duty.
              * * * * * * *

              CHAPTER 49--MISCELLANEOUS PROHIBITIONS AND PENALTIES

              * * * * * * *

    Sec. 972. Members: effect of time lost

      (a) * * *
      (b) Officers Not Allowed Service Credit for Time Lost.--In
    the case of an officer of an armed force who after [the date of
    the enactment of the National Defense Authorization Act for
    Fiscal Year 1996] February 10, 1996--
              (1) * * *
              * * * * * * *

    Sec. 976. Membership in military unions, organizing of military unions,
                        and recognition of military unions prohibited

      (a) * * *
              * * * * * * *
      (f) Whoever violates subsection (b), (c), or (d) [shall, in
    the case of an individual, be fined not more than $10,000 or
    imprisoned not more than five years, or both, and in the case
    of an organization or association, be fined not less than
    $25,000 and not more than $250,000.] shall be fined under title
    18 or imprisoned not more than 5 years, or both, except that,
    in the case of an organization (as defined in section 18 of
    such title), the fine shall not be less than $25,000.
              * * * * * * *

    Sec. 977. Operation of commissary stores: assignment of active duty
                        members generally prohibited

      (a) * * *
              * * * * * * *
      (c) Exception for Certain Additional Members.--[Beginning on
    October 1, 1996, not more than] Not more than 18 members (in
    addition to the officer referred to in subsection (b)) of the
    armed forces on active duty may be assigned to the Defense
    Commissary Agency. Members who may be assigned under this
    subsection to regional headquarters of the agency shall be
    limited to enlisted members assigned to duty as advisors in the
    regional headquarters responsible for overseas commissaries and
    to veterinary specialists.
      (d) Exception for Certain Navy Personnel.--(1) The Secretary
    of the Navy may assign to the Defense Commissary Agency a
    member of the Navy on active duty whose assignment afloat is
    part of the operation of a ship's food service or a ship's
    store. Any such assignment shall be on a nonreimbursable basis.
      (2) The number of such members assigned to the Defense
    Commissary Agency during any period [before October 1, 1996,
    may not exceed the number of such members so assigned on
    October 1, 1993. After September 30, 1996, the number of such
    members so assigned] may not exceed the lesser of (A) the
    number of members so assigned on October 1, 1993, and (B) 400.
              * * * * * * *

                 CHAPTER 53--MISCELLANEOUS RIGHTS AND BENEFITS

    Sec.
    1031.  Administration of oath.
         * * * * * * *
    1033.  Participation in management of specified non-Federal entities:
              authorized activities.
              * * * * * * *

    Sec. 1033. Participation in management of specified non-Federal
                        entities: authorized activities

      (a) Authorization.--The Secretary concerned may authorize a
    member of the armed forces under the Secretary's jurisdiction,
    as part of that member's official duties, to serve without
    compensation as a director, officer, or trustee, or to
    otherwise participate, in the management of an entity
    designated under subsection (b). Any such authorization shall
    be made on a case-by-case basis, for a particular member to
    participate in a specific capacity with a specific designated
    entity. Such authorization may be made be only for the purpose
    of providing oversight and advice to, and coordination with,
    the designated entity, and participation of the member in the
    activities of the designated entity may not extend to
    participation in the day-to-day operations of the entity.
      (b) Designated Entities.--(1) The Secretary of Defense, and
    the Secretary of Transportation in the case of the Coast Guard
    when it is not operating as a service in the Navy, shall
    designate those entities for which authorization under
    subsection (a) may be provided. The list of entities so
    designated may not be revised more frequently than
    semiannually. In making such designations, the Secretary shall
    designate each military welfare society and may designate any
    other entity described in paragraph (3). No other entities may
    be designated.
      (2) In this section, the term ``military welfare society''
    means the following:
              (A) Army Emergency Relief.
              (B) Air Force Aid Society, Inc.
              (C) Navy-Marine Corps Relief Society.
              (D) Coast Guard Mutual Assistance.
      (3) An entity described in this paragraph is an entity that--
              (A) regulates and supports the athletic programs of
            the service academies (including athletic conferences);
              (B) regulates international athletic competitions;
              (C) accredits service academies and other schools of
            the armed forces (including regional accrediting
            agencies); or
              (D)(i) regulates the performance, standards, and
            policies of military health care (including health care
            associations and professional societies), and (ii) has
            designated the position or capacity in that entity in
            which a member of the armed forces may serve if
            authorized under subsection (a).
      (c) Publication of Designated Entities and of Authorized
    Persons.--A designation of an entity under subsection (b), and
    an authorization under subsection (a) of a member of the armed
    forces to participate in the management of such an entity,
    shall be published in the Federal Register.
      (d) Regulations.--The Secretary of Defense, and the Secretary
    of Transportation in the case of the Coast Guard when it is not
    operating as a service in the Navy, shall prescribe regulations
    to carry out this section.
              * * * * * * *

    Sec. 1060a. Special supplemental food program

      (a) * * *
      (b) Federal Payments and Commodities.--For the purpose of
    obtaining Federal payments and commodities in order to carry
    out the program referred to in subsection (a), the Secretary of
    Agriculture shall make available to the Secretary of Defense
    from funds appropriated for such purpose, the same payments and
    commodities as are made for the special supplemental food
    program in the United States under section 17 of the Child
    Nutrition Act of 1966 (42 U.S.C. 1786). Pending receipt of such
    funds from the Secretary of Agriculture for any fiscal year,
    the Secretary of Defense may use funds appropriated to the
    Department of Defense for that fiscal year for operations and
    maintenance to carry out, and to avoid delay in implementation
    of, the program referred to in subsection (a) during any fiscal
    year.
              * * * * * * *

                      CHAPTER 55--MEDICAL AND DENTAL CARE

    Sec.

    1071.  Purpose of this chapter.
         * * * * * * *
    1097.  Contracts for medical care for retirees, dependents, and
              survivors: alternative delivery of health care.
         * * * * * * *
    [1106.  Submittal of claims under CHAMPUS.]
    1106.  Submittal of claims: standard form; time limits.
         * * * * * * *

    Sec. 1072. Definitions

      In this chapter:
              (1)  * * *
              * * * * * * *
              (7) The term ``TRICARE program'' means the managed
            health care program that is established by the
            Department of Defense under the authority of this
            chapter, principally section 1097 of this title, and
            includes the competitive selection of contractors to
            financially underwrite the delivery of health care
            services under the Civilian Health and Medical Program
            of the Uniformed Services.
              * * * * * * *

    Sec. 1074a. Medical and dental care: members on duty other than active
                        duty for a period of more than 30 days

      (a) Under joint regulations prescribed by the administering
    Secretaries, the following persons are entitled to the benefits
    described in subsection (b):
              (1) * * *
              * * * * * * *
              (3) Each member of the armed forces who incurs or
            aggravates an injury, illness, or disease in the line
            of duty while remaining overnight immediately before
            the commencement of inactive-duty training, or while
            remaining overnight, between successive periods of
            inactive-duty training, at or in the vicinity of the
            site of the inactive-duty training, if the site is
            outside reasonable commuting distance from the member's
            residence.
              * * * * * * *

    Sec. 1076. Medical and dental care for dependents: general rule

      (a)(1) A dependent described in paragraph (2) is entitled,
    upon request, to the medical and dental care prescribed by
    section 1077 of this title in facilities of the uniformed
    services, subject to the availability of space and facilities
    and the capabilities of the medical and dental staff.
      (2) A dependent referred to in paragraph (1) is a dependent
    of a member of a uniformed service--
              (A) who is on active duty for a period of more than
            30 days or who died while on that duty; [or]
              (B) who died from an injury, illness, or disease
            incurred or aggravated--
                      (i) while on active duty under a call or
                    order to active duty of 30 days or less, on
                    active duty for training, or on inactive duty
                    training; or
                      (ii) while traveling to or from the place at
                    which the member is to perform, or has
                    performed, such active duty, active duty for
                    training, or inactive duty training[.]; or
              (C) who incurs or aggravates an injury or illness in
            the line of duty while serving on active duty for a
            period of 30 days or less and whose orders are
            subsequently modified to extend the period of active
            duty to a period of more than 30 days.
              * * * * * * *

    Sec. 1076a. Dependents' dental program

      (a) * * *
              * * * * * * *
      (h) Care Outside the United States.--The [Secretary]
    Secretary of Defense may exercise the authority provided under
    subsection (a) to establish basic dental benefits plans for the
    provision of dental benefits outside the United States for the
    eligible dependents of members of the uniformed services
    accompanying the members on permanent assignments to duty
    outside the United States. In the case of such an overseas
    dental plan, the Secretary may waive or reduce the copayments
    otherwise required by subsection (e) to the extent the
    Secretary determines appropriate for the effective and
    efficient operation of the plan.
              * * * * * * *

    Sec. 1076b. Selected Reserve dental insurance

      (a) * * *
      (b) Premium Sharing.--(1) * * *
              * * * * * * *
      [(3) A member's share of the premium for coverage by the
    dental insurance plan shall be deducted and withheld from the
    basic pay payable to the member for inactive duty training and
    from the basic pay payable to the member for active duty. In
    the case of a member who does not receive basic pay, the
    Secretary of Defense shall establish procedures for the
    collection of the member's share of the premium for coverage.]
              (3) The Secretary of Defense shall establish
            procedures for the collection of the member's share of
            the premium for coverage by the dental insurance plan.
            Not later than October 1, 1998, the Secretary shall
            permit a member to pay the member's share of the
            premium through a deduction and withholding from basic
            pay payable to the member for inactive duty training or
            basic pay payable to the member for active duty.
              * * * * * * *

    Sec. 1076c. Dental insurance plan: certain retirees and their surviving
                        spouses and other dependents

      (a) * * *
      (b) Persons Eligible for Plan.--The following persons are
    eligible to enroll in the dental insurance plan established
    under subsection (a):
              (1) * * *
              * * * * * * *
              (4) The unremarried surviving spouse and eligible
            child dependents of a deceased member--
                      (A) who [dies] died while in a status
                    described in paragraph (1) or (2); [or]
                      (B) who is described in section 1448(d)(1) of
                    this title[.]; or
                      (C) who died while on active duty for a
                    period of more than 30 days and whose eligible
                    dependents are not eligible, or no longer
                    eligible, for dental benefits under section
                    1076a of this title pursuant to subsection
                    (i)(2) of such section.
      (c) Premiums.--(1) A member enrolled in the dental insurance
    plan established under subsection (a) shall pay the premiums
    charged for the insurance coverage.
      [(2) The amount of the premiums payable by a member entitled
    to retired pay shall be deducted and withheld from the retired
    pay and shall be disbursed to pay the premiums. The regulations
    prescribed under subsection (h) shall specify the procedures
    for payment of the premiums by other enrolled members and by
    enrolled surviving spouses.]
              (2) In the regulations prescribed under subsection
            (h), the Secretary of Defense shall establish
            procedures for the payment by enrolled members and by
            other enrolled covered beneficiaries of premiums
            charged for coverage by the dental insurance plan. Not
            later than October 1, 1998, the Secretary shall permit
            a member enrolled in the plan and entitled to retired
            pay to pay the member's share of the premium through a
            deduction and withholding from the retired pay of the
            member.
              * * * * * * *

    Sec. 1077. Medical care for dependents: authorized care in facilities
                        of uniformed services

      (a) Only the following types of health care may be provided
    under section 1076 of this title:
              (1) Hospitalization.
              * * * * * * *
              (15) Prosthetic devices, as determined by the
            Secretary of Defense to be necessary because of
            significant conditions resulting from trauma,
            congenital anomalies, or disease.
      (b) The following types of health care may not be provided
    under section 1076 of this title:
              (1) Domiciliary or custodial care.
              [(2) Prosthetic devices, hearing aids, orthopedic
            footwear, and spectacles except that--
                      [(A) outside the United States and at
                    stations inside the United States where
                    adequate civilian facilities are unavailable,
                    such items may be sold to dependents at cost to
                    the United States, and
                      [(B) artificial limbs, voice prostheses, and
                    artificial eyes may be provided.]
              (2) Hearing aids, orthopedic footwear, and
            spectacles, except that, outside of the United States
            and at stations inside the United States where adequate
            civilian facilities are unavailable, such items may be
            sold to dependents at cost to the United States.
              * * * * * * *

    Sec. 1079. Contracts for medical care for spouses and children: plans

      (a) * * *
              * * * * * * *
      (h)[(1) Payment for a charge for services by an individual
    health care professional (or other noninstitutional health care
    provider) for which a claim is submitted under a plan
    contracted for under subsection (a) may not exceed the lesser
    of--
              [(A) the amount equivalent to the 80th percentile of
            billed charges made for similar services in the same
            locality during the base period; or
              [(B) an amount determined to be appropriate, to the
            extent practicable, in accordance with the same
            reimbursement rules as apply to payments for similar
            services under title XVIII of the Social Security Act
            (42 U.S.C. 1395 et seq.).
      [(2) For the purposes of paragraph (1)(A), the 80th
    percentile of charges shall be determined by the Secretary of
    Defense, in consultation with the other administering
    Secretaries, and the base period shall be a period of twelve
    calendar months. The Secretary of Defense shall adjust the base
    period as frequently as he considers appropriate.
      [(3) For the purposes of paragraph (1)(B), the appropriate
    payment amount shall be determined by the Secretary of Defense,
    in consultation with the other administering Secretaries.]
      (1) Except as provided in paragraphs (2) and (3), payment for
    a charge for services by an individual health care professional
    (or other noninstitutional health care provider) for which a
    claim is submitted under a plan contracted for under subsection
    (a) shall be equal to an amount determined to be appropriate,
    to the extent practicable, in accordance with the same
    reimbursement rules as apply to payments for similar services
    under title XVIII of the Social Security Act (42 U.S.C. 1395 et
    seq.). The Secretary of Defense shall determine the appropriate
    payment amount under this paragraph in consultation with the
    other administering Secretaries.
      [(4)] (2) The Secretary of Defense, in consultation with the
    other administering Secretaries, shall prescribe regulations to
    provide for such exceptions to the payment limitations under
    paragraph (1) as the Secretary determines to be necessary to
    assure that covered beneficiaries retain adequate access to
    health care services. Such exceptions may include the payment
    of amounts higher than the amount allowed under paragraph (1)
    when enrollees in managed care programs obtain covered services
    from nonparticipating providers. To provide a suitable
    transition from the payment methodologies in effect before the
    date of the enactment of this paragraph to the methodology
    required by paragraph (1), the amount allowable for any service
    may not be reduced by more than 15 percent below the amount
    allowed for the same service during the immediately preceding
    12-month period (or other period as established by the
    Secretary of Defense).
      [(5)] (3) In addition to the authority provided under
    [paragraph (4), the Secretary] paragraph (2), the Secretary of
    Defense may authorize the commander of a facility of the
    uniformed services, the lead agent (if other than the
    commander), and the health care contractor to modify the
    payment limitations under paragraph (1) for certain health care
    providers when necessary to ensure both the availability of
    certain services for covered beneficiaries and lower costs than
    would otherwise be incurred to provide the services. With the
    consent of the health care provider, the Secretary is also
    authorized reduce the authorized payment for certain health
    care services below the amount otherwise required by the
    payment limitations under paragraph (1).
      [(6)] (4) The Secretary of Defense, in consultation with the
    other administering Secretaries, shall prescribe regulations to
    establish limitations (similar to the limitations established
    under title XVIII of the Social Security Act (42 U.S.C. 1395 et
    seq.)) on beneficiary liability for charges of an individual
    health care professional (or other noninstitutional health care
    provider).
              * * * * * * *

    Sec. 1089. Defense of certain suits arising out of medical malpractice

      (a) The remedy against the United States provided by sections
    1346(b) and 2672 of title 28 for damages for personal injury,
    including death, caused by the negligent or wrongful act or
    omission of any physician, dentist, nurse, pharmacist, or
    paramedical or other supporting personnel (including medical
    and dental technicians, nursing assistants, and therapists) of
    the armed forces, the National Guard while engaged in training
    or duty under section 316, 502, 503, 504, or 505 of title 32,
    the Department of Defense, the Armed Forces Retirement Home, or
    the Central Intelligence Agency in the performance of medical,
    dental, or related health care functions (including clinical
    studies and investigations) while acting within the scope of
    his duties or employment therein or therefor shall hereafter be
    exclusive of any other civil action or proceeding by reason of
    the same subject matter against such physician, dentist, nurse,
    pharmacist, or paramedical or other supporting personnel (or
    the estate of such person) whose act or omission gave rise to
    such action or proceeding. This subsection shall also apply if
    the physician, dentist, nurse, pharmacist, or paramedical or
    other supporting personnel (or the estate of such person)
    involved is serving under a personal services contract entered
    into by the Secretary of Defense under section 1091 of this
    title.
              * * * * * * *
      (f)(1) The head of the agency concerned may, to the extent
    that the head of the agency concerned considers appropriate,
    hold harmless or provide liability insurance for any person
    described in subsection (a) for damages for personal injury,
    including death, caused by such person's negligent or wrongful
    act or omission in the performance of medical, dental, or
    related health care functions (including clinical studies and
    investigations) while acting within the scope of such person's
    duties if such person is assigned to a foreign country or
    detailed for service with other than a Federal department,
    agency, or instrumentality or if the circumstances are such as
    are likely to preclude the remedies of third persons against
    the United States described in section 1346(b) of title 28, for
    such damage or injury.
      (2) With respect to the Secretary of Defense and the Armed
    Forces Retirement Home Board, the authority provided by
    paragraph (1) also includes the authority to provide for
    reasonable attorney's fees for persons described in subsection
    (a), as determined necessary pursuant to regulations issued by
    the head of the agency concerned.
              * * * * * * *

    Sec. 1091. Personal services contracts

      (a) Authority.--(1) The Secretary of Defense, with respect to
    medical treatment facilities of the Department of Defense, and
    the Secretary of Transportation, with respect to medical
    treatment facilities of the Coast Guard when the Coast Guard is
    not operating as a service in the Navy, may enter into personal
    services contracts to carry out health care responsibilities in
    such facilities, as determined to be necessary by the
    Secretary. The authority provided in this subsection is in
    addition to any other contract authorities of the Secretary,
    including authorities relating to the management of such
    facilities and the administration of this chapter.
      (2) The Secretary of Defense may also enter into personal
    services contracts to carry out other health care
    responsibilities of the Secretary, such as the provision of
    medical screening examinations at Military Entrance Processing
    Stations, at locations outside medical treatment facilities, as
    determined necessary pursuant to regulations issued by the
    Secretary.
              * * * * * * *

    Sec. 1094. Licensure requirement for health-care professionals

      (a) * * *
              * * * * * * *
      (d)(1) Notwithstanding any law regarding the licensure of
    health care providers, a health-care professional described in
    paragraph (2) may practice the health profession or professions
    of the health-care professional in any State, the District of
    Columbia, or a Commonwealth, territory, or possession of the
    United States, regardless of whether the practice occurs in a
    health care facility of the Department of Defense, a civilian
    facility affiliated with the Department of Defense, or any
    other location authorized by the Secretary of Defense.
      (2) A health-care professional referred to in paragraph (1)
    is a member of the armed forces who--
              (A) has a current license to practice medicine,
            osteopathic medicine, dentistry, or another health
            profession; and
              (B) is performing authorized duties for the
            Department of Defense.
      [(d)] (e) In this section:
              (1) The term ``license''--
                      (A) means a grant of permission by an
                    official agency of a State, the District of
                    Columbia, or a Commonwealth, territory, or
                    possession of the United States to provide
                    health care independently as a health-care
                    professional; and
                      (B) includes, in the case of such care
                    furnished in a foreign country by any person
                    who is not a national of the United States, a
                    grant of permission by an official agency of
                    that foreign country for that person to provide
                    health care independently as a health-care
                    professional.
              (2) The term ``health-care professional'' means a
            physician, dentist, clinical psychologist, or nurse and
            any other person providing direct patient care as may
            be designated by the Secretary of Defense in
            regulations.
              * * * * * * *

    [Sec. 1106. Submittal of claims under CHAMPUS

      [(a) Submittal to Claims Processing Office.--Each provider of
    services under the Civilian Health and Medical Program of the
    Uniformed Services shall submit claims for payment for such
    services directly to the claims processing office designated
    pursuant to regulations prescribed under subsection (b). A
    claim for payment for services shall be submitted in a standard
    form (as prescribed in the regulations) not later than one year
    after the services are provided.
      [(b) Regulations.--The regulations required by subsection (a)
    shall be prescribed by the Secretary of Defense after
    consultation with the other administering Secretaries.
      [(c) Waiver.--The Secretary of Defense may waive the
    requirements of subsection (a) if the Secretary determines that
    the waiver is necessary in order to ensure adequate access for
    covered beneficiaries to health care services under this
    chapter.]

    Sec. 1106. Submittal of claims: standard form; time limits

      (a) Standard Form.--The Secretary of Defense, after
    consultation with the other administering Secretaries, shall
    prescribe by regulation a standard form for the submission of
    claims for the payment of health care services provided under
    this chapter.
      (b) Time for Submission.--A claim for payment for services
    shall be submitted as provided in such regulations not later
    than one year after the services are provided.
              * * * * * * *

                       CHAPTER 57--DECORATIONS AND AWARDS

    Sec.
    1121.  Legion of Merit: award.
         * * * * * * *
    1131.  Purple Heart: limitation to members of the armed forces.
              * * * * * * *

    Sec. 1129. Purple Heart: members killed or wounded in action by
                        friendly fire

      (a) * * *
              * * * * * * *
      (c) This section applies to members of the armed forces who
    are killed or wounded on or after December 7, 1941. In the case
    of a member killed or wounded as described in subsection (b) on
    or after December 7, 1941, and before [the date of the
    enactment of this section,] November 30, 1993, the Secretary
    concerned shall award the Purple Heart under subsection (a) in
    each case which is known to the Secretary [before the date of
    the enactment of this section or] before such date or for which
    an application is made to the Secretary in such manner as the
    Secretary requires.
              * * * * * * *

    Sec. 1131. Purple Heart: limitation to members of the armed forces

      The decoration known as the Purple Heart (authorized to be
    awarded pursuant to Executive Order 11016) may only be awarded
    to a person who is a member of the armed forces at the time the
    person is killed or wounded under circumstances otherwise
    qualifying that person for award of the Purple Heart.

       CHAPTER 58--BENEFITS AND SERVICES FOR MEMBERS BEING SEPARATED OR
                               RECENTLY SEPARATED

              * * * * * * *

    Sec. 1151. Assistance to separated members to obtain certification and
                        employment as teachers or employment as teachers'
                        aides

      (a) * * *
      (b) States [with] With Alternative Certification Requirements
    and Teacher and Teacher's Aide Shortages.--Upon the
    establishment of the placement program authorized by subsection
    (a), the Secretary of Defense and the Secretary of
    Transportation, in consultation with the Secretary of
    Education, shall--
              (1) * * *
              * * * * * * *

    Sec. 1152. Assistance to eligible members and former members to obtain
                        employment with law enforcement agencies

      (a) * * *
              * * * * * * *
      (g) Authority To Expand Placement To Include Firefighters.--
    (1) The Secretary may expand the placement activities
    authorized by subsection (a) to include the placement of
    eligible members and former members and eligible civilian
    employees of the Department of Defense as firefighters or
    members of rescue squads or ambulance crews with public fire
    departments.
              * * * * * * *

          CHAPTER 61--RETIREMENT OR SEPARATION FOR PHYSICAL DISABILITY

              * * * * * * *

    Sec. 1204. Members on active duty for 30 days or less: retirement

      Upon a determination by the Secretary concerned that a member
    of the armed forces not covered by section 1201, 1202, or 1203
    of this title is unfit to perform the duties of his office,
    grade, rank, or rating because of physical disability, the
    Secretary may retire the member with retired pay computed under
    section 1401 of this title, if the Secretary also determines
    that--
              (1) based upon accepted medical principles, the
            disability is of a permanent nature and stable;
              (2) the disability is the proximate result of, or was
            incurred in line of duty after the date of the
            enactment of this Act as a result of--
                      (A) performing active duty or inactive-duty
                    training;
                      (B) traveling directly to or from the place
                    at which such duty is performed; or
                      (C) an injury, illness, or disease incurred
                    or aggravated while remaining overnight
                    immediately before the commencement of
                    inactive-duty training, or while remaining
                    overnight, between successive periods of
                    inactive-duty training, at or in the vicinity
                    of the site of the inactive duty training, if
                    the site is outside reasonable commuting
                    distance of the member's residence;
              * * * * * * *

    Sec. 1206. Members on active duty for 30 days or less: separation

      Upon a determination by the Secretary concerned that a member
    of the armed forces not covered by section 1201, 1202, or 1203
    of this title is unfit to perform the duties of his office,
    grade, rank, or rating because of physical disability, the
    member may be separated from his armed force, with severance
    pay computed under section 1212 of this title, if the Secretary
    also determines that--
              (1) the member has less than 20 years of service
            computed under section 1208 of this title;
              (2) the disability was incurred in the line of duty
            as a result of--
                      (A) performing active duty or inactive-duty
                    training;
                      (B) traveling directly to or from the place
                    at which such duty is performed; or
                      (C) an injury, illness, or disease incurred
                    or aggravated while remaining overnight
                    immediately before the commencement of
                    inactive-duty training, or while remaining
                    overnight between successive periods of
                    inactive-duty training, at or in the vicinity
                    of the site of the inactive-duty training, if
                    the site is outside reasonable commuting
                    distance of the member's residence;
              [(2)] (3) the disability is not the result of the
            member's intentional misconduct or willful neglect, and
            was not incurred during a period of unauthorized
            absence;
              [(3)] (4) based upon accepted medical principles, the
            disability is or may be of a permanent nature; and
              [(4)] (5) the disability is less than 30 percent
            under the standard schedule of rating disabilities in
            use by the Department of Veterans Affairs at the time
            of the determination, and was the proximate result of
            performing active duty or inactive-duty training or of
            traveling directly to or from the place at which such
            duty is performed.
    However, if the member is eligible for transfer to the inactive
    status list under section 1209 of this title, and so elects, he
    shall be transferred to that list instead of being separated.

              * * * * * * *

                         CHAPTER 63--RETIREMENT FOR AGE

              * * * * * * *

    Sec. 1251. Age 62: regular commissioned officers; exceptions

      (a)  * * *
              * * * * * * *
      (c)(1) The Secretary concerned may defer the retirement under
    subsection (a) of a health professions officer if during the
    period of the deferment the officer will be performing duties
    consisting primarily of providing patient care or performing
    other clinical duties.
      (2) The Secretary concerned may defer the retirement under
    subsection (a) of an officer who is appointed or designated as
    a chaplain if during the period of the deferment the officer
    will be performing duties consisting primarily of providing
    direct support as a chaplain to units or installations.
      [(2)](3)(A) Except as provided in subparagraph (B), a
    deferment under this subsection may not extend beyond the first
    day of the month following the month in which the officer
    becomes 68 years of age.
      (B) The Secretary concerned may extend a deferment under this
    subsection beyond the day referred to in subparagraph (A) if
    the Secretary determines that extension of the deferment is
    necessary for the needs of the military department concerned.
    Such an extension shall be made on a case-by-case basis and
    shall be for such period as the Secretary considers
    appropriate.
      [(3)] (4) For purposes of this subsection, a health
    professions officer is--
              (A) a medical officer;
              (B) a dental officer; or
              (C) an officer in the Army Nurse Corps, an officer in
            the Navy Nurse Corps, or an officer in the Air Force
            designated as a nurse.
      (d) The Secretary concerned may defer the retirement under
    subsection (a) of an officer who is the Chief of Chaplains or
    Deputy Chief of Chaplains of that officer's armed force. Such a
    deferment may not extend beyond the first day of the month
    following the month in which the officer becomes 68 years of
    age.
              * * * * * * *

                           CHAPTER 69--RETIRED GRADE

              * * * * * * *

    Sec. 1370. Commissioned officers: general rule; exceptions

      (a) Rule for Retirement in Highest Grade Held
    Satisfactorily.--(1) * * *
      (2)(A) In order to be eligible for voluntary retirement under
    any provision of this title in a grade above major or
    lieutenant commander, a commissioned officer of the Army, Navy,
    Air Force, or Marine Corps must have served on active duty in
    that grade for not less than three years, except that the
    Secretary of Defense may authorize the Secretary of a military
    department to reduce such period to a period of not less than
    two years in the case of retirements effective during the nine-
    year period beginning on October 1, 1990.
              * * * * * * *
      (d) Reserve Officers.--(1) Unless entitled to a higher grade,
    or to credit for satisfactory service in a higher grade, under
    some other provision of law, a person who is entitled to
    retired pay under chapter [1225] 1223 of this title shall, upon
    application under section 12731 of this title, be credited with
    satisfactory service in the highest grade in which that person
    served satisfactorily at any time in the armed forces, as
    determined by the Secretary concerned in accordance with this
    subsection.
              * * * * * * *
      (3)(A) In order to be credited with satisfactory service in
    an officer grade above major or lieutenant commander, a person
    covered by paragraph (1) must have served satisfactorily in
    that grade (as determined by the Secretary of the military
    department concerned) as a reserve commissioned officer in an
    active status, or in a retired status on active duty, for not
    less than three years.
              * * * * * * *
      (F) The Secretary of Defense may authorize the Secretary of a
    military department to reduce the three-year period specified
    in subparagraph (A) to a period of not less than two years in
    the case of retirements effective during the period beginning
    on the date of the enactment of this subparagraph and ending on
    September 30, 1999. The number of officers in an armed force in
    a grade for whom a reduction is made during any fiscal year in
    the period of service-in-grade otherwise required under this
    paragraph may not exceed the number equal to two percent of the
    authorized reserve active status strength for that fiscal year
    for officers of that armed force in that grade.
              * * * * * * *

                     CHAPTER 71--COMPUTATION OF RETIRED PAY

              * * * * * * *

    Sec. 1408. Payment of retired or retainer pay in compliance with court
                        orders

      (a) Definitions.--In this section:
              * * * * * * *
      (d) Payments by Secretary Concerned [To] to (or for Benefit
    of) Spouse or Former Spouse.--(1) After effective service on
    the Secretary concerned of a court order providing for the
    payment of child support or alimony or, with respect to a
    division of property, specifically providing for the payment of
    an amount of the disposable retired pay from a member to the
    spouse or a former spouse of the member, the Secretary shall
    make payments (subject to the limitations of this section) from
    the disposable retired pay of the member to the
              * * * * * * *
      [(6)](7)(A) The Secretary concerned may not accept service of
    a court order that is an out-of State modification, or comply
    with the provisions of such a court order, unless the court
    issuing that order has jurisdiction in the manner specified in
    subsection (c)(4) over both the member and the spouse or former
    spouse involved.
              * * * * * * *

    Sec. 1450. Payment of annuity: beneficiaries

      (a) * * *
              * * * * * * *
      (f) Change in Election of Insurable Interest or Former Spouse
    Beneficiary.--
              (1) Authorized changes.--
                      (A) * * *
              * * * * * * *
                      (C) Procedures, effective date, etc.--Any
                    such change of election is subject to the same
                    rules with respect to execution, revocation,
                    and effectiveness as are set forth in section
                    1448(a)(5) of this title (without regard to the
                    eligibility of the person making the change of
                    election to make such an election under that
                    section), except that such a change of election
                    to change a beneficiary under the Plan from a
                    former spouse to a spouse may be made at any
                    time after the person providing the annuity
                    remarries (rather than only within one year
                    after the date on which that person marries).
              * * * * * * *

                           CHAPTER 75--DEATH BENEFITS

              * * * * * * *

    Sec. 1481. Recovery, care, and disposition of remains: decedents
                        covered

      (a) The Secretary concerned may provide for the recovery,
    care, and disposition of the remains of the following persons:
              (1) Any Regular of an armed force, or member of an
            armed force without component, under his jurisdiction
            who dies while on active duty.
              (2) A member of a reserve component of an armed force
            who dies while--
                      (A) on active duty;
                      (B) performing inactive-duty training;
                      (C) performing authorized travel directly to
                    or from active duty or inactive-duty training;
                      (D) remaining overnight immediately before
                    the commencement of inactive-duty training, or
                    remaining overnight, between successive periods
                    of inactive-duty training, at or in the
                    vicinity of the site of the inactive-duty
                    training, if the site is outside reasonable
                    commuting distance from the member's residence;
                    or
                      (E) hospitalized or undergoing treatment for
                    an injury, illness, or disease incurred or
                    aggravated while on active duty or performing
                    inactive-duty training.
              * * * * * * *

                          CHAPTER 76--MISSING PERSONS

    Sec.
    1501.  System for accounting for missing persons.
         * * * * * * *
    1509.  Preenactment cases, special interest.
         * * * * * * *

    Sec. 1501. System for accounting for missing persons

      (a) * * *
              * * * * * * *
      [(c) Covered Persons.--Section 1502 of this title applies in
    the case of any member of the armed forces on active duty who
    becomes involuntarily absent as a result of a hostile action,
    or under circumstances suggesting that the involuntary absence
    is a result of a hostile action, and whose status is
    undetermined or who is unaccounted for.]
      (c) Covered Persons.--Section 1502 of this title applies in
    the case of the following persons:
              (1) Any member of the armed forces on active duty who
            becomes involuntarily absent as a result of a hostile
            action, or under circumstances suggesting that the
            involuntary absence is a result of a hostile action,
            and whose status is undetermined or who is unaccounted
            for.
              (2) Any civilian employee of the Department of
            Defense, and any employee of a contractor of the
            Department of Defense, who serves with or accompanies
            the armed forces in the field under orders who becomes
            involuntarily absent as a result of a hostile action,
            or under circumstances suggesting that the involuntary
            absence is a result of a hostile action, and whose
            status is undetermined or who is unaccounted for.
              * * * * * * *
      (f) Secretary Concerned.--In this chapter, the term
    ``Secretary concerned'' includes, in the case of a civilian
    employee of the Department of Defense or contractor of the
    Department of Defense, the Secretary of the military department
    or head of the element of the Department of Defense employing
    the employee or contracting with the contractor, as the case
    may be.

    Sec. 1502. Missing persons: initial report

      (a) Preliminary Assessment and Recommendation by Commander.--
    After receiving information that the whereabouts and status of
    a person described in section 1501(c) of this title is
    uncertain and that the absence of the person may be
    involuntary, the commander of the unit, facility, or area to or
    in which the person is assigned shall make a preliminary
    assessment of the circumstances. If, as a result of that
    assessment, the commander concludes that the person is missing,
    the commander shall--
              (1) recommend that the person be placed in a missing
            status; and
              (2) not later than [10 days] 48 hours after receiving
            such information, transmit a report containing that
            recommendation to the [Secretary concerned] theater
            component commander with jurisdiction over the missing
            person in accordance with procedures prescribed under
            section 1501(b) of this title.
      (b) Transmission Through Theater Component Commander.--Upon
    reviewing a report under subsection (a) recommending that a
    person by placed in a missing status, the theater component
    commander shall ensure that all necessary actions are being
    taken, and all appropriate assets are being used, to resolve
    the status of the missing person. Not later than 14 days after
    receiving the report, the theater component commander shall
    forward the report to the Secretary of Defense or the Secretary
    concerned in accordance with procedures prescribed under
    section 1501(b) of this title. The theater component commander
    shall include with such report a certification that all
    necessary actions are being taken, and all appropriate assets
    are being used, to resolve the status of the missing person.
      [(b)] (c) Safeguarding and Forwarding of Records.--A
    commander making a preliminary assessment under subsection (a)
    with respect to a missing person shall (in accordance with
    procedures prescribed under section 1501 of this title)
    safeguard and forward for official use any information relating
    to the whereabouts and status of the missing person that
    results from the preliminary assessment or from actions taken
    to locate the person. The theater component commander through
    whom the report with respect to the missing person is
    transmitted under subsection (b) shall ensure that all
    pertinent information relating to the whereabouts and status of
    the missing person that results from the preliminary assessment
    or from actions taken to locate the person is properly
    safeguarded to avoid loss, damage, or modification.

    Sec. 1503. Actions of Secretary concerned; initial board inquiry

      (a) Determination by Secretary.--Upon receiving a
    recommendation under section [1502(a)] 1502(b) of this title
    that a person be placed in a missing status, the Secretary
    receiving the recommendation shall review the recommendation
    and, not later than 10 days after receiving such
    recommendation, shall appoint a board under this section to
    conduct an inquiry into the whereabouts and status of the
    person.
              * * * * * * *
      (c) Composition.--(1) A board appointed under this section to
    inquire into the whereabouts and status of a person shall
    consist of at least [one military officer] one individual
    described in paragraph (2) who has experience with and
    understanding of military operations or activities similar to
    the operation or activity in which the person disappeared.
      (2) An individual referred to in paragraph (1) is the
    following:
              (A) A military officer, in the case of an inquiry
            with respect to a member of the armed forces.
              (B) A civilian, in the case of an inquiry with
            respect to a civilian employee of the Department of
            Defense or of a contractor of the Department of
            Defense.
      [(2)] (3) An individual may be appointed as a member of a
    board under this section only if the individual has a security
    clearance that affords the individual access to all information
    relating to the whereabouts and status of the missing persons
    covered by the inquiry.
      [(3)] (4) A Secretary appointing a board under this
    subsection shall, for purposes of providing legal counsel to
    the board, assign to the board a judge advocate, or appoint to
    the board an attorney, who has expertise in the law relating to
    missing persons, the determination of death of such persons,
    and the rights of family members and dependents of such
    persons.
              * * * * * * *

    Sec. 1504. Subsequent board of inquiry

      (a) * * *
              * * * * * * *
      (d) Composition.--(1) A board appointed under this section
    shall be composed of at least three members [who are officers
    having the grade of major or lieutenant commander or above.] as
    follows:
              (A) In the case of a board that will inquire into the
            whereabouts and status of one or more members of the
            armed forces (and no civilians described in
            subparagraph (B)), the board shall be composed of
            officers having the grade of major or lieutenant
            commander or above.
              (B) In the case of a board that will inquire into the
            whereabouts and status of one or more civilian
            employees of the Department of Defense or contractors
            of the Department of Defense (and no members of the
            armed forces), the board shall be composed of--
                      (i) not less than three employees of the
                    Department of Defense whose rate of annual pay
                    is equal to or greater than the rate of annual
                    pay payable for grade GS-13 of the General
                    Schedule under section 5332 of title 5; and
                      (ii) such members of the armed forces as the
                    Secretary considers advisable.
              (C) In the case of a board that will inquire into the
            whereabouts and status of both one or more members of
            the armed forces and one or more civilians described in
            subparagraph (B)--
                      (i) the board shall include at least one
                    officer described in subparagraph (A) and at
                    least one employee of the Department of Defense
                    described in subparagraph (B)(i); and
                      (ii) the ratio of such officers to such
                    employees on the board shall be roughly
                    proportional to the ratio of the number of
                    members of the armed forces who are subjects of
                    the board's inquiry to the number of civilians
                    who are subjects of the board's inquiry.
              * * * * * * *
      (4) The Secretary who appoints a board under this subsection
    shall, for purposes of providing legal counsel to the board,
    assign to the board a judge advocate, or appoint to the board
    an attorney, with the same qualifications as specified in
    [section 1503(c)(3)] section 1503(c)(4) of this title.
              * * * * * * *

    Sec. 1505. Further review

      (a) * * *
      [(b) Frequency of Subsequent Reviews.--The Secretary
    concerned shall conduct inquiries into the whereabouts and
    status of a person under subsection (a) upon receipt of
    information that may result in a change of status of the
    person. The Secretary concerned shall appoint a board to
    conduct such inquiries.]
      (b) Frequency of Subsequent Reviews.--(1) In the case of a
    missing person who was last known to be alive or who was last
    suspected of being alive, the Secretary shall appoint a board
    to conduct an inquiry with respect to a person under this
    subsection--
              (A) on or about three years after the date of the
            initial report of the disappearance of the person under
            section 1502(a) of this title; and
              (B) not later than every three years thereafter.
      (2) In addition to appointment of boards under paragraph (1),
    the Secretary shall appoint a board to conduct an inquiry with
    respect to a missing person under this subsection upon receipt
    of information that could result in a change of status of the
    missing person. When the Secretary appoints a board under this
    paragraph, the time for subsequent appointments of a board
    under paragraph (1)(B) shall be determined from the date of the
    receipt of such information.
      (3) The Secretary is not required to appoint a board under
    paragraph (1) with respect to the disappearance of any person--
              (A) more than 30 years after the initial report of
            the disappearance of the missing person required by
            section 1502 of this title; or
              (B) if, before the end of such 30-year period, the
            missing person is accounted for.
              * * * * * * *

    Sec. 1506. Personnel files

      (a) * * *
              * * * * * * *
      (e) Wrongful Withholding.--Except as provided in subsections
    (a) through (d), any person who knowingly and willfully
    withholds from the personnel file of a missing person any
    information relating to the disappearance or whereabouts and
    status of a missing person shall be fined as provided in title
    18 or imprisoned not more than one year, or both.
      [(e)] (f) Availability of Information.--The Secretary
    concerned shall, upon request, make available the contents of
    the personnel file of a missing person to the primary next of
    kin, the other members of the immediate family, or any other
    previously designated person of the person.

    Sec. 1507. Recommendation of status of death

      (a) * * *
      (b) Submittal of Information on Death.--If a board appointed
    under section 1503, 1504, or 1505 of this title makes a
    recommendation that a missing person be declared dead, the
    board shall include in the report of the board with respect to
    the person under that section the following:
              (1) A detailed description of the location where the
            death occurred.
              (2) A statement of the date on which the death
            occurred.
              (3) A description of the location of the body, if
            recovered.
              (4) If the body has been recovered and is not
            identifiable through visual means, a certification by a
            practitioner of an appropriate forensic science that
            the body recovered is that of the missing person.
              * * * * * * *

    Sec. 1509. Preenactment, special interest cases

      (a) * * *
              * * * * * * *
      (c) Special Rule for Persons Classified as ``KLA/BNR''.--In
    the case of a person described in subsection (b) who was
    classified as ``killed in action/body not recovered'', the case
    of that person may be reviewed under this section only if the
    new information referred to in subsection (a) is compelling.
      [(c)] (d) Definitions.--In this section:
              (1) The term ``Korean conflict'' means the period
            beginning on June 27, 1950, and ending on January 31,
            1955.
              (2) The term ``Cold War'' means the period beginning
            on September 2, 1945, and ending on August 21, 1991.
              (3) The term ``Indochina war era'' means the period
            beginning on July 8, 1959, and ending on May 15, 1975.
              * * * * * * *

    Sec. 1513. Definitions

      In this chapter:
              [(1) The term ``missing person'' means a member of
            the armed forces on active duty who is in a missing
            status.]
              (1) The term ``missing person'' means--
                      (A) a member of the armed forces on active
                    duty who is in a missing status; or
                      (B) a civilian employee of the Department of
                    Defense or an employee of a contractor of the
                    Department of Defense who serves with or
                    accompanies the armed forces in the field under
                    orders and who is in a missing status.
              * * * * * * *
              (8) The term ``theater component commander'' means,
            with respect to any of the combatant commands, an
            officer of any of the armed forces who (A) is commander
            of all forces of that armed force assigned to that
            combatant command, and (B) is directly subordinate to
            the commander of the combatant command.
              * * * * * * *

                         CHAPTER 81--CIVILIAN EMPLOYEES

    Sec.
    1581.  Foreign National Employees Separation Pay Account.
         * * * * * * *
    1585.  Carrying of firearms.
    1585a.    Special agents of the Defense Criminal Investigative Service:
              authority to execute warrants and make arrests.
         * * * * * * *
    1589.  Participation in management of specified non-Federal entities:
              authorized activities.
              * * * * * * *

    Sec. 1585a. Special agents of the Defense Criminal Investigative
                        Service: authority to execute warrants and make
                        arrests

      (a) Authority.--The Secretary of Defense may authorize any
    DCIS special agent--
              (1) to execute and serve any warrant or other process
            issued under the authority of the United States; and
              (2) to make arrests without a warrant--
                      (A) for any offense against the United States
                    committed in the presence of that agent; and
                      (B) for any felony cognizable under the laws
                    of the United States if the agent has probable
                    cause to believe that the person to be arrested
                    has committed or is committing the felony.
      (b) Attorney General Guidelines.--Authority of a DCIS special
    agent under subsection (a) may be exercised only in accordance
    with guidelines approved by the Attorney General.
      (c) DCIS Special Agent Defined.--In this section, the term
    ``DCIS special agent'' means an employee of the Department of
    Defense who is a special agent of the Defense Criminal
    Investigative Service (or any successor to that service).
              * * * * * * *

    Sec. 1589. Participation in management of specified non-Federal
                        entities: authorized activities

      (a) Authorization.--(1) The Secretary concerned may authorize
    an employee described in paragraph (2), as part of that
    employee's official duties, to serve without compensation as a
    director, officer, or trustee, or to otherwise participate, in
    the management of an entity designated under subsection (b).
    Any such authorization shall be made on a case-by-case basis,
    for a particular employee to participate in a specific capacity
    with a specific designated entity. Such authorization may be
    made be only for the purpose of providing oversight and advice
    to, and coordination with, the designated entity, and
    participation of the employee in the activities of the
    designated entity may not extend to participation in the day-
    to-day operations of the entity.
      (2) Paragraph (1) applies to any employee of the Department
    of Defense or, in the case of the Coast Guard when not
    operating as a service in the Navy, of the Department of
    Transportation. For purposes of this section, the term
    ``employee'' includes a civilian officer.
      (b) Designated Entities.--(1) The Secretary of Defense, and
    the Secretary of Transportation in the case of the Coast Guard
    when it is not operating as a service in the Navy, shall
    designate those entities for which authorization under
    subsection (a) may be provided. The list of entities so
    designated may not be revised more frequently than
    semiannually. In making such designations, the Secretary shall
    designate each military welfare society and may designate any
    other entity described in paragraph (3). No other entities may
    be designated.
      (2) In this section, the term ``military welfare society''
    means the following:
              (A) Army Emergency Relief.
              (B) Air Force Aid Society, Inc.
              (C) Navy-Marine Corps Relief Society.
              (D) Coast Guard Mutual Assistance.
      (3) An entity described in this paragraph is an entity that--
              (A) regulates and supports the athletic programs of
            the service academies (including athletic conferences);
              (B) regulates international athletic competitions;
              (C) accredits service academies and other schools of
            the armed forces (including regional accrediting
            agencies); or
              (D)(i) regulates the performance, standards, and
            policies of military health care (including health care
            associations and professional societies), and (ii) has
            designated the position or capacity in that entity in
            which a Federal employee described in subsection (a)(2)
            may serve if authorized under subsection (a).
      (c) Publication of Designated Entities and of Authorized
    Persons.--A designation of an entity under subsection (b), and
    an authorization under subsection (a) of an employee to
    participate in the management of such an entity, shall be
    published in the Federal Register.
      (d) Civilians Outside the Military Departments.--In this
    section, the term ``Secretary concerned'' includes the
    Secretary of Defense with respect to employees of the
    Department of Defense who are not employees of a military
    department.
      (e) Regulations.--The Secretary of Defense, and the Secretary
    of Transportation in the case of the Coast Guard when it is not
    operating as a service in the Navy, shall prescribe regulations
    to carry out this section.
              * * * * * * *

    Sec. 1595. Civilian faculty members at certain Department of Defense
                        schools: employment and compensation

      (a) * * *
              * * * * * * *
      (d) Application to Faculty Members at NDU.--(1) * * *
      (2) For purposes of this section, the National Defense
    University includes the National War College, the Armed Forces
    Staff College, the [Institute for National Strategic Study,]
    Institute for National Strategic Studies, the Information
    Resources Management College, and the Industrial College of the
    Armed Forces.
              * * * * * * *

    Sec. 1599c. Veterans' preference requirements: Department of Defense
                        failure to comply treated as a prohibited personnel
                        practice

      (a) * * *
              * * * * * * *
      (c) Veterans' Preference Defined.--(1) In this section, the
    term ``veterans' preference'' means any of the following
    provisions of law:
              (A) * * *
              * * * * * * *
              (F) Sections 106[(f)](e), 7281(e), and 7802(5) of
            title 38.
              * * * * * * *

                   CHAPTER 87--DEFENSE ACQUISITION WORKFORCE

              * * * * * * *

                  SUBCHAPTER V--GENERAL MANAGEMENT PROVISIONS

              * * * * * * *

    Sec. 1763. Reassignment of authority

      [On and after October 1, 1993, the] The Secretary of Defense
    may assign the responsibilities under this chapter of the Under
    Secretary of Defense for Acquisition and Technology to any
    other civilian official in the Office of the Secretary of
    Defense who is appointed by the President by and with the
    advice and consent of the Senate. If the Secretary takes action
    under the preceding sentence, he may authorize the
    [secretaries] Secretaries of the military departments to assign
    the responsibilities of a senior acquisition executive under
    this chapter to any other civilian official in the military
    department who is appointed by the President by and with the
    advice and consent of the Senate.
              * * * * * * *

                        PART III--TRAINING AND EDUCATION

              * * * * * * *

                        CHAPTER 101--TRAINING GENERALLY

              * * * * * * *

    Sec. 2010. Participation of developing countries in combined exercises:
                        payment of incremental expenses

      (a) * * *
              * * * * * * *
      [(e) Not more than $13,400,000 may be obligated or expended
    for the purposes of this section during fiscal years 1987
    through 1991.]

    Sec. 2011. Special operations forces: training with friendly foreign
                        forces

      (a) * * *
              * * * * * * *
      [(e) Reports.--Not later than April 1 of each year, the
    Secretary of Defense shall submit to Congress a report
    regarding training during the preceding fiscal year for which
    expenses were paid under this section. Each report shall
    specify the following:
              [(1) All countries in which that training was
            conducted.
              [(2) The type of training conducted, including
            whether such training was related to counter-narcotics
            or counter-terrorism activities, the duration of that
            training, the number of members of the armed forces
            involved, and expenses paid.
              [(3) The extent of participation by foreign military
            forces, including the number and service affiliation of
            foreign military personnel involved and physical and
            financial contribution of each host nation to the
            training effort.
              [(4) The relationship of that training to other
            overseas training programs conducted by the armed
            forces, such as military exercise programs sponsored by
            the Joint Chiefs of Staff, military exercise programs
            sponsored by a combatant command, and military training
            activities sponsored by a military department
            (including deployments for training, short duration
            exercises, and other similar unit training events).]

    Sec. 2012. Support and services for eligible organizations and
                        activities outside Department of Defense

      (a) * * *
              * * * * * * *
      (g) Treatment of Member's Participation in Provision of
    Support or Services.--(1) The Secretary of a military
    department may not require or request a member of the armed
    forces to submit for consideration by a selection board
    (including a promotion board, command selection board, or any
    other kind of selection board) evidence of the member's
    participation in the provision of support and services to non-
    Department of Defense organizations and activities under this
    section or the member's involvement in, or support of, other
    community relations and public affairs activities of the armed
    forces. A selection board may not evaluate a member on the
    basis of the member's participation or involvement in, or
    support of, such support, services, or activities.
      (2) Paragraph (1) shall not apply with respect to the
    following members:
              (A) A member who is in a public affairs career field.
              (B) A member who is not in a public affairs career
            field, but who is serving, at the time the member is
            considered by a selection board, in a public affairs
            position specified in service authorization documents
            or who served in such a position within three years
            before being considered by a selection board.
      [(g)] (h) Advisory Councils.--(1) The Secretary of Defense
    shall encourage the establishment of advisory councils at
    regional, State, and local levels, as appropriate, in order to
    obtain recommendations and guidance concerning assistance under
    this section from persons who are knowledgeable about regional,
    State, and local conditions and needs.
      (2) The advisory councils should include officials from
    relevant military organizations, representatives of appropriate
    local, State, and Federal agencies, representatives of civic
    and social service organizations, business representatives, and
    labor representatives.
      (3) The Federal Advisory Committee Act (5 U.S.C. App.) shall
    not apply to such councils.
      [(h)] (i) Construction of Provision.--Nothing in this section
    shall be construed as authorizing--
              (1) the use of the armed forces for civilian law
            enforcement purposes or for response to natural or
            manmade disasters; or
              (2) the use of Department of Defense personnel or
            resources for any program, project, or activity that is
            prohibited by law.
              * * * * * * *

              CHAPTER 103--SENIOR RESERVE OFFICERS' TRAINING CORPS

    Sec.
    2101.  Definitions.
         * * * * * * *
    [2111a.   Detail of officers to senior military colleges.]
    2111a.   Support for senior military colleges.
              * * * * * * *

    [Sec. 2111a. Detail of officers to senior military colleges]

    Sec. 2111a. Support for senior military colleges

      (a) * * *
              * * * * * * *
      (d) Additional Support.--(1) The Secretaries of the military
    departments shall ensure that each unit of the Senior Reserve
    Officers' Training Corps at a senior military college provides
    support to the Corps of Cadets at the college over and above
    the level of support associated with the conduct of the formal
    Senior Reserve Officers' Training Corps course of instruction.
      (2) This additional support shall include the following:
              (A) Mentoring, teaching, coaching, counseling and
            advising cadets and cadet leaders in the areas of
            leadership, military, and academic performance.
              (B) Involvement in cadet leadership training,
            development, and evaluation, as well as drill,
            ceremonies, parades, and inspections.
      (3) This additional support may include the following:
              (A) Advising cadet teams, clubs, and organizations.
              (B) Involvement in matters of discipline and
            administration of the Corps of Cadets so long as such
            involvement does not interfere with the conduct of the
            formal Senior Reserve Officers' Training Corps course
            of instruction or the support required by paragraph
            (2).
      (e) Termination or Reduction of Program Prohibited.--The
    Secretary of Defense and the Secretaries of the military
    departments may not take or authorize any action to terminate
    or reduce a unit of the Senior Reserve Officers' Training Corps
    at a senior military college unless the termination or
    reduction is specifically requested by the college.
      (f) Assignment to Active Duty.--(1) The Secretary of the Army
    shall ensure that a graduate of a senior military college who
    desires to serve as a commissioned officer on active duty upon
    graduation from the college, who is medically and physically
    qualified for active duty, and who is recommended for such duty
    by the professor of military science at the college, shall be
    assigned to active duty. This paragraph shall apply to a member
    of the program at a senior military college who graduates from
    the college after March 31, 1997.
      (2) Nothing in this section shall be construed to prohibit
    the Secretary of the Army from requiring a member of the
    program who graduates from a senior military college to serve
    on active duty.
      [(d)] (g) Senior Military Colleges.--The senior military
    colleges are the following:
              (1) Texas A&M University.
              (2) Norwich [College] University.
              (3) The Virginia Military Institute.
              (4) The Citadel.
              (5) Virginia Polytechnic Institute and State
            University.
              (6) North Georgia College and State University.
              * * * * * * *

    Sec. 2130a. Financial assistance: nurse officer candidates

      (a) Bonus Authorized.--(1) A person described in subsection
    (b) who, during the period beginning on November 29, 1989, and
    ending on September 30, [1998] 1999, executes a written
    agreement in accordance with subsection (c) to accept an
    appointment as a nurse officer may, upon the acceptance of the
    agreement by the Secretary concerned, be paid an accession
    bonus of not more than $5,000. The bonus shall be paid in
    periodic installments, as determined by the Secretary concerned
    at the time the agreement is accepted, except that the first
    installment may not exceed $2,500.
              * * * * * * *

                   CHAPTER 108--DEPARTMENT OF DEFENSE SCHOOLS

    Sec.
    2161.  Defense Intelligence School: master of science of strategic
              intelligence.
         * * * * * * *
    2165.  National Defense University: Center for the Study of Chinese
              Military Affairs.
              * * * * * * *

    Sec. 2162. Preparation of budget requests for operation of professional
                        military education schools

      (a) * * *
              * * * * * * *
      (d) Definitions.--In this section:
              (1) * * *
              (2) The term ``National Defense University'' means
            the National War College, the Armed Forces Staff
            College, the Institute for National Strategic Studies,
            the Information Resources Management College, and the
            Industrial College of the Armed Forces.
              * * * * * * *

    Sec. 2165. National Defense University: Center for the Study of Chinese
                        Military Affairs

      (a) Establishment.--(1) The Secretary of Defense shall
    establish a Center for the Study of Chinese Military Affairs
    (hereinafter in this section referred to as the ``Center'') as
    part of the National Defense University. The Center shall be
    organized as an independent institute under the University.
      (2) The Director of the Center shall be a distinguished
    scholar of proven academic, management, and leadership
    credentials with a superior record of achievement and
    publication regarding Chinese political, strategic, and
    military affairs. The Director shall be appointed by the
    Secretary of Defense in consultation with the chairman and
    ranking minority party member of the Committee on National
    Security of the House of Representatives and the chairman and
    ranking minority party member of the Committee on Armed
    Services of the Senate.
      (b) Mission.--The mission of the Center is to study the
    national goals and strategic posture of the People's Republic
    of China and the ability of that nation to develop, field, and
    deploy an effective military instrument in support of its
    national strategic objectives.
      (c) Areas of Study.--The Center shall conduct research
    relating to the People's Republic of China as follows:
              (1) To assess the potential of that nation to act as
            a global great power, the Center shall conduct research
            that considers the policies and capabilities of that
            nation in a regional and world-wide context, including
            Central Asia, Southwest Asia, Europe, and Latin
            America, as well as the Asia-Pacific region.
              (2) To provide a fuller assessment of the areas of
            study referred to in paragraph (1), the Center shall
            conduct research on--
                      (A) economic trends relative to strategic
                    goals and military capabilities;
                      (B) strengths and weaknesses in the
                    scientific and technological sector; and
                      (C) relevant demographic and human resource
                    factors on progress in the military sphere.
              (3) The Center shall conduct research on the armed
            forces of the People's Republic of China, taking into
            account the character of those armed forces and their
            role in Chinese society and economy, the degree of
            their technological sophistication, and their
            organizational and doctrinal concepts. That research
            shall include inquiry into the following matters:
                      (A) Concepts concerning national interests,
                    objectives, and strategic culture.
                      (B) Grand strategy, military strategy,
                    military operations, and tactics.
                      (C) Doctrinal concepts at each of the four
                    levels specified in subparagraph (B).
                      (D) The impact of doctrine on China's force
                    structure choices.
                      (E) The interaction of doctrine and force
                    structure at each level to create an integrated
                    system of military capabilities through
                    procurement, officer education, training, and
                    practice and other similar factors.
      (d) Faculty of the Center.--(1) The core faculty of the
    Center should comprise mature scholars capable of providing
    diverse perspectives on Chinese political, strategic, and
    military thought. Center scholars shall demonstrate the
    following competencies and capabilities:
              (A) Analysis of national strategy, military strategy,
            and doctrine.
              (B) Analysis of force structure and military
            capabilities.
              (C) Analysis of--
                      (i) issues relating to weapons of mass
                    destruction, military intelligence, defense
                    economics, trade, and international economics;
                    and
                      (ii) the relationship between those issues
                    and grand strategy, science and technology, the
                    sociology of human resources and demography,
                    and political science.
      (2) A substantial number of Center scholars shall be
    competent in the Chinese language. The Center shall include a
    core of junior scholars capable of providing linguistics and
    translation support to the Center.
      (e) Activities of the Center.--The activities of the Center
    shall include other elements appropriate to its mission,
    including the following:
              (1) The Center should include an active conference
            program with an international reach.
              (2) The Center should conduct an international
            competition for a Visiting Fellowship in Chinese
            Military Affairs and Chinese Security Issues. The term
            of the fellowship should be for one year, renewable for
            a second. The visitor should contract to produce a
            major publication in the visitor's area of expertise.
              (3) The Center shall provide funds to support at
            least one trip per analyst per year to China and the
            region and to support visits of Chinese military
            leaders to the Center.
              (4) The Center shall support well defined,
            distinguished, signature publications.
              (5) Center scholars shall have appropriate access to
            intelligence community assessments of Chinese military
            affairs.
      (f) Studies and Reports.--The Director may contract for
    studies and reports from the private sector to supplement the
    work of the Center.
              * * * * * * *

                CHAPTER 109--EDUCATIONAL LOAN REPAYMENT PROGRAMS

    Sec.
    2171.  Education loan repayment program: enlisted members on active duty
              in specified military specialties.
         * * * * * * *
    2173.  Education loan repayment program: commissioned officers in
              specified health professions.
         * * * * * * *

    Sec. 2173. Education loan repayment program: commissioned officers in
                        specified health professions

      (a) Authority to Repay Education Loans.--For the purpose of
    maintaining adequate numbers of commissioned officers of the
    armed forces on active duty who are qualified in the various
    health professions, the Secretary of a military department may
    repay, in the case of a person described in subsection (b), a
    loan that was used by the person to finance education regarding
    a health profession and was obtained from a governmental
    entity, private financial institution, school, or other
    authorized entity.
      (b) Eligible Persons.--To be eligible to obtain a loan
    repayment under this section, a person must--
              (1) satisfy one of the academic requirements
            specified in subsection (c);
              (2) be fully qualified for, or hold, an appointment
            as a commissioned officer in one of the health
            professions; and
              (3) sign a written agreement to serve on active duty,
            or, if on active duty, to remain on active duty for a
            period in addition to any other incurred active duty
            obligation.
      (c) Academic Requirements.--One of the following academic
    requirements must be satisfied for purposes of determining the
    eligibility of a person for a loan repayment under this
    section:
              (1) The person must be fully qualified in a health
            profession that the Secretary of the military
            department concerned has determined to be necessary to
            meet identified skill shortages.
              (2) The person must be enrolled as a full-time
            student in the final year of a course of study at an
            accredited educational institution leading to a degree
            in a health profession other than medicine or
            osteopathic medicine.
              (3) The person must be enrolled in the final year of
            an approved graduate program leading to specialty
            qualification in medicine, dentistry, osteopathic
            medicine, or other health profession.
      (d) Certain Person Ineligible.--Participants of the Armed
    Forces Health Professions Scholarship and Financial Assistance
    program under subchapter I of chapter 105 of this title and
    students of the Uniformed Services University of the Health
    Sciences established under section 2112 of this title are not
    eligible for the repayment of an education loan under this
    section.
      (e) Loan Repayments.--(1) Subject to the limits established
    by paragraph (2), a loan repayment under this section may
    consist of payment of the principal, interest, and related
    expenses of a loan obtained by a person described in subsection
    (b) for--
              (A) all educational expenses, comparable to all
            educational expenses recognized under section 2127(a)
            of this title for participants in the Armed Forces
            Health Professions Scholarship and Financial Assistance
            program; and
              (B) reasonable living expenses, not to exceed
            expenses comparable to the stipend paid under section
            2121(d) of this title for participants in the Armed
            Forces Health Professions Scholarship and Financial
            Assistance program.
      (2) For each year of obligated service that a person agrees
    to serve in an agreement described in subsection (b)(3), the
    Secretary of the military department concerned may pay not more
    than $22,000 on behalf of the person. This maximum amount shall
    be increased annually by the Secretary of Defense effective
    October 1 of each year by a percentage equal to the percent
    increase in the average annual cost of educational expenses and
    stipend costs of a single scholarship under the Armed Forces
    Health Professions Scholarship and Financial Assistance
    program. The total amount that may be repaid on behalf of any
    person may not exceed an amount determined on the basis of a
    four-year active duty service obligation.
      (f) Active Duty Service Obligation.--(1) A person entering
    into an agreement described in subsection (b)(3) incurs an
    active duty service obligation. The length of this obligation
    shall be determined under regulations prescribed by the
    Secretary of Defense, but those regulations may not provide for
    a period of obligation of less than one year for each maximum
    annual amount, or portion thereof, paid on behalf of the person
    for qualified loans.
      (2) For persons on active duty before entering into the
    agreement, the active duty service obligation shall be served
    consecutively to any other incurred obligation.
      (g) Effect of Failure to Complete Obligation.--A commissioned
    officer who is relieved of the officer's active duty obligation
    under this section before the completion of that obligation may
    be given, with or without the consent of the officer, any
    alternative obligation comparable to any of the alternative
    obligations authorized by section 2123(e) of this title for
    participants in the Armed Forces Health Professions Scholarship
    and Financial Assistance program.
      (h) Regulations.--The Secretary of Defense shall prescribe
    regulations to carry out this section, including standards for
    qualified loans and authorized payees and other terms and
    conditions for the making of loan repayments.
              * * * * * * *

                       CHAPTER 137--PROCUREMENT GENERALLY

              * * * * * * *

    Sec. 2327. Contracts: consideration of national security objectives

      (a) * * *
              * * * * * * *
      (c) Waiver.--(1)(A) If the Secretary of Defense determines
    under paragraph (2) that entering into a contract with a firm
    or a subsidiary of a firm described in subsection (b) is not
    inconsistent with the national security objectives of the
    United States, the Secretary shall remove the firm or
    subsidiary from the list maintained under subsection (d)(1) and
    the head of an agency may enter into a contract with such firm
    or subsidiary after the date on which such head of an agency
    submits to Congress a report on the contract.
              * * * * * * *
      (d) List of Firms Subject to Subsection (b).--(1) The
    Secretary of Defense shall develop and maintain a list of all
    firms and subsidiaries of firms that have been subject to the
    prohibition in subsection (b) since the date occurring five
    years before the date of the enactment of the National Defense
    Authorization Act for Fiscal Year 1998. The Secretary shall
    make the list available to the public.
      (2) A firm or subsidiary included on the list maintained
    under paragraph (1) may request the Secretary of Defense to
    remove such firm or subsidiary from the list if its foreign
    ownership circumstances have significantly changed. Upon
    receipt of such request, the Secretary shall determine if
    paragraphs (1) and (2) of subsection (b) still apply to the
    firm or subsidiary. If the Secretary determines such paragraphs
    no longer apply, the Secretary shall remove the firm or
    subsidiary from the list.
      (3) The head of an agency shall provide a copy of the list
    maintained under paragraph (1) to each firm or subsidiary of a
    firm that submits a bid or proposal in response to a
    solicitation issued by the Department of Defense.
      (4) The head of an agency shall prohibit each firm or
    subsidiary of a firm awarded a contract by the agency from
    using in the performance of the contract any equipment, parts,
    or services that are provided by a firm or subsidiary included
    on the list maintained under paragraph (1).
      [(d)] (e) Applicability.--(1) This section does not apply to
    a contract for an amount less than $100,000.
      (2) This section does not apply to the Coast Guard or the
    National Aeronautics and Space Administration.
      [(e)] (f) Regulations.--The Secretary of Defense, after
    consultation with the Secretary of State, shall prescribe
    regulations to carry out this section. Such regulations shall
    include a definition of the term ``significant interest''.
              * * * * * * *

                   PART IV--SERVICE, SUPPLY, AND PROCUREMENT

    Chap.                                                               Sec.

    131. Planning and Coordination................................      2201
         * * * * * * *
    [147. Utilities and Services..................................     2481]
    147. Commissaries and Exchanges and Other Morale, Welfare, and
        Recreation Activities.....................................      2481
         * * * * * * *
    152. Issue of Supplies, Services, and Facilities............[2540]  2541
         * * * * * * *

                     CHAPTER 131--PLANNING AND COORDINATION

              * * * * * * *

    Sec. 2208. Working-capital funds

      (a) * * *
              * * * * * * *
      [(k) The Secretary of Defense shall provide that of the total
    amount of payments received in a fiscal year by funds
    established under this section for industrial-type activities,
    not less than 3 percent during fiscal year 1985, not less than
    4 percent during fiscal year 1986, and not less than 5 percent
    during fiscal year 1987 shall be used for the acquistion of
    capital equipment for such activities.]
              * * * * * * *

    Sec. 2220. Performance based management: acquisition programs

      (a) * * *
      (b) Annual Reporting Requirement.--The Secretary of Defense
    shall include in the annual report submitted to Congress
    pursuant to section 113(c) of this title an assessment of
    whether major [and nonmajor] acquisition programs of the
    Department of Defense are achieving, on average, 90 percent of
    cost, performance, and schedule goals established pursuant to
    subsection (a) and whether the average period for converting
    emerging technology into operational capability has decreased
    by 50 percent or more from the average period required for such
    conversion as of October 13, 1994. The Secretary shall use data
    from existing management systems in making the assessment.
              * * * * * * *

    Sec. 2221. Fisher House trust funds

      (a) * * *
              * * * * * * *
      (c) Use of Funds.--(1) * * *
              * * * * * * *
      (5) There is hereby authorized to be appropriated for any
    fiscal year from a trust fund specified in subsection (a) any
    amount referred to in paragraph (1), (2), or (3) (as applicable
    to that trust fund), such amount to be available only for the
    purposes stated in that paragraph. With respect to any such
    amount, the preceding sentence is the specific authorization by
    law required by section 1321(b)(2) of title 31.
              * * * * * * *

              CHAPTER 134--MISCELLANEOUS ADMINISTRATIVE PROVISIONS

              * * * * * * *

             SUBCHAPTER II--MISCELLANEOUS ADMINISTRATIVE AUTHORITY

              * * * * * * *

    Sec. 2253. Motor vehicles

      (a) General Authorities.--The Secretary of Defense and the
    Secretary of each military department may--
              (1) provide for insurance of official motor vehicles
            in a foreign country when the laws of such country
            require such insurance; and
              (2) purchase right-hand drive vehicles at a cost of
            not more than [$12,000] $30,000 each.
              * * * * * * *

                       CHAPTER 137--PROCUREMENT GENERALLY

    Sec.
    2302.  Definitions.
         * * * * * * *
    [2306b.   Multiyear contracts.]
    2306b.   Multiyear contracts: acquisition of property.
         * * * * * * *
    2325.   Restructuring costs.
              * * * * * * *

    Sec. 2304. Contracts: competition requirements

      (a) * * *
              * * * * * * *
      (f)(1) * * *
      (2) In the case of a procurement permitted by subsection
    (c)(2), the justification and approval required by paragraph
    (1) may be made after the contract is awarded. The
    justification and approval required by paragraph (1) is not
    required--
              (A) * * *
              * * * * * * *
              (E) in the case of a procurement permitted by
            subsection (c)(4), but only if the head of the
            contracting activity prepares a document in connection
            with such procurement that describes the terms of an
            agreement or treaty, or the written directions,
            referred to in that subsection that have the effect of
            requiring the use of procedures other than competitive
            [procedures and such document is approved by the
            competition advocate for the procuring activity.]
            procedures.
              * * * * * * *

    Sec. 2306. Kinds of contracts

      (a) * * *
              * * * * * * *
      (h) Multiyear contracting authority for the purchase of
    property is provided in section 2306b of this title.
              * * * * * * *

    [Sec. 2306b. Multiyear contracts]

    Sec. 2306b. Multiyear contracts: acquisition of property

      (a) In General.--To the extent that funds are otherwise
    available for obligation, the head of an agency may enter into
    multiyear contracts for the purchase of property whenever the
    head of that agency [finds--] finds each of the following:
              (1) [that] That the use of such a contract will
            result in substantial savings of the total anticipated
            costs of carrying out the program through annual
            contracts[;].
              (2) [that] That the minimum need for the property to
            be purchased is expected to remain substantially
            unchanged during the contemplated contract period in
            terms of production rate, procurement rate, and total
            quantities[;].
              (3) [that] That there is a reasonable expectation
            that throughout the contemplated contract period the
            head of the agency will request funding for the
            contract at the level required to avoid contract
            cancellation[;].
              (4) [that] That there is a stable design for the
            property to be acquired and that the technical risks
            associated with such property are not excessive[;].
              (5) [that] That the estimates of both the cost of the
            contract and the anticipated cost avoidance through the
            use of a multiyear contract are realistic[; and].
              (6) [in] In the case of a purchase by the Department
            of Defense, that the use of such a contract will
            promote the national security of the United States.
              * * * * * * *
      (d) Participation by Subcontractors, Vendors, and
    Suppliers.--In order to broaden the defense industrial base,
    the regulations shall provide that, to the extent practicable--
              (1) multiyear contracting under [paragraph (1)]
            subsection (a) shall be used in such a manner as to
            seek, retain, and promote the use under such contracts
            of companies that are subcontractors, vendors, or
            suppliers; and
              (2) upon accrual of any payment or other benefit
            under such a multiyear contract to any subcontractor,
            vendor, or supplier company participating in such
            contract, such payment or benefit shall be delivered to
            such company in the most expeditious manner
            practicable.
              * * * * * * *
      (i) Defense Acquisitions Specifically Authorized by Law.--(1)
    A multiyear contract may not be entered into for any fiscal
    year under this section for a defense acquisition program that
    has been specifically authorized by law to be carried out using
    multiyear contract authority unless each of the following
    conditions is satisfied:
              (A) The Secretary of Defense certifies to Congress
            that the current [five-year] future-years defense
            program fully funds the support costs associated with
            the multiyear program.
              (B) The proposed multiyear contract provides for
            production at not less than minimum economic rates
            given the existing tooling and facilities.
              * * * * * * *
      (3) In the case of the Department of Defense, a multiyear
    contract may not be entered into for any fiscal year under this
    section unless the contract is specifically authorized by law
    in an Act other than an appropriations Act.
      (k) Multiyear Contract Defined.--For the purposes of [this
    subsection] this section, a multiyear contract is a contract
    for the purchase of property or services for more than one, but
    not more than five, program years. Such a contract may provide
    that performance under the contract during the second and
    subsequent years of the contract is contingent upon the
    appropriation of funds and (if it does so provide) may provide
    for a cancellation payment to be made to the contractor if such
    appropriations are not made.
      (l) Various Additional Requirements With Respect to Multiyear
    Defense Contracts.--(1)(A) The head of an agency may not
    initiate a contract described in subparagraph (B) unless the
    congressional defense committees are notified of the proposed
    contract at least 30 days in advance of the award of the
    proposed contract.
      (B) Subparagraph (A) applies to the following contracts:
              (i) A multiyear contract--
                      (I) that employs economic order quantity
                    procurement in excess of $20,000,000 in any one
                    year of the contract; or
                      (II) that includes an unfunded contingent
                    liability in excess of $20,000,000.
              (ii) Any contract for advance procurement leading to
            a multiyear contract that employs economic order
            quantity procurement in excess of $20,000,000 in any
            one year.
      (2) The head of an agency may not initiate a multiyear
    contract for which the economic order quantity advance
    procurement is not funded at least to the limits of the
    Government's liability.
      (3) The head of an agency may not initiate a multiyear
    procurement contract for any system (or component thereof) if
    the value of the multiyear contract would exceed $500,000,000
    unless authority for the contract is specifically provided in
    an appropriations Act.
      (4) The head of an agency may not terminate a multiyear
    procurement contract until 10 days after the date on which
    notice of the proposed termination is provided to the
    congressional defense committees.
      (5) The execution of multiyear authority shall require the
    use of a present value analysis to determine lowest cost
    compared to an annual procurement.
      (6) This subsection does not apply to the National
    Aeronautics and Space Administration or to the Coast Guard.
      (7) In this subsection, the term ``congressional defense
    committees'' means the following:
              (A) The Committee on Armed Services of the Senate and
            the Subcommittee on Defense of the Committee on
            Appropriations of the Senate.
              (B) The Committee on National Security of the House
            of Representatives and the Subcommittee on National
            Security of the Committee on Appropriations of the
            House of Representatives.
              * * * * * * *

    Sec. 2307. Contract financing

      (a) * * *
              * * * * * * *
      (i) Vesting of Title.--If a contract made by the head of an
    agency provides for title to property to vest in the United
    States, such title shall vest in accordance with the terms of
    the contract, regardless of any security interest in the
    property asserted by the contractor.
              * * * * * * *

    Sec. 2315. Law inapplicable to the procurement of automatic data
                        processing equipment and services for certain
                        defense purposes

      (a) For the purposes of [the Information Technology
    Management Reform Act of 1996] division E of the Clinger-Cohen
    Act of 1996 (40 U.S.C. 1401 et seq.), the term ``national
    security systems'' means those telecommunications and
    information systems operated by the Department of Defense, the
    functions, operation or use of which--
              (1) * * *
              * * * * * * *

    Sec. 2325. Restructuring costs

      (a) Limitation on Payment of Restructuring Costs.--(1) The
    Secretary of Defense may not pay, under section 2324 of this
    title, a defense contractor for restructuring costs associated
    with a business combination of the contractor unless the
    Secretary determines in writing either--
              (A) that the amount of savings for the Department of
            Defense associated with the restructuring, based on
            audited cost data, will be at least twice the amount of
            the costs allowed; or
              (B) that the amount of savings for the Department of
            Defense associated with the restructuring, based on
            audited cost data, will exceed the amount of the costs
            allowed and that the business combination will result
            in the preservation of a critical capability that
            otherwise might be lost to the Department.
      (2) The Secretary may not delegate the authority to make a
    determination under paragraph (1) to an official of the
    Department of Defense below the level of an Assistant Secretary
    of Defense.
      (b) Report.--Not later than March 1 in each of 1998, 1999,
    2000, 2001, and 2002, the Secretary of Defense shall submit to
    Congress a report containing the following:
              (1) For each defense contractor to which the
            Secretary has paid, under section 2324 of this title,
            restructuring costs associated with a business
            combination, a summary of the following:
                      (A) The amount of savings for the Department
                    of Defense associated with such business
                    combination that has been realized as of the
                    date of the report, based on audited cost data.
                      (B) An estimate, as of the date of the
                    report, of the amount of savings for the
                    Department of Defense associated with such
                    business combination that is expected to be
                    achieved in the future.
              (2) An identification of any business combination for
            which the Secretary has paid restructuring costs under
            section 2324 of this title during the preceding
            calendar year and, for each such business combination--
                      (A) the supporting rationale for allowing
                    such costs;
                      (B) factual information associated with the
                    determination made under subsection (a) with
                    respect to such costs; and
                      (C) a discussion of whether the business
                    combination would have proceeded without the
                    payment of restructuring costs by the
                    Secretary.
              (3) An assessment of the degree of vertical
            integration resulting from business combinations of
            defense contractors and a discussion of the measures
            taken by the Secretary of Defense to increase the
            ability of the Department of Defense to monitor
            vertical integration trends and address any resulting
            negative consequences.
      (c) Definition.--In this section, the term ``business
    combination'' includes a merger or acquisition.

    Sec. 2326. Undefinitized contractual actions: restrictions

      (a) * * *
      (b) Limitations on Obligations of Funds.--(1) * * *
              * * * * * * *
      [(4) The head of an agency may waive the provisions of this
    subsection with respect to a contract of that agency if such
    head of an agency determines that the waiver is necessary in
    order to support a contingency operation.]
      [(5)] (4) This subsection does not apply to an undefinitized
    contractual action for the purchase of initial spares.
              * * * * * * *
      (g) Definitions.--In this section:
              (1) The term ``undefinitized contractual action''
            means a new procurement action entered into by the head
            of an agency for which the contractual terms,
            specifications, or price are not agreed upon before
            performance is begun under the action. Such term does
            not include contractual actions with respect to the
            following:
                      (A) * * *
              * * * * * * *
                      (E) Purchases in support of contingency
                    operations.
                      (F) Purchases in support of humanitarian or
                    peacekeeping operations, as defined in
                    2302(7)(B) of this title.
                      (G) Purchases in support of emergency work
                    and other disaster relief operations performed
                    pursuant to the Robert T. Stafford Disaster
                    Relief and Emergency Assistance Act (42 U.S.C.
                    5121 et seq.).
              * * * * * * *

    Sec. 2327. Contracts: consideration of national security objectives

      (a) * * *
              * * * * * * *
      (c) Waiver.--(1)(A) If the Secretary of Defense determines
    under paragraph (2) that entering into a contract with a firm
    or a subsidiary of a firm described in subsection (b) is not
    inconsistent with the national security objectives of the
    United States, the Secretary shall remove the firm or
    subsidiary from the list maintained under subsection (d)(1) and
    the head of an agency may enter into a contract with such firm
    or subsidiary after the date on which such head of an agency
    submits to Congress a report on the contract.
              * * * * * * *
      (d) List of Firms Subject to Subsection (b).--(1) The
    Secretary of Defense shall develop and maintain a list of all
    firms and subsidiaries of firms that have been subject to the
    prohibition in subsection (b) since the date occurring five
    years before the date of the enactment of the National Defense
    Authorization Act for Fiscal Year 1998. The Secretary shall
    make the list available to the public.
      (2) A firm or subsidiary included on the list maintained
    under paragraph (1) may request the Secretary of Defense to
    remove such firm or subsidiary from the list if its foreign
    ownership circumstances have significantly changed. Upon
    receipt of such request, the Secretary shall determine if
    paragraphs (1) and (2) of subsection (b) still apply to the
    firm or subsidiary. If the Secretary determines such paragraphs
    no longer apply, the Secretary shall remove the firm or
    subsidiary from the list.
      (3) The head of an agency shall provide a copy of the list
    maintained under paragraph (1) to each firm or subsidiary of a
    firm that submits a bid or proposal in response to a
    solicitation issued by the Department of Defense.
      (4) The head of an agency shall prohibit each firm or
    subsidiary of a firm awarded a contract by the agency from
    using in the performance of the contract any equipment, parts,
    or services that are provided by a firm or subsidiary included
    on the list maintained under paragraph (1).
      [(d)] (e) Applicability.--(1) This section does not apply to
    a contract for an amount less than $100,000.
      (2) This section does not apply to the Coast Guard or the
    National Aeronautics and Space Administration.
      [(e)] (f) Regulations.--The Secretary of Defense, after
    consultation with the Secretary of State, shall prescribe
    regulations to carry out this section. Such regulations shall
    include a definition of the term ``significant interest''.
              * * * * * * *

        CHAPTER 138--COOPERATIVE AGREEMENTS WITH NATO ALLIES AND OTHER
                                   COUNTRIES

              * * * * * * *

            SUBCHAPTER I--ACQUISITION AND CROSS-SERVICING AGREEMENTS

              * * * * * * *

    Sec. 2350. Definitions

      In this subchapter:
              (1) The term ``logistic support, supplies, and
            services'' means food, billeting, transportation
            (including airlift), petroleum, oils, lubricants,
            clothing, communications services, medical services,
            ammunition, base operations support (and construction
            incident to base operations support), storage services,
            use of facilities, training services, spare parts and
            components, repair and maintenance services,
            calibration services, and port services. Such term
            includes temporary use of general purpose vehicles and
            [other items of military equipment not designated as
            part of the United States Munitions List] other
            nonlethal items of military equipment which are not
            designated as significant military equipment on the
            United States Munitions List promulgated pursuant to
            section 38(a)(1) of the Arms Export Control Act.
              * * * * * * *

                     CHAPTER 139--RESEARCH AND DEVELOPMENT

              * * * * * * *

    Sec. 2371a. Cooperative research and development agreements under
                        Stevenson-Wydler Technology Innovation Act of 1980

      The Secretary of Defense, in carrying out research projects
    through the Defense Advanced Research Projects Agency, and the
    Secretary of each military department, in carrying out research
    projects, may permit the director of any federally funded
    research and development center to enter into cooperative
    research and development agreements with any person, any agency
    or instrumentality of the United States, any unit of State or
    local government, and any other entity under the authority
    granted by section 12 of the Stevenson-Wydler Technology
    Innovation Act of 1980 (15 U.S.C. 3710a). Technology may be
    transferred to a non-Federal party to such an agreement
    consistent with the provisions of sections 11 and 12 of such
    Act (15 U.S.C. 3710, 3710a).
              * * * * * * *

               CHAPTER 141--MISCELLANEOUS PROCUREMENT PROVISIONS

    Sec.
    2381.  Contracts: regulations for bids.
         * * * * * * *
    [2410a.   Appropriated funds: availability for certain contracts for 12
              months.]
    2410a.   Severable services contracts for periods crossing fiscal years.
         * * * * * * *

    Sec. 2401a. Lease of vehicles, equipment, vessels, and aircraft

      (a) Leasing of Commercial Vehicles and Equipment.--The
    Secretary of Defense may use leasing in the acquisition of
    commercial vehicles and equipment whenever the Secretary
    determines that [leasing of such vehicles] such leasing is
    practicable and efficient.
              * * * * * * *

    [Sec. 2410a. Appropriated funds: availability for certain contracts for
                        12 months

      [(a) Funds appropriated to the Department of Defense for a
    fiscal year shall be available for payments under contracts for
    any of the following purposes for 12 months beginning at any
    time during the fiscal year:
              [(1) The maintenance of tools, equipment, and
            facilities.
              [(2) The lease of real or personal property,
            including the maintenance of such property when
            contracted for as part of the lease agreement.
              [(3) Depot maintenance.
              [(4) The operation of equipment.
      [(b) The Secretary of Transportation with respect to the
    Coast Guard when it is not operating as a service in the Navy,
    may enter into a contract for procurement of severable services
    for a period that begins in one fiscal year and ends in the
    next fiscal year if (without regard to any option to extend the
    period of the contract) the contract period does not exceed one
    year. Funds made available for a fiscal year may be obligated
    for the total amount of a contract entered into under the
    authority of this subsection.]

    Sec. 2410a. Severable services contracts for periods crossing fiscal
                        years

      (a) Authority.--The Secretary of Defense or the Secretary of
    a military department may enter into a contract for procurement
    of severable services for a period that begins in one fiscal
    year and ends in the next fiscal year if (without regard to any
    option to extend the period of the contract) the contract
    period does not exceed one year.
      (b) Obligation of Funds.--Funds made available for a fiscal
    year may be obligated for the total amount of a contract
    entered into under the authority of subsection (a).
              * * * * * * *

                CHAPTER 144--MAJOR DEFENSE ACQUISITION PROGRAMS

              * * * * * * *

    Sec. 2432. Selected Acquisition Reports

      (a) * * *
              * * * * * * *
      (h)(1) * * *
      (2) A limited report under this subsection shall include the
    following:
              (A) * * *
              * * * * * * *
              [(D) The completion status of the development program
            expressed--
                      [(i) as the percentage that the number of
                    years for which funds have been appropriated
                    for the development program is of the number of
                    years for which it is planned that funds will
                    be appropriated for the program; and
                      [(ii) as the percentage that the amount of
                    funds that have been appropriated for the
                    development program is of the total amount of
                    funds which it is planned will be appropriated
                    for the program.]
              [(E)] (D) Program highlights since the last Selected
            Acquisition Report.
              [(F)] (E) Other information as the Secretary of
            Defense considers appropriate.
              * * * * * * *

      CHAPTER 146--CONTRACTING FOR PERFORMANCE OF CIVILIAN COMMERCIAL OR
                           INDUSTRIAL TYPE FUNCTIONS

    Sec.
    2460.  Definition of depot-level maintenance and repair.
    2461.  Commercial or industrial type functions: required studies and
              reports before conversion to contractor performance.
         * * * * * * *
    2474.  Centers of Industrial and Technical Excellence: designation;
              public-private partnerships.

    Sec. 2460. Definition of depot-level maintenance and repair

      (a) In General.--In this chapter, the term ``depot-level
    maintenance and repair'' means material maintenance or repair
    requiring the overhaul, upgrading, or rebuilding of parts,
    assemblies, or subassemblies, and the testing and reclamation
    of equipment as necessary, regardless of the source of funds
    for the maintenance or repair. The term includes all aspects of
    software maintenance and such portions of interim contractor
    support, contractor logistics support, or any similar
    contractor support for the performance of services that are
    described in the preceding sentence.
      (b) Exception.--The term does not include the procurement of
    a major weapon system modification or upgrade, except where the
    changes to the system are primarily for safety reasons, to
    correct a deficiency, or to improve program performance.
              * * * * * * *

    Sec. 2464. Core logistics functions

      (a) Necessity for Core Logistics Capability.--(1) It is
    essential for the national defense that Department of Defense
    activities maintain [a logistics capability (including
    personnel, equipment, and facilities)] a core logistics
    capability that is Government-owned and Government-operated
    (including Government personnel and Government-owned and
    Government-operated equipment and facilities) to ensure a ready
    and controlled source of technical competence and resources
    necessary to ensure effective and timely response to a
    mobilization, national defense contingency situations, and
    other emergency requirements.
      (2) The Secretary of Defense shall identify those logistics
    activities that are necessary to maintain the core logistics
    capability described in paragraph (1).
      (3) Those core logistics activities identified under
    paragraphs (1) and (2) shall include the capability,
    facilities, and equipment to maintain and repair all types of
    weapon systems and other military equipment that are identified
    by the Secretary, in consultation with the Joint Chiefs of
    Staff, as necessary to enable the armed forces to fulfill the
    national military strategy, including the capability and
    capacity to maintain and repair any new mission-essential
    weapon system or materiel within four years after the system or
    materiel achieves initial operational capability.
      (4) The Secretary of Defense shall require the performance of
    core logistics activities identified under paragraphs (1), (2),
    and (3) at Government-owned, Government-operated facilities of
    the Department of Defense (including Government-owned,
    Government-operated facilities of a military department) and
    shall assign such facilities sufficient workload to ensure cost
    efficiency and technical proficiency in peacetime while
    preserving the surge capacity and reconstitution capabilities
    necessary to meet the military contingencies provided for in
    the national military strategy.
              * * * * * * *

    Sec. 2466. Limitations on the performance of depot-level maintenance of
                        materiel

      (a) * * *
      (b) Treatment of Certain Large Projects.--If a maintenance or
    repair project concerning an aircraft carrier or submarine that
    is contracted for performance by non-Federal Government
    personnel and that accounts for five percent or more of the
    funds made available in a fiscal year to a military department
    or a Defense Agency for depot-level maintenance and repair
    workload, the project and the funds necessary for the project
    shall not be considered when applying the percentage limitation
    specified in subsection (a) to that military department or
    Defense Agency.
              * * * * * * *
      [(e) Report.--Not later than January 15, 1995, the Secretary
    of Defense shall submit to Congress a report identifying, for
    each military department and Defense Agency, the percentage of
    funds referred to in subsection (a) that was used during fiscal
    year 1994 to contract for the performance by non-Federal
    Government personnel of depot-level maintenance and repair
    workload.]
              * * * * * * *

    Sec. 2469. Contracts to perform workloads previously performed by
                        depot-level activities of the Department of
                        Defense: requirement of competition

      (a) Requirement for Competition.--The Secretary of Defense
    shall ensure that the performance of a depot-level maintenance
    [or repair] and repair workload described in subsection (b) is
    not changed to performance by a contractor or by another depot-
    level activity of the Department of Defense unless the change
    is made using--
              (1) merit-based selection procedures for competitions
            among all depot-level activities of the Department of
            Defense; or
              (2) competitive procedures for competitions among
            private and public sector entities.
      (b) Scope.--Subsection (a) applies to any depot-level
    maintenance [or repair] and repair workload that has a value of
    not less than $3,000,000 and is being performed by a depot-
    level activity of the Department of Defense.
              * * * * * * *
      (d) Restriction on Contracts at Certain Facilities.--
              (1) Restriction.--The Secretary of Defense may not
            enter into any contract for the performance of depot-
            level maintenance and repair of weapon systems or other
            military equipment of the Department of Defense, or for
            the performance of management functions related to
            depot-level maintenance and repair of such systems or
            equipment, at any military installation where a depot-
            level maintenance and repair facility was approved in
            1995 for closure under the Defense Base Closure and
            Realignment Act of 1990 (part A of title XXIX of Public
            Law 101-510; 10 U.S.C. 2687 note). In the preceding
            sentence, the term ``military installation'' includes a
            former military installation closed under the Act that
            was a military installation when it was approved for
            closure under the Act.
              (2) Exception.--Paragraph (1) shall not apply with
            respect to an installation or former installation
            described in such paragraph if the Secretary of Defense
            certifies to Congress, not later than 45 days before
            entering into a contract for depot-level maintenance
            and repair at the installation or former installation,
            that--
                      (A) not less than 80 percent of the capacity
                    at each of the depot-level maintenance and
                    repair activities of the military department
                    concerned is being utilized on an ongoing basis
                    to perform industrial operations in support of
                    the depot-level maintenance and repair of
                    weapon systems and other military equipment of
                    the Department of Defense;
                      (B) the Secretary has determined, on the
                    basis of a detailed analysis (which the
                    Secretary shall submit to Congress with the
                    certification), that the total amount of the
                    costs of the proposed contract to the
                    Government, both recurring and nonrecurring and
                    including any costs associated with planning
                    for and executing the proposed contract, would
                    be less than the costs that would otherwise be
                    incurred if the depot-level maintenance and
                    repair to be performed under the contract were
                    performed using equipment and facilities of the
                    Department of Defense;
                      (C) all of the information upon which the
                    Secretary determined that the total costs to
                    the Government would be less under the contract
                    is available for examination; and
                      (D) none of the depot-level maintenance and
                    repair to be performed under the contract was
                    considered, before July 1, 1995, to be a core
                    logistics capability of the military department
                    concerned pursuant to section 2464 of this
                    title.
              (3) Capacity of depot-level activities.--For purposes
            of paragraph (2)(A), the capacity of depot-level
            maintenance and repair activities shall be considered
            to be the same as the maximum potential capacity
            identified by the Defense Base Closure and Realignment
            Commission for purposes of the selection in 1995 of
            military installations for closure or realignment under
            the Defense Base Closure and Realignment Act of 1990,
            without regard, after 1995, to any limitation on the
            maximum number of Federal employees (expressed as full
            time equivalent employees or otherwise), Federal
            employment levels, or the actual availability of
            equipment to support depot-level maintenance and
            repair.
              (4) GAO review.--At the same time that the Secretary
            submits the certification and analysis to Congress
            under paragraph (2), the Secretary shall submit a copy
            of the certification and analysis to the Comptroller
            General. The Comptroller General shall review the
            analysis and the information referred to in
            subparagraph (C) of paragraph (2) and, not later than
            30 days after Congress receives the certification,
            submit to Congress a report containing a statement
            regarding whether the Comptroller General concurs with
            the determination of the Secretary included in the
            certification pursuant to subparagraph (B) of that
            paragraph.
              (5) Application.--This subsection shall apply with
            respect to any contract described in paragraph (1) that
            is entered into, or proposed to be entered into, after
            January 1, 1997.
              * * * * * * *

    Sec. 2474. Centers of Industrial and Technical Excellence: designation;
                        public-private partnerships

      (a) Designation.--(1) The Secretary of Defense shall
    designate each depot-level activity of the military departments
    and the Defense Agencies (other than facilities approved for
    closure or major realignment under the Defense Base Closure and
    Realignment Act of 1990 (part A of title XXIX of Public Law
    101-510; 10 U.S.C. 2687 note)) as a Center of Industrial and
    Technical Excellence in the recognized core competencies of the
    activity.
      (2) The Secretary shall establish a policy to encourage the
    Secretary of each military department and the head of each
    Defense Agency to reengineer industrial processes and adopt
    best-business practices at their depot-level activities in
    connection with their core competency requirements, so as to
    serve as recognized leaders in their core competencies
    throughout the Department of Defense and in the national
    technology and industrial base (as defined in section 2500(1)
    of this title).
      (b) Public-Private Partnerships.--The Secretary of Defense
    shall enable Centers of Industrial and Technical Excellence to
    form public-private partnerships for the performance of depot-
    level maintenance and repair and shall encourage the use of
    such partnerships to maximize the utilization of the capacity
    at such Centers.
      (c) Additional Work.--The policy required under subsection
    (a) shall include measures to enable a private sector entity
    that enters into a partnership arrangement under subsection (b)
    or leases excess equipment and facilities at a Center of
    Industrial and Technical Excellence pursuant to section 2471 of
    this title to perform additional work at the Center, subject to
    the limitations outlined in subsection (b) of such section,
    outside of the types of work normally assigned to the Center.

                     [CHAPTER 147--UTILITIES AND SERVICES]

    CHAPTER 147--COMMISSARIES AND EXCHANGES AND OTHER MORALE, WELFARE, AND
                             RECREATION ACTIVITIES

    Sec.
    [2481.  Utilities and services: sale; expansion and extension of systems
              and facilities.]
    2481.  Morale, welfare, and recreation activities: leases and other
              contracts to benefit.
         * * * * * * *
    [2483.  Sale of electricity from alternate energy and cogeneration
              production facilities.]
         * * * * * * *
    [2490.  Utility services: furnishing for certain buildings.]
    2490a.   Combined exchange and commissary stores.

    [Sec. 2481. Utilities and services: sale; expansion and extension of
                        systems and facilities

      [(a) Under such regulations and for such periods and at such
    prices as he may prescribe, the Secretary concerned or his
    designee may sell or contract to sell to purchasers within or
    in the immediate vicinity of an activity of the Army, Navy, Air
    Force, Marine Corps, or Coast Guard, as the case may be, any of
    the following utilities and related services, if it is
    determined that they are not available from another local
    source and that the sale is in the interest of national defense
    or in the public interest:
              [(1) Electric power.
              [(2) Steam.
              [(3) Compressed air.
              [(4) Water.
              [(5) Sewage and garbage disposal.
              [(6) Natural, manufactured, or mixed gas.
              [(7) Ice.
              [(8) Mechanical refrigeration.
              [(9) Telephone service.
      [(b) Proceeds of sales under subsection (a) shall be credited
    to the appropriation currently available for the supply of that
    utility or service.
      [(c) To meet local needs the Secretary concerned may make
    minor expansions and extensions of any distributing system or
    facility within an activity through which a utility or service
    is furnished under subsection (a).]

    Sec. 2481. Morale, welfare, and recreation activities: leases and other
                        contracts to benefit

      (a) Leases and Other Contracts Authorized.--The Secretary of
    Defense may authorize a nonappropriated fund instrumentality to
    enter into leases, licensing agreements, concession agreements,
    and other contracts with private persons and State or local
    governments involving real property (and related personal
    property) under the control of the nonappropriated fund
    instrumentality in order to facilitate the provision of
    facilities, goods, or services to authorized patrons of the
    nonappropriated fund instrumentality.
      (b) Conditions.--A nonappropriated fund instrumentality may
    enter into an authorized lease or other contract under
    subsection (a) only if the nonappropriated fund instrumentality
    determines, in consultation with the Secretary of Defense,
    that--
              (1) the use of the property subject to the lease or
            contract will provide appropriate space, or contribute
            to the provision of goods and services, for a morale,
            welfare, or recreation activity of the nonappropriated
            fund instrumentality;
              (2) the lease or contract will not be inconsistent
            with and will not adversely affect the mission of the
            Department or the nonappropriated fund instrumentality;
            and
              (3) the lease or contract will enhance the use of the
            property subject to the lease or contract.
      (c) Access to Resulting Facilities, Goods, or Services.--The
    use of a lease or contract under subsection (a) to provide
    facilities, goods, or services shall not be construed to permit
    the use of the resulting facilities, goods, or services by
    persons who are not authorized patrons of the nonappropriated
    fund instrumentality that is a party to the lease or contract.
      (d) Lease and Contract Terms.--Subsection (b) of section 2667
    of this title shall apply to a lease or contract under
    subsection (a), except that references to the Secretary
    concerned shall be deemed to mean the nonappropriated fund
    instrumentality that is a party to the lease or contract.
      (e) Money Rentals.--Money rentals received pursuant to a
    lease or contract under subsection (a) shall be treated in the
    same manner as other receipts of the nonappropriated fund
    instrumentality that is a party to the lease or contract,
    except that use of the rentals shall be restricted to the
    installation at which the property covered by the lease or
    contract is located.
      (f) Definition.--In this section, the term ``nonappropriated
    fund instrumentality'' means the Army and Air Force Exchange
    Service, Navy Exchange Service Command, Marine Corps exchanges,
    or any other instrumentality of the United States under the
    jurisdiction of the armed forces which is conducted for the
    comfort, pleasure, contentment, or physical or mental
    improvement of members of the armed forces.

    Sec. 2482. Commissary stores: operation

      (a) * * *
              * * * * * * *
      (c) Treatment of Certain Receipts.--(1) The Defense
    Commissary Agency shall deposit amounts received from the
    sources specified in paragraph (2) into the same account in
    which the proceeds from the adjustment of, or surcharge on,
    commissary store prices authorized by subsection (a) of section
    2685 of this title are deposited. In such amounts as provided
    in appropriations Acts, the amounts deposited under this
    paragraph shall be available for the purposes described in
    subsection (b) of such section.
      (2) Paragraph (1) shall apply with respect to amounts
    received by the Defense Commissary Agency from--
              (A) the sale of items for recycling;
              (B) the disposal of excess property;
              (C) license fees, royalties, incentive allowances,
            and management and other fees; and
              (D) a nonappropriated fund instrumentality of the
            United States.

    [Sec. 2483. Sale of electricity from alternate energy and cogeneration
                        production facilities

      [(a) The Secretary of a military department may sell,
    contract to sell, or authorize the sale by a contractor to a
    public or private utility company of electrical energy
    generated from alternate energy or cogeneration type production
    facilities which are under the jurisdiction (or produced on
    land which is under the jurisdiction) of the Secretary
    concerned. The sale of such energy shall be made under such
    regulations, for such periods, and at such prices as the
    Secretary concerned prescribes consistent with the Public
    Utility Regulatory Policies Act of 1978 (16 U.S.C. 2601 et
    seq.).
      [(b)(1) Proceeds from sales under subsection (a) shall be
    credited to the appropriation account currently available to
    the military department concerned for the supply of electrical
    energy.
      [(2) Subject to the availability of appropriations for this
    purpose, proceeds credited under paragraph (1) may be used to
    carry out military construction projects under the energy
    performance plan developed by the Secretary of Defense under
    section 2865(a) of this title, including minor military
    construction projects authorized under section 2805 of this
    title that are designed to increase energy conservation.
      [(c) Before carrying out a military construction project
    described in subsection (b) using proceeds from sales under
    subsection (a), the Secretary concerned shall notify Congress
    in writing of the project, the justification for the project,
    and the estimated cost of the project. The project may be
    carried out only after the end of the 21-day period beginning
    on the date the notification is received by Congress.]
              * * * * * * *

    Sec. 2486. Commissary stores: merchandise that may be sold; uniform
                        surcharges and pricing

      (a) In General.--Commissary stores are similar to commercial
    grocery stores and may sell merchandise similar to that sold in
    commercial grocery stores.
      [(b) Merchandise sold in commissary stores may include items
    in the following categories:]
      (b) Authorized Commissary Merchandise Categories.--
    Merchandise sold in, at, or by commissary stores may include
    items only in the following categories:
              (1) * * *
              * * * * * * *
              [(11) Other categories designated in regulations
            prescribed by the Secretary of a military department
            and approved by the Secretary of Defense.]
              (11) Subject to the congressional notification
            requirements of subsection (f), such other merchandise
            categories as the Secretary of Defense may prescribe.
      (c) Uniform Sales Price Surcharge or Adjustment.--An
    adjustment of or surcharge on sales prices in commissary stores
    under section 2484(b) or 2685(a) of this title or for any other
    purpose shall be applied as a uniform percentage of the sales
    price of all merchandise sold [in commissary stores.] in, at,
    or by commissary stores. The uniform percentage in effect on
    the date of the enactment of the National Defense Authorization
    Act for Fiscal Year 1998 may not be changed except by a law
    enacted after such date.
      [(d) The Secretary of Defense shall prescribe regulations
    establishing uniform pricing policies for merchandise
    authorized for sale by this section. The policies in the
    regulations shall--
              [(1) require the establishment of a sales price of
            each item of merchandise at a level which will recoup
            the actual product cost of the item (consistent with
            this section and sections 2484 and 2685 of this title);
            and
              [(2) promote the lowest practical price of
            merchandise sold at commissary stores.]
      (d) Sales Price Establishment.--The Secretary of Defense
    shall establish the sales price of each item of merchandise
    sold in, at, or by commissary stores at the level that will
    recoup the actual product cost of the item (consistent with
    this section and sections 2484 and 2685 of this title).
      (e) Special Rule for Brand-Name Commercial Items.--The
    Secretary of Defense may not use the exception provided in
    section 2304(c)(5) of this title regarding the procurement of a
    brand-name commercial item for resale [in commissary stores]
    in, at, or by commissary stores unless the commercial item is
    regularly sold outside of commissary stores under the same
    brand name as the name by which the commercial item will be
    sold [in commissary stores] in, at, or by commissary stores. In
    determining whether a brand name commercial item is regularly
    sold outside of commissary stores, the Secretary shall consider
    only sales of the item on a regional or national basis by
    commercial grocery or other retail operations consisting of
    multiple stores.
      (f) Congressional Notification.--(1) Any change in the
    pricing policies for merchandise sold in, at, or by commissary
    stores, and any addition of a merchandise category under
    subsection (a)(11), shall not take effect until the Secretary
    of Defense submits written notice of the proposed change or
    addition to Congress and a period of 90 days of continuous
    session of Congress expires following the date on which notice
    was received.
      (2) For purposes of this subsection, the continuity of a
    session of Congress is broken only by an adjournment of the
    Congress sine die, and the days on which either House is not in
    session because of an adjournment or recess of more than three
    days to a day certain are excluded in a computation of such 90-
    day period.
      (g) Special Rule for Certain Merchandise.--(1)
    Notwithstanding the general requirement that merchandise sold
    in, at, or by commissary stores be commissary store inventory,
    the Secretary of Defense may authorize the sale of items in the
    merchandise categories specified in paragraph (2) as
    noncommissary store inventory. Subsections (c) and (d) shall
    not apply to the pricing of such items of merchandise.
      (2) The merchandise categories referred to in paragraph (1)
    are as follows:
              (A) Magazines and other periodicals.
              (B) Tobacco products.
              * * * * * * *

    [Sec. 2490. Utility services: furnishing for certain buildings

      [Appropriations for the Department of Defense may be used for
    utility services for--
              [(1) buildings constructed at private cost, as
            authorized by law; and
              [(2) buildings on military reservations authorized by
            regulation to be used for morale, welfare, and
            recreational purposes.]
              * * * * * * *

     CHAPTER 148--NATIONAL DEFENSE TECHNOLOGY AND INDUSTRIAL BASE, DEFENSE
                      REINVESTMENT, AND DEFENSE CONVERSION

              * * * * * * *

                           SUBCHAPTER I--DEFINITIONS

    Sec.
    [2491.  Definitions.]
    2500.  Definitions.

    [Sec. 2491.] Sec. 2500. Definitions

      In this chapter:
              (1) * * *
              * * * * * * *

        SUBCHAPTER IV--MANUFACTURING TECHNOLOGY AND DUAL-USE ASSISTANCE
                               EXTENSION PROGRAMS

              * * * * * * *

    Sec. 2525. Manufacturing Technology Program

      (a) * * *
              * * * * * * *
      (e) Funding Requirement.--(1) Subject to paragraph (2), the
    Secretary of Defense shall make available each fiscal year for
    the Manufacturing Technology Program the greater of the
    following amounts:
              (A) 0.25 percent of the amount available for the
            fiscal year concerned for the demonstration and
            validation, engineering and manufacturing development,
            operational systems development, and procurement
            programs of the military departments and Defense
            Agencies.
              (B) The amount authorized to be appropriated by law
            for the fiscal year concerned for projects of the
            military departments and Defense Agencies under the
            Manufacturing Technology Program.
      (2) Paragraph (1) applies to fiscal years 1998, 1999, and
    2000.
      (f) Transfer Authority.--The Secretary of Defense may
    transfer funds made available pursuant to subsection (e) from a
    military department or Defense Agency to another military
    department or Defense Agency to ensure efficient implementation
    of the Manufacturing Technology Program. The Secretary may
    delegate the authority provided in the preceding sentence to
    the Under Secretary of Defense for Acquisition and Technology.
    Authority to transfer funds under this subsection is in
    addition to any other authority provided by law to transfer
    funds (whether enacted before, on, or after the date of the
    enactment of this section) and is not subject to any dollar
    limitation or notification requirement contained in any other
    such authority to transfer funds.
      (g) Report.--(1) At the same time the President submits to
    Congress the budget for fiscal year 1999 pursuant to section
    1105(a) of title 31, the Secretary of Defense shall submit to
    Congress a report that--
              (A) specifies the plans of the Secretary for
            expenditures under the program during fiscal years
            1998, 1999, and 2000; and
              (B) assesses the effectiveness of the program.
      (2) The Secretary shall submit an updated version of such
    report at the same time the President submits the budget for
    each fiscal year after fiscal year 1999 during which the
    program is in effect.shall include--
              (A) an assessment of whether the funding of the
            program, as provided pursuant to the funding
            requirement of subsection (e), is sufficient; and
              (B) any recommendations considered appropriate by the
            Secretary for changes in, or an extension of, the
            funding requirement of subsection (e).
              * * * * * * *

       SUBCHAPTER V--MISCELLANEOUS TECHNOLOGY BASE POLICIES AND PROGRAMS

              * * * * * * *

    Sec. 2534. Miscellaneous limitations on the procurement of goods other
                        than United States goods

      (a) Limitation on Certain Procurements.--The Secretary of
    Defense may procure any of the following items only if the
    manufacturer of the item satisfies the requirements of
    subsection (b):
              (1) Buses.--Multipassenger motor vehicles (buses).
              (2) Chemical weapons antidote.--Chemical weapons
            antidote contained in automatic injectors (and
            components for such injectors).
              (3) Components for naval vessels.--(A) * * *
              (B) The following components of vessels, to the
            extent they are unique to marine applications:
            gyrocompasses, electronic navigation chart systems,
            steering controls, pumps, propulsion and machinery
            control systems, [and] totally enclosed lifeboats, and
            shipboard work stations.
              * * * * * * *
      (c) Applicability to Certain Items.--
              (1) Components for naval vessels.--Subsection (a)
            does not apply to a procurement of spare or repair
            parts needed to support components for naval vessels
            produced or manufactured outside the United States.
              (2) Valves and machine tools.--(A) * * *
              * * * * * * *
              (C) Subsection (a)(4) and this paragraph shall cease
            to be effective on [October 1, 1996] October 1, 2001.
              (3) Ball bearings and roller bearings.--Subsection
            (a)(5) and this paragraph shall cease to be effective
            on October 1, 2000.
              [(4) Vessel propellers.--Subsection (a)(3)(A)(iii)
            and this paragraph shall cease to be effective on
            February 10, 1998.]
      (d) Waiver Authority.--The Secretary of Defense may [waive
    the limitation in subsection (a) with respect to the
    procurement of an item listed in that subsection if the
    Secretary determines] waive, on a case-by-case basis, the
    limitation in subsection (a) in the case of a specific
    procurement of an item listed in that subsection if the
    Secretary determines, for that specific procurement, that any
    of the following apply:
              (1) * * *
              * * * * * * *
              (4) Satisfactory quality items manufactured by an
            entity that is part of the national technology and
            industrial base (as defined in section [2491(1)]
            section 2500(1) of this title) are not available.
              (5) Application of the limitation would result in the
            existence of only one source for the item that is an
            entity that is part of the national technology and
            industrial base (as defined in [section 2491(1)]
            section 2500(1) of this title).
              * * * * * * *

            CHAPTER 152--ISSUE OF SUPPLIES, SERVICES, AND FACILITIES

    Sec.
    2541.  Equipment and barracks: national veterans' organizations.
         * * * * * * *
    2549.  Provision of medical care to foreign military and diplomatic
              personnel: reimbursement required; waiver for provision of
              reciprocal services.
    2549a.  Emergency health care: overseas activities of On-Site Inspection
              Agency.
              * * * * * * *

    Sec. 2549a. Emergency health care: overseas activities of On-Site
                        Inspection Agency

      (a) Authority to Pay Expenses.--From funds appropriated for
    the necessary expenses of the On-Site Inspection Agency of the
    Department of Defense, the Secretary of Defense may pay or
    reimburse an employee of the Agency, a member of the uniformed
    services or a civilian employee assigned or detailed to the
    Agency, or an employee of a contractor operating under a
    contract with the Agency, for emergency health care services
    obtained by the employee, member, or contractor employee while
    permanently or temporarily on duty in a state of the former
    Soviet Union or the former Warsaw Pact.
      (b) Initial Deposits.--The expenses for emergency health care
    that may be paid or reimbursed under subsection (a) include
    initial deposits for emergency care and inpatient care.
              * * * * * * *

                          CHAPTER 157--TRANSPORTATION

    Sec.
    2631.  Supplies: preference to United States vessels.
         * * * * * * *
    2646.  Space available travel: members of Selected Reserve.
              * * * * * * *

    Sec. 2640. Charter air transportation of members of the armed forces

      (a) * * *
              * * * * * * *
      (h) Authority to Protect Safety-Related Information
    Voluntarily Provided by An Air Carrier.--(1) In any case in
    which an air carrier voluntarily provides safety-related
    information to the Secretary for purposes of this section, the
    Secretary may (notwithstanding any other provision of law)
    withhold the information from public disclosure if the
    Secretary determines that--
              (A) disclosure of the information would inhibit the
            air carrier from voluntarily providing safety-related
            information to the Secretary; and
              (B) the information would aid--
                      (i) the Secretary in carrying out his
                    responsibilities under this section; or
                      (ii) the head of another agency in carrying
                    out the safety responsibilities of the agency.
      (2) If the Secretary provides to the head of another agency
    safety-related information described in paragraph (1) with
    respect to which the Secretary has made a determination
    described in that paragraph, the head of that agency shall
    (notwithstanding any other provision of law) withhold the
    information from public disclosure.
      [(h)] (i) Regulations.--The Secretary shall prescribe
    regulations to carry out this section, including requirements
    and identification of inspecting personnel with respect to
    preflight safety inspections required by subsection (b)(3).
      [(i)] (j) Definitions.--In this section:
              (1) The terms ``air carrier'', ``aircraft'', ``air
            transportation'', and ``charter air transportation''
            have the meanings given such terms by section 40102(a)
            of title 49.
              (2) The term ``members of the armed forces'' means
            members of the Army, Navy, Air Force, and Marine Corps.
              * * * * * * *

    Sec. 2646. Space available travel: members of Selected Reserve

      (a) Availability.--The Secretary of Defense shall prescribe
    regulations to allow members of the Selected Reserve in good
    standing (as determined by the Secretary concerned), and
    dependents of such members, to receive transportation on
    aircraft of the Department of Defense on a space available
    basis under the same terms and conditions as apply to members
    of the armed forces on active duty and dependents of such
    members.
      (b) Condition on Dependent Transportation.--A dependent of a
    member of the Selected Reserve may be provided transportation
    under this section only when the dependent is actually
    accompanying the member on the travel.
              * * * * * * *

      CHAPTER 159--REAL PROPERTY; RELATED PERSONAL PROPERTY; AND LEASE OF
                               NONEXCESS PROPERTY

    Sec.
    2661.  Miscellaneous administrative provisions relating to real
              property.
         * * * * * * *
    2672.  Acquisition: interests in land when cost is not more than
              $200,000.
    2672.   Acquisition: interests in land when cost is not more than
              $500,000.
    2686.  Utilities and services: sale; expansion and extension of systems
              and facilities.
         * * * * * * *
    [2692.  Storage and disposal of nondefense toxic and hazardous
              materials.]
    2692.  Storage, treatment, and disposal of nondefense toxic and
              hazardous materials.
         * * * * * * *
    2695.  Acceptance of funds to cover administrative expenses relating to
              certain real property transactions.
              * * * * * * *

    Sec. 2667. Leases: non-excess property

      (a) * * *
      (b) A lease under subsection (a)--
              (1) * * *
              * * * * * * *
              (4) shall provide[, in the case of the lease of real
            property,] in the payment (in cash or in kind) by the
            lessee of consideration in an amount that is not less
            than the fair market value of the lease interest, as
            determined by the Secretary; and
              * * * * * * *
      (g)(1) If a proposed lease under subsection (a) involves only
    personal property, the lease term exceeds one year, and the
    fair market value of the lease interest exceeds $100,000, as
    determined by the Secretary concerned, the Secretary shall use
    competitive procedures to select the lessee.
      (2) Not later than 45 days before entering into a lease
    referred to in paragraph (1), the Secretary concerned shall
    submit to Congress written notice describing the terms of the
    proposed lease and the competitive procedures used to select
    the lessee.
      [(g)] (h) In this section, the term ``base closure law''
    means each of the following:
              (1) The Defense Base Closure and Realignment Act of
            1990 (part A of title XXIX of Public Law 101-510; 10
            U.S.C. 2687 note).
              (2) Title II of the Defense Authorization Amendments
            and Base Closure and Realignment Act (Public Law 100-
            526; 10 U.S.C. 2687 note).
              (3) Section 2687 of this title.
              * * * * * * *

    [Sec. 2672. Acquisition: interests in land when cost is not more than
                        $200,000]

    Sec. 2672. Acquisition: interests in land when cost is not more than
                        $500,000

      (a)(1) The Secretary of a military department may acquire any
    interest in land that--
              (A) the Secretary determines is needed in the
            interest of national defense; and
              (B) does not cost more than [$200,000] $500,000,
            exclusive of administrative costs and the amounts of
            any deficiency judgments.
      (2) This section does not apply to the acquisition, as a part
    of the same project, of more than one parcel of land unless the
    parcels are noncontiguous, or, if contiguous, unless the total
    cost is not more than [$200,000] $500,000.
              * * * * * * *

    Sec. 2681. Use of test and evaluation installations by commercial
                        entities

      (a) * * *
              * * * * * * *
      (g) Termination of Authority.--The authority provided to the
    Secretary of Defense by subsection (a) shall terminate on
    [September 30, 1998] September 30, 2000.
              * * * * * * *

    Sec. 2684. Cooperative agreements for management of cultural resources

      (a) * * *
      (b) Application of Other Laws.--Section 1535 and chapter 63
    of title 31[, United States Code,] shall not apply to a
    cooperative agreement entered into under this section.
              * * * * * * *

    Sec. 2686. Utilities and services: sale; expansion and extension of
                        systems and facilities

      (a) Under such regulations and for such periods and at such
    prices as he may prescribe, the Secretary concerned or his
    designee may sell or contract to sell to purchasers within or
    in the immediate vicinity of an activity of the Army, Navy, Air
    Force, Marine Corps, or Coast Guard, as the case may be, any of
    the following utilities and related services, if it is
    determined that they are not available from another local
    source and that the sale is in the interest of national defense
    or in the public interest:
              (1) Electric power.
              (2) Steam.
              (3) Compressed air.
              (4) Water.
              (5) Sewage and garbage disposal.
              (6) Natural, manufactured, or mixed gas.
              (7) Ice.
              (8) Mechanical refrigeration.
              (9) Telephone service.
      (b) Proceeds of sales under subsection (a) shall be credited
    to the appropriation currently available for the supply of that
    utility or service.
      (c) To meet local needs the Secretary concerned may make
    minor expansions and extensions of any distributing system or
    facility within an activity through which a utility or service
    is furnished under subsection (a).
              * * * * * * *

    [Sec. 2692. Storage and disposal of nondefense toxic and hazardous
                        materials]

    Sec. 2692. Storage, treatment, and disposal of nondefense toxic and
                        hazardous materials

      (a)(1) Except as otherwise provided in this section, the
    Secretary of Defense may not permit the use of an installation
    of the Department of Defense for the [storage] storage,
    treatment, or disposal of any material that is a toxic or
    hazardous material and that is not owned either by the
    Department of Defense or by a member of the armed forces (or a
    dependent of the member) assigned to or provided military
    housing on the installation.
              * * * * * * *
      (b) Subsection (a) does not apply to--
              (1) the storage, treatment, or disposal of materials
            that will be or have been used in connection with an
            activity of the Department of Defense or in connection
            with a service to be performed on an installation of
            the Department for the benefit of the Department;
              [(1)] (2) the storage of strategic and critical
            materials in the National Defense Stockpile under an
            agreement for such storage with the Administrator of
            General Services;
              [(2)] (3) the temporary storage or disposal of
            explosives in order to protect the public or to assist
            agencies responsible for [Federal law enforcement]
            Federal, State, or local law enforcement in storing or
            disposing of explosives when no alternative solution is
            available, if such storage or disposal is made in
            accordance with an agreement between the Secretary of
            Defense and the head of the [Federal agency] Federal,
            State, or local agency concerned;
              [(3)] (4) the temporary storage or disposal of
            explosives in order to provide emergency lifesaving
            assistance to civil authorities;
              [(4)] (5) the disposal of excess explosives produced
            under a Department of Defense contract, if the head of
            the military department concerned determines, in each
            case, that an alternative feasible means of disposal is
            not available to the contractor, taking into
            consideration public safety, available resources of the
            contractor, and national defense production
            requirements;
              [(5)] (6) the temporary storage of nuclear materials
            or non-nuclear classified materials in accordance with
            an agreement with the Secretary of Energy;
              [(6)] (7) the storage of materials that constitute
            military resources intended to be used during peacetime
            civil emergencies in accordance with applicable
            Department of Defense regulations;
              [(7)] (8) the temporary storage of materials of other
            Federal agencies in order to provide assistance and
            refuge for commercial carriers of such material during
            a transportation emergency;
              [(8)] (9) the storage of any material that is not
            owned by the Department of Defense if the Secretary of
            the military department concerned determines that the
            material is required or generated [by a private person
            in connection with the authorized and compatible use by
            that person of an industrial-type] in connection with
            the authorized use of a facility of the Department of
            Defense[; and] including the use of such a facility for
            testing materiel and training personnel;
              [(9)] (10) the treatment and disposal of any material
            that is not owned by the Department of Defense if the
            Secretary of the military department concerned
            determines that the material is required or generated
            [by a private person in connection with the authorized
            and compatible commercial use by that person of an
            industrial-type] in connection with the authorized use
            of a facility of that military department and the
            Secretary enters into a contract [with that person] or
            agreement with the prospective user that--
                      (A) is consistent with the best interest of
                    national defense and environmental security;
                    and
                      (B) provides [for that person's] for the
                    prospective user's continued financial and
                    environmental responsibility and liability with
                    regard to the material[.]; and
              (11) the storage of any material that is not owned by
            the Department of Defense if the Secretary of the
            military department concerned determines that the
            material is required or generated in connection with
            the use of a space launch facility located on an
            installation of the Department of Defense or on other
            land controlled by the United States.
              * * * * * * *

    Sec. 2695. Acceptance of funds to cover administrative expenses
                        relating to certain real property transactions

      (a) Authority To Accept.--In connection with a real property
    transaction described in subsection (b) with a non-Federal
    person or entity, the Secretary of a military department may
    accept amounts provided by the person or entity to cover
    administrative expenses incurred by the Secretary in entering
    into the transaction.
      (b) Covered Transactions.--Subsection (a) applies to the
    following transactions:
              (1) The conveyance or exchange of real property.
              (2) The grant of an easement over, in, or upon real
            property of the United States.
              (3) The lease or license of real property of the
            United States.
      (c) Use of Amounts Collected.--Amounts collected under
    subsection (a) for administrative expenses shall be credited to
    the appropriation, fund, or account from which the expenses
    were paid. Amounts so credited shall be merged with funds in
    such appropriation, fund, or account and shall be available for
    the same purposes and subject to the same limitations as the
    funds with which merged.
              * * * * * * *

         CHAPTER 169--MILITARY CONSTRUCTION AND MILITARY FAMILY HOUSING

              * * * * * * *

                      SUBCHAPTER I--MILITARY CONSTRUCTION

              * * * * * * *

    Sec. 2805. Unspecified minor construction

      (a)(1) Except as provided in paragraph (2), within an amount
    equal to 125 percent of the amount authorized by law for such
    purpose, the Secretary concerned may carry out [minor military
    construction projects] unspecified minor military construction
    projects not otherwise authorized by law. [A minor] An
    unspecified minor military construction project is a military
    construction project that has an approved cost equal to or less
    than $1,500,000. However, if the military construction project
    is intended solely to correct a deficiency that is life-
    threatening, health-threatening, or safety-threatening, [a
    minor] an unspecified minor military construction project may
    have an approved cost equal to or less than $3,000,000.
      (2) A Secretary may not use more than $5,000,000 for
    exercise-related unspecified minor military construction
    projects coordinated or directed by the Joint Chiefs of Staff
    outside the United States during any fiscal year.
      (b)(1) [A minor] An unspecified minor military construction
    project costing more than $500,000 may not be carried out under
    this section unless approved in advance by the Secretary
    concerned.
      (2) When a decision is made to carry out [a minor] an
    unspecified minor military construction project to which
    paragraph (1) is applicable, the Secretary concerned shall
    notify in writing the appropriate committees of Congress of
    that decision, of the justification for the project, and of the
    estimated cost of the project. The project may then be carried
    out only after the end of the 21-day period beginning on the
    date the notification is received by the committees. This
    paragraph shall apply even though the project is to be carried
    out using funds made available to enhance the deployment and
    mobility of military forces and supplies.
      (c)(1) Except as provided in [paragraph (2)] paragraphs (2)
    and (3), the Secretary concerned may spend from appropriations
    available for operation and maintenance amounts necessary to
    carry out an unspecified minor military construction project
    costing not more than--
              (A) $1,000,000, in the case of an unspecified minor
            military construction project intended solely to
            correct a deficiency that is life-threatening, health-
            threatening, or safety-threatening; or
              (B) $500,000, in the case of any other unspecified
            minor military construction project.
      (2) The authority provided in paragraph (1) may not be used
    with respect to any exercise-related unspecified minor military
    construction project coordinated or directed by the Joint
    Chiefs of Staff outside the United States.
      (3) The limitations specified in paragraph (1) shall not
    apply if the unspecified minor military construction project is
    to be carried out using funds made available to enhance the
    deployment and mobility of military forces and supplies.
      (d) Military family housing projects for construction of new
    housing units may not be carried out under the authority of
    this section.
              * * * * * * *

    Sec. 2811. Repair of facilities

      (a) * * *
              * * * * * * *
      (d) Congressional Notification.--When a decision is made to
    carry out a repair project under this section with an estimated
    cost in excess of $10,000,000, the Secretary concerned shall
    submit to the appropriate committees of Congress a report
    containing--
              (1) the justification for the repair project and the
            current estimate of the cost of the project; and
              (2) the justification for carrying out the project
            under this section.
      (e) Repair Project Defined.--In this section, the term
    ``repair project'' means a project to restore a real property
    facility, system, or component to such a condition that it may
    effectively be used for its designated functional purpose.
              * * * * * * *

                     SUBCHAPTER II--MILITARY FAMILY HOUSING

              * * * * * * *

    Sec. 2828. Leasing of military family housing

      (a) * * *
      (b)(1) Not more than 10,000 family housing units may be
    leased at any one time under subsection (a).
      (2) Except as provided in [paragraph (3)] paragraphs (3) and
    (4), expenditures for the rental of housing units under
    subsection (a) (including the cost of utilities, maintenance,
    and operation) may not exceed $12,000 per unit per year.
      (3) Not more than 500 housing units may be leased under
    subsection (a) for which the expenditure for the rental of such
    units (including the cost of utilities, maintenance, and
    operation) exceeds $12,000 per unit per year but does not
    exceed $14,000 per unit per year.
      (4) The Secretary of the Army may lease not more than eight
    housing units in the vicinity of Miami, Florida, for key and
    essential personnel, as designated by the Secretary, for the
    United States Southern Command for which the expenditure for
    the rental of such units (including the cost of utilities,
    maintenance, and operation, including security enhancements)
    exceeds the expenditure limitations in paragraphs (2) and (3).
    The total amount for all leases under this paragraph may not
    exceed $280,000 per year, and no lease on any individual
    housing unit may exceed $60,000 per year.
      [(4)] (5) At the beginning of each fiscal year, the Secretary
    concerned shall adjust the maximum lease amount provided for
    under [paragraphs (2) and (3)] paragraphs (2), (3), and (4) for
    the previous fiscal year by the percentage (if any) by which
    the Consumer Price Index for All Urban Consumers, published by
    the Bureau of Labor Statistics, during the preceding fiscal
    year exceeds such Consumer Price Index for the fiscal year
    before such preceding fiscal year.
              * * * * * * *

    Sec. 2830. Occupancy of substandard family housing units

      (a)(1) A member of the uniformed services with dependents
    may, without loss of the member's [basic allowance for
    quarters] basic allowance for housing under section 403 of
    title 37, occupy a substandard family housing unit under the
    jurisdiction of the Secretary concerned.
      (2) Occupancy of a family housing unit under paragraph (1)
    shall be subject to a charge against the member's [basic
    allowance for quarters] basic allowance for housing in the
    amount of the fair rental value of the housing unit. However,
    such a charge may not be made in an amount in excess of 75
    percent of the amount of such allowance.
              * * * * * * *

     SUBCHAPTER III--ADMINISTRATION OF MILITARY CONSTRUCTION AND MILITARY
                                 FAMILY HOUSING

    Sec.
    2851.  Supervision of military construction projects.
         * * * * * * *
    2867.  Sale of electricity from alternate energy and cogeneration
              production facilities.
    2868.  Utility services: furnishing for certain buildings.
              * * * * * * *

    Sec. 2865. Energy savings at military installations

      (a) * * *
      (b) Use of Energy Cost Savings.--(1) Two-thirds of the
    portion of the funds appropriated to the Department of Defense
    for a fiscal year that is equal to the amount of energy cost
    savings realized by the Department, including financial
    benefits resulting from shared energy savings contracts [and
    financial incentives described in subsection (d)(2)], shall
    remain available for obligation under paragraph (2) through the
    end of the fiscal year following the fiscal year for which the
    funds were appropriated, without additional authorization or
    appropriation.
      (2) The Secretary shall provide that the amount that remains
    available for obligation under paragraph (1) and section
    2866(b) of this title, and the funds made available under
    [section 2483(b)(2)] section 2867(b)(2) of this title, shall be
    used as follows:
              (A) * * *
              * * * * * * *
      (d) Energy Saving Activities.--(1) The Secretary of Defense
    shall permit and encourage each military department, Defense
    Agency, and other instrumentality of the Department of Defense
    to participate in programs conducted by any gas or electric
    utility for the management of electricity demand or for energy
    conservation or by any utility for water conservation
    activities.
      (2) The Secretary of Defense may authorize any military
    installation to accept any financial incentive, goods, or
    services generally available from a gas or electric utility, to
    adopt technologies and practices that the Secretary determines
    are cost effective for the Federal Government. Financial
    incentives received under this paragraph or section 2866(a)(2)
    of this title shall be credited to an appropriation account
    designated by the Secretary of Defense.
              * * * * * * *
      (f) Annual Report.--Not later than December 31 of each year,
    the Secretary of Defense shall transmit an annual report to the
    Congress containing a description of the actions taken to carry
    out this section, and the savings realized from such actions,
    during the fiscal year ending in the year in which the report
    is made. Each report shall also describe the types and amount
    of financial incentives received under subsection (d)(2) and
    section 2866(a)(2) of this title during the period covered by
    the report and the appropriation account or accounts to which
    the incentives were credited.

    Sec. 2866. Water conservation at military installations

      (a) Water Conservation Activities.--(1) The Secretary of
    Defense shall permit and encourage each military department,
    Defense Agency, and other instrumentality of the Department of
    Defense to participate in programs conducted by a utility for
    the management of water demand or for water conservation.
      (b) Use of Water Cost [Savings.--] Savings and Financial
    Incentives.--(1) Water cost savings realized under this section
    shall be used as provided in section 2865(b)(2) of this title.
      (2) Financial incentives received under this section shall be
    used as provided in section 2865(d)(2) of this title.
              * * * * * * *

    Sec. 2867. Sale of electricity from alternate energy and cogeneration
                        production facilities

      (a) The Secretary of a military department may sell, contract
    to sell, or authorize the sale by a contractor to a public or
    private utility company of electrical energy generated from
    alternate energy or cogeneration type production facilities
    which are under the jurisdiction (or produced on land which is
    under the jurisdiction) of the Secretary concerned. The sale of
    such energy shall be made under such regulations, for such
    periods, and at such prices as the Secretary concerned
    prescribes consistent with the Public Utility Regulatory
    Policies Act of 1978 (16 U.S.C. 2601 et seq.).
      (b)(1) Proceeds from sales under subsection (a) shall be
    credited to the appropriation account currently available to
    the military department concerned for the supply of electrical
    energy.
      (2) Subject to the availability of appropriations for this
    purpose, proceeds credited under paragraph (1) may be used to
    carry out military construction projects under the energy
    performance plan developed by the Secretary of Defense under
    section 2865(a) of this title, including minor military
    construction projects authorized under section 2805 of this
    title that are designed to increase energy conservation.
      (c) Before carrying out a military construction project
    described in subsection (b) using proceeds from sales under
    subsection (a), the Secretary concerned shall notify Congress
    in writing of the project, the justification for the project,
    and the estimated cost of the project. The project may be
    carried out only after the end of the 21-day period beginning
    on the date the notification is received by Congress.

    Sec. 2868. Utility services: furnishing for certain buildings

      Appropriations for the Department of Defense may be used for
    utility services for--
              (1) buildings constructed at private cost, as
            authorized by law; and
              (2) buildings on military reservations authorized by
            regulation to be used for morale, welfare, and
            recreational purposes.
              * * * * * * *

    SUBCHAPTER IV--ALTERNATIVE AUTHORITY FOR ACQUISITION AND IMPROVEMENT OF
                                MILITARY HOUSING

              * * * * * * *

    Sec. 2875. Investments in nongovernmental entities

      (a) Investments Authorized.--The Secretary concerned may make
    investments in nongovernmental entities carrying out projects
    for the acquisition or construction of housing units suitable
    for use as military family housing or as military unaccompanied
    housing.
              * * * * * * *
      (e) Congressional Notification Required.--Amounts in the
    Department of Defense Family Housing Improvement Fund or the
    Department of Defense Military Unaccompanied Housing
    Improvement Fund may be used to make a cash investment under
    this section in a nongovernmental entity only after the end of
    the 30-day period beginning on the date the Secretary of
    Defense submits written notice of, and justification for, the
    investment to the appropriate committees of Congress.
              * * * * * * *

    Sec. 2882. Assignment of members of the armed forces to housing units

      (a) * * *
      (b) Effect of Certain Assignments on Entitlement to Housing
    Allowances.--(1) Except as provided in paragraph (2), housing
    referred to in subsection (a) shall be considered as quarters
    of the United States or a housing facility under the
    jurisdiction of a uniformed service for purposes of [section
    403(b)] section 403 of title 37.
      (2) A member of the armed forces who is assigned in
    accordance with subsection (a) to a housing unit not owned or
    leased by the United States shall be entitled to a [basic
    allowance for quarters under section 403 of title 37 and, if in
    a high housing cost area, a variable housing allowance under
    section 403a of that title.] basic allowance for housing under
    section 403 of title 37.
              * * * * * * *

    Sec. 2885. Expiration of authority

      The authority to enter into a contract under this subchapter
    shall expire [five years after the date of the enactment of the
    National Defense Authorization Act for Fiscal Year 1996] on
    February 10, 2001.
              * * * * * * *

     CHAPTER 172--STRATEGIC ENVIRONMENTAL RESEARCH AND DEVELOPMENT PROGRAM

              * * * * * * *

    Sec. 2904. Strategic Environmental Research and Development Program
                        Scientific Advisory Board

      (a) * * *
      (b)(1) * * *
              * * * * * * *
      (4) Members of the Advisory Board shall be appointed for
    terms of [three] not less than two and not more than four
    years.
              * * * * * * *

                                Subtitle B--Army

              * * * * * * *

                              PART I--ORGANIZATION

              * * * * * * *

                             CHAPTER 307--THE ARMY

    Sec.
    3061.  Regulations.
         * * * * * * *
    3083.  Public Affairs Corps.
              * * * * * * *

    Sec. 3064. Special branches

      (a) The special branches of the Army consist of commissioned
    officers of the Regular Army appointed therein, other members
    of the Army assigned thereto by the Secretary of the Army, and
    the sections prescribed in this chapter. The special branches
    are--
              (1) each corps of the Army Medical Department;
              (2) the Judge Advocate General's Corps;
              (3) the Public Affairs Corps;
              [(3)] (4) the Chaplains; and
              [(4)] (5) such other special branches as may be
            established by the Secretary of the Army under
            subsection (b).
              * * * * * * *

    Sec. 3083. Public Affairs Corps

      There is a Public Affairs Corps in the Army. The Public
    Affairs Corps consists of--
              (1) the Chief of the Public Affairs Corps;
              (2) commissioned officers of the Regular Army
            appointed therein; and
              (3) other members of the Army assigned thereto by the
            Secretary of the Army.
              * * * * * * *

                               PART III--TRAINING

              * * * * * * *

                  CHAPTER 403--UNITED STATES MILITARY ACADEMY

              * * * * * * *

    Sec. 4344. Selection of persons from foreign countries

      (a) * * *
      (b)(1) A person receiving instruction under this section is
    entitled to the pay, allowances, and emoluments of a cadet
    appointed from the United States, and from the same
    appropriations.
      (2) Each foreign country from which a cadet is permitted to
    receive instruction at the Academy under this section shall
    reimburse the United States for the cost of providing such
    instruction, including the cost of pay, allowances, and
    emoluments provided under paragraph (1) unless a written waiver
    of reimbursement is granted by the Secretary of Defense. The
    Secretary of the Army shall prescribe the rates for
    reimbursement under this paragraph[.], except that the
    reimbursement rates may not be less than the cost to the United
    States of providing such instruction, including pay,
    allowances, and emoluments, to a cadet appointed from the
    United States.
      (3) The amount of reimbursement waived under paragraph (2)
    may not exceed 25 percent of the per-person reimbursement
    amount otherwise required to be paid by a foreign country under
    such paragraph, except in the case of not more than five
    persons receiving instruction at the Academy under this section
    at any one time.
              * * * * * * *

                         CHAPTER 407--SCHOOLS AND CAMPS

    Sec.
    4411.  Establishment: purpose.
         * * * * * * *
    4416.  Academy of Health Sciences: admission of civilians in physician
              assistant training program.
              * * * * * * *

    Sec. 4416. Academy of Health Sciences: admission of civilians in
                        physician assistant training program

      (a) Reciprocal Agreements With Colleges.--The Secretary of
    the Army may enter into an agreement with an accredited
    institution of higher education under which students of the
    institution may attend the physician assistant training program
    conducted by the Army Medical Department at the Academy of
    Health Sciences at Fort Sam Houston, Texas, during the didactic
    portion of the program. In exchange for the admission of such
    students, the institution of higher education shall agree to
    provide such academic services as the Secretary and the
    institution consider to be appropriate to support the physician
    assistant training program at the Academy. The Secretary shall
    ensure that the Army Medical Department does not incur any
    additional costs as a result of the agreement than the
    Department would incur to obtain such academic services in the
    absence of the agreement.
      (b) Selection of Students.--The attendance of civilian
    students at the Academy pursuant to an agreement under
    subsection (a) may not result in a decrease in the number of
    members of the armed forces enrolled in the physician assistant
    training program. In consultation with the institution of
    higher education that is a party to the agreement, the
    Secretary shall establish qualifications and methods of
    selection for students to receive instruction at the Academy.
    The qualifications established shall be comparable to those
    generally required for admission to the physician assistant
    training program at the Academy.
      (c) Rules of Attendance.--Except as the Secretary determines
    necessary, a civilian student who receives instruction at the
    Academy pursuant to an agreement entered into under subsection
    (a) shall be subject to the same regulations governing
    attendance, discipline, discharge, and dismissal as apply to
    other persons attending the Academy.
      (d) Report.--For each year in which an agreement under
    subsection (a) is in effect, the Secretary shall submit to
    Congress a report specifying the number of civilian students
    who received instruction at the Academy under the agreement
    during the period covered by the report and accessing the
    benefits to the United States of the agreement.
      (e) Academy Defined.--In this section, the term ``Academy''
    means the Academy of Health Sciences of the Army Medical
    Department at Fort Sam Houston, Texas.
              * * * * * * *

                       Subtitle C--Navy and Marine Corps

              * * * * * * *

                              PART I--ORGANIZATION

              * * * * * * *

           CHAPTER 513--BUREAUS; OFFICE OF THE JUDGE ADVOCATE GENERAL

              * * * * * * *

    Sec. 5142. Chaplain Corps and Chief of Chaplains

      (a) * * *
      (b) There is in the executive part of the Department of the
    Navy the office of the Chief of Chaplains of the Navy. The
    Chief of Chaplains shall be appointed by the President, by and
    with the advice and consent of the Senate, from officers of the
    Chaplain Corps in the grade of commander or above who are
    serving on active duty[, who are not on the retired list,] and
    who have served on active duty in the Chaplain Corps for at
    least eight years.
              * * * * * * *

    Sec. 5142a. Deputy Chief of Chaplains

      The Secretary of the Navy may detail as the Deputy Chief of
    Chaplains an officer of the Chaplain Corps in the grade of
    commander or above who is on active duty[, who is not on the
    retired list,] and who has served on active duty in the
    Chaplain Corps for at least eight years.
              * * * * * * *

                        PART III--EDUCATION AND TRAINING

              * * * * * * *

                   CHAPTER 601--OFFICER PROCUREMENT PROGRAMS

              * * * * * * *

    Sec. 6912. Aviation cadets: benefits

      Except as provided in [section 402(a) and (b)] section 402(c)
    of title 37, aviation cadets or their beneficiaries are
    entitled to the same allowances, pensions, gratuities, and
    other benefits as are provided for enlisted members in pay
    grade E-4. While on active duty, an aviation cadet is entitled
    to uniforms, clothing, and equipment at the expense of the
    United States.

              * * * * * * *

                    CHAPTER 603--UNITED STATES NAVAL ACADEMY

    Sec.
    6951.  Location.
         * * * * * * *
    6976.  Operation of Naval Academy dairy farm.
              * * * * * * *

    Sec. 6957. Selection of persons from foreign countries

      (a) * * *
      (b)(1) A person receiving instruction under this section is
    entitled to the pay, allowances, and emoluments of a midshipman
    appointed from the United States, and from the same
    appropriations.
      (2) Each foreign country from which a midshipman is permitted
    to receive instruction at the Academy under this section shall
    reimburse the United States for the cost of providing such
    instruction, including the cost of pay, allowances, and
    emoluments provided under paragraph (1) unless a written waiver
    of reimbursement is granted by the Secretary of Defense. The
    Secretary of the Navy shall prescribe the rates for
    reimbursement under this paragraph[.], except that the
    reimbursement rates may not be less than the cost to the United
    States of providing such instruction, including pay,
    allowances, and emoluments, to a midshipman appointed from the
    United States.
      (3) The amount of reimbursement waived under paragraph (2)
    may not exceed 25 percent of the per-person reimbursement
    amount otherwise required to be paid by a foreign country under
    such paragraph, except in the case of not more than five
    persons receiving instruction at the Naval Academy under this
    section at any one time.
              * * * * * * *
      (d) A person receiving instruction under this section is not
    subject to section 6958(d) of this title.

    Sec. 6958. Midshipmen: qualifications for admission

      (a) * * *
              * * * * * * *
      (d) To be admitted to the Naval Academy, an appointee must
    take and subscribe to an oath prescribed by the Secretary of
    the Navy. If a candidate for admission refuses to take and
    subscribe to the prescribed oath, the candidate's appointment
    is terminated.
              * * * * * * *

    Sec. 6976. Operation of Naval Academy dairy farm

      (a) Discretion Regarding Continued Operation.--(1) Subject to
    paragraph (2), the Secretary of the Navy may terminate or
    reduce the dairy or other operations conducted at the Naval
    Academy dairy farm located in Gambrills, Maryland.
      (2) Notwithstanding the termination or reduction of
    operations at the Naval Academy dairy farm under paragraph (1),
    the real property containing the dairy farm (consisting of
    approximately 875 acres)--
              (A) may not be declared to be excess real property to
            the needs of the Navy or transferred or otherwise
            disposed of by the Navy or any Federal agency; and
              (B) shall be maintained in its rural and agricultural
            nature.
      (b) Lease Authority.--(1) Subject to paragraph (2), to the
    extent that the termination or reduction of operations at the
    Naval Academy dairy farm permit, the Secretary of the Navy may
    lease the real property containing the dairy farm, and any
    improvements and personal property thereon, to such persons and
    under such terms as the Secretary considers appropriate. In
    leasing any of the property, the Secretary may give a
    preference to persons who will continue dairy operations on the
    property.
      (2) Any lease of property at the Naval Academy dairy farm
    shall be subject to a condition that the lessee maintain the
    rural and agricultural nature of the leased property.
      (c) Effect of Other Laws.--Nothing in section 6971 of this
    title shall be construed to require the Secretary of the Navy
    or the Superintendent of the Naval Academy to operate a dairy
    farm for the Naval Academy in Gambrills, Maryland, or any other
    location.
              * * * * * * *

              CHAPTER 605--UNITED STATES NAVAL POSTGRADUATE SCHOOL

    Sec.
    7041.  Function.
         * * * * * * *
    [7045.  Officers of Army, Air Force, and Coast Guard: admission.]
    7045.  Officers of the other armed forces; enlisted members: admission.
    7046.  Officers of foreign countries: admission.
    [7047.  Students at institutions of higher education: admission.]
    7047.  Civilian students at institutions of higher education: admission.
    7048.  Conferring of degrees on graduates.
              * * * * * * *

    Sec. 7043. Academic Dean

      (a) * * *
      (b) The Academic Dean is entitled to such compensation for
    his services as the Secretary prescribes, but not more than the
    rate of compensation authorized for [grade GS-18 of the General
    Schedule under section 5332 of title 5] level IV of the
    Executive Schedule.
              * * * * * * *

    [Sec. 7045. Officers of Army, Air Force, and Coast Guard: admission]

    Sec. 7045. Officers of the other armed forces; enlisted members:
                        admission

      (a)(1) The Secretary of the Navy may permit officers of the
    Army, Air Force, and Coast Guard to receive instruction at the
    Naval Postgraduate School. The numbers and grades of such
    officers shall be as agreed upon by the Secretary of the Navy
    with the Secretaries of the Army, Air Force, and
    Transportation, respectively.
      (2) The Secretary may permit an enlisted member of the armed
    forces who is assigned to the Naval Postgraduate School or to a
    nearby command to receive instruction at the Naval Postgraduate
    School. Admission of enlisted members for instruction under
    this paragraph shall be on a space-available basis.
      (b) The Department of the Army, the Department of the Air
    Force, and the Department of Transportation shall bear the cost
    of the instruction received by the [students] officers detailed
    for that instruction by the Secretaries of the Army, Air Force,
    and Transportation, respectively. In the case of an enlisted
    member permitted to receive instruction at the Postgraduate
    School, the Secretary of the Navy shall charge that member only
    for such costs and fees as the Secretary considers appropriate
    (taking into consideration the admission of enlisted members on
    a space-available basis).
      (c) While receiving instruction at the Postgraduate School,
    [officers] members of the Army, Air Force, and Coast Guard are
    subject to [the same regulations] regulations, as determined
    appropriate by the Secretary of the Navy, as apply to students
    who are [officers] members of the naval service.
              * * * * * * *

    [Sec. 7047. Students at institutions of higher education: admission

      [(a) Admission Pursuant to Reciprocal Agreement.--The
    Secretary of the Navy may enter into an agreement with an
    accredited institution of higher education to permit a student
    described in subsection (b) enrolled at that institution to
    receive instruction at the Naval Postgraduate School on a
    tuition-free basis. In exchange for the admission of the
    student, the institution of higher education shall be required
    to permit an officer of the armed forces to attend on a
    tuition-free basis courses offered by that institution
    corresponding in length to the instruction provided to the
    student at the Naval Postgraduate School.
      [(b) Eligible Students.--A student enrolled at an institution
    of higher education that is party to an agreement under
    subsection (a) may be admitted to the Naval Postgraduate School
    pursuant to that agreement if--
              [(1) the student is a citizen of the United States or
            lawfully admitted for permanent residence in the United
            States; and
              [(2) the Secretary of the Navy determines that the
            student has a demonstrated ability in a field of study
            designated by the Secretary as related to naval warfare
            and national security.]

    Sec. 7047. Civilian students at institutions of higher education:
                        admission

      (a) Admission on Tuition-Free, Exchange Basis.--(1) The
    Secretary of the Navy may enter into an agreement with an
    accredited institution of higher education (or a consortium of
    such institutions) under which students described in subsection
    (c) who are enrolled at that institution (or an institution in
    such consortium) are permitted to receive instruction at the
    Naval Postgraduate School on a space-available, tuition-free
    basis in exchange for which the institution of higher education
    (or each institution in the consortium) agrees to enroll, on a
    tuition-free basis, officers of the armed forces or other
    persons properly admitted for instruction at the Naval
    Postgraduate School.
      (2) Exchange of students under paragraph (1) need not be on a
    one-for-one basis.
      (3) An exchange under such an agreement shall be on the basis
    of in-kind reimbursement, with the total value of the
    instruction provided during a year by the Naval Postgraduate
    School to civilian students from the institutions that are
    parties to the agreement being at least as great as the value
    of instruction provided by those institutions to students from
    the Naval Postgraduate School.
      (4) In determining the value of the in-kind reimbursement for
    the instruction provided by the Naval Postgraduate School, the
    Secretary shall use the same amount charged by the Secretary
    for the provision of the same instruction to a Federal employee
    who is not a Department of Defense employee.
      (5) The authority of the Secretary to accept an offer of in-
    kind reimbursement under this subsection may not be delegated
    below the level of Assistant Secretary of the Navy.
      (b) Admission on Cost-Reimbursable Basis.--(1) The Secretary
    of the Navy may permit a student described in subsection (c)
    who is enrolled at an accredited institution of higher
    education that is a party to an agreement under subsection (a)
    to receive instruction at the Naval Postgraduate School on a
    cost-reimbursable, space-available basis.
      (2) The Secretary shall ensure that the value of any
    reimbursement received under this subsection in the case of any
    such student is not less than the amount charged by the
    Secretary for the provision of the same instruction to a
    Federal employee who is not a Department of Defense employee.
      (c) Eligible Students.--A student enrolled at an accredited
    institution of higher education that is party to an agreement
    under subsection (a) may be admitted to the Naval Postgraduate
    School under subsection (a) or (b) if the student--
              (1) is a citizen of the United States or is lawfully
            admitted for permanent residence in the United States;
              (2) has a demonstrated ability, as determined by the
            Secretary of the Navy, in a field of study designated
            by the Secretary as related to naval warfare, armed
            conflict, or national security; and
              (3) meets the academic requirements for the course or
            courses for which the student seeks admission to the
            Naval Postgraduate School.
      (d) Standards of Conduct.--Except as the Secretary of the
    Navy otherwise determines necessary, a person receiving
    instruction under this section is subject to the same
    regulations governing attendance, discipline, dismissal, and
    standards of study as apply to students who are officers of the
    naval service.
      (e) Retention of Funds Received.--Amounts received under
    subsection (b) to reimburse the Naval Postgraduate School for
    the costs of providing instruction to students permitted to
    attend the Naval Postgraduate School under this section shall
    be credited to the current appropriation supporting the
    operation and maintenance of the Naval Postgraduate School.
              * * * * * * *

                        PART IV--GENERAL ADMINISTRATION

              * * * * * * *

                           CHAPTER 633--NAVAL VESSELS

              * * * * * * *

    Sec. 7305. Vessels stricken from Naval Vessel Register: sale

      (a) * * *
              * * * * * * *
      (e) Relationship to Toxic Substances Control Act.--(1)
    Subject to paragraph (2), the sale of a vessel under this
    section for export, or any subsequent resale of a vessel sold
    under this section for export--
              (A) is not a disposal or a distribution in commerce
            under section 6 or 12(a) of the Toxic Substances
            Control Act (15 U.S.C. 2605 and 2611(a)) or an export
            of hazardous waste under section 3017 of the Solid
            Waste Disposal Act (42 U.S.C. 6938); and
              (B) is not subject to section 12(b) of the Toxic
            Substances Control Act (15 U.S.C. 2611(b)).
      (2)(A) Paragraph (1) applies to a vessel being sold for
    export only if, before the sale of such vessel, any item listed
    in subparagraph (B) containing polychlorinated biphenyls is
    removed from the vessel.
      (B) Subparagraph (A) covers any transformer, large high or
    low voltage capacitor, or hydraulic or heat transfer fluid.
              * * * * * * *

    Sec. 7306a. Vessels stricken from Naval Vessel Register: use for
                        experimental purposes or operational training

      (a) Authority.--The Secretary of the Navy may use for
    experimental purposes or operational training any vessel
    stricken from the Naval Vessel Register.
              * * * * * * *
      (c) Relationship to Other Laws.--The sinking of a vessel for
    an experimental purpose or for operational training pursuant to
    subsection (a) is not--
              (1) a disposal or a distribution in commerce under
            section 6 or 12(a) of the Toxic Substances Control Act
            (15 U.S.C. 2605 and 2611(a)); or
              (2) the transport of material for the purpose of
            dumping it into ocean waters, or the dumping of
            material transported from a location outside the United
            States, under section 101 of the Marine Protection,
            Research, and Sanctuaries Act of 1972 (33 U.S.C. 1411).
              * * * * * * *

                        CHAPTER 643--CIVILIAN EMPLOYEES

    Sec.
         * * * * * * *
    7472.  Physical examination: employees engaged in hazardous occupations.
         * * * * * * *
    [7478.  Naval War College and Marine Corps Command Staff College:
              civilian faculty members.]
    7478.  Naval War College and Marine Corps University: civilian faculty
              members.
              * * * * * * *

    [Sec. 7478. Naval War College and Marine Corps Command and Staff
                        College: civilian faculty members]

    Sec. 7478. Naval War College and Marine Corps University: civilian
                        faculty members

      (a) Authority of Secretary.--The Secretary of the Navy may
    employ as many civilians as professors, instructors, and
    lecturers at a school of the Naval War College [or at the
    Marine Corps Command and Staff College] or at a school of the
    Marine Corps University as the Secretary considers necessary.
      (b) Compensation of Faculty Members.--The compensation of
    persons employed under this section shall be as prescribed by
    the Secretary.
      (c) Application to Certain Faculty Members.--This section
    shall not apply with respect to professors, instructors, and
    lecturers employed at a school of the Naval War College [or at
    the Marine Corps Command and Staff College] or at a school of
    the Marine Corps University if the duration of the principal
    course of instruction offered at the school or college involved
    is less than 10 months.
              * * * * * * *

             CHAPTER 649--QUARTERS, UTILITIES, AND RELATED SERVICES

              * * * * * * *

    Sec. 7572. Quarters: accommodations in place of for members on sea duty

      (a) * * *
      (b)(1) Under such regulations as the Secretary prescribes, a
    member of a uniformed service on sea duty who is deprived of
    quarters on board ship because of repairs or because of other
    conditions that make the member's quarters uninhabitable and
    for whom it is impracticable to furnish accommodations under
    subsection (a) may be reimbursed for expenses incurred in
    obtaining quarters in an amount not more than [the total of--
              [(A) the basic allowance for quarters payable to a
            member of the same pay grade without dependents for the
            period during which the member is deprived of quarters
            on board ship; and
              [(B) the variable housing allowance that could be
            paid to a member of the same pay grade under section
            403a of title 37 at the location where the member is
            deprived of quarters onboard ship for the period during
            which the member is deprived of quarters on board
            ship.] the basic allowance for housing payable under
            section 403 of title 37 to a member of the same pay
            grade without dependents for the period during which
            the member is deprived of quarters on board ship.
      (2) A member entitled to receipt of [basic allowance for
    quarters] basic allowance for housing may not be reimbursed for
    expenses under this subsection when deprived of quarters on
    board ship at a location at which the member can reside with
    such member's dependents.
              * * * * * * *

    Sec. 7573. Quarters: temporary; transient members

      Temporary quarters may be furnished on a rental basis to
    transient members of the naval service with their dependents,
    for periods not exceeding 60 days, without loss of entitlement
    to [basic allowance for quarters] basic allowance for housing
    under section 403 of title 37.
              * * * * * * *

            CHAPTER 665--NATIONAL OCEANOGRAPHIC PARTNERSHIP PROGRAM

              * * * * * * *

    Sec. 7902. National Ocean Research Leadership Council

      (a) Council.--There is a National Ocean Research Leadership
    Council (hereinafter in this chapter referred to as the
    ``Council'').
      (b) Membership.--The Council is composed of the following
    members:
              (1) * * *
              * * * * * * *
              [(11) The President of the National Academy of
            Sciences, the President of the National Academy of
            Engineering, and the President of the Institute of
            Medicine.]
              [(12)] (11) The Director of the Office of Science and
            Technology.
              [(13)] (12) The Director of the Office of Management
            and Budget.
              [(14)] (13) One member appointed by the [chairman]
            President from among individuals who will represent the
            views of ocean industries.
              [(15)] (14) One member appointed by the [chairman]
            President from among individuals who will represent the
            views of State governments.
              [(16)] (15) One member appointed by the [chairman]
            President from among individuals who will represent the
            views of academia.
              [(17) One member] (16) Not more than four members
            appointed by the [chairman] President from among
            individuals who will represent such other views as the
            [chairman] President considers appropriate.
              * * * * * * *
      (d) Term of Office.--The term of office of a member of the
    Council appointed under paragraph [(14), (15), (16), or (17)]
    (13), (14), (15), or (16) of subsection (b) shall be two years,
    except that any person appointed to fill a vacancy occurring
    before the expiration of the term for which his predecessor was
    appointed shall be appointed for the remainder of such term.
              * * * * * * *
      (j) Delegation of Appointment Authority.--The President may
    delegate the authority to make appointments under subsection
    (b) to the head of a department, without authority to
    redelegate.
              * * * * * * *

                             SUBTITLE D--AIR FORCE

              * * * * * * *

                               PART III--TRAINING

              * * * * * * *

                  CHAPTER 903--UNITED STATES AIR FORCE ACADEMY

    Sec.
    9331.  Establishment; Superintendent; faculty.
         * * * * * * *
    9345.  Exchange program with foreign military academies.
              * * * * * * *

    Sec. 9344. Selection of persons from foreign countries

      (a) * * *
      (b)(1) A person receiving instruction under this section is
    entitled to the pay, allowances, and emoluments of a cadet
    appointed from the United States, and from the same
    appropriations.
      (2) Each foreign country from which a cadet is permitted to
    receive instruction at the Academy under this section shall
    reimburse the United States for the cost of providing such
    instruction, including the cost of pay, allowances, and
    emoluments provided under paragraph (1) unless a written waiver
    of reimbursement is granted by the Secretary of Defense. The
    Secretary of the Air Force shall prescribe the rates for
    reimbursement under this paragraph[.], except that the
    reimbursement rates may not be less than the cost to the United
    States of providing such instruction, including pay,
    allowances, and emoluments, to a cadet appointed from the
    United States.
      (3) The amount of reimbursement waived under paragraph (2)
    may not exceed 25 percent of the per-person reimbursement
    amount otherwise required to be paid by a foreign country under
    such paragraph, except in the case of not more than five
    persons receiving instruction at the Academy under this section
    at any one time.
              * * * * * * *

    Sec. 9345. Exchange program with foreign military academies

      (a) Exchange Program Authorized.--The Secretary of the Air
    Force may permit a student enrolled at a military academy of a
    foreign country to receive instruction at the Air Force Academy
    in exchange for an Air Force cadet receiving instruction at
    that foreign military academy pursuant to an exchange agreement
    entered into between the Secretary and appropriate officials of
    the foreign country. Students receiving instruction at the
    Academy under the exchange program shall be in addition to
    persons receiving instruction at the Academy under section 9344
    of this title.
      (b) Limitations on Number and Duration of Exchanges.--An
    exchange agreement under this section between the Secretary and
    a foreign country shall provide for the exchange of students on
    a one-for-one basis each fiscal year. Not more than 10 Air
    Force cadets and a comparable number of students from all
    foreign military academies participating in the exchange
    program may be exchanged during any fiscal year. The duration
    of an exchange may not exceed the equivalent of one academic
    semester at the Air Force Academy.
      (c) Costs and Expenses.--(1) A student from a military
    academy of a foreign country is not entitled to the pay,
    allowances, and emoluments of an Air Force cadet by reason of
    attendance at the Air Force Academy under the exchange program,
    and the Department of Defense may not incur any cost of
    international travel required for transportation of such a
    student to and from the sponsoring foreign country.
      (2) The Secretary may provide a student from a foreign
    country under the exchange program, during the period of the
    exchange, with subsistence, transportation within the
    continental United States, clothing, health care, and other
    services to the same extent that the foreign country provides
    comparable support and services to the exchanged Air Force
    cadet in that foreign country.
      (3) The Air Force Academy shall bear all costs of the
    exchange program from funds appropriated for the Academy.
    Expenditures in support of the exchange program may not exceed
    $50,000 during any fiscal year.
      (d) Application of Other Laws.--Subsections (c) and (d) of
    section 9344 of this title shall apply with respect to a
    student enrolled at a military academy of a foreign country
    while attending the Air Force Academy under the exchange
    program.
      (e) Regulations.--The Secretary shall prescribe regulations
    to implement this section. Such regulations may include
    qualification criteria and methods of selection for students of
    foreign military academies to participate in the exchange
    program.
              * * * * * * *

    Sec. 9353. Cadets: degree and commission on graduation

      (a) [After the date of the accrediting of the Academy, the]
    The Superintendent of the Academy may, under such conditions as
    the Secretary of the Air Force may prescribe, confer the degree
    of bachelor of science upon graduates of the Academy.
              * * * * * * *

                   PART IV--SERVICE, SUPPLY, AND PROCUREMENT

              * * * * * * *

                           CHAPTER 949--REAL PROPERTY

    Sec.
    9771.  Acceptance of donations: land for mobilization, training, supply
              base, or aviation field.
         * * * * * * *
    9782.  Maintenance and repair of real property.
              * * * * * * *

    Sec. 9782. Maintenance and repair of real property

      (a) Allocation of Funds.--The Secretary of the Air Force
    shall allocate funds authorized to be appropriated by a
    provision described in subsection (c) and a provision described
    in subsection (d) for maintenance and repair of real property
    at military installations of the Department of the Air Force
    without regard to whether the installation is supported with
    funds authorized by a provision described in subsection (c) or
    (d).
      (b) Mixing of Funds Prohibited on Individual Projects.--The
    Secretary of the Air Force may not combine funds authorized to
    be appropriated by a provision described in subsection (c) and
    funds authorized to be appropriated by a provision described in
    subsection (d) for an individual project for maintenance and
    repair of real property at a military installation of the
    Department of the Air Force.
      (c) Research, Development, Test, and Evaluation Funds.--The
    provision described in this subsection is a provision of a
    national defense authorization Act that authorizes funds to be
    appropriated for a fiscal year to the Air Force for research,
    development, test, and evaluation.
      (d) Operation and Maintenance Funds.--The provision described
    in this subsection is a provision of a national defense
    authorization Act that authorizes funds to be appropriated for
    a fiscal year to the Air Force for operation and maintenance.
              * * * * * * *

                         Subtitle E--Reserve Components

              * * * * * * *

                    PART I--ORGANIZATION AND ADMINISTRATION

              * * * * * * *

                  CHAPTER 1005--ELEMENTS OF RESERVE COMPONENTS

              * * * * * * *

    Sec. 10144. Ready Reserve: Individual Ready Reserve

      (a) Within the Ready Reserve of each of the reserve
    components there is an Individual Ready Reserve. The Individual
    Ready Reserve consists of those members of the Ready Reserve
    who are not in the Selected Reserve or the inactive National
    Guard.
      (b)(1) Within the Individual Ready Reserve of each reserve
    component there is a category of members, as designated by the
    Secretary concerned, who are subject to being ordered to active
    duty involuntarily in accordance with section 12304 of this
    title. A member may not be placed in that mobilization category
    unless--
              (A) the member volunteers for that category; and
              (B) the member is selected for that category by the
            Secretary concerned, based upon the needs of the
            service and the grade and military skills of that
            member.
      (2) A member of the Individual Ready Reserve may not be
    carried in such mobilization category of members after the end
    of the 24-month period beginning on the date of the separation
    of the member from active service.
      (3) The Secretary shall designate the grades and military
    skills or specialities of members to be eligible for placement
    in such mobilization category.
      (4) A member in such mobilization category shall be eligible
    for benefits (other than pay and training) as are normally
    available to members of the Selected Reserve, as determined by
    the Secretary of Defense.
              * * * * * * *

               CHAPTER 1007--ADMINISTRATION OF RESERVE COMPONENTS

    Sec.
    10201.  Assistant Secretary of Defense for Reserve Affairs.
         * * * * * * *
    [10216.  Military technicians.]
    10216. Military technicians (dual status).
    10217. Non-dual status military technicians.
              * * * * * * *

    [Sec. 10216. Military technicians

      [(a) In General.--Military technicians are Federal civilian
    employees hired under title 5 and title 32 who are required to
    maintain dual-status as drilling reserve component members as a
    condition of their Federal civilian employment. Such employees
    shall be authorized and accounted for as a separate category of
    dual-status civilian employees, exempt as specified in
    subsection (b)(3) from any general or regulatory requirement
    for adjustments in Department of Defense civilian personnel.]

    Sec. 10216. Military technicians (dual status)

      (a) In General.--(1) For purposes of this section and any
    other provision of law, a military technician (dual status) is
    a Federal civilian employee who--
              (A) is employed under section 3101 of title 5 or
            section 709 of title 32;
              (B) is required as a condition of that employment to
            maintain membership in the Selected Reserve; and
              (C) is assigned to a position as a technician in the
            administration and training of the Selected Reserve or
            in the maintenance and repair of supplies or equipment
            issued to the Selected Reserve or the armed forces.
      (2) Military technicians (dual status) shall be authorized
    and accounted for as a separate category of civilian employees.
      (b) Priority for Management of Military Technicians (Dual
    Status).--(1) As a basis for making the annual request to
    Congress pursuant to section 115(g) of this title for
    authorization of end strengths for military technicians (dual
    status) of the Army and Air Force reserve components, the
    Secretary of Defense shall give priority to supporting
    authorizations for [dual status military technicians] military
    technicians (dual status) in the following high-priority units
    and organizations:
              (A) Units of the Selected Reserve that are scheduled
            to deploy no later than 90 days after mobilization.
              (B) Units of the Selected Reserve that are or will
            deploy to relieve active duty peacetime operations
            tempo.
              (C) Those organizations with the primary mission of
            providing direct support surface and aviation
            maintenance for the reserve components of the Army and
            Air Force, to the extent that the military technicians
            (dual status) in such units would mobilize and deploy
            in a skill that is compatible with their civilian
            position skill.
      (2) For each fiscal year, the Secretary of Defense shall, for
    the high-priority units and organizations referred to in
    paragraph (1), seek to achieve a programmed manning level for
    military technicians (dual status) that is not less than 90
    percent of the programmed manpower structure for those units
    and organizations for military technicians (dual status) for
    that fiscal year.
      (3) Military technician (dual status) authorizations and
    personnel shall be exempt from any requirement (imposed by law
    or otherwise) for reductions in Department of Defense civilian
    personnel and shall only be reduced as part of military force
    structure reductions.
      (c) Information Required To Be Submitted With Annual End
    Strength Authorization Request.--(1) The Secretary of Defense
    shall include as part of the budget justification documents
    submitted to Congress with the budget of the Department of
    Defense for any fiscal year the following information with
    respect to the end strengths for military technicians (dual
    status) requested in that budget pursuant to section 115(g) of
    this title, shown separately for each of the Army and Air Force
    reserve components:
              (A) The number of [dual-status technicians] military
            technicians (dual status) in the high priority units
            and organizations specified in [subsection (a)(1)]
            subsection (b)(1).
              (B) The number of technicians other than [dual-status
            technicians] military technicians (dual status) in the
            high priority units and organizations specified in
            [subsection (a)(1)] subsection (b)(1).
              (C) The number of [dual-status technicians] military
            technicians (dual status) in other than high priority
            units and organizations specified in [subsection
            (a)(1)] subsection (b)(1).
              (D) The number of technicians other than [dual-status
            technicians] military technicians (dual status) in
            other than high priority units and organizations
            specified in [subsection (a)(1)] subsection (b)(1).
      (2)(A) If the budget submitted to Congress for any fiscal
    year requests authorization for that fiscal year under section
    115(g) of this title of a military technician (dual status) end
    strength for a reserve component of the Army or Air Force in a
    number that constitutes a reduction from the end strength
    minimum established by law for that reserve component for the
    fiscal year during which the budget is submitted, the Secretary
    of Defense shall submit to the congressional defense committees
    with that budget a justification providing the basis for that
    requested reduction in technician end strength.
      (B) Any justification submitted under subparagraph (A) shall
    clearly [delineate--
              [(i) in the case of a reduction that includes a
            reduction in technicians described in subparagraph (A)
            or (C) of paragraph (1), the specific force structure
            reductions forming the basis for such requested
            technician reduction (and the numbers related to those
            force structure reductions); and
              [(ii) in the case of a reduction that includes
            reductions in technicians described in subparagraphs
            (B) or (D) of paragraph (1), the specific force
            structure reductions, Department of Defense civilian
            personnel reductions, or other reasons] delineate the
            specific force structure reductions forming the basis
            for such requested technician reduction (and the
            numbers related to those reductions).
      [(d) Dual-Status Requirement.--The Secretary of Defense shall
    require the Secretary of the Army and the Secretary of the Air
    Force to establish as a condition of employment for each
    individual who is hired after February 10, 1996, as a military
    technician that the individual maintain membership in the
    Selected Reserve (so as to be a so-called ``dual-status''
    technician) and shall require that the civilian and military
    position skill requirements of dual-status military technicians
    be compatible. No Department of Defense funds may be spent for
    compensation for any military technician hired after February
    10, 1996, who is not a member of the Selected Reserve, except
    that compensation may be paid for up to six months following
    loss of membership in the Selected Reserve if such loss of
    membership was not due to the failure to meet military
    standards.]
      (d) Unit Membership Requirement.--(1) Unless specifically
    exempted by law, each individual who is hired as a military
    technician (dual status) after December 1, 1995, shall be
    required as a condition of that employment to maintain
    membership in--
              (A) the unit of the Selected Reserve by which the
            individual is employed as a military technician; or
              (B) a unit of the Selected Reserve that the
            individual is employed as a military technician to
            support.
      (2) Paragraph (1) does not apply to a military technician
    (dual status) who is employed by the Army Reserve in an area
    other than Army Reserve troop program units.
      (e) Dual-Status Requirement.--(1) Funds appropriated for the
    Department of Defense may not (except as provided in paragraph
    (2)) be used for compensation as a military technician of any
    individual hired as a military technician after February 10,
    1996, who is no longer a member of the Selected Reserve.
      (2) The Secretary concerned may pay compensation described in
    paragraph (1) to an individual described in that paragraph who
    is no longer a member of the Selected Reserve for a period not
    to exceed six months following the individual's loss of
    membership in the Selected Reserve if the Secretary determines
    such loss of membership was not due to the failure of that
    individual to meet military standards.

    Sec. 10217. Non-dual status military technicians

      (a) Definition.--For the purposes of this section and any
    other provision of law, a non-dual status military technician
    is a civilian employee of the Department of Defense who--
              (1) was hired as a military technician before the
            date of the enactment of the National Defense
            Authorization Act for Fiscal Year 1998 under any of the
            authorities specified in subsection (d); and
              (2) as of the date of the enactment of that Act is
            not a member of the Selected Reserve or after such date
            ceases to be a member of the Selected Reserve.
      (b) Fiscal Year 1998 Limitation.--As of September 30 1998,
    the number of civilian employees of a military department who
    are non-dual status military technicians may not exceed the
    following:
              (1) For the Army Reserve, 1,200.
              (2) For the Army National Guard of the United States,
            2,260.
              (3) For the Air Force Reserve, 0.
              (4) For the Air National Guard of the United States,
            395.
      (c) Reductions for Future Years.--For each of the 10 fiscal
    years beginning with fiscal year 1999, the Secretary of the
    military department concerned shall reduce the number of non-
    dual status military technicians under the jurisdiction of that
    Secretary, as of the end of that fiscal year, from the
    authorized number for the preceding fiscal year by not less--
              (1) 120, for the Army Reserve;
              (2) 226, for the Army National Guard of the United
            States; and
              (3) 39, for the Air National Guard of the United
            States.
      (d) Employment Authorities.--The authorities referred to in
    subsection (a) are the following:
              (1) Section 10216 of this title.
              (2) Section 709 of title 32.
              (3) The requirements referred to in section 8401 of
            title 5.
              (4) Section 8016 of the Department of Defense
            Appropriations Act, 1996 (Public Law 104-61; 109 Stat.
            654), and any comparable provision provided on an
            annual basis in the Department of Defense
            Appropriations Acts for fiscal years 1984 through 1995.
              (5) Any memorandum of agreement between the
            Department of Defense and the Office of Personnel
            Management providing for the hiring of military
            technicians.
              * * * * * * *

        CHAPTER 1013--BUDGET INFORMATION AND ANNUAL REPORTS TO CONGRESS

    Sec.
    10541.  National Guard and reserve component equipment: annual report to
              Congress.
         * * * * * * *
    10544.  Budget information.
         * * * * * * *

    Sec. 10544. Budget information

      (a) Report.--The Secretary of Defense shall submit to the
    congressional committees specified in subsection (d), at the
    same time that the President submits the budget for a fiscal
    year under section 1105(a) of title 31, United States Code, a
    report on amounts requested in that budget for the reserve
    components.
      (b) Content.--The report shall include the following:
              (1) A description of the anticipated effect that the
            amounts requested (if approved by Congress) will have
            to enhance the capabilities of each of the reserve
            components.
              (2) A listing, with respect to each such component,
            of each of the following:
                      (A) The amount requested for each major
                    weapon system for which funds are requested in
                    the budget for that component.
                      (B) The amount requested for each item of
                    equipment (other than a major weapon system)
                    for which funds are requested in the budget for
                    that component.
      (c) Inclusion of Information in Next FYDP.--The Secretary of
    Defense shall specifically display in the each future-years
    defense program (or program revision) submitted to Congress
    under section 221 of this title the amounts programmed for
    procurement of equipment for each of the reserve components.
      (d) Congressional Committees Specified.--The congressional
    committees referred to in subsection (a) are the following:
              (1) The Committee on Armed Services and the Committee
            on Appropriations of the Senate.
              (2) The Committee on National Security and the
            Committee on Appropriations of the House of
            Representatives.
      (e) Exclusion of Coast Guard Reserve.--In this section, the
    term ``reserve components'' does not include the Coast Guard
    Reserve.

                          PART II--PERSONNEL GENERALLY

              * * * * * * *

          CHAPTER 1201--AUTHORIZED STRENGTHS AND DISTRIBUTION IN GRADE

              * * * * * * *

    Sec. 12011. Authorized strengths: reserve officers on active duty or on
                        full-time National Guard duty for administration of
                        the reserves or the National Guard

      (a) The number of reserve officers of the Army, Air Force,
    and Marine Corps who may be on active duty or full-time
    National Guard duty in each of the grades of major, lieutenant
    colonel, and colonel, and of the Navy who may be on active duty
    in each of the grades of lieutenant commander, commander, and
    captain, as of the end of any fiscal year for duty described in
    subclauses (B) and (C) of section 523(b)(1) of this title or
    full-time National Guard duty (other than for training) under
    section 502(f) of title 32 may not exceed the number for that
    grade and armed force in the following table:

    ------------------------------------------------------------------------
                                                              Air     Marine
                   [Grade                   Army     Navy    Force    Corps
    ------------------------------------------------------------------------
    Major or Lieutenant Commander.......    3,219   1,071     643      140
    Lieutenant Colonel or Commander.....    1,524     520     672       90
    Colonel or Navy Captain.............      412     188     274       30]
    ------------------------------------------------------------------------

    ------------------------------------------------------------------------
                                                              Air     Marine
                    Grade                   Army     Navy    Force    Corps
    ------------------------------------------------------------------------
    Major or Lieutenant Commander.......    3,219   1,071     673      140
    Lieutenant Colonel or Commander.....    1,524     520     672       90
    Colonel or Navy Captain.............      437     188     274       30
    ------------------------------------------------------------------------

              * * * * * * *

    Sec. 12012. Authorized strengths: senior enlisted members on active
                        duty or on full-time National Guard duty for
                        administration of the reserves or the National
                        Guard

      (a) The number of enlisted members in pay grades E-8 and E-9
    who may be on active duty (other than for training) or on full-
    time National Guard duty under the authority of section 502(f)
    of title 32 (other than for training) as of the end of any
    fiscal year in connection with organizing, administering,
    recruiting, instructing, or training the reserve components or
    the National Guard may not exceed the number for that grade and
    armed force in the following table:

    ------------------------------------------------------------------------
                                                              Air     Marine
                   [Grade                   Army     Navy    Force    Corps
    ------------------------------------------------------------------------
    E-9.................................     603     202      366       20
    E-8.................................   2,585     429      890      94]
    ------------------------------------------------------------------------

    ------------------------------------------------------------------------
                                                              Air     Marine
                    Grade                   Army     Navy    Force    Corps
    ------------------------------------------------------------------------
    E-9.................................     627     202      371       20
    E-8.................................   2,585     429      900       94
    ------------------------------------------------------------------------

              * * * * * * *

                           CHAPTER 1209--ACTIVE DUTY

    Sec.
    12301.  Reserve components generally.
         * * * * * * *
    [12304.  Selected Reserve; order to active duty other than during war or
              national emergency.]
    12304. Selected Reserve and certain Individual Ready Reserve members;
              order to active duty other than during war or national
              emergency
              * * * * * * *

    [Sec. 12304. Selected Reserve; order to active duty other than during
                        war or national emergency]

    Sec. 12304. Selected Reserve and certain Individual Ready Reserve
                        members; order to active duty other than during war
                        or national emergency

      (a) Notwithstanding the provisions of section 12302(a) or any
    other provision of law, when the President determines that it
    is necessary to augment the active forces for any operational
    mission, he may authorize the Secretary of Defense and the
    Secretary of Transportation with respect to the Coast Guard
    when it is not operating as a service in the Navy, without the
    consent of the members concerned, to order any unit, and any
    member not assigned to a unit organized to serve as a unit of
    the Selected Reserve (as defined in section 10143(a) of this
    title), or any member in the Individual Ready Reserve
    mobilization category and designated as essential under
    regulations prescribed by the Secretary concerned, under their
    respective jurisdictions, to active duty (other than for
    training) for not more than 270 days.
              * * * * * * *
      (c) Not more than 200,000 members of the Selected Reserve and
    the Individual Ready Reserve may be on active duty under this
    section at any one time, of whom not more than 30,000 may be
    members of the Individual Ready Reserve.
              * * * * * * *
      (f) Whenever the President authorizes the Secretary of
    Defense or the Secretary of Transportation to order any unit or
    member of the Selected Reserve or Individual Ready Reserve to
    active duty, under the authority of subsection (a), he shall,
    within 24 hours after exercising such authority, submit to
    Congress a report, in writing, setting forth the circumstances
    necessitating the action taken under this section and
    describing the anticipated use of these units or members.
      (g) Whenever any unit of the Selected Reserve or any member
    of the Selected Reserve not assigned to a unit organized to
    serve as a unit, or member of the Individual Ready Reserve, is
    ordered to active duty under authority of subsection (a), the
    service of all units or members so ordered to active duty may
    be terminated by--
              (1) order of the President, or
              (2) law.
              * * * * * * *
      (i) For purposes of this section, the term ``Individual Ready
    Reserve mobilization category'' means, in the case of any
    reserve component, the category of the Individual Ready Reserve
    described in section 10144(b) of this title.
              * * * * * * *

           CHAPTER 1214--READY RESERVE MOBILIZATION INCOME INSURANCE

    Sec.
    12521.  Definitions.
         * * * * * * *
    12533.  Termination of program.
         * * * * * * *

    Sec. 12533. Termination of program

      (a) In General.--The Secretary shall terminate the insurance
    program in accordance with this section.
      (b) Termination of New Enrollments.--The Secretary may not
    enroll a member of the Ready Reserve for coverage under the
    insurance program after the date of the enactment of this
    section.
      (c) Termination of Coverage.--(1) The enrollment under the
    insurance program of insured members other than insured members
    described in paragraph (2) is terminated as of the date of the
    enactment of this section. The enrollment of an insured member
    described in paragraph (2) is terminated as of the date of the
    termination of the period of covered service of that member
    described in that paragraph.
      (2) An insured member described in this paragraph is an
    insured member who on the date of the enactment of this section
    is serving on covered service for a period of service, or has
    been issued an order directing the performance of covered
    service, that satisfies or would satisfy the entitlement-to-
    benefits provisions of this chapter.
      (d) Termination of Payment of Benefits.--The Secretary may
    not make any benefit payment under the insurance program after
    the date of the enactment of this section other than to an
    insured member who on that date (1) is serving on an order to
    covered service, (2) has been issued an order directing
    performance of covered service, or (3) has served on covered
    service before that date for which benefits under the program
    have not been paid to the member.
      (e) Termination of Insurance Fund.--The Secretary shall close
    the Fund not later than 60 days after the date on which the
    last benefit payment from the Fund is made. Any amount
    remaining in the Fund when closed shall be covered into the
    Treasury as miscellaneous receipts.
              * * * * * * *

               CHAPTER 1223--RETIRED PAY FOR NON-REGULAR SERVICE

              * * * * * * *

    Sec. 12733. Computation of retired pay: computation of years of service

      For the purpose of computing the retired pay of a person
    under this chapter, the person's years of service and any
    fraction of such a year are computed by dividing 360 into the
    sum of the following:
              (1) The person's days of active service.
              (2) The person's days of full-time service under
            sections 316, 502, 503, 504, and 505 of title 32 while
            performing annual training duty or while attending a
            prescribed course of instruction at a school designated
            as a service school by law or by the Secretary
            concerned.
              (3) One day for each point credited to the person
            under clause (B), (C), or (D) of section 12732(a)(2) of
            this title, but not more than 60 days in any one year
            of service before the year of service in which [the
            date of the enactment of the National Defense
            Authorization Act for Fiscal Year 1997] September 23,
            1996, occurs and not more than 75 days in any
            subsequent year of service.
              (4) 50 days for each year before July 1, 1949, and
            proportionately for each fraction of a year, of service
            (other than active service) in a reserve component of
            an armed force, in the Army or the Air Force without
            component, or in any other category covered by section
            12732(a)(1) of this title, except a regular component.

              * * * * * * *

      PART III--PROMOTION AND RETENTION OF OFFICERS ON THE RESERVE ACTIVE-
                                  STATUS LIST

              * * * * * * *

                         CHAPTER 1403--SELECTION BOARDS

              * * * * * * *

    Sec. 14101. Convening of selection boards

      (a) Promotion Boards.--(1) * * *
      (2) A promotion board convened to recommend reserve officers
    of the Army or reserve officers of the Air Force for promotion
    (A) to fill a position vacancy under section 14315 of this
    title, or (B) to the grade of brigadier general or major
    general, shall [(except in the case of a board convened to
    consider officers as provided in section 14301(e) of this
    title)] be known as a ``vacancy promotion board''. Any other
    promotion board convened under this subsection shall be known
    as a ``mandatory promotion board''.
              * * * * * * *

                            CHAPTER 1405--PROMOTIONS

              * * * * * * *

    Sec. 14301. Eligibility for consideration for promotion: general rules

      (a) * * *
              * * * * * * *
      (c) Previously Selected Officers Not Eligible To Be
    Considered.--A promotion board convened under section 14101(a)
    of this title may not consider for promotion to the next higher
    [grade--] grade any of the following officers:
              (1) [an officer] An officer whose name is on a
            promotion list for that grade as a result of
            recommendation for promotion to that grade by an
            earlier selection board convened under that section or
            section 14502 of this title or under chapter 36 of this
            title[;].
              (2) An officer who is recommended for promotion to
            that grade in the report of an earlier selection board
            convened under a provision referred to in paragraph
            (1), in the case of such a report that has not yet been
            approved by the President.
              [(2) an officer] (3) An officer who has been approved
            for Federal recognition by a board convened under
            section 307 of title 32 and nominated by the President
            for promotion to [the next higher grade] that grade as
            a reserve of the Army or of the Air Force as the case
            may be, if that nomination is pending before the Senate
            [; or].
              [(3) an officer] (4) An officer who has been
            nominated by the President for promotion to [the next
            higher grade] that grade under any other provision of
            law, if that nomination is pending before the Senate.
              * * * * * * *
      [(e) Reserve Officers of the Army; Consideration for
    Brigadier General and Major General.--In the case of officers
    of the Army, if the Secretary of the Army determines that
    vacancies are authorized or anticipated in the reserve grades
    of major general or brigadier general for officers who are on
    the reserve active-status list and who are not assigned to
    units organized to serve as a unit and the Secretary convenes a
    mandatory promotion board under section 14101(a) of this title
    to consider officers for promotion to fill such vacancies, the
    Secretary may limit the officers to be considered by that board
    to those determined to be exceptionally well qualified for
    promotion under such criteria and procedures as the Secretary
    may by regulation prescribe.]
      [(f)] (e) Certain Reserve Officers of the Air Force.--A
    reserve officer of the Air Force who (1) is in the Air National
    Guard of the United States and holds the grade of lieutenant
    colonel, colonel, or brigadier general, or (2) is in the Air
    Force Reserve and holds the grade of colonel or brigadier
    general, is not eligible for consideration for promotion by a
    mandatory promotion board convened under section 14101(a) of
    this title.
      [(g)] (f) Nonconsideration of Officers Scheduled for Removal
    From Reserve Active-Status List.--The Secretary of the military
    department concerned may, by regulation, provide for the
    exclusion from consideration for promotion by a promotion board
    of any officer otherwise eligible to be considered by the board
    who has an established date for removal from the reserve
    active-status list that is not more than 90 days after the date
    on which the selection board for which the officer would
    otherwise be eligible is to be convened.
              * * * * * * *

    Sec. 14308. Promotions: how made

      (a) * * *
              * * * * * * *
      (e) Army Reserve and Air Force Reserve Promotions To Fill
    Vacancies.--Subject to this section and to section 14311(e) of
    this title, and under regulations prescribed by the Secretary
    of the military department concerned--
              (1) an officer in the Army Reserve or the Air Force
            Reserve who is on a promotion list as a result of
            selection for promotion by a mandatory promotion board
            convened under section 14101(a) of this title or a
            board convened under section 14502 or chapter 36 of
            this title may be promoted at any time to fill a
            vacancy in a position to which the officer is assigned;
            and
              (2) an officer in a grade below colonel in the Army
            Reserve or the Air Force Reserve who is on a promotion
            list as a result of selection for promotion by a
            vacancy promotion board convened under section 14101(a)
            of this title may be promoted at any time to fill the
            vacancy for which the officer was selected.
              * * * * * * *
      (g) Army and Air Force General Officer Promotions.--A reserve
    officer of the Army or the Air Force who is on a promotion list
    for promotion to the grade of brigadier general or major
    general as a result of selection by a vacancy promotion board
    may be promoted to that grade only to fill a vacancy [in that
    grade in a unit of the Army Reserve that is organized to serve
    as a unit and that has attained the strength prescribed by the
    Secretary of the Army. A reserve officer of the Air Force who
    is on a promotion list for promotion to the grade of brigadier
    general or major general as a result of selection by a vacancy
    promotion board may be promoted to that grade only to fill a
    vacancy in the Air Force Reserve in that grade.] in the Army
    Reserve or the Air Force Reserve, as the case may be, in that
    grade.
              * * * * * * *

    Sec. 14315. Position vacancy promotions: Army and Air Force officers

      (a) * * *
      (b) Consideration for Vacancy Promotion to Brigadier General
    or Major General.--(1) A reserve officer of the Army who is in
    the Army Reserve and on the reserve active-status list in the
    grade of colonel or brigadier general may be considered for
    promotion to the next higher grade under this section if the
    officer (A) is assigned to [the duties of a general officer of
    the next higher reserve grade in a unit of the Army Reserve
    organized to serve as a unit,] duties of a general officer of
    the next higher reserve grade in the Army Reserve, (B) has held
    the officer's present grade for the minimum period of service
    prescribed in section 14303 of this title for eligibility for
    consideration for promotion to the higher grade, and (C) meets
    the standards for consideration prescribed by the Secretary of
    the Army.
              * * * * * * *

       CHAPTER 1407--FAILURE OF SELECTION FOR PROMOTION AND INVOLUNTARY
                                   SEPARATION

              * * * * * * *

    Sec. 14508. Removal from the reserve active-status list for years of
                        service: reserve general and flag officers

      (a) * * *
              * * * * * * *
      (c) Retention of Brigadier Generals.--A reserve officer of
    the Army or Air Force in the grade of brigadier general who
    would otherwise be removed from an active status under
    subsection (a) may, in the discretion of the Secretary of the
    Army or the Secretary of the Air Force, as the case may be, be
    retained in an active status, but [not later than the date on
    which the officer becomes 60 years of age] not later than the
    last day of the month in which the officer becomes 60 years of
    age. Not more than 10 officers of the Army and not more than 10
    officers of the Air Force may be retained under this subsection
    at any one time.
              * * * * * * *

      CHAPTER 1409--CONTINUATION OF OFFICERS ON THE RESERVE ACTIVE-STATUS
                        LIST AND SELECTIVE EARLY REMOVAL

              * * * * * * *

    Sec. 14702. Retention on reserve active-status list of certain officers
                        until age 60

      (a) Retention.--Notwithstanding the provisions of [section
    14506 or 14507] section 14506, 14507, or 14508 of this title,
    the Secretary of the military department concerned may, with
    the officer's consent, retain on the reserve active-status list
    an officer in the grade of major, lieutenant colonel, [or
    colonel] colonel, or brigadier general who is--
              (1) an officer of the Army National Guard of the
            United States and assigned to a headquarters or
            headquarters detachment of a State; or
              (2) a reserve officer of the Army or Air Force who,
            as a condition of continued employment as a National
            Guard or Reserve technician is required by the
            Secretary concerned to maintain membership in a
            Selected Reserve unit or organization.
              * * * * * * *

     CHAPTER 1411--ADDITIONAL PROVISIONS RELATING TO INVOLUNTARY SEPARATION

              * * * * * * *

    Sec. 14906. Officers eligible to serve on boards

      (a) Composition of Boards.--(1) Each officer who serves on a
    board convened under this chapter shall be an officer of the
    same armed force as the officer being required to show cause
    for retention in an active status.
      (2) An officer may not serve on a board under this chapter
    unless the officer holds [a grade above lieutenant colonel or
    commander] the grade of lieutenant colonel or commander or a
    higher grade and is senior in grade and rank to any officer
    considered by the board.
              * * * * * * *

      PART IV--TRAINING FOR RESERVE COMPONENTS AND EDUCATIONAL ASSISTANCE
                                    PROGRAMS

              * * * * * * *

                CHAPTER 1609--EDUCATION LOAN REPAYMENT PROGRAMS

              * * * * * * *

    Sec. 16302. Education loan repayment program: health professions
                        officers serving in Selected Reserve with wartime
                        critical medical skill shortages

      (a) * * *
              * * * * * * *
      (d) The authority provided in this section shall apply only
    in the case of a person first appointed as a commissioned
    officer before [October 1, 1998] October 1, 1999.
              * * * * * * *
                                  ----------

            NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 1997

              * * * * * * *

                DIVISION A--DEPARTMENT OF DEFENSE AUTHORIZATIONS

              * * * * * * *

             TITLE II--RESEARCH, DEVELOPMENT, TEST, AND EVALUATION

              * * * * * * *

             Subtitle E--National Oceanographic Partnership Program

              * * * * * * *

    SEC. 282. NATIONAL OCEANOGRAPHIC PARTNERSHIP PROGRAM.

      (a) * * *
              * * * * * * *
      [(c) Initial Appointments of Advisory Panel Members.--The
    National Ocean Research Leadership Council established by
    section 7902 of title 10, United States Code, as added by
    subsection (a)(1), shall make the appointments required by
    section 7903 of such title not later than January 1, 1997.]
              * * * * * * *

                      TITLE III--OPERATION AND MAINTENANCE

              * * * * * * *

                      Subtitle C--Environmental Provisions

              * * * * * * *

    SEC. 327. AGREEMENTS FOR SERVICES OF OTHER AGENCIES IN SUPPORT OF
                        ENVIRONMENTAL TECHNOLOGY CERTIFICATION.

      (a) Authority.--Subject to subsection (b), the Secretary of
    Defense may enter into a cooperative agreement with an agency
    of a State or local government, or with an Indian tribe, to
    obtain assistance in certifying environmental technologies.
      (b) Limitations.--The Secretary of Defense may enter into a
    cooperative agreement with respect to an environmental
    technology under subsection (a) only if the Secretary
    determines--
              (1) that the technology has clear potential to be of
            significant value to the Department of Defense [in
            carrying out its environmental restoration activities];
            and
              * * * * * * *
      (e) Definition.--In this section, the term `Indian tribe' has
    the meaning given that term by section 101(36) of the
    Comprehensive Environmental Response, Compensation, and
    Liability Act of 1980 (42 U.S.C. 9601(36)).
      [(e)] (f) Termination of Authority.--The authority provided
    under subsection (a) shall terminate five years after the date
    of the enactment of this Act.
              * * * * * * *

    SEC. 333. NAVY PROGRAM TO MONITOR ECOLOGICAL EFFECTS OF ORGANOTIN.

      (a) * * *
              * * * * * * *
      (e) Report.--Not later than [June 1] October 30, 1997, the
    Secretary of the Navy shall submit to Congress a report
    containing the following:
              [(1) A description of the monitoring program
            developed pursuant to subsection (a).
              [(2) An analysis of the results of the monitoring
            program as of the date of the submission of the
            report.]
              [(3)] (1) Information about the progress of Navy
            programs, referred to in section 7(c) of the Organotin
            Antifouling Paint Control Act of 1988 (33 U.S.C.
            2406(c)), for evaluating the laboratory toxicity and
            environmental risks associated with the use of
            antifouling paints containing organotin.
              [(4)] (2) An assessment, developed in consultation
            with the Administrator of the Environmental Protection
            Agency, of the effectiveness of existing laws and rules
            concerning organotin compounds in ensuring protection
            of human health and the environment.
              (3) A description of the present and future use, if
            any, of antifouling paints containing organotin on
            naval vessels.
              * * * * * * *

                           Subtitle F--Other Matters

              * * * * * * *

    SEC. 367. DEPARTMENT OF DEFENSE SUPPORT FOR SPORTING EVENTS.

      (a) Authority To Provide Support.--[Subchapter II of chapter]
    Chapter 152 of title 10, United States Code, is amended by
    adding at the end the following new section:

    ``Sec. 2554. Provision of support for certain sporting events

      ``(a) * * *
              * * * * * * *
      (b) Clerical Amendment.--The table of sections at the
    beginning of such [subchapter] chapter is amended by adding at
    the end the following new item:

    ``2554. Provision of support for certain sporting events.''.
              * * * * * * *

              TITLE VI--COMPENSATION AND OTHER PERSONNEL BENEFITS

              * * * * * * *

               Subtitle B--Bonuses and Special and Incentive Pays

              * * * * * * *

    SEC. 614. SPECIAL PAY FOR CERTAIN PUBLIC HEALTH SERVICE OFFICERS.

      (a) * * *
      (b) Nonphysician Health Care Providers.--Section 302c(d) of
    title 37, United States Code, is amended--
              (1)  * * *
              (2) in paragraph (1)--
                      (A) by striking out ``or'' the third place it
                    appears; and
                      (B) by inserting before [the period] the
                    semicolon at the end the following: ``, or an
                    officer in the Regular or Reserve Corps of the
                    Public Health Service''.
              * * * * * * *

                       TITLE VII--HEALTH CARE PROVISIONS

              * * * * * * *

              Subtitle C--Uniformed Services Treatment Facilities

              * * * * * * *

    SEC. 722. INCLUSION OF DESIGNATED PROVIDERS IN UNIFORMED SERVICES
                        HEALTH CARE DELIVERY SYSTEM.

      (a)  * * *
              * * * * * * *
      (c) Effective Date of Agreements.--(1) Unless an earlier
    effective date is agreed upon by the Secretary and the
    designated provider, the agreement shall take effect upon the
    later of the following:
              [(1)] (A) The date on which a managed care support
            contract under the TRICARE program is implemented in
            the service area of the designated provider.
              [(2)] (B) October 1, 1997.
      (2) The Secretary may modify the effective date established
    under paragraph (1) for an agreement to permit a transition
    period of not more than six months between the date on which
    the agreement is executed by the parties and the date on which
    the designated provider commences the delivery of health care
    services under the agreement.
      (d) Temporary Continuation of Existing Participation
    Agreements.--The Secretary shall extend the participation
    agreement of a designated provider in effect immediately before
    the date of the enactment of this Act under section 718(c) of
    the National Defense Authorization Act for Fiscal Year 1991
    (Public Law 101-510; 42 U.S.C. 248c) until the agreement
    required by this section takes effect under subsection (c),
    including any transitional period provided by the Secretary
    under paragraph (2) of such subsection.
              * * * * * * *
      (g) Continued Acquisition of Reduced-Cost Drugs.--A
    designated provider shall be treated as part of the Department
    of Defense for purposes of section 8126 of title 38, United
    States Code, in connection with the provision by the designated
    provider of health care services to covered beneficiaries
    pursuant to the participation agreement of the designated
    provider under section 718(c) of the National Defense
    Authorization Act for Fiscal Year 1991 (Public Law 101-510; 42
    U.S.C. 248c note) or pursuant to the agreement entered into
    under subsection (b).
              * * * * * * *

    SEC. 726. PAYMENTS FOR SERVICES.

      (a) * * *
      (b) Limitation on Total Payments.--Total capitation payments
    for health care services to a designated provider shall not
    exceed an amount equal to the cost that would have been
    incurred by the Government if the enrollees had received such
    health care services through a military treatment facility, the
    TRICARE program, or the Medicare program, as the case may be.
    In establishing the ceiling rate for enrollees with the
    designated providers who are also eligible for the Civilian
    Health and Medical Program of the Uniformed Services, the
    Secretary of Defense shall take into account the health status
    of the enrollees.
              * * * * * * *

      TITLE VIII--ACQUISITION POLICY, ACQUISITION MANAGEMENT, AND RELATED
                                    MATTERS

              * * * * * * *

                       Subtitle A--Acquisition Management

              * * * * * * *

    SEC. 802. EXTENSION OF PILOT MENTOR-PROTEGE PROGRAM.

      Section 831(j) of the National Defense Authorization Act for
    Fiscal Year 1991 (10 U.S.C. 2302 note) is amended--
              (1) in paragraph (1), by striking out ``[1995] 1996''
            and inserting in lieu thereof ``1998''; and
              * * * * * * *

                           Subtitle B--Other Matters

              * * * * * * *

    SEC. 829. ASSESSMENT OF NATIONAL DEFENSE TECHNOLOGY AND INDUSTRIAL BASE
                        AND DEPENDENCY OF BASE ON SUPPLIES AVAILABLE ONLY
                        FROM FOREIGN COUNTRIES.

      (a) * * *
              * * * * * * *
      (c) Periodic Defense Capability Assessments, Including
    Foreign Dependency.--(1)  * * *
      (2) [Section 2502(b)] Section 2502(c) of title 10, United
    States Code, is amended--
              (A) by striking out ``the following
            responsibilities:'' and all that follows through
            ``effective cooperation'' and inserting in lieu thereof
            ``the responsibility to ensure effective cooperation'';
            and
              (B) by striking out paragraph (2); and
      [(3)] (C) by redesignating subparagraphs (A), (B), and (C) as
    paragraphs (1), (2), and (3), respectively, and adjusting the
    margin of such paragraphs two ems to the left.
              * * * * * * *

                   DIVISION C--DEPARTMENT OF ENERGY NATIONAL

                SECURITY AUTHORIZATIONS AND OTHER AUTHORIZATIONS

          TITLE XXXI--DEPARTMENT OF ENERGY NATIONAL SECURITY PROGRAMS

              * * * * * * *

                           Subtitle D--Other Matters

              * * * * * * *

    [SEC. 3156. REQUIREMENTS FOR DEPARTMENT OF ENERGY WEAPONS ACTIVITIES
                        BUDGETS FOR FISCAL YEARS AFTER FISCAL YEAR 1997.

      [(a) In General.--The weapons activities budget of the
    Department of Energy for any fiscal year after fiscal year 1997
    shall--
              [(1) set forth with respect to each of the activities
            under the budget (including stockpile stewardship,
            stockpile management, and program direction) the
            funding requested to carry out each project or activity
            that is necessary to meet the requirements of the
            Nuclear Weapons Stockpile Memorandum; and
              [(2) identify specific infrastructure requirements
            arising from the Nuclear Posture Review, the Nuclear
            Weapons Stockpile Memorandum, and the programmatic and
            technical requirements associated with the review and
            memorandum.
      [(b) Required Detail.--The Secretary of Energy shall include
    in the materials that the Secretary submits to Congress in
    support of the budget for any fiscal year after fiscal year
    1997 that is submitted by the President pursuant to section
    1105 of title 31, United States Code, the following:
              [(1) A long-term program plan, and a near-term
            program plan, for the certification and stewardship of
            the nuclear weapons stockpile.
              [(2) An assessment of the effects of the plans
            referred to in paragraph (1) on each nuclear weapons
            laboratory and each nuclear weapons production plant.
      [(c) Definitions.--In this section:
              [(1) The term ``Nuclear Posture Review'' means the
            Department of Defense Nuclear Posture Review as
            contained in the report of the Secretary of Defense to
            the President and Congress dated February 19, 1995, or
            in subsequent such reports.
              [(2) The term ``nuclear weapons laboratory'' means
            the following:
                      [(A) Lawrence Livermore National Laboratory,
                    California.
                      [(B) Los Alamos National Laboratory, New
                    Mexico.
                      [(C) Sandia National Laboratories.
              [(3) The term ``nuclear weapons production plant''
            means the following:
                      [(A) The Pantex Plant, Texas.
                      [(B) The Savannah River Site, South Carolina.
                      [(C) The Kansas City Plant, Missouri.
                      [(D) The Y-12 Plant, Oak Ridge, Tennessee.]
              * * * * * * *
                                  ----------

            NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 1995

                DIVISION A--DEPARTMENT OF DEFENSE AUTHORIZATIONS

              * * * * * * *

             TITLE II--RESEARCH, DEVELOPMENT, TEST, AND EVALUATION

              * * * * * * *

                           Subtitle E--Other Matters

              * * * * * * *

    SEC. 257. DEFENSE EXPERIMENTAL PROGRAM TO STIMULATE COMPETITIVE
                        RESEARCH.

      (a)  * * *
              * * * * * * *
      (d) Eligible States.--(1)  * * *
              * * * * * * *
              (3) In this section, the term ``State'' means a State
            of the United States, the District of Columbia, the
            Commonwealth of Puerto Rico, Guam, the Virgin Islands,
            American Samoa, and the Commonwealth of the Northern
            Mariana Islands.
              * * * * * * *

      TITLE VIII--ACQUISITION POLICY, ACQUISITION MANAGEMENT, AND RELATED
                                    MATTERS

              * * * * * * *

                           Subtitle B--Other Matters

              * * * * * * *

    SEC. 818. PAYMENT OF RESTRUCTURING COSTS UNDER DEFENSE CONTRACTS.

      [(a) Certification of Cost Savings.--(1) The Secretary of
    Defense may not, under section 2324 of title 10, United States
    Code, pay restructuring costs associated with a business
    combination undertaken by a defense contractor until the
    Department of Defense reviews the projected costs and savings
    that will result for the Department from such business
    combination and an official of the Department of Defense at the
    level of Assistant Secretary of Defense or above certifies in
    writing that projections of future cost savings resulting for
    the Department from the business combination are based on
    audited cost data and should result in overall reduced costs to
    the Department.
      [(2) The requirements for a review and certification under
    paragraph (1) shall not apply with respect to any business
    combination for which restructuring costs were paid or
    otherwise approved by the Secretary before August 15, 1994.]
              * * * * * * *

     DIVISION C--DEPARTMENT OF ENERGY NATIONAL SECURITY AUTHORIZATIONS AND
                              OTHER AUTHORIZATIONS

          TITLE XXXI--DEPARTMENT OF ENERGY NATIONAL SECURITY PROGRAMS

              * * * * * * *

                           Subtitle D--Other Matters

              * * * * * * *

    SEC. 3161. AUTHORITY FOR APPOINTMENT OF CERTAIN SCIENTIFIC,
                        ENGINEERING, AND TECHNICAL PERSONNEL.

      (a)  * * *
              * * * * * * *
      [(c) EPA Study.--(1) Upon the 50th appointment made by the
    Secretary pursuant to subsection (a)(1)(B), the Administrator
    of the Environmental Protection Agency, in consultation with
    the Secretary, shall conduct a study of the effects of the
    implementation of such subsection on the conduct of remedial
    actions at sites on the National Priorities List.
      [(2) The study shall assess whether serious problems have
    resulted at any site on the National Priorities List from
    appointments made pursuant to subsection (a)(1)(B) of persons
    whose employment, at the time of the appointment, involved
    remedial actions or other similar activities at the site.
      [(3) For purposes of this subsection, a serious problem
    includes any of the following occurrences:
              [(A) A significant delay or significant disruption of
            a schedule for completion of a remedial action at the
            site.
              [(B) A significant escalation of the personnel costs
            for the remedial action.
              [(C) A significant exacerbation of any shortage in
            the number of critical personnel at the site.
      [(4) The Administrator, in consultation with the Secretary,
    shall submit to Congress a report on the study conducted under
    paragraph (1). The report shall be submitted not later than 30
    days after the date upon which the Secretary has made the 50th
    appointment pursuant to subsection (a)(1)(B). The Secretary may
    not make more than 50 such appointments until the submission of
    the report.
      [(5) If, as a result of the study conducted under paragraph
    (1), the Administrator, in consultation with the Secretary,
    determines that serious problems have resulted at any site on
    the National Priorities List from appointments made pursuant to
    subsection (a)(1)(B), the Administrator and the Secretary shall
    jointly submit to Congress, together with the report referred
    to in paragraph (4), a plan to ameliorate the effects of those
    serious problems. Under the plan, the Administrator and the
    Secretary shall provide for--
              [(A) a reduction in the rate at which persons are
            appointed pursuant to such subsection;
              [(B) the making of appointments pursuant to such
            subsection of persons other than persons whose
            employment, at the time of the appointment, involved
            remedial actions or other similar activities at sites
            on the National Priorities List; or
              [(C) any other effective alternative to appointing
            persons described in subparagraph (B) that the
            Administrator and the Secretary consider appropriate.
      [(6) To carry out this section, the Secretary shall regularly
    provide to the Administrator the following information:
              [(A) The relevant previous places of employment of
            each person appointed pursuant to subsection (a)(1)(B).
              [(B) The site on the National Priorities List, if the
            employment of such person, at the time of the
            appointment of that person pursuant to such subsection,
            involved remedial actions or other similar activities
            at the site.]
      (d) Termination.--(1) The authority provided under subsection
    (a)(1) shall terminate on September 30, [1997] 1999.
              * * * * * * *
                                  ----------

            SECTION 234 OF THE BALLISTIC MISSILE DEFENSE ACT OF 1995

    SEC. 234. THEATER MISSILE DEFENSE ARCHITECTURE.

      (a) Establishment of Core Program.--To implement the policy
    established in paragraph (1) of section 233, the Secretary of
    Defense shall restructure the core theater missile defense
    program to consist of the following systems[, to be carried out
    so as to achieve the specified capabilities]:
              (1) The Patriot PAC-3 system[, with a first unit
            equipped (FUE) during fiscal year 1998].
              (2) The [Navy Lower Tier (Area) system, with a user
            operational evaluation system (UOES) capability during
            fiscal year 1997 and an initial operational capability
            (IOC) during fiscal year 1999] Navy Area Defense
            system.
              (3) The Theater High-Altitude Area Defense (THAAD)
            system, [with a] to be carried out so as to achieve a
            user operational evaluation system (UOES) capability
            not later than [fiscal year 1998] fiscal year 2000 and
            a first unit equipped (FUE) not later than [fiscal year
            2000] fiscal year 2004.
              (4) [The Navy Upper Tier (Theater Wide) system, with]
            Navy Theater Wide system, to be carried out so as to
            achieve a user operational evaluation system (UOES)
            capability during fiscal year 1999 and an initial
            operational capability (IOC) during fiscal year 2001.
              * * * * * * *
                                  ----------

            NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 1996

              * * * * * * *

                DIVISION A--DEPARTMENT OF DEFENSE AUTHORIZATIONS

              * * * * * * *

             TITLE II--RESEARCH, DEVELOPMENT, TEST, AND EVALUATION

              * * * * * * *

             Subtitle D--Other Ballistic Missile Defense Provisions

    SEC. 251. BALLISTIC MISSILE DEFENSE PROGRAM ELEMENTS.

      (a) Elements Specified.--In the budget justification
    materials submitted to Congress in support of the Department of
    Defense budget for any fiscal year after fiscal year 1996 (as
    submitted with the budget of the President under section
    1105(a) of title 31, United States Code), the amount requested
    for activities of the Ballistic Missile Defense Organization
    shall be set forth in accordance with the following program
    elements:
              (1) The Patriot system.
              (2) [The Navy Lower Tier (Area) system] Navy Area
            Defense system.
              (3) The Theater High-Altitude Area Defense (THAAD)
            system.
              (4) [The Navy Upper Tier (Theater Wide) system] Navy
            Theater Wide system.
              (5) The Corps Surface-to-Air Missile (SAM) system.
              (6) Other Theater Missile Defense Activities.
              (7) National Missile Defense.
              (8) Follow-On and Support Technologies.
              * * * * * * *

                      TITLE III--OPERATION AND MAINTENANCE

              * * * * * * *

         Subtitle E--Performance of Functions by Private-Sector Sources

              * * * * * * *

    SEC. 354. DEMONSTRATION PROGRAM TO IDENTIFY OVERPAYMENTS MADE TO
                        VENDORS.

      (a) In General.--The Secretary of Defense shall conduct a
    demonstration program to evaluate the feasibility of using
    private contractors to audit accounting and procurement records
    of the Department of Defense in order to identify overpayments
    made to vendors by the Department. [The demonstration program
    shall be conducted for the Defense Logistics Agency and include
    the Defense Personnel Support Center.]
      (b) Program Requirements.--(1) Under the demonstration
    program, the Secretary shall, by contract, provide for one or
    more persons to audit the accounting and procurement records
    [of the Defense Logistics Agency that relate to (at least)
    fiscal years 1993, 1994, and 1995] relating to fiscal years
    after fiscal year 1993 of the working-capital funds and
    industrial, commercial, and support type activities managed
    through the Defense Business Operations Fund, except the
    Defense Logistics Agency to the extent such records have
    already been audited. The Secretary may enter into more than
    one contract under the program.
              * * * * * * *
      [(d) Bonus Payment.--To the extent provided for in a contract
    under the demonstration program, the Secretary may pay the
    contractor a bonus in addition to any other amount paid for
    performance of the contract. The amount of such bonus may not
    exceed the amount that is equal to 25 percent of all amounts
    recovered by the United States on the basis of information
    obtained as a result of the audit performed under the contract.
    Any such bonus shall be paid out of amounts made available
    pursuant to subsection (e).
      [(e) Availability of Funds.--Of the amount authorized to be
    appropriated pursuant to section 301(5), not more than
    $5,000,000 shall be available for the demonstration program.]
      (d) Collection Method.--In the case of an overpayment to a
    vendor identified under the demonstration program, the
    Secretary shall require the use of the procedures specified in
    section 32.611 of the Federal Acquisition Regulation, regarding
    a setoff against existing invoices for payment to the vendor,
    as the first method by which the Department shall seek to
    recover the amount of the overpayment (and any applicable
    interest and penalties) from the vendor.
      (e) Fees for Contractor.--The Secretary shall pay to the
    contractor under the contract entered into under the
    demonstration program an amount not to exceed 25 percent of the
    total amount recovered by the Department (through the
    collection of overpayments and the use of setoffs) solely on
    the basis of information obtained as a result of the audits
    performed by the contractor under the program. When an
    overpayment is recovered through the use of a setoff, amounts
    for the required payment to the contractor shall be derived
    from funds available to the working-capital fund or industrial,
    commercial, or support type activity for which the overpayment
    is recovered.
              * * * * * * *

                       TITLE V--MILITARY PERSONNEL POLICY

              * * * * * * *

                     Subtitle D--Officer Education Programs

                           PART I--SERVICE ACADEMIES

              * * * * * * *

    SEC. 533. REPEAL OF REQUIREMENT FOR ATHLETIC DIRECTOR AND
                        NONAPPROPRIATED FUND ACCOUNT FOR THE ATHLETICS
                        PROGRAMS AT THE SERVICE ACADEMIES.

      (a) * * *
      (b) United States Naval Academy.--Section 556 of the National
    Defense Authorization Act for Fiscal Year 1995 (Public Law 103-
    337; 108 Stat. 2774) is amended by striking out subsections (b)
    and (e) and the amendments made by subsection (b), effective as
    of October 5, 1994.
              * * * * * * *

                          TITLE X--GENERAL PROVISIONS

                         Subtitle A--Financial Matters

    SEC. 1001. TRANSFER AUTHORITY.

      (a) Authority To Transfer Authorizations.--(1) * * *
      (2) The total amount of authorizations that the Secretary of
    Defense may transfer under the authority of this section may
    not exceed [$2,000,000,000] $3,100,000,000.
              * * * * * * *

                  TITLE XV--TECHNICAL AND CLERICAL AMENDMENTS

    SEC. 1501. AMENDMENTS RELATED TO RESERVE OFFICER PERSONNEL MANAGEMENT
                        ACT.

      (a) * * *
              * * * * * * *
      (d) Cross References in Other Defense Laws.--
              (1) Section [337(b)] 377(b) of the National Defense
            Authorization Act for Fiscal Year 1995 (Public Law 103-
            337; 108 Stat. [2717] 2737) is amended by inserting
            before the period at the end the following: ``or who
            after November 30, 1994, transferred to the Retired
            Reserve under section 10154(2) of title 10, United
            States Code, without having completed the years of
            service required under section 12731(a)(2) of such
            title for eligibility for retired pay under chapter
            1223 of such title''.
              * * * * * * *

                DIVISION B--MILITARY CONSTRUCTION AUTHORIZATIONS

              * * * * * * *

                        TITLE XXVIII--GENERAL PROVISIONS

              * * * * * * *

                     Subtitle D--Land Conveyances Generally

                            PART I--ARMY CONVEYANCES

              * * * * * * *

    SEC. 2858. LAND CONVEYANCE, INDIANA ARMY AMMUNITION PLANT, CHARLESTOWN,
                        INDIANA.

      (a) Conveyance Authorized.--(1) The Secretary of the Army may
    convey, without consideration, to the State of Indiana (in this
    section referred to as the ``State''), all right, title, and
    interest of the United States in and to a parcel of real
    property, including any improvements thereon, that consists of
    approximately 1125 acres at the inactivated Indiana Army
    Ammunition Plant in Charlestown, Indiana, and is the subject of
    a 25-year lease between the Secretary and the State.
      (2) The Secretary may also convey to the State, without
    consideration, an additional parcel of real property at the
    Indiana Army Ammunition Plant consisting of approximately 500
    acres located along the Ohio River.
      (b) Condition of Conveyance.--The [conveyance] conveyances
    authorized under subsection (a) shall be subject to the
    condition that the State use the conveyed property for
    recreational purposes.
              * * * * * * *
      (d) Additional Terms and Conditions.--The Secretary may
    require such additional terms and conditions in connection with
    the [conveyance] conveyances under subsection (a) as the
    Secretary considers appropriate to protect the interests of the
    United States.
              * * * * * * *

                        PART III--AIR FORCE CONVEYANCES

    SEC. 2874. LAND ACQUISITION OR EXCHANGE, SHAW AIR FORCE BASE, SOUTH
                        CAROLINA.

      (a) * * *
              * * * * * * *
      (g) Study of Exchange Options.--To facilitate the use of a
    land exchange to acquire the real property described in
    subsection (a), the Secretary of the Air Force shall conduct a
    study to identify real property in the possession of the Air
    Force (located in the State of South Carolina or elsewhere)
    that satisfies the requirements of subsection (b)(2), is
    acceptable to the party holding the property to be acquired,
    and is otherwise suitable for exchange under this section. Not
    later than three months after the date of the enactment of the
    National Defense Authorization Act for Fiscal Year 1998, the
    Secretary shall submit to Congress a report containing the
    results of the study.
              * * * * * * *

     DIVISION C--DEPARTMENT OF ENERGY NATIONAL SECURITY AUTHORIZATIONS AND
                              OTHER AUTHORIZATIONS

          TITLE XXXI--DEPARTMENT OF ENERGY NATIONAL SECURITY PROGRAMS

              * * * * * * *

                           Subtitle D--Other Matters

              * * * * * * *

    [SEC. 3153. MASTER PLAN FOR THE CERTIFICATION, STEWARDSHIP, AND
                        MANAGEMENT OF WARHEADS IN THE NUCLEAR WEAPONS
                        STOCKPILE.

      [(a) Master Plan Requirement.--Not later than March 15, 1996,
    the President shall submit to Congress a master plan for
    maintaining the nuclear weapons stockpile. The President shall
    submit to Congress an update of the master plan not later than
    March 15 of each year thereafter.
      [(b) Plan Elements.--The master plan and each update of the
    master plan shall set forth the following:
              [(1) The numbers of weapons (including active and
            inactive weapons) for each type of weapon in the
            nuclear weapons stockpile.
              [(2) The expected design lifetime of each weapon
            type, the current age of each weapon type, and any
            plans (including the analytical basis for such plans)
            for lifetime extensions of a weapon type.
              [(3) An estimate of the lifetime of the nuclear and
            nonnuclear components of the weapons (including active
            weapons and inactive weapons) in the nuclear weapons
            stockpile, and any plans (including the analytical
            basis for such plans) for lifetime extensions of such
            components.
              [(4) A schedule of the modifications, if any,
            required for each weapon type (including active and
            inactive weapons) in the nuclear weapons stockpile and
            the cost of such modifications.
              [(5) The process to be used in recertifying the
            safety, reliability, and performance of each weapon
            type (including active weapons and inactive weapons) in
            the nuclear weapons stockpile.
              [(6) The manufacturing infrastructure required to
            maintain the nuclear weapons stockpile stewardship and
            management programs, including a detailed project plan
            that demonstrates the manner by which the Government
            will develop by 2002 the capability to refabricate and
            certify warheads in the nuclear weapons stockpile and
            to design, fabricate, and certify new warheads.
      [(c) Form of Plan.--The master plan and each update of the
    master plan shall be submitted in unclassified form, but may
    contain a classified appendix.]
              * * * * * * *

    [SEC. 3159. REQUIREMENTS FOR DEPARTMENT OF ENERGY WEAPONS ACTIVITIES
                        BUDGETS FOR FISCAL YEARS AFTER FISCAL YEAR 1996.

      [(a) In General.--The weapons activities budget of the
    Department of Energy shall be developed in accordance with the
    Nuclear Posture Review, the Post Nuclear Posture Review
    Stockpile Memorandum currently under development, and the
    programmatic and technical requirements associated with the
    review and memorandum.
      [(b) Required Detail.--The Secretary of Energy shall include
    in the materials that the Secretary submits to Congress in
    support of the budget for a fiscal year submitted by the
    President pursuant to section 1105 of title 31, United States
    Code, a long-term program plan, and a near-term program plan,
    for the certification and stewardship of the nuclear weapons
    stockpile.
      [(c) Definition.--In this section, the term ``Nuclear Posture
    Review'' means the Department of Defense Nuclear Posture Review
    as contained in the report of the Secretary of Defense to the
    President and the Congress dated February 19, 1995, or in
    subsequent such reports.]
              * * * * * * *

                    TITLE XXXIII--NATIONAL DEFENSE STOCKPILE

            Subtitle A--Authorization of Disposals and Use of Funds

              * * * * * * *

    [SEC. 3304. RESTRICTIONS ON DISPOSAL OF MANGANESE FERRO.

      [(a) Disposal of Lower Grade Material First.--The President
    may not dispose of high carbon manganese ferro in the National
    Defense Stockpile that meets the National Defense Stockpile
    classification of Grade One, Specification 30(a), as revised on
    May 22, 1992, until completing the disposal of all manganese
    ferro in the National Defense Stockpile that does not meet such
    classification. The President may not reclassify manganese
    ferro in the National Defense Stockpile after the date of the
    enactment of this Act.
      [(b) Requirement for Remelting by Domestic Ferroalloy
    Producers.--Manganese ferro in the National Defense Stockpile
    that does not meet the classification specified in subsection
    (a) may be sold only for remelting by a domestic ferroalloy
    producer unless the President determines that a domestic
    ferroalloy producer is not available to acquire the material.
      [(c) Domestic Ferroalloy Producer Defined.--For purposes of
    this section, the term ``domestic ferroalloy producer'' means a
    company or other business entity that, as determined by the
    President--
              [(1) is engaged in operations to upgrade manganese
            ores of metallurgical grade or manganese ferro; and
              [(2) conducts a significant level of its research,
            development, engineering, and upgrading operations in
            the United States.]
              * * * * * * *
                                  ----------

                          TITLE 5, UNITED STATES CODE

              * * * * * * *

                              PART III--EMPLOYEES

              * * * * * * *

                      SUBPART B--EMPLOYMENT AND RETENTION

              * * * * * * *

               CHAPTER 33--EXAMINATION, SELECTION, AND PLACEMENT

           SUBCHAPTER I--EXAMINATION, CERTIFICATION, AND APPOINTMENT

              * * * * * * *

    Sec. 3329. Appointments of military reserve technicians to positions in
                        the competitive service

      (a) For the purpose of this section, the term ``military
    reserve technician'' has the meaning given such term by section
    8401(30).
      (b) The Secretary of Defense shall take such steps as may be
    necessary to ensure that, except as provided in subsection (d),
    any military reserve technician who is involuntarily separated
    from technician service, after completing at least 15 years of
    such service and 20 years of service creditable under section
    1332 of title 10, by reason of ceasing to satisfy the condition
    described in section 8401(30)(B) shall, if appropriate written
    application is submitted within 1 year after the date of
    separation, be provided placement consideration in a position
    described in subsection (c) through a priority placement
    program of the Department of Defense [a position described in
    subsection (c)] not later than 6 months after the date of the
    application.
              * * * * * * *

                         SUBPART D--PAY AND ALLOWANCES

              * * * * * * *

                       CHAPTER 53--PAY RATES AND SYSTEMS

              * * * * * * *

                  SUBCHAPTER II--EXECUTIVE SCHEDULE PAY RATES

              * * * * * * *

    Sec. 5315. Positions at level IV

      Level IV of the Executive Schedule applies to the following
    positions, for which the annual rate of basic pay shall be the
    rate determined with respect to such level under chapter 11 of
    title 2, as adjusted by section 5318 of this title:
              Deputy Administrator of General Services.
              * * * * * * *
              Chief Information Officer, Department of the
            Interior.
              Chief Information Officer, Department of Justice.
              Chief Information Officer, Department of Labor.
              Chief Information Officer, Department of State.
              Chief Information Officer, Department of
            Transportation.
              Chief Information Officer, Department of the
            Treasury.
              * * * * * * *

    Sec. 5316. Positions at level V

      Level V of the Executive Schedule applies to the following
    positions, for which the annual rate of basic pay shall be the
    rate determined with respect to such level under chapter 11 of
    title 2, as adjusted by section 5318 of this title:
              Administrator, Bonneville Power Administration,
            Department of the Interior.
              Administrator of the National Capital Transportation
            Agency.
              * * * * * * *
              Assistant to the Secretary of Defense for [Atomic
            Energy] Nuclear and Chemical and Biological Defense
            Programs, Department of Defense.
              * * * * * * *

                   SUBCHAPTER III--GENERAL SCHEDULE PAY RATES

    Sec. 5334. Rate on change of position or type of appointment;
                        regulations

      (a) * * *
              * * * * * * *
      (d) The rate of pay established for a teaching position as
    defined by section 901 of title 20 held by an individual who
    becomes subject to subsection (a) of this section [is deemed
    increased by 20 percent] shall be increased by such amount as
    may be authorized, if any, under regulations issued by the
    Secretary of Defense, but not to exceed 20 percent, to
    determine the yearly rate of pay of the position.
              * * * * * * *

                         CHAPTER 55--PAY ADMINISTRATION

              * * * * * * *

                 SUBCHAPTER VII--PAYMENTS TO MISSING EMPLOYEES

    Sec. 5561. Definitions

      For the purpose of this subchapter--
              (1) * * *
              * * * * * * *
              (6) ``pay and allowances'' means--
                      (A) basic pay;
                      (B) special pay;
                      (C) incentive pay;
                      (D) [basic allowance for quarters] basic
                    allowance for housing;
                      (E) basic allowance for subsistence; and
                      (F) station per diem allowances for not more
                    than 90 days.
              * * * * * * *

              Chapter 57--Travel, Transportation, and Subsistence

       subchapter i--travel and subsistence expenses; mileage allowances

              * * * * * * *

    Sec. 5707a. Adherence to fire safety guidelines in establishing rates
                        and discounts for lodging expenses

      (a)(1) For the purpose of making payments under this chapter
    for lodging expenses incurred in a State, each agency shall
    ensure that not less than 90 percent of the commercial-lodging
    room nights for employees of that agency for a fiscal year are
    booked in approved places of public accommodation.
      (2) Each agency shall establish explicit procedures to
    satisfy the percentage requirement of paragraph (1).
      [(a)] (b) Studies or surveys for the purposes of establishing
    per diem rates for lodging expenses under this chapter shall be
    limited to [places of public accommodation that meet the
    requirements of the fire prevention and control guidelines
    described in section 29 of the Federal Fire Prevention and
    Control Act of 1974] approved places of public accommodation.
    The provisions of this subsection shall not apply with respect
    to studies and surveys that are conducted in any jurisdiction
    that is not a State [as defined in section 4 of the Federal
    Fire Prevention and Control Act of 1974].
      [(b)] (c) The Administrator of General Services may not
    include in any directory which lists lodging accommodations any
    hotel, motel, or other place of public accommodation that [does
    not meet the requirements of the fire prevention and control
    guidelines described in section 29 of the Federal Fire
    Prevention and Control Act of 1974] is not an approved place of
    public accommodation.
      [(c)] (d) The Administrator of General Services shall include
    in each directory which lists lodging accommodations a
    description of the access and safety devices, including
    appropriate emergency alerting devices, which each listed place
    of public accommodation provides for guests who are hearing-
    impaired or visually or physically handicapped.
      [(d)] (e) The Administrator of General Services may take any
    additional actions the Administrator determines appropriate to
    [encourage] facilitate the ability of employees traveling on
    official business to stay at [places of public accommodation
    that meet the requirements of the fire prevention and control
    guidelines described in section 29 of the Federal Fire
    Prevention and Control Act of 1974] approved places of public
    accommodation.
      (f) For purposes of this section:
              (1) The term ``agency'' does not include the
            government of the District of Columbia.
              (2) The term ``approved places of public
            accommodation'' means hotels, motels, and other places
            of public accommodation that are listed by the Federal
            Emergency Management Agency as meeting the requirements
            of the fire prevention and control guidelines described
            in section 29 of the Federal Fire Prevention and
            Control Act of 1974 (15 U.S.C. 2225).
              (3) The term ``State'' means any State, the District
            of Columbia, the Commonwealth of Puerto Rico, the
            Commonwealth of the Northern Mariana Islands, the Trust
            Territory of the Pacific Islands, the Virgin Islands,
            Guam, American Samoa, or any other territory or
            possession of the United States.
              * * * * * * *
                                  ----------

            NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 1991

              * * * * * * *

                DIVISION A--DEPARTMENT OF DEFENSE AUTHORIZATIONS

              * * * * * * *

                    TITLE XII--DEFENSE ACQUISITION WORKFORCE

              * * * * * * *

    SEC. 1205. DEFENSE ACQUISITION UNIVERSITY STRUCTURE

      (a) Establishment of Structure.--Not later than October 1,
    1991, the Secretary of Defense, acting through the [Under
    Secretary of Defense for Acquisition] Under Secretary of
    Defense for Acquisition and Technology, shall prescribe
    regulations for the initial structure for a defense acquisition
    university under section 1746 of title 10, United States Code
    (as added by section 1202). The regulations shall include the
    following:
              (1) * * *
              * * * * * * *
              (6) An appropriate centralized mechanism, under the
            [Under Secretary of Defense for Acquisition] Under
            Secretary of Defense for Acquisition and Technology, to
            control the allocation of resources for purposes of
            conducting mandatory acquisition courses and other
            training, education, and research activities to achieve
            the objectives of the university, such as funding for
            students to attend courses of instruction, funding to
            conduct the courses, and funding to pay instructor
            salaries.
              * * * * * * *

                         TITLE XIV--GENERAL PROVISIONS

              * * * * * * *

                      Part B--Naval Vessels and Shipyards

              * * * * * * *

    SEC. 1425. AUTHORIZATION FOR NAVAL SHIPYARDS AND AVIATION DEPOTS TO
                        ENGAGE IN DEFENSE-RELATED PRODUCTION AND SERVICES

      (a) * * *
              * * * * * * *
      (e) Expiration of Authority.--The authority provided by this
    section expires on [September 30, 1997] September 30, 1999.
              * * * * * * *

                DIVISION B--MILITARY CONSTRUCTION AUTHORIZATIONS

              * * * * * * *

               TITLE XXIX--DEFENSE BASE CLOSURES AND REALIGNMENTS

              * * * * * * *

        Part B--Other Provisions Relating to Defense Base Closures and
                                  Realignments

    SEC. 2921. CLOSURE OF FOREIGN MILITARY INSTALLATIONS

      (a) * * *
              * * * * * * *
      (e) Negotiations for Payments-in-Kind.--(1) * * *
      (3) * * *
              (B) the Committee on Armed Services, the Committee on
            Appropriations, and the Defense [Subcommittees]
            Subcommittee of the Committee on Appropriations of the
            Senate.
      (f) OMB Review of Proposed Settlements.--(1) * * *
      (2) Each year, the Secretary shall submit to [the Committees
    on Armed Services of the Senate and House of Representatives]
    the Committee on Armed Services of the Senate and the Committee
    on National Security of the House of Representatives a report
    on each proposed agreement of settlement that was not submitted
    by the Secretary to the Director of the Office of Management
    and Budget in the previous year under paragraph (1) because the
    value of the improvements to be released pursuant to the
    proposed agreement did not exceed $10,000,000.
      (g) * * *
              * * * * * * *
                                  ----------

            NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 1993

              * * * * * * *

                DIVISION A--DEPARTMENT OF DEFENSE AUTHORIZATIONS

              * * * * * * *

                      TITLE III--OPERATION AND MAINTENANCE

              * * * * * * *

                           Subtitle G--Other Matters

              * * * * * * *

    SEC. 386. ASSISTANCE TO LOCAL EDUCATIONAL AGENCIES THAT BENEFIT
                        DEPENDENTS OF MEMBERS OF THE ARMED FORCES AND
                        DEPARTMENT OF DEFENSE CIVILIAN EMPLOYEES.

      (a) * * *
              * * * * * * *
      (c) Eligible Local Educational Agencies.--A local educational
    agency is eligible for assistance under subsection (b) for a
    fiscal year if--
              (1) at least 20 percent (as rounded to the nearest
            whole percent) of the students in average daily
            attendance in the schools of that agency in that fiscal
            year are military dependent students counted under
            [section 8003(a)] section 8003(a)(1) of the Elementary
            and Secondary Education Act of 1965 [(20 U.S.C.
            7703(a))] (20 U.S.C. 7703(a)(1));
              (2) * * *
              * * * * * * *

      TITLE VIII--ACQUISITION POLICY, ACQUISITION MANAGEMENT, AND RELATED
                                    MATTERS

              * * * * * * *

                 Subtitle B--Acquisition Management Improvement

    SEC. 812. ACQUISITION WORKFORCE IMPROVEMENT.

      (a) * * *
              * * * * * * *
      (c) Fulfillment Standards for Mandatory Training.--(1) The
    Secretary of Defense, acting through the Under Secretary of
    Defense for Acquisition and Technology, shall develop
    fulfillment standards, and implement a program, for purposes of
    the training requirements of sections 1723, 1724, and 1735 of
    title 10, United States Code. Such fulfillment standards shall
    consist of criteria for determining whether an individual has
    demonstrated competence in the areas that would be taught in
    the training courses required under those sections. If an
    individual meets the appropriate fulfillment standard, the
    applicable training requirement is fulfilled.
      (2) * * *
              * * * * * * *

     DIVISION C--DEPARTMENT OF ENERGY NATIONAL SECURITY AUTHORIZATIONS AND
                              OTHER AUTHORIZATIONS

          TITLE XXXI--DEPARTMENT OF ENERGY NATIONAL SECURITY PROGRAMS

              * * * * * * *

                           Subtitle C--Other Matters

              * * * * * * *

    [SEC. 3134. REPORTS ON THE DEVELOPMENT OF NEW TRITIUM PRODUCTION
                        CAPACITY.

      [(a) Report by the Secretary of Energy.--(1) The Secretary of
    Energy shall annually submit to the congressional defense
    committees a report on the new tritium production capacity of
    the Department of Energy.
      [(2) The annual report shall include the following:
              [(A) An estimate of the date by which new production
            reactor capacity will be necessary in order to maintain
            the active and any reserve stockpile of nuclear weapons
            of the United States.
              [(B) An estimate of the date on which construction of
            such capacity should begin in order to maintain the
            active and any reserve stockpile.
              [(C) An assessment of the technical adequacy of the
            methods available for the production of tritium,
            including an assessment of the risk that each method
            may fail to produce tritium on a reliable basis within
            the period necessary for meeting the requirements of
            the United States.
              [(D) An assessment of the capability of the potential
            industrial suppliers of new tritium production
            capacity, including reactors, to design and construct
            such capacity by the date estimated pursuant to
            subparagraph (A).
      [(3) The Secretary shall submit the annual report in 1993 and
    each year thereafter until the construction of the new tritium
    production capacity is completed. The Secretary shall submit
    the report not later than 60 days after the date on which the
    President submits the budget to Congress under section 1105 of
    title 31, United States Code. The report shall be submitted in
    unclassified form with a classified appendix if necessary.
      [(b) Sense of Congress.--It is the sense of Congress that the
    technology chosen for new tritium production capacity shall be
    the technology that has the highest probability of successfully
    sustaining operation, the lowest risk of operational failure,
    and the lowest cost of construction and operation (including
    any revenues accruing to the United States from such
    operation).]
              * * * * * * *

                      Subtitle E--Defense Nuclear Workers

    SEC. 3161. DEPARTMENT OF ENERGY DEFENSE NUCLEAR FACILITIES WORKFORCE
                        RESTRUCTURING PLAN.

      (a) * * *
              * * * * * * *
      (c) Objectives.--In preparing the plan required under
    subsection (a), the Secretary shall be guided by the following
    objectives:
              (1) Changes in the workforce at a Department of
            Energy defense nuclear facility--
                      (A) should be accomplished so as to minimize
                    social and economic impacts; and
                      [(B) should be made only after the provision
                    of notice of such changes not later than 120
                    days before the commencement of such changes to
                    such employees and the communities in which
                    such facilities are located; and]
                      (C) should be accomplished, when possible,
                    through the use of retraining, early
                    retirement, attrition, and other options that
                    minimize layoffs.
              * * * * * * *
      [(e) Plan Updates.--Not later than one year after issuing a
    plan referred to in subsection (a) and on an annual basis
    thereafter, the Secretary shall issue an update of the plan.
    Each updated plan under this subsection shall--
              [(1) be guided by the objectives referred to in
            subsection (c), taking into account any changes in the
            function or mission of the Department of Energy defense
            nuclear facilities and any other changes in
            circumstances that the Secretary determines to be
            relevant;
              [(2) contain an evaluation by the Secretary of the
            implementation of the plan during the year preceding
            the report; and
              [(3) contain such other information and provide for
            such other matters as the Secretary determines to be
            relevant.
      [(f) Submittal to Congress.--(1) The Secretary shall submit
    to Congress a plan referred to in subsection (a) with respect
    to a defense nuclear facility within 90 days after the date on
    which a notice of changes described in subsection (c)(1)(B) is
    provided to employees of the facility, or 90 days after the
    date of the enactment of this Act, whichever is later.
      [(2) The Secretary shall submit to Congress any updates of
    the plan under subsection (e) immediately upon completion of
    any such update.]
      (e) Treatment of Federal Employees.--This section does not
    apply to employees of the Department of Energy.
              * * * * * * *

    DIVISION D--DEFENSE CONVERSION, REINVESTMENT, AND TRANSITION ASSISTANCE

              * * * * * * *

       TITLE XLIV--PERSONNEL ADJUSTMENT, EDUCATION, AND TRAINING PROGRAMS

              * * * * * * *

     Subtitle F--Job Training and Employment and Educational Opportunities

              * * * * * * *

    SEC. 4471. NOTICE TO CONTRACTORS AND EMPLOYEES UPON PROPOSED AND ACTUAL
                        TERMINATION OR SUBSTANTIAL REDUCTION IN MAJOR
                        DEFENSE PROGRAMS.

      (a) * * *
              * * * * * * *
      (e) Loss of Eligibility.--An employee who receives a notice
    of withdrawal or cancellation of the termination of, or a
    substantial reduction in, contract funding shall not be
    eligible for training, adjustment assistance, and employment
    services under section 325 or 325A of the Job Training
    Partnership Act (29 U.S.C. 1662d, 1662d-1) beginning on the
    date on which the employee receives the notice.
              * * * * * * *
                                  ----------

                          TITLE 37, UNITED STATES CODE

              * * * * * * *

                             CHAPTER 1--DEFINITIONS

    Sec.

    101. Definitions.
         * * * * * * *

    Sec. 101. Definitions

      In addition to the definitions in sections 1-5 of title 1,
    the following definitions apply in this title:
              (1) * * *
              * * * * * * *
              (25) The term ``regular compensation'' or ``regular
            military compensation (RMC)'' means the total of the
            following elements that a member of a uniformed service
            accrues or receives, directly or indirectly, in cash or
            in kind every payday: basic pay, [basic allowance for
            quarters (including any variable housing allowance or
            station housing allowance)] basic allowance for
            housing, basic allowance for subsistence, and Federal
            tax advantage accruing to the aforementioned allowances
            because they are not subject to Federal income tax.
              * * * * * * *

                              CHAPTER 3--BASIC PAY

              * * * * * * *

    Sec. 204. Entitlement

      (a) * * *
              * * * * * * *
      (g)(1) A member of a reserve component of a uniformed service
    is entitled, to the pay and allowances provided by law or
    regulation for a member of a regular component of a uniformed
    service of corresponding grade and length of service whenever
    such member is physically disabled as the result of an injury,
    illness, or disease incurred or aggravated--
              (A) * * *
              * * * * * * *
              (D) in line of duty while remaining overnight
            immediately before the commencement of inactive-duty
            training, or while remaining overnight, between
            successive periods of inactive-duty training, at or in
            the vicinity of the site of the inactive-duty training,
            if the site is outside reasonable commuting distance
            from the member's residence.
              * * * * * * *
      (h)(1) A member of a reserve component of a uniformed service
    who is physically able to perform his military duties, is
    entitled, upon request, to a portion of the monthly pay and
    allowances provided by law or regulation for a member of a
    regular component of a uniformed service of corresponding grade
    and length of service for each month for which the member
    demonstrates a loss of earned income from nonmilitary
    employment or self-employment as a result of an injury,
    illness, or disease incurred or aggravated--
              (A) * * *
              * * * * * * *
              (D) in line of duty while remaining overnight
            immediately before the commencement of inactive-duty
            training, or while remaining overnight, between
            successive periods of inactive-duty training, at or in
            the vicinity of the site of the inactive-duty training,
            if the site is outside reasonable commuting distance
            from the member's residence.
              * * * * * * *

    Sec. 205. Computation: service creditable

      (a) * * *
              * * * * * * *
      (d) Notwithstanding subsection (a), a commissioned officer
    may not count in computing basic pay a period of service after
    October 13, 1964, that the officer performed concurrently as a
    member of the Senior Reserve Officers' Training Corps, except
    for service that the officer performed on or after August 1,
    1979[.], other than for training as an enlisted member of the
    Selected Reserve may be so counted.
              * * * * * * *

    Sec. 206. Reserves; members of National Guard: inactive-duty training

      (a) Under regulations prescribed by the Secretary concerned,
    and to the extent provided for by appropriations, a member of
    the National Guard or a member of a reserve component of a
    uniformed service who is not entitled to basic pay under
    section 204 of this title, is entitled to compensation, at the
    rate of \1/30\ of the basic pay authorized for a member of a
    uniformed service of a corresponding grade entitled to basic
    pay--
              (1) * * *
              * * * * * * *
              (3) for a regular period of instruction that the
            member is scheduled to perform but is unable to perform
            because of physical disability resulting from an
            injury, illness, or disease incurred or aggravated--
                      (A) * * *
              * * * * * * *
                      (C) in line of duty while remaining overnight
                    immediately before the commencement of
                    inactive-duty training, or while remaining
                    overnight, between successive periods of
                    inactive-duty training, at or in the vicinity
                    of the site of the inactive-duty training, if
                    the site is outside reasonable commuting
                    distance from the member's residence.
              * * * * * * *

                     CHAPTER 5--SPECIAL AND INCENTIVE PAYS

    Sec.

    301.  Incentive pay: hazardous duty.
         * * * * * * *
    301e.  Multiyear retention bonus: dental officers of the armed forces.
         * * * * * * *
    [305.  Special pay: while on duty at certain places.]
    305.  Special pay: hardship duty location pay.
         * * * * * * *
    [314.  Special pay: qualified enlisted members extending duty at
              designated locations overseas.]
    314.  Special pay or bonus: qualified enlisted members extending duty at
              designated locations overseas.
         * * * * * * *

    Sec. 301. Incentive pay: hazardous duty

          (a) * * *
      (b) For the performance of the hazardous duty described in
    clause (1) of subsection (a), a member is entitled to monthly
    incentive pay as follows:

    Pay grade:                                                  Monthly Rate
        O-10......................................................$[110] 150
        O-9....................................................... [110] 150
        O-8....................................................... [110] 150
        O-7....................................................... [110] 150
        O-6.......................................................       250
        O-5.......................................................       250
        O-4.......................................................       225
        O-3.......................................................       175
        O-2.......................................................       150
        O-1....................................................... [125] 150
        W-5.......................................................       250
        W-4.......................................................       250
        W-3.......................................................       175
        W-2.......................................................       150
        W-1....................................................... [125] 150
        E-9.......................................................       200
        E-8.......................................................       200
        E-7.......................................................       200
        E-6.......................................................       175
        E-5.......................................................       150
        E-4....................................................... [125] 150
        E-3....................................................... [110] 150
        E-2....................................................... [110] 150
        E-1....................................................... [110] 150

        (c)(1) For the performance of hazardous duty described in
    clauses (2) through (10) of subsection (a), a member is
    entitled to [$110] $150 a month. However, a member performing
    hazardous duty described in clause (3) of that subsection who
    also performs as an essential part of such duty parachute
    jumping in military free fall operations involving parachute
    deployment by the jumper without the use of a static line is
    entitled to [$165] $225 a month.
      (2)(A) For the performance of hazardous duty described in
    clause (11) of subsection (a), a member is entitled to monthly
    incentive pay based upon his years of service as an air weapons
    controller as follows:

                                                     Years of service as an air weapons controller
                                  ----------------------------------------------------------------------------------
              Pay grade              2 or
                                     less     Over 2    Over 3    Over 4    Over 6    Over 8    Over 10
    O-7 and above................      $200      $200      $200      $200      $200      $200      $200
    O-6..........................       225       250       300       325       350       350       350
    O-5..........................       200       250       300       325       350       350       350
    O-4..........................       175       225       275       300       350       350       350
    O-3..........................     [125]
                                        150       156       188       206       350       350       350
    O-2..........................     [125]
                                        150       156       188       206       250       300       300
    O-1..........................     [125]
                                        150       156       188       206       250       250       250
    W-4..........................       200       225       275       300       325       325       325
    W-3..........................       175       225       275       300       325       325       325
    W-2..........................       150       200       250       275       325       325       325
    W-1..........................     [100]
                                        150     [125]
                                                  150       150       175       325       325       325
    E-9..........................       200       225       250       275       300       300       300
    E-8..........................       200       225       250       275       300       300       300
    E-7..........................       175       200       225       250       275       275       275
    E-6..........................       156       175       200       225       250       250       250
    E-5..........................     [125]
                                        150       156       175       188       200       200       200
    E-4 and below................     [125]
                                        150       156       175       188       200       200       200
                                  ----------------------------------------------------------------------------------

                                                 Years of service as an air weapons controller--Continued
          Pay grade--Continued       -------------------------------------------------------------------------------
                                       Over 12   Over 14   Over 16   Over 18   Over 20   Over 22   Over 24   Over 25
    O-7 and above...................      $200      $200      $200      $200      $200      $200      $200    $[110]
                                                                                                                 150
    O-6.............................       350       350       350       350       300       250       250       225
    O-5.............................       350       350       350       350       300       250       250       225
    O-4.............................       350       350       350       350       300       250       250       225
    O-3.............................       350       350       350       300       275       250       225       200
    O-2.............................       300       300       300       275       245       210       200       180
    O-1.............................       250       250       250       245       210       200       180       150
    W-4.............................       325       325       325       325       276       250       225       200
    W-3.............................       325       325       325       325       325       250       225       200
    W-2.............................       325       325       325       325       275       250       225       200
    W-1.............................       325       325       325       325       275       250       225       200
    E-9.............................       300       300       300       300       275       230       200       200
    E-8.............................       300       300       300       300       265       230       200       200
    E-7.............................       300       300       300       300       265       230       200       200
    E-6.............................       300       300       300       300       265       230       200       200
    E-5.............................       250       250       250       250       225       200       175       150
    E-4 and below...................       200       200       200       200       175       150     [125]
                                                                                                       150     [125]
                                                                                                                 150
                                     -------------------------------------------------------------------------------

              * * * * * * *

    Sec. 301b. Special pay: aviation career officers extending period of
                        active duty

          (a) Bonus Authorized.--An aviation officer described in
    subsection (b) who, during the period beginning on January 1,
    1989, and ending on September 30, [1998,] 1999, executes a
    written agreement to remain on active duty in aviation service
    for at least one year may, upon the acceptance of the agreement
    by the Secretary concerned, be paid a retention bonus as
    provided in this section.
              * * * * * * *

    Sec. 301e. Multiyear retention bonus: dental officers of the armed
                        forces

      (a) Bonus Authorized.--(1) A dental officer described in
    subsection (b) who executes a written agreement to remain on
    active duty for two, three, or four years after completion of
    any other active-duty service commitment may, upon acceptance
    of the written agreement by the Secretary of the military
    department concerned, be paid a retention bonus as provided in
    this section.
      (2) The amount of a retention bonus under paragraph (1) may
    not exceed $14,000 for each year covered by a four-year
    agreement. The maximum yearly retention bonus for two-year and
    three-year agreements shall be reduced to reflect the shorter
    service commitment.
      (b) Officers Automatically Eligible.--Subsection (a) applies
    to an officer of the armed forces who--
              (1) is an officer of the Dental Corps of the Army or
            the Navy or an officer of the Air Force designated as a
            dental officer;
              (2) has a dental specialty in oral and maxillofacial
            surgery;
              (3) is in a pay grade below pay grade 0-7;
              (4) has at least eight years of creditable service
            (computed as described in section 302b(g) of this
            title) or has completed any active-duty service
            commitment incurred for dental education and training;
            and
              (5) has completed initial residency training (or will
            complete such training before September 30 of the
            fiscal year in which the officer enters into an
            agreement under subsection (a)).
      (c) Extension of Bonus to Other Dental Officers.--At the
    discretion of the Secretary of the military department
    concerned, the Secretary may enter into a written agreement
    described in subsection (a)(1) with a dental officer who does
    not have the dental specialty specified in subsection (b)(2),
    and pay a retention bonus to such an officer as provided in
    this section, if the officer otherwise satisfies the
    eligibility requirements specified in subsection (b). The
    Secretaries shall exercise the authority provided in this
    section in a manner consistent with regulations prescribed by
    the Secretary of Defense.
      (d) Refunds.--(1) Refunds shall be required, on a pro rata
    basis, of sums paid under this section if the officer who has
    received the payment fails to complete the total period of
    active duty specified in the agreement, as conditions and
    circumstances warrant.
      (2) An obligation to reimburse the United States imposed
    under paragraph (1) is for all purposes a debt owed to the
    United States.
      (3) A discharge in bankruptcy under title 11, United States
    Code, that is entered less than five years after the
    termination of an agreement under this section does not
    discharge the member signing such agreement from a debt arising
    under such agreement or under paragraph (1). This paragraph
    applies to any case commenced under title 11 after the date of
    the enactment of the National Defense Authorization Act for
    Fiscal Year 1998.
              * * * * * * *

    Sec. 302b. Special pay: dental officers of the armed forces

      (a) Variable, Additional, and Board Certification Special
    Pay.--(1) * * *
      (2) An officer described in paragraph (1) who is serving in a
    pay grade below pay grade O-7 is entitled to variable special
    pay at the following rates:
              (A) * * *
              * * * * * * *
              [(C) $7,000 per year, if the officer has at least six
            but less than 10 years of creditable service.
              [(D) $6,000 per year, if the officer has at least 10
            but less than 14 years of creditable service.
              [(E) $4,000 per year, if the officer has at least 14
            but less than 18 years of creditable service.
              [(F) $3,000 per year, if the officer has 18 or more
            years of creditable service.]
              (C) $7,000 per year, if the officer has at least six
            but less than eight years of creditable service.
              (D) $12,000 per year, if the officer has at least
            eight but less than 12 years of creditable service.
              (E) $10,000 per year, if the officer has at least 12
            but less than 14 years of creditable service.
              (F) $9,000 per year, if the officer has at least 14
            but less than 18 years of creditable service.
              (G) $8,000 per year, if the officer has 18 or more
            years of creditable service.
      (3) An officer described in paragraph (1) who is serving in a
    pay grade above pay grade O-6 is entitled to variable special
    pay at the rate of [$1,000] $7,000 per year.
      (4) Subject to subsection (b), an officer entitled to
    variable special pay under paragraph (2) or (3) is entitled to
    additional special pay for any 12-month period during which the
    officer is not undergoing dental internship or residency
    training. Such additional special pay shall be paid at the
    following rates:
              (A) $4,000 per year, if the officer has less than
            three years of creditable service.
              [(B) $6,000 per year, if the officer has at least
            three but less than 14 years of creditable service.
              [(C) $8,000 per year, if the officer has at least 14
            but less than 18 years of creditable service.
              [(D) $10,000 per year, if the officer has at least 18
            or more years of creditable service.]
              (B) $6,000 per year, if the officer has at least
            three but less than 10 years of creditable service.
              (C) $15,000 per year, if the officer has 10 or more
            years of creditable service.
              * * * * * * *

    Sec. 302d. Special pay: accession bonus for registered nurses

          (a) Accession Bonus Authorized.--(1) A person who is a
    registered nurse and who, during the period beginning on
    November 29, 1989, and ending on September 30, [1998] 1999,
    executes a written agreement described in subsection (c) to
    accept a commission as an officer and remain on active duty for
    a period of not less than four years may, upon the acceptance
    of the agreement by the Secretary concerned, be paid an
    accession bonus in an amount determined by the Secretary
    concerned.
              * * * * * * *

    Sec. 302e. Special pay: nurse anesthetists

          (a) Special Pay Authorized.--(1) An officer described in
    subsection (b)(1) who, during the period beginning on November
    29, 1989, and ending on September 30, [1998] 1999, executes a
    written agreement to remain on active duty for a period of one
    year or more may, upon the acceptance of the agreement by the
    Secretary concerned, be paid incentive special pay in an amount
    not to exceed $15,000 for any 12-month period.
              * * * * * * *

    Sec. 302g. Special pay: Selected Reserve health care professionals in
                        critically short wartime specialties

      (a) * * *
              * * * * * * *
      (f) Termination of Agreement Authority.--No agreement under
    this section may be entered into after September 30, [1998]
    1999.
              * * * * * * *

    [Sec. 305. Special pay: while on duty at certain places

      [(a) Except as provided by subsections (b) and (c), under
    regulations prescribed by the President, an enlisted member of
    a uniformed service who is entitled to basic pay may, while on
    duty at a designated place outside the 48 contiguous States and
    the District of Columbia, be paid special pay at the following
    monthly rates:

                                                                     Monthly
    [Pay grade:                                                         rate
        E-9...........................................................$22.50
        E-8........................................................... 22.50
        E-7........................................................... 22.50
        E-6........................................................... 20.00
        E-5........................................................... 16.00
        E-4........................................................... 13.00
        E-3...........................................................  9.00
        E-2...........................................................  8.00
        E-1........................................................... 8.00]

    Sec. 305. Special pay: hardship duty location pay

      (a) Special Pay Authorized.--A member of a uniformed service
    who is entitled to basic pay may be paid special pay under this
    section at a monthly rate not to exceed $300 while the member
    is on duty at a location in the United States or outside the
    United States designated by the Secretary of Defense as a
    hardship duty location.
      (b) Exception for Certain Members Serving in Certain
    Locations.--Appropriations of the Department of Defense may not
    be paid, [as foreign duty pay] as hardship duty location pay
    under subsection (a), to a member of a uniformed service who is
    a resident of a State, Puerto Rico, the Virgin Islands, a
    possession, or a foreign country and who is serving in that
    State, Puerto Rico, the Virgin Islands, that possession, or
    that foreign country, as the case may be.
      (c) Exception for Members Receiving Career Sea Pay.--A member
    receiving special pay under section 305a of this title may not
    be paid [special pay under this section] hardship duty location
    pay under subsection (a) for the same period of service.
      (d) Regulations.--The Secretary of Defense shall prescribe
    regulations for the provision of hardship duty location pay
    under subsection (a), including the actual monthly rates at
    which the special pay will be available.

    Sec. 305a. Special pay: career sea pay

      (a) * * *
              * * * * * * *
      (d)(1) In this section, the term ``sea duty'' means duty
    performed by a member--
              (A) while permanently or temporarily assigned to a
            ship[, ship-based staff, or ship-based aviation unit]
            and--
                      (i) while serving on a ship the primary
                    mission of which is accomplished while under
                    way;
                      (ii) while serving as a member of the off-
                    crew of a two-crewed submarine; or
                      (iii) while serving as a member of a tender-
                    class ship (with the hull classification of
                    submarine or destroyer); or
              (B) while permanently or temporarily assigned to a
            ship [or ship-based staff] and while serving on a ship
            the primary mission of which is normally accomplished
            while in port, but only during a period that the ship
            is away from its homeport.
      (2) The Secretary concerned may designate duty performed by a
    member while serving on a ship the primary mission of which is
    accomplished either while under way or in port as ``sea duty''
    for purposes of this section, even though the duty is performed
    while the member is permanently or temporarily assigned to a
    ship-based staff or other unit not covered by paragraph (1).
      [(2)] (3) For the purpose of determining the years of sea
    duty with which a member may be credited for purposes of this
    section, the term ``sea duty'' also includes duty performed
    after December 31, 1988, by a member while permanently or
    temporarily assigned to a ship or ship-based staff and while
    serving on a ship on which the member would be entitled, during
    a period that the ship is away from its homeport, to receive
    sea pay by reason of paragraph (1)(B).
      [(3)] (4) A ship shall be considered to be away from its
    homeport for purposes of this subsection when it is--
              (A) at sea; or
              (B) in a port that is more than 50 miles from its
            homeport.
              * * * * * * *

    Sec. 308. Special pay: reenlistment bonus

      (a) * * *
              * * * * * * *
      (g) No bonus shall be paid under this section with respect to
    any reenlistment, or voluntary extension of an active-duty
    reenlistment, in the armed forces entered into after September
    30, [1998] 1999.

    Sec. 308a. Special pay: enlistment bonus

      (a) * * *
              * * * * * * *
      (c) No bonus shall be paid under this section with respect to
    any enlistment or extension of an initial period of active duty
    in the armed forces made after September 30, [1998] 1999.

    Sec. 308b. Special pay: reenlistment bonus for members of the Selected
                        Reserve

      (a) An enlisted member of a reserve component who--
              (1) has completed less than [ten] 14 years of total
            military service; and
              (2) reenlists or voluntarily extends his enlistment
            for a period of three years or for a period of six
            years in a designated military skill, or in a
            designated unit, as determined by the Secretary
            concerned, in the Selected Reserve of the Ready Reserve
            of an armed force;
    may be paid a bonus as provided in subsection (b).
      [(b) The bonus to be paid under subsection (a) shall be--
              [(1) an initial payment of--
                      [(A) an amount not to exceed $1,250, in the
                    case of a member who reenlists or voluntarily
                    extends his enlistment for a period of three
                    years; or
                      [(B) an amount not to exceed $2,500, in the
                    case of a member who reenlists or voluntarily
                    extends his enlistment for a period of six
                    years; and
              [(2) a subsequent payment of an amount not to exceed
            $416.66 upon the completion of each year of the period
            of such reenlistment or extension of enlistment during
            which such member has satisfactorily participated in
            training with his unit.
      [(c) No member shall be paid more than one bonus under this
    section.
      [(d) A member who fails to participate satisfactorily in
    training with his unit during a term of enlistment for which a
    bonus is being paid to him under this section shall refund an
    amount equal to the amount by which the amount of such bonus
    exceeds the product of--
              [(1) the number of months during that term of
            enlistment during which such member participated
            satisfactorily in training with his unit; and
              [(2) $69.44.]
      (b)(1) The amount of a bonus under this section may not
    exceed--
              (A) $2,500, in the case of a member who reenlists or
            extends an enlistment for a period of three years; and
              (B) $5,000, in the case of a member who reenlists or
            extends an enlistment for a period of six years.
      (2) The bonus shall be paid according to a payment schedule
    determined by the Secretary concerned, except that the initial
    payment to a member may not exceed one-half the total bonus
    amount for the member.
      (c) A member may not be paid more than one six-year bonus or
    two three-year bonuses under this section.
      (d) A member who receives a bonus under this section and who
    fails, during the period for which the bonus was paid, to serve
    satisfactorily in the element of the Selected Reserve of the
    Ready Reserve with respect to which the bonus was paid shall
    refund to the United States an amount that bears the same
    relation to the amount of the bonus paid to the member as the
    period that the member failed to serve satisfactorily bears to
    the total period for which the bonus was paid.
              * * * * * * *

    Sec. 308d. Special pay: enlisted members of the Selected Reserve
                        assigned to certain high priority units

          (a) * * *
              * * * * * * *
          (c) Additional compensation may not be paid under this
    section for inactive duty performed after September 30, [1998]
    1999.

    Sec. 308e. Special pay: bonus for reserve affiliation agreement

      (a) * * *
              * * * * * * *
      (e) No bonus may be paid under this section to any person for
    a reserve obligation agreement entered into after September 30,
    [1998] 1999.

    Sec. 308f. Special pay: bonus for enlistment in the Army

      (a) * * *
              * * * * * * *
      (c) No bonus may be paid under this section with respect to
    an enlistment in the Army after September 30, [1998] 1999.
              * * * * * * *

    Sec. 308h. Special pay: bonus for reenlistment, enlistment, or
                        voluntary extension of enlistment in elements of
                        the Ready Reserve other than the Selected Reserve

      (a) * * *
              * * * * * * *
      (g) A bonus may not be paid under this section to any person
    for a reenlistment, enlistment, or voluntary extension of an
    enlistment after September 30, [1998] 1999.

    Sec. 308i. Special pay: prior service enlistment bonus

      (a)(1) A person who is a former enlisted member of an armed
    force who enlists in the Selected Reserve of the Ready Reserve
    of an armed force for a period of three or six years in a
    critical military skill designated for such a bonus by the
    Secretary concerned and who meets the requirements of paragraph
    (2) may be paid a bonus as prescribed in subsection (b).
      (2) A bonus may only be paid under this section to a person
    who--
              [(A) has completed his military service obligation
            but has less than 10 years of total military service;]
              (A) has completed a military obligation but has less
            than 14 years of total military service;
              * * * * * * *
      [(b) The bonus to be paid under subsection (a) shall be--
              [(1) an initial payment of--
                      [(A) an amount not to exceed $1,250, in the
                    case of a member who enlists for a period of
                    three years; or
                      [(B) an amount not to exceed $2,500, in the
                    case of a member who enlists for a period of
                    six years; and
              [(2) a subsequent payment of an amount not to exceed
            $416.66 upon the completion of each year of the period
            of such reenlistment or extension of enlistment during
            which such member has satisfactorily participated in
            unit training.
      [(c) A member may not be paid more than one bonus under this
    section and may not be paid a bonus under this section unless
    the specialty associated with the position the member is
    projected to occupy is a specialty in which the member
    successfully served while on active duty and attained a level
    of qualification commensurate with the member's grade and years
    of service.]
      (b)(1) The amount of a bonus under this section may not
    exceed--
              (A) $2,500, in the case of a person who enlists for a
            period of three years; and
              (B) $5,000, in the case of a person who enlists for a
            period of six years.
      (2) The bonus shall be paid according to a payment schedule
    determined by the Secretary concerned, except that the initial
    payment to a person may not exceed one-half the total bonus
    amount for the person.
      (c)(1) A person may not be paid more than one six-year bonus
    or two three-year bonuses under this section.
      (2) A person may not be paid a bonus under this section
    unless the specialty associated with the position the person is
    projected to occupy as a member of the Selected Reserve is a
    specialty in which--
              (A) the person successfully served while a member on
            active duty; and
              (B) the person attained a level of qualification
            while a member commensurate with the grade and years of
            service of the member.
              * * * * * * *
      (i) No bonus may be paid under this section to any person for
    an enlistment after September 30, [1998] 1999.
              * * * * * * *

    Sec. 312. Special pay: nuclear-qualified officers extending period of
                        active duty

      (a) * * *
              * * * * * * *
      (e) The provisions of this section shall be effective only in
    the case of officers who, on or before September 30, [1998]
    1999, execute the required written agreement to remain in
    active service.
              * * * * * * *

    Sec. 312b. Special pay: nuclear career accession bonus

      (a) * * *
              * * * * * * *
      (c) The provisions of this section shall be effective only in
    the case of officers who, on or before September 30, [1998]
    1999, have been accepted for training for duty in connection
    with the supervision, operation, and maintenance of naval
    nuclear propulsion plants.
              * * * * * * *

    Sec. 312c. Special pay: nuclear career annual incentive bonus

      (a) * * *
              * * * * * * *
      (d) For the purposes of this section, a ``nuclear service
    year'' is any fiscal year beginning before October 1, [1998]
    1999.
              * * * * * * *

    [Sec. 314. Special pay: qualified enlisted members extending duty at
                        designated locations overseas

      [(a) Under regulations prescribed by the Secretary concerned,
    an enlisted member of an armed force who--
              [(1) is entitled to basic pay;
              [(2) has a specialty that is designated by the
            Secretary concerned for the purposes of this section;
              [(3) has completed a tour of duty (as defined in
            accordance with regulations prescribed by the Secretary
            concerned) at a location outside the 48 contiguous
            States and the District of Columbia that is designated
            by the Secretary concerned for the purposes of this
            section; and
              [(4) at the end of that tour of duty executes an
            agreement to extend that tour for a period of not less
            than one year;
    is entitled, upon acceptance of the agreement providing for
    such extension by the Secretary concerned, to special pay for
    duty performed during the period of the extension at a rate of
    not more than $80 per month, as prescribed by the Secretary
    concerned.
      [(b) A member who elects to receive rest and recuperative
    absence or transportation at Government expense, or any
    combination thereof, under section 705 of title 10 is not
    entitled to the special pay authorized by this section for the
    period of extension of duty for which the rest and recuperative
    absence or transportation is authorized.]

    Sec. 314. Special pay or bonus: qualified enlisted members extending
                        duty at designated locations overseas

      (a) Covered Members.--This section applies with respect to an
    enlisted member of an armed force who--
              (1) is entitled to basic pay;
              (2) has a specialty that is designated by the
            Secretary concerned for the purposes of this section;
              (3) has completed a tour of duty (as defined in
            accordance with regulations prescribed by the Secretary
            concerned) at a location outside the 48 contiguous
            States and the District of Columbia that is designated
            by the Secretary concerned for the purposes of this
            section; and
              (4) at the end of that tour of duty executes an
            agreement to extend that tour for a period of not less
            than one year.
      (b) Special Pay or Bonus Authorized.--Under regulations
    prescribed by the Secretary concerned, an enlisted member
    described in subsection (a) is entitled, upon acceptance by the
    Secretary concerned of the agreement providing for extension of
    the member's tour of duty, to either--
              (1) special pay for duty performed during the period
            of the extension at a rate of not more than $80 per
            month, as prescribed by the Secretary concerned; or
              (2) a bonus of up to $2,000 per year, as prescribed
            by the Secretary concerned, for specialty requirements
            at designated locations.
      (c) Selection and Payment of Special Pay or Bonus.--Not later
    than the date on which the Secretary concerned accepts an
    agreement described in subsection (a)(4) providing for the
    extension of a member's tour of duty, the Secretary concerned
    shall notify the member regarding whether the member will
    receive special pay or a bonus under this section. The payment
    rate for the special pay or bonus shall be fixed at the time of
    the agreement and may not be changed during the period of the
    extended tour of duty. The Secretary concerned may pay a bonus
    under this section either in a lump sum or installments.
      (d) Repayment of Bonus.--(1) If a member who receives all or
    part of a bonus under this section fails to complete the total
    period of extension specified in the agreement described in
    subsection (a)(4), the Secretary concerned may require the
    member to repay the United States, on a pro rata basis and to
    the extent that the Secretary determines conditions and
    circumstances warrant, amounts paid to the member under this
    section.
      (2) An obligation to repay the United States imposed under
    paragraph (1) is for all purposes a debt owed to the United
    States.
      (3) A discharge in bankruptcy under title 11 that is entered
    less than five years after the termination of the agreement
    does not discharge the member signing the agreement from a debt
    arising under the agreement or under paragraph (1). This
    paragraph applies to any case commenced under title 11 on or
    after October 1, 1997.
      (e) Effect of Rest and Recuperative Absence.--A member who
    elects to receive one of the benefits specified in section
    705(b) of title 10 as part of the extension of a tour of duty
    is not entitled to the special pay or bonus authorized by this
    section for the period of the extension of duty for which the
    benefit under such section is provided.
              * * * * * * *

                             CHAPTER 7--ALLOWANCES

    Sec.

    401.  Definitions.
    402.  Basic allowance for subsistence.
    [403.  Basic allowance for quarters.
    [403a.   Variable housing allowance.]
    403.  Basic allowance for housing.
         * * * * * * *

    [Sec. 402. Basic allowance for subsistence

      [(a) Except as otherwise provided by law, each member of a
    uniformed service who is entitled to basic pay is entitled to a
    basic allowance for subsistence as set forth in this section.
      [(b)(1) An enlisted member is entitled to the basic allowance
    for subsistence on a daily basis, of one of the following
    types--
              [(A) when rations in kind are not available;
              [(B) when permission to mess separately is granted;
            and
              [(C) when assigned to duty under emergency conditions
            where no messing facilities of the United States are
            available.
      [(2) The allowance to an enlisted member, when authorized,
    may be paid in advance for a period of not more than three
    months. An enlisted member is entitled to the allowance while
    on an authorized leave of absence, while confined in a
    hospital, or while performing travel under orders away from his
    designated post of duty other than field duty or sea duty. The
    allowance for an enlisted member who is authorized to receive
    the basic allowance for subsistence under this subsection is at
    the rate prescribed in accordance with section 1009 of this
    title or as otherwise prescribed by law.
      [(3) Unless he is entitled to basic pay under chapter 3 of
    this title, an enlisted member of a reserve component of a
    uniformed service, or of the National Guard, is entitled, in
    the discretion of the Secretary concerned, to rations in kind,
    or a part thereof, when the instruction or duty periods,
    described in section 206(a) of this title, total at least eight
    hours in a calendar day. The Secretary concerned may provide an
    enlisted member who could be provided rations in kind under the
    preceding sentence with a commutation when rations in kind are
    not available.
      [(4) In the case of enlisted members of the Army, Navy, Air
    Force, or Marine Corps who, when present at their permanent
    duty station, reside without dependents in Government quarters,
    the Secretary concerned may not provide a basic allowance for
    subsistence to more than 12 percent of such members under the
    jurisdiction of the Secretary concerned. The Secretary
    concerned may exceed such percentage if the Secretary
    determines that compliance would increase costs to the
    Government, would impose financial hardships on members
    otherwise entitled to a basic allowance for subsistence, or
    would reduce the quality of life for such members. This
    paragraph shall not apply to members described in the first
    sentence when the members are not residing at their permanent
    duty station. The Secretary concerned shall achieve the
    percentage limitation specified in this paragraph as soon as
    possible after the date of the enactment of this paragraph, but
    in no case later than September 30, 1996.
      [(c) An officer of a uniformed service who is entitled to
    basic pay is, at all times, entitled to the basic allowances
    for subsistence at the monthly rate prescribed in accordance
    with section 1009 of this title. An aviation cadet of the Navy,
    Air Force, Marine Corps, or Coast Guard is entitled to the same
    basic allowance for subsistence as is provided for an officer
    of the Navy, Air Force, Marine Corps, or Coast Guard,
    respectively.
      [(d) Under regulations and in areas prescribed by the
    Secretary of Defense and the Secretary of Transportation with
    respect to the Coast Guard when it is not operating as a
    service in the Navy, an enlisted member who is granted
    permission to mess separately, and whose duties require him to
    buy at least one meal from other than a messing facility of the
    United States, is entitled to not more than the pro rata
    allowance authorized for each such meal for an enlisted member
    when rations in kind are not available.
      [(e)(1) The President may prescribe regulations for the
    administration of this section, including definitions of the
    terms ``field duty'' and ``sea duty'' for the purposes of
    subsection (b)(2).
      [(2) For purposes of subsection (b)(2), a member shall not be
    considered to be performing travel under orders away from his
    designated post of duty if such member--
              [(A) is an enlisted member serving his first tour of
            active duty;
              [(B) has not actually reported to a permanent duty
            station pursuant to orders directing such assignment;
            and
              [(C) is not actually traveling between stations
            pursuant to orders directing a change of station.

    [Sec. 403. Basic allowance for quarters

      [(a)(1) Except as otherwise provided by law, a member of a
    uniformed service who is entitled to basic pay is entitled to a
    basic allowance for quarters at the monthly rates prescribed in
    accordance with section 1009 of this title or as otherwise
    prescribed by law, according to the pay grade in which he is
    assigned or distributed for basic pay purposes. The allowance
    authorized by this section may be paid in advance.
      [(2) A member of a uniformed service with dependents is not
    entitled to a basic allowance for quarters as a member with
    dependents unless the member makes an annual certification to
    the Secretary concerned indicating the status of each dependent
    of the member. The certification shall be made in accordance
    with regulations prescribed by the Secretary of Defense.
      [(b)(1) Except as otherwise provided by law, a member of a
    uniformed service who is assigned to quarters of the United
    States or a housing facility under the jurisdiction of a
    uniformed service appropriate to his grade, rank or rating and
    adequate for himself and his dependents, if with dependents, is
    not entitled to a basic allowance for quarters.
      [(2) Subject to the provisions of subsection (j), a member
    without dependents who is in a pay grade above pay grade E-6
    and who is assigned to quarters in the United States or a
    housing facility under the jurisdiction of a uniformed service,
    appropriate to his grade or rank and adequate for himself, may
    elect not to occupy those quarters and instead to receive the
    basic allowance for quarters prescribed for his pay grade by
    this section.
      [(3) Subject to the provisions of subsection (j), a member
    without dependents who is in pay grade E-6 and who is assigned
    to quarters of the United States that do not meet the minimum
    adequacy standards established by the Department of Defense for
    members in such pay grade, or to a housing facility under the
    jurisdiction of a uniformed service that does not meet such
    standards, may elect not to occupy such quarters or facility
    and instead to receive the basic allowance for quarters
    prescribed for the member's pay grade by this section.
      [(c)(1) A member of a uniformed service without dependents
    who makes a permanent change of station for assignment to a
    unit conducting field operations is not entitled to a basic
    allowance for quarters while on that initial field duty unless
    his commanding officer certifies that the member was
    necessarily required to procure quarters at his expense.
      [(2) A member of a uniformed service without dependents who
    is in a pay grade below pay grade E-6 is not entitled to a
    basic allowance for quarters while he is on sea duty. A member
    of a uniformed service without dependents who is in a pay grade
    above E-5 who is assigned to sea duty under a permanent change
    of station is not entitled to a basic allowance for quarters if
    the unit to which the member is ordered is deployed and the
    permanent station of the unit is different than the permanent
    station from which the member is reporting.
      [(d)(1) A member of a uniformed service who is assigned to
    quarters of the United States or a housing facility under the
    jurisdiction of a uniformed service may not be denied the basic
    allowance for quarters if, because of orders of competent
    authority, his dependents are prevented from occupying those
    quarters.
      [(2) A member of a reserve component without dependents who
    is called or ordered to active duty in support of a contingency
    operation (other than a member who is authorized transportation
    of household goods under section 406 of this title as part of
    that call or order) may not be denied a basic allowance for
    quarters if, because of that call or order, the member is
    unable to continue to occupy a residence--
              [(A) which is maintained as the primary residence of
            the member at the time of the call or order; and
              [(B) which is owned by the member or for which the
            member is responsible for rental payments.
      [(e) Notwithstanding any other law (including those
    restricting the occupancy of housing facilities under the
    jurisdiction of a department or agency of the United States by
    members, and their dependents, of the armed forces above
    specified grades, or by members, and their dependents, of the
    National Oceanic and Atmospheric Administration and the Public
    Health Service), a member of a uniformed service, and his
    dependents, may be accepted as tenants in, and may occupy on a
    rental basis, any of those housing facilities, other than
    public quarters constructed or designated for assignment to an
    occupancy without charge by such a member, and his dependents,
    if any. Such a member may not, because of his occupancy under
    this subsection, be deprived of any money allowance to which he
    is otherwise entitled for the rental of quarters.
      [(f) A member of a uniformed service without dependents who
    is in pay grade E-4 (four or more years' service), or above, is
    entitled to a basic allowance for quarters while he is in a
    travel or leave status between permanent duty stations,
    including time granted as delay en route or proceed time, when
    he not assigned to quarters of the United States.
      [(g) An aviation cadet of the Navy, Air Force, Marine Corps,
    or Coast Guard is entitled to the same basic allowance for
    quarters as a member of the uniformed services in pay grade E-
    4.
      [(h) The Secretary concerned, or his designee, may make any
    determination necessary to administer this section with regard
    to enlisted members, including determinations of dependency and
    relationship, and may, when warranted by the circumstances,
    reconsider and change or modify any such determination. This
    authority may be redelegated by the Secretary concerned or his
    designee. Any determination made under this section with regard
    to enlisted members is final and is not subject to review by
    any accounting officer of the United States or a court, unless
    there is fraud or gross negligence.
      [(i) Notwithstanding any other provision of law, the basic
    allowance for quarters to which an enlisted member may be
    entitled as a member with dependents shall not, for such period
    as the Secretary concerned may prescribe, be contingent on the
    right of such member to receive pay.
      [(j)(1) The Secretary of Defense shall prescribe regulations
    for the administration of this section, including definitions
    of the terms ``field duty'' and ``sea duty.''
      [(2) The Secretary concerned may deny the right to make an
    election under subsection (b) if he determines that the
    exercise of such an election would adversely affect a training
    mission, military discipline, or military readiness.
      [(k) Parking facilities (including utility connections)
    provided members of the uniformed services for house trailers
    and mobile homes not owned by the Government shall not be
    considered to be quarters for the purposes of this section or
    any other provision of law. Any fees established by the
    Government for the use of such a facility shall be established
    in an amount sufficient to cover the cost of maintenance,
    services, and utilities and to amortize the cost of
    construction of the facility over the 25-year period beginning
    with the completion of such construction.
      [(l)(1) The Secretary of Defense, or the Secretary of
    Transportation in the case of the Coast Guard when not
    operating as a service in the Navy, may allow the dependents of
    a member of the armed forces who dies in line of duty and whose
    dependents are occupying family housing provided by the
    Department of Defense, or by the Department of Transportation
    in the case of the Coast Guard, other than on a rental basis on
    the date of the member's death to continue to occupy such
    housing without charge for a period of 180 days.
      [(2) The Secretary concerned may pay an allowance for
    quarters to the dependents of a member of the uniformed
    services who dies in line of duty and whose dependents are not
    occupying a housing facility under the jurisdiction of a
    uniformed service on the date of the member's death or are
    occupying such housing on a rental basis on such date, or whose
    dependents vacate such housing sooner than 180 days after the
    date of the member's death. The amount of the allowance for
    quarters shall be the same amount that would be payable to the
    deceased member under sections 403, 403a, and 405 of this title
    if the member had not died. The payment of an allowance for
    quarters under this subsection shall terminate 180 days after
    the date of the member's death.
      [(m)(1) Except as provided in paragraph (2), in the case of a
    member of a uniformed service who is assigned to quarters of
    the United States or a housing facility under the jurisdiction
    of a uniformed service and who is authorized a basic allowance
    for quarters solely by reason of the member's payment of child
    support, the amount of the basic allowance for quarters to
    which the member is entitled shall be equal to the difference
    between the basic allowance for quarters applicable to the
    member's grade, rank, or rating at the with-dependent rate and
    the applicable basic allowance for quarters at the without-
    dependent rate.
      [(2) A member of a uniformed service shall not be entitled to
    a basic allowance for quarters solely by reason of the payment
    of child support if the monthly rate of that child support is
    less than the amount of the basic allowance for quarters
    computed for the member under paragraph (1).
      [(3) The application of this subsection to a member of a
    uniformed service shall not affect the entitlement of that
    member to a basic allowance for quarters at a partial rate
    under section 1009(c) of this title.

    [Sec. 403a. Variable housing allowance

      [(a)(1) Except as provided in subsection (b), a member of a
    uniformed service entitled to basic allowance for quarters is
    entitled to a variable housing allowance under this section
    whenever assigned to duty in an area of the United States which
    is a high housing cost area with respect to that member. A
    member with dependents who is assigned to an unaccompanied tour
    of duty outside the United States is entitled to a variable
    housing allowance while serving that tour of duty for any
    period during which the member's dependents reside in an area
    of the United States where, if the member were assigned to duty
    in that area, the member would be entitled to receive a
    variable housing allowance. The allowance authorized by this
    section may be paid in advance.
      [(2) In the case of a member with dependents--
              [(A) who is assigned to duty inside the United States
            the location or the circumstances of which make it
            necessary that his dependents reside at another
            location; and
              [(B) whose dependents reside in an area of the United
            States where, if the member were assigned to duty in
            that area, the member would be entitled to receive a
            variable housing allowance at a rate other than the
            rate to which the member is entitled (if at all) in the
            area of his duty assignment,
    the member may be paid a variable housing allowance as if he
    were assigned to duty in the area in which his dependents
    reside if the Secretary concerned determines (under regulations
    prescribed under subsection (e)) that it would be inequitable
    to base the member's entitlement to, and amount of, variable
    housing allowance on the area to which the member is assigned.
      [(3) In the case of a member with dependents--
              [(A) who is assigned to an unaccompanied tour of duty
            in Alaska or Hawaii; and
              [(B) who would, if his duty station were outside the
            United States, be entitled to a family separation
            allowance under section 427(a) of this title,
    the member may be paid a variable housing allowance at the rate
    applicable to a member without dependents serving in the same
    grade and at the same location. Payment of a variable housing
    allowance under this paragraph shall be in addition to any
    allowance or per diem to which the member otherwise may be
    entitled under this title.
      [(4) In the case of a member with dependents--
              [(A) who is assigned to duty inside the United
            States;
              [(B) who is authorized to receive the basic allowance
            for quarters at the rate established for a member with
            dependents solely by reason of the payment of child
            support by the member; and
              [(C) who is not assigned to a housing facility under
            the jurisdiction of a uniformed service,
    the member may be paid a variable housing allowance at the rate
    applicable to a member without dependents serving in the same
    grade and at the same location.
      [(5)(A) In the case of a member described in subparagraph (B)
    who is assigned to duty away from the member's principal place
    of residence (as determined under regulations prescribed by the
    Secretary of Defense), the member shall be considered to be
    assigned to duty at that residence for the purpose of
    determining the entitlement of the member to a variable housing
    allowance under this section.
      [(B) A member referred to in subparagraph (A) is a member of
    a uniformed service who--
              [(i) is a member of a reserve component called or
            ordered to active duty (other than for training) or is
            a retired member ordered to active duty under section
            688(a) of title 10; and
              [(ii) is not authorized transportation of household
            goods under section 406 of this title from the member's
            principal place of residence to the place of that duty
            assignment.
      [(b) A member of a uniformed service may not be paid a
    variable housing allowance--
              [(1) in the case of a member who makes a change in
            permanent duty station, for the number of days that
            travel is authorized between permanent duty stations
            (under regulations prescribed under subsection (e));
              [(2) in the case of a member with dependents who is
            authorized the basic allowance for quarters at the rate
            established for a member with dependents solely by
            reason of the payment of child support by the member,
            if--
                      [(A) the member is assigned to a housing
                    facility under the jurisdiction of a uniformed
                    service;
                      [(B) the member (i) is assigned to duty
                    outside the United States or in Alaska or
                    Hawaii, and (ii) is authorized a station
                    housing allowance under section 405 of this
                    title; or
                      [(C) the member is assigned to sea duty and
                    elects not to occupy assigned quarters for
                    unaccompanied personnel, unless the member is
                    in a pay grade above E-6
              [(3) in the case of a member of a reserve component,
            while on active duty under a call or order to active
            duty specifying a period of less than 140 days, unless
            the call or order to active duty is in support of a
            contingency operation; or
              [(4) unless the member makes an annual certification
            (in accordance with such regulations as the Secretary
            of Defense may prescribe) to the Secretary concerned
            identifying the housing costs of the member.
      [(c)(1) The monthly amount of a variable housing allowance
    under this section for a member of a uniformed service with
    respect to an area is equal to the greater of the following
    amounts:
              [(A) An amount equal to the difference between--
                      [(i) the median monthly cost of housing in
                    that area for members of the uniformed services
                    serving in the same pay grade and with the same
                    dependency status as that member; and
                      [(ii) 80 percent of the median monthly cost
                    of housing in the United States for members of
                    the uniformed services serving in the same pay
                    grade and with the same dependency status as
                    that member.
              [(B) An amount equal to the difference between--
                      [(i) the adequate housing allowance floor
                    determined by the Secretary of Defense for all
                    members of the uniformed services in that area
                    entitled to a variable housing allowance under
                    this section; and
                      [(ii) the monthly basic allowance for
                    quarters for members of the uniformed services
                    serving in the same pay grade and with the same
                    dependency status as that member.
      [(2) The rates of variable housing allowance shall be reduced
    as necessary to comply with subsection (d).
      [(3) The effective date of any adjustment in rates of
    variable housing allowance because of a redetermination of
    median monthly costs of housing under paragraph (1)(A) or the
    minimum amount of a variable housing allowance under paragraph
    (1)(B) shall be the same as the effective date of the next
    increase after such redetermination in the basic allowances for
    quarters. However, so long as a member of a uniformed service
    retains uninterrupted eligibility to receive a variable housing
    allowance within an area and the member's certified housing
    costs are not reduced (as indicated by certifications provided
    by the member under subsection (b)(4)), the monthly amount of a
    variable housing allowance under this section for the member
    within that area may not be reduced as a result of systematic
    adjustments required by changes in housing costs within that
    area.
      [(4) For the purposes of this section, an area shall be
    considered to be a high housing cost area with respect to a
    member of a uniformed service whenever the median monthly cost
    of housing in that area for members of the uniformed services
    serving in the same pay grade and with the same dependency
    status as that member exceeds 80 percent of the median monthly
    cost of housing in the United States for members of the
    uniformed services serving in the same pay grade and with the
    same dependency status as that member.
      [(5) Any reduction required under paragraph (2) and any
    determination of median monthly costs of housing or minimum
    amount of a variable housing allowance under this subsection
    shall be made under regulations prescribed under subsection
    (e).
      [(6)(A) The monthly variable housing allowance that would
    otherwise be paid to a member under this section shall be
    reduced by an amount equal to one-half of the amount (if any)
    by which--
              [(i) the total monthly housing allowance prescribed
            for members of the same grade as such member who are
            assigned to duty in the same area as such member (or in
            the same area in which the dependents of the member
            reside, as appropriate), exceeds
              [(ii) the monthly housing costs of the member in the
            area in which the member is assigned to duty (or in the
            area in which the dependents of the member reside, as
            appropriate).
      [(B) In subparagraph (A), the term ``total monthly housing
    allowance'' means, in the case of any member, the sum of--
              [(i) the monthly basic allowance for quarters to
            which the member is entitled; and
              [(ii) the monthly variable housing allowance
            prescribed for the same grade as such member for the
            area in which the member is assigned to duty (or in the
            area in which the dependents of the member reside, as
            appropriate).
      [(7)(A) For purposes of paragraph (1)(B)(i), the Secretary of
    Defense shall establish an adequate housing allowance floor for
    members of the uniformed services in an area as a selected
    percentage, not to exceed 85 percent, of the cost of adequate
    housing in that area based on an index of housing costs
    selected by the Secretary of Defense from among the following:
              [(i) The fair market rentals established annually by
            the Secretary of Housing and Urban Development under
            section 8(c)(1) of the United States Housing Act of
            1937 (42 U.S.C. 1437f(c)(1)).
              [(ii) An index developed in the private sector that
            the Secretary of Defense determines is comparable to
            the fair market rentals referred to in clause (i) and
            is appropriate for use to determine the adequate
            housing allowance floor.
      [(B) The Secretary of Defense shall carry out this paragraph
    in consultation with the Secretary of Transportation, the
    Secretary of Commerce, and the Secretary of Health and Human
    Services.
      [(d)(1) The total amount that may be paid for a fiscal year
    for the variable housing allowance authorized members of the
    uniformed services by this section is the product of--
              [(A) the total amount authorized to be paid for such
            allowance for the preceding fiscal year (as adjusted
            under paragraph (3)); and
              [(B) a fraction--
                      [(i) the numerator of which is the military
                    housing cost index for October of the preceding
                    fiscal year; and
                      [(ii) the denominator of which is the
                    military housing cost index for October of the
                    fiscal year before the preceding fiscal year.
      [(2) The military housing cost index is the housing component
    of the Consumer Price Index (as determined by the Bureau of
    Labor Statistics of the Department of Labor), as adjusted under
    regulations prescribed under subsection (e). Such regulations
    may assign weights to the elements of that housing component
    other than those assigned by the Secretary of Labor in order
    more appropriately to reflect the distribution of elements of
    housing costs of members of the uniformed services.
      [(3) In making a determination under paragraph (1) for a
    fiscal year, the amount authorized to be paid for the preceding
    fiscal year for the variable housing allowance shall be
    adjusted to reflect changes during the year for which the
    determination is made in the number, grade distribution, and
    dependency status of members of the uniformed services entitled
    to variable housing allowance from the number of such members
    during the preceding fiscal year. In addition, the total amount
    determined under paragraph (1) shall be adjusted to ensure that
    sufficient amounts are available to allow payment of any
    additional amounts of variable housing allowance necessary as a
    result of the requirements of paragraph (1)(B) of subsection
    (c) and the second sentence of paragraph (3) of that
    subsection. Adjustments under this paragraph shall be made in
    accordance with regulations prescribed under subsection (e).
      [(e)(1) The Secretary of Defense may prescribe regulations
    for the administration of this section.
      [(2) Any regulations prescribed under paragraph (1) may not
    allow--
              [(A) an increase in the variable housing allowance
            rate for a pay grade in an area solely to prevent the
            variable housing allowance rate for a lower pay grade
            in that area from exceeding such rate; or
              [(B) a failure to lower the variable housing
            allowance rate for a pay grade in an area in accordance
            with a decrease in housing costs for such pay grade in
            that area determined on the basis of the annual
            certifications of housing costs of members of the
            uniformed services receiving a variable housing
            allowance for that area.
      [(3) Paragraph (2) shall not apply to regulations prescribed
    with respect to any pay grade in an area for which available
    data describe fewer than 50 persons in the pay grade.
        [(f) The monthly rate of a variable housing allowance for
    members of the uniformed services in the same pay grade and
    dependency status in an area may not be reduced pursuant to
    subsection (c)(2), a redetermination of median monthly costs of
    housing under that subsection, or any other law to the extent
    that the total amount of monthly basic pay, basic allowance for
    quarters, basic allowance for subsistence, and variable housing
    allowance for that grade and status is reduced, as a result of
    such a reduction in variable housing allowance, below the
    monthly total of those items of pay and allowances for the
    month preceding the effective date of the most recent increase
    in the rate of basic pay for that grade.]

    Sec. 402. Basic allowance for subsistence

      (a) Entitlement; Rate; Adjustment.--(1) Except as otherwise
    provided by law, each member of a uniformed service described
    in subsection (b) or (c) is entitled to a basic allowance for
    subsistence. The rate for the allowance shall be prescribed in
    regulations by the Secretary of Defense after consultation with
    the Secretaries concerned specified in subparagraphs (D), (E),
    and (F) of section 101(5) of this title. The allowance may be
    paid in advance for a period of not more than three months.
      (2) Whenever basic pay is increased pursuant to section 1009
    of this title or another law, the Secretary of Defense shall
    adjust the basic allowance for subsistence at the same rate as
    the most recent adjustment made to the cost of the moderate
    food plan of the Department of Agriculture (one of the four
    official food plans used by the Department of Agriculture under
    the Food Stamp Act of 1977) to reflect changes in the cost of
    the diet described by the moderate food plan.
      (b) Enlisted Members.--An enlisted member is entitled to the
    basic allowance for subsistence on a daily basis if the member
    is entitled to basic pay and one or more of the following
    applies with respect to the member:
              (1) Rations in kind are not available.
              (2) Rations in kind are available, but the Secretary
            of Defense authorizes the payment of the basic
            allowance for subsistence.
              (3) Permission to mess separately is granted.
              (4) The member is assigned to duty under emergency
            conditions where no messing facilities of the United
            States are available.
              (5) The member is on an authorized leave of absence,
            is confined in a hospital, or is performing travel
            under orders away from the member's designated post of
            duty (except when rations in kind are available and the
            Secretary of Defense does not authorizes the payment of
            the basic allowance for subsistence.).
      (c) Officers.--An officer of a uniformed service who is
    entitled to basic pay is entitled, at all times, to the basic
    allowances for subsistence. An aviation cadet of the Navy, Air
    Force, Marine Corps, or Coast Guard is entitled to the same
    basic allowance for subsistence as is provided for an officer
    of the Navy, Air Force, Marine Corps, or Coast Guard,
    respectively.
      (d) Special Rule for Certain Members Authorized to Mess
    Separately.--Under regulations and in areas prescribed by the
    Secretary of Defense, and the Secretary of Transportation with
    respect to the Coast Guard when it is not operating as a
    service in the Navy, an enlisted member who is granted
    permission to mess separately, and whose duties require the
    member to buy at least one meal from other than a messing
    facility of the United States, is entitled to not more than the
    pro rata allowance authorized for each such meal for an
    enlisted member when rations in kind are not available.
      (e) Payment for Rations in Kind Actually Received.--The
    Secretary of Defense may require a member of the uniformed
    services to pay for rations in kind actually received by the
    member while entitled to a basic allowance for subsistence.
      (f) Administration.--(1) The Secretary of Defense may
    prescribe regulations for the administration of this section.
      (2) For purposes of subsection (b)(5), a member shall not be
    considered to be performing travel under orders away from his
    designated post of duty if the member--
              (A) is an enlisted member serving the member's first
            tour of active duty;
              (B) has not actually reported to a permanent duty
            station pursuant to orders directing such assignment;
            and
              (C) is not actually traveling between stations
            pursuant to orders directing a change of station.
      (g) Percentage Limitation on Enlisted Members Receiving
    Allowance.--(1) This subsection apples with respect to enlisted
    members of the Army, Navy, Air Force, and Marine Corps who,
    when present at their permanent duty station and at which
    adequate messing facilities of the United States are available,
    reside without dependents in Government quarters. The Secretary
    concerned may not provide a basic allowance for subsistence to
    more than 12 percent of such members under the jurisdiction of
    the Secretary concerned.
      (2) The Secretary concerned may exceed the percentage
    limitation specified in paragraph (1) if the Secretary
    determines that compliance would increase costs to the
    Government, would impose financial hardships on members
    otherwise entitled to a basic allowance for subsistence, or
    would reduce the quality of life for such members.
      (3) This subsection shall not apply to a member described in
    paragraph (1) when the member is not residing at the member's
    permanent duty station.
      (h) Rations in Kind for Certain Reserves.--(1) The Secretary
    concerned may provide rations in kind, or a part thereof, to an
    enlisted member of a reserve component or of the National Guard
    when the member's instruction or duty periods, described in
    section 206(a) of this title, total at least eight hours in a
    calendar day. The Secretary concerned may provide the member
    with a commutation when rations in kind are not available.
      (2) This subsection shall not apply with respect to an
    enlisted member of a reserve component or of the National Guard
    who is entitled to basic pay.
      (i) Use of Messing Facilities.--The Secretary of Defense, in
    consultation with the Secretaries concerned, shall establish
    policies regarding the use of messing facilities of the United
    States, including field messing facilities.

    Sec. 403. Basic allowance for housing

      (a) Components of Basic Allowance for Housing.--The basic
    allowance for housing consists of the following components:
              (1) A basic allowance for quarters for members of the
            uniformed services stationed in the United States and,
            under certain circumstances, members on duty outside of
            the United States whose dependents continue to reside
            in the United States.
              (2) A overseas station housing allowance for members
            on duty outside of the United States to reflect housing
            costs incurred by the members.
              (3) A family separation housing allowance for members
            with dependents when the movement of the dependents to
            the members' permanent station is not authorized at the
            expense of the United States.
      (b) Eligibility for Allowance.--(1) Except as otherwise
    provided by law, a member of a uniformed service who is
    entitled to basic pay shall receive the component or components
    of the basic allowance for housing to which the member is
    entitled under this section at the monthly rates prescribed in
    connection with the component under this section or other
    provision of law. The amount of the allowance for a member will
    vary according to the pay grade in which the member is assigned
    or distributed for basic pay purposes and the member's
    dependency status.
      (2) The basic allowance for housing may be paid in advance.
      (c) Effect of Assignment to Government Quarters.--(1) Except
    as otherwise provided by law, a member of a uniformed service
    who is assigned to quarters of the United States appropriate to
    the grade, rank, or rating of the member and adequate for the
    member and dependents, if with dependents, is not entitled to a
    basic allowance for housing. In this section, the term
    ``quarters of the United States'' includes a housing facility
    under the jurisdiction of a uniformed service.
      (2) A member without dependents who is in a pay grade above
    pay grade E-6 and is assigned to quarters of the United States
    may elect not to occupy those quarters and instead receive the
    basic allowance for housing to which the member is otherwise
    entitled.
      (3) A member without dependents who is in pay grade E-6 and
    is assigned to quarters of the United States that do not meet
    the minimum adequacy standards established by the Secretary of
    Defense for members in such pay grade may elect not to occupy
    those quarters and instead to receive the basic allowance for
    housing to which the member is otherwise entitled. The
    Secretary concerned may deny the right to make an election
    under this paragraph if the Secretary determines that the
    exercise of such an election would adversely affect a training
    mission, military discipline, or military readiness.
      (4) In the case of a member with dependents who is assigned
    to quarters of the United States at a location or under
    circumstances that, as determined by the Secretary concerned,
    require the member's dependents to reside at different
    location, the member shall receive a basic allowance for
    housing as if the member were assigned to duty in the area in
    which the dependents reside and did not reside in quarters of
    the United States.
      (d) Effect of Field Duty and Sea Duty.--(1) The Secretary
    concerned may deny the basic allowance for housing to a member
    of a uniformed service without dependents when the member is
    assigned to field duty with a unit conducting field operations.
      (2) A member of a uniformed service without dependents who is
    in a pay grade below pay grade E-6 is not entitled to a basic
    allowance for housing while on sea duty. After taking into
    consideration the availability of quarters for members serving
    in pay grade E-5, the Secretary concerned may authorize the
    payment of a basic allowance for housing to a member without
    dependents who is serving in such pay grade and is assigned to
    sea duty.
      (3) Notwithstanding section 421 of this title, two members of
    the uniformed services in a pay grade below pay grade E-6 who
    are married to each other, have no other dependents, and are
    simultaneously assigned to sea duty are jointly entitled to one
    basic allowance for housing during the period of such
    simultaneous sea duty. The amount of the allowance shall be
    based on the without dependents rate for the pay grade of the
    senior member of the couple. However, this paragraph shall not
    apply to a couple if one or both of the members are entitled to
    a basic allowance for housing under paragraph (2).
      (4) For purposes of this subsection, the Secretary of Defense
    shall prescribe, by regulation, definitions of the terms
    ``field duty'' and ``sea duty''.
      (e) Basic Allowance for Quarters.--(1) The Secretary of
    Defense shall determine the costs of adequate housing in a
    military housing area for all members of the uniformed services
    entitled to a basic allowance for quarters in that area. The
    Secretary shall base the determination upon the costs of
    adequate housing for civilians with comparable income levels in
    the same area.
      (2) The monthly amount of a basic allowance for quarters for
    an area of the United States for a member of a uniformed
    service is equal to difference between--
              (A) the monthly cost of housing in that area, as
            determined by the Secretary of Defense, for members of
            the uniformed services serving in the same pay grade
            and with the same dependency status as the member; and
              (B) 15 percent of the national average monthly cost
            of housing in the United States, as determined by the
            Secretary, for members of the uniformed services
            serving in the same pay grade and with the same
            dependency status as the member.
      (3) The rates of basic allowance for quarters shall be
    reduced as necessary to comply with this paragraph. The total
    amount that may be paid for a fiscal year for the basic
    allowance for quarters is the product of--
              (A) the total amount authorized to be paid for such
            allowance for the preceding fiscal year (as adjusted
            under paragraph (5)); and
              (B) a fraction--
                      (i) the numerator of which is the index of
                    the national average monthly cost of housing
                    for June of the preceding fiscal year; and
                      (ii) the denominator of which is the index of
                    the national average monthly cost of housing
                    for June of the fiscal year before the
                    preceding fiscal year.
      (4) An adjustment in the rates of basic allowance for
    quarters as a result of the Secretary's redetermination of
    housing costs in an area shall take effect on the same date as
    the effective date of the next increase in basic pay under
    section 1009 of this title or other provision of law.
      (5) In making a determination under paragraph (3) for a
    fiscal year, the amount authorized to be paid for the preceding
    fiscal year for the basic allowance for quarters shall be
    adjusted to reflect changes during the year for which the
    determination is made in the number, grade distribution,
    geographic distribution, and dependency status of members of
    the uniformed services entitled to the allowance from the
    number of such members during the preceding fiscal year.
      (6) So long as a member of a uniformed service retains
    uninterrupted eligibility to receive a basic allowance for
    quarters within an area of the United States, the monthly
    amount of the allowance for the member may not be reduced as a
    result of changes in housing costs in the area, changes in the
    national average monthly cost of housing, or the promotion of
    the member.
      (f) Overseas Station Housing Allowance.--(1) The Secretary of
    Defense may prescribe an overseas station housing allowance for
    a member of a uniformed service who is on duty outside of the
    United States. The Secretary shall base the station housing
    allowance on housing costs in the overseas area in which the
    member is assigned.
      (2) So long as a member of a uniformed service retains
    uninterrupted eligibility to receive an overseas station
    housing allowance in an overseas area and the actual monthly
    cost of housing for the member is not reduced, the monthly
    amount of the overseas station housing allowance may not be
    reduced as a result of changes in housing costs in the area or
    the promotion of the member. The monthly amount of the
    allowance may be adjusted to reflect changes in currency rates.
      (g) Family Separation Housing Allowance.--(1) A member of a
    uniformed service with dependents who is on permanent duty at a
    location described in paragraph (2) is entitled to a family
    separation housing allowance under this subsection at a monthly
    rate equal to the rate of basic allowance for quarters or
    overseas station housing allowance established for that
    location for members without dependents in the same grade.
      (2) A permanent duty location referred to in paragraph (1) is
    a location--
              (A) to which the movement of the member's dependents
            is not authorized at the expense of the United States
            under section 406 of this title, and the member's
            dependents do not reside at or near the location; and
              (B) at which quarters of the United States are not
            available for assignment to the member.
      (3) The allowance provided under this subsection is in
    addition to any other allowance or per diem that the member is
    otherwise entitled to under this title.
      (h) Partial Allowance.--(1) The Secretary of Defense may
    prescribe a partial basic allowance for housing for a member of
    a uniformed service without dependents who is not entitled to
    the allowance pursuant to subsection (c) or (d).
      (2) In the case of a member of a uniformed service who is
    assigned to quarters of the United States and pays child
    support, the Secretary of Defense may authorize the payment of
    a partial basic allowance for housing, at a rate prescribed by
    the Secretary, on account of the member's payment of the child
    support. The allowance shall be at a reduced rate to reflect
    the member's assignment to quarters of the United States. The
    amount of the partial allowance shall not exceed the monthly
    rate of the member's child support. The payment of a partial
    allowance under this paragraph to a member may be in addition
    to any allowance paid to the member under paragraph (1).
      (i) Special Rules for Certain Members.--(1)(A) In the case of
    a member of a reserve component of a uniformed service without
    dependents who is called or ordered to active duty (other than
    for training) or a retired member without dependents ordered to
    active duty under section 688(a) of title 10, the member shall
    be considered to be assigned to duty at the location of the
    primary residence of the member at the time of the call or
    order for purposes of determining the amount of the member's
    basic allowance for housing.
      (B) If a member described in subparagraph (A) is called or
    ordered to active duty for less than 30 days, the Secretary of
    Defense shall prescribe the amount of the basic allowance for
    housing to be paid to the member.
      (C) This paragraph shall not apply to a member described in
    subparagraph (A) if the member is authorized transportation of
    household goods under section 406 of this title as part of the
    call or order to active duty or if the primary residence of the
    member is not owned by the member or the member is not
    responsible for rental payments.
      (2) A member of a uniformed service without dependents who is
    in pay grade E-4 (four or more years' service), or above, is
    entitled to a basic allowance for housing while the member is
    in a travel or leave status between permanent duty stations,
    including time granted as delay en route or proceed time, when
    the member is not assigned to quarters of the United States.
    Notwithstanding subsection (e)(2), the rate of basic allowance
    for quarters for such a member shall be equal to the national
    average monthly cost of housing in the United States, as
    determined by the Secretary, for members of the uniformed
    services serving in the same pay grade and with the same
    dependency status as the member.
      (3) The eligibility of an aviation cadet of the Navy, Air
    Force, Marine Corps, or Coast Guard for a basic allowance for
    housing shall be determined as if the aviation cadet were a
    member of the uniformed services in pay grade E-4.
      (4) In the case of a member without dependents who is
    assigned to duty inside the United States, the location or the
    circumstances of which make it necessary that the member be
    reassigned under the conditions of low cost or no cost
    permanent change of station or permanent change of assignment,
    the member may be treated as if the member were not reassigned
    if the Secretary concerned determines that it would be
    inequitable to base the member's entitlement to, and amount of,
    a basic allowance for housing on the area to which the member
    is reassigned.
      (j) Administration.--(1) The Secretary concerned may make
    such determinations as may be necessary to administer this
    section, including determinations of dependency and
    relationship. When warranted by the circumstances, the
    Secretary concerned may reconsider and change or modify any
    such determination. This authority may be delegated by the
    Secretary concerned. Any determination made under this section
    with regard to a member of the uniformed services is final and
    is not subject to review by any accounting officer of the
    United States or a court, unless there is fraud or gross
    negligence.
      (2) Parking facilities (including utility connections)
    provided members of the uniformed services for house trailers
    and mobile homes not owned by the Government shall not be
    considered to be quarters for the purposes of this section or
    any other provision of law. Any fees established by the
    Government for the use of such a facility shall be established
    in an amount sufficient to cover the cost of maintenance,
    services, and utilities and to amortize the cost of
    construction of the facility over the 25-year period beginning
    with the completion of such construction.
      (k) Temporary Continuation of Allowance.--(1) The Secretary
    of Defense, or the Secretary of Transportation in the case of
    the Coast Guard when not operating as a service in the Navy,
    may allow the dependents of a member of the armed forces who
    dies while on active duty and whose dependents are occupying
    family housing provided by the Department of Defense, or by the
    Department of Transportation in the case of the Coast Guard,
    other than on a rental basis on the date of the member's death
    to continue to occupy such housing without charge for a period
    of 180 days.
      (2) The Secretary concerned may pay an allowance for housing
    to the dependents of a member of the uniformed services who
    dies while on active duty and whose dependents are not
    occupying a housing facility under the jurisdiction of a
    uniformed service on the date of the member's death or are
    occupying such housing on a rental basis on such date, or whose
    dependents vacate such housing sooner than 180 days after the
    date of the member's death. The amount of the allowance shall
    be the same amount that would otherwise be payable to the
    deceased member under this section if the member had not died.
    The payment of an allowance under this paragraph shall
    terminate 180 days after the date of the member's death.
              * * * * * * *

    Sec. 404. Travel and transportation allowances: general

      (a) * * *
      (b)(1) * * *
      (2) In prescribing such conditions and allowances, the
    Secretaries concerned shall provide that a member who is
    performing travel under orders away from his designated post of
    duty and who is authorized a per diem under clause (2) of
    subsection (d) shall be paid for the meals portion of that per
    diem in a cash amount at a rate that is not less than the rate
    established under section 1011(a) of this title for meals sold
    to members. The preceding sentence shall not apply with respect
    to a member on field duty or sea duty (as defined in
    regulations prescribed [under section 402(e) of this title] by
    the Secretary of Defense) or a member of a unit with respect to
    which the Secretary concerned has determined that unit messing
    is essential to the accomplishment of the unit's training and
    readiness.
              * * * * * * *

    Sec. 405. Travel and transportation allowances: per diem while on duty
                        outside the United States or in Hawaii or Alaska

      (a) * * *
      [(b) A station housing allowance may be prescribed under this
    section for a member who is on duty outside of the United
    States without regard to costs other than housing costs and may
    consist of the difference between basic allowance for quarters
    and applicable housing cost. A station housing allowance may
    not be prescribed under this section for a member who is on
    duty in Hawaii or Alaska. A station housing allowance
    prescribed under this section may be paid in advance.]
      [(c)] (b) Housing cost and allowance may be disregarded in
    prescribing a station cost of living allowance under this
    section.
      [(d)](c)(1) In the case of a member of the uniformed services
    authorized to receive a per diem allowance under subsection
    (a), the Secretary concerned may make a lump-sum payment for
    nonrecurring expenses--
              (A) * * *
              * * * * * * *

    Sec. 406. Travel and transportation allowances: dependents; baggage and
                        household effects

      (a) * * *
              * * * * * * *
      (c) The allowances and transportation authorized by
    subsections (a) and (b) are in addition to those authorized by
    [sections 404 and 405] sections 403(f), 404, and 405 of this
    title and are--
              (1) subject to such conditions and limitations;
              (2) for such grades, ranks, and ratings; and
              (3) to and from such places;
    prescribed by the Secretaries concerned. Transportation of the
    household effects of a member may not be made by commercial air
    carrier at an estimated over-all cost that is more than the
    estimated over-all cost of the transportation thereof by other
    means, unless an appropriate transportation officer has
    certified in writing to his commanding officer that those
    household effects to be so transported are necessary for use in
    carrying out assigned duties, or are necessary to prevent undue
    hardship and other means of transportation will not fill those
    needs. However, not more than 1,000 pounds of unaccompanied
    baggage may be transported by commercial air carrier, without
    regard to the preceding sentence, under regulations prescribed
    under the authority of the Secretary of Defense.
              * * * * * * *
      (h)(1) * * *
      (2) A member referred to in paragraph (1) is a member who--
              (A) * * *
              * * * * * * *
              (C) is sentenced by a court-martial--
                      (i) to be confined for a period of more than
                    30 days,
                      (ii) to receive a dishonorable or bad-conduct
                    discharge, or
                      (iii) to be dismissed from a uniformed
                    service[,
            if the sentence is approved under section 860(c)(2) of
            title 10.].
              * * * * * * *

    [Sec. 407. Travel and transportation allowances: dislocation allowance

      [(a) Except as provided in subsections (b), (c), and (d) and
    under regulations prescribed by the Secretary concerned, a
    member of a uniformed service is entitled to a dislocation
    allowance equal to the basic allowance for quarters for two and
    one-half months as provided for the member's pay grade and
    dependency status in section 403 of this title if--
              [(1) the member's dependents actually make an
            authorized move in connection with the member's change
            of permanent station, including--
                      [(A) a move to join the member at the
                    member's duty station after an unaccompanied
                    tour of duty when the member's next tour of
                    duty is an accompanied tour at the same
                    station; and
                      [(B) a move to a location designated by the
                    member after an accompanied tour of duty when
                    the member's next tour of duty is an
                    unaccompanied tour at the same duty station;
              [(2) the member's dependents actually move pursuant
            to section 405a(a), 406(e), 406(h), or 554 of this
            title;
              [(3) the member's dependents actually move from their
            place of residence under circumstances described in
            section 406a of this title;
              [(4) the member is without dependents and--
                      [(A) actually moves to a new permanent
                    station where not assigned to quarters of the
                    United States; or
                      [(B) actually moves from a place of residence
                    under circumstances described in section 406a
                    of this title; or
              [(5) the member is ordered to move in connection with
            the closure or realignment of a military installation
            and, as a result, the member's dependents actually move
            or, in the case of a member without dependents, the
            member actually moves.
    If a dislocation allowance is paid under paragraph (3) or
    (4)(B), the member is not entitled to a dislocation allowance
    under paragraph (1) or (5).
      [(b) Under regulations prescribed by the Secretary concerned,
    whenever a member is entitled to a dislocation allowance under
    paragraph (3) or (4)(B) of subsection (a), the member is also
    entitled to a second dislocation allowance equal to the basic
    allowance for quarters for two months as provided for a
    member's pay grade and dependency status in section 403 of this
    title if, subsequent to the member or member's dependents
    actually moving from their place of residence under
    circumstances described in section 406a of this title, the
    member or member's dependents complete that move to a new
    location and then actually move from that new location to
    another location also under circumstances described in section
    406a of this title. If a second dislocation allowance is paid
    under this subsection, the member is not entitled to a
    dislocation allowance under paragraph (1) or (5) of subsection
    (a) in connection with those moves.
      [(c) A member is not entitled to more than one dislocation
    allowance during a fiscal year unless--
              [(1) the Secretary concerned finds that the
            exigencies of the service require the member to make
            more than one change of permanent station during the
            fiscal year;
              [(2) the member is ordered to a service school as a
            change of permanent station;
              [(3) the member's dependents are covered by section
            405a(a), 406(e), 406(h), or 554 of this title; or
              [(4) the member or the member's dependents are
            covered by subsection (a)(3), (a)(4)(B), or (b).
    This subsection does not apply in time of national emergency
    declared after April 1, 1975, or in time of war.
      [(d) A member is not entitled to payment of a dislocation
    allowance when ordered from his home to the first duty station
    or from the last duty station to his home.
      [(e) For purposes of this section, a member whose dependents
    may not make an authorized move in connection with a change of
    permanent station is considered a member without dependents.
      [(f) An allowance payable under this section may be paid in
    advance.]

    Sec. 407. Travel and transportation allowances: dislocation allowance

      (a) Basic Eligibility.--(1) Under regulations prescribed by
    the Secretary concerned, a member of a uniformed service
    described in paragraph (2) is entitled to a dislocation
    allowance at the rate set forth in the tables in subsection (c)
    for the member's pay grade and dependency status.
      (2) A member of the uniformed services referred to in
    paragraph (1) is any of the following:
              (A) A member who makes a change of permanent station
            and the member's dependents actually make an authorized
            move in connection with the change, including a move by
            the dependents--
                      (i) to join the member at the member's duty
                    station after an unaccompanied tour of duty
                    when the member's next tour of duty is an
                    accompanied tour at the same station; and
                      (ii) to a location designated by the member
                    after an accompanied tour of duty when the
                    member's next tour of duty is an unaccompanied
                    tour at the same duty station.
              (B) A member whose dependents actually move pursuant
            to section 405a(a), 406(e), 406(h), or 554 of this
            title.
              (C) A member whose dependents actually move from
            their place of residence under circumstances described
            in section 406a of this title.
              (D) A member who is without dependents and--
                      (i) actually moves to a new permanent station
                    where the member is not assigned to quarters of
                    the United States; or
                      (ii) actually moves from a place of residence
                    under circumstances described in section 406a
                    of this title.
              (E) A member who is ordered to move in connection
            with the closure or realignment of a military
            installation and, as a result, the member's dependents
            actually move or, in the case of a member without
            dependents, the member actually moves.
      (3) If a dislocation allowance is paid under this subsection
    to a member described in subparagraph (C) or (D)(ii), the
    member is not entitled to another dislocation allowance as a
    member described in subparagraph (A) or (E) in connection with
    the same move.
      (b) Second Allowance Authorized Under Certain
    Circumstances.--(1) Under regulations prescribed by the
    Secretary concerned, whenever a member is entitled to a
    dislocation allowance as a member described in subparagraph (C)
    or (D)(ii) of subsection (a)(2), the member is also entitled to
    a second dislocation allowance at the rate set forth in the
    tables in subsection (c) for the member's pay grade and
    dependency status if, subsequent to the member or the member's
    dependents actually moving from their place of residence under
    circumstances described in section 406a of this title, the
    member or member's dependents complete that move to a new
    location and then actually move from that new location to
    another location also under circumstances described in section
    406a of this title.
      (2) If a second dislocation allowance is paid under this
    subsection, the member is not entitled to a dislocation
    allowance as a member described in subparagraph (A) or (E) of
    subsection (a)(2) in connection with those moves.
      (c) Dislocation Allowance Rates.--(1) A dislocation allowance
    under this section shall be paid at the following monthly
    rates, based on a member's pay grade and dependency status:

                              COMMISSIONED OFFICERS
    ------------------------------------------------------------------------
                Paygrade              Without dependents    With dependents
    ------------------------------------------------------------------------
    O-10............................          $2,061.75           $2,538.00
    O-9.............................           2,061.75            2,538.00
    O-8.............................           2,061.75            2,538.00
    O-7.............................           2,061.75            2,538.00
    O-6.............................           1,891.50            2,285.25
    O-5.............................           1,821.75            2,202.75
    O-4.............................           1,688.25            1,941.75
    O-3.............................           1,353.00            1,606.50
    O-2.............................           1,073.25            1,371.75
    O-1.............................             903.75            1,226.25
    ------------------------------------------------------------------------

      COMMISSIONED OFFICERS WITH OVER 4 YEARS OF ACTIVE DUTY SERVICE AS AN
                       ENLISTED MEMBER OR WARRANT OFFICER
    ------------------------------------------------------------------------
                Paygrade              Without dependents    With dependents
    ------------------------------------------------------------------------
    O-3E............................          $1,461.00           $1,726.50
    O-2E............................           1,242.00            1,557.75
    O-1E............................           1,068.00            1,439.25
    ------------------------------------------------------------------------

                                 WARRANT OFFICER
    ------------------------------------------------------------------------
                Paygrade              Without dependents    With dependents
    ------------------------------------------------------------------------
    W-5.............................          $1,715.25           $1,874.25
    W-4.............................           1,523.25            1,718.25
    W-3.............................           1,280.00            1,574.25
    W-2.............................           1,137.00            1,448.25
    W-1.............................             951.75            1,252.50
    ------------------------------------------------------------------------

                                 ENLISTED MEMBER
    ------------------------------------------------------------------------
                Paygrade              Without dependents    With dependents
    ------------------------------------------------------------------------
    E-9.............................          $1,251.00           $1,649.25
    E-8.............................           1,148.25            1,520.25
    E-7.............................             981.00            1,411.50
    E-6.............................             888.00            1,304.25
    E-5.............................             819.00            1,173.00
    E-4.............................             712.50            1,020.00
    E-3.............................             699.00              949.50
    E-2.............................             567.75              903.75
    E-1.............................             506.25              903.75
    ------------------------------------------------------------------------

      (2) For each calendar year after 1997, the Secretary of
    Defense shall adjust the rates in the tables in paragraph (1)
    by the percentage equal to the rate of change of the national
    average monthly cost of housing, as determined by the Secretary
    under section 403 of this title for that calendar year.
      (d) Fiscal Year Limitation; Exceptions.--(1) A member is not
    entitled to more than one dislocation allowance during a fiscal
    year unless--
              (A) the Secretary concerned finds that the exigencies
            of the service require the member to make more than one
            change of permanent station during the fiscal year;
              (B) the member is ordered to a service school as a
            change of permanent station;
              (C) the member's dependents are covered by section
            405a(a), 406(e), 406(h), or 554 of this title; or
              (D) subparagraph (C) or (D)(ii) of subsection (a)(2)
            or subsection (b) apply with respect to the member or
            the member's dependents.
      (2) This subsection does not apply in time of national
    emergency or in time of war.
      (e) First or Last Duty.--A member is not entitled to payment
    of a dislocation allowance when ordered from the member's home
    to the member's first duty station or from the member's last
    duty station to the member's home.
      (f) Rule of Construction.--For purposes of this section, a
    member whose dependents may not make an authorized move in
    connection with a change of permanent station is considered a
    member without dependents.
      (g) Advance Payment.--A dislocation allowance payable under
    this section may be paid in advance.
              * * * * * * *

    Sec. 420. Allowances while participating in international sports

      (a) * * *
              * * * * * * *
      (c) Notwithstanding any other law, a member of a uniformed
    service who has no dependents is not entitled to the basic
    allowances for subsistence and [quarters] housing authorized by
    sections 402 and 403 of this title for a period during which he
    is subsisted and quartered by the agency sponsoring his
    participation in a competition covered by section 717 of title
    10.
              * * * * * * *

    Sec. 427. Family separation allowance

      [(a) Allowance Equal to Basic Allowance for Quarters.-- In
    addition to any allowance or per diem to which he otherwise may
    be entitled under this title, a member of a uniformed service
    with dependents who is on permanent duty outside of the United
    States, or in Alaska, is entitled to a monthly allowance equal
    to the basic allowance for quarters payable to a member without
    dependents in the same pay grade if--
              [(1) the movement of his dependents to his permanent
            station or a place near that station is not authorized
            at the expense of the United States under section 406
            of this title and his dependents do not reside at or
            near that station; and
              [(2) quarters of the United States or a housing
            facility under the jurisdiction of a uniformed service
            are not available for assignment to him.
      [(b) Additional Separation Allowance.--] (a) Availability of
    Separation Allowance.--(1) In addition to any allowance or per
    diem to which he otherwise may be entitled under this title,
    [including subsection (a)] including section 403(g) of this
    title, a member of a uniformed service with dependents is
    entitled to a monthly allowance equal to [$75] $100 if--
              (A) * * *
              * * * * * * *
      [(4) A member] (b) Effect of Election to Serve Unaccompanied
    Tour of Duty.--A member who elects to serve a tour of duty
    unaccompanied by his dependents at a permanent station to which
    the movement of his dependents is authorized at the expense of
    the United States under section 406 of this title is not
    entitled to an allowance under [paragraph (1)(A) of this
    subsection] subsection (a)(1)(A). The Secretary concerned may
    waive the preceding sentence in situations in which it would be
    inequitable to deny the allowance to the member because of
    unusual family or operational circumstances.
      [(5) Section 421] (c) Effect of Dependent Entitled to Basic
    Pay.--Section 421 of this title does not apply to bar an
    entitlement to an allowance under [paragraph (1)(D)] subsection
    (a)(1)(D). However, not more than one monthly allowance may be
    paid with respect to a married couple under [paragraph (1)(D)]
    subsection (a)(1)(D) for any month.
              * * * * * * *

    Sec. 433. Allowance for muster duty

          (a) * * *
              * * * * * * *
          (c) The allowance authorized by this section may not be
    disbursed in kind [and shall be paid to the member on or before
    the date on which the muster duty is performed]. The allowance
    may be paid to the member on or before the date on which the
    muster duty is performed, but shall be paid not later than 30
    days after the date on which the muster duty is performed. The
    allowance shall constitute the single, flat-rate monetary
    allowance authorized for the performance of muster duty and
    shall constitute payment in full to the member, regardless of
    grade or rank in which serving, as commutation for travel to
    the immediate vicinity of the designated muster duty location,
    transportation, subsistence, and the special or extraordinary
    costs of enforced absence from home and civilian pursuits,
    including such absence on weekends and holidays.
              * * * * * * *

    Sec. 551. Definitions

      In this chapter:
              (1) * * *
              * * * * * * *
              (3) The term ``pay and allowances'' means--
                      (A) * * *
              * * * * * * *
                      (D) [basic allowance for quarters] basic
                    allowance for housing;
              * * * * * * *

                 CHAPTER 17--MISCELLANEOUS RIGHTS AND BENEFITS

              * * * * * * *

    Sec. 907. Enlisted members and warrant officers appointed as officers:
                        pay and allowances stabilized

      (a) * * *
              * * * * * * *
      (d) In determining the amount of the pay and allowances of a
    grade formerly held by an officer, incentive pay for hazardous
    duty under section 301 of this title, special pay for diving
    duty under section 304 of this title, for [duty at certain
    places] duty at a hardship duty location under section 305 of
    this title, and for sea duty under section 305a of this title,
    and proficiency pay under section 307 of this title may be
    considered only so long as the officer continues to perform the
    duty creating the entitlement to or eligibility for that pay
    and would otherwise be eligible to receive that pay in his
    former grade.
              * * * * * * *

                           CHAPTER 19--ADMINISTRATION

    Sec.

    1001.  Regulations relating to pay and allowances.
         * * * * * * *
    [1009.  Adjustments of compensation.]
    1009.  Certain elements of compensation: adjustment; protection against
              change.
         * * * * * * *

    [Sec. 1009. Adjustments of compensation

      [(a) Whenever the General Schedule of compensation for
    Federal classified employees as contained in section 5332 of
    title 5 is adjusted upward, the President shall immediately
    make an upward adjustment in the--
              [(1) monthly basic pay authorized members of the
            uniformed services by section 203(a) of this title;
              [(2) basic allowance for subsistence authorized
            enlisted members and officers by section 402 of this
            title; and
              [(3) basic allowance for quarters authorized members
            of the uniformed services by section 403(a) of this
            title.
      [(b) An adjustment under this section shall have the force
    and effect of law and shall--
              [(1) carry the same effective date as that applying
            to the compensation adjustments provided General
            Schedule employees;
              [(2) be based on the rates of the various elements of
            compensation as defined in, or made under, section 402
            or 403 of this title or this section; and
              [(3) subject to subsections (c) and (d), provide all
            eligible members with an increase in each element of
            compensation, set forth in subsection (a), which is of
            the same percentage as the overall average percentage
            increase in the General Schedule rates of basic pay for
            civilian employees.
      [(c)(1) Whenever the President determines such action to be
    in the best interest of the Government, he is authorized to
    allocate the overall average percentage of any increase
    described in subsection (b)(3) among the elements of
    compensation specified in subsection (a) on a percentage basis
    other than an equal percentage basis; however, the amount
    allocated to the element of monthly basic pay may not be less
    than 75 percent of the amount that would have been allocated to
    the element of basic pay under subsection (b)(3).
      [(2) Under regulations prescribed by the President, whenever
    the President exercises his authority under paragraph (1) to
    allocate the elements of compensation specified in subsection
    (a) on a percentage basis other than an equal percentage basis,
    he may pay to each member without dependents who, under section
    403 (b) or (c), is not entitled to receive a basic allowance
    for quarters, an amount equal to the difference between (1) the
    amount of such increase under paragraph (1) in the amount of
    the basic allowance for quarters which, but for section 403 (b)
    or (c) of this title, such member would be entitled to receive,
    and (2) the amount by which such basic allowance for quarters
    would have been increased under subsection (b)(3) if the
    President had not exercised such authority.
      [(d)(1) Subject to paragraph (2), whenever the President
    determines such action to be in the best interest of the
    Government, he may allocate the overall percentage increase in
    the element of basic pay that would otherwise be effective
    after any allocation made under subsection (c) among such pay
    grade and years-of-service categories as he considers
    appropriate.
      [(2) In making any allocation of an overall percentage
    increase in basic pay under paragraph (1)--
              [(A) the amount of the increase in basic pay for any
            given pay grade and years-of-service category after any
            allocation made under this subsection or under
            subsection (c) (or under both such subsections) may not
            be less than 75 percent of the amount of the increase
            in the element of basic pay that would otherwise have
            been effective with respect to such pay grade and
            years-of-service category under subsection (b)(3); and
              [(B) the overall percentage increase in the elements
            of compensation specified in subsection (a) in the case
            of any member of the uniformed services with four years
            or less service may not exceed the overall percentage
            increase in the General Schedule rates of basic pay for
            civilian employees.
      [(e) Whenever the President plans to exercise his authority
    under subsection (c) or (d) with respect to any anticipated
    increase in the compensation of members of the uniformed
    services, he shall advise the Congress, at the earliest
    practicable time prior to the effective date of such increase,
    regarding the proposed allocation of such increase.
      [(f) The allocations of increases made under this section
    shall be assessed in conjunction with the quadrennial review of
    military compensation required by section 1008(b) of this
    title.]

    Sec. 1009. Certain elements of compensation: adjustment; protection
                        against change

      (a) Elements of Compensation.--In this section, the term
    ``elements of compensation'' means--
              (1) the monthly basic pay authorized members of the
            uniformed services by section 203(a) of this title;
              (2) the basic allowance for subsistence authorized
            members of the uniformed services by section 402 of
            this title; and
              (3) the basic allowance for housing authorized
            members of the uniformed services by section 403 of
            this title.
      (b) Annual Adjustment of Basic Pay.--Effective as of the
    first day of the first applicable pay period beginning on or
    after January 1 of each calendar year, the rates of basic pay
    of members of the uniformed services shall be increased by the
    percentage (rounded to the nearest one-tenth of one percent)
    equal to the percentage by which the Employment Cost Index for
    the base quarter of the year before the preceding calendar year
    exceeds the Employment Cost Index for the base quarter of the
    second year before the preceding calendar year (if at all).
      (c) Allocation of Adjustment.--(1) Subject to paragraph (2),
    whenever the President determines such action to be in the best
    interest of the Government, the President may allocate the
    percentage increase in basic pay among such pay grade and
    years-of-service categories as the President considers
    appropriate.
      (2) In making any allocation under paragraph (1), the amount
    of the increase in basic pay for any given pay grade and years-
    of-service category after the allocation under paragraph (1)
    may not be less than 75 percent of the amount of the increase
    that otherwise would have been effective with respect to such
    pay grade and years-of-service category under subsection (b).
      (3) Whenever the President plans to use the authority
    provided under paragraph (1) with respect to any anticipated
    increase in the compensation of members of the uniformed
    services, the President shall advise the Congress, at the
    earliest practicable time before the effective date of the
    increase, regarding the proposed allocation of the increase
    among pay grade and years-of-service categories.
      (d) Protection of Member's Total Compensation While
    Performing Certain Duty.--(1) The total daily amount of the
    elements of compensation, described in subsection (a), together
    with other pay and allowances under this title, to be paid to a
    member of the uniformed services who is temporarily assigned to
    duty away from the member's permanent duty station or to duty
    under field conditions at the member's permanent duty station
    shall not be less, for any day during the assignment period,
    than the total amount, for the day immediately preceding the
    date of the assignment, of the elements of compensation and
    other pay and allowances of the member.
      (2) Paragraph (1) shall not apply with respect to an element
    of compensation or other pay or allowance of a member during an
    assignment described in such paragraph to the extent that the
    element of compensation or other pay or allowance is reduced or
    terminated due to circumstances unrelated to the assignment.
      (e) Other Definitions.--In this section:
              (1) The term ``Employment Cost Index'' means the
            Employment Cost Index (wages and salaries, private
            industry workers) published quarterly by the Bureau of
            Labor Statistics.
              (2) The term ``base quarter'', for each year, means
            the three-month period ending on September 30 of such
            year.
              * * * * * * *

    Sec. 1012. Disbursement and accounting: pay of enlisted members of the
                        National Guard

      Amounts appropriated for the pay, under subsections (a), (b),
    and (d) of section 206, section 301(f), section 402(b)(3), and
    section 1002 of this title, of enlisted members of the Army
    National Guard of the United States or the Air National Guard
    of the United States for attending regular periods of duty and
    instruction shall be disbursed and accounted for by the
    Secretary of Defense. All such disbursements shall be made for
    3-month periods for units of the Army National Guard or Air
    National Guard under regulations prescribed by the Secretary of
    Defense, and on pay rolls prepared and authenticated as
    prescribed in those regulations.

              * * * * * * *

    Sec. 1014. Payment date for pay and allowances

      (a) Amounts of basic pay, basic allowance for quarters, basic
    allowance for subsistence, and other payments of military
    compensation (other than travel and transportation allowances
    and separation allowances) shall be paid on the first day of
    the month beginning after the month during which the right to
    such compensation accrues.
              * * * * * * *
                                  ----------

                          TITLE 32, UNITED STATES CODE

              * * * * * * *

                            CHAPTER 1--ORGANIZATION

              * * * * * * *

    Sec. 107. Availability of appropriations

      (a) * * *
      (b) The expenses of enlisted members of the Regular Army or
    the Regular Air Force on duty with the National Guard shall be
    paid from appropriations for the Army National Guard or the Air
    National Guard, as the case may be, but not from the allotment
    of a State or Territory, Puerto Rico or the District of
    Columbia. Payable expenses include allowances for subsistence
    [and quarters] and housing under sections 402 and 403 of title
    37 and expenses for medicine and medical attendance.
              * * * * * * *

    Sec. 112. Drug interdiction and counter-drug activities

      (a) * * *
              * * * * * * *
      (g) Prohibition on Certain Civil-Military Activities.--Funds
    provided under this section may not be used to conduct
    activities, including community-outreach programs, designed to
    reduce the demand for illegal drugs among persons who are not
    members of the National Guard or their dependents.
      [(g)] (h) Statutory Construction.--Nothing in this section
    shall be construed as a limitation on the authority of any unit
    of the National Guard of a State, when such unit is not in
    Federal service, to perform law enforcement functions
    authorized to be performed by the National Guard by the laws of
    the State concerned.
      [(h)] (i) Definitions.--For purposes of this section:
              (1) The term ``drug interdiction and counter-drug
            activities'', with respect to the National Guard of a
            State, means the use of National Guard personnel in
            drug interdiction and counter-drug law enforcement
            activities authorized by the law of the State and
            requested by the Governor of the State.
              (2) The term ``Governor of a State'' means, in the
            case of the District of Columbia, the Commanding
            General of the National Guard of the District of
            Columbia.
              (3) The term ``State'' means each of the several
            States, the District of Columbia, the Commonwealth of
            Puerto Rico, or a territory or possession of the United
            States.
              * * * * * * *

                              CHAPTER 5--TRAINING

    Sec.
    501.  Training generally.
         * * * * * * *
    509.  National Guard Challenge Program of opportunities for civilian
              youth.
              * * * * * * *

    Sec. 509. National Guard Challenge Program of opportunities for
                        civilian youth

      (a) Program Authority and Purpose.--The Secretary of Defense,
    acting through the Chief of the National Guard Bureau, may
    conduct a National Guard civilian youth opportunities program
    (to be known as the ``National Guard Challenge Program'') to
    use the National Guard to provide military-based training,
    including supervised work experience in community service and
    conservation projects, to civilian youth who cease to attend
    secondary school before graduating so as to improve the life
    skills and employment potential of such youth.
      (b) Conduct of the Program.--The Secretary of Defense shall
    provide for the conduct of the National Guard Challenge Program
    in such States as the Secretary considers to be appropriate,
    except that Federal expenditures under the program may not
    exceed $50,000,000 for any fiscal year.
      (c) Program Agreements.--(1) To carry out the National Guard
    Challenge Program in a State, the Secretary of Defense shall
    enter into an agreement with the Governor of the State or, in
    the case of the District of Columbia, with the commanding
    general of the District of Columbia National Guard, under which
    the Governor or the commanding general will establish,
    organize, and administer the National Guard Challenge Program
    in the State.
      (2) The agreement may provide for the Secretary to provide
    funds to the State for civilian personnel costs attributable to
    the use of civilian employees of the National Guard in the
    conduct of the National Guard Challenge Program.
      (d) Matching Funds Required.--The amount of assistance
    provided under this section to a State program of the National
    Guard Challenge Program may not exceed--
              (1) for fiscal year 1998, 75 percent of the costs of
            operating the State program during that year;
              (2) for fiscal year 1999, 70 percent of the costs of
            operating the State program during that year;
              (3) for fiscal year 2000, 65 percent of the costs of
            operating the State program during that year; and
              (4) for fiscal year 2001 and each subsequent fiscal
            year, 60 percent of the costs of operating the State
            program during that year.
      (e) Persons Eligible to Participate in Program.--A school
    dropout from secondary school shall be eligible to participate
    in the National Guard Challenge Program. The Secretary of
    Defense shall prescribe the standards and procedures for
    selecting participants from among school dropouts.
      (f) Authorized Benefits for Participants.--(1) To the extent
    provided in an agreement entered into in accordance with
    subsection (c) and subject to the approval of the Secretary of
    Defense, a person selected for training in the National Guard
    Challenge Program may receive the following benefits in
    connection with that training:
              (A) Allowances for travel expenses, personal
            expenses, and other expenses.
              (B) Quarters.
              (C) Subsistence.
              (D) Transportation.
              (E) Equipment.
              (F) Clothing.
              (G) Recreational services and supplies.
              (H) Other services.
              (I) Subject to paragraph (2), a temporary stipend
            upon the successful completion of the training, as
            characterized in accordance with procedures provided in
            the agreement.
      (2) In the case of a person selected for training in the
    National Guard Challenge Program who afterwards becomes a
    member of the Civilian Community Corps under subtitle E of
    title I of the National and Community Service Act of 1990 (42
    U.S.C. 12611 et seq.), the person may not receive a temporary
    stipend under paragraph (1)(I) while the person is a member of
    that Corps. The person may receive the temporary stipend after
    completing service in the Corps unless the person elects to
    receive benefits provided under subsection (f) or (g) of
    section 158 of such Act (42 U.S.C. 12618).
      (3) In the case of a person who is selected for training in a
    State program conducted under the National Guard Challenge
    Program and who obtains a general education diploma in
    connection with such training, the general education diploma
    shall be treated as equivalent to a high school diploma for
    purposes of determining the eligibility of the person for
    enlistment in the armed forces.
      (g) Program Personnel.--(1) Personnel of the National Guard
    of a State in which the National Guard Challenge Program is
    conducted may serve on full-time National Guard duty for the
    purpose of providing command, administrative, training, or
    supporting services for the program. For the performance of
    those services, any such personnel may be ordered to duty under
    section 502(f) of this title for not longer than the period of
    the program.
      (2) A Governor participating in the National Guard Challenge
    Program and the commanding general of the District of Columbia
    National Guard (if the District of Columbia National Guard is
    participating in the program) may procure by contract the
    temporary full time services of such civilian personnel as may
    be necessary to augment National Guard personnel in carrying
    out the National Guard Challenge Program in that State.
      (3) Civilian employees of the National Guard performing
    services for the National Guard Challenge Program and
    contractor personnel performing such services may be required,
    when appropriate to achieve the purposes of the program, to be
    members of the National Guard and to wear the military uniform.
      (h) Equipment and Facilities.--(1) Equipment and facilities
    of the National Guard, including military property of the
    United States issued to the National Guard, may be used in
    carrying out the National Guard Challenge Program.
      (2) Activities under the National Guard Challenge Program
    shall be considered noncombat activities of the National Guard
    for purposes of section 710 of this title.
      (i) Status of Participants.--(1) A person receiving training
    under the National Guard Challenge Program shall be considered
    an employee of the United States for the purposes of the
    following provisions of law:
              (A) Subchapter I of chapter 81 of title 5 (relating
            to compensation of Federal employees for work
            injuries).
              (B) Section 1346(b) and chapter 171 of title 28 and
            any other provision of law relating to the liability of
            the United States for tortious conduct of employees of
            the United States.
      (2) In the application of the provisions of law referred to
    in paragraph (1)(A) to a person referred to in paragraph (1)--
              (A) the person shall not be considered to be in the
            performance of duty while the person is not at the
            assigned location of training or other activity or duty
            authorized in accordance with a program agreement
            referred to in subsection (c), except when the person
            is traveling to or from that location or is on pass
            from that training or other activity or duty;
              (B) the person's monthly rate of pay shall be deemed
            to be the minimum rate of pay provided for grade GS-2
            of the General Schedule under section 5332 of title 5;
            and
              (C) the entitlement of a person to receive
            compensation for a disability shall begin on the day
            following the date on which the person's participation
            in the National Guard Challenge Program is terminated.
      (3) A person referred to in paragraph (1) may not be
    considered an employee of the United States for any purpose
    other than a purpose set forth in that paragraph.
      (j) Supplemental Resources.--(1) To carry out the National
    Guard Challenge Program in a State, the Governor of the State
    or, in the case of the District of Columbia, the commanding
    general of the District of Columbia National Guard may
    supplement funds made available under the program out of other
    resources (including gifts) available to the Governor or the
    commanding general. The Governor or the commanding general may
    accept, use, and dispose of gifts or donations of money, other
    property, or services for the National Guard Challenge Program.
      (k) Report.--Within 90 days after the end of each fiscal
    year, the Secretary of Defense shall submit to Congress a
    report on the design, conduct, and effectiveness of the
    National Guard Challenge Program during the preceding fiscal
    year. In preparing the report, the Secretary shall coordinate
    with the Governor of each State in which the National Guard
    Challenge Program is carried out and, if the program is carried
    out in the District of Columbia, with the commanding general of
    the District of Columbia National Guard.
      (l) Definitions.--In this section:
              (1) The term ``State'' includes the Commonwealth of
            Puerto Rico, the territories, and the District of
            Columbia.
              (2) The term ``school dropout'' means an individual
            who is no longer attending any school and who has not
            received a secondary school diploma or a certificate
            from a program of equivalency for such a diploma.
              * * * * * * *

                  CHAPTER 7--SERVICE, SUPPLY, AND PROCUREMENT

              * * * * * * *

    Sec. 709. Technicians: employment, use, status

      (a) * * *
      (b) [Except as prescribed by the Secretary concerned, a
    technician] A technician employed under subsection (a) shall,
    while so employed--
              (1) be a member of the National Guard;
              (2) hold the military grade specified by the
            Secretary concerned for that position; and
              (3) wear the uniform appropriate for the member's
            grade and component of the armed forces while
            performing duties as a technician.
              * * * * * * *
                                  ----------

       SECTION 8106 OF THE DEPARTMENT OF DEFENSE APPROPRIATIONS ACT, 1996

                              (Public Law 104-61)

      [Sec. 8106. None of the funds available to the Department of
    Defense during fiscal year 1996 may be obligated or expended to
    support or finance the activities of the Defense Policy
    Advisory Committee on Trade.]
                                  ----------

                SECTION 4 OF THE MILITARY SELECTIVE SERVICE ACT

                              training and service

          Sec. 4. (a) * * *
              * * * * * * *
          (k)(1) * * *
              * * * * * * *
          (10) Each person inducted into the National Security
    Training Corps shall be compensated at the monthly rate of $30:
    Provided, however, That each such person, having a dependent or
    dependents [as such terms are defined in the Career
    Compensation Act of 1949, shall be entitled to receive a
    dependency allowance equal to the sum of the basic allowance
    for quarters provided for persons in pay grade E-1 by section
    302(f) of the Career Compensation Act of 1949 as amended by
    section 3 of the Dependents' Assistance Act of 1950 as may be
    extended or amended] shall be entitled to receive a dependency
    allowance equal to the basic allowance for quarters provided
    for persons in pay grade E-1 under section 403 of title 37,
    United States Code, plus $40 so long as such person has in
    effect an allotment equal to the amount of such dependency
    allowance for the support of the dependent or dependents on
    whose account the allowance is claimed.
              * * * * * * *
                                  ----------

     SECTION 9 OF THE COAST AND GEODETIC SURVEY COMMISSIONER OFFICERS' ACT
                                    OF 1948

      Sec. 9. (a) * * *
      (b)(1) In the case of an officer who has completed five or
    more years of continuous active service immediately before that
    separation, the amount of separation pay which may be paid to
    the officer under this section is 10 percent of the product of
    (A) the years of active service creditable to the officer, and
    (B) twelve times the monthly basic pay to which the officer was
    entitled at the time of separation[, or $30,000, whichever is
    less].
      (2) In the case of an officer who has completed three but
    fewer than five years of continuous active service immediately
    before that separation, the amount of separation pay which may
    be paid to the officer under this section is one-half of the
    amount computed under paragraph (1)[, but in no event more than
    $15,000].
              * * * * * * *
      (d)[(1)] A period for which an officer has previously
    received separation pay, severance pay, or readjustment pay
    under any other provision of law based on service in a
    uniformed service may not be included in determining the years
    of creditable service that may be counted in computing the
    separation pay of the officer under this section.
      [(2) The total amount that an officer may receive in
    separation pay under this section and separation pay, severance
    pay, and readjustment pay under any other provision of law
    based on service in a uniformed service may not exceed
    $30,000.]
      (e)(1) * * *
      (2) An officer who has received separation pay under this
    section may not be deprived, by reason of receipt of that pay,
    of any disability compensation to which the officer is entitled
    under the laws administered by the Secretary of Veterans
    Affairs, but there shall be deducted from that disability
    compensation an amount equal to the total amount of separation
    pay received, less the amount of Federal income tax withheld
    from such pay (such withholding being at the flat withholding
    rate for Federal income tax withholding, as in effect pursuant
    to regulations prescribed under chapter 24 of the Internal
    Revenue Code of 1986). Notwithstanding the preceding sentence,
    no deduction may be made from disability compensation for the
    amount of separation pay received because of an earlier
    discharge, separation, or release from a period of active duty
    if the disability which is the basis for that disability
    compensation was incurred or aggravated during a later period
    of active duty.
                                  ----------

                  SECTION 221 OF THE PUBLIC HEALTH SERVICE ACT

        rights, privileges, etc. of officers and surviving beneficiaries

      Sec. 221. (a) Commissioned officers of the Service or their
    surviving beneficiaries are entitled to all the rights,
    benefits, privileges, and immunities now or hereafter provided
    for commissioned officers of the Army or their surviving
    beneficiaries under the following provisions of title 10,
    United States Code:
              (1) * * *
              * * * * * * *
              (16) Section 1052, Reimbursement for adoption
            expenses.
              * * * * * * *
                                  ----------

                 DEPARTMENT OF DEFENSE AUTHORIZATION ACT, 1986

              * * * * * * *

       TITLE IX--PROCUREMENT POLICY REFORM AND OTHER PROCUREMENT MATTERS

              * * * * * * *

    [SEC. 913. MINIMUM PERCENTAGE OF COMPETITIVE PROCUREMENTS

      [(a) Annual Goal.--The Secretary of Defense shall establish
    for each fiscal year a goal for the percentage of defense
    procurements to be made during that year (expressed in total
    dollar value of contracts entered into) that are to be
    competitive procurements.
      [(b) Definition.--For the purposes of this section, the term
    ``competitive procurements'' means procurements made by the
    Department of Defense through the use of competitive
    procedures, as defined in section 2304 of title 10, United
    States Code.]
              * * * * * * *

                         TITLE XIV--GENERAL PROVISIONS

              * * * * * * *

                  Part D--Miscellaneous Reporting Requirements

              * * * * * * *

    [SEC. 1437. REPORT ON RETENTION OF BASIC POINT DEFENSE MISSILE SYSTEM

      [(a) Requirement for Report by Secretary of the Navy.--The
    Secretary of the Navy shall submit to the Committees on Armed
    Services of the Senate and House of Representatives a report on
    the removal of the Basic Point Defense Missile System from
    naval amphibious vessels.
      [(b) Replacement of the Basic Point Defense Missile System.--
    (1) The report shall consider the current plans to replace the
    Basic Point Defense Missile System on amphibious vessels with
    the Close-in Weapon System (CIWS).
      [(2) The report shall include an assessment of the
    effectiveness of the anti-air warfare capabilities of
    amphibious vessels. This assessment shall be used by the
    Secretary of the Navy in considering augmenting rather than
    replacing the Basic Point Defense Missile System on amphibious
    vessels with the Close-in Weapon System.
      [(c) Limitations on Removal of Basic Point Defense Missile
    System.--The Secretary of the Navy may not remove the Basic
    Point Defense Missile System from amphibious vessels until the
    report is submitted.]
              * * * * * * *
                                  ----------

                    OFFICE OF FEDERAL PROCUREMENT POLICY ACT

    SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

      (a) Short Title.--This Act may be cited as the ``Office of
    Federal Procurement Policy Act''.
      (b) Table of Contents.--The table of contents for this Act is
    as follows:
    Sec. 1. Short title; table of contents.
         * * * * * * *
    [Sec. 27. Procurement integrity.]
    Sec. 27. Restrictions on disclosing and obtaining contractor bid or
              proposal information or source selection information.
         * * * * * * *

    SEC. 6. AUTHORITY AND FUNCTIONS OF THE ADMINISTRATOR.

      (a) * * *
              * * * * * * *
      (d) The functions of the Administrator shall include--
              (1) * * *
              * * * * * * *
              (5) providing for and directing the activities of the
            Federal Acquisition Institute (including recommending
            to the Administrator of General Services a sufficient
            budget for such activities), which shall be located in
            the General Services Administration, in order to--
                      (A) * * *
              * * * * * * *
                      (J) perform other career management or
                    research functions as directed by the
                    Administrator[.];
              (6) administering the provisions of section 37;
              * * * * * * *
              (12) developing policies that will promote
            achievement of goals for participation by small
            businesses, small businesses owned and controlled by
            socially and economically disadvantaged individuals,
            and [small business] small businesses owned and
            controlled by women; and
              * * * * * * *

    SEC. 20. ADVOCATES FOR COMPETITION.

      (a) * * *
      (b) The advocate for competition of an executive agency
    shall--
              (1) * * *
              * * * * * * *
              (3) identify and report to the senior procurement
            executive of the executive agency designated pursuant
            to section 16(3)--
                      (A) opportunities and actions taken to
                    achieve full and open competition in the
                    procurement activities of the executive agency;
                    and
                      (B) any condition or action which has the
                    effect of unnecessarily restricting competition
                    in the procurement actions of the executive
                    agency; [and]
              [(4) prepare and transmit to such senior procurement
            executive an annual report describing--
                      [(A) such advocate's activities under this
                    section;
                      [(B) new initiatives required to increase
                    competition; and
                      [(C) barriers to full and open competition
                    that remain;]
              [(5)] (4) recommend to the senior procurement
            executive of the executive agency goals and the plans
            for increasing competition on a fiscal year basis;
              [(6)] (5) recommend to the senior procurement
            executive of the executive agency a system of personal
            and organizational accountability for competition,
            which may include the use of recognition and awards to
            motivate program managers, contracting officers, and
            others in authority to promote competition in
            procurement programs; and
              [(7)] (6) describe other ways in which the executive
            agency has emphasized competition in programs for
            procurement training and research.
              * * * * * * *

    SEC. 25. FEDERAL ACQUISITION REGULATORY COUNCIL.

      (a) * * *
              * * * * * * *
      (c) Functions.--(1) * * *
              * * * * * * *
      [(4)(A) Under procedures established by the Administrator, a
    person may request the Administrator to review any regulation
    relating to procurement on the basis that such regulation is
    inconsistent with the Federal Acquisition Regulation.
      [(B) Unless the request is frivolous or does not, on its
    face, state a valid basis for such review, the Administrator
    shall complete such a review not later than 60 days after
    receiving the request. The time for completion of the review
    may be extended if the Administrator determines that an
    additional period of review is required. The Administrator
    shall advise the requester of the reasons for the extension and
    the date by which the review will be completed.
      [(5) If the Administrator determines that a regulation
    relating to procurement is inconsistent with the Federal
    Acquisition Regulation or that the regulation should otherwise
    be revised to remove an inconsistency with any policies issued
    under section 6(a) of this Act, the Administrator shall rescind
    or deny the promulgation of the regulation or take such other
    action authorized under section 6 as may be necessary to remove
    the inconsistency. If the Administrator determines that such a
    regulation, although not inconsistent with the Federal
    Acquisition Regulation or such policies, should be revised to
    improve compliance with such regulation or policies, the
    Administrator shall take such action authorized under section 6
    as may be necessary and appropriate.
      [(6) The decisions of the Administrator shall be in writing
    and made publicly available. The Administrator shall provide a
    listing of such decisions in the annual report to Congress
    required by section 8 of this Act.]
              * * * * * * *
      [(g) Reports.--The Administrator for Federal Procurement
    Policy shall--
              [(1) publish a report every 12 months relating to the
            development of procurement regulations to be issued in
            accordance with subsection (c) of this section; and
              [(2) include in each report published under paragraph
            (1)--
                      [(A) the status of each such regulation;
                      [(B) a description of those regulations which
                    are required by statute;
                      [(C) a description of the methods by which
                    public comment was sought with regard to each
                    proposed regulation in accordance with section
                    22 of this Act, and to the extent appropriate,
                    sections 3504(h) and 3507 of title 44, United
                    States Code;
                      [(D) regulatory activities completed and
                    initiated since the last report;
                      [(E) regulations, policies, procedures,
                    practices, and forms that are under
                    consideration or review by the Office of
                    Federal Procurement Policy;
                      [(F) whether the regulations have paperwork
                    requirements;
                      [(G) the progress made in promulgating and
                    implementing the Federal Acquisition
                    Regulation; and
                      [(H) such other matters as the Administrator
                    determines would be useful.]
              * * * * * * *

    SEC. 35. COMMERCIALLY AVAILABLE OFF-THE-SHELF ITEM ACQUISITIONS: LISTS
                        OF INAPPLICABLE LAWS IN FEDERAL ACQUISITION
                        REGULATION.

      (a) * * *
      (b) Covered Law.--Except as provided in subsection (a)(3),
    the list referred to in subsection (a)(1) shall include each
    provision of law that, as determined by the Administrator,
    imposes on persons who have been awarded contracts by the
    Federal Government for the procurement of commercially
    available off-the-shelf items Government-unique policies,
    procedures, requirements, or restrictions for the procurement
    of property or services, except the following:
              (1) A provision of law that provides for criminal or
            civil penalties.
              (2) A provision of law that specifically refers to
            this section and provides that, notwithstanding this
            section, such provision of law shall be applicable to
            contracts for the procurement of [commercial]
            commercially available off-the-shelf items.
              * * * * * * *
                                  ----------

                           MERCHANT MARINE ACT, 1936

              * * * * * * *

                  TITLE II--UNITED STATES MARITIME COMMISSION

              * * * * * * *
      Sec. 213. The Secretary of Transportation shall make studies
    of and make reports to Congress [on--] on the following:
              [(a)] (1) The scrapping or removal from service of
            old or obsolete merchant tonnage owned by the United
            States or in use in the merchant marine[;].
              [(b)] (2) Tramp shipping service and the advisability
            of citizens of the United States participating in such
            service with vessels under United States registry[;].
      [(c) The relative cost of construction or reconditioning of
    comparable ocean vessels in shipyards in the various coastal
    districts of the United States, together with recommendations
    as to how such shipyards may compete for work on an equalized
    basis; reports under this paragraph shall be made annually on
    the first day of October of each year.]
              * * * * * * *

                   TITLE V--CONSTRUCTION-DIFFERENTIAL SUBSIDY

              * * * * * * *
      Sec. 510. (a) * * *
              * * * * * * *
      (i)(1) The Secretary of Transportation is authorized to
    acquire suitable documented vessels, as defined in section 2101
    of title 46, United States Code, with funds in the Vessel
    Operations Revolving Fund derived from the sale of obsolete
    vessels in the National Defense Reserve Fleet. For purposes of
    this subsection, the acquired and obsolete vessels shall be
    valued at their scrap value in domestic or foreign markets as
    of the date of the acquisition for or sale from the National
    Defense Reserve Fleet; except that, in a transaction subject to
    this section, the value assigned to those vessels will be
    determined on the same basis, with consideration given to the
    fair value of the cost of positioning the traded-out vessel to
    the place of scrapping. All costs incident to the lay-up of the
    vessel acquired under this subsection may be paid from balances
    in the Fund. Notwithstanding the provisions of sections 9 and
    37 of the Shipping Act, 1916, vessels sold from the National
    Defense Reserve Fleet under this subsection may be scrapped in
    approved foreign markets.
      (2)(A) Subject to subparagraph (B), the sale under this
    subsection of a vessel from the National Defense Reserve Fleet
    for export, or any subsequent resale of a vessel sold from the
    Fleet for export--
              (i) is not a disposal or a distribution in commerce
            under section 6 or 12(a) of the Toxic Substances
            Control Act (15 U.S.C. 2605 and 2611(a)) or an export
            of hazardous waste under section 3017 of the Solid
            Waste Disposal Act (42 U.S.C. 6938); and
              (ii) is not subject to subsection (b) of section 12
            of the Toxic Substances Control Act (15 U.S.C. 2611).
      (B)(i) Subparagraph (A) applies to a vessel being sold for
    export only if, before the sale of such vessel, any item listed
    in clause (ii) containing polychlorinated biphenyls is removed
    from the vessel.
      (ii) Clause (i) covers any transformer, large high or low
    voltage capacitor, or hydraulic or heat transfer fluid.
              * * * * * * *

                 TITLE VI--VESSEL OPERATING ASSISTANCE PROGRAMS

              * * * * * * *

                  Subtitle B--Maritime Security Fleet Program

              * * * * * * *

                              operating agreements

      Sec. 652. (a) * * *
              * * * * * * *
      (c) Regulatory Relief.--A contractor of a vessel included in
    an operating agreement under this subtitle may operate the
    vessel in the foreign commerce of the United States without
    restriction, and shall not be subject to any requirement under
    section 801, 808, 809, or 810. Participation in the program
    established by this subtitle shall not subject a contractor to
    section 805 or to any provision of subtitle A. The third
    sentence of section 901(b)(1) shall not apply to a vessel
    included in an operating agreement under this subtitle.
              * * * * * * *

                         national security requirements

      Sec. 653. (a) * * *
              * * * * * * *
      (d) Temporary Replacement Vessels.--Notwithstanding any other
    provision of this subtitle or of other law to the contrary--
              [(1) a contractor may operate or employ in foreign
            commerce a foreign-flag vessel or foreign-flag vessel
            capacity, as a temporary replacement for a United
            States-documented vessel or United States-documented
            vessel capacity that is activated under an Emergency
            Preparedness Agreement; and]
              (1) a contractor or other person that commits to make
            available a vessel or vessel capacity under the
            Emergency Preparedness Program or another primary
            sealift readiness program approved by the Secretary of
            Defense may, during the activation of that vessel or
            capacity under that program, operate or employ in
            foreign commerce a foreign-flag vessel or foreign-flag
            vessel capacity as a temporary replacement for the
            activated vessel or capacity; and
              * * * * * * *

                         noncontiguous domestic trades

      Sec. 656. (a) * * *
      (b)(1) Subsection (a) shall not apply in any way to provision
    by a contractor of service within the level of service provided
    by that contractor as of the date established by subsection (c)
    or to provision of service permitted by subsection (d).
      (2) Subsection (a) shall not apply to operation by a
    contractor of a self-propelled tank vessel in a noncontiguous
    domestic trade, or to ownership by a contractor of an interest
    in a self-propelled tank vessel that operates in a
    noncontiguous domestic trade.
              * * * * * * *
                                  ----------

            SECTION 6 OF THE NATIONAL MARITINE HERITAGE ACT OF 1994

    SEC. 6. FUNDING.

      (a) Availability of Funds From Sale and Scrapping of Obsolete
    Vessels.--
              (1) In general.--Notwithstanding any other provision
            of law, the amount of funds credited in a fiscal year
            to the Vessel Operations Revolving Fund established by
            the Act of June 2, 1951 (46 App. U.S.C. 1241a), that is
            attributable to the sale of obsolete vessels in the
            National Defense Reserve Fleet that are scrapped or
            sold under section 508 or 510(i) of the Merchant Marine
            Act, 1936 (46 App. U.S.C. 1158 or 1160(i)) shall be
            available until expended as follows:
                      (A) * * *
              * * * * * * *
      (b) Use of Amounts for Program.--
              (1) * * *
              (2) Use for interim projects.--Amounts available for
            the Program under subsection (a)(1)(C) that are the
            proceeds of any of the first 6 obsolete vessels in the
            National Defense Reserve Fleet that are sold or
            scrapped after July 1, 1994, under section 508 or
            510(i) of the Merchant Marine Act, 1936 (46 U.S.C. 1158
            or 1160(i)) are available to the Secretary for grants
            for interim projects approved under section 4(j) of
            this Act.
              * * * * * * *
      (c) Disposals of Vessels.--
              (1) Requirement.--The Secretary of Transportation
            shall dispose of all vessels described in paragraph
            (2)--
                      (A) by September 30, [1999] 2001;
              * * * * * * *
                                  ----------

            NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 1989

              * * * * * * *

         DIVISION A--DEPARTMENT OF DEFENSE AND OTHER NATIONAL DEFENSE
                                 AUTHORIZATIONS

              * * * * * * *

          Part B--Program Requirements, Restrictions, and Limitations

              * * * * * * *

    [SEC. 117. MANAGEMENT OF CERTAIN DEFENSE PROCUREMENT PROGRAMS

      [(a) Stretchout Impact Statement.--The Secretary of Defense
    shall submit to Congress, at the same time the budget for any
    fiscal year is submitted to Congress under section 1105 of
    title 31, United States Code, a statement of what the effect
    would be during the fiscal year for which the budget is
    submitted of the stretchout of a major defense acquisition
    program if either of the following applies with respect to that
    program:
              [(1) The final year of procurement scheduled for the
            program at the time the statement is submitted is more
            than two years later than the final year of procurement
            for the program as specified in the most recent annual
            Selected Acquisition Report for that program.
              [(2) The proposed procurement quantity for that
            fiscal year is less than 90 percent of the procurement
            quantity proposed for the same fiscal year in the most
            recent annual Selected Acquisition Report for that
            program.
      [(b) Changes in Certain Costs To Be Included.--A statement
    under subsection (a) with respect to a major defense
    acquisition program shall contain an estimate of the projected
    increase in unit cost and the projected increase in total
    program cost for the system being procured under the program
    compared to the program specified in the most recent annual
    Selected Acquisition Report for that program.
      [(d) Limitations.--(1) Subsection (a) shall apply only for
    major defense acquisition programs for which procurement is
    proposed at a rate of six or more units per year.
      [(2) Subsection (a) shall not apply if the total procurement
    quantity has been increased, compared to the program specified
    in the most recent annual Selection Acquisition Report for that
    program, and subsection (a)(2) does not apply.
      [(e) Report on Establishing Maximum Production Rates.--Not
    later than March 15, 1989, the Secretary of Defense shall
    submit to the Committees on Armed Services of the Senate and
    the House of Representatives a report on the feasibility and
    effect of establishing maximum production rates by December
    1990 for certain major defense acquisition programs. The report
    shall identify and discuss ten programs, of which seven shall
    be programs for the procurement of conventional, tactical, or
    dual-capable systems.
      [(f) Definition.--For purposes of this section, the term
    ``major defense acquisition program'' has the meaning given
    that term in section 2430 of title 10, United States Code.]
              * * * * * * *

           TITLE XIV--DEPARTMENT OF ENERGY NATIONAL SECURITY PROGRAMS

              * * * * * * *

    SEC. 1436. NUCLEAR TEST BAN READINESS PROGRAM

      (a) * * *
              * * * * * * *
      [(e) Annual Report.--The Secretary of Energy shall submit to
    Congress each year an unclassified report (with a classified
    annex as necessary) that describes the progress made to the
    date of the report in achieving the purposes of the program
    required to be established under subsection (b).]
              * * * * * * *
                                  ----------

       NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEARS 1990 AND 1991

              * * * * * * *

                DIVISION A--DEPARTMENT OF DEFENSE AUTHORIZATIONS

                              TITLE I--PROCUREMENT

              * * * * * * *

                          Part B--B-2 Aircraft Program

              * * * * * * *

    [SEC. 115. ONGOING INDEPENDENT ASSESSMENT OF B-2 AIRCRAFT PROGRAM

      [(a) Independent Assessment.--The Secretary of Defense shall
    provide for an ongoing independent assessment of the
    technological capabilities and performance of the B-2 aircraft.
    The Secretary shall appoint a panel of experts and shall use
    the resources of federally funded research and development
    centers (FFRDCs) to conduct the assessment. The Secretary shall
    provide the panel such resources as are necessary, including
    technical assistance by private contractors and the United
    States intelligence community, to assist the panel in
    conducting the assessment. Individuals appointed to the panel
    shall be independent of the Air Force and shall have no
    arrangements with the Air Force that would constitute a
    conflict of interest.
      [(b) Report.--The panel shall submit periodic reports of its
    findings to Congress. The first such report shall be submitted
    not later than April 1, 1990. Subsequent reports shall be
    submitted every six months thereafter until B-2 aircraft
    procurement is completed. Such reports shall be submitted in
    both classified and unclassified form. Each such report shall
    address the following matters:
              [(1) The capability of air defenses of the Soviet
            Union to defeat the B-2 aircraft during the designed
            service life of that aircraft, taking into
            consideration in particular--
                      [(A) the low radar signature and anticipated
                    performance of the aircraft;
                      [(B) technological capabilities of the Soviet
                    Union;
                      [(C) developments by the Soviet Union of
                    alternatives to defeat the B-2 aircraft; and
                      [(D) the estimated cost to the Soviet Union
                    to defeat the B-2 aircraft.
              [(2) The rationale for building the B-2 aircraft as a
            manned penetrating bomber, taking into consideration in
            particular--
                      [(A) the missions of the aircraft;
                      [(B) the capabilities of the aircraft to
                    complete those missions; and
                      [(C) the capability of the aircraft to search
                    for, identify, and destroy strategic
                    relocatable targets.
              [(3) The opportunity costs associated with the B-2
            program as compared to other available or emerging
            technologies and operational concepts that could
            perform the missions of the B-2 aircraft at lesser
            costs.
              [(4) The planned service life of the B-2 aircraft and
            the potential for growth in that planned service life
            through the incorporation of preplanned product
            improvements and other modifications.
              [(5) The requirements for any follow-on aircraft or
            system that incorporates both low observable technology
            and high speed maneuverability.
              [(6) An assessment of the capability of the United
            States to defeat, identify, and destroy low observable
            vehicles, including manned aircraft and unmanned
            systems.]
              * * * * * * *

     DIVISION C--DEPARTMENT OF ENERGY NATIONAL SECURITY AUTHORIZATIONS AND
                              OTHER AUTHORIZATIONS

          TITLE XXXI--DEPARTMENT OF ENERGY NATIONAL SECURITY PROGRAMS

              * * * * * * *

                  Part D--Environment, Safety, and Management

              * * * * * * *

    [SEC. 3143. MAJOR DEPARTMENT OF ENERGY NATIONAL SECURITY PROGRAMS

      [(a) Major Program Defined.--In this section, the term
    ``major Department of Energy national security program'' means
    a research and development program (which may include
    construction and production  activities),  a  construction
    program,  or  a  production program--
              [(1) that is designated by the Secretary of Energy as
            a major Department of Energy national security program;
            or
              [(2) that is estimated by the Secretary of Energy to
            cost more than $500,000,000 (based on fiscal year 1989
            constant dollars).
      [(b) Required Reports.--(1) Except as provided in paragraph
    (3), the Secretary of Energy shall submit to the Committees on
    Armed Services and the Committees on Appropriations of the
    Senate and House of Representatives at the end of each
    calendar-year quarter a report  on  each  major  Department  of
     Energy  national  security program.
      [(2) Each such report shall include, at a minimum, the
    following information:
              [(A) A description of the program, its purpose, and
            its relationship to the mission of the national
            security program of the Department of Energy.
              [(B) The program schedule, including estimated annual
            costs.
              [(C) A comparison of the current schedule and cost
            estimates with previous schedule and cost estimates,
            and an explanation of changes.
      [(3) A report under this section need not be submitted for
    the first, second, or third calendar-year quarter if the
    comparison between current schedule and cost estimates and
    schedule and cost estimates contained in the last submitted
    report shows that there has been--
              [(A) less than a 5 percent change in total program
            cost; and
              [(B) less than a 90-day delay in any significant
            schedule item of the program.
      [(c) Submission of Report.--Each report under this section
    shall be submitted not later than 30 days after the end of each
    calendar-year quarter. The first report shall cover the fourth
    quarter of 1989 and shall be submitted not later than January
    30, 1990.
      [(d) Identification of Programs.--Not later than 60 days
    after the date of the enactment of this Act, the Secretary of
    Energy shall submit a report to the Committees on Armed
    Services and the Committees on Appropriations of the Senate and
    House of Representatives that identifies all programs of the
    Department of Energy that are major Department of Energy
    national security programs, as defined in subsection (a).]
              * * * * * * *
                                  ----------

          THE NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 1994

                DIVISION A--DEPARTMENT OF DEFENSE AUTHORIZATIONS

              * * * * * * *

      TITLE VIII--ACQUISITION POLICY, ACQUISITION MANAGEMENT, AND RELATED
                                    MATTERS

              * * * * * * *

                           Subtitle E--Other Matters

              * * * * * * *

    SEC. 845. AUTHORITY OF THE DEFENSE DEFENSE ADVANCED RESEARCH PROJECTS
                        AGENCY TO CARRY OUT CERTAIN PROTOTYPE PROJECTS.

      (a) Authority.--The Director of the Defense Defense Advanced
    Research Projects Agency may, under the authority of section
    2371 of title 10, United States Code, carry out prototype
    projects that are directly relevant to weapons or weapon
    systems proposed to be acquired or developed by the Department
    of Defense.
              * * * * * * *

     DIVISION C--DEPARTMENT OF ENERGY NATIONAL SECURITY AUTHORIZATIONS AND
                              OTHER AUTHORIZATIONS

          TITLE XXXI--DEPARTMENT OF ENERGY NATIONAL SECURITY PROGRAMS

              * * * * * * *

       Subtitle C--Program Authorizations, Restrictions, and Limitations

              * * * * * * *

    SEC. 3138. STOCKPILE STEWARDSHIP PROGRAM.

      (a) * * *
              * * * * * * *
      [(d) Report.--Each year, at the same time the President
    submits the budget under section 1105 of title 31, United
    States Code, the President shall submit to the Congress a
    report covering the most recently completed calendar year which
    sets forth--
              [(1) any concerns with respect to the safety,
            security, effectiveness, or reliability of existing
            United States nuclear weapons raised by the Stockpile
            Surveillance Program of the Department of Energy, and
            the calculations and experiments performed by Sandia
            National Laboratories, Lawrence Livermore National
            Laboratory, or Los Alamos National Laboratory; and
              [(2) if such concerns have been raised, the
            President's evaluation of each concern and a report on
            what actions are being or will be taken to address that
            concern.]
                                  ----------

       NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEARS 1992 AND 1993

                DIVISION A--DEPARTMENT OF DEFENSE AUTHORIZATIONS

              * * * * * * *

      TITLE VIII--ACQUISITION POLICY, ACQUISITION MANAGEMENT, AND RELATED
                                    MATTERS

                          Part A--Acquisition Process

              * * * * * * *

    SEC. 807. GOVERNMENT-INDUSTRY COMMITTEE ON RIGHTS IN TECHNICAL DATA.

      (a) * * *
              * * * * * * *
      (b) Government-Industry Committee.--(1) Not later than 60
    days after the date of the enactment of this Act, the Secretary
    of Defense shall appoint a government-industry committee for
    the purpose of developing regulations to recommend to the
    Secretary of Defense for purposes of carrying out subsection
    (a).
      (2) The membership of the committee shall include, at a
    minimum, representatives of the following:
              (A) The Under Secretary of Defense for Acquisition
            and Technology.
              * * * * * * *

                          TITLE X--GENERAL PROVISIONS

              * * * * * * *

                         Part G--Miscellaneous Matters

              * * * * * * *

    [SEC. 1084. DISPLAY OF POW/MIA FLAG.

      [(a) Display of POW/MIA Flag.--The POW/MIA flag, having been
    recognized and designated in section 2 of Public Law 101-355
    (104 Stat. 416) as the symbol of the Nation's concern and
    commitment to resolving as fully as possible the fates of
    Americans still prisoner, missing, and unaccounted for, thus
    ending the uncertainty for their families and the Nation, shall
    be displayed--
              [(1) at each national cemetery and at the National
            Vietnam Veterans Memorial each year on Memorial Day and
            Veterans Day and on any day designated by law as
            National POW/MIA Recognition Day; and
              [(2) on, or on the grounds of, the buildings
            specified in subsection (b) on any day designated by
            law as National POW/MIA Recognition Day.
      [(b) Specified Buildings for Flag Display.--The buildings
    referred to in subsection (a)(2) are the buildings containing
    the primary offices of--
              [(1) the Secretary of State;
              [(2) the Secretary of Defense;
              [(3) the Secretary of Veterans Affairs; and
              [(4) the Director of the Selective Service System.
      [(c) Procurement and Distribution of Flags.--Within 30 days
    after the date of the enactment of this Act, the Administrator
    of General Services shall procure POW/MIA flags and distribute
    them as necessary to carry out this section.
      [(d) Termination of Flag Display Requirement.--Subsection (a)
    shall cease to apply upon a determination by the President that
    the fullest possible accounting has been made of all members of
    the Armed Forces and civilian employees of the United States
    who have been identified as prisoner of war or missing in
    action in Southeast Asia.
      [(e) POW/MIA Flag Defined.--As used in this section, the term
    ``POW/MIA flag'' means the National League of Families POW/MIA
    flag recognized officially and designated by section 2 of
    Public Law 101-355 (104 Stat. 416).]
              * * * * * * *
                                  ----------

    SECTION 1121 OF THE NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEARS
                                 1988 AND 1989

    SEC. 1121. COUNTERINTELLIGENCE POLYGRAPH PROGRAM.

      (a) * * *
              * * * * * * *
      (c) Limitation on Number of Examinations.--The number of
    counterintelligence polygraph examinations that may be
    administered [under this section--
              [(1) may not exceed 10,000 during each of fiscal
            years 1988, 1989, and 1990; and
              [(2) may not exceed 5,000 during any fiscal year
            after fiscal year 1990] under this section may not
            exceed 5,000 during any fiscal year for which a
            specific number is not otherwise provide by law.
      (d) * * *
              * * * * * * *
                                  ----------

    SECTION 309 OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF
                                      1949

    SEC. 309. DEFINITIONS.

      As used in this title--
      (a) * * *
      (b) The term ``competitive procedures'' means procedures
    under which an executive agency enters into a contract pursuant
    to full and open competition. Such term also includes--
              (1) * * *
              (2) the competitive selection of basic research
            proposals resulting from a general solicitation and the
            peer review or scientific review (as appropriate) of
            such proposals; [and]
              * * * * * * *
                                  ----------

                 SECTION 6 OF THE CONTRACT DISPUTES ACT OF 1978

                      decision by the contracting officer

      Sec. 6. (a) * * *
              * * * * * * *
      (d) Notwithstanding any other provision of this Act, a
    contractor and a contracting officer may use any alternative
    means of dispute resolution under subchapter IV of chapter 5 of
    title 5, United States Code [(as in effect on September 30,
    1995)], or other mutually agreeable procedures, for resolving
    claims. In a case in which such alternative means of dispute
    resolution or other mutually agreeable procedures are used, the
    contractor shall certify that the claim is made in good faith,
    that the supporting data are accurate and complete to the best
    of his or her knowledge and belief, and that the amount
    requested accurately reflects the contract adjustment for which
    the contractor believes the Government is liable. All
    provisions of subchapter IV of chapter 5 of title 5, United
    States Code [(as in effect on September 30, 1995)], shall apply
    to such alternative means of dispute resolution.
      (e) The authority of agencies to engage in alternative means
    of dispute resolution proceedings under subsection (d) shall
    cease to be effective on October 1, 1999, except that such
    authority shall continue in effect with respect to then pending
    dispute resolution proceedings which, in the judgment of the
    agencies that are parties to such proceedings, require such
    continuation, until such proceedings terminate. In any case in
    which the contracting officer rejects a contractor's request
    for alternative dispute resolution proceedings, the contracting
    officer shall provide the contractor with a written
    explanation, citing one or more of the conditions in section
    572(b) of title 5, United States Code [(as in effect on
    September 30, 1995)], or such other specific reasons that
    alternative dispute resolution procedures are inappropriate for
    the resolution of the dispute. In any case in which a
    contractor rejects a request of an agency for alternative
    dispute resolution proceedings, the contractor shall inform the
    agency in writing of the contractor's specific reasons for
    rejecting the request.
                                  ----------

                      SECTION 16 OF THE SMALL BUSINESS ACT

      Sec. 16. (a) * * *
              * * * * * * *
      (d)(1) Whoever misrepresents the status of any concern or
    person as a ``small business concern'', a ``small business
    concern owned and controlled by socially and economically
    disadvantaged individuals'', or a ``small business [concerns]
    concern owned and controlled by women'', in order to obtain for
    oneself or another any--
              (A) * * *
              * * * * * * *
      (e) Any representation of the status of any concern or person
    as a ``small business concern'', a ``small business concern
    owned and controlled by socially and economically disadvantaged
    individuals'', or a ``small business [concerns] concern owned
    and controlled by women'' in order to obtain any prime contract
    or subcontract enumerated in subection (d) of this section
    shall be in writing.
              * * * * * * *
                                  ----------

      SECTION 1505 OF THE WEAPONS OF MASS DESTRUCTION CONTROL ACT OF 1992

    SEC. 1505. INTERNATIONAL NONPROLIFERATION INITIATIVE.

      (a) * * *
              * * * * * * *
      (d) Sources of Assistance.--(1) * * *
              * * * * * * *
      (3) The total amount of the assistance provided in the form
    of funds under this section, including funds used for
    activities of the Department of Defense in support of the
    United Nations Special Commission on Iraq, may not exceed
    $25,000,000 for fiscal year 1994, $20,000,000 for fiscal year
    1995, $15,000,000 for fiscal year 1996, [or] $15,000,000 for
    fiscal year 1997, or $15,000,000 for fiscal year 1998.
              * * * * * * *
      (f) Termination of Authority.--The authority of the Secretary
    of Defense to provide assistance under this section terminates
    at the close of fiscal year [1997] 1998.
              * * * * * * *
                                  ----------

          MILITARY CONSTRUCTION AUTHORIZATION ACT FOR FISCAL YEAR 1997

                DIVISION B--MILITARY CONSTRUCTION AUTHORIZATIONS

    SEC. 2001. SHORT TITLE.

      This division may be cited as the ``Military Construction
    Authorization Act for Fiscal Year 1997''.
              * * * * * * *

                                TITLE XXII--NAVY

    SEC. 2201. AUTHORIZED NAVY CONSTRUCTION AND LAND ACQUISITION PROJECTS.

      (a) Inside the United States.--Using amounts appropriated
    pursuant to the authorization of appropriations in section
    2204(a)(1), and, in the case of the projects described in
    paragraphs (2) and (3) of section 2204(b), other amounts
    appropriated pursuant to authorizations enacted after this Act
    for the projects, the Secretary of the Navy may acquire real
    property and carry out military construction projects for the
    installations and locations inside the United States, and in
    the amounts, set forth in the following table:

                         Navy: Inside the United States
    ------------------------------------------------------------------------
                                       Installation or
                 State                     location              Amount
    ------------------------------------------------------------------------
    Arizona.......................  Navy Detachment, Camp         $3,920,000
                                     Navajo.
    California....................  Marine Corps Air-
                                     Ground Combat
                                     Center, Twentynine
                                     Palms...............         $4,020,000
                                    Marine Corps Air
                                     Station, Camp
                                     Pendleton...........         $6,240,000
                                    Marine Corps Base,
                                     Camp Pendleton......        $51,630,000
          *         *         *         *         *         *         *
    Mississippi...................  Navy Project, Stennis         $7,960,000
                                     Space Center.
                                    Naval Air Station,            $4,990,000
                                     Pascagoula.
          *         *         *         *         *         *         *
                                    Naval Undersea
                                     Warfare Center,
                                     Keyport.............         $6,800,000
    CONUS Various.................  Defense access roads.           $300,000
                                                          ------------------
                                      Total:.............     [$589,992,000]
                                                                $594,982,000
    ------------------------------------------------------------------------

              * * * * * * *

    SEC. 2204. AUTHORIZATION OF APPROPRIATIONS, NAVY.

      (a) In General.--Funds are hereby authorized to be
    appropriated for fiscal years beginning after September 30,
    1996, for military construction, land acquisition, and military
    family housing functions of the Department of the Navy in the
    total amount of [$2,213,731,000] $2,218,721,000 as follows:
              (1) For military construction projects inside the
            United States authorized by section 2201(a),
            [$579,312,000] $584,302,000.
              * * * * * * *

                             TITLE XXIII--AIR FORCE

    SEC. 2301. AUTHORIZED AIR FORCE CONSTRUCTION AND LAND ACQUISITION
                        PROJECTS.

      (a) Inside the United States.--Using amounts appropriated
    pursuant to the authorization of appropriations in section
    2304(a)(1), the Secretary of the Air Force may acquire real
    property and carry out military construction projects for the
    installations and locations inside the United States, and in
    the amounts, set forth in the following table:

                       Air Force: Inside the United States
    ------------------------------------------------------------------------
                                         Installation or
                 State                       location             Amount
    ------------------------------------------------------------------------
    Alabama........................  Maxwell Air Force Base.      $7,875,000
          *         *         *         *         *         *         *
    Kansas.........................  McConnell Air Force       [$19,130,000]
                                      Base.                      $25,830,000
          *         *         *         *         *         *         *
    Washington.....................  Fairchild Air Force         $18,155,000
                                      Base.
                                     McChord Air Force Base.     $57,065,000
    Wyoming........................  F.E. Warren Air Force        $3,700,000
                                      Base.
                                                             ---------------
                                       Total:...............    $603,834,000
    ------------------------------------------------------------------------

              * * * * * * *

    SEC. 2304. AUTHORIZATION OF APPROPRIATIONS, AIR FORCE.

      (a) In General.--Funds are hereby authorized to be
    appropriated for fiscal years beginning after September 30,
    1996, for military construction, land acquisition, and military
    family housing functions of the Department of the Air Force in
    the total amount of [$1,894,594,000] $1,901,294,000 as follows:
              (1) For military construction projects inside the
            United States authorized by section 2301(a),
            [$603,834,000] $610,534,000.
              * * * * * * *

                TITLE XXVI--GUARD AND RESERVE FORCES FACILITIES

    SEC. 2601. AUTHORIZED GUARD AND RESERVE CONSTRUCTION AND LAND
                        ACQUISITION PROJECTS.

      There are authorized to be appropriated for fiscal years
    beginning after September 30, 1996, for the costs of
    acquisition, architectural and engineering services, and
    construction of facilities for the Guard and Reserve Forces,
    and for contributions therefor, under chapter 1803 of title 10,
    United States Code (including the cost of acquisition of land
    for those facilities), the following amounts:
              (1) For the Department of the Army--
                      (A) for the Army National Guard of the United
                    States, [$59,194,000] $65,094,000; and
                      (B) for the Army Reserve, $55,543,000.
              (2) For the Department of the Navy, for the Naval and
            Marine Corps Reserve, [$32,779,000] $37,879,000.
              * * * * * * *

                        TITLE XXVIII--GENERAL PROVISIONS

              * * * * * * *

                          Subtitle C--Land Conveyances

                            PART I--ARMY CONVEYANCES

              * * * * * * *

    SEC. 2824. LAND CONVEYANCE, ARMY RESERVE CENTER, ANDERSON, SOUTH
                        CAROLINA.

      (a) Conveyance Authorized.--The Secretary of the Army may
    convey, without consideration, to the [County of Anderson,
    South Carolina (in this section referred to as the ``County'')]
    Board of Education, Anderson County, South Carolina (in this
    section referred to as the ``Board''), all right, title, and
    interest of the United States in and to a parcel of real
    property, including improvements thereon, that is located at
    805 East Whitner Street in Anderson, South Carolina, and
    contains an Army Reserve Center.
      (b) Condition of Conveyance.--The conveyance authorized under
    subsection (a) shall be subject to the condition that the
    [County] Board retain the conveyed property for the use and
    benefit of the Anderson [County] Board Department of Education.
      (c) Description of Property.--The exact acreage and legal
    description of the real property to be conveyed under
    subsection (a) shall be determined by a survey satisfactory to
    the Secretary. The cost of the survey shall be borne by the
    [County] Board.
              * * * * * * *

                           PART II--NAVY CONVEYANCES

              * * * * * * *

    SEC. 2837. LEASE TO FACILITATE CONSTRUCTION OF RESERVE CENTER, NAVAL
                        AIR STATION, MERIDIAN, MISSISSIPPI.

      (a) Lease of Property for Construction of Reserve Center.--
    (1) The Secretary of the Navy may lease, without reimbursement,
    to the [State of Mississippi (in this section referred to as
    the ``State'')] County of Lauderdale, Mississippi (in this
    section referred to as the ``County''), approximately five
    acres of real property located at Naval Air Station, Meridian,
    Mississippi. The [State] County shall use the property to
    construct a reserve center of approximately 22,000 square feet
    and ancillary supporting facilities.
      (2) The term of the lease under this subsection shall expire
    on the same date that the lease authorized by subsection (b)
    expires.
      (b) Leaseback of Reserve Center.--(1) The Secretary may lease
    from the [State] County the property and improvements
    constructed pursuant to subsection (a) for a five-year period.
    The term of the lease shall begin on the date on which the
    improvements are available for occupancy, as determined by the
    Secretary.
      (2) Rental payments under the lease under paragraph (1) may
    not exceed $200,000 per year, and the total amount of the
    rental payments for the entire period may not exceed 20 percent
    of the total cost of constructing the reserve center and
    ancillary supporting facilities.
      (3) Subject to the availability of appropriations for this
    purpose, the Secretary may use funds appropriated pursuant to
    an authorization of appropriations for the operation and
    maintenance of the Naval Reserve to make rental payments
    required under this subsection.
      (c) Effect of Termination of Leases.--At the end of the lease
    term under subsection (b), the [State] County shall convey,
    without reimbursement, to the United States all right, title,
    and interest of the [State] County in the reserve center and
    ancillary supporting facilities subject to the lease.
              * * * * * * *
                                  ----------

    SECTION 2401 OF THE MILITARY CONSTRUCTION AUTHORIZATION ACT FOR FISCAL
                                   YEAR 1995

    SEC. 2401. AUTHORIZED DEFENSE AGENCIES CONSTRUCTION AND LAND
                        ACQUISITION PROJECTS.

      Using amounts appropriated pursuant to the authorization of
    appropriations in section 2405(a)(1), the Secretary of Defense
    may acquire real property and carry out military construction
    projects for the installations and locations inside the United
    States, and in the amounts, set forth in the following table:

                                       Defense Agencies: Inside the United States
    ----------------------------------------------------------------------------------------------------------------
                         Agency                                Installation or location                  Amount
    ----------------------------------------------------------------------------------------------------------------

    Chemical Agents and Munitions Destruction......  Anniston Army Depot, Alabama................         $5,000,000
                                                     Pine Bluff Arsenal, Arkansas................     [$115,000,000]
                                                                                                        $134,000,000
                                                     Tooele Army Depot, Utah.....................         $4,000,000
                                                     Umatilla Army Depot, Oregon.................     [$186,000,000]
                                                                                                        $187,000,000
                              *         *         *         *         *         *         *
    ----------------------------------------------------------------------------------------------------------------

                                  ----------

     SECTION 204 OF THE DEFENSE AUTHORIZATION AMENDMENTS AND BASE CLOSURE
                              AND REALIGNMENT ACT

    SEC. 204. IMPLEMENTATION.

      (a) * * *
      (b) Management and Disposal of Property.--(1) * * *
              * * * * * * *
      (5)(A) Except as provided in [subparagraph (B)] subparagraphs
    (B) and (C), the Secretary shall take such actions as the
    Secretary determines necessary to ensure that final
    determinations under paragraph (1) regarding whether another
    department or agency of the Federal Government has identified a
    use for any portion of a military installation to be closed
    under this title after the date of the enactment of the
    National Defense Authorization Act for Fiscal Year 1994, or
    will accept transfer of any portion of such installation, are
    made not later than 6 months after such date of enactment.
              * * * * * * *
      (C)(i) Before acquiring non-Federal real property as the
    location for a new or replacement Federal facility of any type,
    the head of the Federal agency acquiring the property shall
    consult with the Secretary regarding the feasibility and cost
    advantages of using Federal property or facilities at a
    military installation to be closed or realigned under this
    title as the location for the new or replacement facility. In
    considering the availability and suitability of a specific
    military installation, the Secretary and the head of the
    Federal agency involved shall consult with the redevelopment
    authority with respect to the installation and comply with the
    redevelopment plan for the installation.
      (ii) Not later than 30 days after acquiring non-Federal real
    property as the location for a new or replacement Federal
    facility, the head of the Federal agency acquiring the property
    shall submit to Congress a report containing the results of the
    consultation under clause (i) and the reasons why military
    installations referred to in such clause that are located
    within the area to be served by the new or replacement Federal
    facility or within a 200-mile radius of the new or replacement
    facility, whichever area is greater, were considered to be
    unsuitable or unavailable for the site of the new or
    replacement facility.
              * * * * * * *
                                  ----------

      SECTION 2905 OF THE DEFENSE BASE CLOSURE AND REALIGNMENT ACT OF 1990

    SEC. 2905. IMPLEMENTATION.

      (a) * * *
      (b) Management and Disposal of Property.--(1) * * *
              * * * * * * *
      (5)(A) Except as provided in [subparagraph (B)] subparagraphs
    (B) and (C), the Secretary shall take such actions as the
    Secretary determines necessary to ensure that final
    determinations under paragraph (1) regarding whether another
    department or agency of the Federal Government has identified a
    use for any portion of a military installation to be closed
    under this part, or will accept transfer of any portion of such
    installation, are made not later than 6 months after the date
    of approval of closure of that installation.
              * * * * * * *
      (C)(i) Before acquiring non-Federal real property as the
    location for a new or replacement Federal facility of any type,
    the head of the Federal agency acquiring the property shall
    consult with the Secretary regarding the feasibility and cost
    advantages of using Federal property or facilities at a
    military installation to be closed or realigned under this part
    as the location for the new or replacement facility. In
    considering the availability and suitability of a specific
    military installation, the Secretary and the head of the
    Federal agency involved shall consult with the redevelopment
    authority with respect to the installation and comply with the
    redevelopment plan for the installation.
      (ii) Not later than 30 days after acquiring non-Federal real
    property as the location for a new or replacement Federal
    facility, the head of the Federal agency acquiring the property
    shall submit to Congress a report containing the results of the
    consultation under clause (i) and the reasons why military
    installations referred to in such clause that are located
    within the area to be served by the new or replacement Federal
    facility or within a 200-mile radius of the new or replacement
    facility, whichever area is greater, were considered to be
    unsuitable or unavailable for the site of the new or
    replacement facility.
              * * * * * * *
                                  ----------

               THE MILITARY CONSTRUCTION AUTHORIZATION ACT, 1985

              * * * * * * *

                         TITLE VIII--GENERAL PROVISIONS

              * * * * * * *

                       PART C--REAL PROPERTY TRANSACTIONS

              * * * * * * *

                      land conveyance, lompoc, california

      Sec. 834. (a) * * *
      (b)(1) The conveyance authorized by subsection (a) shall be
    subject to the condition that the real property conveyed shall
    be used by the City--
              [(A) for the Lompoc, California, Western Spaceport
            Museum and Science Center as a permanent site for a
            space science museum;
              [(B) for educational and recreational purposes
            related to the purpose described in subparagraph (A);
            or]
              (A) for educational and recreational purposes;
              (B) for open space; or
              * * * * * * *

                 land conveyance, riverside county, california

      Sec. 835. (a) * * *
      (b) In consideration for the conveyance by the Secretary
    under subsection (a), the Corporation shall pay to the United
    States an amount of money equal to the fair market value (as
    determined by the Secretary) of the land authorized to be
    conveyed under [subsection (b)] subsection (a).
      (c) The land referred to in subsection (a) is a portion of
    March Air Force Base, California, composed of one parcel
    containing approximately 150 acres. The tract of land is on
    west March Air Force Base bounded on the east by [Clark Street,
    on the west by Allen Street, on the south by 5th Street, and
    the north is an extension of 11th Street between Allen and
    Clark Streets.] Village West Drive, on the west by Allen
    Avenue, on the south by 8th Street, and the north is an
    extension of 11th Street between Allen Avenue and Clark Street.
              * * * * * * *
                                  ----------

    SECTION 5 OF THE ROCKY MOUNTAIN ARSENAL NATIONAL WILDLIFE REFUGE ACT OF
                                      1992

    SEC. 5. DISPOSAL OF CERTAIN REAL PROPERTY AT THE ARSENAL FOR
                        COMMERCIAL, HIGHWAY, OR OTHER PUBLIC USE.

      (a) * * *
              * * * * * * *
      (c) Transfer for Sale.--(1) The Secretary of the Army shall
    transfer to the Administrator of the General Services
    Administration those parcels of the area of real property
    described in subsection (a)(1). [The transferred property shall
    be sold in advertised sales] The Administrator shall convey the
    transferred property to Commerce City, Colorado, in a
    negotiated sale, as surplus property under the provisions of
    the Federal Property and Administrative Services Act of 1949
    (40 U.S.C. 471 et seq.), except that the provisions of such Act
    relating to reduced- or no-cost transfers to other governmental
    entities shall not apply to this property.
              * * * * * * *
                                  ----------

        SECTION 810 OF THE MILITARY CONSTRUCTION AUTHORIZATION ACT, 1968

      [Sec. 810. (a) The Naval Academy Dairy Farm is a self-
    supporting operation, an economic and morale-building asset to
    the Department of the Navy, and shall continue in its present
    status and function.
      [(b) Notwithstanding the provisions of the Federal Property
    and Administrative Services Act of 1949 (40 U.S.C. 471 et seq.)
    or any other provision of law, the real property located in
    Gambrills, Anne Arundel County, Maryland, and comprising the
    Naval Academy Dairy Farm shall not be determined excess to the
    needs of the holding agency or transferred, reassigned, or
    otherwise disposed of by such agency, nor shall any action be
    taken by the Navy to close, dispose of or phase out the Naval
    Academy Dairy Farm unless specially authorized by an Act of
    Congress.]
                                  ----------

                           ACT OF SEPTEMBER 15, 1960

            (Public Law 86-797, Commonly Known as the ``Sikes Act'')

    SECTION 1. SHORT TITLE.

      This Act may be cited as the ``Sikes Act''.

      TITLE I--CONSERVATION PROGRAMS ON [MILITARY RESERVATIONS] MILITARY
                                 INSTALLATIONS

      Sec. 101. (a)(1) The Secretary of Defense [is authorized to]
    shall carry out a program of planning for, and the development,
    maintenance, and coordination of, wildlife, fish, and game
    conservation and rehabilitation [in each military reservation
    in accordance with a cooperative plan] on military
    installations. Under the program, the Secretary shall prepare
    and implement for each military installation in the United
    States an integrated natural resource management plan mutually
    agreed upon by the Secretary of Defense, the Secretary of the
    Interior, and the appropriate State agency designated by the
    State in which [the reservation] the installation is located,
    except that the Secretary is not required to prepare such a
    plan for a military installation if the Secretary determines
    that preparation of such a plan for the installation is not
    appropriate.
      (2) Consistent with essential military requirements to
    enhance the national security of the United States, the
    Secretary of Defense shall manage each military installation to
    provide--
              (A) for the conservation of fish and wildlife on the
            military installation and sustained multipurpose uses
            of those resources, including hunting, fishing, and
            trapping; and
              (B) public access that is necessary or appropriate
            for those uses.
      (b) Each [cooperative plan] integrated natural resource
    management plan entered into under subsection (a)--
              (1) shall provide for--
                      (A) fish and wildlife habitat improvements or
                    modifications,
                      (B) range rehabilitation where necessary for
                    support of wildlife,
                      (C) control of off-road vehicle traffic,
                    [and]
                      (D) specific habitat improvement projects and
                    related activities and adequate protection for
                    species of fish, wildlife, and plants
                    considered threatened or endangered[;],
                      (E) wetland protection and restoration, and
                    wetland creation where necessary, for support
                    of fish or wildlife,
                      (F) consideration of conservation needs for
                    all biological communities, and
                      (G) the establishment of specific natural
                    resource management goals, objectives, and
                    time-frames for proposed actions;
              (2) shall for the military installation for which it
            is prepared--
                      (A) address the needs for fish and wildlife
                    management, land management, forest management,
                    and wildlife-oriented recreation,
                      (B) ensure the integration of, and
                    consistency among, the various activities
                    conducted under the plan,
                      (C) ensure that there is no net loss in the
                    capability of installation lands to support the
                    military mission of the installation,
                      (D) provide for sustained use by the public
                    of natural resources, to the extent that such
                    use is not inconsistent with the military
                    mission of the installation or the needs of
                    fish and wildlife management,
                      (E) provide the public access to the
                    installation that is necessary or appropriate
                    for that use, to the extent that access is not
                    inconsistent with the military mission of the
                    installation, and
                      (F) provide for professional enforcement of
                    natural resource laws and regulations;
              [(2)] (3) must be reviewed as to operation and effect
            by the parties thereto on a regular basis, but not less
            often than every 5 years;
              [(3) shall, if a multiuse natural resources
            management plan is applicable to the military
            reservation, be treated as the exclusive component of
            that management plan with respect to wildlife, fish,
            and game conservation and rehabilitation; and]
              (4) may stipulate the issuance of special State
            hunting and fishing permits to individuals and require
            payment of nominal fees therefor, which fees shall be
            utilized for the protection, conservation, and
            management of fish and wildlife, including habitat
            improvement and related activities in accordance with
            the [cooperative plan] integrated natural resource
            management plan; except that--
                      (A) the Commanding Officer of [the
                    reservation] the installation or persons
                    designated by that Officer are authorized to
                    enforce such special hunting and fishing
                    permits and to [collect the fees therefor,]
                    collect, spend, administer, and account for
                    fees therefor, acting as agent or agents for
                    the State if the [cooperative plan] integrated
                    natural resource management plan so provides,
                    and
                      (B) the fees collected under this paragraph
                    may not be expended with respect to other than
                    the military [reservation] installation on
                    which collected, unless that military
                    installation is subsequently closed, in which
                    case the fees may be transferred to another
                    military installation to be used for the same
                    purposes.
      (c) After [a cooperative plan] an integrated natural resource
    management plan is agreed to under subsection (a)--
              (1) no sale of land, or forest products from land,
            that is within [a military reservation] a military
            installation covered by that plan may be made under
            section 2665 (a) or (b) of title 10, United States
            Code; and
              (2) no leasing of land that is within [the
            reservation] the installation may be made under section
            2667 of such title 10;
    unless the effects of that sale or leasing are compatible with
    the purposes of the plan.
      (d) With regard to the implementation and enforcement of
    [cooperative plans] integrated natural resource management
    plans agreed to under subsection (a)--
              (1) neither Office of Management and Budget Circular
            A-76 nor any successor circular thereto applies to the
            procurement of services that are necessary for that
            implementation and enforcement; and
              (2) priority shall be given to the entering into of
            contracts for the procurement of such implementation
            and enforcement services with Federal and State
            agencies having responsibility for the conservation or
            management of fish or wildlife.
      (e) [Cooperative plans] Integrated natural resource
    management plans agreed to under the authority of this section
    and section 102 shall not be deemed to be, nor treated as,
    cooperative agreements to which the Federal Grant and
    Cooperative Agreement Act of 1977 (41 U.S.C. 501 et seq.)
    applies.
      (f) Public Comment.--The Secretary of Defense shall provide
    an opportunity for public comment on each integrated natural
    resource management plan prepared under subsection (a).
      (g) Reviews and Reports.--
              (1) Secretary of defense.--The Secretary of Defense
            shall, by not later than March 1 of each year, review
            the extent to which integrated natural resource
            management plans were prepared or in effect and
            implemented in accordance with this Act in the
            preceding year, and submit a report on the findings of
            that review to the committees. Each report shall
            include--
                      (A) the number of integrated natural resource
                    management plans in effect in the year covered
                    by the report, including the date on which each
                    plan was issued in final form or most recently
                    revised;
                      (B) the amount of moneys expended on
                    conservation activities conducted pursuant to
                    those plans in the year covered by the report,
                    including amounts expended under the Legacy
                    Resource Management Program established under
                    section 8120 of the Act of November 5, 1990
                    (Public Law 101-511; 104 Stat. 1905); and
                      (C) an assessment of the extent to which the
                    plans comply with the requirements of
                    subsection (b)(1) and (2), including
                    specifically the extent to which the plans
                    ensure in accordance with subsection (b)(2)(C)
                    that there is no net loss of lands to support
                    the military missions of military
                    installations.
              (2) Secretary of the interior.--The Secretary of the
            Interior, by not later than March 1 of each year and in
            consultation with State agencies responsible for
            conservation or management of fish or wildlife, shall
            submit a report to the committees on the amount of
            moneys expended by the Department of the Interior and
            those State agencies in the year covered by the report
            on conservation activities conducted pursuant to
            integrated natural resource management plans.
              (3) Committees defined.--For purposes of this
            subsection, the term ``committees'' means the Committee
            on Resources and the Committee on National Security of
            the House of Representatives and the Committee on Armed
            Services and the Committee on Environment and Public
            Works of the Senate.
      Sec. 102. The Secretary of Defense in cooperation with the
    Secretary of Interior and the appropriate State agency is
    authorized to carry out a program for the conservation,
    restoration and management of migratory game birds on [military
    reservations] military installations, including the issuance of
    special hunting permits and the collection of fees therefor, in
    accordance with [a cooperative plan] an integrated natural
    resource management plan mutually agreed upon by the Secretary
    of Defense, the Secretary of the Interior and the appropriate
    State agency: Provided, That possession of a special permit for
    hunting migratory game birds issued pursuant to this title
    shall not relieve the permittee of the requirements of the
    Migratory Bird Hunting Stamp Act as amended nor of the
    requirements pertaining to State law set forth in Public Law
    85-337.
      Sec. 103. The Secretary of Defense is also authorized to
    carry out a program for the development, enhancement,
    operation, and maintenance of public outdoor recreation
    resources at [military reservations] military installations in
    accordance with [a cooperative plan] an integrated natural
    resource management plan mutually agreed upon by the Secretary
    of Defense and the Secretary of the Interior, in consultation
    with the appropriate State agency designated by the State in
    which [such reservations] such installations are located.
      Sec. 103a. (a) * * *
      (b) A cooperative agreement shall provide for the Secretary
    of Defense and the other party or parties to the agreement--
              (1) to contribute funds on a [matching basis] cost-
            sharing basis to defray the cost of programs, projects,
            and activities under the agreement; or
              (2) to furnish services on a [matching basis] cost-
            sharing basis to carry out such programs, projects, and
            activities,
    or to do both.
      (c) Cooperative agreements entered into under this section
    shall be subject to the availability of funds and shall not be
    considered, nor be treated as, cooperative agreements to which
    chapter 63 of title 31, United States Code, applies, and shall
    not be subject to section 1535 of that title.
              * * * * * * *

    SEC. 106. FEDERAL ENFORCEMENT OF OTHER LAWS.

      All Federal laws relating to the conservation of natural
    resources on Federal lands may be enforced by the Secretary of
    Defense with respect to violations of those laws which occur on
    military installations within the United States.

    SEC. 107. NATURAL RESOURCE MANAGEMENT SERVICES.

      The Secretary of each military department shall ensure that
    sufficient numbers of professionally trained natural resource
    management personnel and natural resource law enforcement
    personnel are available and assigned responsibility to perform
    tasks necessary to comply with this Act, including the
    preparation and implementation of integrated natural resource
    management plans.

    SEC. 108. DEFINITIONS.

      In this title:
              (1) Military installation.--The term ``military
            installation''--
                      (A) means any land or interest in land owned
                    by the United States and administered by the
                    Secretary of Defense or the Secretary of a
                    military department; and
                      (B) includes all public lands withdrawn from
                    all forms of appropriation under public land
                    laws and reserved for use by the Secretary of
                    Defense or the Secretary of a military
                    department.
              (2) State fish and wildlife agency.--The term ``State
            fish and wildlife agency'' means an agency of State
            government that is responsible under State law for
            managing fish or wildlife resources.
              (3) United states.--The term ``United States'' means
            the States, the District of Columbia, and the
            territories and possessions of the United States.
      Sec. 109. (a) The Secretary of Defense shall expend such
    funds as may be collected in accordance with the integrated
    natural resource management plans agreed to under sections 101
    and 102 and cooperative agreements agreed to under section 103a
    of this title, and for no other purpose. All funds that are so
    collected shall remain available until expended.
      (b) There are authorized to be appropriated to the Secretary
    of Defense not to exceed $1,500,000 for each of the fiscal
    years 1983 through 2000, to carry out this title, including the
    enhancement of fish and wildlife habitat and the development of
    public recreation and other facilities, and to carry out such
    functions and responsibilities as the Secretary may have under
    cooperative agreements entered into under section 103a. The
    Secretary of Defense shall, to the greatest extent practicable,
    enter into agreements to utilize the services, personnel,
    equipment, and facilities, with or without reimbursement, of
    the Secretary of the Interior in carrying out the provisions of
    this section.
      (c) There are authorized to be appropriated to the Secretary
    of the Interior not to exceed $3,000,000 for each of the fiscal
    years 1983 through 2000, to carry out such functions and
    responsibilities as the Secretary may have under integrated
    natural resource management plans to which such Secretary is a
    party under this section, including those for the enhancement
    of fish and wildlife habitat and the development of public
    recreation and other facilities.
      (d) The Secretary of Defense and the Secretary of the
    Interior may each use any authority available to him under
    other laws relating to fish, wildlife, or plant conservation or
    rehabilitation for purposes of carrying out the provisions of
    this title.
              * * * * * * *

             TITLE II--CONSERVATION PROGRAMS ON CERTAIN PUBLIC LAND

              * * * * * * *
      Sec. 209. (a) There are authorized to be appropriated [the
    sum of $10,000,000 for each of the fiscal years 1983, 1984,
    1985, 1986, 1987, 1988, 1989, 1990, 1991, 1992, and 1993, to
    enable the Secretary of the Interior] $4,000,000 for each of
    fiscal years 1998 through 2000, to enable the Secretary of the
    Interior to carry out his functions and responsibilities under
    this title, including data collection, research, planning, and
    conservation and rehabilitation programs on public lands. Such
    funds shall be in addition to those authorized for wildlife,
    range, soil, and water management pursuant to section 318 of
    the Federal Land Policy and Management Act of 1976 (43 U.S.C.
    1748), or other provisions of law.
      (b) There are authorized to be appropriated [the sum of
    $12,000,000 for each of the fiscal years 1983, 1984, 1985,
    1986, 1987, 1988, 1989, 1990, 1991, 1992, and 1993, to enable
    the Secretary of Agriculture] $5,000,000 for each of fiscal
    years 1998 through 2000, to enable the Secretary of Agriculture
    to carry out his functions and responsibilities under this
    title. Such funds shall be in addition to those provided under
    other provisions of law. In requesting funds under this
    subsection the Secretary shall take into account fish and
    wildlife program needs, including those for projects,
    identified in the State comprehensive plans as contained in the
    program developed pursuant to the Forest and Rangeland
    Renewable Resources Planning Act of 1974, as amended (16 U.S.C.
    1601-1610).
              * * * * * * *
                                  ----------

                    SECTION 2 OF THE ACT OF OCTOBER 27, 1986

     AN ACT To enhance the carrying out of fish and wildlife conservation
    and natural resource management programs on military reservations, and
                              for other purposes.

              * * * * * * *

    [SEC. 2. NATURAL RESOURCES AND FISH AND WILDLIFE MANAGEMENT ON MILITARY
                        RESERVATIONS; REPORT ON MILITARY EXPENDITURES FOR
                        FISH AND WILDLIFE MANAGEMENT.

      [(a) Natural Resources Management.--The Secretary of each
    military department shall manage the natural resources of each
    military reservation within the United States that is under the
    jurisdiction of the Secretary--
              [(1) so as to provide for sustained multipurpose uses
            of those resources; and
              [(2) to provide the public access that is necessary
            or appropriate for those uses;
    to the extent that those uses and that access are not
    inconsistent with the military mission of the reservation.
      [(b) Fish and Wildlife Management Services.--The Secretary of
    each military department shall ensure, to the extent feasible,
    that the services necessary for the development,
    implementation, and enforcement of fish and wildlife management
    on each military reservation within the United States under the
    jurisdiction of the Secretary are provided by the Department of
    Defense personnel who have professional training in those
    services.
      [(c) Fish and Wildlife Management Report.--The Secretary of
    each military department shall submit to each House of the
    Congress, before the close of the 180-day period occurring
    after the close of fiscal year 1986, a detailed report setting
    forth the amount and purpose of all expenditures made during
    fiscal year 1986 for fish and wildlife management on each
    military reservation in the United States under the
    jurisdiction of the Secretary.
      [(d) Definitions.--As used in this section--
              [(1) The term ``military department'' means the
            Department of the Army, the Department of the Navy, and
            the Department of the Air Force.
              [(2) The term ``United States'' means the States, the
            District of Columbia, the Commonwealth of Puerto Rico,
            and the territories and possessions of the United
            States.]
                                  ----------

    SECTION OF THE 210 DEPARTMENT OF ENERGY NATIONAL SECURITY AND MILITARY
            APPLICATIONS OF NUCLEAR ENERGY AUTHORIZATION ACT OF 1981

     [restriction on licensing requirement for certain defense activities
                                 and facilities

      [Sec. 210. None of the funds authorized to be appropriated by
    this or any other Act may be used for any purpose related to
    licensing of any defense activity or facility of the Department
    of Energy by the Nuclear Regulatory Commission.]
                                  ----------

       SECTION 6 OF THE STRATEGIC AND CRITICAL MATERIALS STOCK PILING ACT

                              stockpile management

      Sec. 6. (a) * * *
      (b) Except as provided in subsections (c) and (d),
    acquisition of strategic and critical materials under this Act
    shall be made in accordance with established Federal
    procurement practices, and, except as provided in subsections
    (c) and (d) and in section 7(a), disposal of [materials from
    the stockpile shall be made by formal advertising or
    competitive negotiation procedures.] strategic and critical
    materials from the stockpile shall be made in accordance with
    the next sentence. To the maximum extent feasible--
              (1) * * *
              * * * * * * *
                                  ----------

                   SECTION 2 OF THE ACT OF DECEMBER 12, 1979

          AN ACT To authorize appropriations for fiscal year 1980 for
      conservation, exploration, development, and use of naval petroleum
         reserves and naval oil shale reserves, and for other purposes.

      [Sec. 2. The Secretary of the Navy, in coordination with the
    Secretary of Energy, shall insure that commissioned officers of
    the Navy on active duty continue to be assigned to key
    management positions within the Office of Naval Petroleum and
    Oil Shale Reserves in the Department of Energy. The position of
    Director of such Office shall continue to be filled by a
    qualified officer of the Navy on active duty in the grade of
    captain.]
                                  ----------

                            PANAMA CANAL ACT OF 1979

              * * * * * * *

                                TABLE OF CONTENTS

    Sec. 1. Short title.
         * * * * * * *

                     TITLE I--ADMINISTRATION AND REGULATIONS

         * * * * * * *

                              Chapter 2--Employees

         * * * * * * *

                  Subchapter II--Wage and Employment Practices

    [Sec. 1210. Travel and transportation.]
    Sec. 1210. Air transportation.
         * * * * * * *
    [Sec. 1215. Basic pay.]
         * * * * * * *
    [Sec. 1219. Salary protection upon conversion of pay base.]
         * * * * * * *
    [Sec. 1225. Minimum level of pay; minimum annual increases.]
         * * * * * * *

             Subchapter III--Conditions of Employment and Placement

         * * * * * * *
    Sec. 1233. Transition separation incentive payments.
         * * * * * * *

                          TITLE III--GENERAL PROVISIONS

                             Chapter 1--Procurement

    Sec. 3101. Procurement system.
    Sec. 3102. Panama Canal Board of Contract Appeals.
         * * * * * * *

                                  definitions

      Sec. 3. (a) * * *
      (b) Subject to the provisions of subsection (c) of this
    section, for purposes of applying [the Canal Zone Code or other
    laws of the United States and regulations issued pursuant to
    such Code or other laws] laws of the United States and
    regulations issued pursuant to such laws with respect to
    transactions, occurrences, or status on or after [the effective
    date of this Act] October 1, 1979--
              (1) * * *
              * * * * * * *
      (c) Any reference set forth in subsection (b) of this section
    shall apply except as otherwise provided in this Act or unless
    (1) such reference is inconsistent with the provisions of this
    Act, (2) in the context in which a term is used such reference
    is clearly not intended, or (3) a term refers to a time before
    [the effective date of this Act] October 1, 1979.
      (d) For purposes of this Act:
              (1) The term ``Canal Transfer Date'' means December
            31, 1999, such date being the date specified in the
            Panama Canal Treaty of 1977 for the transfer of the
            Panama Canal from the United States of America to the
            Republic of Panama.
              (2) The term ``Panama Canal Authority'' means the
            entity created by the Republic of Panama to succeed the
            Panama Canal Commission as of the Canal Transfer Date.

                    TITLE I--ADMINISTRATION AND REGULATIONS

                       Chapter 1--Panama Canal Commission

              * * * * * * *

                          general powers of commission

      Sec. 1102a. (a) * * *
              * * * * * * *
      (g)(1) The Commission may appoint any United States citizen
    to have the general powers of a notary public to perform, on
    behalf of Commission employees and their dependents outside the
    United States, any notarial act that a notary public is
    required or authorized to perform within the United States.
    Unless an earlier expiration is provided by the terms of the
    appointment, any such appointment shall expire three months
    after the Canal Transfer Date.
      (2) Every notarial act performed by a person acting as a
    notary under paragraph (1) shall be as valid, and of like force
    and effect within the United States, as if executed by or
    before a duly authorized and competent notary public in the
    United States.
      (3) The signature of any person acting as a notary under
    paragraph (1), when it appears with the title of that person's
    office, is prima facie evidence that the signature is genuine,
    that the person holds the designated title, and that the person
    is authorized to perform a notarial act.
      [(g)] (h) The authority of the Commission under this section
    and section [1102B] 1102b is subject to the Panama Canal Treaty
    of 1977 and related agreements, and to chapter 91 of title 31,
    United States Code.

                         specific powers of commission

      Sec. 1102b. (a) * * *
              * * * * * * *
      (e) The Commission may conduct and promote commercial
    activities related to the management, operation, or maintenance
    of the Panama Canal. Any such commercial activity shall be
    carried out consistent with the Panama Canal Treaty of 1977 and
    related agreements.

                                 administrator

      Sec. 1103. (a) * * *
              * * * * * * *
      (c) The Congress consents, for purposes of the 8th clause of
    article I, section 9 of the Constitution of the United States,
    to the acceptance by the individual serving as Administrator of
    the Commission of appointment by the Republic of Panama to the
    position of Administrator of the Panama Canal Authority. Such
    consent is effective only if that individual, while serving in
    both such positions, serves as Administrator of the Panama
    Canal Authority without compensation, except for payments by
    the Republic of Panama of travel and entertainment expenses,
    including per diem payments.
      (d) The Administrator, with respect to participation in any
    matter as Administrator of the Panama Canal Commission (whether
    such participation is before, on, or after the date of the
    enactment of the Panama Canal Transition Facilitation Act of
    1997), shall not be subject to section 208 of title 18, United
    States Code, insofar as the matter relates to prospective
    employment as Administrator of the Panama Canal Authority.
      (e) If the Republic of Panama appoints as the Administrator
    of the Panama Canal Authority the individual serving as the
    Administrator of the Commission and if that individual accepts
    the appointment--
              (1) the Foreign Agents Registration Act of 1938, as
            amended (22 U.S.C. 611 et seq.), shall not apply to
            that individual with respect to service as the
            Administrator of the Panama Canal Authority;
              (2) that individual, with respect to participation in
            any matter as the Administrator of the Panama Canal
            Commission, is not subject to section 208 of title 18,
            United States Code, insofar as the matter relates to
            service as, or performance of the duties of, the
            Administrator of the Panama Canal Authority; and
              (3) that individual, with respect to official acts
            performed as the Administrator of the Panama Canal
            Authority, is not subject to the following:
                      (A) Sections 203 and 205 of title 18, United
                    States Code.
                      (B) Effective upon termination of the
                    individual's appointment as Administrator of
                    the Panama Canal Commission at noon on the
                    Canal Transfer Date, section 207 of title 18,
                    United States Code.
                      (C) Sections 501(a) and 502(a)(4) of the
                    Ethics in Government Act of 1978 (5 U.S.C.
                    App.), with respect to compensation received
                    for, and service in, the position of
                    Administrator of the Panama Canal Authority.
              * * * * * * *
      Sec. 1110

                          authority of the ambassador

      Sec. 1110. (a) * * *
      (b)(1) * * *
              * * * * * * *
      (2) Except as provided in paragraph (1) of this subsection,
    [section 16 of the Act of August 1, 1956 (22 U.S.C. 2680a),]
    section 207 of the Foreign Service Act of 1980 (22 U.S.C. 3927)
    shall apply with respect to the activities of the Commission.
              * * * * * * *

                    code of conduct for commission personnel

      Sec. 1112. (a) * * *
      (b) Not later than 60 days after all the members of the Board
    of the Commission have been appointed, the Board shall adopt a
    code of conduct applicable to the persons referred to in
    subsection (a) of this section. The code of conduct shall
    contain provisions substantially equivalent to those contained
    in part 735 of title 5 of the Code of Federal Regulations on
    [the effective date of this Act] October 1, 1979. The code of
    conduct shall, at a minimum, contain provisions substantially
    equivalent to the following provisions of law:
              (1) * * *
              * * * * * * *
      (e) Effective as of the Canal Transfer Date, section 207 of
    title 18, United States Code, shall not apply to an individual
    who is an officer or employee of the Panama Canal Authority,
    but only with respect to official acts of that individual as an
    officer or employee of the Authority and only in the case of an
    individual who was an officer or employee of the Commission and
    whose employment with the Commission was terminated at noon on
    the Canal Transfer Date.
      (f)(1) The Congress consents to the following persons
    accepting civil employment (and compensation for that
    employment) with the Panama Canal Authority for which the
    consent of the Congress is required by the last paragraph of
    section 9 of article I of the Constitution of the United
    States, relating to acceptance of emoluments, offices, or
    titles from a foreign government:
              (A) Retired members of the uniformed services.
              (B) Members of a reserve component of the armed
            forces.
              (C) Members of the Commisioned Reserve Corps of the
            Public Health service.
      (2) The consent of the Congress under paragraph (1) is
    effective without regard to subsection (b) of section 908 of
    title 37, United States Code (relating to approval required for
    employment of Reserve and retired members by foreign
    governments).
              * * * * * * *

                              Chapter 2--Employees

                Subchapter I--Panama Canal Commission Personnel

              * * * * * * *

                      appointment and compensation; duties

      Sec. 1202. (a) * * *
              * * * * * * *
      (c) In the case of an individual who is an officer or
    employee of the Commission on the day before the date of the
    enactment of the Panama Canal Transition Facilitation Act of
    1997 and who has not had a break in service with the Commission
    since that date, the rate of basic pay for that officer or
    employee on or after that date may not be less than the rate in
    effect for that officer or employee on the day before that date
    of enactment except--
              (1) as provided in a collective bargaining agreement;
              (2) as a result of an adverse action against the
            officer or employee; or
              (3) pursuant to a voluntary demotion.
              * * * * * * *

                  Subchapter II--Wage and Employment Practices

                          [travel and transportation]

                               air transportation

      Sec. 1210. [(a) Subject to subsections (b) and (c), the
    Commission may pay travel and transportation expenses for
    employees in accordance with subchapter II of chapter 57 of
    title 5, United States Code.
      [(b) For an employee to whom section 1206 applies, the
    Commission may pay travel and transportation expenses
    associated with vacation leave for the employee and the
    immediate family of the employee notwithstanding requirements
    regarding periods of service established by subchapter II of
    chapter 57 of title 5, United States Code, or the regulations
    promulgated thereunder.
      [(c) For an employee to whom section 1206 does not apply, the
    Commission may pay travel and transportation expenses
    associated with vacation leave for the employee and the
    immediate family of the employee notwithstanding requirements
    regarding a written agreement concerning the duration of a
    continuing service obligation established by subchapter II of
    chapter 57 of title 5, United States Code, or the regulations
    promulgated thereunder.]
      [(d)(1)] (a) Notwithstanding any other provision of law
    (except [paragraph (2)] subsection (b)), the Commission may
    contract with Panamanian carriers registered under the laws of
    the Republic of Panama to provide air transportation to
    officials and employees of the Commission who are citizens of
    the Republic of Panama.
      [(2) Notwithstanding paragraph (1), an] (b) An official or
    employee of the Commission [referred to in paragraph (1)] who
    is a citizen of the Republic of Panama may elect, for security
    or other reasons, to travel by an air carrier holding a
    certificate under section 41102 of title 49, United States
    Code.
              * * * * * * *

    panama canal employment system; merit and other employment requirements

      Sec. 1212. (a) * * *
      (b)(1) * * *
              * * * * * * *
      (3) Notwithstanding any other provision of this Act or the
    Panama Canal Act Amendments of 1996, this subchapter, [as last
    in effect before the effective date of section 3530 of the
    Panama Canal Act Amendments of 1996] as in effect on September
    22, 1996, shall continue to apply to an Executive agency or the
    Smithsonian Institution to the extent of an election under
    paragraph (1) by the head of agency or the Institution,
    respectively.
              * * * * * * *

                   uniform application of standards and rates

      Sec. 1216. The standards established pursuant to section 1213
    of this Act and the rates of basic pay established pursuant to
    section [1215] 1202 of the Act shall be applied without regard
    to whether the employee or individual concerned is a citizen of
    the United States or a citizen of the Republic of Panama.

                     recruitment and retention remuneration

      Sec. 1217. (a) * * *
              * * * * * * *
      (c)(1) The Commission may pay a recruitment bonus to an
    individual who is newly appointed to a position with the
    Commission, or a relocation bonus to an employee of the
    Commission who must relocate to accept a position, if the
    Commission determines that the Commission would be likely, in
    the absence of such a bonus, to have difficulty in filling the
    position.
      (2) A recruitment or relocation bonus may be paid to an
    employee under this subsection only if the employee enters into
    an agreement with the Commission to complete a period of
    employment with the Commission established by the Commission.
    If the employee voluntarily fails to complete such period of
    employment or is separated from service in such employment as a
    result of an adverse action before the completion of such
    period, the employee shall repay the entire amount of the
    bonus.
      (3) A relocation bonus under this subsection may be paid as a
    lump sum. A recruitment bonus under this subsection shall be
    paid on a pro rata basis over the period of employment covered
    by the agreement under paragraph (2). A bonus under this
    subsection may not be considered to be part of the basic pay of
    an employee.
      (d)(1) The Commission may pay a retention bonus to an
    employee of the Commission if the Commission determines that--
              (A) the employee has unusually high or unique
            qualifications and those qualifications make it
            essential for the Commission to retain the employee for
            a period specified by the Commission ending not later
            than the Canal Transfer Date, or the Commission
            otherwise has a special need for the services of the
            employee making it essential for the Commission to
            retain the employee for a period specified by the
            Commission ending not later than the Canal Transfer
            Date; and
              (B) the employee would be likely to leave employment
            with the Commission before the end of that period if
            the retention bonus is not paid.
      (2) A retention bonus under this subsection--
              (A) shall be in a fixed amount;
              (B) shall be paid on a pro rata basis (over the
            period specified by the Commission as essential for the
            retention of the employee), with such payments to be
            made at the same time and in the same manner as basic
            pay; and
              (C) may not be considered to be part of the basic pay
            of an employee.
      (3) A decision by the Commission to exercise or to not
    exercise the authority to pay a bonus under this subsection
    shall not be subject to review under any statutory procedure or
    any agency or negotiated grievance procedure except under any
    of the laws referred to in section 2302(d) of title 5, United
    States Code.
      [(c)] (e) Additional compensation provided under this section
    may not exceed 25 percent of the rate of basic pay for the same
    or similar work performed in the United States by individuals
    employed by the Government of the United States.

                          benefits based on basic pay

      Sec. 1218. For the purposes of determining--
              (1) amounts of compensation for disability or death
            under chapter 81 of title 5, United States Code,
            relating to compensation for work injuries;
              (2) benefits under subchapter III of chapter 83 or
            chapter 84 of title 5, United States Code, relating to
            retirement;
              (3) amounts of insurance under chapter 87 of title 5,
            United States Code, relating to life insurance;
              (4) amounts of overtime pay or other premium pay;
              (5) annual leave benefits; and
              (6) any other benefits related to basic pay;
    the basic pay of each employee shall include the rate of basic
    pay established for his position under section [1215] 1202 of
    this Act plus the amount of any additional compensation
    provided under section [1217] 1217(a) of this Act.
              * * * * * * *

                     panama canal board of appeals; duties

      Sec. 1221. (a) Subject to the provisions of this chapter, the
    [President] Commission shall prescribe regulations establishing
    a Panama Canal Board of Appeals. The regulations shall provide
    for the number of members of the Board and their appointment,
    compensation, and terms of office, the selection of a Chairman
    of the Board, the appointment and compensation of the Board's
    employees, and other appropriate matters relating to the Board.
              * * * * * * *

              appeals to board; procedures; finality of decisions

      Sec. 1222. (a) An employee may appeal to the Panama Canal
    Board of Appeals from an adverse determination made by an
    agency under section 1220 of this Act. The appeal shall be made
    in writing within a reasonable time (as specified in
    regulations prescribed by, or under the authority of, the
    [President] Commission) after the date of the transmittal by
    the agency to the employee of written notice of the adverse
    determination.
              * * * * * * *

             Subchapter III--Conditions of Employment and Placement

                      transferred or reemployed employees

      Sec. 1231. (a) * * *
              * * * * * * *
      (c)(1) * * *
              * * * * * * *
      (3)(A) The head of a department or agency of the United
    States may grant a sabbatical to any teacher to whom paragraph
    (1) of this subsection applies for not to exceed 11 months in
    order to permit the teacher to engage in study or uncompensated
    work experience which is in the United States and which will
    contribute to the teacher's development and effectiveness.
    Basic compensation shall be paid to teachers on sabbatical
    under this section in the same manner and to the same extent as
    basic compensation would have been paid to teachers on
    sabbatical while employed in the Canal Zone Government school
    system on [the day before the effective date of this Act]
    September 30, 1979. A sabbatical shall not result in a loss of,
    or reduction in, leave to which the teacher is otherwise
    entitled, credit for time or service, or performance or
    efficiency rating. The head of the department or agency may
    authorize in accordance with chapter 57 of title 5, United
    States Code, such travel expenses (including per diem
    allowance) as the head of the department or agency may
    determine to be essential for the study or experience.
              * * * * * * *

                    transition separation incentive payments

      Sec. 1233. (a) In applying to the Commission and employees of
    the Commission the provisions of section 663 of the Treasury,
    Postal Service, and General Government Appropriations Act, 1997
    (as contained in section 101(f) of division A of Public Law
    104-208; 110 Stat. 3009-383), relating to voluntary separation
    incentives for employees of certain Federal agencies (in this
    section referred to as ``section 663'')--
              (1) the term ``employee'' shall mean an employee of
            the Commission who has served in the Republic of Panama
            in a position with the Commission for a continuous
            period of at least three years immediately before the
            employee's separation under an appointment without time
            limitation and who is covered under the Civil Service
            Retirement System or the Federal Employees' Retirement
            System under subchapter III of chapter 83 or chapter
            84, respectively, of title 5, United States Code, other
            than--
                      (A) an employee described in any of
                    subparagraphs (A) through (F) of subsection
                    (a)(2) of section 663; or
                      (B) an employee of the Commission who, during
                    the 24-month period preceding the date of
                    separation, has received a recruitment or
                    relocation bonus under section 1217(c) of this
                    Act or who, within the 12-month period
                    preceding the date of separation, received a
                    retention bonus under section 1217(d) of this
                    Act;
              (2) the strategic plan under subsection (b) of
            section 663 shall include (in lieu of the matter
            specified in subsection (b)(2) of that section)--
                      (A) the positions to be affected, identified
                    by occupational category and grade level;
                      (B) the number and amounts of separation
                    incentive payments to be offered; and
                      (C) a description of how such incentive
                    payments will facilitate the successful
                    transfer of the Panama Canal to the Republic of
                    Panama;
              (3) a separation incentive payment under section 663
            may be paid to a Commission employee only to the extent
            necessary to facilitate the successful transfer of the
            Panama Canal by the United States of America to the
            Republic of Panama as required by the Panama Canal
            Treaty of 1977;
              (4) such a payment--
                      (A) may be in an amount determined by the
                    Commission not to exceed $25,000; and
                      (B) may be made (notwithstanding the
                    limitation specified in subsection (c)(2)(D) of
                    section 663) in the case of an eligible
                    employee who voluntarily separates (whether by
                    retirement or resignation) during the 90-day
                    period beginning on the date of the enactment
                    of this section or during theperiod beginning
    on October 1, 1998, and ending on December 31, 1998;
              (5) in the case of not more than 15 employees who (as
            determined by the Commission) are unwilling to work for
            the Panama Canal Authority after the Canal Transfer
            Date and who occupy critical positions for which (as
            determined by the Commission) at least two years of
            experience is necessary to ensure that seasoned
            managers are in place on and after the Canal Transfer
            Date, such a payment (notwithstanding paragraph (4))--
                      (A) may be in an amount determined by the
                    Commission not to exceed 50 percent of the
                    basic pay of the employee; and
                      (B) may be made (notwithstanding the
                    limitation specified in subsection (c)(2)(D) of
                    section 663) in the case of such an employee
                    who voluntarily separates (whether by
                    retirement or resignation) during the 90-day
                    period beginning on the date of the enactment
                    of this section; and
              (6) the provisions of subsection (f) of section 663
            shall not apply.
      (b) A decision by the Commission to exercise or to not
    exercise the authority to pay a transition separation incentive
    under this section shall not be subject to review under any
    statutory procedure or any agency or negotiated grievance
    procedure except under any of the laws referred to in section
    2302(d) of title 5, United States Code.

                           Subchapter IV--Retirement

              * * * * * * *

                   retirement under special treaty provisions

      Sec. 1243. (a) * * *

              * * * * * * *

      (c)(1) * * *
      (2) The retirement annuity referred to in paragraph (1) of
    this subsection with respect to any employee will cover
    [retroactivity] retroactively, from October 1, 1979, all
    periods of service, described in subparagraph (D) of that
    paragraph, by that employee at any permanent duty station in
    the Republic of Panama (including the area known before that
    date as the Canal Zone) in agencies and instrumentalities of
    the Government of the United States during which that employee
    was not covered by the United States Civil Service Retirement
    System or any other Federal retirement system providing
    benefits similar to those retirement benefits provided by the
    Social Security System of the Republic of Panama.
              * * * * * * *

                   Subchapter VII--Labor-Management Relations

                           labor-management relations

      Sec. 1271. (a) * * *
              * * * * * * *
      (c)(1) This subsection applies to any matter that becomes the
    subject of collective bargaining between the Commission and the
    exclusive representative for any bargaining unit of employees
    of the Commission during the period beginning on the date of
    the enactment of this subsection and ending on the Canal
    Transfer Date.
      (2)(A) The resolution of impasses resulting from collective
    bargaining between the Commission and any such exclusive
    representative during that period shall be conducted in
    accordance with such procedures as may be mutually agreed upon
    between the Commission and the exclusive representative
    (without regard to any otherwise applicable provisions of
    chapter 71 of title 5, United States Code). Such mutually
    agreed upon procedures shall become effective upon transmittal
    by the Chairman of the Commission to the Congress of notice of
    the agreement to use those procedures and a description of
    those procedures.
      (B) The Federal Services Impasses Panel shall not have
    jurisdiction to resolve any impasse between the Commission and
    any such exclusive representative in negotiations over a
    procedure for resolving impasses.
      (3) If the Commission and such an exclusive representative do
    not reach an agreement concerning a procedure for resolving
    impasses with respect to a bargaining unit and transmit notice
    of the agreement under paragraph (2) on or before July 1, 1998,
    the following shall be the procedure by which collective
    bargaining impasses between the Commission and the exclusive
    representative for that bargaining unit shall be resolved:
              (A) If bargaining efforts do not result in an
            agreement, the parties shall request the Federal
            Mediation and Conciliation Service to assist in
            achieving an agreement.
              (B) If an agreement is not reached within 45 days
            after the date on which either party requests the
            assistance of the Federal Mediation and Conciliation
            Service in writing (or within such shorter period as
            may be mutually agreed upon by the parties), the
            parties shall be considered to be at an impasse and
            shall request the Federal Services Impasses Panel of
            the Federal Labor Relations Authority to decide the
            impasse.
              (C) If the Federal Services Impasses Panel fails to
            issue a decision within 90 days after the date on which
            its services are requested (or within such shorter
            period as may be mutually agreed upon by the parties),
            the efforts of the Panel shall be terminated.
              (D) In such a case, the Chairman of the Panel (or
            another member in the absence of the Chairman) shall
            immediately determine the matter by a drawing
            (conducted in such manner as the Chairman (or, in the
            absence of the Chairman, such other member) determines
            appropriate) between the last offer of the Commission
            and the last offer of the exclusive representative,
            with the offer chosen through such drawing becoming the
            binding resolution of the matter.
      (4) In the case of a notice of agreement described in
    paragraph (2)(A) that is transmitted to the Congress as
    described in the second sentence of that paragraph after July
    1, 1998, the impasse resolution procedures covered by that
    notice shall apply to any impasse between the Commission and
    the other party to the agreeement that is unresolved on the
    date on which that notice is transmitted to the Congress.

                         Chapter 3--Funds and Accounts

                              Subchapter I--Funds

                          panama canal revolving fund

      Sec. 1302. (a) There is established in the Treasury of the
    United States a revolving fund to be known as ``Panama Canal
    Revolving Fund''. The Panama Canal Revolving Fund shall,
    subject to subsection (b), be available to the Commission to
    carry out the purposes, functions, and powers authorized by
    this Act, including [for--] for the following purposes:
              (1) [the] The hire of passenger motor vehicles and
            aircraft[;].
              (2) [uniforms] Uniforms or allowances therefor[;].
              (3) [official] Official receptions and representation
            expenses of the Board, the Secretary of the Commission,
            and the Administrator[;].
              (4) [the] The operation of guide services[;].
              (5) [a] A residence for the Administrator[;].
              (6) [disbursements]Disbursements by the Administrator
            for employee and community projects[;].
              (7) [the] The procurement of expert and consultant
            services[;].
              (8) [promotional] Promotional activities, including
            the preparation, distribution, or use of any kit,
            pamphlet, booklet, publication, radio, television,
            film, or other media presentation designed to promote
            the Panama Canal as a resource of the world shipping
            industry[; and].
              (9) [the] The purchase and transportation to the
            Republic of Panama of passenger motor vehicles,
            including large, heavy-duty vehicles.
              (10) Payment to the Panama Canal Authority, not later
            than the Canal Transfer Date, of such amount as is
            computed by the Commission to be the future amount of
            severance pay to be paid by the Panama Canal Authority
            to employees whose employment with the Authority is
            terminated, to the extent that such severance pay is
            attributable to periods of service performed with the
            Commission before the Canal Transfer Date (and assuming
            for purposes of such computation that the Panama Canal
            Authority, in paying severance pay to terminated
            employees, will provide for crediting of periods of
            service with the Commission).
              * * * * * * *

                                    printing

      Sec. 1306. (a) [Section 501] Sections 501 through 517 and
    1101 through 1123 of title 44, United States Code, shall not
    apply to direct purchase by the Commission for its use of
    printing, binding, and blank-book work in the Republic of
    Panama when the Commission determines that such direct purchase
    is in the best interest of the Government.
              * * * * * * *

                      Subchapter III--Interagency Accounts

                      interagency services; reimbursements

      Sec. 1321. (a) * * *
              * * * * * * *
      (c) Notwithstanding any other provision of law, funds
    appropriated (for any fiscal year beginning after September 30,
    1979) to or for the use of the Department of Defense, or to any
    other department or agency of the United States as may be
    designated by the President to carry out the purposes of this
    subsection, shall be available for--
              (1) conducting the educational and health care
            activities, including kindergartens and college,
            carried out by the Canal Zone Government and the Panama
            Canal Company before [the effective date of this Act]
            October 1, 1979, and
              (2) providing the services related thereto to the
            categories of persons to which such services were
            provided before [such effective date] October 1, 1979.
    Notwithstanding any other provision of law, the Department of
    Defense, or any department or agency designated by the
    President to provide health care services to those categories
    of persons referred to in this subsection, shall provide such
    services to such categories of persons on a basis no less
    favorable than that applied to its own employees and their
    dependents.
              * * * * * * *
      (e) The appropriations or funds of the Commission, or of any
    other department or agency of the United States conducting
    operations in the Republic of Panama, shall be available to
    defray the cost of--
              (1) * * *
              (2) educational services provided by schools in the
            Republic of Panama or the United States, which are not
            operated by the United States, to employees of the
            Commission who are citizens of the United States [and
            persons], to other Commission employees when determined
            by the Commission to be necessary for their recruitment
            or retention, and to other persons who were receiving
            such services at the expense of the Canal Zone
            Government before the effective date of this Act.
    Notwithstanding the provisions relating to the availability of
    adequate schools contained in section 5924(4)(A) of title 5,
    United States Code, the Commission shall by regulation
    determine the extent to which costs of educational services may
    be defrayed under this subsection.
              * * * * * * *

               Subchapter V--Accounts With the Republic of Panama

                       payments to the republic of panama

      Sec. 1341. (a) * * *
              * * * * * * *
      (f) The prohibitions contained in this section and in
    [sections 1302(c)] sections 1302(b) and 1503 of this Act shall
    apply notwithstanding any other provisions of law authorizing
    transfers of funds between accounts, reprogramming of funds,
    use of funds for contingency purposes, or waivers of
    prohibitions.
              * * * * * * *

                    transactions with the republic of panama

      Sec. 1342. (a) The Commission may, on a reimbursable basis,
    provide to the Republic of Panama materials, supplies,
    equipment, work, or services, including water and electric
    power, requested by the Republic of Panama, at such rates as
    may be agreed upon by the Commission and the Republic of
    Panama. Payment for such materials, supplies, equipment, work,
    or services may be made by direct payment by the Republic of
    Panama to the Commission or by offset against amounts due the
    Republic of Panama by the United States.
      (b) The Commission may provide office space, equipment,
    supplies, personnel, and other in-kind services to the Panama
    Canal Authority on a nonreimbursable basis.
      (c) Any executive department or agency of the United States
    may, on a reimbursable basis, provide to the Panama Canal
    Authority materials, supplies, equipment, work, or services
    requested by the Panama Canal Authority, at such rates as may
    be agreed upon by that department or agency and the Panama
    Canal Authority.
              * * * * * * *

             Chapter 4--Claims for Injuries to Persons or Property

              * * * * * * *

                          Subchapter II--Vessel Damage

                           injuries in locks of canal

      Sec. 1411. (a) Subject to subsection (b) of this section, the
    Commission shall promptly adjust and pay damages for injuries
    to vessels, or to the cargo, crew, or passengers of vessels,
    which may arise by reason of their passage through the locks of
    the Panama Canal when the injury was proximately caused by
    negligence or fault on the part of an officer or employee of
    the United States acting within the scope of his employment and
    in the line of his duties in connection with the operation of
    the Canal. If the negligence or fault of the vessel, master,
    crew, or passengers proximately contributed to the injury, the
    award of damages shall be diminished in proportion to the
    negligence to fault attributable to the vessel, master, crew,
    or passengers. Damages may not be allowed and paid for injuries
    to any protrusion beyond any portion of the hull of a vessel,
    whether it is permanent or temporary in character. A vessel is
    considered to be passing through the locks of the Canal, under
    the control of officers or employees of the United States, from
    the time the first towing line is made fast on board before
    entrance into the locks and until the towing lines are cast off
    upon, or immediately prior to, departure from the lock chamber.
    No payment for damages on a claim may be made under this
    section unless the claim is filed with the commission [within 2
    years after the date of the injury, or within 1 year after the
    date of the enactment of the Panama Canal Amendments Act of
    1985,] within one year after the date of the injury or the date
    of the enactment of the Panama Canal Transition Facilitation
    Act of 1997, whichever is later.
              * * * * * * *

                             injuries outside locks

      Sec. 1412. The Commission shall promptly adjust and pay
    damages for injuries to vessels, or to the cargo, crew, or
    passengers of vessels which may arise by reason of their
    presence in the Panama Canal, or waters adjacent thereto, other
    than the locks, when the injury was proximately caused by
    negligence or fault on the part of an officer or employee of
    the United States acting within the scope of his employment and
    in the line of his duties in connection with the operation of
    the Canal. If the negligence or fault of the vessel, master,
    crew, or passengers proximately contributed to the injury, the
    award of damages shall be diminished in proportion to the
    negligence or fault attributable to the vessel, master, crew,
    or passengers. In the case of a vessel which is required by or
    pursuant to regulations prescribed pursuant to section 1801 of
    this Act to have a Panama Canal pilot on duty aboard, damages
    may not be adjusted and paid for injuries to the vessel, or its
    cargo, crew, or passengers, incurred while the vessel was
    underway and in motion, unless at the time the injuries were
    incurred the navigation or movement of the vessel was under the
    control of a Panama Canal pilot. No payment for damages on a
    claim may be made under this section unless the claim is filed
    with the Commission [within 2 years after the date of the
    injury, or within 1 year after the date of the enactment of the
    Panama Canal Amendments Act of 1985,] within one year after the
    date of the injury or the date of the enactment of the Panama
    Canal Transition Facilitation Act of 1997, whichever is later.
              * * * * * * *

                               actions on claims

      Sec. 1416. A claimant for damages pursuant to section 1411(a)
    or 1412 of this Act who considers himself aggrieved by the
    findings, determination, or award of the Commission in
    reference to his claim may bring an action on the claim against
    the Commission in the United States District Court for the
    Eastern District of Louisiana. Subject to the provisions of
    this chapter and of applicable regulations issued pursuant to
    section 1801 of this Act relative to navigation of the Panama
    Canal and adjacent waters, such actions shall proceed and be
    heard by the court without a jury according to the principles
    of law and rules of practice obtaining generally in like cases
    between a private party and a department or agency of the
    United States. Any judgment obtained against the Commission in
    an action under this subchapter may be paid out of money
    allotted for the maintenance and operation of the Panama Canal.
    An action for damages cognizable under this section shall not
    otherwise lie against the United States or the Commission, nor
    in any other court, than as provided in this section; nor may
    it lie against any officer or employee of the United States or
    of the Commission. Any action on a claim under this section
    shall be barred unless the action is brought within [one year]
    180 days after the date on which the Commission mails to the
    claimant written notification of the Commission's final
    determination with respect to the [claim, or within one year
    after the date of the enactment of the Panama Canal Amendments
    Act of 1985,] claim or the date of the enactment of the Panama
    Canal Transition Facilitation Act of 1997, whichever is later.
    Attorneys appointed by the Commission shall represent the
    Commission in any action arising under this subchapter.
              * * * * * * *

                  Chapter 6--Tolls for Use of the Panama Canal

              * * * * * * *

                                 bases of tolls

      Sec. 1602. (a) Tolls on merchant vessels, army and navy
    transports, colliers, tankers, hospital ships, [supply ships,
    and yachts] and supply ships shall be based on net vessel tons
    of one hundred cubic feet each of actual earning capacity, or
    its equivalent, determined in accordance with the rules for the
    measurement of vessels for the Panama Canal, and tolls on other
    floating craft shall be based on displacement tonnage. The
    tolls on vessels in ballast without passengers or cargo may be
    less than the tolls for vessels with passengers or cargo. Tolls
    for small vessels (including yachts), as defined by the
    Commission, may be set at rates determined by the Commission
    without regard to the preceding provisions of this subsection.
              * * * * * * *

                         TITLE III--GENERAL PROVISIONS

                             Chapter 1--Procurement

                               procurement system

      Sec. 3101. (a) Panama Canal Acquisition Regulation.--(1) The
    Commission shall establish by regulation a comprehensive
    procurement system. The regulation shall be known as the
    ``Panama Canal Acquisition Regulation'' (in this section
    referred to as the ``Regulation'') and shall provide for the
    procurement of goods and services by the Commission in a manner
    that--
              (A) applies the fundamental operating principles and
            procedures in the Federal Acquisition Regulation;
              (B) uses efficient commercial standards of practice;
            and
              (C) is suitable for adoption and uninterrupted use by
            the Republic of Panama after the Canal Transfer Date.
      (2) The Regulation shall contain provisions regarding the
    establishment of the Panama Canal Board of Contract Appeals
    described in section 3102.
      (b) Supplement to Regulation.--The Commission shall develop a
    Supplement to the Regulation (in this section referred to as
    the ``Supplement'') that identifies both the provisions of
    Federal law applicable to procurement of goods and services by
    the Commission and the provisions of Federal law waived by the
    Commission under subsection (c).
      (c) Waiver Authority.--(1) Subject to paragraph (2), the
    Commission shall determine which provisions of Federal law
    should not apply to procurement by the Commission and may waive
    those laws for purposes of the Regulation and Supplement.
      (2) For purposes of paragraph (1), the Commission may not
    waive--
              (A) section 27 of the Office of Federal Procurement
            Policy Act (41 U.S.C. 423);
              (B) the Contract Disputes Act of 1978 (41 U.S.C. 601
            et seq.), other than section 10(a) of such Act (41
            U.S.C 609(a)); or
              (C) civil rights, environmental, or labor laws.
      (d) Consultation With Administrator for Federal Procurement
    Policy.--In establishing the Regulation and developing the
    Supplement, the Commission shall consult with the Administrator
    for Federal Procurement Policy.
      (e) Effective Date.--The Regulation and the Supplement shall
    take effect on the date of publication in the Federal Register,
    or January 1, 1999, whichever is earlier.

                     panama canal board of contract appeals

      Sec. 3102. (a) Establishment.--(1) The Secretary of Defense,
    in consultation with the Commission, shall establish a board of
    contract appeals, to be known as the Panama Canal Board of
    Contract Appeals, in accordance with section 8 of the Contract
    Disputes Act of 1978 (41 U.S.C. 607). Except as otherwise
    provided by this section, the Panama Canal Board of Contract
    Appeals (in this section referred to as the `Board') shall be
    subject to the Contract Disputes Act of 1978 (41 U.S.C. 601 et
    seq.) in the same manner as any other agency board of contract
    appeals established under that Act.
      (2) The Board shall consist of three members. At least one
    member of the Board shall be licensed to practice law in the
    Republic of Panama. Individuals appointed to the Board shall
    take an oath of office, the form of which shall be prescribed
    by the Secretary of Defense.
      (b) Exclusive Jurisdiction To Decide Appeals.--
    Notwithstanding section 10(a)(1) of the Contract Disputes Act
    of 1978 (41 U.S.C. 609(a)(1)) or any other provision of law,
    the Board shall have exclusive jurisdiction to decide an appeal
    from a decision of a contracting officer under section 8(d) of
    such Act (41 U.S.C. 607(d)).
      (c) Exclusive Jurisdiction To Decide Protests.--The Board
    shall decide protests submitted to it under this subsection by
    interested parties in accordance with subchapter V of title 31,
    United States Code. Notwithstanding section 3556 of that title,
    section 1491(b) of title 28, United States Code, and any other
    provision of law, the Board shall have exclusive jurisdiction
    to decide such protests. For purposes of this subsection--
              (1) except as provided in paragraph (2), each
            reference to the Comptroller General in sections 3551
            through 3555 of title 31, United States Code, is deemed
            to be a reference to the Board;
              (2) the reference to the Comptroller General in
            section 3553(d)(3)(C)(ii) of such title is deemed to be
            a reference to both the Board and the Comptroller
            General;
              (3) the report required by paragraph (1) of section
            3554(e) of such title shall be submitted to the
            Comptroller General as well as the committees listed in
            such paragraph;
              (4) the report required by paragraph (2) of such
            section shall be submitted to the Comptroller General
            as well as Congress; and
              (5) section 3556 of such title shall not apply to the
            Board, but nothing in this subsection shall affect the
            right of an interested party to file a protest with the
            appropriate contracting officer.
      (d) Procedures.--The Board shall prescribe such procedures as
    may be necessary for the expeditious decision of appeals and
    protests under subsections (b) and (c).
      (e) Commencement.--The Board shall begin to function as soon
    as it has been established and has prescribed procedures under
    subsection (d), but not later than January 1, 1999.
      (f) Transition.--The Board shall have jurisdiction under
    subsection (b) and (c) over any appeals and protests filed on
    or after the date on which the Board begins to function. Any
    appeals and protests filed before such date shall remain before
    the forum in which they were filed.
      (g) Other Functions.--The Board may perform functions similar
    to those described in this section for such other matters or
    activities of the Commission as the Commission may determine
    and in accordance with regulations prescribed by the
    Commission.
              * * * * * * *
                                  ----------

                       TITLE 5 OF THE UNITED STATES CODE

              * * * * * * *

                              PART III--EMPLOYEES

              * * * * * * *

                         Subpart D--Pay and Allowances

              * * * * * * *

                       CHAPTER 53--PAY RATES AND SYSTEMS

              * * * * * * *

                SUBCHAPTER II--EXECUTIVE SCHEDULE AND PAY RATES

              * * * * * * *

    Sec. 5315. Positions at level IV

      Level IV of the Executive Schedule applies to the following
    positions, for which the annual rate of basic pay shall be the
    rate determined with respect to such level under chapter 11 of
    title 2, as adjusted by section 5318 of this title:
              * * * * * * *
              [Administrator of the Panama Canal Commission.]
              * * * * * * *

              CHAPTER 57--TRAVEL, TRANSPORTATION, AND SUBSISTENCE

              * * * * * * *

      SUBCHAPTER II--TRAVEL AND TRANSPORTATIONS EXPENSES; NEW APPOINTEES,
                  STUDENT TRAINEES, AND TRANSFERRED EMPLOYEES

              * * * * * * *

    Sec. 5724. Travel and transportation expenses of employees

      (a) Under regulations prescribed under section 5738 of this
    title and when the head of the agency concerned or his designee
    authorizes or approves, the agency shall pay from Government
    funds--
              (1)  * * *
              * * * * * * *
              (3) upon the separation (or death in service) of a
            career appointee, as defined in section 3132(a)(4) of
            this title, the travel expenses of that individual (if
            applicable), the transportation expenses of the
            immediate family of such individual, and the expenses
            of moving (including transporting, packing, crating,
            temporarily storing, draying, and unpacking) the
            household goods of such individual and personal effects
            not in excess of eighteen thousand pounds net weight,
            to the place where the individual will reside (or, in
            the case of a career appointee who dies in service or
            who dies after separating but before the travel,
            transportation, and moving is completed, to the place
            where the family will reside) within the United States,
            its territories or possessions[, the Commonwealth of
            Puerto Rico, or the areas and installations in the
            Republic of Panama made available to the United States
            pursuant to the Panama Canal Treaty of 1977 and related
            agreements, as described in section 3(a) of the Panama
            Canal Act of 1979] or the Commonwealth of Puerto Rico,
            if such individual--
              * * * * * * *

    Sec. 5724a. Relocation expenses of employees transferred or reemployed

      (a) * * *
              * * * * * * *
      (j) For purposes of subsections (c), (d), and (e), the term
    ``United States'' includes the District of Columbia, the
    Commonwealth of Puerto Rico, the Commonwealth of the Northern
    Mariana Islands, and the territories and possessions of the
    [United States, and the areas and installations in the Republic
    of Panama that are made available to the United States pursuant
    to the Panama Canal Treaty of 1977 and related agreements (as
    described in section 3(a) of the Panama Canal Act of 1979 (22
    U.S.C. 3602(a))).] United States.
              * * * * * * *
                                  ----------

     SECTION 5 OF THE PANAMA CANAL COMMISSION COMPENSATION FUND ACT OF 1988

    SEC. 5. FINAL EVALUATION OF THE FUND; DEFICIENCY OR SURPLUS IN THE
                        FUND.

      (a) Final Evaluation of the Fund.--[Upon the termination of
    the Panama Canal Commission] By March 31, 1998, the Secretary
    of Labor shall, on the basis of an actuarial study conducted by
    experts or consultants whose services are procured by the
    Secretary of Labor by contract, make a final determination of
    the amounts estimated to be necessary to meet expenditures for
    workers' compensation benefits and other payments described in
    section 3(a), as calculated in accordance with the second
    sentence of section 3(b). Amounts in the Fund shall be used to
    pay for the final determination under this subsection. The
    Secretary of the Treasury shall, in accordance with such final
    determination, transfer from the Fund to the Employee
    Compensation Fund amounts sufficient to meet expenditures for
    workers' compensation benefits and other payments described in
    section 3(a).
              * * * * * * *
                        ADDITIONAL AND DISSENTING VIEWS

                                  ----------

                     DISSENTING VIEWS OF RONALD V. DELLUMS

        I voted against reporting H.R. 1119 from the committee for
    several reasons. First, the price tag for this bill continues
    to be significantly out of line with the military requirements
    of this country, out of line with a properly balanced
    allocation of expenditures across all national security
    accounts, and out of line with the strategic and geopolitical
    realities of our world.
        The national security agenda of this country contains three
    equally important elements, and requires a balance of funding
    among the accounts of each element. We must have a vibrant and
    energetic economy and an informed, healthy, trained and
    educated citizenry in order to maintain our domestic
    tranquillity. Second, we must have an engaged foreign policy
    and foreign aid program that can promote sustainable
    development, a respect for human rights, and the growth of
    democracy, all of which are vital for regional stability and
    the prevention of war and conflict. Third, we must field a
    right-sized, properly equipped and appropriately trained
    military force in order to deter violence and aggression,
    participate in internationally sanctioned peace keeping and
    meet our obligations to support humanitarian operations.
        Our national security is as dependent on the amount of the
    discretionary budget allocated to the first two of these
    accounts as it is to the account that is recommended to be
    authorized in this bill and report. To the extent that we over-
    fund the defense account, as I believe we have done with this
    recommendation, those other elements of our national security
    agenda will continue to atrophy.
        Second, the committee recommendation would procure too much
    of yesterday's technology by adding, for example, funding for
    long-lead procurement of nine additional B-2 bomber aircraft as
    well as for the purchase of additional tactical aircraft for
    which there is no urgent requirement.
        Third, the committee recommendation would press forward too
    rapidly with national missile defense, notwithstanding that the
    committee recommendation implicitly adopts the administration's
    so-called three-plus-three strategy for development and
    preparation of a national missile defense system. I applaud the
    committee's retreat from any effort to implicitly or to
    explicitly recommend a program that would exceed the limits of
    the ABM Treaty.
        Fourth, the committee recommendation fails to offer the
    operations and maintenance, personnel and other savings that
    could be attained if our force structure were further
    realigned. In an era where we will face no peer competitor for
    at least a decade, we should undertake such action in order to
    meet the near-term and mid-term requirements that will confront
    us.
        Fifth, I am troubled that the committee recommendation
    siphons off important resources from the environmental clean-up
    and construction accounts of the Department of Energy's defense
    programs in order to finance procurement of the unnecessary
    additional items in the procurement account.
        Sixth, I am also troubled at the decision to reduce funds
    for the Cooperative Threat Reduction program, a program that is
    essential to our interests in reducing or eliminating threats
    that are currently posed by nuclear, chemical and biological
    weapons and materials.

                                                     Ronald V. Dellums.
                        ADDITIONAL VIEWS OF JOHN SPRATT

        I support most aspects of this legislation and will vote
    for it, but I disagree with the diversion of $2.6 billion in
    budget authority from the Department of Energy (budget
    subfunction 053) to the Department of Defense (budget
    subfunction 051). I agree with OMB Director Frank Raines, who
    wrote the following to the Chairman of the House National
    Security Committee prior to committee mark-up:

              The Administration does not support reducing funds
            from DOE (subfunction 053) accounts below the
            President's 1998 budget request or allocating these
            funds to DOD programs. This would be inconsistent with
            our understanding of the Budget Agreement reached with
            the Congressional leadership.

        Of the $2.6 billion diverted, $1.5 billion was designated
    to start a ``full funding'' policy of major Department of
    Energy (DOE) capital investments. ``Full funding'' simply means
    that Congress provides sufficient budget authority to cover the
    entire estimated procurement cost of major capital investments
    in one year, rather than paying for the project over a period
    of years (``incremental funding''). In essence, the DOE was
    ``banking'' funds needed for large projects, most of which were
    for the Stockpile Stewardship program (which ensures the safety
    and reliability of our nuclear weapon stockpile) and for
    environmental clean-up of sites contaminated by radioactive
    waste.
        The committee also slashed $936 million from the DOE's
    $1.006 billion request to ``privatize'' portions of its
    environmental clean-up program. The DOE wants private companies
    to build facilities to treat hazardous radioactive waste. In
    exchange, the DOE will guarantee that it will pay for the
    treatment of the waste at a set price per unit of treated
    waste. By law, an agency cannot enter into a contract without
    having the budget authority to fully cover the costs of the
    contract, so the DOE needs to have the budget authority now in
    order to commit to paying for treatment of waste years from
    now.
        I am not sold yet on DOE's privatization policy, and the
    committee may be wise in postponing this policy. But I am sold
    on the need to clean up DOE's nuclear weapons facilities, and
    whether the clean-up is financed through direct appropriations
    or by privatizing some projects, there is a need for
    environmental funding. The simple fact is that the committee
    diverted these funds to the Department of Defense (DOD) and
    created a $936 million hole in the DOE's five-year
    environmental clean-up plan. It would have been more prudent to
    fence the money, to prohibit DOE from spending it until we are
    convinced of the merits of privatization. If the committee
    remained unconvinced, Congress could then direct that the funds
    be used to clean-up our nuclear weapon sites in more
    traditional ways. Diverting the funding to DOD has effectively
    cut nearly $1 billion from a sorely needed program.
        The committee's actions have created a $2.6 billion
    shortfall in the DOE's planned activities over the next five
    years. In prior years, this shortfall could have been overcome
    by re-adjusting future budget requests. But under the
    bipartisan budget agreement, function levels for discretionary
    spending have been established for the next five years. The DOE
    will be hard-pressed to replace this loss of funding since it
    will either mean retrieving the money from future DOD budgets,
    or adding funding from other budget functions to the 050
    function and violating the budget agreement. This problem is
    exacerbated since the $2.6 billion diversion fromDOE to DOD
    went into procurement items that will generate future DOD costs, making
    it even harder to retrieve the funding from future DOD budgets.
        I do not believe that we fully thought through the
    implications for environmental clean-up or nuclear weapons,
    particularly stockpile stewardship, when we decided to divert
    this funding. While I support the overall bill, I hope these
    issues will be revisited during the House-Senate conference.
        Other important programs at DOE received cuts that seem
    unwarranted. The Office Worker and Community Transition was
    established by Congress in the early 1990s to ease the impact
    of worker layoffs at DOE sites.
        On a more positive note, I was pleased by several actions
    taken by the committee to address needs at Shaw Air Force Base
    and the South Carolina National Guard.
        The committee fully funded the Air Force's request for
    $6.072 million for the construction of an ``information warfare
    sq ops facility.'' The facility will house a new information
    warfare unit at Shaw Air Force Base in Sumter, South Carolina.
    The Joint Chiefs of Staff state in Joint Vision 2010 that
    information superiority will be a key asset in the battles of
    the 21st century. The Research & Development and Procurement
    Subcommittees held a hearing this week which underscored this
    point. Lt. Gen. Douglas Buchholz, Director for Command Control,
    Communications and Computer Systems who represented the JCS at
    the hearing explained, ``Our successes in the battlespace of
    the future, whether combating large, heavily armed forces or
    providing peacekeeping and humanitarian assistance, depend upon
    the precise application of force across the full spectrum of
    missions. The cornerstone of this effort is the ability to get
    the right information to the right place at the right time--or
    information superiority.'' The Air Force's information warfare
    unit at Shaw is tasked with making informational warfare
    ``operational at the component level.'' In other words, its
    work is where the rubber meets the road, developing methods to
    make certain that information technology can be used to
    tactical advantage.
        The committee included language directing the Air Force to
    study the acquisition of land near Shaw without appropriated
    funds. This language will allow the Air Force to exercise its
    authority, granted in the FY96 Defense Authorization Act to
    acquire land adjacent to Shaw. This land will provide a
    significant enhancement to the base, improving operational
    flexibility for the Air Force.
        Finally, the committee included funding for 2 Research and
    Development projects important to the Navy. The committee
    included $2 million to complete the Navy's effort to develop a
    second source qualification process for several materials
    including carbon-fibers like the Joint Strike Fighter. However,
    the Navy has been limited to a single qualified source for
    these fibers. As a result, the Navy has not been able to take
    advantage of the potential for cost savings and quality
    improvements from a second source. The NAWC Materials Division
    was organized in part to take advantage of the opportunity to
    develop second-sources for materials. However, funding for NAWC
    has been so limited that the development of qualification
    processes has been impossible. Last year, the committee
    corrected this problem by authorizing $5 million for NAWC to
    establish second-source qualification procedures for 3 products
    including carbon fibers. This funding was included in the final
    authorization bill signed into law. However, during the
    conference on the defense appropriations bill funding was
    reduced to $3 million. This year's authorization bill finishes
    the process by authorizing the remaining $2 million.

                                                           John Spratt.
       ADDITIONAL VIEWS OF JAMES HANSEN, TILLIE FOWLER AND SOLOMON ORTIZ

        We strongly support the committee's action to reaffirm the
    long-held Congressional position that depot-level maintenance
    of mission essential weapons systems and equipment is a core
    competency of the Department of Defense. This position was also
    reaffirmed by each of the military services in testimony before
    the committee. Depots are not the tail but the backbone of our
    fighting forces. As such, it is essential for national security
    that the Department of Defense maintain a robust, responsive
    and cost effective system of organic industrial facilities (air
    logistics centers, maintenance depots, shipyards, arsenals,
    weapons centers and ammunition plants). This capability is
    critical to ensuring competitive options in a downsized and
    vertically integrated defense industry. We remain concerned
    that any restriction on the public sector's ability to
    effectively compete would result in increased costs to the
    Department of Defense in a market where over 90% of contracts
    are awarded on sole-source basis and where the public sector is
    responsible for over 50% of the savings achieved.
        We also recognize the critical role the private sector
    already plays in depot-level maintenance and logistics support.
    Currently, each of the three military departments spends over
    35% of the funds made available for depot-level maintenance
    directly in the private sector. We encourage privatization of
    non-core functions where a highly competitive marketplace
    exists and real savings can be achieved. As such, we support
    the committee's effort to expand the flexibility of the
    Services to pursue public-private competitions and
    partnerships, while protecting both current private sector
    contracts and the efficient operation of public Centers of
    Industrial and Technical Excellence.
        It is our view that the key to real savings within the
    Department's industrial infrastructure is a prioritized and
    sequential process of re-engineering core capabilities,
    consolidation of workloads and shedding of expensive excess
    capacity, and the full and open competition of non-core
    functions. The independent BRAC process is critical to the task
    of bringing DOD's infrastructure in line with its force
    structure. The Quadrennial Defense Review recommended two
    additional rounds of BRAC may be needed. While we have grave
    reservations about the magnitude of savings the Pentagon claims
    are generated by BRAC, without full faith in the independent
    and apolitical nature of BRAC, and without equal treatment for
    all facilities and a clear focus on military value, there is in
    our view no prospect for additional BRAC authorization.
        The Navy and Army have each closed and consolidated over
    50% of their respective industrial depot capacity. The Navy
    closed 4 of 8 shipyards and 3 of 6 aviation depots. The Army
    recommended closure and consolidation for 6 of their 9 depots.
    These strategies are paying real dividends and if fully
    implemented would provide efficiencies for both the public and
    private sector and free up funding for much needed
    modernization.
        The Air Force depot system continues to be plagued by
    costly excess capacity. The BRAC Commission found over 50%
    excess capacity across the system and recommended the closure
    of the two least efficient and lowest military value
    facilities. Their intent was clearly stated in the final BRAC
    report: ``The closure of McClellan (and Kelly) AFB permits
    significantly improved utilization of the remaining depots and
    reduces DOD operating costs.'' The Defense Depot Maintenance
    Council (DDMC) was given the authority to decide if individual
    workloads would be ``consolidated to other DOD depots or to the
    private sector,'' but again the intent was clear: ``move the
    required equipment and any required personnel to the receiving
    locations.'' Consolidation of workloads and reduction of excess
    capacity was the clearintent for both the public and private
    sectors. In the case of the San Antonio ALC the Commission specifically
    urged ``the Air Force to consolidate engine maintenance activity at
    Tinker to reduce excess capacity. The Commission firmly believes that
    consolidation of engine activities will result in lower costs and
    increased efficiencies.'' In the case of McClellan AFB, ``the
    Commission assumed that depot closure and consolidation of work'' would
    permit significantly reduced personnel and overhead.
        We also note the findings of the Defense Science Board in
    this regard, which stated: ``The task force strongly urges DOD
    to avoid privatization in-place (PIP) strategy for outsourcing
    DOD support functions. Under this approach, DOD transfers the
    organic facility, workload, and workforce to a single
    contractor or group of contractors. The contractor or
    contractors are obligated to perform that workload in the
    transferred facility. As a result, PIP often results in the
    artificial preservation of surplus capacity and the suboptimal
    utilization of resources.'' Even the Governor of California's
    CEO Defense Privatization Task Force recognized the problems of
    excess capacity, observing that Awhile Privatization in-place
    solves the political implications . . . it does not resolve the
    issue of excess capacity at the remaining public sector
    facilities. Without additional workload, the remaining public
    sector facilities will continue to operate inefficiently, and
    one or more could be the target of a future round of base
    closings.'' This report also noted the effect of PIP on the
    private sector. ``Privatization in-place . . . does nothing to
    solve the excess capacity problem within the private sector
    industrial base.''
        We view with great concern the findings of the General
    Accounting Office and the Air Force Materiel Command whose
    analyses concluded that privatization in-place of workload at
    McClellan and Kelly will increase the problem of excess
    capacity within the depots and will cost DoD between $468
    million and $689 million annually. Privatization in-place,
    despite attempts to call it competition, will not only not save
    money for critically needed modernization, but will likely cost
    us much more. We are also aware that privatization in-place of
    workload at Newark AGMC has resulted in an increase in costs by
    up to $27 million per year, or over 78%. In these days of tight
    defense budgets, any cost increase is simply too much to waste.
        Accordingly, we strongly support the Committee's action to
    maintain its support for a government-owned, government-
    operated core logistics capability, including government
    personnel, while also providing important new flexibility to
    allow the private sector to perform core maintenance functions
    in partnership with the government at government-owned Centers
    of Industrial and Technical Excellence. The Secretary retains
    the responsibility for identifying those core capabilities, but
    must do so in reference to both the national military strategy
    and the efficient operations of our Centers of Industrial and
    Technical Excellence. This will ensure a ready and controlled
    source of technical competence and resources necessary to
    provide effective and timely response to any mobilization,
    national defense contingency, or other emergency requirement.
    Where core capabilities for the sustainment of mission
    essential new weapons systems are identified, the Secretary of
    Defense must establish the capability to perform these
    activities at government-owned, government-operated facilities
    within four years of IOC. When appropriate, teaming and
    partnership between our national asset organic Centers of
    Industrial and Technical Excellence and the private sector for
    the performance of these depot maintenance activities should be
    encouraged and enabled.
        We strongly support the restrictions placed on contracting
    for core maintenance activities at depot maintenance facilities
    closed or realigned by the 1995 BRAC Commission. Given the
    clear intention and advantage to consolidation of this
    workload, the requirement that theremaining facilities of the
    affected Service be operated at 80% is only reasonable. The 80%
    capacity utilization requirement only applies to actions related to
    depots closed or realigned by the 1995 BRAC Commission. We strongly
    support the committee's position that none of the workload considered
    for privatization was considered core by the Air Force prior to
    conclusion of the 1995 BRAC Commission deliberations. We understand
    that in certified data provided to the BRAC Commission 79% of the
    workload at the San Antonio ALC and 87% of the workload at the
    McClellan ALC was reported as core.
        We recognize that best business practices can and are being
    adopted in the public sector industrial base; including much
    needed logistics automation and customer-driven, on-time
    delivery. We are pleased to see the committee reaffirm its
    position that artificial constraints such as Full Time
    Equivalent ceilings restrain DOD from getting the best value
    for each defense dollar.
        We are also pleased to support the committee in reaffirming
    its position that the original intent of Title 10 section 2466
    was that all funds used to perform depot-level maintenance
    regardless of the funding source be accounted for in
    determining the distribution of workloads. This has always been
    the intent of the committee and is reflected in the
    Department's own financial regulations. It is critically
    important that the Department of Defense take this clear
    Congressional direction into consideration when making workload
    decisions. According to data provided by the Defense Depot
    Maintenance Council (DDMC), this full and accurate accounting
    would not affect any current contracts or the logical extension
    of these contracts, nor would it require any work currently
    performed in the private sector to be moved into the public
    sector.
        We are all committed to working with the Secretary to
    streamline the Department of Defense infrastructure. Restoring
    integrity to the critical, independent BRAC process is one
    important step in this process. Competitive privatization of
    truly non-core functions will continue to receive our support.
    Wholesale privatization of core capabilities which represent
    the backbone of our nation's ability to sustain combat forces
    and ensure readiness, and the retention of expensive excess
    capacity to satisfy political agendas, will not.

                                       James Hansen.
                                       Tillie Fowler.
                                       Solomon Ortiz.
                      ADDITIONAL VIEWS OF JAMES M. TALENT

        I am pleased that the full committee, after vigorous
    debate, soundly rejected efforts to procure a mix of the older-
    model F/A-18C/D and the new F/A-18E/F ``Super Hornet,'' and
    instead procure only the newer E/F. However, I must express my
    profound disagreement with the net result of the House National
    Security Committee's action, which was to reduce overall
    procurement funding for Super Hornets from the Navy's request
    of $2.1 billion for 20 low-rate initial-production aircraft to
    $1.348 billion, and to reduce the Navy's research and
    development request from $267.5 to $153.3 million. These
    reductions are entirely unjustified and will detract from the
    Navy's ability to execute its missions in the increasingly
    demanding threat environment of the next two decades.
        The Secretary of Defense, in his June 10, 1997 letter,
    emphasized his ``strong support of the F/A-18E/F Super Hornet
    program,'' stating that ``our warfighters require the most
    advanced technology available.'' He further added that ``the
    Quadrennial Defense Review clearly validated the need for the
    F/A-18E/F. . . . Without the E/F we would be sending our pilots
    into combat at the turn of the century with the 1970s
    technology of the F/A-18C/D.''
        The Chief of Naval Operations, in his own letter to the
    chairman and ranking member, expressed his ``strongest possible
    support for the F/A-18E/F program . . . It is the cornerstone
    of the future of carrier aviation and the Navy's number one
    aviation priority.'' Further, he recently stated to Congress
    that ``the multi-mission F/A-18E/F Super Hornet is a leap
    forward in both TacAir design and survivability. The Super
    Hornet may look like its predecessor, however it is far larger,
    significantly more capable, and most importantly it is a first
    strike, every day strike, survivable weapon system for the
    foreseeable future.'' The Navy states that the Super Hornet
    will dominate all possible threats for at least the next two
    decades.
        The CNO's letter further states that ``the E/F has
    flawlessly progressed through every required milestone to
    include operational requirements, mission needs, cost and
    threat analysis, and engine development. Admiral Johnson
    describes the entire aircraft program as ``a model of
    acquisition reform and unprecedented cost performance. The F/A-
    18E/F has completed significant portions of the flight rest
    program (over 1,100 flight hours) . . . Testing results have
    clearly exceeded all specific performance parameters. The
    program is on schedule, within budget and under specification
    weight.''
        In terms of cost, the Under Secretary for Acquisition, Dr.
    Kaminski, in his recent Selective Acquisition Report, found
    that the Super Hornet would cost only 13 percent more than its
    C/D predecessor based on production figures of 1,000 aircraft
    per program. His report pegged C/D per-unit cost at $36.5
    million and E/F per-unit cost at $41.6 million.
        In terms of survivability, the Center for Naval Analysis in
    its recent report to Congress, reported that the Super Hornet
    would suffer roughly one fifth the losses of an F/A-18C/D
    airwing given the same threat environment and warfighter
    scenario. The independent Institute for Defense Analysis, in
    its report requested by the Joint Staff, determined that the
    Super Hornet's survivability characteristics, to include a
    radar signature only one-tenth that of the older C/D, reduces
    the number of targets considered as ``high risk'' to the pilot
    and aircraft by 75 percent over the C/D Hornet it will replace.
        Finally, it is essential to point out that the E/F program
    is not in competition with the emerging joint strike fighter
    concept. The Super Hornet will replace aging F-14s, whose
    operational costs the Navy desperately seeks to avoid, and
    older Hornets, all of which have reached the limits of their
    technological upgradability. The most optimistic forecast for a
    Navy version of the JSF is 2010, and even then the service
    would not be able to place a meaningful number of aircraft on
    its carrier decks until approximately 2015. The Super Hornet is
    indeed a ``bridge'' from the F-14 and C/D-model Hornets to the
    joint strike fighter, and that bridge by any reasonable
    estimate appears to be about two decades in length.
        I am pleased that the House National Security Committee,
    after careful consideration of these important issues, declared
    its overwhelming and bipartisan support for the F/A-18E/F Super
    Hornet program.

                                                       James M. Talent.
                     ADDITIONAL VIEWS OF PATRICK J. KENNEDY

        The defense authorization bill as reported out by the House
    National Security Committee contains a number of significant
    measures, ranging from substantive quality of life initiatives
    to research and development investment, that will serve to
    further our national security objectives. While I was proud to
    vote in support of the legislation, there remain a number of
    provisions with which I have serious concern.
        It is important that the committee rejected an attempt to
    roll-back military training methods by moving toward gender
    segregation. The Marine Corps notwithstanding, our committee
    heard time and time again that military leaders find it
    important to their mission to be able to train as they will
    fight. I am pleased the bill contained a number of provisions
    that sought to first try and fix the system rather than attempt
    to dismantle it. I am also gratified that my amendment to
    expand the human relations training received by Army drill
    sergeants was adopted by the committee. Currently, in
    preparation for their role as Army drill sergeants they receive
    only two and a half hours of human relations training. This is
    woefully inadequate; if we do not provide our servicemembers
    with the necessary tools and skills to perform the tasks we ask
    of them, we are doing nothing short of consigning them to
    failure.
        I am confident that the Army will design a course that
    meets the needs of prospective drill sergeants. In designing
    that course, the Army has been tasked to engage the experts at
    the DOD's premier human relations organization, the Defense
    Equal Opportunity Management Institute (DEOMI). Because the
    services are utilizing DEOMI at a greater rate than ever,
    creating a waiting list in most instances, next year I intend
    to pursue increasing the resources available to DEOMI.
        I am pleased that the committee did not accept the
    Administration's proposal to prohibit federally-employed
    civilian reservists from taking penalty-free leave in order to
    perform their annual two-week military training period. The
    federal government should set a positive example with respect
    to treatment of the Guard and Reserve members who also are
    federal employees. Had such a provision survived, a surely a
    negative message would have been sent to other employers
    regarding the treatment of Guardsmen and Reservists.
        The committee accepted a provision to extend the National
    Guard's Youth Challenge program and to provide a waiver to
    allow Challenge graduates with a GED to go active duty into any
    of the services. This program requires minimal investment yet
    it pays tremendous dividends. Not only do the graduates of the
    Challenge program receive a GED, their lives are turned around
    in a positive direction. Almost all graduates go on to further
    their education, find gainful employment or join the military.
    By taking former high school dropouts and turning them into
    citizens with much to contribute to society, Challenge is a
    win-win for America.
        This year the committee again worked to ensure a strong
    focus remained on anti-submarine warfare (ASW). As a maritime
    nation, we must be able to achieve and maintain sea control,
    therefore we must invest in ASW to remain effective against
    increasingly advanced submarines. In recognition of the
    continuing importance of ASW to our national security, as was
    done in previous years the committee made a significant
    increase to the Administration's request for ASW.
        While the committee maintained undersea warfare as a
    priority, it failed to accept the proposal put forward by the
    Navy and the shipyards with respect to the teaming agreement.
    In this instance, I believe we lost an opportunity to take the
    most cost effective approach tomodernizing our submarines while
    maintaining a hedge against a future threat. By pursuing a plan that
    calls for competition of submarine construction at extremely low rates
    of production, we will embark upon a prohibitively expensive course
    that will force us into the dangerous position of possessing only one
    shipyard actively constructing submarines. The Navy's proposal
    represented an opportunity to endorse the concept of putting the best
    minds in the business together to develop a more effective yet
    affordable next generation attack submarine. I am disappointed the
    committee did not pursue the teaming route though I am confident that
    we will again revisit this issue during the conference process.
        I am also disturbed that the committee failed to accept an
    amendment which would serve to harm the personal security of
    our service women and female dependents living overseas. Again,
    as in past years, we did not ensure equal health service access
    to all U.S. servicemembers. Today, servicewomen and military
    family members living overseas remain barred from using their
    own funds to receive reproductive health care procedures
    legally available in hospitals located in the U.S. I find such
    a measure hypocritical at best, a public health danger at
    worst. Women in uniform take very seriously their duty to
    protect the Constitutional rights of all American citizens, yet
    we have chosen time and time again to deny them the same
    protections we extend to women on American soil.
        Finally, I would like to express my disappointment that the
    committee did not address the issue of sexual orientation and
    service in the military. Theoretically, current policy permits
    gays and lesbians to serve in the military as long as they do
    not disclose their sexual orientation nor engage in homosexual
    activity. I remain steadfast in my belief that servicemembers
    should be assessed on their ability to perform the duties their
    country asks of them. If anything, the instances of sexual
    misconduct and harassment at Aberdeen are indicative that our
    military has many more pressing concerns than the presence of
    patriotic gays and lesbians among its ranks. Although we are
    not there yet, I believe we will someday have a military which
    recognizes and values the contributions of all serving in
    uniform regardless of sexual orientation.

                                                    Patrick J. Kennedy.
    ADDITIONAL VIEWS OF VAN HILLEARY, STEPHEN BUYER, TILLIE FOWLER, ROSCOE
      BARTLETT, BUCK MCKEON, JOE SCARBOROUGH, LINDSEY GRAHAM AND JIM RYUN

        Two years ago, when President Clinton first began talking
    openly about sending American ground troops into the Bosnian
    quagmire, many opponents of the idea voiced concern that we may
    have been headed for another Vietnam.
        Sending Americans into harm's way should only be done when
    one of our vital national interests is in danger. Keeping peace
    in Bosnia is a well-intentioned goal, but there are many war-
    torn areas in the world, and we simply can't risk American
    lives every time a war breaks out someplace in the world. The
    plain fact is that Bosnia is not critical to our vital national
    interests, so American lives should not be risked there.
        At the time troops were sent, the President assured
    Congress and the public that American troops would only be in
    Bosnia for a short time, and that they would be back home by
    December 20, 1996. The Clinton administration's second deadline
    of March 1997 has likewise passed with no end to the Bosnia
    mission. But we are now almost half of the way through 1997,
    and the President now says the troops won't be coming home
    until June 30, 1998. Additionally, we are concerned that
    President Clinton is making plans to continue our military
    presence beyond this deadline of June 1998.
        While the comparison to Vietnam is certainly still
    possible, especially considering the Clinton administration's
    vague, open-ended Bosnia policy, American involvement in Bosnia
    seems likely to follow one of two unfortunately familiar paths.
        The first possible outcome of our current Bosnia policy
    might be called the Beirut Resolution. In this conclusion, U.S.
    forces would be removed from Bosnia only after some sort of
    deadly terrorist attack on our troops. In Beirut, this came in
    1983 in the form of a suicide bomber who drove a truck filled
    with explosives into barracks housing American servicemen and
    women, killing 241 Marines.
        At the time, U.S. troops were in a situation which now
    seems eerily familiar. Americans were separating historically
    bitter enemies who had recently been involved in a regional and
    religious conflict. Our mission was not clearly defined, with
    no clear exit strategy. And proponents of American involvement
    argued that the fragile peace would fall apart if we pulled
    out.
        Of course, we ended up pulling out of Beirut--but only
    after paying an enormously high price. Those who argue that we
    should continue military involvement in Bosnia should be ready
    to defend this continued involvement even if, God forbid, an
    event reminiscent of the Beirut tragedy happens to Americans in
    Bosnia.
        A second possible outcome of our current involvement in
    Bosnia could be called the Korean Resolution, which actually
    isn't a resolution to the situation at all. Approximately 40
    years ago, American soldiers were sent into Korea, and now, two
    generations later, American soldiers remain to enforce an
    uneasy peace. They are situated between hostile foreign
    military forces, costing the United States billions of dollars
    every single year.
        While we are not advocating the removal of U.S. troops in
    Korea, and we believe our intervention in Korea is important to
    our national interests, we do not want to see the Bosnia
    mission turn into a multi-generational occupation like the
    Korean mission. In other words, we want to make sure our future
    grandchildren aren't going to be sent to continue a risky,open-
    ended military operation in a place which holds no vital interest for
    our nation.
        Because the current Bosnia mission has a strong possibility
    of becoming another Beirut or another Korea, we believe that
    Congress should reassert its oversight authority. It is vitally
    important for Congress to exercise its oversight authority now
    because with duties such as rounding up war criminals and
    enforcing the return of refugees possibly on the horizon for
    American troops, we would stop this ``mission creep'' before it
    starts. Undertaking these new activities in the Balkans could
    easily lead to an indefinite American presence, which could in
    turn easily lead to another Beirut-style tragedy or another
    Korea-style occupation.
        In addition to the dangers of mission creep and nation
    building, we believe we should bring our troops home because
    Bosnia is essentially a European problem which can and should
    be handled by our European allies. Our allies in Europe were
    trained to guard against a Soviet invasion, so they are more
    than capable of handling the lesser military forces in Bosnia,
    who don't even have an air force.
        Finally, the price tag for this questionable Bosnia mission
    will top $7.7 billion by mid-1998. That's money which comes
    directly out of other areas of the defense budget--areas such
    as the development and purchase of new technologies and troop
    readiness. With all the other cuts the defense budget has been
    forced to endure in this decade, funneling nearly $8 billion to
    an unnecessary mission in inexcusable.
        With all these factors at work in Bosnia--danger to our
    troops, the lack of a vital American interest, the danger of
    mission creep and the depletion of the defense budget--it seems
    clear to us that we must finally set a withdrawal date in stone
    and force this administration to explain to the public and the
    Congress what the exact mission of our troops is and when their
    parents can expect their sons and daughters to come home.
        We hope that as this legislation proceeds, it will be
    amended to set a date certain for withdrawal while giving the
    President the latitude to continue his Bosnian policy if he can
    make his case to the public and the entire Congress.

                                       Van Hilleary.
                                       Stephen Buyer.
                                       Tillie Fowler.
                                       Roscoe Bartlett.
                                       Buck McKeon.
                                       Joe Scarborough.
                                       Lindsey Graham.
                                       Jim Ryun.