H. R. 1119—240
Sec. 1085. Sense of Congress on granting of statutory Federal charters.
Sec. 1086. Sense of Congress regarding military voting rights.
Sec. 1087. Designation of Bob Hope as an honorary veteran of the Armed Forces of
the United States.
Sec. 1088. Five-year extension of aviation insurance program.
Subtitle A—Financial Matters
SEC. 1001. TRANSFER AUTHORITY.
(a) AUTHORITY TO TRANSFER AUTHORIZATIONS.—(1) Upon deter-
mination 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 1998 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 pre-
pared by the committee of conference to accompany the conference
report on the bill H.R. 1119 of the One Hundred Fifth 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 pursu-
ant to an authorization contained in this Act that are made avail-
able 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.
H. R. 1119—241
SEC. 1003. AUTHORITY FOR OBLIGATION OF UNAUTHORIZED FISCAL
YEAR 1997 DEFENSE APPROPRIATIONS.
(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 1997
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 1997 defense appropria-
tions that are in excess of the amounts provided for such programs,
projects, and activities in fiscal year 1997 defense authorizations.
(c) DEFINITIONS.—For the purposes of this section:
(1) FISCAL YEAR 1997 DEFENSE APPROPRIATIONS.—The term
‘‘fiscal year 1997 defense appropriations’’ means amounts appro-
priated or otherwise made available to the Department of
Defense for fiscal year 1997 in the Department of Defense
Appropriations Act, 1997 (as contained in section 101(b) of
Public Law 104–208).
(2) FISCAL YEAR 1997 DEFENSE AUTHORIZATIONS.—The term
‘‘fiscal year 1997 defense authorizations’’ means amounts
authorized to be appropriated for the Department of Defense
for fiscal year 1997 in the National Defense Authorization
Act for Fiscal Year 1997 (Public Law 104–201).
SEC. 1004. AUTHORIZATION OF PRIOR EMERGENCY SUPPLEMENTAL
APPROPRIATIONS FOR FISCAL YEAR 1997.
Amounts authorized to be appropriated to the Department of
Defense for fiscal year 1997 in the National Defense Authorization
Act for Fiscal Year 1997 (Public Law 104–201) 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 the 1997 Emergency Supplemental Appropriations Act
for Recovery from Natural Disasters, and for Overseas Peacekeeping
Efforts, Including Those in Bosnia (Public Law 105–18).
SEC. 1005. INCREASE IN FISCAL YEAR 1996 TRANSFER AUTHORITY.
Section 1001(a)(2) of the National Defense Authorization Act
for Fiscal Year 1996 (Public Law 104–106; 100 Stat. 414) is amended
by striking out ‘‘$2,000,000,000’’ and inserting in lieu thereof
‘‘$3,100,000,000’’.
SEC. 1006. REVISION OF AUTHORITY FOR FISHER HOUSE TRUST
FUNDS.
(a) CORRECTION TO ELIMINATE USE OF TERM ASSOCIATED WITH
FUNDING AUTHORITIES.—Section 2221(c) of title 10, United States
Code, is amended by striking out ‘‘or maintenance’’ each place
it appears.
(b) CORPUS OF AIR FORCE TRUST FUND.—The Secretary of the
Air Force shall deposit in the Fisher House Trust Fund, Department
of the Air Force, an amount that the Secretary determines appro-
priate to establish the corpus of the fund.
SEC. 
1007. 
FLEXIBILITY 
IN 
FINANCING 
CLOSURE 
OF 
CERTAIN
OUTSTANDING CONTRACTS FOR WHICH A SMALL FINAL
PAYMENT IS DUE.
(a) CLOSURE OF OUTSTANDING CONTRACTS.—The Secretary of
Defense may make the final payment on a contract to which this
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section applies from the account established pursuant to subsection
(d).
(b) COVERED CONTRACTS.—This section applies to any contract
of the Department of Defense—
(1) that was entered into before December 5, 1990; and
(2) for which an unobligated balance of an appropriation
that had been initially applied to the contract was canceled
before December 5, 1990, pursuant to section 1552 of title
31, United States Code, as in effect before that date.
(c) AUTHORITY LIMITED TO SMALL FINAL PAYMENTS.—The Sec-
retary may use the authority provided by this section only for
a contract for which the amount of the final payment due is not
greater than the micro-purchase threshold (as defined in section
32 of the Office of Federal Procurement Policy Act (41 U.S.C.
428)).
(d) ACCOUNT.—The Secretary may establish an account for
the purposes of this section. The Secretary may from time to time
transfer into the account, from funds made available to the Depart-
ment of Defense for procurement or for research, development,
test, and evaluation, such amounts as the Secretary determines
to be needed for the purposes of the account, except that the
total of such transfers may not exceed $1,000,000. Amounts in
the account may be used only for the purposes of this section.
(e) CLOSURE
OF ACCOUNT.—When the Secretary determines
that all contracts to which this section applies have been closed
and there is no further need for the account established under
subsection (d), the Secretary shall close the account. Any amounts
remaining in the account shall be covered into the Treasury as
miscellaneous receipts.
SEC. 1008. BIENNIAL FINANCIAL MANAGEMENT IMPROVEMENT PLAN.
(a) BIENNIAL PLAN.—(1) Chapter 131 of title 10, United States
Code, is amended by adding at the end the following new section:
‘‘§ 2222. Biennial financial management improvement plan
‘‘(a) BIENNIAL PLAN REQUIRED.—The Secretary of Defense shall
submit to Congress a biennial strategic plan for the improvement
of financial management within the Department of Defense. The
plan shall be submitted not later than September 30 of each even-
numbered year.
‘‘(b) CONCEPT
OF OPERATIONS.—Each plan under subsection
(a) shall include a statement of the Secretary of Defense’s concept
of operations for the financial management of the Department of
Defense. Each such statement shall be a clear description of the
manner in which the Department’s financial management oper-
ations are carried out or will be carried out under the improvements
set forth in the plan under subsection (a), including identification
of operations that must be performed.
‘‘(c) MATTERS TO BE ADDRESSED IN PLAN.—(1) Each plan under
subsection (a) shall address all aspects of financial management
within the Department of Defense, including the finance systems,
accounting systems, and data feeder systems of the Department
that support financial functions of the Department.
‘‘(2) For the purposes of paragraph (1), a data feeder system
is an automated or manual system from which information is
derived for a financial management system or an accounting sys-
tem.’’.
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(2) The table of sections at the beginning of such chapter
is amended by adding at the end the following new item:
‘‘2222. Biennial financial management improvement plan.’’.
(b) ADDITIONAL CONTENT OF FIRST PLAN.—The first financial
management improvement plan submitted under section 2222 of
title 10, United States Code (as added by subsection (a)), shall
include the following:
(1) A description of the costs and benefits of integrating
the various finance and accounting systems of the Department
of Defense and reducing the total number of such systems,
together with the Secretary’s assessment of the feasibility of
implementing such an integration.
(2) Identification of problems with the accuracy of data
included in the finance systems, accounting systems, and data
feeder systems that support financial functions of the Depart-
ment of Defense, together with a description of the actions
that the Secretary can take to address those problems.
(3) Identification of weaknesses in the internal controls
of the systems referred to in paragraph (2), together with
a description of the actions that the Secretary can take to
address those weaknesses.
(4) A description of actions that the Secretary can take
to eliminate negative unliquidated obligations, unmatched
disbursements, and in-transit disbursements and to avoid such
obligations and disbursements in the future.
(5) A description of the status of the efforts being under-
taken in the Department to consolidate and eliminate—
(A) redundant or unneeded finance systems; and
(B) redundant or unneeded accounting systems.
(6) A description of efforts being undertaken to consolidate
or eliminate redundant personnel data systems, acquisition
data systems, asset accounting systems, time and attendance
systems, and other data feeder systems of the Department.
(7) A description of efforts being undertaken to integrate
the data feeder systems of the Department with the finance
and accounting systems of the Department.
(8) A description of problems with the organization or
performance of the Operating Locations and Service Centers
of the Defense Finance and Accounting Service, together with
a description of the actions the Secretary can take to address
those problems.
(9) A description of the costs and benefits of reorganizing
the Operating Locations and Service Centers of the Defense
Finance and Accounting Service according to function, together
with the Secretary’s assessment of the feasibility of carrying
out such a reorganization.
(10) A description of the costs and benefits of contracting
for private-sector performance of specific functions currently
performed by the Defense Finance and Accounting Service,
together with the Secretary’s assessment of the feasibility of
contracting for such performance.
(11) A description of actions that can be taken to ensure
that each comptroller position (and comparable position) in
the Department of Defense, whether filled by a member of
the Armed Forces or by a civilian employee, is held by a
person who, by reason of education, technical competence, and
H. R. 1119—244
experience, has the core competencies for financial manage-
ment.
(12) A description of any other change in the financial
management structure of the Department or revision of the
financial processes and business practices of the Department
that the Secretary considers necessary to improve financial
management in the Department.
(c) ADDITIONAL MATTERS.—For each of the problems and actions
identified pursuant to paragraphs (1) through (12) of subsection
(b) or in any other part of the plan covered by that subsection,
the Secretary shall include statements of objectives, performance
measures, and schedules and shall specify the individual and
organizational responsibilities.
(d) DEFINITION.—In subsection (b), the term ‘‘data feeder sys-
tem’’ has the meaning given that term in subsection (c)(2) of section
2222 of title 10, United States Code, as added by subsection (a).
SEC. 1009. ESTIMATES AND REQUESTS FOR PROCUREMENT AND MILI-
TARY CONSTRUCTION FOR THE RESERVE COMPONENTS.
(a) DETAILED PRESENTATION IN FUTURE-YEARS DEFENSE PRO-
GRAM.—Section 10543 of title 10, United States Code, is amended—
(1) by inserting ‘‘(a) IN GENERAL.—’’ before ‘‘The Secretary
of Defense’’; and
(2) by adding at the end the following:
‘‘(b) ASSOCIATED ANNEXES.—The associated annexes of the
future-years defense program shall specify, at the same level of
detail as is set forth in the annexes for the active components,
the amount requested for—
‘‘(1) procurement of each item of equipment to be procured
for each reserve component; and
‘‘(2) each military construction project to be carried out
for each reserve component, together with the location of the
project.
‘‘(c) REPORT.—(1) If the aggregate of the amounts specified
in paragraphs (1) and (2) of subsection (b) for a fiscal year is
less than the amount equal to 90 percent of the average authorized
amount applicable for that fiscal year under paragraph (2), the
Secretary of Defense shall submit to Congress a report specifying
for each reserve component the additional items of equipment that
would be procured, and the additional military construction projects
that would be carried out, if that aggregate amount were an amount
equal to such average authorized amount. The report shall be
at the same level of detail as is required by subsection (b).
‘‘(2) In this subsection, the term ‘average authorized amount’,
with respect to a fiscal year, means the average of—
‘‘(A) the aggregate of the amounts authorized to be appro-
priated for the preceding fiscal year for the procurement of
items of equipment, and for military construction, for the
reserve components; and
‘‘(B) the aggregate of the amounts authorized to be appro-
priated for the fiscal year preceding the fiscal year referred
to in subparagraph (A) for the procurement of items of equip-
ment, and for military construction, for the reserve compo-
nents.’’.
(b) PROHIBITION.—The level of detail provided for procurement
and military construction in the future-years defense programs
for fiscal years after fiscal year 1998 may not be less than the
H. R. 1119—245
level of detail provided for procurement and military construction
in the future-years defense program for fiscal year 1998.
SEC. 1010. SENSE OF CONGRESS REGARDING FUNDING FOR RESERVE
COMPONENT 
MODERNIZATION 
NOT 
REQUESTED 
IN
PRESIDENT’S BUDGET.
(a) CRITERIA.—It is the sense of Congress that, to the maximum
extent practicable, Congress should authorize appropriations for
procurement of reserve component modernization equipment for
a fiscal year for equipment that is not included in the budget
of the President for that fiscal year only if—
(1) there is a requirement for that equipment that has
been validated by the Joint Requirements Oversight Council;
(2) procurement of that equipment is included for reserve
component modernization in the modernization plan of the
military department concerned and is incorporated into the
current future-years defense program;
(3) procurement of that equipment is consistent with
planned use of reserve component forces under Department
of Defense war plans; and
(4) funds for that procurement, if authorized and appro-
priated for that fiscal year, could be obligated during that
fiscal year.
(b) CONSIDERATION OF VIEWS OF CHAIRMAN OF JOINT CHIEFS
OF STAFF.—It is further the sense of Congress that, in applying
the criteria set forth in subsection (a) with respect to procurement
of reserve component modernization equipment, Congress should
obtain the views of the Chairman of the Joint Chiefs of Staff
on whether, under Department of Defense war plans, that equip-
ment is appropriate for procurement for, and assignment to, reserve
component forces.
SEC. 1011. MANAGEMENT OF WORKING-CAPITAL FUNDS.
(a) CONTRACTING
FOR
CAPITAL
ASSETS
PROCUREMENT
IN
ADVANCE OF FUNDS.—Section 2208 of title 10, United States Code,
is amended by striking out subsection (k) and inserting in lieu
thereof the following new subsection:
‘‘(k)(1) Subject to paragraph (2), a contract for the procurement
of a capital asset financed by a working-capital fund may be
awarded in advance of the availability of funds in the working-
capital fund for the procurement.
‘‘(2) Paragraph (1) applies to any of the following capital assets
that have a development or acquisition cost of not less than
$100,000:
‘‘(A) An unspecified minor military construction project
under section 2805(c)(1) of this title.
‘‘(B) Automatic data processing equipment or software.
‘‘(C) Any other equipment.
‘‘(D) Any other capital improvement.’’.
(b) USE OF ADVANCE BILLING.—Such section is further amended
by adding at the end the following new subsection:
‘‘(l)(1) An advance billing of a customer of a working-capital
fund may be made if the Secretary of the military department
concerned submits to Congress written notification of the advance
billing within 30 days after the end of the month in which the
advanced billing was made. The notification shall include the
following:
‘‘(A) The reasons for the advance billing.
H. R. 1119—246
‘‘(B) An analysis of the effects of the advance billing on
military readiness.
‘‘(C) An analysis of the effects of the advance billing on
the customer.
‘‘(2) The Secretary of Defense may waive the notification
requirements of paragraph (1)—
‘‘(A) during a period war or national emergency; or
‘‘(B) to the extent that the Secretary determines necessary
to support a contingency operation.
‘‘(3) In this subsection:
‘‘(A) The term ‘advance billing’, with respect to a working-
capital fund, means a billing of a customer by the fund, or
a requirement for a customer to reimburse or otherwise credit
the fund, for the cost of goods or services provided (or for
other expenses incurred) on behalf of the customer that is
rendered or imposed before the customer receives the goods
or before the services have been performed.
‘‘(B) The term ‘customer’ means a requisitioning component
or agency.’’.
(c) FISCAL YEAR LIMITATIONS.—(1) The total amount of advance
billings for Department of the Navy working-capital funds and
the Defense Business Operations Fund may not exceed—
(A) $1,000,000,000 for fiscal year 1998; and
(B) $800,000,000 for fiscal year 1999.
(2) For purposes of paragraph (1), the term ‘‘advance billing’’
has the meaning given such term in section 2208(l)(3) of title
10, United States Code, as added by subsection (b).
SEC. 1012. AUTHORITY OF SECRETARY OF DEFENSE TO SETTLE CLAIMS
RELATING TO PAY, ALLOWANCES, AND OTHER BENEFITS.
Section 3702(e) of title 31, United States Code, is amended—
(1) in paragraph (1), by striking out ‘‘Comptroller General’’
and inserting in lieu thereof ‘‘Secretary of Defense’’; and
(2) by striking out paragraph (2) and inserting in lieu
thereof the following new paragraph:
‘‘(2) Payment of a claim settled under paragraph (1) shall
be made from an appropriation that is available, for the fiscal
year in which the payment is made, for the same purpose as
the appropriation to which the obligation claimed would have been
charged if the obligation had been timely paid.’’.
SEC. 1013. PAYMENT OF CLAIMS BY MEMBERS FOR LOSS OF PERSONAL
PROPERTY DUE TO FLOODING IN RED RIVER BASIN.
(a) PAYMENT AUTHORIZED.—Notwithstanding section 3721(e) of
title 31, United States Code, the Secretary of a military department
may pay the claim of a member of the Armed Forces who resided
(or whose dependents resided) in the vicinity of Grand Forks Air
Force Base, North Dakota, during April and May 1997 for loss
and damage to personal property incurred by the member as a
direct result of the flooding in the Red River Basin during such
months.
(b) REPORT ON DEPARTMENT POLICY.—The Secretary of Defense
shall submit to Congress a report describing the Department of
Defense policy regarding the payment of a claim by a member
of the Armed Forces who is not assigned to quarters of the United
States for losses and damage to personal property of the member
incurred at the member’s residence as a result of a natural disaster.
The report shall include a description of the number of such claims
H. R. 1119—247
received over the past 10 years, the number of claims paid, and
the number of claims rejected. If the Secretary determines the
Department of Defense should modify its policy in order to accept
additional claims by members who are not assigned to quarters
of the United States for losses and damage to personal property,
the Secretary shall also include in the report any legislative changes
that the Secretary considers necessary to enable the Secretary
to implement the policy change.
SEC. 1014. ADVANCES FOR PAYMENT OF PUBLIC SERVICES.
(a) IN GENERAL.—Subsection (a) of section 2396 of title 10,
United States Code, is amended—
(1) by striking out ‘‘and’’ at the end of paragraph (2);
(2) by striking out the period at the end of paragraph
(3) and inserting in lieu thereof ‘‘; and’’; and
(3) by adding at the end the following new paragraph:
‘‘(4) public service utilities.’’.
(b) CLERICAL AMENDMENTS.—(1) The heading of such section
is amended to read as follows:
‘‘§ 2396. Advances for payments for compliance with foreign
laws, rent in foreign countries, tuition, public
utility services, and pay and supplies of armed
forces of friendly foreign countries’’.
(2) The item relating to such section in the table of sections
at the beginning of chapter 141 of such title is amended to read
as follows:
‘‘2396. Advances for payments for compliance with foreign laws, rent in foreign
countries, tuition, public utility services, and pay and supplies of armed
forces of friendly foreign countries.’’.
SEC. 1015. UNITED STATES MAN AND THE BIOSPHERE PROGRAM
LIMITATION.
During fiscal year 1998, the Secretary of Defense may not
take any steps to carry out or support the United States Man
and the Biosphere Program or any related project.
Subtitle B—Naval Vessels and Shipyards
SEC. 1021. PROCEDURES FOR SALE OF VESSELS STRICKEN FROM THE
NAVAL VESSEL REGISTER.
Section 7305(c) of title 10, United States Code, is amended
to read as follows:
‘‘(c) PROCEDURES FOR SALE.—(1) A vessel stricken from the
Naval Vessel Register and not subject to disposal under any other
law may be sold under this section.
‘‘(2) In such a case, the Secretary may—
‘‘(A) sell the vessel to the highest acceptable bidder, regard-
less of the appraised value of the vessel, after publicly advertis-
ing the sale of the vessel for a period of not less than 30
days; or
‘‘(B) subject to paragraph (3), sell the vessel by competitive
negotiation to the acceptable offeror who submits the offer
that is most advantageous to the United States (taking into
account price and such other factors as the Secretary deter-
mines appropriate).
H. R. 1119—248
‘‘(3) Before entering into negotiations to sell a vessel under
paragraph (2)(B), the Secretary shall publish notice of the intention
to do so in the Commerce Business Daily sufficiently in advance
of initiating the negotiations that all interested parties are given
a reasonable opportunity to prepare and submit proposals. The
Secretary shall afford an opportunity to participate in the negotia-
tions to all acceptable offerors submitting proposals that the Sec-
retary considers as having the potential to be the most advan-
tageous to the United States (taking into account price and such
other factors as the Secretary determines appropriate).’’.
SEC. 1022. AUTHORITY TO ENTER INTO A LONG-TERM CHARTER FOR
A VESSEL IN SUPPORT OF THE SURVEILLANCE TOWED-
ARRAY SENSOR (SURTASS) PROGRAM.
The Secretary of the Navy is authorized to enter into a contract
in accordance with section 2401 of title 10, United States Code,
for the charter, for a period through fiscal year 2003, of the vessel
RV CORY CHOUEST (United States official number 933435) in
support of the Surveillance Towed-Array Sensor (SURTASS) pro-
gram.
SEC. 1023. TRANSFER OF TWO SPECIFIED OBSOLETE TUGBOATS OF
THE ARMY.
(a) AUTHORITY TO TRANSFER VESSELS.—The Secretary of the
Army may transfer the two obsolete tugboats of the Army described
in subsection (b) to the Brownsville Navigation District, Browns-
ville, Texas.
(b) VESSELS COVERED.—Subsection (a) applies to the following
two decommissioned tugboats of the Army, each of which is listed
as of the date of the enactment of this Act as being surplus to
the needs of the Army: the Normandy (LT–1971) and the Salerno
(LT–1953).
(c) TRANSFERS TO BE AT NO COST TO UNITED STATES.—A trans-
fer authorized by this section shall be made at no cost to the
United States.
(d) TERMS AND CONDITIONS.—The Secretary may require such
additional terms and conditions in connection with the transfers
authorized by this section as the Secretary considers appropriate.
SEC. 1024. CONGRESSIONAL REVIEW PERIOD WITH RESPECT TO
TRANSFER OF EX-U.S.S. HORNET (CV–12) AND EX-U.S.S.
MIDWAY (CV–41).
(a) REDUCTION IN CONGRESSIONAL REVIEW PERIOD.—In apply-
ing section 7306 of title 10, United States Code, with respect to
the transfer of a vessel specified in subsection (c), subsection
(d)(1)(B) of that section shall be applied by substituting ‘‘30 days’’
for ‘‘60 days’’.
(b) WAIVER IF ONLY ONE QUALIFIED ENTITY APPLIES FOR TRANS-
FER OF VESSEL.—If in the case of a vessel specified in subsection
(c) only a single qualified entity, as determined by the Secretary
of the Navy, applies for transfer of the vessel, the Secretary may
carry out the transfer of the vessel under section 7306 of title
10, United States Code, without regard to subsection (d)(1)(B) of
that section. In such a case, the transfer may be made only after
10 days of continuous session of Congress (determined in the man-
ner specified in section 7306(d)(2) of title 10, United States Code)
have expired following the date on which the Secretary submits