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"(i) a specific limitation provided by law on the quantity of the items or services that may be procured; or

“(ii) the requirement for the items or services as approved by the Joint Requirements Oversight Council and reported to Congress by the Secretary of Defense; or

“(B) result in an obligation or expenditure of funds in excess of a specific limitation provided by law on the amount that may be obligated or expended, respectively, for that procurement program.

“(2) Funds in the Defense Modernization Account may not be used for a purpose or program for which Congress has not authorized appropriations.

“(3) Funds may not be transferred from the Defense Modernization Account in any year for the purpose of

“(A) making an expenditure for which there is no corresponding obligation; or

"(B) making an expenditure that would satisfy an unliquidated or unrecorded obligation arising in a prior fiscal year.

“(f) TRANSFER OF FUNDS.-(1) The Secretary of Defense may transfer funds in the Defense Modernization Account to appropriations available for purposes set forth in subsection (d).

“(2) Funds in the Defense Modernization Account may not be transferred under paragraph (1) until 30 days after the date on which the Secretary concerned notifies the congressional defense committees in writing of the amount and purpose of the proposed transfer.

“(3) The total amount of transfers from the Defense Modernization Account during any fiscal year under this subsection may not exceed $500,000,000.

“(g) AVAILABILITY OF FUNDS BY APPROPRIATION.-In addition to transfers under subsection (f), funds in the Defense Modernization Account may be made available for purposes set forth in subsection (d) in accordance with the provisions of appropriations Acts, but only to the extent authorized in an Act other than an appropriations Act.

"(h) SECRETARY TO ACT THROUGH COMPTROLLER.—The Secretary of Defense shall carry out this section through the Under Secretary of Defense (Comptroller), who shall be authorized to implement this section through the issuance of any necessary regulations, policies, and procedures after consultation with the General Counsel and Inspector General of the Department of Defense.

“(i) QUARTERLY REPORTS.—(1) Not later than 15 days after the end of each calendar quarter, the Secretary of Defense shall submit to the congressional committees specified in paragraph (2) a report on the Defense Modernization Account. Each such report shall set forth the following:

“(A) The amount and source of each credit to the account during that quarter.

“(B) The amount and purpose of each transfer from the account during that quarter.

“(C) The balance in the account at the end of the quarter and, of such balance, the amount attributable to transfers to the account from each Secretary concerned.

“(2) The committees referred to in paragraph (1) are the congressional defense committees and the Committee on Governmental Affairs of the Senate and the Committee on Government Reform and Oversight of the House of Representatives.

“(j) DEFINITIONS.-In this section:

“(1) The term 'Secretary concerned' includes the Secretary of Defense with respect to Defense-wide appropriations accounts.

“(2) The term "unexpired funds' means funds appropriated for a definite period that remain available for obligation.

“(3) The term “congressional defense committees' means

“(A) the Committee on Armed Services and the Committee on Appropriations of the Senate; and

“(B) the Committee on National Security and the Committee on Appropriations of the House

of Representatives.".

(2) The table of sections at the beginning of chapter 131 of such title is amended by inserting after the item relating to section 2215 the following new item: “2216. Defense Modernization Account.”.

(b) EFFECTIVE DATE.-Section 2216 of title 10, United States Code (as added by subsection (a), shall apply only to funds appropriated for fiscal years after fiscal year 1995.

(C) EXPIRATION OF AUTHORITY AND ACCOUNT.-(1) The authority under section 2216(b) of title 10, United States Code (as added by subsection (a)), to transfer funds into the Defense Modernization Account terminates at the close of September 30, 2003.

(2) Three years after the termination date specified in paragraph (1), the Defense Modernization Account shall be closed and any remaining balance in the account shall be canceled and thereafter shall not be available for any purpose.

(d) GAO REVIEWS.-(1) The Comptroller General of the United States shall conduct two reviews of the administration of the Defense Modernization Account. In each review, the Comptroller General shall assess the operations and benefits of the account.

(2) Not later than March 1, 2000, the Comptroller General shall

(A) complete the first review; and

(B) submit to the specified committees of Congress an initial report on the administration and benefits of the Defense Modernization Account.

(3) Not later than March 1, 2003, the Comptroller General shall

(A) complete the second review; and

(B) submit to the specified committees of Congress a final report on the administration and benefits of the Defense Modernization Account.

(4) Each such report shall include any recommended legislation regarding the account that the

the Comptroller General considers appropriate.

(5) For purposes of this subsection, the term "specified committees of Congress" means the congressional committees referred to in section 2216(i)(2) of title 10, United States Code, as added by subsection (a). SEC. 913. DESIGNATION AND LIABILITY OF DIS

BURSING AND CERTIFYING OFFI.

CIALS. (a) DISBURSING OFFICIALS.—(1) Section 3321(c) of title 31, United States Code, is amended by striking out paragraph (2) and inserting in lieu thereof the following:

“(2) The Department of Defense.”.

(2) Section 2773 of title 10, United States Code, is amended

(A) in subsection (a)

(i) in paragraph (1), by striking out “With the approval of a Secretary of a military department when the Secretary considers it necessary, a disbursing official of the military department” and inserting in lieu thereof "Subject to paragraph (3), a disbursing official of the Department of Defense"; and

(ii) by adding at the end the following new paragraph:

“(3) A disbursing official may make a designation under paragraph (1) only with the approval of the Secretary of Defense or, in the case of a disbursing official of a military department, the Secretary of that military department.'; and

(B) in subsection (b)(1), by striking out "any military department" and inserting in lieu thereof "the Department of Defense”.

(b) DESIGNATION OF MEMBERS OF THE ARMED FORCES TO HAVE AUTHORITY TO CERTIFY VOUCHERS.-Section 3325(b) of title 31, United States Code, is amended to read as follows:

"(b) In addition to officers and employees referred to in subsection (a)(1)(B) of this section as having authorization to certify vouchers, members of the armed forces under the jurisdiction of the Secretary of Defense may certify vouchers when authorized, in writing, by the Secretary to do so.”.

(c) CONFORMING AMENDMENTS.—(1) Section 1012 of title 37, United States Code, is amended by striking out “Secretary concerned" both places it appears and inserting in lieu thereof “Secretary of Defense”.

(2) Section 1007(a) of title 37, United States Code, is amended by striking out “Secretary concerned” and inserting in lieu thereof “Secretary of Defense, or upon the denial of relief of an officer pursuant to section 3527 of title 31”.

(3)(A) Section 7863 of title 10, United States Code, is amended

(i) in the first sentence, by striking out "disbursements of public moneys or” and “the money was paid or”; and

(ii) in the second sentence, by striking out "disbursement or”.

(B)(i) The heading of such section is amended to read as follows: “8 7863. Disposal of public stores by order of

commanding officer”.

(ii) The item relating to such section in the table of sections at the beginning of chapter 661 of such title is amended to read as follows: "7863. Disposal of public stores by order of

commanding officer.". (4) Section 3527(b)(1) of title 31, United States Code, is amended

(A) by striking out "a disbursing official of the armed forces" and inserting in lieu thereof "an official of the armed forces referred to in subsection (a)””;

(B) by striking out “records,” and inserting in lieu thereof “records, or a payment described in section 3528(a)(4)(A) of this title,”;

(C) by redesignating subparagraphs (A), (B), and (C) as clauses (i), (ii), and (iii), and realigning such clauses four ems from the left margin;

(D) by inserting before clause (i), as so redesignated, the following:

“(A) in the case of a physical loss or deficiency":

(E) in clause (iii), as so redesignated, by striking out the period at the end and inserting in lieu thereof “; or”; and

(F) by adding at the end the following:

“(B) in the case of a payment described in section 3528(a)(4)(A) of this title, the Secretary of Defense or the Secretary of the appropriate military department, after taking a diligent collection action, finds that the criteria of section 3528(b)(1) of this title are satisfied.”.

(5) Section 3528 of title 31, United States Code, is amended by striking out subsection (d). SEC. 914. FISHER HOUSE TRUST FUNDS.

(a) ESTABLISHMENT.—(1) Chapter 131 of title 10, United States Code, is amended by adding at the end the following new section: "2221. Fisher House trust funds

“(a) ESTABLISHMENT.—The following trust funds are established on the books of the Treasury:

“(1) The Fisher House Trust Fund, Department of the Army.

“(2) The Fisher House Trust Fund, Department of the Air Force.

“(b) INVESTMENT.–Funds in the trust funds may be invested in securities of the United States. Earnings and gains realized from the investment of funds in a trust fund shall be credited to the trust fund.

"(c) USE OF FUNDS.-(1) Amounts in the Fisher House Trust Fund, Department of the Army, that are attributable to earnings or gains realized from investments shall be available for the operation and maintenance of Fisher houses that are located in proximity to medical treatment facilities of the Army.

“(2) Amounts in the Fisher House Trust Fund, Department of the Air Force, that are attributable to earnings or gains realized from investments shall be available for the operation and maintenance of Fisher houses that are located in proximity to medical treatment facilities of the Air Force.

“(3) The use of funds under this section is subject to section 1321(b)(2) of title 31.

"(d) FISHER HOUSE DEFINED.-In this section, the term 'Fisher house' means a housing facility that

“(1) is located in proximity to a medical treatment facility of the Army or the Air Force; and

“(2) is available for residential use on a temporary basis by patients at such facilities, members of the family of such patients, and others providing the equivalent of familial support for such patients.”.

(2) The table of sections at the beginning of such chapter is amended by adding at the end the following new item: “2221. Fisher House trust funds.".

(b) CORPUS OF TRUST FUNDS.—(1) The Secretary of the Treasury shall

(A) close the accounts established with the funds that were required by section 8019 of Public Law 102–172 (105 Stat. 1175) and section 9023 of Public Law 102–396 (106 Stat. 1905) to be transferred to an appropriated trust fund; and

(B) transfer the amounts in such accounts to the Fisher House Trust Fund, Department of the Army, established by subsection (a)(1) of section 2221 of title 10, United States Code, as added by subsection (a).

(2) The Secretary of the Air Force shall transfer to the Fisher House Trust Fund, Department of the Air Force, established by subsection (a)(2) of section 2221 of title 10, United States Code (as added by section (a)), all amounts in the accounts for Air Force installations and other facilities that, as of the date of the enactment of this Act, are available for operation and maintenance of Fisher houses (as defined in subsection (d) of such section 2221).

(c) CONFORMING AMENDMENTS.-Section 1321 of title 31, United States Code, is amended

(1) by adding at the end of subsection (a) the following:

“(92) Fisher House Trust Fund, Department of the Army.

"(93) Fisher House Trust Fund, Department of the Air Force.”; and

(2) in subsection (b)-
(A) by inserting “(1)” after “(b)””;

(B) in the second sentence, by striking out “Amounts accruing to these funds (except to the trust fund ‘Armed Forces Retirement Home Trust Fund')” and inserting in lieu thereof "Except as provided in paragraph (2), amounts accruing to these funds””;

(C) by striking out the third sentence; and (D) by adding at the end the following:

"(2) Expenditures from the following trust funds may be made only under annual appropriations and only if the appropriations are specifically authorized by law:

"(A) Armed Forces Retirement Home Trust Fund.

“(B) Fisher House Trust Fund, Department of the Army.

"(C) Fisher House Trust Fund, Department of the Air Force.”.

(d) REPEAL OF SUPERSEDED PROVISIONS.The following provisions of law are repealed:

(1) Section 8019 of Public Law 102–172 (105 Stat. 1175).

(2) Section 9023 of Public Law 102–396 (106 Stat. 1905).

(3) Section 8019 of Public Law 103–139 (107 Stat. 1441).

(4) Section 8017 of Public Law 103–335 (108 Stat. 2620; 10 U.S.C. 1074 note). SEC. 915. LIMITATION ON USE OF AUTHORITY TO

PAY FOR EMERGENCY AND EX

TRAORDINARY EXPENSES. Section 127 of title 10, United States Code, is amended,

(1) by redesignating subsection (c) as subsection (d); and

(2) by inserting after subsection (b) the following new subsection (c):

"(c)(1) Funds may not be obligated or expended in an amount in excess of $500,000 under the authority of subsection (a) or (b) until the Secretary of Defense has notified the Committee on Armed Services and the Committee on Appropriations of the Senate and the Committee on National Security and the Committee on Appropriations of the House of Representatives of the intent to obligate or expend the funds, and

“(A) in the case of an obligation or expenditure in excess of $1,000,000, 15 days have elapsed since the date of the notification; or

“(B) in the case of an obligation or expenditure in excess of $500,000, but not in excess of $1,000,000, 5 days have elapsed since the date of the notification.

"(2) Subparagraph (A) or (B) of paragraph (1) shall not apply to an obligation or expenditure of funds otherwise covered by such subparagraph if the Secretary of Defense determines that the national security objectives of the United States will be compromised by the application of the subparagraph to the obligation or expenditure. If the Secretary makes a determination with respect to an obligation or expenditure under the preceding sentence, the Secretary shall immediately notify the committees referred to in paragraph (1) that such obligation or expenditure is necessary and provide any relevant information (in classified form, if necessary) jointly to the chairman and ranking minority member (or their designees) of such committees.

“(3) A notification under paragraph (1) and information referred to in paragraph (2) shall include the amount to be obligated or expended, as the case may be, and the purpose of the obligation or expenditure.”.

TITLE X-GENERAL PROVISIONS

Subtitle A-Financial Matters SEC. 1001. TRANSFER AUTHORITY.

(a) AUTHORITY TO TRANSFER AUTHORIZATIONS.—(1) Upon determination by the Secretary of Defense that such action is necessary in the national interest, the Secretary may transfer amounts of authorizations made available to the Department of Defense in this division for fiscal year 1996 between any such authorizations for that fiscal year

(or any subdivisions thereof). Amounts of authorizations so transferred shall be merged with and be available for the same purposes as the authorization to which transferred.

(2) The total amount of authorizations that the Secretary of Defense may transfer under the authority of this section may not exceed $2,000,000,000.

(b) LIMITATIONS.—The authority provided by this section to transfer authorizations

(1) may only be used to provide authority for items that have a higher priority than the items from which authority is transferred; and

(2) may not be used to provide authority for an item that has been denied authorization by Congress.

(C) EFFECT ON AUTHORIZATION AMOUNTS.-A transfer made from one account to another under the authority of this section shall be deemed to increase the amount authorized

for the account to which the amount is transferred by an amount equal to the amount transferred.

(d) NOTICE TO CONGRESS.--The Secretary shall promptly notify Congress of each transfer made under subsection (a). SEC. 1002. INCORPORATION OF CLASSIFIED

ANNEX. (a) STATUS OF CLASSIFIED ANNEX.—The Classified Annex prepared by the committee on conference to accompany the bill H.R. 1530 of the One Hundred Fourth Congress and transmitted to the President is hereby incorporated into this Act.

(b) CONSTRUCTION WITH OTHER PROVISIONS OF ACT.—The amounts specified in the Classified Annex are not in addition to amounts authorized to be appropriated by other provisions of this Act.

(C) LIMITATION ON USE OF FUNDS.–Funds appropriated pursuant to an authorization contained in this Act that are made available for a program, project, or activity referred to in the Classified Annex may only be expended for such program, project, or activity in accordance with such terms, conditions, limitations, restrictions, and requirements as are set out for that program, project, or activity in the Classified Annex.

(d) DISTRIBUTION OF CLASSIFIED ANNEX.The President shall provide for appropriate distribution of the Classified Annex, or of appropriate portions of the annex, within the executive branch of the Government. SEC. 1003. IMPROVED FUNDING MECHANISMS

FOR UNBUDGETED OPERATIONS. (a) REVISION OF FUNDING MECHANISM.-(1) Section 127a of title 10, United States Code, is amended to read as follows: "§ 127a. Operations for which funds are not

provided in advance: funding mechanisms

“(a) IN GENERAL.—(1) The Secretary of Defense shall use the procedures prescribed by this section with respect to any operation specified in paragraph (2) that involves

“(A) the deployment (other than for a training exercise) of elements of the Armed Forces for a purpose other than a purpose for which funds have been specifically provided in advance; or

“(B) the provision of humanitarian assistance, disaster relief, or support for law enforcement (including immigration control) for which funds have not been specifically provided in advance.

"(2) This section applies to

"(A) any operation the incremental cost of which is expected to exceed $50,000,000; and

"(B) any other operation the expected incremental cost of which, when added to the expected incremental costs of other operations that are currently ongoing, is expected to result in a cumulative incremental cost of ongoing operations of the Department of Defense in excess of $100,000,000. Any operation the incremental cost of which is expected not to exceed $10,000,000 shall be disregarded for the purposes of subparagraph (B).

"(3) Whenever an operation to which this section applies is commenced or subsequently becomes covered by this section, the Secretary of Defense shall designate and identify that operation for the purposes of this section and shall promptly notify Congress of that designation (and of the identification of the operation).

“(4) This section does not provide authority for the President or the Secretary of Defense to carry out any operation, but establishes mechanisms for the Department of Defense by which funds are provided for operations that the armed forces are required to carry out under some other authority.

"(b) WAIVER OF REQUIREMENT TO REIMBURSE SUPPORT UNITS.-(1) The Secretary of Defense shall direct that, when a unit of the Armed Forces participating in an operation is

described in subsection (a) receives services from an element of the Department of Defense that operates through the Defense Business Operations Fund (or a successor fund), such unit of the Armed Forces may not be required to reimburse that element for the incremental costs incurred by that element in providing such services, notwithstanding any other provision of law or any Government accounting practice.

(2) The amounts which but for paragraph (1) would be required to be reimbursed to an element of the Department of Defense (or a fund) shall be recorded as an expense attributable to the operation and shall be accounted for separately.

"(c) TRANSFER AUTHORITY.—(1) Whenever there is an operation of the Department of Defense described in subsection (a), the Secretary of Defense may transfer amounts described in paragraph (3) to accounts from which incremental expenses for that operation were incurred in order to reimburse those accounts for those incremental expenses. Amounts so transferred shall be merged with and be available for the same purposes as the accounts to which transferred.

“(2) The total amount that the Secretary of Defense may transfer under the authority of this section in any

fiscal

year is $200,000,000.

“(3) Transfers under this subsection may only be made from amounts appropriated to the Department of Defense for any fiscal year that remain available for obligation, other than amounts within any operation and maintenance appropriation that are available for (A) an account (known as a budget activity 1 account) that is specified as being for operating forces, or (B) an account (known as a budget activity 2 account) that

specified as being for mobilization.

"(4) The authority provided by this subsection is in addition to any other authority provided by law authorizing the transfer of amounts available to the Department of Defense. However, the Secretary may not use any such authority under another provision of law for a purpose described in paragraph (1) if there is authority available under this subsection for that purpose.

“(5) The authority provided by this subsection to transfer amounts may not be used to provide authority for an activity that has been denied authorization by Congress.

“(6) A transfer made from one account to another under the authority of this subsection shall be deemed to increase the amount authorized for the account to which the amount is transferred by an amount equal to the amount transferred.

"(d) REPORT UPON DESIGNATION OF AN OPERATION.—Within 45 days after the Secretary of Defense identifies an operation pursuant to subsection (a)(2), the Secretary of Defense shall submit to Congress a report that sets forth the following:

“(1) The manner by which the Secretary proposes to obtain funds for the cost to the United States of the operation, including a specific discussion of how the Secretary proposes to restore balances in

(A) the Defense Business Operations Fund (or a successor fund), or

“(B) the accounts from which the Secretary transfers funds under the authority of subsection (c), to the levels that would have been anticipated but for the provisions of subsection (c).

"(2) If the operation is described in subsection (a)(1)(B), a justification why the budgetary resources of another department or agency of the Federal Government, instead of resources of the Department of Defense, are not being used for carrying out the operation.

“(3) The objectives of the operation.

“(4) The estimated duration of the operation and of any deployment of armed forces personnel in such operation.

“(5) The estimated incremental cost of the operation to the United States.

*(6) The exit criteria for the operation and for the withdrawal of the elements of the armed forces involved in the operation.

"(e) LIMITATIONS.—(1) The Secretary may not restore balances in the Defense Business Operations Fund through increases in rates charged by that fund in order to compensate for costs incurred and not reimbursed due to subsection (b).

“(2) The Secretary may not restore balances in the Defense Business Operations Fund or any other fund or account through the use of unobligated amounts in an operation and maintenance appropriation that are available within that appropriation for (A) an account (known as a budget activity 1 account) that is specified as being for operating forces, or (B) an account (known as a budget activity 2 account) that is specified as being for mobilization.

“(f) SUBMISSION OF REQUESTS FOR SUPPLEMENTAL APPROPRIATIONS.-It is the sense of Congress that whenever there is an operation described in subsection (a), the President should, not later than 90 days after the date on which notification is provided pursuant to subsection (a)(3), submit to Congress a request for the enactment of supplemental appropriations for the then-current fiscal year in order to provide funds to replenish the Defense Business Operations Fund or any other fund or account of the Department of Defense from which funds for the incremental expenses of that operation were derived under this section and should, as necessary, submit subsequent requests for the enactment of such appropriations.

“(g) INCREMENTAL COSTS.–For purposes of this section, incremental costs of the Department of Defense with respect to an operation are the costs of the Department that are directly attributable to the operation (and would not have been incurred but for the operation). Incremental costs do not include the cost of property or services acquired by the Department that are paid for by a source outside the Department or out of funds contributed by such a source.

“(h) RELATIONSHIP TO WAR POWERS RESOLUTION.—This section may not be construed as altering or superseding the War Powers Resolution. This section does not provide authority to conduct any military operation.

"(i) GAO COMPLIANCE REVIEWS.-The Comptroller General of the United States shall from time to time, and when requested by a committee of Congress, conduct a review of the defense funding structure under this section to determine whether the Department of Defense is complying with the requirements and limitations of this section."

(2) The item relating to section 127a in the table of sections at the beginning of chapter 3 of such title is amended to read as follows: “127a. Operations for which funds are not

provided in advance: funding

mechanisms.”. (b) EFFECTIVE DATE.—The amendment to section 127a of title 10, United States Code, made by subsection (a) shall take effect on the date of the enactment of this Act and shall apply to any operation of the Department of Defense that is in effect on or after that date, whether such operation is begun before, on, or after such date of enactment. In the case of an operation begun before such date, any reference in such section to the commencement of such operation shall be treated as referring to the effective date under the preceding sentence. SEC. 1004. OPERATION PROVIDE COMFORT.

(a) AUTHORIZATION OF AMOUNTS AVAILABLE.—Within the total amounts authorized

to be appropriated in titles III and IV, there is hereby authorized to be appropriated for fiscal year 1996 for costs associated with Operation Provide Comfort

(1) $136,300,000 for operation and maintenance costs; and

(2) $7,000,000 for incremental military personnel costs.

(b) REPORT.-Not more than $70,000,000 of the amount appropriated under subsection (a) may be obligated until the Secretary of Defense submits to the congressional defense committees a report on Operation Provide Comfort which includes the following:

(1) A detailed presentation of the projected costs to be incurred by the Department of Defense for Operation Provide Comfort during fiscal year 1996, together with a discussion of missions and functions expected to be performed by the Department as part of that operation during that fiscal year.

(2) A detailed presentation of the projected costs to be incurred by other departments and agencies of the Federal Government participating in or providing support to Operation Provide Comfort during fiscal year 1996.

(3) A discussion of available options to reduce the involvement of the Department of Defense in those aspects of Operation Provide Comfort that are not directly related to the military mission of the Department of Defense.

(4) A plan establishing an exit strategy for United States involvement in, and support for, Operation Provide comfort.

(C) OPERATION PROVIDE COMFORT.-For purposes of this section, the term “Operation Provide Comfort” means the operation of the Department of Defense that as of October 30, 1995, is designated as Operation Provide Comfort. SEC. 1005. OPERATION ENHANCED SOUTHERN

WATCH. (a) AUTHORIZATION OF AMOUNTS AVAILABLE.—Within the total amounts authorized to be appropriated in titles III and IV, there is hereby authorized to be appropriated for fiscal year 1996 for costs associated with Operation Enhanced Southern Watch

(1) $433,400,000 for operation and maintenance costs; and

(2) $70,400,000 for incremental military personnel costs.

(b) REPORT.—(1) Of the amounts specified in subsection (a), not more than $250,000,000 may be obligated until the Secretary of Defense submits to the congressional defense committees a report designating Operation Enhanced Southern Watch, or significant elements thereof, as a forward presence operation for which funding should be budgeted as part of the annual defense budget process in the same manner as other activities of the Armed Forces involving forward presence or forward deployed forces.

(2) The report shall set forth the following:

(A) The expected duration and annual costs of the various elements of Operation Enhanced Southern Watch.

(B) Those elements of Operation Enhanced Southern Watch that are semi-permanent in nature and should be budgeted in the future as part of the annual defense budget process in the same manner as other activities of the Armed Forces involving forward presence or forward deployed forces.

(C) The political and military objectives associated with Operation Enhanced Southern Watch.

(D) The contributions (both in-kind and actual) by other nations to the costs of conducting Operation Enhanced Southern Watch.

(C) OPERATION ENHANCED SOUTHERN WATCH.—For purposes of this section, the term “Operation Enhanced Southern Watch” means the operation of the Department of

Defense that as of October 30, 1995, is des-
ignated as Operation Enhanced Southern
Watch.
SEC. 1006. AUTHORITY FOR OBLIGATION OF

CERTAIN UNAUTHORIZED FISCAL
YEAR 1995 DEFENSE APPROPRIA-

TIONS. (a) AUTHORITY.—The amounts described in subsection (b) may be obligated and expended for programs, projects, and activities of the Department of Defense in accordance with fiscal year 1995 defense appropriations.

(b) COVERED AMOUNTS.—The amounts referred to in subsection (a) are the amounts provided for programs, projects, and activities of the Department of Defense in fiscal year 1995 defense appropriations that are in excess of the amounts provided for such programs, projects, and activities in fiscal year 1995 defense authorizations.

(C) DEFINITIONS.—For the purposes of this section:

(1) FISCAL YEAR 1995 DEFENSE APPROPRIATIONS.—The term “fiscal year 1995 defense appropriations” means amounts appropriated or otherwise made available to the Department of Defense for fiscal year 1995 in the Department of Defense Appropriations Act, 1995 (Public Law 103–335).

(2) FISCAL YEAR 1995 DEFENSE AUTHORIZATIONS.-The term “fiscal year 1995 defense authorizations” means amounts authorized to be appropriated for the Department of Defense for fiscal year 1995 in the National Defense Authorization Act for Fiscal Year 1995 (Public Law 103–337). SEC. 1007. AUTHORIZATION OF PRIOR EMER

GENCY SUPPLEMENTAL APPROPRIA

TIONS FOR FISCAL YEAR 1995. (a) ADJUSTMENT TO PREVIOUS AUTHORIZATIONS.—Amounts authorized to be appropriated to the Department of Defense for fiscal year 1995 in the National Defense Authorization Act for Fiscal Year 1995 (Public Law 103–337) are hereby adjusted, with respect to any such authorized amount, by the amount by which appropriations pursuant to such authorization were increased (by a supplemental appropriation) or decreased (by a rescission), or both, in title I of the Emergency Supplemental Appropriations and Rescissions for the Department of Defense to Preserve and Enhance Military Readiness Act of 1995 (Public Law 104–6; 109 Stat. 73).

(b) NEW AUTHORIZATION.—The appropriation provided in section 104 of such Act (109 Stat. 79) is hereby authorized. SEC. 1008. AUTHORIZATION REDUCTIONS TO RE

FLECT SAVINGS FROM REVISED

ECONOMIC ASSUMPTIONS. (a) REDUCTION.—The total amount authorized to be appropriated in titles I, II, and III of this Act is hereby reduced by $832,000,000 to reflect savings from revised economic assumptions. Such reduction shall be made from accounts in those titles as follows:

Operation and Maintenance, Army, $54,000,000.

Operation and Maintenance, Navy, $80,000,000.

Operation and Maintenance, Marine Corps, $9,000,000.

Operation and Maintenance, Air Force, $51,000,000.

Operation and Maintenance, Defense-Wide, $36,000,000.

Operation and Maintenance, Army Reserve, $4,000,000.

Operation and Maintenance, Navy Reserve, $4,000,000.

Operation and Maintenance, Marine Corps Reserve, $1,000,000.

Operation and Maintenance, Air Force Reserve, $3,000,000.

Operation and Maintenance, Army National Guard, $7,000,000.

Operation and Maintenance, Air National Guard, $7,000,000.

Drug Interdiction and Counter-Drug ACtivities, Defense, $5,000,000.

Environmental Restoration, Defense, $11,000,000.

Overseas Humanitarian, Disaster, and Civic Aid, $1,000,000.

Former Soviet Union Threat Reduction, $2.000.000.

Defense Health Program, $51,000,000.
Aircraft Procurement, Army, $9,000,000.
Missile Procurement, Army, $5,000,000.

Procurement of Weapons and Tracked Combat Vehicles, Army, $10,000,000.

Procurement of Ammunition, Army, $6,000,000.

Other Procurement, Army, $17,000,000.
Aircraft Procurement, Navy, $29,000,000.
Weapons Procurement, Navy, $13,000,000.

Shipbuilding and Conversion, Navy, $42.000.000.

Other Procurement, Navy, $18,000,000.
Procurement, Marine Corps, $4,000,000.

Aircraft Procurement, Air Force, $50,000,000.

Missile Procurement, Air Force, $29,000,000. Other Procurement, Air Force, $45,000,000. Procurement, Defense-Wide, $16,000,000.

Chemical Agents and Munitions Destruction, Defense, $5,000,000.

Research, Development, Test and Evaluation, Army, $20,000,000.

Research, Development, Test and Evaluation, Navy, $50,000,000.

Research, Development, Test and Evaluation, Air Force, $79,000,000.

Research, Development, Test and Evaluation, Defense-Wide, $57,000,000.

Research, Development, Test and Evaluation, Defense, $2,000,000.

(b) REDUCTIONS TO BE APPLIED PROPORTIONALLY-Reductions under this section shall be applied proportionally to each budget activity, activity group, and subactivity group and to each program, project, and activity within each account.

Subtitle B-Naval Vessels and Shipyards SEC. 1011. IOWA CLASS BATTLESHIPS.

(a) RETURN TO NAVAL VESSEL REGISTER.The Secretary of the Navy shall list on the Naval Vessel Register, and maintain on such register, at least two of the Iowa-class battleships that were stricken from the register in February 1995.

(b) SUPPORT.-The Secretary shall retain the existing logistical support necessary for support of at least two operational Iowa class battleships in active service, including technical manuals, repair and replacement parts, and ordnance.

(C) SELECTION OF SHIPS.—The Secretary shall select for listing on the Naval Vessel Register under subsection (a) Iowa class battleships that are in good material condition and can provide adequate fire support for an amphibious assault.

(d) REPLACEMENT FIRE-SUPPORT CAPABILITY.-(1) If the Secretary of the Navy makes a certification described in paragraph (2), the requirements of subsections (a) and (b) shall terminate, effective 60 days after the date of the submission of such certification.

(2) A certification referred to in paragraph (1) is a certification submitted by the Secretary of the Navy in writing to the Committee on Armed Services of the Senate and the Committee on National Security of the House of Representatives that the Navy has within the fleet an operational surface firesupport capability that equals or exceeds the fire-support capability that the Iowa class battleships listed on the Naval Vessel Register pursuant to subsection (a) would, if in active service, be able to provide for Marine Corps amphibious assaults and operations ashore. SEC. 1012. TRANSFER OF NAVAL VESSELS TO CERTAIN

FOREIGN COUNTRIES. (a) TRANSFERS BY GRANT.—The Secretary of the Navy is authorized to transfer on a

grant basis under section 516 of the Foreign Assistance Act of 1961 (22 U.S.C. 2321j) frigates of the Oliver Hazard Perry class to other countries as follows:

(1) To the Government of Bahrain, the guided missile frigate Jack Williams (FFG 24).

(2) To the Government of Egypt, the frigate Copeland (FFG 25).

(3) To the Government of Turkey, the frigates Clifton Sprague (FFG 16) and Antrim (FFG 20).

(b) TRANSFERS BY LEASE OR SALE.—The Secretary of the Navy is authorized to transfer on a lease basis under section 61 of the Arms Export Control Act (22 U.S.C. 2796) or on a sale basis under section 21 of the Arms Export Control Act (22 U.S.C. 2761) frigates of the Oliver Hazard Perry class to other countries as follows:

(1) To the Government of Egypt, the frigate Duncan (FFG 10).

(2) To the Government of Oman, the guided missile frigate Mahlon S. Tisdale (FFG 27).

(3) To the Government of Turkey, the frigate Flatley (FFG 21).

(4) To the Government of the United Arab Emirates, the guided missile frigate Gallery (FFG 26).

(c) FINANCING FOR TRANSFERS BY LEASE.Section 23 of the Arms Export Control Act (22 U.S.C. 2763) may be used to provide financing for any transfer by lease under subsection (b) in the same manner as if such transfer were a procurement by the recipient nation of a defense article.

(d) COSTS OF TRANSFERS.—Any expense incurred by the United States in connection with a transfer authorized by subsection (a) or (b) shall be charged to the recipient.

(e) EXPIRATION OF AUTHORITY.—The authority to transfer a vessel under subsection (a) and under subsection (b) shall expire at the end of the two-year period beginning on the date of the enactment of this Act, except that a lease entered into during that period under any provision of subsection (b) may be renewed.

(f) REPAIR AND REFURBISHMENT IN UNITED STATES SHIPYARDS.-The Secretary of the Navy shall require, as a condition of the transfer of a vessel under this section, that the country to which the vessel is transferred have such repair or refurbishment of the vessel as is needed, before the vessel joins the naval forces of that country, performed at a shipyard located in the United States, including a United States Navy shipyard.

(8) PROHIBITION ON CERTAIN TRANSFERS OF VESSELS ON GRANT BASIS.-(1) Section 516 of the Foreign Assistance Act of 1961 (22 U.S.C. 2321j) is amended by adding at the end the following new subsection:

“(g) PROHIBITION ON CERTAIN TRANSFERS OF VESSELS ON GRANT BASIS.—(1) The President may not transfer on a grant basis under this section a vessel that is in excess of 3,000 tons or that is less than 20 years of age.

“(2) If the President determines that it is in the national security interests of the United States to transfer a particular vessel on a grant basis under this section, the President may request that Congress enact legislation exempting the transfer from the prohibition in paragraph (1).”.

(2) The amendment made by paragraph (1) shall apply with respect to the transfer of a vessel on or after the date of the enactment of this Act (other than a vessel the transfer of which is authorized by subsection (a) or by law before the date of the enactment of this Act). SEC. 1013. CONTRACT OPTIONS FOR LMSR VES

SELS. (a) FINDINGS.-Congress makes the following findings:

(1) A requirement for the Department of the Navy to acquire 19 large, medium-speed, roll-on/roll-off (LMSR) vessels was established by the Secretary of Defense in the Mobility Requirements Study conducted after the sian Gulf War pursuant to section 909 of the National Defense Authorization Act for Fiscal Year 1991 (Public Law 101-510; 104 Stat. 1623) and was revalidated by the Secretary of Defense in the report entitled "Mobility Requirements Study Bottom-Up Review Update”, submitted to Congress in April 1995.

(2) The Strategic Sealift Program is a vital element of the national military strategy calling for the Nation to be able to fight and win two nearly simultaneous major regional contingencies.

(3) The Secretary of the Navy has entered into contracts with shipyards covering acquisition of a total of 17 such LMSR vessels, of which five are vessel conversions and 12 are new construction vessels. Under those contracts, the Secretary has placed orders for the acquisition of 11 vessels and has options for the acquisition of six more, all of which would be new construction vessels. The options allow the Secretary to place orders for one vessel to be constructed at each of two shipyards for award before December 31, 1995, December 31, 1996, and December 31, 1997, respectively.

(4) Acquisition of an additional two such LMSR vessels, for a total of 19 vessels (the requirement described in paragraph (1)) would contribute to preservation of the industrial base of United States shipyards capable of building auxiliary and sealift vessels.

(b) SENSE OF CONGRESS.-It is the sense of Congress that the Secretary of the Navy should plan for, and budget to provide for, the acquisition as soon as possible of a total of 19 large, medium-speed, roll-on/roll-off (LMSR) vessels (the number determined to be required in the Mobility Requirements Study referred to in subsection (a)(1)), rather than only 17 such vessels (the number of vessels under contract as of May 1995).

(c) ADDITIONAL NEW CONSTRUCTION CONTRACT OPTION.—The Secretary of the Navy should negotiate with each of the two shipyards holding new construction contracts referred to in subsection (a)(3) (Department of the Navy contracts numbered N00024–93-C2203 and N00024–93–C-2205) for an option under each such contract for construction of one additional such LMSR vessel, with such option to be available to the Secretary for exercise during 1995, 1996, or 1997, subject to the availability of funds authorized and appropriated for such purpose. Nothing in this subsection shall be construed to preclude the Secretary of the Navy from competing the award of the two options between the two shipyards holding new construction contracts referred to in subsection (a)(3).

(d) REPORT.-The Secretary of the Navy shall submit to the congressional defense committees, by March 31, 1996, a report stating the intentions of the Secretary regarding the acquisition of options for the construction of two additional LMSR vessels as described in subsection (c). SEC. 1014. NATIONAL DEFENSE RESERVE FLEET.

(a) AVAILABILITY OF NATIONAL DEFENSE SEALIFT FUND.-Section 2218 of title 10, United States Code, is amended

(1) in subsection (c)(1)

(A) by striking out “only for—” in the matter preceding subparagraph (A) and inserting in lieu thereof “only for the following purposes:");

(B) by capitalizing the first letter of the first word of subparagraphs (A), (B), (C), and (D);

(C) by striking out the semicolon at the end of subparagraphs (A) and (B) and inserting in lieu thereof a period;

(D) by striking out "; and” at the end of subparagraph (C) and inserting in lieu thereof a period; and

(E) by adding at the end the following new subparagraph:

"(E) Expenses for maintaining the National Defense Reserve Fleet under section 11 of the Merchant Ship Sales Act of 1946 (50 U.S.C. App. 1744), and for the costs of acquisition of vessels for, and alteration and conversion of vessels in (or to be placed in), the fleet, but only for vessels built in United States shipyards."; and

(2) in subsection (i), by inserting “(other than subsection (c)(1)(E))" after "Nothing in this section”.

(b) CLARIFICATION OF EXEMPTION OF NDRF VESSELS FROM RETROFIT REQUIREMENT.-Section 11 of the Merchant Ship Sales Act of 1946 (50 U.S.C. App. 1744) is amended by adding at the end the following new subsection:

"(e) Vessels in the National Defense Reserve Fleet are exempt from the provisions of section 3703a of title 46, United States Code.”.

(c) AUTHORITY TO USE NATIONAL DEFENSE SEALIFT FUND TO CONVERT TWO VESSELS.-Of the amount authorized to be appropriated in section 302 for fiscal year 1996 for the National Defense Sealift Fund under section 2218 of title 10, United States Code, not more than $20,000,000 shall be available for conversion work on the following two roll-on/rolloff vessels, which were acquired by the Maritime Administration during fiscal year 1995:

(1) M/V Cape Knox (ON-1036323).

(2) M/V Cape Kennedy (ON-1036324). SEC. 1015. NAVAL SALVAGE FACILITIES.

Chapter 637 of title 10, United States Code, is amended to read as follows:

“CHAPTER 637-SALVAGE FACILITIES “Sec. "7361. Authority to provide for necessary

salvage facilities. "7362. Acquisition and transfer of vessels and

equipment. "7363. Settlement of claims. “7364. Disposition of receipts. "7361. Authority to provide for necessary salvage facilities

“(a) AUTHORITY.—The Secretary of the Navy may provide, by contract or otherwise, necessary salvage facilities for public and private vessels.

“(b) COORDINATION WITH SECRETARY OF TRANSPORTATION.—The Secretary shall submit to the Secretary of Transportation for comment each proposed contract for salvage facilities that affects the interests of the Department of Transportation.

"(c) LIMITATION.—The Secretary of the Navy may enter into a term contract under subsection (a) only if the Secretary determines that available commercial salvage facilities are inadequate to meet the requirements of national defense.

“(d) PUBLIC NOTICE.—The Secretary may not enter into a contract under subsection (a) until the Secretary has provided public notice of the intent to enter into such a contract. “8 7362. Acquisition and transfer of vessels

and equipment

“(a) AUTHORITY.–The Secretary of the Navy may acquire or transfer for operation by private salvage companies such vessels and equipment as the Secretary considers necessary.

“(b) AGREEMENT ON USE.—Before any salvage vessel or salvage gear is transferred by the Secretary to a private party, the private party must agree in writing with the Secretary that the vessel or gear will be used to support organized offshore salvage facilities for a period of as many years as the Secretary considers appropriate.

“(C) REFERENCE TO AUTHORITY TO ADVANCE FUNDS FOR IMMEDIATE SALVAGE OPER

ATIONS.—For authority for the Secretary of the Navy to advance to private salvage companies such funds as the Secretary considers necessary to provide for the immediate financing of salvage operations, see section 2307(g)(2) of this title. “8 7363. Settlement of claims

“The Secretary of the Navy may settle any claim by the United States for salvage services rendered by the Department of the Navy and may receive payment of any such claim. "§ 7364. Disposition of receipts

“Amounts received under this chapter shall be credited to appropriations for maintaining naval salvage facilities. However, any amount received under this chapter in any fiscal year in excess of naval salvage costs incurred by the Navy during that fiscal year shall be deposited into the general fund of the Treasury.”. SEC. 1016. VESSELS SUBJECT TO REPAIR UNDER

PHASED MAINTENANCE CONTRACTS. (a) IN GENERAL.—The Secretary of the Navy shall ensure that any vessel that is covered by the contract referred to in subsection (b) remains covered by that contract, regardless of the operating command to which the vessel is subsequently assigned, unless the vessel is taken out of service for the Department of the Navy.

(b) COVERED CONTRACT.—The contract referred to in subsection (a) is the contract entered into before the date of the enactment of this Act for the phased maintenance of AE class ships. SEC. 1017. CLARIFICATION OF REQUIREMENTS

RELATING TO REPAIRS OF VESSELS. Section 7310(a) of title 10, United States Code, is amended by inserting or Guam" after “the United States” the second place it appears. SEC. 1018. SENSE OF CONGRESS CONCERNING

NAMING OF AMPHIBIOUS SHIPS. It is the sense of Congress that the Secretary of the Navy

(1) should name the vessel to be designated LHD-7 as the U.S.S. Iwo Jima; and

(2) should name the vessel to be designated LPD-17, and each subsequent ship of the LPD-17 class, after a Marine Corps battle or a member of the Marine Corps. SEC. 1019. SENSE OF CONGRESS CONCERNING NAMING

OF

NAVAL VESSEL. It is the sense of Congress that the Secretary of the Navy should name an appropriate ship of the United States Navy the U.S.S. Joseph Vittori, in honor of Marine Corporal Joseph Vittori (1929-1951) of Beverly, Massachusetts, who was posthumously awarded the Medal of Honor for actions against the enemy in Korea on September 15–16, 1951. SEC. 1020. TRANSFER OF RIVERINE PATROL

CRAFT. (a) AUTHORITY TO TRANSFER VESSEL.-Notwithstanding subsections (a) and (d) of section 7306 of title 10, United States Code, but subject to subsections (b) and (c) of that section, the Secretary of the Navy may transfer a vessel described in subsection (b) to Tidewater Community College, Portsmouth, Virginia, for scientific and educational purposes.

(b) VESSEL.-The authority under subsection (a) applies in the case of a riverine patrol craft of the U.S.S. Swift class.

(c) LIMITATION.—The transfer authorized by subsection (a) may be made only if the Secretary determines that the vessel to be transferred is of no further use to the United States for national security purposes.

(d) TERMS AND CONDITIONS.—The Secretary may require such terms and conditions in connection with the transfer authorized by this section as the Secretary considers appropriate.

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