-CITE-
    10 USC CHAPTER 434 - ARMAMENTS INDUSTRIAL BASE              01/03/2007

-EXPCITE-
    TITLE 10 - ARMED FORCES
    Subtitle B - Army
    PART IV - SERVICE, SUPPLY, AND PROCUREMENT
    CHAPTER 434 - ARMAMENTS INDUSTRIAL BASE

-HEAD-
                  CHAPTER 434 - ARMAMENTS INDUSTRIAL BASE              

-MISC1-
    Sec.                                                     
    4551.       Definitions.                                          
    4552.       Policy.                                               
    4553.       Armament Retooling and Manufacturing Support
                 Initiative.                                          
    4554.       Property management contracts and leases.             
    4555.       ARMS Initiative loan guarantee program.               

-End-



-CITE-
    10 USC Sec. 4551                                            01/03/2007

-EXPCITE-
    TITLE 10 - ARMED FORCES
    Subtitle B - Army
    PART IV - SERVICE, SUPPLY, AND PROCUREMENT
    CHAPTER 434 - ARMAMENTS INDUSTRIAL BASE

-HEAD-
    Sec. 4551. Definitions

-STATUTE-
      In this chapter:
        (1) The term "ARMS Initiative" means the Armament Retooling and
      Manufacturing Support Initiative authorized by this chapter.
        (2) The term "eligible facility" means a Government-owned,
      contractor-operated ammunition manufacturing facility, or a
      Government-owned, contractor-operated depot for the storage,
      maintenance, renovation, or demilitarization of ammunition, of
      the Department of the Army that is in an active, inactive,
      layaway, or caretaker status.
        (3) The term "property manager" includes any person or entity
      managing an eligible facility made available under the ARMS
      Initiative through a property management contract.
        (4) The term "property management contract" includes facility
      use contracts, site management contracts, leases, and other
      agreements entered into under the authority of this chapter.
        (5) The term "Secretary" means the Secretary of the Army.

-SOURCE-
    (Added Pub. L. 106-398, Sec. 1 [[div. A], title III, Sec.
    344(a)(1)], Oct. 30, 2000, 114 Stat. 1654, 1654A-67; amended Pub.
    L. 109-163, div. A, title III, Sec. 323(a), Jan. 6, 2006, 119 Stat.
    3193.)


-MISC1-
                                AMENDMENTS                            
      2006 - Par. (2). Pub. L. 109-163, Sec. 323(a), inserted ", or a
    Government-owned, contractor-operated depot for the storage,
    maintenance, renovation, or demilitarization of ammunition," after
    "manufacturing facility".

                    ARSENAL SUPPORT PROGRAM INITIATIVE                
      Pub. L. 106-398, Sec. 1 [[div. A], title III, Sec. 343], Oct. 30,
    2000, 114 Stat. 1654, 1654A-65, as amended by Pub. L. 107-314, div.
    A, title III, Sec. 362, Dec. 2, 2002, 116 Stat. 2519; Pub. L. 108-
    375, div. A, title III, Sec. 342, Oct. 28, 2004, 118 Stat. 1857,
    provided that:
      "(a) Demonstration Program Required. - To help maintain the
    viability of the Army manufacturing arsenals and the unique
    capabilities of these arsenals to support the national security
    interests of the United States, the Secretary of the Army shall
    carry out a demonstration program under this section during fiscal
    years 2001 through 2008 at each manufacturing arsenal of the
    Department of the Army.
      "(b) Purposes of Demonstration Program. - The purposes of the
    demonstration program are as follows:
        "(1) To provide for the utilization of the existing skilled
      workforce at the Army manufacturing arsenals by commercial firms.
        "(2) To provide for the reemployment and retraining of skilled
      workers who, as a result of declining workload and reduced Army
      spending on arsenal production requirements at these Army
      arsenals, are idled or underemployed.
        "(3) To encourage commercial firms, to the maximum extent
      practicable, to use these Army arsenals for commercial purposes.
        "(4) To increase the opportunities for small businesses
      (including socially and economically disadvantaged small business
      concerns and new small businesses) to use these Army arsenals for
      those purposes.
        "(5) To maintain in the United States a work force having the
      skills in manufacturing processes that are necessary to meet
      industrial emergency planned requirements for national security
      purposes.
        "(6) To demonstrate innovative business practices, to support
      Department of Defense acquisition reform, and to serve as both a
      model and a laboratory for future defense conversion initiatives
      of the Department of Defense.
        "(7) To the maximum extent practicable, to allow the operation
      of these Army arsenals to be rapidly responsive to the forces of
      free market competition.
        "(8) To reduce or eliminate the cost of Government ownership of
      these Army arsenals, including the costs of operations and
      maintenance, the costs of environmental remediation, and other
      costs.
        "(9) To reduce the cost of products of the Department of
      Defense produced at these Army arsenals.
        "(10) To leverage private investment at these Army arsenals
      through long-term facility use contracts, property management
      contracts, leases, or other agreements that support and advance
      the demonstration program for the following activities:
          "(A) Recapitalization of plant and equipment.
          "(B) Environmental remediation.
          "(C) Promotion of commercial business ventures.
          "(D) Other activities approved by the Secretary of the Army.
        "(11) To foster cooperation between the Department of the Army,
      property managers, commercial interests, and State and local
      agencies in the implementation of sustainable development
      strategies and investment in these Army arsenals.
      "(c) Contract Authority. - (1) In the case of each Army
    manufacturing arsenal, the Secretary of the Army may enter into
    contracts with commercial firms to authorize the contractors,
    consistent with section 4543 of title 10, United States Code - 
        "(A) to use the arsenal, or a portion of the arsenal, and the
      skilled workforce at the arsenal to manufacture weapons, weapon
      components, or related products consistent with the purposes of
      the program; and
        "(B) to enter into subcontracts for the commercial use of the
      arsenal consistent with such purposes.
      "(2) A contract under paragraph (1) shall require the contractor
    to contribute toward the operation and maintenance of the Army
    manufacturing arsenal covered by the contract.
      "(3) In the event an Army manufacturing arsenal is converted to
    contractor operation, the Secretary may enter into a contract with
    the contractor to authorize the contractor, consistent with section
    4543 of title 10, United States Code - 
        "(A) to use the facility during the period of the program in a
      manner consistent with the purposes of the program; and
        "(B) to enter into subcontracts for the commercial use of the
      facility consistent with such purposes.
      "(d) Loan Guarantees. - (1) Subject to paragraph (2), the
    Secretary of the Army may guarantee the repayment of any loan made
    to a commercial firm to fund, in whole or in part, the
    establishment of a commercial activity at an Army manufacturing
    arsenal under this section.
      "(2) Loan guarantees under this subsection may not be committed
    except to the extent that appropriations of budget authority to
    cover their costs are made in advance, as required by section 504
    of the Federal Credit Reform Act of 1990 (2 U.S.C. 661c).
      "(3) The Secretary of the Army may enter into agreements with the
    Administrator of the Small Business Administration or the
    Administrator of the Farmers Home Administration, the Administrator
    of the Rural Development Administration, or the head of other
    appropriate agencies of the Department of Agriculture, under which
    such Administrators may, under this subsection - 
        "(A) process applications for loan guarantees;
        "(B) guarantee repayment of loans; and
        "(C) provide any other services to the Secretary of the Army to
      administer this subsection.
      "(4) An Administrator referred to in paragraph (3) may guarantee
    loans under this section to commercial firms of any size,
    notwithstanding any limitations on the size of applicants imposed
    on other loan guarantee programs that the Administrator
    administers. To the extent practicable, each Administrator shall
    use the same procedures for processing loan guarantee applications
    under this subsection as the Administrator uses for processing loan
    guarantee applications under other loan guarantee programs that the
    Administrator administers.
      "(e) Loan Limits. - The maximum amount of loan principal
    guaranteed during a fiscal year under subsection (d) may not exceed
    - 
        "(1) $20,000,000, with respect to any single borrower; and
        "(2) $320,000,000 with respect to all borrowers.
      "(f) Transfer of Funds. - The Secretary of the Army may transfer
    to an Administrator providing services under subsection (d), and
    the Administrator may accept, such funds as may be necessary to
    administer loan guarantees under such subsection.
      "(g) Reporting Requirements. - (1) Not later than July 1 of each
    year in which a guarantee issued under subsection (d) is in effect,
    the Secretary of the Army shall submit to Congress a report
    specifying the amounts of loans guaranteed under such subsection
    during the preceding calendar year. No report is required after
    fiscal year 2008.
      "(2) Not later than July 1, 2007, the Secretary of the Army shall
    submit to the congressional defense committees [Committees on Armed
    Services and Appropriations of the Senate and the House of
    Representatives] a report on the results of the demonstration
    program since its implementation, including the Secretary's views
    regarding the benefits of the program for Army manufacturing
    arsenals and the Department of the Army and the success of the
    program in achieving the purposes specified in subsection (b). The
    report shall contain a comprehensive review of contracting at the
    Army manufacturing arsenals covered by the program and such
    recommendations as the Secretary considers appropriate regarding
    changes to the program."

-End-



-CITE-
    10 USC Sec. 4552                                            01/03/2007

-EXPCITE-
    TITLE 10 - ARMED FORCES
    Subtitle B - Army
    PART IV - SERVICE, SUPPLY, AND PROCUREMENT
    CHAPTER 434 - ARMAMENTS INDUSTRIAL BASE

-HEAD-
    Sec. 4552. Policy

-STATUTE-
      It is the policy of the United States - 
        (1) to encourage, to the maximum extent practicable, commercial
      firms to use Government-owned, contractor-operated ammunition
      manufacturing, storage, maintenance, renovation, and
      demilitarization facilities of the Department of the Army;
        (2) to use such facilities for supporting programs, projects,
      policies, and initiatives that promote competition in the private
      sector of the United States economy and that advance United
      States interests in the global marketplace;
        (3) to increase the manufacture of products inside the United
      States;
        (4) to support policies and programs that provide manufacturers
      with incentives to assist the United States in making more
      efficient and economical use of eligible facilities for
      commercial purposes;
        (5) to provide, as appropriate, small businesses (including
      socially and economically disadvantaged small business concerns
      and new small businesses) with incentives that encourage those
      businesses to undertake manufacturing and other industrial
      processing activities that contribute to the prosperity of the
      United States;
        (6) to encourage the creation of jobs through increased
      investment in the private sector of the United States economy;
        (7) to foster a more efficient, cost-effective, and adaptable
      armaments industry in the United States;
        (8) to achieve, with respect to armaments manufacturing,
      storage, maintenance, renovation, and demilitarization capacity,
      an optimum level of readiness of the national technology and
      industrial base within the United States that is consistent with
      the projected threats to the national security of the United
      States and the projected emergency requirements of the armed
      forces; and
        (9) to encourage facility use contracting where feasible.

-SOURCE-
    (Added Pub. L. 106-398, Sec. 1 [[div. A], title III, Sec.
    344(a)(1)], Oct. 30, 2000, 114 Stat. 1654, 1654A-67; amended Pub.
    L. 109-163, div. A, title III, Sec. 323(c), Jan. 6, 2006, 119 Stat.
    3194.)


-MISC1-
                                AMENDMENTS                            
      2006 - Pars. (1), (8). Pub. L. 109-163 inserted ", storage,
    maintenance, renovation, and demilitarization" after
    "manufacturing".

-End-



-CITE-
    10 USC Sec. 4553                                            01/03/2007

-EXPCITE-
    TITLE 10 - ARMED FORCES
    Subtitle B - Army
    PART IV - SERVICE, SUPPLY, AND PROCUREMENT
    CHAPTER 434 - ARMAMENTS INDUSTRIAL BASE

-HEAD-
    Sec. 4553. Armament Retooling and Manufacturing Support Initiative

-STATUTE-
      (a) Authority for Initiative. - The Secretary may carry out a
    program to be known as the "Armament Retooling and Manufacturing
    Support Initiative".
      (b) Purposes. - The purposes of the ARMS Initiative are as
    follows:
        (1) To encourage commercial firms, to the maximum extent
      practicable, to use eligible facilities for commercial purposes.
        (2) To increase the opportunities for small businesses
      (including socially and economically disadvantaged small business
      concerns and new small businesses) to use eligible facilities for
      those purposes.
        (3) To maintain in the United States a work force having the
      skills necessary to meet industrial emergency planned
      requirements for national security purposes.
        (4) To demonstrate innovative business practices, to support
      Department of Defense acquisition reform, and to serve as both a
      model and a laboratory for future defense conversion initiatives
      of the Department of Defense.
        (5) To the maximum extent practicable, to allow the operation
      of eligible facilities to be rapidly responsive to the forces of
      free market competition.
        (6) To reduce or eliminate the cost of Government ownership of
      eligible facilities, including the costs of operations and
      maintenance, the costs of environmental remediation, and other
      costs.
        (7) To reduce the cost of products of the Department of Defense
      produced at eligible facilities.
        (8) To leverage private investment at eligible facilities
      through long-term facility use contracts, property management
      contracts, leases, or other agreements that support and advance
      the policies and purposes of this chapter, for the following
      activities:
          (A) Recapitalization of plant and equipment.
          (B) Environmental remediation.
          (C) Promotion of commercial business ventures.
          (D) Other activities approved by the Secretary.

        (9) To foster cooperation between the Department of the Army,
      property managers, commercial interests, and State and local
      agencies in the implementation of sustainable development
      strategies and investment in eligible facilities made available
      for purposes of the ARMS Initiative.
        (10) To reduce or eliminate the cost of asset disposal that
      would be incurred if property at an eligible facility was
      declared excess to the needs of the Department of the Army.

      (c) Availability of Facilities. - The Secretary may make any
    eligible facility available for the purposes of the ARMS
    Initiative.
      (d) Consideration for Leases. - Section 1302 of title 40 shall
    not apply to uses of property or facilities in accordance with the
    ARMS Initiative.
      (e) Program Support. - (1) Funds appropriated for purposes of the
    ARMS Initiative may be used for administrative support and
    management.
      (2) A full annual accounting of such expenses for each fiscal
    year shall be provided to the Committee on Armed Services and the
    Committee on Appropriations of the Senate and the Committee on
    Armed Services and the Committee on Appropriations of the House of
    Representatives not later than March 30 of the following fiscal
    year.

-SOURCE-
    (Added Pub. L. 106-398, Sec. 1 [[div. A], title III, Sec.
    344(a)(1)], Oct. 30, 2000, 114 Stat. 1654, 1654A-68; amended Pub.
    L. 108-178, Sec. 4(b)(5), Dec. 15, 2003, 117 Stat. 2641; Pub. L.
    109-163, div. A, title III, Sec. 323(d), Jan. 6, 2006, 119 Stat.
    3194.)


-MISC1-
                                AMENDMENTS                            
      2006 - Subsec. (b)(3). Pub. L. 109-163 struck out "in
    manufacturing processes that are" after "having the skills".
      2003 - Subsec. (d). Pub. L. 108-178 substituted "Section 1302 of
    title 40" for "Section 321 of the Act of June 30, 1932 (40 U.S.C.
    303b),".

                     EFFECTIVE DATE OF 2003 AMENDMENT                 
      Amendment by Pub. L. 108-178 effective Aug. 21, 2002, see section
    5 of Pub. L. 108-178, set out as a note under section 5334 of Title
    5, Government Organization and Employees.

-End-



-CITE-
    10 USC Sec. 4554                                            01/03/2007

-EXPCITE-
    TITLE 10 - ARMED FORCES
    Subtitle B - Army
    PART IV - SERVICE, SUPPLY, AND PROCUREMENT
    CHAPTER 434 - ARMAMENTS INDUSTRIAL BASE

-HEAD-
    Sec. 4554. Property management contracts and leases

-STATUTE-
      (a) In General. - In the case of each eligible facility that is
    made available for the ARMS Initiative, the Secretary - 
        (1) shall make full use of facility use contracts, leases, and
      other such commercial contractual instruments as may be
      appropriate;
        (2) shall evaluate, on the basis of efficiency, cost, emergency
      mobilization requirements, and the goals and purposes of the ARMS
      Initiative, the procurement of services from the property
      manager, including maintenance, operation, modification,
      infrastructure, environmental restoration and remediation, and
      disposal of ammunition manufacturing assets, and other services;
      and
        (3) may, in carrying out paragraphs (1) and (2) - 
          (A) enter into contracts, and provide for subcontracts, for
        terms up to 25 years, as the Secretary considers appropriate
        and consistent with the needs of the Department of the Army and
        the goals and purposes of the ARMS Initiative; and
          (B) use procedures that are authorized to be used under
        section 2304(c)(5) of this title when the contractor or
        subcontractor is a source specified in law.

      (b) Consideration for Use. - (1) To the extent provided in a
    contract entered into under this section for the use of property at
    an eligible facility that is accountable under the contract, the
    Secretary may accept consideration for such use that is, in whole
    or in part, in a form other than - 
        (A) rental payments; or
        (B) revenue generated at the facility.

      (2) Forms of consideration acceptable under paragraph (1) for a
    use of an eligible facility or any property at an eligible facility
    include the following:
        (A) The improvement, maintenance, protection, repair, and
      restoration of the facility, the property, or any property within
      the boundaries of the installation where the facility is located.
        (B) Reductions in overhead costs.
        (C) Reductions in product cost.
        (D) The demilitarization and storage of conventional
      ammunition.

      (3) The authority under paragraph (1) may be exercised without
    regard to section 3302(b) of title 31 and any other provision of
    law.

-SOURCE-
    (Added Pub. L. 106-398, Sec. 1 [[div. A], title III, Sec.
    344(a)(1)], Oct. 30, 2000, 114 Stat. 1654, 1654A-69; amended Pub.
    L. 109-163, div. A, title III, Sec. 323(b), Jan. 6, 2006, 119 Stat.
    3194.)


-MISC1-
                                AMENDMENTS                            
      2006 - Subsec. (b)(2)(D). Pub. L. 109-163 added subpar. (D).

                           IMPLEMENTATION REPORT                       
      Pub. L. 106-398, Sec. 1 [[div. A], title III, Sec. 344(b)], Oct.
    30, 2000, 114 Stat. 1654, 1654A-71, provided that, not later than
    July 1, 2001, the Secretary of Defense was to submit to the
    congressional defense committees a report on the procedures and
    controls implemented to carry out this section.

-End-



-CITE-
    10 USC Sec. 4555                                            01/03/2007

-EXPCITE-
    TITLE 10 - ARMED FORCES
    Subtitle B - Army
    PART IV - SERVICE, SUPPLY, AND PROCUREMENT
    CHAPTER 434 - ARMAMENTS INDUSTRIAL BASE

-HEAD-
    Sec. 4555. ARMS Initiative loan guarantee program

-STATUTE-
      (a) Program Authorized. - Subject to subsection (b), the
    Secretary may carry out a loan guarantee program to encourage
    commercial firms to use eligible facilities under this chapter.
    Under any such program, the Secretary may guarantee the repayment
    of any loan made to a commercial firm to fund, in whole or in part,
    the establishment of a commercial activity to use an eligible
    facility under this chapter.
      (b) Advanced Budget Authority. - Loan guarantees under this
    section may not be committed except to the extent that
    appropriations of budget authority to cover their costs are made in
    advance, as required by section 504 of the Federal Credit Reform
    Act of 1990 (2 U.S.C. 661c).
      (c) Program Administration. - (1) The Secretary may enter into an
    agreement with any of the officials named in paragraph (2) under
    which that official may, for the purposes of this section - 
        (A) process applications for loan guarantees;
        (B) guarantee repayment of loans; and
        (C) provide any other services to the Secretary to administer
      the loan guarantee program.

      (2) The officials referred to in paragraph (1) are as follows:
        (A) The Administrator of the Small Business Administration.
        (B) The head of any appropriate agency in the Department of
      Agriculture, including - 
          (i) the Administrator of the Farmers Home Administration; and
          (ii) the Administrator of the Rural Development
        Administration.

      (3) Each official authorized to do so under an agreement entered
    into under paragraph (1) may guarantee loans under this section to
    commercial firms of any size, notwithstanding any limitations on
    the size of applicants imposed on other loan guarantee programs
    that the official administers.
      (4) To the extent practicable, each official processing loan
    guarantee applications under this section pursuant to an agreement
    entered into under paragraph (1) shall use the same processing
    procedures as the official uses for processing loan guarantee
    applications under other loan guarantee programs that the official
    administers.
      (d) Loan Limits. - The maximum amount of loan principal
    guaranteed during a fiscal year under this section may not exceed -
    
        (1) $20,000,000, with respect to any single borrower; and
        (2) $320,000,000 with respect to all borrowers.

      (e) Transfer of Funds. - The Secretary may transfer to an
    official providing services under subsection (c), and that official
    may accept, such funds as may be necessary to administer the loan
    guarantee program under this section.

-SOURCE-
    (Added Pub. L. 106-398, Sec. 1 [[div. A], title III, Sec.
    344(a)(1)], Oct. 30, 2000, 114 Stat. 1654, 1654A-70.)

-End-