[House Report 108-607]
[From the U.S. Government Publishing Office]



108th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     108-607

======================================================================



 
            MILITARY CONSTRUCTION APPROPRIATIONS BILL, 2005

                                _______
                                

 July 15, 2004.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

 Mr. Knollenberg, from the Committee on Appropriations, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 4837]

    The Committee on Appropriations submits the following 
report in explanation of the accompanying bill making 
appropriations for military construction, family housing, and 
base realignment and closure for the Department of Defense for 
the fiscal year ending September 30, 2005.

                                CONTENTS

                                                                   Page
Purpose of the Bill..............................................     2
Conformance With Authorization Bill..............................     2
Summary of Committee Recommendation..............................     2
General Statement................................................     7
Budgetary Cap on Housing Privatization...........................     7
Sustainment, Restoration, and Modernization......................     8
Military Construction:
    Army.........................................................     9
    Navy and Marine Corps........................................    10
    Air Force....................................................    11
    Defense-wide.................................................    12
    Army National Guard..........................................    13
    Air National Guard...........................................    14
    Army Reserve.................................................    14
    Naval Reserve................................................    15
    Air Force Reserve............................................    15
NATO Security Investment Program.................................    16
Family Housing Overview..........................................    16
Family Housing:
    Army.........................................................    18
    Navy and Marine Corps........................................    20
    Air Force....................................................    20
    Defense-wide.................................................    21
Department of Defense Family Housing Improvement Fund............    22
Homeowners Assistance Fund, Defense..............................    22
Chemical Demilitarization Construction, Defense-wide.............    23
Base Realignment and Closure Account.............................    23
General Provisions...............................................    24
Changes in Application of Existing Law...........................    26
Definition of Program, Project and Activity......................    26
Appropriations Not Authorized by Law.............................    27
Transfer of Funds................................................    29
Constitutional Authority.........................................    29
Comparisons With Budget Resolution...............................    29
Five-Year Projection of Outlays..................................    29
Financial Assistance to State and Local Governments..............    30
Statement of General Performance Goals and Objectives............    30
State List.......................................................    30

                          Purpose of the Bill

    The Military Construction Appropriations bill provides 
funds for planning, design, construction, alteration, and 
improvement of facilities and family housing located on reserve 
and active duty military installations around the world. 
Additionally, the bill provides funds for the U.S. share of the 
North Atlantic Treaty Organization Security Investment Program. 
The bill also provides funds to execute projects identified by 
the base realignment and closure authorities. Finally, the bill 
provides funds for the Department of Defense Chemical 
Demilitarization Construction program.

                  Conformance With Authorization Bill

    On May 20, 2004, the House passed the National Defense 
Authorization Act for 2005 (H.R. 4200) by a vote of 391 to 34. 
At this time, conference action on the legislation has not 
concluded; therefore, projects in this bill are approved 
subject to authorization.

                  Summary of Committee Recommendation

    The Committee recommends $10,003,000,000 in new budget 
authority for the Military Construction Appropriations bill. 
This recommendation is $449,625,000 above the President's 
request and $162,139,000 above the fiscal year 2004 enacted 
level. The following table compares amounts recommended in the 
bill to the President's request and amounts appropriated in 
fiscal year 2004:


                           General Statement

    Several witnesses from the Army, Navy, Marine Corps, Air 
Force, and the Office of the Secretary of Defense emphasized to 
this Committee that we remain a nation at war. Current 
operations relating to the Global War on Terrorism, including, 
but not limited to Iraq and Afghanistan, combined with the 
other security commitments of the United States and homeland 
defense, place a great burden on the armed services. The 
Committee believes the ultimate purpose of this bill is to 
support our service men and women and their families.
    The challenges to military infrastructure at this time are 
numerous. The Secretary of Defense set the goal of achieving a 
67-year recapitalization rate across all facilities by 2008, 
but even at this rate, the Department will not bring facilities 
up to an average readiness rating of C-2 until the end of 
fiscal year 2010.
    It is therefore with disappointment that the Committee 
notes the continuing inadequacy of military construction budget 
requests. As a percentage of the overall defense budget, 
military construction and family housing expenditures have 
declined since the mid-1990s. The Committee understands that 
much of the growth in the defense budget in recent years has 
been due to operations and maintenance costs related to the 
Global War on Terrorism. At the same time, the Committee 
believes that the relatively small amounts needed to build and 
maintain good infrastructure and family housing yield 
tremendous benefits in terms of readiness, quality of life, and 
recruitment and retention rates of our service men and women. 
Yet the Committee notes that the military construction budget 
requests for the active and reserve components represent a cut 
of $378,697,000 and $110,545,000, respectively, from the fiscal 
year 2004 enacted level. Underfunding military construction 
with the expectation that Congress will fill in the gaps is an 
unwise and unsustainable budget strategy. The Committee is 
encouraged by indications that more substantial increases in 
military construction budget requests are forthcoming beginning 
in fiscal year 2006, and will continue to scrutinize those 
requests to ensure that those budgets are sufficiently matched 
to the Department's goals.

                 Budgetary Cap on Housing Privatization

    The Committee fully supports the Military Housing 
Privatization Initiative (MHPI). Where it has been undertaken, 
privatized family housing for service members and their loved 
ones has dramatically improved the quality of life, resulting 
in residencies that are commensurate with the sacrifices that 
our service men and women are called on to make. By helping to 
ensure that inadequate housing is eliminated by the end of the 
decade, MHPI has a direct and positive impact on recruitment 
and retention rates, which are crucial to maintaining the 
excellence of the All Volunteer Force.
    While the Committee believes that the services should 
continue to rely on local housing markets as much as possible, 
privatized military housing represents the next best option in 
many cases. Before the end of this calendar year, the statutory 
cap limiting total Federal government contributions to 
$850,000,000 for privatized family housing will be reached. 
Without legislative relief, MHPI will come to a halt, 
endangering numerous planned housing projects. Unfortunately, 
the Congressional Budget Office (CBO) has indicated that it 
will score any such legislation differently than in the past, 
rendering passage more difficult.
    The Committee believes that CBO's approach is unmerited and 
greatly exaggerates the financial risk to the Federal 
government. While the Committee acknowledges the need for 
fiscal discipline, especially in this time of budget deficits, 
MHPI saves the Federal government money by leveraging private 
capital. The average ratio of private to Federal dollars is 
11:1. Without MHPI, much of the family housing that would 
otherwise be built by leveraging private capital would 
necessarily be funded through traditional construction 
accounts. The inability to leverage private capital would 
entail a great loss of efficiency and likely delay the 
elimination of inadequate family housing well into the next 
decade of budget cycles.
    The Secretary of Defense has established a department-wide 
goal of eliminating inadequate family housing by the end of 
fiscal year 2007. Without MHPI, achieving this goal is nearly 
impossible. The Committee therefore strongly supports current 
efforts to raise or eliminate the budgetary cap on MHPI and 
address scoring methodology changes proposed by CBO.

              Sustainment, Restoration, and Modernization

    The Committee continues to be concerned about the 
inadequacy of sustainment, restoration, and modernization (SRM) 
funds budgeted by the services. Although SRM funds are not 
appropriated in this bill, the level of SRM funds requested, 
enacted, and expended has a direct impact on the quality of all 
Department of Defense facilities. While the services submitted 
budgets that ostensibly fund 95 percent of the required SRM 
level, the Committee is not confident this level will hold 
through budget execution, primarily due to the migration of 
funds to support underfunded base operations support accounts. 
Nor does the Committee have confidence that all installations 
will be treated equitably in the allocation of SRM funds.
    All services use C-ratings to measure facility readiness, 
with C-1 being the best and C-4 the worst. Although these 
ratings are subject to slightly differing interpretations by 
each service, it is fair to say that C-3 and C-4 ratings 
negatively impact a facility's ability to effectively support 
the mission. The Committee notes the percentages of C-3 and C-4 
rated facilities as follows: 65 percent for the Army, 64 
percent for the Navy, 50 percent for the Marine Corps, and 59 
percent for the Air Force. Facilities in this shape have a 
direct impact on men and women in uniform, undermining 
readiness and endangering safety. The Committee therefore 
strongly urges the Administration to fully fund both SRM and 
base operating support for all services and ensure these levels 
are maintained through budget execution.
    The Department is directed to continue describing on form 
1390 the backlog of SRM requirements at installations with 
future construction projects. For troop housing requests, form 
1391 should describe any SRM conducted in the past two years. 
Likewise, future requirements for unaccompanied housing at the 
corresponding installation should be included. Additionally, 
the forms should include English equivalent measurements for 
projects presented in metric measurement. Rules for funding 
repairs of facilities under the Operation and Maintenance 
account are described below:
     Components of the facility may be repaired by 
replacement. Such replacement can be up to current standards or 
codes.
     Interior arrangements and restorations may be 
included as repair.
     Additions, new facilities, and functional 
conversions must be performed as military construction 
projects. Such projects may be done concurrently with repair 
projects as long as the final conjunctively funded project is a 
complete and usable facility.
     The appropriate service secretary shall notify the 
appropriate committees 21 days prior to carrying out any repair 
project with an estimated cost in excess of $7,500,000.

                      Military Construction, Army





Fiscal year 2004 appropriation........................    $1,426,724,000
Fiscal year 2005 budget request.......................     1,771,285,000
Committee recommendation in the bill..................     1,862,854,000
Comparison with:
    Fiscal year 2004 appropriation....................       436,130,000
    Fiscal year 2005 budget request...................        91,569,000


    The Committee recommends an appropriation of $1,862,854,000 
for Military Construction, Army, for fiscal year 2005. This is 
an increase of $436,130,000 above the fiscal year 2004 enacted 
level and an increase of $91,569,000 above the budget request.
    Alabama--Fort Rucker: Aircraft Maintenance Hangar.--Of the 
amount provided for planning and design in this account, the 
Committee directs that not less than $750,000 be made available 
for the design of this facility.
    California--Sierra Army Depot: Amedee Army Airfield Runway 
Extension.--Of the amount provided for planning and design in 
this account, the Committee directs that not less than $561,000 
be made available for the design of this project.
    Georgia--Fort Benning: Receptee Barracks Expansion.--Of the 
amount provided for planning and design in this account, the 
Committee directs that not less than $2,250,000 be made 
available for the design of this facility.
    Georgia--Fort Gordon: Law Enforcement Complex.--Of the 
amount provided for planning and design in this account, the 
Committee directs that not less than $310,000 be made available 
for the design of this facility.
    Kentucky--Bluegrass Depot: Consolidated Shipping Center.--
Of the amount provided for planning and design in this account, 
the Committee directs that not less than $365,000 be made 
available for the design of this facility.
    North Carolina--Raleigh: Joint Forces Headquarters Armed 
Forces Reserve Center.--The Committee recognizes the importance 
of the North Carolina Joint Forces Headquarters Readiness 
Center to the Army National Guard and requests the National 
Guard Bureau to provide a status report on the planning and 
design for this facility no later than February 1, 2005. The 
committee also encourages the Department to consider including 
this project in the next Future Year Defense Program.
    Pennsylvania--Tobyhanna: Child Development Center.--Of the 
amount provided for planning and design in this account, the 
Committee directs that not less than $278,000 be made available 
for the design of this facility.
    Virginia--Fort A.P. Hill: Combined Arms Collective Training 
Facility.--Of the amount provided for planning and design in 
this account, the Committee directs that not less than $486,000 
be made available for the design of this facility.
    Virginia--Fort Belvoir: Access Roads.--Of the amount 
provided for planning and design in this account, the Committee 
directs that not less than $500,000 be made available for the 
design of this project.
    Army Aviation Restructuring and Revitalization.--The Army 
announced on February 23, 2004 its intention to restructure and 
revitalize the Army Aviation program. In addition to the 
purchase of 800 new aircraft and the modernization of 1,400 
helicopters, the plan envisions the transformation of the 
Reserve component of Army Aviation. As a result of the 
cancellation of the Comanche helicopter program, the 
Administration submitted a budget amendment requesting the 
reallocation of $30,000,000 from the Comanche program to the 
Military Construction, Army National Guard account in fiscal 
year 2005. The Committee understands that these funds are 
intended to provide a head start on the Reserve component of 
Army Aviation restructuring. The Committee, however, believes 
that additional information is required to assess the impact of 
Army Aviation restructuring on Army facilities. The Committee 
therefore directs the Army to submit by September 10, 2004 a 
report on future plans for Army Aviation Support Facilities and 
all other projects required or affected by restructuring (e.g., 
runways). The report should include, for as many fiscal years 
as information is available, the installations at which new or 
modernized aircraft are to be delivered, the type of aircraft 
and date of delivery, and the projected cost of associated 
military construction.

              Military Construction, Navy and Marine Corps





Fiscal year 2004 appropriation........................    $1,238,366,000
Fiscal year 2005 budget request.......................     1,060,455,000
Committee recommendation in the bill..................     1,081,042,000
Comparison with:
    Fiscal year 2004 appropriation....................     (157,324,000)
    Fiscal year 2005 budget request...................        20,587,000


    The Committee recommends an appropriation of $1,081,042,000 
for Military Construction, Navy and Marine Corps, for fiscal 
year 2005. This is a decrease of $157,324,000 below the fiscal 
year 2004 enacted level and an increase of $20,587,000 above 
the budget request.
    California--Miramar MCAS: East Gate Physical Security.--Of 
the amount provided for planning and design in this account, 
the Committee directs that not less than $268,000 be made 
available for the design of this project.
    California--China Lake NAWC: Advanced Sensor Integration 
Facility.--Of the amount provided for planning and design in 
this account, the Committee directs that not less than $250,000 
be made available for the design of this facility.
    California--Naval Postgraduate School: Spanagel Hall.--The 
Committee is aware the Navy is in the process of conducting a 
space requirement for Spanagel Hall. The Navy is also in the 
process of making a determination of whether replacement or 
renovation of the existing facility is the right acquisition 
approach. The Committee encourages the Navy to move this 
project forward in an expeditious manner.
    Florida--Jacksonville NAS: Construct Aircraft Parking Apron 
(III).--Of the amount provided for planning and design in this 
account, the Committee directs that not less than $150,000 be 
made available for the design of this project.
    Florida--Jacksonville NAS: Consolidated Operational Support 
Facility.--Of the amount provided for planning and design in 
this account, the Committee directs that not less than $150,000 
be made available for the design of this facility.
    Pennsylvania--Norfolk NSY Philadelphia DET: Improve Inside 
Machine Shops.--Of the amount provided for planning and design 
in this account, the Committee directs that not less than 
$1,032,000 be made available for the design of this facility.
    Energy Conservation.--In addition to energy conservation 
programs for military construction projects funded through the 
Energy Conservation Improvement program, the Department of 
Defense has the authority to develop geothermal resources on 
military lands and keep the proceeds from the sale of 
electricity generated from those resources for use by the 
Department, including military construction projects. The 
Committee understands the Department of the Navy's Geothermal 
Program Office is responsible for managing and developing these 
resources for the military. The Committee encourages the Navy 
to expand opportunities to use this authority for military 
construction projects, such as the use of triple junction 
amorphous silicon photovoltaic roofing. The Committee requests 
the Navy to provide a report to the Committee on actions taken 
to incorporate section 2867 of title 10 U.S.C. into the 
military construction program no later than January 14, 2005.

                    Military Construction, Air Force





Fiscal year 2004 appropriation........................    $1,337,301,000
Fiscal year 2005 budget request.......................       663,964,000
Committee recommendation in the bill..................       797,865,000
Comparison with:
    Fiscal year 2004 appropriation....................     (539,436,000)
    Fiscal year 2005 budget request...................       133,901,000


    The Committee recommends an appropriation of $797,865,000 
for Military Construction, Air Force, for fiscal year 2005. 
This is a decrease of $539,436,000 below the fiscal year 2004 
enacted level and an increase of $133,901,000 above the budget 
request.
    Florida--Cape Canaveral: Security Forces Operational 
Facility.--Of the amount provided for planning and design in 
this account, the Committee directs that not less than $880,000 
be made available for the design of this facility.
    Florida--MacDill AFB: CENTCOM Consolidation.--Of the amount 
provided for planning and design in this account, the Committee 
directs that not less than $8,000,000 be made available for the 
design of this facility.
    Idaho--Mountain Home AFB: Logistics Readiness Center.--Of 
the amount provided for planning and design in this account, 
the Committee directs that not less than $1,340,000 be made 
available for the design of this facility.
    Kansas--McConnell AFB: Consolidated Mobility Processing 
Center.--Of the amount provided for planning and design in this 
account, the Committee directs that not less than $1,332,000 be 
made available for the design of this facility.
    Nebraska--Offutt AFB: Repair Runway.--Of the amount 
provided for planning and design in this account, the Committee 
directs that not less than $497,000 be made available for the 
design of this project.
    Nevada--Nellis AFB: Fire and Crash Rescue Station.--Of the 
amount provided for planning and design in this account, the 
Committee directs that not less than $837,000 be made available 
for the design of this facility.
    North Dakota--Minot AFB: Dock 1 Multi-purpose Hangar 
Project.--Of the amount provided for planning and design in 
this account, the Committee directs that not less than $890,000 
be made available for the design of this facility.
    Washington--Fairchild AFB: Mission Support Complex.--Of the 
amount provided for planning and design in this account, the 
Committee directs that not less than $670,000 be made available 
for the design of this facility.

                  Military Construction, Defense-wide





Fiscal year 2004 appropriation........................      $581,347,000
Fiscal year 2005 budget request.......................       709,337,000
Committee recommendation in the bill..................       718,837,000
Comparison with:
    Fiscal year 2004 appropriation....................       137,490,000
    Fiscal year 2005 budget request...................         9,500,000


    The Committee recommends an appropriation of $718,837,000 
for Military Construction, Defense-wide, for fiscal year 2005. 
This is an increase of $137,490,000 above the fiscal year 2004 
enacted level and an increase of $9,500,000 above the budget 
request. Within this appropriation is $50,000,000 for the 
Energy Conservation Improvement Program, the same as the fiscal 
year 2004 level.
    Use of Steel in Military Construction.--The Committee 
understands the Department of Defense uses cold-formed steel 
for the framing of both residential and non-residential 
construction projects in tropical and coastal regions due to 
steel's enhanced resistance to hurricanes, mold, rot and insect 
problems that frequently occur in these areas. Steel framing, 
which is produced domestically, may also hold other advantages 
in terms of fire resistance and life cycle costs. The Committee 
encourages the Department to explore opportunities for 
expanding the use of steel to other regions for military 
construction projects.
    Use of Sustainable Design Standards by the Department of 
Defense.--The Committee encourages the Department to utilize 
sustainable building design and construction methods of 
maximize the efficient use of renewable, recycled, and 
environmentally sound materials. However, concerns have been 
expressed that certain rating systems adopted by the Department 
to assess the standards of sustainable design and construction 
of facilities may unfairly discriminate against domestic 
producers of wood construction products. Therefore, the 
Committee requests the Secretary of Defense submit a report to 
the Committee by June 1, 2005 that describes: (1) the standards 
used by each military department to assess the use of 
sustainable design and construction methods, including credits 
provided for products made from renewable and recycled 
materials; (2) the extent to which such standards comply with 
the requirements of section 6002 of the Resource Conservation 
and Recovery Act, section 6962 of title 42 U.S.C., Executive 
Order 13101, Office of Management and Budget Circular A-119, 
and other applicable requirements of law and regulation; and 
(3) the extent to which the standards adopted by each military 
department unfairly discriminate against the use of products 
and materials manufactured in the United States. The Committee 
expects the Secretary to take appropriate action to address any 
noncompliance with applicable requirements of law or regulation 
and any unfair discrimination against any U.S. manufactured 
materials identified during the course of this review.
    Water-Saving Technology.--The Committee is aware that the 
Department of Defense has installed water-free urinals in some 
new facilities. These devices may reduce a facility's cost to 
taxpayers by reducing water and sewer bills, as well as 
maintenance and repair costs. These devices also can yield 
environmental and hygienic benefits. The Committee encourages 
the Department to utilize this and other water-saving 
technology when building or improving facilities.

               Military Construction, Army National Guard





Fiscal year 2004 appropriation........................      $311,592,000
Fiscal year 2005 budget request.......................       295,657,000
Committee recommendation in the bill..................       394,100,000
Comparison with:
    Fiscal year 2004 appropriation....................        82,508,000
    Fiscal year 2005 budget request...................        98,443,000


    The Committee recommends an appropriation of $394,100,000 
for Military Construction, Army National Guard, for fiscal year 
2005. This is an increase of $82,508,000 above the fiscal year 
2004 enacted level and an increase of $98,443,000 above the 
budget request.
    Florida--Daytona Beach: Joint Armed Forces Reserve 
Center.--Of the amount provided for planning and design in this 
account, the Committee directs that not less than $789,000 be 
made available for the design of this facility.
    Indiana--Gary: Joint Armed Forces Reserve Center.--Of the 
amount provided for planning and design in this account, the 
Committee directs that not less than $844,000 be made available 
for the design of this facility.
    Mississippi--Camp Shelby: Wastewater Treatment Facility.--
Of the amount provided for unspecified minor construction in 
this account, the Committee directs that not less than 
$2,700,000 be made available for the construction of this 
facility.
    Nebraska--Lincoln: Joint Forces Headquarters.--Of the 
amount provided for planning and design in this account, the 
Committee directs that not less than $614,000 be made available 
for the design of this facility.
    North Carolina--Raleigh: Joint Forces Headquarters Armed 
Forces Reserve Center.--The Committee recognizes the importance 
of the North Carolina Joint Forces Headquarters Readiness 
Center to the Army National Guard and requests the National 
Guard Bureau to provide a status report on the planning and 
design for this facility no later than February 1, 2005. The 
Committee also encourages the Department to consider including 
this project in the next Future Year Defense Program.
    Pennsylvania--Hermitage: Readiness Center.--Of the amount 
provided for planning and design in this account, the Committee 
directs that not less than $485,000 be made available for the 
design of this facility.
    Tennessee--Nashville: Readiness Center Addition/Alteration 
Phase II.--Of the amount provided for planning and design in 
this account, the Committee directs that not less than 
$1,999,000 be made available for the design of this facility.
    Tennessee--Smyrna: Reserve Center.--Of the amount provided 
for planning and design in this account, the Committee directs 
that not less than $935,000 be made available for the design of 
this facility.
    Virginia--Winchester: Armory.--Of the amount provided for 
planning and design in this account, the Committee directs that 
not less than $530,000 be made available for the design of this 
facility.
    Washington--Gray Field: Aviation Readiness Center.--Of the 
amount provided for planning and design in this account, the 
Committee directs that not less than $2,014,000 be made 
available for the design of this facility.

               Military Construction, Air National Guard





Fiscal year 2004 appropriation........................      $222,908,000
Fiscal year 2005 budget request.......................       127,368,000
Committee recommendation in the bill..................       180,533,000
Comparison with:
    Fiscal year 2004 appropriation....................      (42,375,000)
    Fiscal year 2005 budget request...................        53,165,000


    The Committee recommends an appropriation of $180,533,000 
for Military Construction, Air National Guard, for fiscal year 
2005. This is a decrease of $42,375,000 below the fiscal year 
2004 enacted level and an increase of $53,165,000 above the 
budget request.
    Alabama--Montgomery Regional Airport: Composite Operations 
Training Facility.--Of the amount provided for planning and 
design in this account, the Committee directs that not less 
than $772,000 be made available for the design of this 
facility.
    Colorado--Greeley Airport: Space Warning System Squadron 
Support Facility.--Of the amount provided for planning and 
design in this account, the Committee directs that not less 
than $509,000 be made available for the design of this 
facility.
    Illinois--Springfield: Base Entrance 183rd Fighter Wing.--
Of the amount provided for planning and design in this account, 
the Committee directs that not less than $300,000 be made 
available for the design of this project.
    Iowa--Fort Dodge: Vehicle Maintenance and Communications 
Training Facility.--Of the amount provided for planning and 
design in this account, the Committee directs that not less 
than $375,000 be made available for the design of this 
facility.
    Missouri--Rosencrans Airport: Fire and Crash Rescue 
Station.--Of the amount provided for planning and design in 
this account, the Committee directs that not less than $650,000 
be made available for the design of this facility.
    New York--Westhampton: Pararescue Complex.--Of the amount 
provided for planning and design in this account, the Committee 
directs that not less than $990,000 be made available for the 
design of this facility.
    New York--Stewart IAP: Replace Fire and Crash Rescue 
Station.--Of the amount provided for planning and design in 
this account, the Committee directs that not less than $501,000 
be made available for the design of this facility.

                  Military Construction, Army Reserve





Fiscal year 2004 appropriation........................       $88,451,000
Fiscal year 2005 budget request.......................        87,070,000
Committee recommendation in the bill..................       116,521,000
Comparison with:
    Fiscal year 2004 appropriation....................        28,070,000
    Fiscal year 2005 budget request...................        29,451,000


    The Committee recommends an appropriation of $116,521,000 
for Military Construction, Army Reserve, for fiscal year 2005. 
This is an increase of $28,070,000 above the fiscal year 2004 
enacted level and an increase of $29,451,000 above the budget 
request.
    California--Garden Grove: Army Reserve Center/OMS/Unheated 
Storage.--Of the amount provided for planning and design in 
this account, the Committee directs that not less than $843,000 
be made available for the design of this facility.

                  Military Construction, Naval Reserve





Fiscal year 2004 appropriation........................       $45,498,000
Fiscal year 2005 budget request.......................        25,285,000
Committee recommendation in the bill..................        30,955,000
Comparison with:
    Fiscal year 2004 appropriation....................      (14,543,000)
    Fiscal year 2005 budget request...................         5,670,000


    The Committee recommends an appropriation of $30,955,000 
for Military Construction, Naval Reserve, for fiscal year 2005. 
This is a decrease of $14,543,000 below the fiscal year 2004 
enacted level and an increase of $5,670,000 above the budget 
request.

                Military Construction, Air Force Reserve





Fiscal year 2004 appropriation........................       $62,032,000
Fiscal year 2005 budget request.......................        84,556,000
Committee recommendation in the bill..................       111,725,000
Comparison with:
  Fiscal year 2004 appropriation......................        49,693,000
  Fiscal year 2005 budget request.....................        27,169,000


    The Committee recommends an appropriation of $111,725,000 
for Military Construction, Air Force Reserve, for fiscal year 
2005. This is an increase of $49,693,000 above the fiscal year 
2004 enacted level and an increase of $27,169,000 above the 
budget request.
    Ohio--Youngstown ARS: Joint Services Lodging Facility Phase 
I.--Of the amount provided for planning and design in this 
account, the Committee directs that not less than $954,000 be 
made available for the design of this facility.

     North Atlantic Treaty Organization Security Investment Program





Fiscal year 2004 appropriation........................      $161,300,000
Fiscal year 2005 budget request.......................       165,800,000
Committee recommendation in the bill..................       165,800,000
Comparison with:
  Fiscal year 2004 appropriation......................         4,500,000
  Fiscal year 2005 budget request.....................  ................


    The Committee recommends an appropriation of $165,800,000 
for the North Atlantic Treaty Organization Security Investment 
Program (NSIP). This is an increase of $4,500,000 above the 
fiscal year 2004 enacted level and the same level as the budget 
request.
    NSIP consists of annual contributions by NATO member 
countries. The program finances the costs of construction 
needed to support the roles of the major NATO commands. The 
investments cover facilities such as airfields, fuel pipelines 
and storage, harbors, communications and information systems, 
radar and navigational aids, and military headquarters.
    Occasionally, the U.S. has been forced to delay temporarily 
the authorization of projects due to shortfalls in U.S. 
obligation authority. The Committee directs the Secretary of 
Defense to notify the Committee 30 days prior to taking such 
action.

                        Family Housing Overview





Fiscal year 2004 appropriation........................    $3,820,100,000
Fiscal year 2005 budget request.......................     4,171,596,000
Committee recommendation in the bill..................     4,151,766,000
Comparison with:
  Fiscal year 2004 appropriation......................       331,666,000
  Fiscal year 2005 budget request.....................      (19,830,000)


    The Committee recommends a total appropriation of 
$4,151,766,000 for the family housing construction and 
operation and maintenance accounts for fiscal year 2005. This 
is an increase of $331,666,000 above the fiscal year 2004 
enacted level and a decrease of $19,830,000 below the budget 
request. The decrease below the request is within the operation 
and maintenance accounts and is explained under general and 
flag officer quarters and under the individual account 
sections. The operation and maintenance accounts provide funds 
to pay for maintenance and repair, furnishings, management, 
services, utilities, leasing, interest, mortgage insurance, and 
miscellaneous expenses.
    Historically, housing for military personnel and their 
families has been a low priority for the Department of Defense. 
Consequently, the inventory is old and in many cases 
substandard. In January 2001, the Department estimated that out 
of 300,000 total housing units worldwide, approximately 180,000 
(or 60 percent) were inadequate. The Committee is pleased to 
note that progress has been made to reduce this percentage. At 
the beginning of fiscal year 2004, the number of inadequate 
units had been reduced to 120,000 (or 47 percent) of 256,000 
total units. With the budget effort supported in this bill and 
assuming the continuation of the Military Housing Privatization 
Initiative (MHPI), the number of inadequate units will be 
reduced to 61,000 by the end of fiscal year 2005. The Committee 
fully approves the Secretary of Defense's goal to eliminate 
inadequate housing by the end of fiscal year 2007, with the 
exception of four Air Force installations in fiscal year 2008 
and Air Force overseas housing in 2009.
    Achieving that goal depends on two key factors. The first 
is the continuation of the MHPI. The Committee has noted its 
concern about the future of this program in the beginning of 
this report. The second is the commitment of the services and 
the Administration to request an increased level of funding for 
fiscal years 2006 and 2007. The Committee strongly supports 
continuation of MHPI and expects to see future budget requests 
follow through on the commitment to eliminate inadequate 
housing.
    General and Flag Officer Quarters.--The Committee is 
concerned by the often large expenditures on renovations and 
repairs for general and flag officer quarters (GFOQ), 
especially within the Navy and Marine Corps. A May 2004 General 
Accounting Office (GAO) report indicated that, of the 13 cases 
in which actual costs of major repair projects exceeding 
$100,000 went over budget, all were Navy and Marine Corps 
projects. The GAO report additionally found that 45 percent of 
cost increases for Marine Corps major renovation projects that 
exceeded budgets by 10 percent were ``customer driven,'' or 
demanded by officers residing in those quarters. According to 
the GAO report, housing officials indicated that, ``controlling 
costs due to customer requests is directly related to a housing 
officer's ability to say no to requests that could be perceived 
as excessive and draw scrutiny upon the service.''
    The Committee believes that, in order to arrest this 
problem, the Navy and Marine Corps should ensure customer-
driven cost increases for GFOQ repair and renovation projects 
are reviewed at the regional level before final approval. The 
Committee notes that the overwhelming majority--93 percent--of 
GFOQ repair and renovation projects reviewed by GAO across all 
services were completed within budget, and commends the 
services on their general performance.
    In order to further improve such performance, the Committee 
supports the recommendations of the House Armed Services 
Committee for increasing congressional oversight of GFOQ 
maintenance, including lowering the reporting threshold to 
$20,000. In addition, the Committee reduced the family housing 
operations and maintenance account for each service by the 
following amounts: $2,400,000 for the Army, $8,200,000 for the 
Navy and Marine Corps, and $230,000 for the Air Force. These 
amounts represent the President's request for GFOQ repairs and 
maintenance.
    Family Housing Operations and Maintenance.--The Committee 
is very concerned by the migration of funds among accounts and 
sub-accounts within the services' family housing operations and 
maintenance (O&M) accounts. In response to a Committee request, 
the GAO reported in May 2004 that reprogramming of O&M funds is 
frequent and substantial across all services, reaching levels 
of 20, 40 and even 60 percent relative to the original 
appropriation for individual accounts and sub-accounts. While 
the sum of these reprogrammings did not reach the 10 percent 
threshold required for congressional notification, the shifting 
of funds is significant enough that the Committee believes 
further information is necessary. The Committee therefore 
directs each service to report to the Committee on 
reprogramming of funds within family housing operations and 
maintenance, including the net amount and percentage of funds 
transferred into or out of each account and sub-account during 
fiscal year 2004. This information should be provided no later 
than the President's budget submission for fiscal year 2006, 
and may be included with budget justification materials.
    Inadequate Housing.--The fiscal year 2004 conference report 
noted the lack of a uniform definition of ``inadequate'' 
housing covering all the services. The report also noted that 
the lack of a uniform definition creates inequities between 
services, between installations, and even among homes on the 
same installation. The report accordingly directed the 
Department of Defense to establish a uniform procedure for 
identifying inadequate housing by October 1, 2003. The 
Committee notes that as of the date of this report, no standard 
has been instituted. While the Committee fully supports the 
goal of eliminating inadequate housing by fiscal year 2007, no 
military families should be left behind in the accomplishment. 
This situation remains unacceptable and the Committee directs 
the Secretary of Defense to report on the progress of its 
efforts to form a standard definition of inadequate housing no 
later than 30 days after the enactment of this Act.
    Foreign Currency Savings.--The Committee directs that 
savings from foreign currency re-estimates be used to maintain 
existing family housing units. The Comptroller is directed to 
report to the Committee on how these savings are allocated by 
December 1, 2005. Likewise, only 10 percent of funds made 
available to the construction and operation and maintenance 
sub-accounts may be transferred between the sub-accounts. Such 
transfers must be reported to the Committee within 30 days of 
such action.
    Leasing Reporting Requirement.--As in prior years, the 
Secretary of Defense is directed to report quarterly on the 
details of all new or renewal domestic leases entered into 
during the previous quarter that exceed $15,000 per unit per 
year, including certification that less expensive housing was 
not available for lease. For foreign leases, the Department is 
directed to: (1) perform an economic analysis on all new leases 
or lease/contract agreements where more than 25 units are 
involved; (2) report the details of new or renewal lease that 
exceeds $20,000 per year (as adjusted for foreign currency 
fluctuation from October 1, 1987, but not adjusted for 
inflation) 21 days prior to entering into such an agreement; 
and (3) base leasing decisions on the economic analysis.
    Reprogramming Criteria.--The reprogramming criteria that 
apply to military construction projects (25 percent of the 
funded amount or $2,000,000, whichever is less) apply to new 
housing construction projects and improvement projects over 
$2,000,000 as well.

                   Family Housing Construction, Army





Fiscal year 2004 appropriation........................      $289,440,000
Fiscal year 2005 budget request.......................       636,099,000
Committee recommendation in the bill..................       636,099,000
Comparison with:
  Fiscal year 2004 appropriation......................       346,659,000
  Fiscal year 2005 budget request.....................  ................


    The Committee recommends an appropriation of $636,099,000 
for Family Housing Construction, Army, for fiscal year 2005. 
This is an increase of $346,659,000 above the fiscal year 2004 
enacted level and the same as the budget request. The 
appropriation includes $394,900,000 to construct new family 
housing units, $211,990,000 to improve existing units, and 
$29,209,000 for planning and design. This funding level will 
provide the budget request of $136,590,000 for the 
privatization of family housing at 6 installations, and 
supports the elimination of 12,076 inadequate family housing 
units.
    The Committee is very supportive of the Army's efforts to 
secure the return of land at the former Fort Ord in order to 
expand its RCI project at the Ord Military Community. The 
Committee is pleased to note that the Army recently resolved 
outstanding issues--save one--that will allow the Army to gain 
control over the Fort Ord parcel known as the ``Stilwell 
Kidney'' on which the Army can build military housing, as well 
as enter into public-private partnership relations for 
developing other civilian housing for government workers.
    The Committee acknowledges that the terms of the Army's 
agreement include 114 acre feet of surplus Army water that 
shall be conveyed to the City of Seaside, California, of which 
39 acre feet shall be used for development of workforce 
housing. The Army is expected to build approximately 300 units 
of housing for military families on the Kidney on land that 
will be gifted back to the U.S. Government. The Army's LLC 
partner, Clark Pinnacle, is required to provide water for and 
to build (or contract out to build) 120 units of workforce 
housing on the Kidney that will be made available on a 
preferential basis to government and public employees. Further, 
the Army with its LLC partner, will provide water for and build 
(or contract out to build) a yet-to-be-determined number of 
market rate houses on the Kideny--the final outstanding issue. 
This market rate housing will be only in numbers as needed to 
provide the financial wherewithal to underwrite the RCI units 
on the Kidney but no more than 150 units. Prior to finalizing 
the contract for this Kidney deal, the Committee directs Army 
to submit to the Committee a final figure and justification on 
the number of market rate units Army will build. The Committee 
expects that water furnished to the market rate housing 
development shall be only for the purpose of supporting housing 
and only in the acre feet necessary to support those specified 
units.

             Family Housing Operation and Maintenance, Army





Fiscal year 2004 appropriation........................    $1,044,446,000
Fiscal year 2005 budget request.......................       928,907,000
Committee recommendation in the bill..................       926,507,000
Comparison with:
  Fiscal year 2004 appropriation......................     (117,939,000)
  Fiscal year 2005 budget request.....................       (2,400,000)


    The Committee recommends an appropriation of $926,507,000 
for Family Housing Operation and Maintenance, Army, for fiscal 
year 2005. This is a decrease of $117,939,000 below the fiscal 
year 2004 enacted level and a decrease of $2,400,000 below the 
budget request. The decrease is to be taken from the 
Maintenance and Real Property account for general and flag 
officer quarters.

           Family Housing Construction, Navy and Marine Corps





Fiscal year 2004 appropriation........................      $143,685,000
Fiscal year 2005 budget request.......................       139,107,000
Committee recommendation in the bill..................       139,107,000
Comparison with:
    Fiscal year 2004 appropriation....................       (4,578,000)
    Fiscal year 2005 budget request...................  ................


    The Committee recommends an appropriation of $139,107,000 
for Family Housing Construction, Navy and Marine Corps, for 
fiscal year 2005. This is a decrease of $4,578,000 below the 
fiscal year 2004 enacted level and the same as the budget 
request. The appropriation includes $27,002,000 to construct 
new family housing units and $112,105,000 to improve existing 
units. This funding level will provide the budget request of 
$102,105,000 for the privatization of family housing at 6 
installations, and supports the elimination of 8,202 inadequate 
family housing units.
    The Committee is aware that the Navy has entered into 
negotiations with a contractor team for the privatization of 
family housing and potential divestiture of properties no 
longer viable for continued Navy use within Navy Region 
Northwest, including housing at Submarine Base, Bangor; Naval 
Undersea Warfare Center, Keyport; Naval Magazine, Indian 
Island; Naval Station, Bremerton; Olalla; Kingston; Bainbridge 
Island; Fort Lawton; Magnolia (Quarters A); Brier; Naval Radio 
Station, Jim Creek; and Naval Air Station, Whidbey Island. The 
Committee is also aware that the Navy has agreed to consult 
with the State Historic Preservation Officer and other 
interested parties, including the City of Seattle to consider 
the interests and concerns of surrounding neighborhoods and 
local jurisdictions. The Committee supports the Navy's 
commitment to work with all parties to achieve a mutually 
beneficial outcome in maintaining Discovery Park as a regional 
resource.

    Family Housing Operation and Maintenance, Navy and Marine Corps





Fiscal year 2004 appropriation........................      $841,358,000
Fiscal year 2005 estimate.............................       704,504,000
Committee recommendation in the bill..................       696,304,000
Comparison with:
    Fiscal year 2004 appropriation....................     (145,054,000)
    Fiscal year 2005 budget request...................       (8,200,000)


    The Committee recommends an appropriation of $696,304,000 
for Family Housing Operation and Maintenance, Navy and Marine 
Corps, for fiscal year 2005. This is a decrease of $145,054,000 
below the fiscal year 2004 enacted level and a decrease of 
$8,200,000 below the budget request. The decrease is to be 
taken from the Maintenance of Real Property account for general 
and flag officer quarters.

                 Family Housing Construction, Air Force





Fiscal year 2004 appropriation........................      $637,718,000
Fiscal year 2005 budget request.......................       846,959,000
Committee recommendation in the bill..................       846,959,000
Comparison with:
    Fiscal year 2004 appropriation....................       209,241,000
    Fiscal year 2005 budget request...................  ................


    The Committee recommends an appropriation of $846,959,000 
for Family Housing Construction, Air Force, for fiscal year 
2005. This is an increase of $209,241,000 above the fiscal year 
2004 enacted level and the same as the budget request. The 
appropriation includes $570,340,000 to construct new family 
housing units, $238,353,000 to improve existing units, and 
$38,266,000 for planning and design. The funding level will 
provide the budget request of $82,863,000 for the privatization 
of family housing at 6 installations, and supports the 
elimination of 14,268 inadequate family housing units.

          Family Housing Operation and Maintenance, Air Force





Fiscal year 2004 appropriation........................      $823,055,000
Fiscal year 2005 budget request.......................       863,896,000
Committee recommendation in the bill..................       854,666,000
Comparison with:
    Fiscal year 2004 appropriation....................        31,611,000
    Fiscal year 2005 budget request...................       (9,230,000)


    The Committee recommends an appropriation of $854,666,000 
for Family Housing Operation and Maintenance, Air Force, for 
fiscal year 2005. This is an increase of $31,611,000 above the 
fiscal year 2004 enacted level and a decrease of $9,230,000 
below the budget request. The decrease is to be taken as 
follows: $230,000 from the Maintenance of Real Property account 
for general and flag officer quarters, $2,500,000 from the 
Furnishings account, and $6,500,000 from the Management 
account. The Air Force requested an increase in the Management 
account despite the fact that the total inventory of housing 
units is expected to decrease by 14,268 units in fiscal year 
2005, suggesting a 23 percent increase in the per unit 
management cost. The Committee finds this increase unjustified 
and the reduction in the Management account represents one-half 
of the difference between the requested amount and the amount 
that would be necessary without this per unit cost increase. 
The Committee also finds that the per unit cost increase in the 
Furnishings account is also unjustified, and the request also 
has been accordingly reduced.

               Family Housing Construction, Defense-wide





Fiscal year 2004 appropriation........................          $350,000
Fiscal year 2005 budget request.......................            49,000
Committee recommendation in the bill..................            49,000
Comparison with:
    Fiscal year 2004 appropriation....................         (301,000)
    Fiscal year 2005 budget request...................  ................


    The Committee recommends an appropriation of $49,000 for 
Family Housing Construction, Defense-wide, for fiscal year 
2005. This is a decrease of $301,000 below the fiscal year 2004 
enacted level and the same as the budget request. The 
recommended amount is solely for the improvement of existing 
units.

         Family Housing Operation and Maintenance, Defense-wide





Fiscal year 2004 appropriation........................       $49,440,000
Fiscal year 2005 budget request.......................        49,575,000
Committee recommendation in the bill..................        49,575,000
Comparison with:
    Fiscal year 2004 appropriation....................           135,000
    Fiscal year 2005 budget request...................  ................


    The Committee recommends an appropriation of $49,575,000 
for Family Housing Operation and Maintenance, Defense-wide, for 
fiscal year 2005. This is an increase of $135,000 above the 
fiscal year 2004 enacted level and the same as the budget 
request.

         Department of Defense Family Housing Improvement Fund





Fiscal year 2004 appropriation........................     $ (9,392,000)
Fiscal year 2005 budget request.......................         2,500,000
Committee recommendation in the bill..................         2,500,000
Comparison with:
    Fiscal year 2004 appropriation....................        11,892,000
    Fiscal year 2005 estimate.........................  ................


    The Committee recommends an appropriation of $2,500,000 for 
the Department of Defense Family Housing Improvement Fund 
(FHIF) for fiscal year 2005. This is an increase of $11,892,000 
above the fiscal year 2004 enacted level and the same as the 
budget request. The Military Construction Appropriations Act, 
2004 (PL 108-132) appropriated $300,000 to the Fund while 
rescinding $9,692,000 for a project that was no longer 
required. The Department is directed to continue providing 
quarterly status reports on each privatization project.
    The FHIF is authorized by section 2883, title 10, United 
States Code, and provides the Department of Defense with 
authority to finance joint ventures with the private sector to 
revitalize and to manage the Department's housing inventory. 
The statute authorizes the Department to use limited 
partnerships, make direct and guaranteed loans, and convey 
Department-owned property to stimulate the private sector to 
increase the availability of affordable, quality housing for 
military personnel.
    The FHIF is used to build or renovate family housing by 
mixing or matching various legal authorities, and by utilizing 
private capital and expertise to the maximum extent possible. 
The Fund is administered as a single account without fiscal 
year limitations and contains appropriated and transferred 
funds from family housing construction accounts.

                  Homeowners Assistance Fund, Defense

    The Committee recommends no appropriation for the 
Homeowners Assistance Fund. The fund is financed by revenue 
from the sale of acquired properties and prior year unobligated 
balances. The total program estimate for fiscal year 2005 is 
$11,542,373.
    The Homeowners Assistance Fund is a non-expiring revolving 
fund that provides assistance to homeowners. The fund was 
established to ameliorate adverse impacts on the economies of 
local communities caused by base realignment and closure 
(BRAC). A service member may access the fund if the value of 
the home decreases due to BRAC. The account receives funds from 
several sources: appropriations, borrowing authority, 
reimbursable authority, prior fiscal year unobligated balances, 
revenue from sale of acquired properties, and recovery of prior 
year obligations.

          Chemical Demilitarization Construction, Defense-wide





Fiscal year 2004 appropriation........................      $119,815,000
Fiscal year 2005 budget request.......................        81,886,000
Committee recommendation in the bill..................        81,886,000
Comparison with:
    Fiscal year 2004 appropriation....................      (37,929,000)
    Fiscal year 2005 budget request...................  ................


    The Committee recommends an appropriation of $81,886,000 
for Chemical Demilitarization Construction, Defense-wide, for 
fiscal year 2005. This is a decrease of $37,929,000 below the 
fiscal year 2004 enacted level and the same as the budget 
request. The following chart displays the fiscal year 2005 
increments included in the bill:

----------------------------------------------------------------------------------------------------------------
              State/Installation                             Project                  Request       Recommended
----------------------------------------------------------------------------------------------------------------
Colorado: Pueblo Depot Activity                 Ammunition Demilitarization          $44,792,000     $44,792,000
                                                 Facility (Ph-VI)
Kentucky: Blue Grass Army Depot                 Ammunition Demilitarization           37,094,000      37,094,000
                                                 Facility (Ph-V)
                                                                                 -------------------------------
      Total...................................  ................................      81,886,000      81,886,000
----------------------------------------------------------------------------------------------------------------

    The Chemical Demilitarization Construction, Defense-wide 
account provides funds for the design and construction of full-
scale chemical disposal facilities and associated projects to 
upgrade installation support facilities and infrastructures 
required to support the Chemical Demilitarization program.

                  Base Realignment and Closure Account





Fiscal year 2004 appropriation........................      $370,427,000
Fiscal year 2005 budget request.......................       246,116,000
Committee recommendation in the bill..................       246,116,000
Comparison with:
    Fiscal year 2004 appropriation....................     (124,311,000)
    Fiscal year 2005 budget request...................  ................


    The Committee recommends an appropriation of $246,116,000 
for the Base Realignment and Closure Account (BRAC) for fiscal 
year 2005. This is a decrease of $124,311,000 below the fiscal 
year 2004 enacted level and the same as the budget request. In 
addition to the amount appropriated, the Department projects 
revenues of $115,000,000 from the sale of land for a total 
program level of $361,116,000.
    The Defense Authorization Amendments and Base Closure and 
Realignment Act of 1988 (Public Law 100-526) and the Defense 
Base Closure and Realignment Act of 1990 (Public Law 101-510) 
authorized four base realignment and closure (BRAC) rounds 
between 1988 and 1995 to reduce excess military bases and 
infrastructure. Ninety-seven major domestic installations were 
closed and several facilities were realigned. The four BRAC 
rounds netted savings of approximately $15,500,000,000 through 
fiscal year 2001. The Department estimates the costs avoided 
from fiscal year 2002 and beyond are approximately 
$6,000,000,000 per year.
    The Congress has appropriated a net total of 
$22,706,132,000 for the BRAC program from fiscal years 1990 
through 2004. Within this amount, the Department has allocated 
$8,405,146,000 for activities associated with environmental 
restoration.
    The Committee has provided the Department with the 
flexibility to allocate funds by service component, by 
functions, and by base. Recognizing the complexities of 
providing for environmental restoration of properties, the 
Committee has provided flexibility to allow the Office of the 
Secretary of Defense to monitor program execution to 
redistribute unobligated balances as appropriate to avoid 
delays and to effect timely execution of environmental cleanup 
responsibilities.
    California--Fort Ord.--A controlled burn at Fort Ord last 
year burned out of control and scorched nearly three times as 
much acreage as planned. The Committee encourages the Army to 
use this unexpected opportunity to conduct additional 
remediation activities as appropriate.

                           General Provisions

    The Administration proposed eliminating several general 
provisions enacted in P.L. 108-132, including sections 111, 
113, 119, 122, 123, 126, 127, and 128. The Committee retains 
each provision with the exception of 128, which established the 
Commission on the Review of Overseas Military Facility 
Structure of the United States.
    The Administration proposed one new general provision 
allowing funds in the Ford Island Improvement Account to be 
appropriated and expended for the purposes specified in 10 
U.S.C. 2814(i)(1) or until transferred pursuant to the 
provisions 10 U.S.C. 2814(i)(3). The Committee did not include 
this provision.
    The Committee includes a new general provision to require 
the Department to provide a written response to inquiries made 
by the subcommittee within 21 days.
    General Provisions included in the bill are as follows:
    Section 101 limits DOD from spending funds appropriated in 
this Act for payments under a cost-plus-a-fixed-fee contract 
for construction where cost estimates exceed $25,000. An 
exception for Alaska is provided.
    Section 102 permits the hire of passenger motor vehicles.
    Section 103 permits funds to be expended on the 
construction of defense access roads under certain 
circumstances.
    Section 104 prohibits construction of new bases in the 
United States without a specific appropriation.
    Section 105 limits the use of funds for the purchase of 
land or land easements that exceed 100% of value.
    Section 106 prohibits the use of funds to acquire land, 
prepare sites, or install utilities for family housing except 
housing for which funds have been appropriated.
    Section 107 limits the use of minor construction funds to 
be transferred or relocated from one installation to another.
    Section 108 prohibits the procurement of steel unless 
American producers, fabricators, and manufacturers have been 
allowed to compete.
    Section 109 limits appropriations from being used to pay 
real property taxes in foreign nations.
    Section 110 prohibits the use of funds to initiate a new 
installation overseas without prior notification.
    Section 111 establishes a preference for American 
architectural and engineering services where the services are 
in Japan, NATO member countries, and the Arabian Gulf.
    Section 112 establishes a preference for American 
contractors for military construction in the United States 
territories and possessions in the Pacific and on Kwajalein 
Atoll, or in the Arabian Gulf, except bids by Marshallese 
contractors for military construction on Kwajalein Atoll.
    Section 113 requires the Secretary of Defense to give prior 
notice to Congress of military exercises where construction 
costs exceed $100,000.
    Section 114 limits obligations to no more than 20 percent 
during the last two months of the fiscal year.
    Section 115 permits DOD to make available funds 
appropriated in prior years for new projects authorized during 
the current session of Congress.
    Section 116 permits the use of expired or lapsed funds to 
pay the cost of supervision for any project being completed 
with lapsed funds.
    Section 117 provides that funds for military construction 
projects are available until the end of the fourth fiscal year 
following the fiscal year in which funds are appropriated, 
subject to certain conditions.
    Section 118 allows the transfer of expired funds to the 
``Foreign Currency Fluctuations, Construction, Defense'' 
account. This provision has been included in every Military 
Construction Appropriations Act since 1992. Once transferred 
these funds become available for obligation until expended. 
Scorekeeping rule 6 requires that extending expired balances be 
scored as new appropriations in the year that they become 
available.
    Section 119 requires the Secretary of Defense to report 
annually on actions taken during the current fiscal year to 
encourage other member nations of the NATO, Japan, Korea, and 
United States allies in the Arabian Gulf to assume a greater 
share of defense costs.
    Section 120 authorizes the transfer of proceeds from ``Base 
Realignment and Closure Account, Part I'' to the continuing 
Base Realignment and Closure accounts.
    Section 121 permits the transfer of funds from Family 
Housing, Construction accounts to the DOD Family Housing 
Improvement Fund.
    Section 122 limits the obligation of funds for Partnership 
for Peace Programs.
    Section 123 requires the Secretary of Defense to notify 
Congressional Committees sixty days prior to issuing a 
solicitation for a contract with the private sector for 
military family housing.
    Section 124 provides transfer authority to the Homeowners 
Assistance Program.
    Section 125 requires that appropriations from this Act be 
the sole source of all operation and maintenance for flag and 
general officer quarter houses and limits the repair on these 
quarters to $20,000 per year without notification.
    Section 126 limits funds from being transferred from this 
appropriations measure to any instrumentality of the United 
States Government without authority from an appropriation Act.
    Section 127 prohibits funds appropriated for the NATO 
Security Investment Program from being obligated or expended 
for the purpose of missile defense studies.
    Section 128 requires the Secretary of Defense or any other 
official of the Department of Defense to respond in writing to 
a question or inquiry submitted by the chairman or another 
member of the subcommittee within 21 days.
    Section 129 increases the limitation in 10 U.S.C. 
2883(g)(1) on the amount of budget authority for the 
privatization of military family housing to $1,350,000,000. The 
section also provides that this section shall not be subject to 
scoring for purposes of the Congressional Budget and 
Impoundment Control Act of 1974.
    Section 130 designates the fitness center at Homestead Air 
Reserve Base, Florida, the Sam Johnson Fitness Center in honor 
of the Honorable Sam Johnson.

              House of Representatives Report Requirements

    The following items are included in accordance with various 
requirements of the rules of the House of Representatives.

                 Changes in Application of Existing Law

    Pursuant to clause 3(f)(1) of rule XIII of the Rules of the 
House of Representatives, the following statements are 
submitted describing the effect of provisions in the 
accompanying bill that directly or indirectly change the 
application of existing law.
    Language is included in various parts of the bill to 
continue on-going activities that require annual authorization 
or additional legislation, which to date has not been enacted.
    The bill includes a number of provisions which place 
limitations on the use of funds in the bill or change existing 
limitations and which might, under some circumstances, be 
construed as changing the application of existing law.
    Language is included that enables various appropriations to 
remain available for more than one year for some programs for 
which the basic authority legislation does not presently 
authorize such extended availability.
    Language is included under Military Construction, Defense-
wide, which permits the Secretary of Defense to transfer funds 
to other accounts for military construction or family housing.
    Language is included raising the statutory cap on budget 
authority for privatizing military family housing by 
$500,000,000.
    Language is included designating a fitness center at 
Homestead Air Reserve Base, Florida.

              Definition of Program, Project, and Activity

    For the purposes of the Balanced Budget and Emergency 
Deficit Control Act of 1985 (Public Law 99-177) as amended by 
the Balanced Budget and Emergency Deficit Control Reaffirmation 
Act of 1987 (Public Law 100-119), and by the Budget Enforcement 
Act of 1990 (Public Law 101-508), the following information 
provides the definitions of the terms ``program, project, and 
activity'' for appropriations contained in the Military 
Construction Appropriations Act. The term ``program, project, 
and activity'' shall include the most specific level of budget 
items, identified in the Military Construction Appropriations 
Act, 2003, accompanying House and Senate reports, and the 
conference report of the joint explanatory statement of the 
managers of the committee of conference.
    In carrying out any sequestrations, the Department of 
Defense (DOD) and related agencies shall carry forth the 
sequestration order in a manner that would not adversely affect 
or alter Congressional policies and priorities established for 
the DOD and related agencies, and no program, project, and 
activity should be eliminated or reduced to a level of funding 
that would adversely affect DOD's ability to effectively 
continue any program, project, and activity.

                  Appropriations Not Authorized by Law

    Pursuant to clause 3(f)(1) of rule XIII of the Rules of the 
House of Representatives, the following table lists the 
appropriations in the accompanying bill which are not 
authorized by law:


                           Transfer of Funds

    Pursuant to clause 3(f)(2) of rule XIII of the Rules of the 
House of Representatives, a statement is required describing 
the transfer of funds provided in the accompanying bill. 
Sections 114, 117, 119, 120, and 123 of the General Provisions, 
and language included under ``Military Construction, Defense-
wide'' provide certain transfer authority.

                        Constitutional Authority

    Clause 3(d)(1) of rule XIII of the Rules of the House of 
Representatives states that:

        Each report of a committee on a bill or joint 
        resolution of a public character shall include a 
        statement citing the specific powers granted to the 
        Congress in the Constitution to enact the law proposed 
        by the bill or joint resolution.

    The Committee on Appropriations bases its authority to 
report this legislation from Clause 7 of Section 9 of Article I 
of the Constitution of the United States of America which 
states:

        No money shall be drawn from the Treasury but in 
        consequence of Appropriations made by law * * *

    Appropriations contained in this bill are made pursuant to 
this specific power granted by the Constitution.

                   Comparisons With Budget Resolution

    Clause 3(c)(2) of rule XIII of the Rules of the House of 
Representatives requires an explanation of compliance with 
section 308(a)(1)(A) of the Congressional Budget and 
Impoundment Control Act of 1974 (Public Law 93-344), as 
amended, which requires that the report accompanying a bill 
providing new budget authority contain a statement detailing 
how that authority compares with the reports submitted under 
section 302 of the Act for the most recently agreed to 
concurrent resolution on the budget for the fiscal year from 
the Committee's section of 302(a) allocation.

                                            [In millions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                      302(b) allocation                   This bill \1\
                                             -------------------------------------------------------------------
                                                   Budget                            Budget
                                                 authority         Outlays         authority         Outlays
----------------------------------------------------------------------------------------------------------------
Discretionary...............................           10,003           10,015           11,208           10,149
Mandatory...................................                0                0                0               0
----------------------------------------------------------------------------------------------------------------
\1\ The amount provided in this bill is $1,205 million above the 302(b) suballocation due to a Congressional
  Budget Office (CBO) interpretation of the scoring of section 129. This section does not actually appropriate
  funds; appropriated amounts in this bill are within the 302(b) suballocation. The Committee is working with
  concerned parties to address CBO's scoring interpretation.

                    Five-Year Projection of Outlays

    In compliance with section 308(a)(1)(B) of the 
Congressional Budget and Impoundment Control Act of 1974 
(Public Law 93-344), as amended, the following table contains 
five-year projections associated with the budget authority 
provided in the accompanying bill:

                        [In millions of dollars]

Budget authority, fiscal year 2005......................         $11,208
Outlays:
    2005................................................           2,592
    2006................................................           4,259
    2007................................................           3,226
    2008................................................           1,525
    2009 and beyond.....................................           4,008

    The bill will not affect the levels of revenues, tax 
expenditures, direct loan obligations, or primary loan 
guarantee commitments under existing law.

          Financial Assistance to State and Local Governments

    In accordance with section 308(a)(1)(C) of the 
Congressional Budget and Impoundment Control Act of 1974 
(Public Law 93-344), as amended, the financial assistance to 
State and local governments is as follows:

                        [In millions of dollars]

New budget authority....................................               0
Fiscal year 2001 outlays resulting therefrom............               0

         Statement of General Performance Goals and Objectives

    Pursuant to clause 3(c)(4) of rule XIII of the Rules of the 
House of Representatives, the following is a statement of 
general performance goals and objectives for which this measure 
authorizes funding:
    The Committee on Appropriations considers program 
performance, including a program's success in developing and 
attaining outcome-related goals and objectives, in developing 
funding recommendations.

                               State List

    The following is a complete listing, by State and country, 
of the Committee's recommendations for military construction 
and family housing projects:



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