[The Regulatory Plan and Unified Agenda of Federal Regulations]
[Department of Defense Regulatory Plan]
[From the U.S. Government Printing Office, www.gpo.gov]


DEPARTMENT OF DEFENSE (DOD)
Statement of Regulatory Priorities
Background
The Department of Defense (DoD) is the largest Federal Department, 
consisting of three Military Departments (Army, Navy, and Air Force), 
nine Unified Combatant Commands, 16 Defense Agencies, and nine DoD 
Field Activities. It has over 1,600,000 military personnel and 900,000 
civilians assigned as of June 30, 1994, and over 500 military 
installations and properties in the continental United States, U.S. 
Territories, and foreign countries. The overall size, composition, and 
dispersion of the Department of Defense, coupled with a new and 
innovative regulatory program, presents a challenge to the management 
of the Defense regulatory program under Executive Order (E.O.) 12866 of 
September 30, 1993.
Because of its nature, composition, and size, the DoD is impacted by 
the regulations issued by regulatory agencies such as the Departments 
of Energy, Health and Human Services, Housing and Urban Development, 
Labor, and Transportation, and the Environmental Protection Agency. In 
order to develop the best possible regulations that embody the 
principles and objectives embedded in E.O. 12866, there must be 
coordination of proposed regulations among the regulating agencies and 
the affected Defense Components. Coordinating the proposed regulations 
in advance throughout an organization as large as the DoD is 
straightforward, yet a formidable undertaking.
The DoD is not a regulatory agency, but in the course of its 
operations, does issue regulations on occasion. These regulations, 
while small in number compared to those of the regulating agencies, can 
be significant as defined in E.O. 12866. In addition, these regulations 
may impact the regulatory agencies. An example of this is the Base 
Closure Community Revitalization requiring coordination with the 
Departments of Housing and Urban Development and Health and Human 
Services. DoD, as a part of its new program, is not only receiving 
coordinating actions from the regulating agencies, but is coordinating 
with the agencies that are impacted by its regulations.
The regulatory program for the DoD fully incorporates the provisions of 
the President's priorities and objectives under E.O. 12866. 
Promulgating and implementing the new regulatory program throughout DoD 
presents a unique challenge to the management of our regulatory 
efforts.
Coordination
Interagency
DoD has been receiving regulatory plans from those agencies that impact 
the operation of the Department through the issuance of regulations. A 
system for coordinating the review process is in place, regulations 
have been reviewed, and comments have been forwarded to the Office of 
Management and Budget. The system is working in the Department and the 
feedback from the Defense Components is most encouraging. For the first 
time, they are able to see and comment on regulations from the other 
agencies before they are required to comply with them.
In a similar manner, DoD has coordinated its significant regulation on 
community revitalization with the Department of Housing and Urban 
Development, the Department of Health and Human Services, the General 
Services Administration, and the public. The coordination process in 
DoD is working as outlined in E.O. 12866.
Internal
Through regulatory program points of contact in the Department, we have 
established a system that provides information from the Vice President 
and the Administrator of the Office of Information and Regulatory 
Affairs (OIRA) to the personnel responsible for the development and 
implementation of DoD regulations. Conversely, the system provides 
feedback from DoD regulatory personnel to the Administrator, OIRA. The 
changes in the internal communications on the regulatory program have 
been well received within the Department.
Overall Priorities
The Department of Defense needs to function at a reasonable cost, while 
eliminating ineffective and unnecessarily burdensome regulations. The 
process should respond in a timely manner, be efficient, cost-
effective, and both fair and perceived as fair. This is being done at a 
time when there is significant downsizing in the Department and it will 
need to react to the contradictory pressures of providing more services 
with fewer resources. The Department of Defense, as a matter of overall 
priority for its regulatory program, adheres to the general principles 
set forth in E.O. 12866 as amplified below.
Problem Identification
Congress typically passes legislation to authorize or require DoD to 
issue regulations and often is quite specific about the problem 
identified for correction. Generally, DoD does not initiate regulations 
as a part of its mission. The significant regulatory action for this 
year on community revitalization is an example. DoD will work closely 
with the Congress and the Administration in this area to identify the 
problem requiring solution, assess its overall significance, and 
identify the performance-based outcomes desired for a regulatory 
solution to the problem.
Conflicting Regulations
DoD does not have a large number of significant regulations and the 
probability of developing conflicting regulations is low. On the other 
hand, DoD is impacted to a great degree by the regulating agencies. 
From that perspective, DoD is in a position to advise the regulatory 
agencies of conflicts that appear to exist using the coordination 
processes that have been developed as a part of the new way of doing 
business in the DoD and Federal agency regulatory programs. It is a 
priority in the Department to communicate with other agencies and the 
affected public to identify and proactively pursue regulatory problems 
that occur as a result of conflicting regulations both within and 
without the Department.
Alternatives
DoD will identify feasible alternatives that will obtain the desired 
regulatory objectives. Where possible, the Department encourages the 
use of incentives to include financial, quality of life, and others to 
achieve the desired regulatory results. For example, in the significant 
regulatory action planned for 1995, the public sector is encouraged to 
acquire base closure properties through outright purchase, or where 
markets are not ready, to have the property conveyed without cost to 
the redevelopment authority. As a further incentive, developers are 
encouraged to acquire the property through a conveyance and still repay 
the DoD through a profit-sharing mechanism. This innovative approach 
fully supports the President's regulatory initiatives.
Risk Assessment
A priority in DoD is the assessment and minimization of risk. In the 
proposed regulation on community revitalization, the risk is 
ameliorated by incorporating the alternatives involving the risk into 
the regulation. The Department will either recover the cost of the 
property through outright sale, or in the case of conveyance, recover 
the cost later in a financial arrangement with the redevelopment 
authority.
Cost-Effectiveness
One of the highest priority objectives of DoD is to obtain the desired 
regulatory objective by the most cost-effective method available. This 
may or may not be through the regulatory process. If a regulation is 
required, DoD will consider incentives for innovation to achieve 
desired results, consistency in the application of the regulation, 
predictability of the activity outcome (achieving the expected 
results), and the costs for regulation development, enforcement, and 
compliance. These will include costs to the public, government, and 
regulated entities, using the best available data or parametric 
analysis methods, to be used in the cost-benefit analysis and the 
decisionmaking process.
In the current significant regulatory action involving community 
revitalization, the cost of the regulation to the Government is 
basically the cost of developing the procedures to dispose of excess 
real and personal property in the event of a base closure. In return, 
the Government will receive reimbursement in the event of a direct sale 
or profit sharing in certain conveyance situations. Cost-effectiveness 
will be achieved.
Cost-Benefit
Conducting cost-benefit analyses on regulation alternatives is a 
priority in the Department of Defense so as to ensure that the 
potential benefits to society outweigh the costs. Evaluations of these 
alternatives are done quantitatively or qualitatively or both, 
depending on the nature of the problem being solved and the type of 
information and data available on the subject. DoD is committed to 
considering the most important alternative approaches to the problem 
being solved and providing the reasoning for selecting the proposed 
regulatory change over the other alternatives.
DoD furthers its commitment to the use of cost-benefit analysis through 
its involvement in the Cost-Benefit Subgroup of the Regulatory Working 
Group. That sub-group is now working on the draft Regulatory Impact 
Analysis Guidance that will have Governmentwide implications for its 
implementation and use in the regulatory process.
Information-Based Decisions
Lack of information in the rulemaking process has been a serious 
problem and it is a priority regulatory issue with the DoD. The new 
thrust of E.O. 12866 with open communications among other Federal 
agencies, State, local, and tribal governments, public interest groups, 
and the public at large is a great step towards solving this problem.
In addition, the pressures of time also require agencies to make 
decisions without as much information as they would like to have. To 
solve this problem, in part, a priority of the DoD is to use the latest 
information technology to provide access to the latest technical, 
scientific, and demographic information in a timely manner through 
world-wide communications which are available on the ``information 
highway.'' Furthermore, the Department intends to use more automation 
in the Notice and Comment Rulemaking process, which should also reduce 
time pressures in the rulemaking process.
DoD is an active participant in the Information Technology Subgroup of 
the Regulatory Working Group and is sharing information about the use 
of technology in the regulatory process with other agencies.
Performance-Based Regulations
Where appropriate, DoD plans to develop performance-based standards 
that will allow the regulated parties to achieve the regulatory 
objective in the most cost-effective manner.
Outreach Initiatives
DoD is taking steps to seek the views of appropriate State, local, and 
tribal officials and the public in implementing measures to enhance 
public awareness and participation both in developing and implementing 
regulatory programs. In its most recent significant regulation 
concerning revitalization of the communities, the Department has 
received hundreds of comments from the public and held a public hearing 
involving focus groups. Reaching out to organizations and individuals 
who are affected by, or involved in, the particular regulatory action 
is a significant regulatory priority of the Department.
Coordination
DoD has embraced the coordination process between and among other 
Federal agencies in the development of new and revised regulations. 
This year, the DoD has coordinated its significant regulatory action 
with the Department of Health and Human Services, the Department of 
Housing and Urban Development, and the General Services Administration. 
In addition, for the first time ever, DoD has received regulatory plans 
from key regulatory agencies and has established a systematic approach 
to providing the plans to the appropriate policy officials within the 
Department. Feedback from the DoD Components indicates that the 
communication among the Federal agencies is a major step toward 
improving regulations and the regulatory process, and improving overall 
Government operations as well.
Minimize Burden
In the regulatory process, there are more complaints concerning burden 
than anything else. In DoD, much of the burden is in the acquisition 
process. By reforming the acquisition process, DoD can make a 
significant contribution to reducing this burden, but DoD cannot do it 
alone. Over the years, acquisition regulations have grown and become 
burdensome principally because of legislative action, enacted for 
laudable reasons.
In coordination with Congress, the Office of Federal Procurement 
Policy, and the public, DoD plans significant reforms to the 
acquisition system. The result is anticipated to be major reductions in 
the regulatory burden on the government and public sectors. To effect 
these changes, DoD has established and staffed the Office of the Under 
Secretary of Defense for Acquisition Reform.
Simple Design
Ensuring that regulations are simple and easy to understand is a high 
regulatory priority in the Department of Defense. All too often the 
regulations are complicated, difficult to understand, and subject to 
misinterpretation, all of which can result in the costly process of 
litigation. The objective in the development of regulations is to write 
them in clear, concise language that is simple and easy to understand.
In summary, the rulemaking process in DoD should produce a rule that 
addresses an identifiable problem, implements the law, implements the 
President's policies including E.O. 12866, is in the public interest, 
is consistent with other rules and policies, is based on the best 
information available, is rationally justified, is cost-effective, can 
actually be implemented, is acceptable and enforceable, is easily 
understood, and stays in effect only as long as is necessary.
Specific Priorities
For this Regulatory Plan, there are four specific DoD priorities, all 
of which reflect the regulatory principles established in E.O. 12866. 
For 1995, there is only one significant regulatory action, but in those 
areas where rulemaking or participation in the regulatory process is 
required, DoD is developing policy and regulation that incorporates not 
only the provisions of the President's priorities and objectives under 
E.O. 12866, but also the National Performance Review, dated September 
1993.
The DoD has focused its regulatory resources on the most serious 
environmental, health, and safety risks. Perhaps most significant is 
that each of the four priorities described below promulgates 
regulations to offset the resource impacts of Federal decisions on the 
public or to improve the quality of public life such as those 
regulations concerning base closures, the wetlands, acquisition, and 
health care delivery.
Revitalize Communities Due to Base Closure
On July 2, 1993, President Clinton announced his five-part plan for the 
economic revitalization of communities where military bases are slated 
to close. The plan, ``A Program to Revitalize Base Closure 
Communities,'' is a high administration priority. DoD has worked with 
representatives of the National Economic Council and the Congress to 
develop legislation that would enable DoD to implement the plan. Title 
XXIX of the National Defense Authorization Act for fiscal year 1994 
includes the enabling provisions. The interim final rule published at 
59 FR 16123, April 6, 1994, encompasses two supporting DoD significant 
regulatory actions that promulgate guidance required by section 2903 of 
the Act, and provides interpretive guidance concerning other changes to 
the base realignment and closure process generated by Title XXIX of the 
Act.
In recognition of the President's goal to minimize the impact of base 
closure on the local community's prospects for employment and economic 
recovery, DoD will be working closely with others to identify problems 
requiring solutions and identify performance-based outcomes for each 
base closure initiative requiring regulation. DoD has worked closely 
among all of the Military Departments, with other Federal agencies and 
State and local authorities, as well as Congress. In the case of real 
property screening, after DoD identifies what it needs to retain, the 
procedures provide for the Departments of Housing and Urban Development 
(HUD) and Health and Human Services (HHS) to be involved in determining 
the suitability of and interest in surplus property for homeless use. 
Specifically tailored for base closure properties, an additional 
screening is aimed at early identification of the needs of the 
homeless. In order to accomplish this and the subsequent processes of 
identifying property for disposal and the process for its disposal or 
conveyance to another, the DoD has emphasized participation by the 
public. This ensures that the new community has optimum opportunity for 
achieving revitalization that is in the interest of the public good.
 In this instance, DoD has developed innovative approaches to ensure 
that property is conveyed in the most cost-effective way possible. One 
of the most effective mechanisms in this regard has been that DoD has 
empowered the Military Departments throughout the entire process to 
work directly with other Federal agencies, homeless providers and reuse 
planners. Furthermore, when conveyance is not possible, Military 
Departments have been delegated disposal authority, thereby resulting 
in responsibility and accountability for real property from ``cradle to 
grave.'' One more alternative has been included in the regulations 
involving the leasing of real property early in the reuse process. This 
process was established as an effective way to quickly attract new jobs 
to replace those that have been lost by the base closing. In addition, 
it is an alternative to allow suitable economic reuse to occur until 
clean-up measures can correct contaminated property and thereby make it 
available for conveyance.
DoD has minimized the risk of proposed base closure regulations by 
achieving the desired objectives by the most cost-effective methods 
which will result in optimizing the cost benefit to all parties 
involved. Throughout the process, DoD has ensured that potential 
benefits to society outweigh the costs. Prior to the interim final 
rule, there was no guidance for ensuring that local redevelopment plans 
would be comprehensive and embrace the range of feasible reuse options 
that will result in rapid job creation. When appraising property for 
disposal, the procedures have been established to take into 
consideration uncertainties and risks in property development as well 
as the impact of base closure on market conditions. Moreover, the 
appraisal will reflect the most likely range of uses consistent with 
local interests rather than highest and best use. To assist in 
determining the estimated fair market value, the Military Departments 
will solicit expressions of interest for the entire, or a substantial 
portion of the base, share that information with the local 
redevelopment authority, and do so simultaneously with other screening 
and disposal actions. Finally, through profit sharing, DoD shall 
generally share in the division of future profits should the property 
conveyed for economic development be subsequently sold or leased. The 
division of profits shall be based on net profits and the share shall 
generally favor the local redevelopment authority.
In summary, this regulatory initiative minimizes the time required to 
influence revitalization through the conduct of concurrent activities. 
An extensive amount of communication and proactive coordination to 
obtain an information-based decision is conducted among Federal and 
local authorities, as well as the public. The Military Departments are 
empowered to make decisions at their level, thereby simplifying the 
overall revitalization efforts. In the screening process, outreach and 
training activities are conducted by DoD to inform and involve the 
general public in activities such as influencing local redevelopment 
plans, identifying eligible entities for conveyance of property, and 
taking inventory of property that may be available for reuse. Training 
is also provided for on-site transition coordinators. The results of 
the regulations developed for revitalizing communities due to base 
closure are that red tape is minimized, environmental cleanup is 
conducted on a fast track, and unused land is transferred or conveyed 
for the most cost-effective use in the interest of the public good.
Preserve Quality and Quantity of Wetlands
While in fiscal year 1995, the Army Corps of Engineers does not propose 
any significant regulatory actions as defined by E.O. 12866, the Office 
of the Assistant Secretary of the Army for Civil Works (OASA(CW)) and 
the Corps will propose and complete several regulations initiated as 
part of the President's August 24, 1993, Wetlands Protection Plan. This 
plan provides for a fair, flexible and effective approach to protecting 
America's wetlands through both regulatory and nonregulatory 
mechanisms. It is a comprehensive package of improvements to Federal 
wetlands programs that is based on the following five principles for 
Federal wetlands policy:
1. An interim goal of no overall net loss of the Nation's remaining 
wetlands, and the long-term goal of increasing the quality and quantity 
of the Nation's wetlands resource base must be established;
2. Regulatory programs must be efficient, fair, flexible, and 
predictable, and must be administered in a manner that avoids 
unnecessary impacts upon private property and the regulated public, and 
minimizes those effects that cannot be avoided, while providing 
effective protection for wetlands. Duplication among regulatory 
agencies must be avoided and the public must have a clear understanding 
of regulatory requirements and various agency roles;
3. Nonregulatory programs, such as advance planning, wetlands 
restoration, inventory, and research, and public/private cooperative 
efforts must be encouraged, to reduce the Federal Government's reliance 
upon regulatory programs as the primary means to protect wetlands 
resources and to accomplish long-term wetlands gains;
4. The Federal Government should expand partnerships with State, 
Tribal, and local governments, the private sector and individual 
citizens and approach wetlands protection and restoration in an 
ecosystem/watershed context, and;
5. Federal wetlands policy should be based upon the best scientific 
information available.
The OASA(CW), through the Corps, is developing several regulatory 
initiatives with respect to the Department of the Army (DA) Section 404 
Clean Water Act regulatory program. The first regulatory initiative was 
finalized on August 25, 1993, when the Corps, along with the 
Environmental Protection Agency, issued final regulations that 
clarified the scope of activities regulated under the Clean Water Act. 
The clarification revised the definition of discharge of dredged 
material to include incidental discharges associated with drainage, 
mechanized land clearing, channelization and other excavation. This 
regulation closed a loophole that had led to the unregulated 
destruction and degradation of wetlands. These regulations also 
clarified the point that prior converted cropland (areas which no 
longer exhibit wetlands characteristics) will not be subject to the 
Department of the Army Regulatory Program. The clarification on prior 
converted cropland eliminated inconsistencies between Federal wetlands 
protection programs under the Clean Water Act and the Food Security 
Act, thus reducing uncertainty for American farmers regarding Federal 
jurisdiction and regulation. Finally, these regulations clarified that 
certain pile-supported structures are regulated under the Clean Water 
Act.
In 1994 and 1995 the Corps is planning to propose and finalize five 
regulations pursuant to its authorities under Section 404 of the Clean 
Water Act and Section 10 of the Rivers and Harbors Act of 1899. The 
first regulation establishes the wetland delineator certification 
program. This program provides for training and certification of 
individuals, as provided for by Section 307(e) of the Water Resources 
Development Act of 1990, to submit for approval wetland delineations in 
accordance with the current Federal wetland delineation manual. 
Individuals can be certified that they meet certain standards resulting 
in an expedited decision by the Corps on their submitted wetland 
delineation. The goal of the certification program is to improve the 
quality of consultant-prepared wetland delineations that are submitted 
to the Corps so that they can be approved more quickly by the Corps. 
The second regulation will establish an administrative appeal process 
whereby permit applicants and landowners can appeal permit denial 
decisions and jurisdiction determinations. The administrative appeal 
process will increase fairness to applicants and landowners in the 
permitting process by establishing a recourse to Corps permit denial 
decisions short of going to court. The process will also provide for 
third-party involvement if the Corps reconsiders a previous permit 
denial. The third initiative will revise some existing nationwide 
permits to ensure that appropriate environmental factors are considered 
and add some new nationwide permits to reduce unnecessary regulatory 
burdens to the Corps and the public due to the August 23, 1993, 
regulation mentioned above. The revised and new nationwide permits will 
also increase efficiency, minimize duplication, and reduce 
inconsistencies between the Clean Water Act and the Food Security Act 
wetlands protection programs. The fourth initiative will increase 
fairness and efficiency in the wetlands permitting process by 
establishing deadlines for wetlands permitting decisions under the 
Clean Water Act. Normally, decisions will be made 90 days from the 
issuance of a public notice except in certain situations that are 
beyond the control of the Corps or involve delays required by other 
laws. The final regulation will be a consolidation of the Corps 
rulemaking and guidance, including the above regulations, that have 
been issued since the last consolidated regulations dated November 13, 
1986. The regulations will also be reorganized to make them clearer and 
easier to use.
Reform Defense Acquisition
In ``Acquisition Reform: A Mandate for Change,'' the Secretary of 
Defense highlighted the need for acquisition reform: ``The Department 
of Defense's Bottom-up Review provides the vision and the blueprint for 
meeting the security challenges of the post-Cold War world, responding 
to threats anywhere in the world where U.S. interests are at risk. In 
today's environment, the current process will not always be able to 
meet the Department's need. DoD will not be able to carry out this 
blueprint without dramatic changes in its acquisition processes--from 
determining what the department needs to logistics support and 
reutilization requirements.''
To meet these new security challenges, the United States must be able 
to rely heavily on commercial companies for defense needs. It cannot 
rely, as it has in the past, exclusively on companies that are 
predominantly defense suppliers. As the Secretary has stated, ``the DoD 
cannot afford the extra costs associated with keeping its industrial 
base isolated from the national base. The country needs the benefit 
that it would otherwise lose as a result of the defense industrial base 
being kept out of this national base.''
To make this drastic change, the acquisition process must be 
fundamentally re-engineered, to ensure the commercial sector is fully 
utilized to support Government needs, and that all possible 
streamlining measures are adopted. The Acquisition Streamlining Act, 
pending before the Congress, promises to be a major step towards 
achieving this goal. Specifically, the legislation is expected to 
provide relief in the following major areas: (1) comprehensive 
authority to facilitate commercial item acquisition; and (2) 
simplifying and streamlining most contract actions. Once enacted, this 
proposed legislation will become a center of regulatory activity in the 
Department of Defense. This is anticipated to include extensive rewrite 
of the Federal Acquisition Regulation (FAR), in coordination with the 
other Federal Agencies, the Defense Supplements, and other related DoD 
Directives and Regulations. In addition to such actions related to the 
pending legislation, there is already a substantial Federal-wide FAR 
rewrite effort underway as a result of a National Performance Review 
(NPR) recommendation. The Department is committed to acquisition reform 
and will continue making significant improvements in this area, 
consistent with the NPR and E.O. 12866. Assessing risk, performing 
cost-benefit analysis, and minimizing burden are cornerstones in the 
establishment of a cost-effective acquisition process that is 
consistent with E.O. 12866.
Improve Health Care Delivery in the Defense Department
DoD operates an extensive system of military medical treatment 
facilities, in support of two missions: wartime readiness and peacetime 
benefits. The readiness mission maintains the peacetime health of 
active duty personnel and makes preparations to attend the sick and 
wounded in war; the benefits mission provides a health benefit as a 
condition of service to DoD's eligible beneficiaries, including 
dependents of active duty personnel and retired military personnel and 
their dependents and survivors.
The principal health-related regulatory publications of the Department 
involve CHAMPUS, the Civilian Health and Medical Program of the 
Uniformed Services (32 CFR Part 199). Through CHAMPUS, DoD shares in 
the cost of civilian care obtained by eligible beneficiaries when 
services are unavailable in military medical treatment facilities. 
CHAMPUS regulations address comprehensively issues such as eligibility, 
benefits, authorized providers, claims payment, appeals procedures, and 
the like. Changes to the CHAMPUS regulations are coordinated by DoD 
with the Departments of Transportation (U.S. Coast Guard) and Health 
and Human Services (Public Health Service), which also have 
beneficiaries eligible for CHAMPUS.
Amendments to the CHAMPUS regulations generally focus on program 
changes arising from revisions to the program's statutory base, or from 
DoD initiatives to improve the program. Over the next few years, 
changes in management of high cost care and revisions to reimbursement 
approaches for providers will be among DoD's regulatory priorities.
A major health care initiative of DoD is the TRICARE Program, which is 
intended to improve the management and integration of health care 
delivery in military medical treatment facilities and CHAMPUS, and to 
increase access to health services, control health care costs, and 
strengthen quality assurance activities. A major feature of TRICARE 
will be local health care delivery networks based on arrangements 
between military and civilian providers and organizations. 
Beneficiaries will be able to enroll in an HMO-like option to receive 
all their care from this integrated military-civilian network, or 
obtain care on a case-by-case basis from the network at preferred cost 
sharing rates.
The regulatory vehicle for implementation of TRICARE will be an 
amendment to the CHAMPUS regulation. This amendment will support the 
objectives of E.O. 12866, in that it will address the identified cost, 
quality and access concerns in health care in a sensible, cost-
effective manner consistent with the President's priorities and with 
existing law and regulation. We will seek public comment and promulgate 
rule changes regarding the new health care choices to be made available 
to beneficiaries and their attendant costs, the additional health care 
management requirements to be introduced, and rules for establishment 
and operation of provider networks. An extensive and ongoing effort to 
inform the public about TRICARE will enhance the E.O. 12866 objective 
of providing full information to the public to encourage substantial 
and meaningful participation in the regulatory process. The Department 
of Defense (DoD) has planned one significant regulatory action for 
accomplishment in fiscal year 1995. It concerns the revitalization of 
communities impacted by base closures and is described below.
_______________________________________________________________________
DOD--Office of the Secretary (OS)
            ___________________________________________________________
FINAL RULE STAGE
            ___________________________________________________________
23.  REVITALIZING BASE CLOSURE COMMUNITIES
Legal Authority:


 10 USC 2687 note


CFR Citation:


 32 CFR 90


Legal Deadline:


 Final, Statutory, May 30, 1994.


Such guidance must be issued and effective to enable the Department of 
Defense (DoD) to perform various acts required by law and to be 
accomplished prior to May 30, 1994.


Abstract:


The interim final rule promulgates guidance required by section 2903 of 
the National Defense Authorization Act for fiscal year 1994, and 
provides interpretive guidance concerning other changes to the base 
realignment and closure process generated by Title XXIX of the Act. 
This interim final rule also establishes policy and procedure, assigns 
responsibilities, and delegates authority under the President's Five-
Part Plan, ``A Program to Revitalize Base Closure Communities,'' July 
2, 1993.


Statement of Need:


DoD is engaged in a major downsizing, resulting in less land and 
buildings needed to support the defense mission. As a result of 
Presidential and Congressional approval of recommendations proffered by 
nonpartisan commissions provided for in Public Laws 100-526 and 101-510 
to assess closure recommendations of the Secretary of Defense, DoD is 
presently in the process of closing 70 major installations throughout 
the United States. Furthermore, additional closing recommendations and 
actions may evolve from subsequent commission meetings scheduled in 
1995. Integral to this action, and the President's five-part plan to 
revitalize base closure communities, is the need to define and 
establish policy and responsibilities that ensure expeditious and 
viable disposition of associated real and personal property, as well as 
speed the economic recovery of communities where bases identified for 
closure are located. This interim rule addresses that need by 
prescribing procedures under which this property may be made available 
to the affected communities, and the process under which other Federal 
agencies and providers of assistance for the homeless may acquire 
excess and surplus property. The pivotal legislation for this action is 
Title XXIX of Public Law 103-160, ``Base Closure Communities 
Assistance,'' commonly referred to as the ``Pryor Amendment.''


Summary of the Legal Basis:


On July 2, 1993, President Clinton announced his five-part plan for the 
economic revitalization of communities where military bases are slated 
to close. The plan, ``A Program to Revitalize Base Closure 
Communities,'' is a high administration priority. The Department of 
Defense worked with representatives of the National Economic Council 
and the Congress to develop legislation that would enable the 
Department to implement the plan. Title XXIX of the National Defense 
Authorization Act for fiscal year 1994 includes the enabling 
provisions. The interim final rule promulgates guidance required by 
section 2903 of the Act and provides interpretive guidance concerning 
other changes to the base realignment and closure process generated by 
Title XXIX of the Act. The legal authority for this interim final rule 
is 10 USC 2687 note. The guidance was issued as an interim final rule 
in order for the Department of Defense (DoD) to perform various acts 
required by law prior to May 30, 1994.


Alternatives:


Previously, Federal law required DoD to put closed bases and 
installations up for sale. After sale, they could be used for 
development that would result in the creation of jobs and associated 
revenues. Oftentimes, bases were slow to sell, lying fallow for long 
periods of time, thus constituting a counterproductive economic 
situation for the Government, as well as the associated community. As a 
result of recommendations by an interagency working group convened by 
the National Economic Council, a legal basis was established for new 
disposition alternatives in such base closure situations. Title XXIX of 
Public Law 103-160, ``Base Closure Communities Assistance,'' authorizes 
several significant and facilitating departures from past procedures. 
Such major new alternatives as authorizing conveyances of real and 
personal property at or below fair market value to local redevelopment 
authorities, making property available for economic development at no 
initial cost when a market doesn't exist, and sharing profits on future 
leases and sales, give top priority to the early reuse of a base's 
valuable assets. DoD has incorporated into its overall base closure 
program these innovative disposition alternatives that define the goals 
of the President's five-part plan for revitalization of base closure 
communities.


Anticipated Costs and Benefits:


The primary cost of this regulatory action is that associated with the 
establishment and management of procedures which provide for the rapid 
redevelopment, creation of new jobs, and speedy economic recovery of 
communities where bases are slated to close. It is minimal. Benefits, 
on the other hand, will be substantial and will accrue to the 
Government and the local communities. The Government may receive 
revenue as a result of direct sales, or later revenues as a result of 
profit sharing in the future sale or lease of real and personal 
property conveyed without initial cost. The local communities will 
receive redevelopment benefits in either case. It is a win-win 
situation. In both scenarios, however, ensuring that the overall 
benefit to society outweighs the costs incurred is a DoD priority.


Risks:


The degree of risk is lessened considerably by incorporating the risk 
variables into the language of the regulatory action itself. For 
financial risk to the Government, this is considerably reduced by 
receiving revenues from an outright sale of the property as before, or 
receiving revenues later through profit-sharing, an option that was 
never before available. The risk of economic hardship on the community 
is reduced because there is a built-in mechanism to have the property 
conveyed at no cost to the community if the community is not market 
ready. Through this innovative regulatory approach, risk is minimized 
on both sides of the regulatory action.


Timetable:
_______________________________________________________________________
Action                                 DFR Cite

_______________________________________________________________________
Interim Final Ru59 FR 16123                                    04/06/94
Interim Final Ru59 FR 16123e                                   04/06/94
Interim Final Ru59 FR 16123Period End                          07/05/94
Public Hearing P59 FR 36367nterim Final Rule                   07/18/94
Extension of Com59 FR 34382 Interim Final Rule                 08/05/94
Public Hearing I59 FR 35463l Rule                              08/05/94
Final Action                                                   10/00/94
Small Entities Affected:


Undetermined


Government Levels Affected:


Undetermined


Agency Contact:
F. Savat
Department of Defense
Office of the Secretary
703 614-5356
RIN: 0790-AF61
BILLING CODE 3810-01-F