[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.

                                 
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