260
Subtitle C—Travel and
Transportation Allowances
SEC. 631. EXPANSION OF TRAVEL AND TRANSPORTATION
ALLOWANCES TO ASSIST SURVIVORS OF A
DECEASED MEMBER TO ATTEND BURIAL
CEREMONY OF THE MEMBER.
(a) AUTHORIZED TRAVEL LOCATIONS.—Subsection
(b) of section 411f of title 37, United States Code, is
amended to read as follows:
‘‘(b) AUTHORIZED LOCATIONS FOR TRAVEL; DURA-
TION AND RATES.—(1) The allowances under subsection
(a) may be provided for travel and transportation by eligi-
ble relatives of the deceased member to the place selected
pursuant to section 1482(a)(8) of title 10 for disposition
of the remains of the deceased member.
‘‘(2) The allowances may not exceed the rates for two
days and the time necessary for the travel.’’.
(b) ELIGIBLE RELATIVES.—Subsection (c)(1)(C) of
such section is amended by striking ‘‘If no person de-
scribed in subparagraph (A) or (B) is provided travel and
transportation allowances under subsection (a)(1), the’’
and inserting ‘‘The’’.
(c) LIMITATION
ON FISCAL YEAR 2005 OBLIGA-
TIONS.—During fiscal year 2005, obligations incurred
under section 411f of title 37, United States Code, as
261
amended by subsections (a) and (b), to provide travel and
transportation allowances, not previously available under
such section, to survivors of deceased members of the uni-
formed services, and to provide such allowances to persons
not previously eligible for such allowances, may not exceed
$2,000,000.
SEC. 632. TRANSPORTATION OF FAMILY MEMBERS INCI-
DENT TO THE SERIOUS ILLNESS OR INJURY
OF MEMBERS OF THE UNIFORMED SERVICES.
(a) REMOVAL OF LIMITATION ON NUMBER OF FAM-
ILY MEMBERS.—Subsection (a)(1) of section 411h of title
37, United States Code, is amended by striking ‘‘not more
than two family members’’ and inserting ‘‘a family mem-
ber’’.
(b) FAMILY
MEMBERS
DESCRIBED.—Subsection
(b)(1) of such section is amended—
(1) by striking ‘‘and’’ at the end of subpara-
graph (C);
(2) by striking the period at the end of sub-
paragraph (D) and inserting ‘‘; and’’; and
(3) by adding at the end the following new sub-
paragraph:
‘‘(E) other persons approved by the Secretary
concerned.’’.
262
(c) AVAILABILITY OF PER DIEM.—Such section is
further amended—
(1) in subsection (a)(1), by inserting ‘‘travel
and’’ before ‘‘transportation’’; and
(2) in subsection (c)—
(A) by inserting ‘‘(1)’’ after ‘‘(c)’’ ; and
(B) by adding at the end the following new
paragraph:
‘‘(2) In addition to the transportation authorized by
subsection (a), the Secretary concerned may provide a per
diem allowance or reimbursement for the actual and nec-
essary expenses of the travel, or a combination thereof,
but not to exceed the rates established under section
404(d) of this title.’’.
(d) EFFECTIVE DATE.—The amendments made by
this section shall take effect on October 1, 2004, and apply
to transportation described in section 411h of title 37,
United States Code, provided on or after that date.
(e) LIMITATION
ON FISCAL YEAR 2005 OBLIGA-
TIONS.—During fiscal year 2005, obligations incurred
under section 411h of title 37, United States Code, as
amended by subsections (a) and (b), to provide travel and
transportation allowances, not previously available under
such section, to family members of seriously ill or injured
members of the uniformed services, and to provide such
263
allowances to persons not previously eligible for such al-
lowances, may not exceed $3,000,000.
SEC. 633. REIMBURSEMENT OF MEMBERS FOR CERTAIN
LODGING COSTS INCURRED IN CONNECTION
WITH STUDENT DEPENDENT TRAVEL.
Section 430(b) of title 37, United States Code, is
amended—
(1) by redesignating paragraphs (2) and (3) as
paragraphs (3) and (4), respectively; and
(2) by inserting after paragraph (1) the fol-
lowing new paragraph (2):
‘‘(2) The transportation allowance paid to a member
under paragraph (1) may include reimbursement, at a rate
prescribed by the Secretaries concerned, for lodging costs
incurred during the annual trip for which the allowance
is paid when, for reasons beyond the control of the depend-
ent child of the member, the child is required to procure
accommodations while en route between the child’s school
and the member’s duty station.’’.
Subtitle D—Retired Pay and
Survivor Benefits
SEC. 641. COMPUTATION OF BENEFITS UNDER SURVIVOR
BENEFIT PLAN FOR SURVIVING SPOUSES
OVER AGE 62.
(a) PHASED INCREASE IN BASIC ANNUITY.—
264
(1) STANDARD ANNUITY.—
(A) INCREASE TO 55 PERCENT.—Clause (i)
of subsection (a)(1)(B) of section 1451 of title
10, United States Code, is amended by striking
‘‘35 percent of the base amount.’’ and inserting
‘‘the product of the base amount and the per-
cent applicable to the month, as follows:
‘‘(I) For a month before October
2005, the applicable percent is 35 percent.
‘‘(II) For months after September
2005 and before April 2006, the applicable
percent is 40 percent.
‘‘(III) For months after March 2006
and before April 2007, the applicable per-
cent is 45 percent.
‘‘(IV) For months after March 2007
and before April 2008, the applicable per-
cent is 50 percent.
‘‘(V) For months after March 2008,
the applicable percent is 55 percent.’’.
(B) COORDINATION WITH SAVINGS PROVI-
SION UNDER PRIOR LAW.—Clause (ii) of such
subsection is amended by striking ‘‘, at the time
the beneficiary becomes entitled to the annu-
ity,’’.
265
(2) 
RESERVE-COMPONENT
ANNUITY.—Sub-
section (a)(2)(B)(i)(I) of such section is amended by
striking ‘‘35 percent’’ and inserting ‘‘the percent
specified under subsection (a)(1)(B)(i) as being ap-
plicable for the month’’.
(3) SURVIVORS OF ELIGIBLE PERSONS DYING
ON ACTIVE DUTY, ETC.—
(A) INCREASE TO 55 PERCENT.—Clause (i)
of subsection (c)(1)(B) of such section is
amended—
(i) by striking ‘‘35 percent’’ and in-
serting ‘‘the applicable percent’’; and
(ii) by adding at the end the fol-
lowing: ‘‘The percent applicable for a
month under the preceding sentence is the
percent 
specified 
under 
subsection
(a)(1)(B)(i) as being applicable for that
month.’’.
(B) COORDINATION WITH SAVINGS PROVI-
SION UNDER PRIOR LAW.—Clause (ii) of such
subsection is amended by striking ‘‘, at the time
the beneficiary becomes entitled to the annu-
ity,’’.
266
(4) CLERICAL AMENDMENT.—The heading for
subsection (d)(2)(A) of such section is amended to
read as follows: ‘‘COMPUTATION OF ANNUITY.—’’.
(b) CORRESPONDING PHASED ELIMINATION OF SUP-
PLEMENTAL ANNUITY.—
(1) PHASED
REDUCTION
OF
SUPPLEMENTAL
ANNUITY.—Section 1457(b) of title 10, United
States Code, is amended—
(A) by striking ‘‘5, 10, 15, or 20 percent’’
and inserting ‘‘the applicable percent’’; and
(B) by inserting after the first sentence
the following: ‘‘The percent used for the com-
putation shall be an even multiple of 5 percent
and, whatever the percent specified in the elec-
tion, may not exceed 20 percent for months be-
fore October 2005, 15 percent for months after
September 2005 and before April 2006, 10 per-
cent for months after March 2006 and before
April 2007, and 5 percent for months after
March 2007 and before April 2008.’’.
(2) REPEAL
UPON
IMPLEMENTATION
OF
PERCENT
SBP
ANNUITY.—Effective on April 1,
2008, chapter 73 of such title is amended—
(A) by striking subchapter III; and
267
(B) by striking the item relating to sub-
chapter III in the table of subchapters at the
beginning of that chapter.
(c) RECOMPUTATION OF ANNUITIES.—
(1) PERIODIC
RECOMPUTATION
REQUIRED.—
Effective on the first day of each month specified in
paragraph (2)—
(A) each annuity under section 1450 of
title 10, United States Code, that commenced
before that month, is computed under a provi-
sion of section 1451 of that title amended by
subsection (a), and is payable for that month
shall be recomputed so as to be equal to the
amount that would be in effect if the percent
applicable for that month under that provision,
as so amended, had been used for the initial
computation of the annuity; and
(B) each supplemental survivor annuity
under section 1457 of such title that com-
menced before that month and is payable for
that month shall be recomputed so as to be
equal to the amount that would be in effect if
the percent applicable for that month under
that section, as amended by this section, had
268
been used for the initial computation of the
supplemental survivor annuity.
(2) TIME FOR RECOMPUTATION.—The require-
ment under paragraph (1) for recomputation of cer-
tain annuities applies with respect to the following
months:
(A) October 2005.
(B) April 2006.
(C) April 2007.
(D) April 2008.
(d) RECOMPUTATION OF RETIRED PAY REDUCTIONS
FOR SUPPLEMENTAL SURVIVOR ANNUITIES.—The Sec-
retary of Defense shall take such actions as are neces-
sitated by the amendments made by subsection (b) and
the requirements of subsection (c)(1)(B) to ensure that
the reductions in retired pay under section 1460 of title
10, United States Code, are adjusted to achieve the objec-
tives set forth in subsection (b) of that section.
SEC. 642. OPEN ENROLLMENT PERIOD FOR SURVIVOR BEN-
EFIT PLAN COMMENCING OCTOBER 1, 2005.
(a) PERSONS NOT CURRENTLY PARTICIPATING IN
SURVIVOR BENEFIT PLAN.—
(1) ELECTION OF SBP COVERAGE.—An eligible
retired or former member may elect to participate in
the Survivor Benefit Plan under subchapter II of
269
chapter 73 of title 10, United States Code, during
the open enrollment period specified in subsection
(f).
(2) ELECTION
OF
SUPPLEMENTAL
ANNUITY
COVERAGE.—An eligible retired or former member
who elects under paragraph (1) to participate in the
Survivor Benefit Plan at the maximum level may
also elect during the open enrollment period to par-
ticipate in the Supplemental Survivor Benefit Plan
established under subchapter III of chapter 73 of
title 10, United States Code.
(3) ELIGIBLE RETIRED OR FORMER MEMBER.—
For purposes of paragraphs (1) and (2), an eligible
retired or former member is a member or former
member of the uniformed services who on the day
before the first day of the open enrollment period is
not a participant in the Survivor Benefit Plan and—
(A) is entitled to retired pay; or
(B) would be entitled to retired pay under
chapter 1223 of title 10, United States Code,
but for the fact that such member or former
member is under 60 years of age.
(4) STATUS UNDER SBP OF PERSONS MAKING
ELECTIONS.—
270
(A) STANDARD ANNUITY.—A person mak-
ing an election under paragraph (1) by reason
of eligibility under paragraph (3)(A) shall be
treated for all purposes as providing a standard
annuity under the Survivor Benefit Plan.
(B) RESERVE-COMPONENT
ANNUITY.—A
person making an election under paragraph (1)
by reason of eligibility under paragraph (3)(B)
shall be treated for all purposes as providing a
reserve-component annuity under the Survivor
Benefit Plan.
(b) ELECTION
TO INCREASE COVERAGE UNDER
SBP.—A person who on the day before the first day of
the open enrollment period is a participant in the Survivor
Benefit Plan but is not participating at the maximum base
amount or is providing coverage under the Plan for a de-
pendent child and not for the person’s spouse or former
spouse may, during the open enrollment period, elect to—
(1) participate in the Plan at a higher base
amount (not in excess of the participant’s retired
pay); or
(2) provide annuity coverage under the Plan for
the person’s spouse or former spouse at a base
amount not less than the base amount provided for
the dependent child.
271
(c) ELECTION FOR CURRENT SBP PARTICIPANTS TO
PARTICIPATE IN SUPPLEMENTAL SBP.—
(1) ELECTION.—A person who is eligible to
make an election under this paragraph may elect
during the open enrollment period to participate in
the Supplemental Survivor Benefit Plan established
under subchapter III of chapter 73 of title 10,
United States Code.
(2) PERSONS ELIGIBLE.—Except as provided in
paragraph (3), a person is eligible to make an elec-
tion under paragraph (1) if on the day before the
first day of the open enrollment period the person is
a participant in the Survivor Benefit Plan at the
maximum level, or during the open enrollment pe-
riod the person increases the level of such participa-
tion to the maximum level under subsection (b) of
this section, and under that Plan is providing annu-
ity coverage for the person’s spouse or a former
spouse.
(3) LIMITATION ON ELIGIBILITY FOR CERTAIN
SBP
PARTICIPANTS
NOT
AFFECTED
BY
TWO-TIER
ANNUITY COMPUTATION.—A person is not eligible to
make an election under paragraph (1) if (as deter-
mined by the Secretary concerned) the annuity of a
spouse or former spouse beneficiary of that person
272
under the Survivor Benefit Plan will be computed
under section 1451(e) of title 10, United States
Code. However, such a person may during the open
enrollment period waive the right to have that annu-
ity computed under such section. Any such election
is irrevocable. A person making such a waiver may
make an election under paragraph (1) as in the case
of any other participant in the Survivor Benefit
Plan.
(d) MANNER OF MAKING ELECTIONS.—An election
under this section must be made in writing, signed by the
person making the election, and received by the Secretary
concerned before the end of the open enrollment period.
Any such election shall be made subject to the same condi-
tions, and with the same opportunities for designation of
beneficiaries and specification of base amount, that apply
under the Survivor Benefit Plan or the Supplemental Sur-
vivor Benefit Plan, as the case may be. A person making
an election under subsection (a) to provide a reserve-com-
ponent annuity shall make a designation described in sec-
tion 1448(e) of title 10, United States Code.
(e) EFFECTIVE DATE FOR ELECTIONS.—Any such
election shall be effective as of the first day of the first
calendar month following the month in which the election
is received by the Secretary concerned.
273
(f) OPEN ENROLLMENT PERIOD DEFINED.—The
open enrollment period is the two-year period beginning
on October 1, 2005.
(g) EFFECT OF DEATH OF PERSON MAKING ELEC-
TION WITHIN TWO YEARS OF MAKING ELECTION.—If a
person making an election under this section dies before
the end of the two-year period beginning on the effective
date of the election, the election is void and the amount
of any reduction in retired pay of the person that is attrib-
utable to the election shall be paid in a lump sum to the
person who would have been the deceased person’s bene-
ficiary under the voided election if the deceased person
had died after the end of such two-year period.
(h) APPLICABILITY
OF CERTAIN PROVISIONS
OF
LAW.—The provisions of sections 1449, 1453, and 1454
of title 10, United States Code, are applicable to a person
making an election, and to an election, under this section
in the same manner as if the election were made under
the Survivor Benefit Plan or the Supplemental Survivor
Benefit Plan, as the case may be.
(i) ADDITIONAL PREMIUM.—The Secretary of De-
fense may require that the premium for a person making
an election under subsection (a)(1) or (b) include, in addi-
tion to the amount required under section 1452(a) of title
10, United States Code, an amount determined under reg-
274
ulations prescribed by the Secretary of Defense for the
purposes of this subsection. Any such amount shall be
stated as a percentage of the base amount of the person
making the election and shall reflect the number of years
that have elapsed since the person retired, but may not
exceed 4.5 percent of that person’s base amount.
(j) REPORT CONCERNING OPEN SEASON.—Not later
than July 1, 2005, the Secretary of Defense shall submit
to the Committee on Armed Services of the Senate and
the Committee on Armed Services of the House of Rep-
resentatives a report on the open season authorized by this
section for the Survivor Benefit Plan. The report shall in-
clude the following:
(1) A description of the Secretary’s plans for
implementation of the open season.
(2) The Secretary’s estimates of the costs asso-
ciated with the open season, including any antici-
pated effect of the open season on the actuarial sta-
tus of the Department of Defense Military Retire-
ment Fund.
(3) Any recommendation by the Secretary for
further legislative action.
275
SEC. 643. SOURCE OF FUNDS FOR SURVIVOR BENEFIT
PLAN ANNUITIES FOR DEPARTMENT OF DE-
FENSE BENEFICIARIES OVER AGE 62.
(a) IN GENERAL.—Chapter 74 of title 10, United
States Code, is amended as follows:
(1) Section 1465(b) of such title is amended by
adding at the end the following new paragraph:
‘‘(4) At the same time that the Secretary of Defense
makes the determination required by paragraph (1) for
any fiscal year, the Secretary shall determine the amount
of the Treasury contribution to be made to the Fund for
the next fiscal year under section 1466(b)(2)(E) of this
title. That amount shall be determined in the same man-
ner as the determination under paragraph (1) of the total
amount of Department of Defense contributions to be
made to the Fund during that fiscal year under section
1466(a) of this title, except that for purposes of this para-
graph the Secretary, in making the calculations required
by subparagraphs (A) and (B) of that paragraph, shall
use the single level percentages determined under sub-
section (c)(5), rather than those determined under sub-
section (c)(1).’’.
(4) Section 1465(c) of such title is amended—
(A) in paragraph (1)—
(i) in subparagraph (A), by inserting
before the semicolon at the end the fol-
276
lowing: 
‘‘and 
as 
if 
benefits 
under
subchpater II of chapter 73 of this title for
beneficiaries 62 years of age and older
were computed for any fiscal year on the
basis of the percentage of 35 percent, rath-
er than any percentage otherwise applica-
ble for that computation for that fiscal
year’’; and
(ii) in subparagraph (B), by inserting
before the period at the end the following:
‘‘and as if benefits under subchapter II of
chapter 73 of this title for beneficiaries 62
years of age and older were computed for
any fiscal year on the basis of the percent-
age of 35 percent, rather than any percent-
age otherwise applicable for that computa-
tion for that fiscal year’’;
(B) by redesignating paragraph (5) as
paragraph (6); and
(C) by inserting after paragraph (4) the
following new paragraph (5):
‘‘(5) Whenever the Secretary carries out an actuarial
valuation under paragraph (1), the Secretary shall include
as part of such valuation the following:
277
‘‘(A) A determination of a single level percent-
age determined in the same manner as applies under
subparagraph (A) of paragraph (1), but determined
as if benefits under subchapter II of chapter 73 of
this title for beneficiaries 62 years of age and older
were computed for any fiscal year on the basis of the
percentage of 35 percent, rather than any percent-
age otherwise applicable for that computation for
that fiscal year.
‘‘(B) A determination of a single level percent-
age determined in the same manner as applies under
subparagraph (B) of paragraph (1), but determined
as if benefits under subchapter II of chapter 73 of
this title for beneficiaries 62 years of age and older
were computed for any fiscal year on the basis of the
percentage of 35 percent, rather than any percent-
age otherwise applicable for that computation for
that fiscal year.
Such single level percentages shall be used for the pur-
poses of subsection (b)(4).’’.
(5) Section 1466(b) of such title is amended—
(A) 
in 
paragraph 
(1), 
by 
inserting
‘‘1465(b)(4),’’ after ‘‘1465(b)(3),’’; and
(B) by adding at the end of paragraph (2)
the following new subparagraph:
278
‘‘(E) The amount for that year determined by
the Secretary of Defense under section 1465(b)(4)
of this title for the cost to the Fund arising from in-
creased amounts payable from the Fund by reason
of benefits under subchapter II of chapter 73 of this
title for beneficiaries 62 years of age and older being
computed for any fiscal year on the basis of the per-
centage greater than 35 percent.’’.
(b) EFFECTIVE DATE.—The amendments made by
subsection (a) shall take effect as of October 1, 2004. If
this Act is enacted after that date, the Secretary of De-
fense shall provide for such administrative adjustments as
necessary to provide for payments made for any period
during fiscal year 2005 before the date of the enactment
of this Act to be treated as having been made in accord-
ance with such amendments and for the provisions of
those amendments to be implemented as if enacted as of
September 30, 2004.
279
Subtitle E—Commissary and Non-
appropriated Fund Instrumen-
tality Benefits
SEC. 651. CONSOLIDATION AND REORGANIZATION OF LEG-
ISLATIVE PROVISIONS REGARDING DEFENSE
COMMISSARY SYSTEM AND EXCHANGES AND
OTHER 
MORALE, 
WELFARE, 
AND 
RECRE-
ATION ACTIVITIES.
(a) 
PROVISIONS
RELATED
TO
COMMISSARY
STORES.—Chapter 147 of title 10, United States Code,
is amended—
(1) by striking the table of sections at the be-
ginning of the chapter and sections 2481, 2483,
2485, and 2487;
(2) by redesignating sections 2482, 2484, and
2486 as sections 2485, 2483 and 2484, respectively;
(3) by inserting after the chapter heading the
following:
‘‘Subchapter
Sec.
‘‘I. Defense Commissary System ..............................................................
2481
‘‘II. Relationship, Continuation, and Common Policies of Defense Com-
missary and Exchange Systems ....................................
2487
‘‘III. Morale, Welfare, and Recreation Programs and Nonappropriated
Fund Instrumentalities .................................................
2491
‘‘SUBCHAPTER I—DEFENSE COMMISSARY
SYSTEM
‘‘Sec.
‘‘2481. Existence and purpose of defense commissary system.
‘‘2482. Commissary stores: criteria for establishment or closure; store size.
280
‘‘2483. Commissary stores: use of appropriated funds to cover operating ex-
penses.
‘‘2484. Commissary stores: merchandise that may be sold; uniform surcharges
and pricing.
‘‘2485. Commissary stores: operation.
‘‘§ 2481. Existence and purpose of defense com-
missary system
‘‘(a) EXISTENCE OF SYSTEM.—The Secretary of the
Defense shall operate, using funds appropriated to the De-
partment of Defense, a world-wide system of commissary
stores that sell, at reduced prices, food and other merchan-
dise consistent with societal norms for product selection
in commercial large-scale grocery stores in the United
States to members of the uniformed services on active
duty, members of the uniformed services entitled to retired
pay, dependents of such members, and patrons authorized
to use the system under chapter 54 of this title.
‘‘(b) PURPOSE OF SYSTEM.—The purpose of the de-
fense commissary system is to enhance the quality of life
of members of the uniformed services, retired members,
dependents of such members, and other authorized pa-
trons and to provide such members with an additional
nonmonetary compensation in recognition of their service
to the United States.
‘‘(c) REDUCES PRICES DEFINED.—In this section,
the term ‘reduced prices’ means prices for food and other
merchandise determined using the price setting process
specified in section 2484 of this title.
281
‘‘§ 2482. Commissary stores: criteria for establishment
or closure; store size
‘‘(a) PRIMARY CONSIDERATION
FOR ESTABLISH-
MENT.—The needs of members of the uniformed services
on active duty and their dependents shall be the primary
consideration whenever the Secretary of Defense—
‘‘(1) assesses the need to establish a com-
missary store; and
‘‘(2) selects the actual location for the store.
‘‘(b) STORE SIZE.—In determining the size of a com-
missary store, the Secretary of Defense shall take into
consideration the number of all authorized patrons of the
defense commissary system who are likely to use the store.
‘‘(c) CLOSURE CONSIDERATIONS.—(1) Whenever as-
sessing whether to close a commissary store, the effect of
the closure on the quality of life of members of the uni-
formed services and their dependents using the store and
on the welfare and security of the military community in
which the commissary is located shall be the primary con-
sideration. In all cases, the quality of life for military pa-
trons shall take priority over any consideration of eco-
nomic criteria relative to store financial performance.
‘‘(2) The Secretary of Defense shall give the quality
of life for members of a reserve component the same pri-
ority as the quality of life for active duty members when-
ever assessing whether to close a commissary store, includ-
283
‘‘(a) IN GENERAL.—As provided in section 2481(a)
of this title, commissary stores are intended to be similar
to commercial grocery stores and may sell merchandise
similar to that sold in commercial grocery stores. The Sec-
retary of Defense shall ensure that the design and format
of commissary stores are consistent with modern grocery
store stockage and format.
‘‘(b) REQUIRED COMMISSARY MERCHANDISE CAT-
EGORIES.—Merchandise sold in, at, or by commissary
stores shall include items in the following categories:
‘‘(1) Meat, poultry, and seafood.
‘‘(2) Nonalcoholic beverages.
‘‘(3) Produce.
‘‘(4) Grocery food, whether stored chilled, fro-
zen, or at room temperature.
‘‘(5) Dairy products.
‘‘(6) Bakery and delicatessen items.
‘‘(7) Nonfood grocery items.
‘‘(8) Health and beauty aids.
‘‘(9) Magazines and periodicals.
‘‘(10) Telephone cards, greeting cards, and film
and one-time use cameras.
‘‘(c) 
INCLUSION
OF
GENERAL
MERCHANDISE
ITEMS.—(1) Among the various defense retail systems—
284
‘‘(A) commissary stores shall be the primary
Department of Defense-operated store for the sale of
items described in paragraphs (1) through (7) of
subsection (b); and
‘‘(B) exchange stores shall continue to maintain
the exclusive right to operate convenience stores,
shopettes, and troop stores, including such stores es-
tablished to support contingency operations.
‘‘(2) Merchandise sold in commissary stores may in-
clude such general merchandise items as the Secretary of
Defense may prescribe, except that the Secretary may not
exclude seasonal items, tobacco products, pet supplies,
batteries, potted plants and floral bouquets, women’s ho-
siery, and school supplies, to the extent such products
have been available in commissary stores before June 1,
2004, unless the Secretary determines that space or other
considerations preclude the sale of all or some of the speci-
fied items. The Secretary shall provide notice to Congress
of any reduction in the availability of such items at least
30 days before the reduction takes effect.
‘‘(3) A military exchange may be considered as the
vendor for the purchase of tobacco products, greeting
cards, and film and one-time use cameras and shall serve
as the vendor for telephone cards. Subsections (e) and (f)
shall not apply to the pricing of such an item when a mili-
285
tary exchange serves as the vendor of the item. Com-
missary store and exchange prices shall be comparable for
such an item.
‘‘(4) During the two-year period ending March 31,
2007, the Secretary shall maintain sales data for com-
missary stores and exchange stores regarding the items
identified in subsection (b)(10). Not later than August 1,
2007, the Secretary shall submit to Congress a report con-
taining such sales data.
‘‘(d) EXCLUDED GOODS OR SERVICES.—Commissary
stores shall not offer film development services.
‘‘(e) UNIFORM SALES PRICE SURCHARGE.—The Sec-
retary of Defense shall apply a uniform surcharge equal
to not more than five percent on the sales prices estab-
lished under subsection (f) for each item of merchandise
sold in, at, or by commissary stores.’’;
(D) in subsection (f), as so redesignated,
by striking ‘‘(consistent with this section and
section 2685 of this title)’’ in paragraph (1);
(E) in subsection (h), as so redesignated,
by striking ‘‘Subsections (c) and (d)’’ and in-
serting ‘‘Subsections (e) and (f)’’; and
(F) by adding at the end the following new
subsection:
286
‘‘(i) USE OF SURCHARGE FOR CONSTRUCTION, RE-
PAIR, IMPROVEMENT, AND MAINTENANCE.—(1)(A) The
Secretary of Defense may use the proceeds from the sur-
charges imposed under subsection (e) only—
‘‘(i) to acquire (including acquisition by lease),
construct, convert, expand, improve, repair, main-
tain, and equip the physical infrastructure of com-
missary stores and central product processing facili-
ties of the defense commissary system; and
‘‘(ii) to cover environmental evaluation and con-
struction costs related to activities described in
clause (i), including costs for surveys, administra-
tion, overhead, planning, and design.
‘‘(B) In subparagraph (A), the term ‘physical infra-
structure’ includes real property, utilities, and equipment
(installed and free standing and including computer equip-
ment), necessary to provide a complete and usable com-
missary store or central product processing facility.
‘‘(2)(A) The Secretary of Defense may authorize a
nonappropriated fund instrumentality of the United
States to enter into a contract for construction of a shop-
ping mall or similar facility for a commissary store and
one or more nonappropriated fund instrumentality activi-
ties. The Secretary may use the proceeds of surcharges
under subsection (e) to reimburse the nonappropriated
287
fund instrumentality for the portion of the cost of the con-
tract that is attributable to construction of the com-
missary store or to pay the contractor directly for that
portion of such cost.
‘‘(B) In subparagraph (A), the term ‘construction’,
with respect to a facility, includes acquisition, conversion,
expansion, installation, or other improvement of the facil-
ity.
‘‘(3) The Secretary of Defense, with the approval of
the Director of the Office of Management and Budget,
may obligate anticipated proceeds from the surcharges
under subsection (e) for any use specified in paragraph
(1) or (2), without regard to fiscal year limitations, if the
Secretary determines that such obligation is necessary to
carry out any use of such adjustments or surcharges speci-
fied in such paragraph.
‘‘(4) Revenues received by the Secretary of Defense
from the following sources or activities of commissary
store facilities shall be available for the purposes set forth
in paragraphs (1), (2), and (3):
‘‘(A) Sale of recyclable materials.
‘‘(B) Sale of excess and surplus property.
‘‘(C) License fees.
‘‘(D) Royalties.
288
‘‘(E) Fees paid by sources of products in order
to obtain favorable display of the products for resale,
known as business related management fees.’’;
(6) by inserting section 2485, as redesignated
by paragraph (2), after section 2484, as amended by
paragraph (5); and
(7) in section 2485, as redesignated by para-
graph (2)—
(A) in subsection (a)(2), by adding at the
end the following new sentence: ‘‘Until Decem-
ber 31, 2009, the Defense Commissary Agency
is not required to conduct any cost-comparison
study under the policies and procedures of Of-
fice of Management and Budget Circular A–76
relating to the possible contracting out of com-
missary store functions.’’;
(B) in subsection (b)(2), by striking ‘‘sec-
tion 2484’’ and inserting ‘‘section 2483’’;
(C) in subsection (c)(2), by adding at the
end the following new sentences: ‘‘The chair-
man of the governing board shall be a commis-
sioned officer or member of the senior executive
service who has demonstrated experience or
knowledge relevant to the management of the
defense commissary system. In selecting other
289
members of the governing board, the Secretary
shall give priority to persons with experience re-
lated to logistics, military personnel, military
entitlements or other experiences of value of
management of commissaries.’’; and
(D) by adding at the end the following new
subsections:
‘‘(d) ASSIGNMENT OF ACTIVE DUTY MEMBERS.—(1)
Except as provided in paragraph (2), members of the
armed forces on active duty may not be assigned to the
operation of a commissary store.
‘‘(2)(A) The Secretary of Defense may assign an offi-
cer on the active-duty list to serve as the Director of the
Defense Commissary Agency.
‘‘(B) Not more than 18 members (in addition to the
officer referred to in subparagraph (A)) of the armed
forces on active duty may be assigned to the Defense Com-
missary Agency. Members who may be assigned under this
subparagraph to regional headquarters of the agency shall
be limited to enlisted members assigned to duty as advis-
ers in the regional headquarters responsible for overseas
commissaries and to veterinary specialists.
‘‘(e) REIMBURSEMENT FOR USE OF COMMISSARY FA-
CILITIES
BY MILITARY DEPARTMENTS.—(1) The Sec-
retary of a military department shall pay the Defense
290
Commissary Agency the amount determined under para-
graph (2) for any use of a commissary facility by the mili-
tary department for a purpose other than commissary
sales or operations in support of commissary sales.
‘‘(2) The amount payable under paragraph (1) for
use of a commissary facility by a military department shall
be equal to the share of depreciation of the facility that
is attributable to that use, as determined under regula-
tions prescribed by the Secretary of Defense.
‘‘(3) The Director of the Defense Commissary Agency
shall credit amounts paid under paragraph (1) for use of
a facility to an appropriate account to which proceeds of
a surcharge applied under section 2484(e) of this title are
credited.
‘‘(4) This subsection applies with respect to a com-
missary facility that is acquired, constructed, converted,
expanded, installed, or otherwise improved (in whole or in
part) with the proceeds of a surcharge applied under sec-
tion 2484(e) of this title.
‘‘(f) DONATION OF UNUSABLE FOOD.—(1) The Sec-
retary of Defense may donate food described in paragraph
(2) to any of the following entities:
‘‘(A) A charitable nonprofit food bank that is
designated by the Secretary of Defense or the Sec-
291
retary of Health and Human Services as authorized
to receive such donations.
‘‘(B) A State or local agency that is designated
by the Secretary of Defense or the Secretary of
Health and Human Services as authorized to receive
such donations.
‘‘(C) A chapter or other local unit of a recog-
nized national veterans organization that provides
services to persons without adequate shelter and is
designated by the Secretary of Veterans Affairs as
authorized to receive such donations.
‘‘(D) A not-for-profit organization that provides
care for homeless veterans and is designated by the
Secretary of Veterans Affairs as authorized to re-
ceive such donations.
‘‘(2) Food that may be donated under this subsection
is commissary store food, mess food, meals ready-to-eat
(MREs), rations known as humanitarian daily rations
(HDRs), and other food available to the Secretary of De-
fense that—
‘‘(A) is certified as edible by appropriate food
inspection technicians;
‘‘(B) would otherwise be destroyed as unusable;
and
292
‘‘(C) in the case of commissary store food, is
unmarketable and unsaleable.
‘‘(3) In the case of commissary store food, a donation
under this subsection shall take place at the site of the
commissary store that is donating the food.
‘‘(4) This subsection does not authorize any service
(including transportation) to be provided in connection
with a donation under this subsection.
‘‘(g) COLLECTION OF DISHONORED CHECKS.—(1)
The Secretary of Defense may impose a charge for the
collection of a check accepted at a commissary store that
is not honored by the financial institution on which the
check is drawn. The imposition and amounts of charges
shall be consistent with practices of commercial grocery
stores regarding dishonored checks.
‘‘(2)(A) The following persons are liable to the United
States for the amount of a check referred to in paragraph
(1) that is returned unpaid to the United States, together
with any charge imposed under that paragraph:
‘‘(i) The person who presented the check.
‘‘(ii) Any person whose status and relationship
to the person who presented the check provide the
basis for that person’s eligibility to make purchases
at a commissary store.
293
‘‘(B) Any amount for which a person is liable under
subparagraph (A) may be collected by deducting and with-
holding such amount from any amounts payable to that
person by the United States.
‘‘(3) Amounts collected as charges imposed under
paragraph (1) shall be credited to the commissary trust
revolving fund.
‘‘(4) Appropriated funds may be used to pay any
costs incurred in the collection of checks and charges re-
ferred to in paragraph (1). An appropriation account
charged a cost under the preceding sentence shall be reim-
bursed the amount of that cost out of funds in the com-
missary trust revolving fund.
‘‘(5) In this subsection, the term ‘commissary trust
revolving fund’ means the trust revolving fund maintained
by the Department of Defense for surcharge collections
and proceeds of sales of commissary stores.
‘‘(h) RELEASE OF CERTAIN COMMERCIALLY VALU-
ABLE INFORMATION TO PUBLIC.—(1) The Secretary of
Defense may limit the release to the public of any informa-
tion described in paragraph (2) if the Secretary deter-
mines that it is in the best interest of the Department
of Defense to limit the release of such information. If the
Secretary determines to limit the release of any such infor-
294
mation, the Secretary may provide for limited release of
such information in accordance with paragraph (3).
‘‘(2) Paragraph (1) applies to the following:
‘‘(A) Information contained in the computerized
business systems of commissary stores or the De-
fense Commissary Agency that is collected through
or in connection with the use of electronic scanners
in commissary stores, including the following infor-
mation:
‘‘(i) Data relating to sales of goods or serv-
ices.
‘‘(ii) Demographic information on cus-
tomers.
‘‘(iii) Any other information pertaining to
commissary transactions and operations.
‘‘(B) Business programs, systems, and applica-
tions (including software) relating to commissary op-
erations that were developed with funding derived
from commissary surcharges.
‘‘(3)(A) The Secretary of Defense may, using com-
petitive procedures, enter into a contract to sell informa-
tion described in paragraph (2).
‘‘(B) The Secretary of Defense may release, without
charge, information on an item sold in commissary stores
295
to the manufacturer or producer of that item or an agent
of the manufacturer or producer.
‘‘(C) The Secretary of Defense may, by contract en-
tered into with a business, grant to the business a license
to use business programs referred to in paragraph (2)(B),
including software used in or comprising any such pro-
gram. The fee charged for the license shall be based on
the costs of similar programs developed and marketed by
businesses in the private sector, determined by means of
surveys.
‘‘(D) Each contract entered into under this para-
graph shall specify the amount to be paid for information
released or a license granted under the contract, as the
case may be.
‘‘(4) Information described in paragraph (2) may not
be released, under paragraph (3) or otherwise, in a form
that identifies any customer or that provides information
making it possible to identify any customer.
‘‘(5) Amounts received by the Secretary under this
section shall be credited to funds derived from commissary
surcharges applied under section 2484(e) of this title,
shall be merged with those funds, and shall be available
for the same purposes as the funds with which merged.’’.
296
(b) RELATION BETWEEN DEFENSE COMMISSARY
AND EXCHANGE SYSTEMS.—Chapter 147 of title 10,
United States Code, is further amended—
(1) by inserting after section 2485, as amended
by subsection (a)(7), the following:
‘‘SUBCHAPTER 
II—RELATIONSHIP, 
CONTINU-
ATION, AND COMMON POLICIES OF DE-
FENSE COMMISSARY AND EXCHANGE SYS-
TEMS
‘‘Sec.
‘‘2487. Existence and purpose of defense commissary system.
‘‘2488. Combined exchange and commissary stores.
‘‘2489. Overseas commissary and exchange stores: access and purchase restric-
tions.
‘‘§ 2487. Relationship between defense commissary
system and exchange stores system
‘‘(a) SEPARATE SYSTEMS.—(1) Except as provided in
paragraph (2), the defense commissary system and the ex-
change stores system shall be operated as separate sys-
tems of the Department of Defense.
‘‘(2) Paragraph (1) does not apply to the following:
‘‘(A) Combined exchange and commissary
stores operated under the authority provided by sec-
tion 2489 of this title.
‘‘(B) NEXMART stores of the Navy Exchange
Service Command established before October 1,
2003.
297
‘‘(b) CONSOLIDATION OR OTHER ORGANIZATIONAL
CHANGES OF DEFENSE RETAIL SYSTEMS.—(1) The oper-
ation and administration of the defense retail systems may
not be consolidated or otherwise merged unless the con-
solidation or merger is specifically authorized by an Act
of Congress.
‘‘(2) In this subsection, the term ‘defense retail sys-
tems’ means the defense commissary system and exchange
stores system and other revenue-generating facilities oper-
ated by nonappropriated fund instrumentalities of the De-
partment of Defense for the morale, welfare, and recre-
ation of members of the armed forces’’;
(2) by redesignating sections 2488, 2489,
2489a as sections 2495, 2495a, and 2495b, respec-
tively; and
(3) by redesignating sections 2490a and 2492
as sections 2488 and 2489, respectively, and insert-
ing such sections after section 2487, as added by
paragraph (1).
(c) MWR PROGRAMS AND NONAPPROPRIATED FUND
INSTRUMENTALITIES.—Chapter 147 of title 10, United
States Code, is further amended—
(1) by inserting after section 2489, as redesig-
nated and moved by subsection (b)(3), the following:
298
‘‘SUBCHAPTER III—MORALE, WELFARE, AND
RECREATION 
PROGRAMS 
AND 
NON-
APPROPRIATED 
FUND 
INSTRUMENTAL-
ITIES
‘‘Sec.
‘‘2491. Uniform funding and management of morale, welfare, and recreation
programs.
‘‘2491a. Department of Defense golf courses: limitation on use of appropriated
funds.
‘‘2491b. Use of appropriated funds for operation of Armed Forces Recreation
Center, Europe: limitation.
‘‘2491c. Retention of morale, welfare, and recreation funds by military installa-
tions: limitation.
‘‘2492. Nonappropriated fund instrumentalities: contracts with other agencies
and instrumentalities to provide and obtain goods and services.
‘‘2493. Fisher Houses: administration as nonappropriated fund instrumentality.
‘‘2494. Nonappropriated fund instrumentalities: furnishing utility services for
morale, welfare, and recreation purposes.
‘‘2495. Nonappropriated fund instrumentalities: purchase of alcoholic beverages.
‘‘2495a. Overseas package stores: treatment of United States wines.
‘‘2495b. Sale or rental of sexually explicit material prohibited.’’;
(2) by redesignating section 2494 as section
2491 and inserting such section after the table of
sections at the beginning of subchapter III, as added
by paragraph (1);
(3) by redesignating section 2482a as section
2492 and inserting such section before section 2493;
(4) by inserting after section 2493 the following
new section:
‘‘§ 2494. Nonappropriated fund instrumentalities: fur-
nishing utility services for morale, wel-
fare, and recreation purposes
‘‘Appropriations for the Department of Defense may
be used to provide utility services for—
299
‘‘(1) buildings on military installations author-
ized by regulation to be used for morale, welfare,
and recreation purposes; and
‘‘(2) other morale, welfare, and recreation ac-
tivities for members of the armed forces.’’; and
(5) by inserting sections 2495, 2495a, and
2495b, as redesignated by subsection (b)(2), after
section 2494, as added by paragraph (4).
(d) INCLUSION OF OTHER TITLE 10 PROVISIONS.—
Sections 2246, 2247, and 2219 of title 10, United States
Code, are—
(1) transferred to chapter 147 of such title;
(2) inserted after section 2491, as redesignated
and moved by subsection (c)(2); and
(3) redesignated as sections 2491a, 2491b, and
2491c, respectively.
(e) CONFORMING AMENDMENTS.—(1) Section 977 of
title 10, United States Code, is repealed.
(2) Section 2868 of such title is amended by striking
‘‘for—’’ and all that follows through the period at the end
and inserting ‘‘for buildings constructed at private cost,
as authorized by law.’’.
(3) Section 367 of the Strom Thurmond National De-
fense Authorization Act for Fiscal Year 1999 (Public Law
300
105–261; 112 Stat. 1987; 10 U.S.C. 2482 note) is re-
pealed.
(f) CLERICAL AMENDMENTS.—(1) The table of sec-
tions at the beginning of chapter 49 of title 10, United
States Code, is amended by striking the item relating to
section 977.
(2) The table of sections at the beginning of chapter
132 of such title is amended by striking the item relating
to section 2219.
(3) The table of sections at the beginning of sub-
chapter I of chapter 134 of such title is amended by strik-
ing the items relating to sections 2246 and 2247.
SEC. 652. CONSISTENT STATE TREATMENT OF DEPART-
MENT 
OF 
DEFENSE 
NONAPPROPRIATED
FUND HEALTH BENEFITS PROGRAM.
Section 349 of the National Defense Authorization
Act for Fiscal Year 1995 (Public Law 103–337; 108 Stat.
2727) is amended by adding at the end the following new
subsection:
‘‘(c) TREATMENT
OF
PROGRAM
AS
FEDERAL
HEALTH BENEFIT PROGRAM.—(1) No State tax, fee,
other monetary payment, or State health plan require-
ment, may be imposed, directly or indirectly, on the Non-
appropriated Fund Uniform Health Benefits Program of
the Department of Defense, or on a carrier or an under-
301
writing or plan administration contractor of the Program,
to the same extent as such prohibition applies to the
health insurance program authorized by chapter 89 of title
5, United States Code, under section 8909(f) of such title.
‘‘(2) Paragraph (1) shall not be construed to exempt
the Nonappropriated Fund Uniform Health Benefits Pro-
gram of the Department of Defense, or any carrier or un-
derwriting or plan administration contractor of the Pro-
gram from the imposition, payment, or collection of a tax,
fee, or other monetary payment on the net income or prof-
it accruing to, or realized by, the Program or by such car-
rier or contractor from business conducted under the Pro-
gram, so long as the tax, fee, or payment is applicable
to a broad range of business activity.
‘‘(3) In this section, the term ‘State’ means each of
the several States, the District of Columbia, the Common-
wealth of Puerto Rico, the United States Virgin Islands,
Guam, American Samoa, and the Commonwealth of the
Northern Mariana Islands, and any political subdivision
or other non-Federal authority thereof.’’.
302
SEC. 653. COOPERATION AND ASSISTANCE FOR QUALIFIED
SCOUTING 
ORGANIZATIONS 
SERVING 
DE-
PENDENTS OF MEMBERS OF THE ARMED
FORCES AND CIVILIAN EMPLOYEES OVER-
SEAS.
(a) AUTHORITY TO COOPERATE AND PROVIDE AS-
SISTANCE.—Subsection (a) of section 2606 of title 10,
United States Code, is amended—
(1) in subsection (a), by striking ‘‘Subject to
subsection (b)’’ and inserting ‘‘In the interest of pro-
moting the recognized morale, welfare, and recre-
ation of members of the armed forces’’; and
(2) in subsection (b), by striking ‘‘and may’’
and all that follows through ‘‘armed forces’’.
(b) TREATMENT OF ORGANIZATIONS AND EMPLOY-
EES.—Such section is further amended—
(1) by striking subsections (e) and (f);
(2) by redesignating subsections (c) and (d) as
subsections (e) and (f), respectively; and
(3) by inserting after subsection (b) the fol-
lowing new subsections:
‘‘(c) TREATMENT AS NONAPPROPRIATED FUND IN-
STRUMENTALITIES.—(1) Subject to paragraphs (2) and
(3), to the extent a qualified scouting organization is pro-
viding services for members of the armed forces and their
dependents, or civilian employees of the Department of
303
Defense and their dependents, at a location outside the
United States consistent with the regulations prescribed
under subsection (b), the qualified scouting organization
shall be a nonappropriated fund instrumentality of the De-
partment of Defense.
‘‘(2) 
Notwithstanding 
treatment 
as 
a 
non-
appropriated fund instrumentality of the Department of
Defense, personnel of the qualified scouting organization
who are performing duties in connection with cooperation
and assistance provided under subsection (a) may continue
such policies and procedures related to personnel manage-
ment and such other policies or procedures established by
the qualified scouting organization as the personnel con-
sider appropriate, subject to the approval of the qualified
scouting organization.
‘‘(3) A qualified scouting organization operating out-
side the United States may operate as a private associa-
tion overseas for the purpose of raising funds. Any funds
so raised may not be commingled with amounts retained
in a nonappropriated morale, welfare, and recreation ac-
count of the Department of Defense.
‘‘(d) TREATMENT AS NONAPPROPRIATED FUND IN-
STRUMENTALITY EMPLOYEES.—(1) Personnel of a quali-
fied scouting organization who are performing duties in
connection with cooperation and assistance provided under
304
subsection (a) for members of the armed forces and their
dependents, or civilian employees of the Department of
Defense and their dependents, shall be nonappropriated
fund instrumentality employees of the United States for
any period during which the personnel perform such du-
ties.
‘‘(2) Such personnel of a qualified scouting organiza-
tion shall receive the same benefits, entitlements, and
logistical support as other nonappropriated fund instru-
mentality employees, except that such personnel—
‘‘(A) shall be allowed to decline to participate in
retirement programs or other personnel management
policies or procedures available to other non-
appropriated fund instrumentality employees and
elect to continue the programs, policies or proce-
dures made available by the qualified scouting orga-
nization; and
‘‘(B) shall not receive nonappropriated fund in-
strumentality employment credit nor rehire priority.
‘‘(3) In the regulations prescribed under subsection
(b), the Secretary of Defense may authorize the use of
funds appropriated to the Department of Defense to pay
costs of such personnel of a qualified scouting organiza-
tion, including reimbursement of the personnel or the
qualified scouting organization, in the case of those retire-
305
ment, personnel management, and other compensation
programs regarding which the personnel have elected to
continue the programs made available to them by the
qualified scouting organization.’’.
(c) CONFORMING AND CLERICAL AMENDMENTS.—
Such section is further amended—
(1) in subsection (a), by inserting ‘‘AUTHORITY
TO COOPERATE AND PROVIDE ASSISTANCE.—’’ after
‘‘(a)’’;
(2) in subsection (c), by inserting ‘‘BASIS FOR
COOPERATION AND ASSISTANCE.—’’;
(3) in subsection (e), as redesignated by sub-
section (b)(2)—
(A) by inserting ‘‘PROVISION OF TRANS-
PORTATION, SPACE, AND SERVICES.—’’ after
‘‘(e)’’; and
(B) in the matter preceding paragraph (1),
by inserting ‘‘, using the authority of subsection
(d)(3)’’ after ‘‘furnished’’;
(4) in subsection (f), as redesignated by sub-
section (b)(2), by inserting ‘‘TRANSPORTATION OF
SUPPLIES.—’’ after ‘‘(f)’’; and
(5) in subsection (g), by inserting ‘‘DEFINI-
TION.—’’ after ‘‘(g)’’.
306
Subtitle F—Other Matters
SEC. 661. REPEAL OF REQUIREMENT THAT MEMBERS ENTI-
TLED TO BASIC ALLOWANCE FOR SUBSIST-
ENCE PAY SUBSISTENCE CHARGES WHILE
HOSPITALIZED.
(a) REPEAL.—(1) Section 1075 of title 10, United
States Code, is repealed.
(2) The table of sections at the beginning of chapter
55 of such title is amended by striking the item relating
to section 1075.
(b) CONFORMING AMENDMENT REGARDING MILI-
TARY-CIVILIAN HEALTH SERVICES PARTNERSHIP PRO-
GRAM.—Section 1096(c) of such title is amended—
(1) by inserting ‘‘who is a dependent’’ after
‘‘covered beneficiary’’; and
(2) by striking ‘‘shall pay’’ and all that follows
through the period at the end of paragraph (2) and
inserting ‘‘shall pay the charges prescribed by sec-
tion 1078 of this title.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall take effect on the date of the enactment
of this Act.
307
SEC. 662. CLARIFICATION OF EDUCATION LOANS QUALI-
FYING FOR EDUCATION LOAN REPAYMENT
PROGRAM 
FOR 
RESERVE 
COMPONENT
HEALTH PROFESSIONS OFFICERS.
Section 16302(a)(5) of title 10, United States Code,
is amended by inserting ‘‘a basic professional qualifying
degree (as determined under regulations prescribed by the
Secretary of Defense) or graduate education in’’ after ‘‘re-
garding’’.
SEC. 663. SURVEY AND ANALYSIS OF EFFECT OF EXTENDED
AND FREQUENT MOBILIZATION OF RESERV-
ISTS FOR ACTIVE DUTY SERVICE ON RESERV-
IST INCOME.
(a) SURVEY OF MOBILIZED RESERVISTS TO DETER-
MINE DIFFERENTIAL BETWEEN PRIVATE SECTOR IN-
COME AND MILITARY COMPENSATION.—(1) The Secretary
of Defense shall conduct a survey involving members of
the reserve components who serve, or have served, on ac-
tive duty in support of a contingency operation at any time
during the period beginning on September 11, 2001, and
ending on September 30, 2005, to determine the extent
to which such members sustained a reduction in monthly
income during the period of the active duty service com-
pared to the average monthly civilian income of the mem-
bers during the 12 months preceding their mobilization.
308
(2) At least 50 percent of the total number of mem-
bers of the reserve components who have served on active
duty in support of a contingency operation at any time
during the period specified in paragraph (1) shall be in-
cluded in the survey.
(b) CALCULATION OF INCOME DIFFERENTIAL.—For
each member surveyed under subsection (a) who reports
that total monthly military compensation during the active
duty service of the member was less, or appeared to be
less, than the average monthly civilian income of the mem-
ber, the Secretary of Defense, in cooperation with the
member, shall calculate the monthly active-duty income
differential for the member.
(c) DEFINITIONS USED
IN CONDUCTING SURVEY
AND CALCULATIONS.—In this section:
(1) The term ‘‘monthly active-duty income dif-
ferential’’, with respect to a member of a reserve
component surveyed under subsection (a), means the
difference between—
(A) the average monthly civilian income of
the member; and
(B) the total monthly military compensa-
tion of the member.
(2) The term ‘‘average monthly civilian in-
come’’, with respect to a member of a reserve com-
309
ponent surveyed under subsection (a), means the
amount, determined by the Secretary of Defense, of
the earned income of the member for the 12 months
preceding the first mobilization of the member dur-
ing the period specified in subsection (a)(1), divided
by 12.
(3) The term ‘‘total monthly military compensa-
tion’’, with respect to a member of a reserve compo-
nent surveyed under subsection (a), means the
amount, computed on a monthly basis, of the sum
of—
(A) the amount of the regular military
compensation (RMC), as defined in section
101(25) of title 37, United States Code, of the
member during the period specified in sub-
section (a)(1); and
(B) any amount of special pay or incentive
pay and any allowance (other than an allowance
included in regular military compensation) that
is paid to the member on a monthly basis dur-
ing the period specified in subsection (a)(1).
(d) COLLECTION
OF DEMOGRAPHIC DATA.—The
Secretary of Defense shall collect demographic data re-
garding each member of a reserve component surveyed
310
under subsection (a), including, at a minimum, data on
the following:
(1) Reserve component.
(2) Unit of assignment.
(3) Grade.
(4) Age.
(5) Years of service.
(6) Sex.
(7) Marital status.
(8) Number of dependents.
(9) General category of private-sector employ-
ment, as determined by the Secretary, but to include
an employment category to cover members who are
self-employed.
(10) Military occupational specialty, including
specifying all surveyed members who are serving in
a critical wartime specialty.
(11) Length of service on active duty during
the most recent mobilization.
(12) Number of times mobilized since Sep-
tember 11, 2001.
(e) EFFECT OF INCOME LOSS ON RETENTION.—The
Secretary of Defense shall include in the survey a question
to solicit information from each member of a reserve com-
ponent surveyed under subsection (a) regarding the likely
311
effect of a reoccurring monthly active-duty income dif-
ferential for the member while serving on active duty on
the decision of the member to remain in the reserve com-
ponent.
(f) ANALYSIS OF SURVEY DATA.—(1) At a minimum,
the Secretary of Defense shall determine, for each variable
listed in paragraphs (2) through (12) of subsection (d),
the number of members of the reserve components sur-
veyed under subsection (a) who sustained a monthly ac-
tive-duty income differential for any month during their
active duty service and compare and contrast that number
with the number of members who did not experience a
monthly active-duty income differential.
(2) The Secretary shall also determine the average
amount of the active-duty income differential by reserve
component for each variable within the characteristics list-
ed in paragraphs (2) through (12) of subsection (d).
(g) SUBMISSION OF SURVEY RESULTS AND REC-
OMMENDATIONS.—Not later than January 31, 2006, the
Secretary of Defense shall submit to Congress and the
Comptroller General a report containing the results of the
surveys conducted under subsection (a), including the re-
sults of the analysis of survey data required by subsection
(e). The Secretary shall include such recommendations as
the Secretary considers appropriate regarding alternatives
312
for restoring income lost by members of the reserve com-
ponents who sustained a monthly active-duty income dif-
ferential during their active duty service.
(h) COMPTROLLER
GENERAL
EVALUATION.—Not
later than March 31, 2006, the Comptroller General shall
submit to Congress an assessment of the findings and rec-
ommendations contained in the report of the Secretary of
Defense submitted under subsection (g).
TITLE VII—HEALTH CARE
PROVISIONS
Subtitle A—Enhanced Benefits for
Reserves
SEC. 701. DEMONSTRATION PROJECT FOR TRICARE COV-
ERAGE FOR READY RESERVE MEMBERS.
(a) DEMONSTRATION PROGRAM.—Section 1076b of
title 10, United States Code, is amended to read as fol-
lows:
‘‘§ 1076b. TRICARE demonstration project: coverage
for members of the Ready Reserve
‘‘(a) IN GENERAL.—(1) The Secretary of Defense
shall conduct a demonstration project beginning in fiscal
year 2005 to test whether TRICARE coverage for certain
Ready Reserve members and their families enhances med-
ical readiness and retention of such members.
313
‘‘(2) Under the demonstration project required by
paragraph (1), within the scope of the project, as estab-
lished by the Secretary, members of the Ready Reserve
may be allowed to enroll for coverage under the TRICARE
Standard option of the TRICARE program and receive
benefits under such enrollment for any period that the
member—
‘‘(A) is not eligible for health care benefits
under an employer-sponsored health benefits plan;
and
‘‘(B) either—
‘‘(i) is not on active duty; or
‘‘(ii) is on active duty but under a call or
order to active duty for a period of 30 days or
less.
‘‘(3) A member allowed to enroll in TRICARE Stand-
ard under the demonstration project may enroll for self-
only coverage or self and family coverage.
‘‘(b) SCOPE OF COVERAGE .—A member and the de-
pendents of a member enrolled in TRICARE Standard
under this section shall be entitled to the same benefits
and shall pay the same charges as are provided under sec-
tion 1079 of this title.
‘‘(c) PREMIUMS.—(1) The Secretary of Defense shall
charge premiums for coverage pursuant to enrollments
314
under this section. The Secretary shall prescribe a pre-
mium for self only coverage and a premium for self and
family coverage.
‘‘(2) The monthly amount of the premium in effect
for a month for a type of coverage under this section shall
be the amount equal to 28 percent of the total amount
determined by the Secretary on an appropriate actuarial
basis as being reasonable for the coverage.
‘‘(3) The premiums payable by a member under this
subsection may be deducted and withheld from basic pay
payable to the member under section 204 of title 37 or
from compensation payable to the member under section
206 of such title. The Secretary shall prescribe the re-
quirements and procedures applicable to the payment of
premiums by members not entitled to such basic pay or
compensation.
‘‘(4) Amounts collected as premiums under this sub-
section shall be credited to the appropriation available for
the Defense Health Program Account under section 1100
of this title, shall be merged with sums in such Account
that are available for the fiscal year in which collected,
and shall be available under subparagraph (B) of such sec-
tion for such fiscal year.
‘‘(d) CONDITIONS OF ELIGIBILITY.—(1) The Sec-
retary of Defense may establish other conditions of eligi-
315
bility, including requiring a member to submit any certifi-
cation that the Secretary considers appropriate to sub-
stantiate the member’s assertion that the member is not
eligible for health care benefits under any other health
benefits plan.
‘‘(2) In the case of any member who is self-employed
and not eligible for coverage under any other employer-
sponsored health benefits plan, the member shall not be
considered eligible to enroll under this section if the mem-
ber’s income in the prior calendar year exceeded $40,000.
‘‘(e) SCOPE
AND
TERMS
OF
DEMONSTRATION
PROJECT.—The geographic scope and priorities for enroll-
ment under the demonstration program, if any, shall be
established by the Secretary of Defense. The Secretary
may establish such other terms and conditions for the
demonstration project required by subsection (a) as the
Secretary determines appropriate to accomplish its pur-
poses.
‘‘(f) TERMINATION OF AUTHORITY.—An enrollment
in TRICARE under this section may not continue after
December 31, 2007.
‘‘(g) EVALUATION OF DEMONSTRATION AND REPORT
TO CONGRESS.—Not later than March 1, 2007, the Sec-
retary shall provide to Congress a report on the results
of the demonstration project required by this section. Such
316
report shall include an analysis of the impact of the dem-
onstration on medical readiness and retention of the mem-
bers who enrolled, an assessment of the costs and benefits
of any improvements in medical readiness or retention,
and recommendations concerning TRICARE Standard
coverage for Ready Reserve members.
‘‘(h) DEFINITION.—In this section, the term
‘TRICARE Standard’ means the option of the TRICARE
program that is also known as the Civilian Health and
Medical Program of the Uniformed Services, as defined
in section 1072(4) of this title.’’.
(b) TERMINATION
OF COVERAGE UNDER SUPER-
SEDED PROVISION OF LAW.—An enrollment in TRICARE
under section 1076b of title 10, United States Code, as
in effect before the date of the enactment of this Act may
not continue after such date.
(c) SITE IDENTIFICATION.—(1) Not later than 60
days after the date of enactment of this Act, the Secretary
of Defense, in consultation with the Committees on Armed
Services of the Senate and the House of Representatives,
shall identify not less than 10 sites that meet the criteria
specified in paragraph (2) for the conduct of the dem-
onstration project required under section 1076b of title
10, United States Code, as amended by this section.
317
(2) For purposes of paragraph (1), the sites selected
for the conduct of the demonstration project shall be areas
of the United States that include a substantial number
of personnel expected to be ordered to active duty for a
period of more than 30 days.
(d) INDEPENDENT EVALUATION AND REPORTS.—(1)
The Comptroller General shall conduct an evaluation of
the demonstration project required under section 1076b
of title 10, United States Code (as amended by this sec-
tion) The evaluation shall include an assessment of the
following:
(A) Compliance by the Department of Defense
with the requirements under section 1076b of title
10, United States Code (as amended by this sec-
tion).
(B) A description of the effects of the dem-
onstration project on medical readiness and reten-
tion of the participants compared to nonparticipants.
(C) The number of Ready Reserve members
and their dependents opting to participate in the
demonstration project.
(D) An analysis of how the demonstration
project affects the overall accessibility of care in the
direct and purchased care systems and a description
318
of the unintended effects (if any) upon the normal
treatment priority system.
(E) A description of the difficulties (if any) ex-
perienced by the Department of Defense in man-
aging the demonstration project.
(F) Any impact of the demonstration project on
employers, including causing them to discontinue
health care insurance benefits for employees who are
members of the reserves.
(G) A recommendation whether to extend the
demonstration project or make the project perma-
nent.
(H) A determination of whether the terms and
conditions of the demonstration project should be
continued or modified if the project is extended or
expanded.
(I) Implications on cost, medical readiness, re-
cruitment, and retention if the demonstration project
was made available to all reservists meeting the en-
rollment criteria throughout the United States and
its territories.
(J) Any additional elements that the Comp-
troller General determines are appropriate to assess
the demonstration project.
319
(2) The Comptroller General shall submit to the
Committees on Armed Services of the Senate and the
House of Representatives—
(A) an interim report on the evaluation under
this section not later than 12 months after the date
on which the demonstration project begins operation;
and
(B) a final report on the evaluation under this
section not later than March 1, 2007.
SEC. 702. COMPTROLLER GENERAL REPORT ON THE COST
AND FEASIBILITY OF PROVIDING PRIVATE
HEALTH INSURANCE STIPENDS FOR MEM-
BERS OF THE READY RESERVES.
(a) STUDY REQUIRED.—The Comptroller General
shall conduct a study on the cost and feasibility of pro-
viding a stipend to members of the Ready Reserves to off-
set the cost of continuing private health insurance cov-
erage for the member’s dependents when the member is
on active duty for a period of more than 30 days, with
the dependents being ineligible to enroll in the TRICARE
program and payment of the stipend ending when the
member is no longer on active duty.
(b) MATTERS COVERED.—The study shall include the
following matters:
320
(1) Recommendation for a benefit amount and
cost to the Department of Defense.
(2) Potential effects on medical readiness, re-
cruitment, and retention.
(3) The extent to which the Reserves and mem-
bers of their families might participate under the sti-
pend program.
(4) Administrative and management consider-
ations for the Department of Defense.
(5) Impact of pre-existing conditions on con-
tinuity of care for dependents.
(6) Possible implications for employers.
(c) REPORT.—Not later than March 31, 2005, the
Comptroller General shall submit to the Committee on
Armed Services of the Senate and the Committee on
Armed Services of the House of Representatives a report
containing the results of the study under this section.
SEC. 703. IMPROVEMENT OF MEDICAL SERVICES FOR ACTI-
VATED MEMBERS OF THE READY RESERVE
AND THEIR FAMILIES.
(a) REQUIREMENT FOR TRICARE COVERAGE FOR
DEPENDENTS OF MEMBERS OF RESERVE COMPONENTS
CALLED TO ACTIVE DUTY.—Paragraph (1) of section
1074(d) of title 10, United States Code, is amended—
321
(1) by inserting ‘‘a dependent of’’ after ‘‘chap-
ter,’’;
(2) by inserting ‘‘a dependent of a member’’
after ‘‘treated as being’’; and
(3) by striking ‘‘the later of’’ and all that fol-
lows through the period at the end of subparagraph
(B) and inserting ‘‘the date described in paragraph
(3).’’.
(b) AUTHORITY
FOR TRICARE COVERAGE
FOR
MEMBERS OF RESERVE COMPONENTS CALLED TO AC-
TIVE DUTY.—Section 1074(d) of such title is further
amended—
(1) by striking paragraph (3);
(2) by redesignating paragraph (2) as para-
graph (4); and
(3) by inserting after paragraph (1) the fol-
lowing new paragraphs:
‘‘(2) The Secretary of Defense may, beginning on the
date described in paragraph (3), provide a member of a
reserve component of the armed forces who is issued a
delayed-effective-date active-duty order, or is covered by
such an order, such medical and dental care (in addition
to care for which the member is eligible under section
1074a(f) of this title or other provisions of law) the Sec-
retary determines appropriate.
322
‘‘(3) The date referred to in paragraphs (1) and (2)
with respect to a member is the later of the date that is—
‘‘(A) the date of the issuance of the delayed-ef-
fective-date active-duty order; or
‘‘(B) 90 days before the date on which the pe-
riod of active duty is to commence under such order
for that member.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall take effect on January 1, 2005.
SEC. 
704. 
MODIFICATION 
OF 
WAIVER 
OF 
CERTAIN
DEDUCTIBLES UNDER TRICARE PROGRAM.
Section 1095d(a) of title 10, United States Code, is
amended in paragraphs (1) and (2) by striking ‘‘less than
one year’’ each place it appears and inserting ‘‘more than
30 days’’.
SEC. 705. AUTHORITY FOR PAYMENT BY UNITED STATES OF
ADDITIONAL AMOUNTS BILLED BY HEALTH
CARE PROVIDERS TO ACTIVATED RESERVE
MEMBERS.
Section 1079(h) of title 10, United States Code, is
amended by adding at the end of paragraph (4) the fol-
lowing new subparagraph:
‘‘(C) In the case of services billed to a dependent re-
ferred to in subsection (a) of a member of a reserve com-
ponent who is ordered to active duty for a period of more
323
than 30 days in support of a contingency operation under
a provision of law referred to in section 101(a)(13)(B) of
this title, the regulations shall provide that, in addition
to amounts otherwise payable by the United States, the
Secretary may pay the amount referred to in subpara-
graph (B)(i) for the services.’’.
SEC. 706. EXTENSION OF TRANSITIONAL HEALTH CARE
BENEFITS AFTER SEPARATION FROM ACTIVE
DUTY.
(a) EXTENSION OF TRANSITIONAL HEALTH CARE
BENEFITS.—Paragraph (3) of section 1145(a) of title 10,
United States Code, is amended to read as follows:
‘‘(3) Transitional health care shall be available under
this subsection for a period beginning on the date on
which the member is separated from active duty and end-
ing on the earlier of—
‘‘(A) 180 days after the date on which the
member is separated from active duty; or
‘‘(B) the date on which the member and de-
pendents of the member are covered by a health plan
sponsored by an employer.’’.
(b) LIMITATION.—During the period beginning on
January 1, 2005, and ending on September 30, 2005, not
more than $170,000,000 of the amount appropriated pur-
suant to the authorization for operations and maintenance
324
for the Defense Health Program in section 303(a) may
be used for transitional health care under section 1145(a)
of title 10, United States Code, as amended by this sec-
tion.
(c) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply with respect to separations from
active duty that take effect on or after January 1, 2005.
Subtitle B—Other Benefits
Improvements
SEC. 711. COVERAGE OF CERTAIN YOUNG CHILDREN
UNDER TRICARE DENTAL PROGRAM.
(a) COVERAGE OF CERTAIN YOUNG CHILDREN.—
Section 1076a(k)(2) of title 10, United States Code, is
amended by inserting after ‘‘by reason of’’ the following:
‘‘the dependent’s young age on the date of death of the
member of’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall take effect on the date of the enact-
ment of this Act.
SEC. 712. COMPTROLLER GENERAL REPORT ON PROVISION
OF HEALTH AND SUPPORT SERVICES FOR EX-
CEPTIONAL FAMILY MEMBER PROGRAM EN-
ROLLEES.
(a) EVALUATION REQUIREMENT.—The Comptroller
General shall evaluate the effect of the Exceptional Family
325
Member Program (in this section referred to as ‘‘EFMP’’)
on health and support services in selected civilian commu-
nities near military installations with a high concentration
of EFMP enrollees.
(b) MATTERS COVERED.—The evaluation under sub-
section (a) shall include a discussion of the following:
(1) Communities that have high concentrations
of EFMP enrollees that use State and local health
and support services.
(2) Needs of EFMP enrollees, if any, that are
not met by State and local health and support serv-
ices.
(3) The burdens, financial and otherwise,
placed on State and local health and support serv-
ices by EFMP enrollees and their families.
(4) The ability of the TRICARE program to
meet the needs of EFMP enrollees and their fami-
lies.
(5) Reasons 
for 
any 
limitations 
of 
the
TRICARE program, the EFMP, and State and local
health and support services in providing assistance
to EFMP enrollees and their families.
(6) Recommendations for more effectively meet-
ing the needs of EFMP enrollees and their families.
326
(c) COMMUNITIES COVERED.—The evaluation under
subsection (a) shall examine no fewer than four civilian
communities, as determined by the Comptroller General,
that have high concentrations of EFMP enrollees and that
are near several military installations, including at least
two military installations with tenants from more than one
of the Armed Forces.
(d) DEFINITIONS.—In this section:
(1) The term ‘‘health and support services’’
means services provided to children and other de-
pendents with special needs, including specialized
day care, mental health day treatment services, res-
pite services, counseling, and other such services
provided for children and other dependents with spe-
cial needs.
(2) The term ‘‘TRICARE program’’ has the
meaning given that term in section 1072(7) of title
10, United States Code.
(e) REPORT.—Not later than March 31, 2005, the
Comptroller General shall submit to the Armed Services
Committees of the Senate and the House of Representa-
tives a report on the results of the evaluation required
under subsection (a), with findings and recommendations.
327
SEC. 713. EXCEPTIONAL ELIGIBILITY FOR TRICARE PRIME
REMOTE.
Section 1079(p) of title 10, United States Code, is
amended—
(1) by redesignating paragraph (4) as para-
graph (5); and
(2) by inserting after paragraph (3) the fol-
lowing new paragraph:
‘‘(4) The Secretary of Defense may provide for cov-
erage of a dependent referred to in subsection (a) who is
not described in paragraph (3) if the Secretary determines
that exceptional circumstances warrant such coverage.’’.
SEC. 714. TRANSITION TO HOME HEALTH CARE BENEFIT
UNDER SUB-ACUTE CARE PROGRAM.
Section 1074j of title 10, United States Code, is
amended in subsection (b)(3)—
(1) by inserting ‘‘(A)’’ after ‘‘(3)’’; and
(2) by adding at the end the following:
‘‘(B) The Secretary of Defense shall establish proce-
dures for the transition to and implementation of the
home health care benefit required by subparagraph (A).
The Secretary may provide in such procedures that cov-
ered beneficiaries who, before the implementation of such
benefit, received home health care under this chapter in
excess of such benefit, may continue to receive such care
for such time as the Secretary considers appropriate.’’.
328
SEC. 715. REQUIREMENT RELATING TO PRESCRIPTION
DRUG BENEFITS FOR MEDICARE-ELIGIBLE
ENROLLEES UNDER DEFENSE HEALTH CARE
PLANS.
Section 1074g(a)(6) of title 10, United States Code,
is amended—
(1) by inserting ‘‘(A)’’ after ‘‘(6)’’; and
(2) by adding at the end the following:
‘‘(B) For a medicare-eligible beneficiary, the
cost-sharing requirements may not be in excess of
the cost-sharing requirements applicable to all other
beneficiaries covered by section 1086 of this title.
For purposes of the preceding sentence, a medicare-
eligible beneficiary is a beneficiary eligible for health
benefits under section 1086 of this title pursuant to
subsection (d)(2) of such section.’’.
SEC. 716. PROFESSIONAL ACCREDITATION OF MILITARY
DENTISTS.
Section 1077(c) of title 10, United States Code, is
amended—
(1) by striking ‘‘A’’ and inserting ‘‘(1) Except
as provided in paragraph (2), a’’; and
(2) by adding at the end the following new
paragraph:
‘‘(2)(A) Dependents who have not attained age 13
and who are participating under a dental plan established
329
under section 1076a of this title may be treated by post-
graduate dental students in eligible dental treatment fa-
cilities if—
‘‘(i)(I) treatment of pediatric dental patients is
required to comply with American Dental Associa-
tion accreditation standards; or
‘‘(II) pediatric dental training is required to en-
able post-graduate dental students to provide dental
care for such dependents outside the United States;
and
‘‘(ii) there are insufficient numbers of children
eligible to be provided dental care under section
1076(a) of this title to meet such standards or train-
ing requirements.
‘‘(B) The total number of dependents who may be
treated under this paragraph may not exceed 2,000 in any
fiscal year.
‘‘(C) In this paragraph, an eligible dental treatment
facility is a dental treatment facility with a post-graduate
dental education program accredited by the American
Dental Association.’’.
330
SEC. 717. ADDITION OF CERTAIN UNREMARRIED FORMER
SPOUSES TO PERSONS ELIGIBLE FOR DEN-
TAL INSURANCE PLAN OF RETIREES OF THE
UNIFORMED SERVICES.
(a) ELIGIBILITY OF CERTAIN FORMER SPOUSES FOR
DENTAL COVERAGE.—(1) Section 1076c(b) of title 10,
United States Code, is amended by adding at the end the
following new paragraph:
‘‘(6) A person who—
‘‘(i) is an unremarried former spouse of a
member described in paragraph (1) or (2);
‘‘(i) is described in section 1072(2)(F)(i)
of this title; and
‘‘(ii) does not have dental coverage under
an employer-sponsored health plan.’’.
(b) EFFECTIVE DATE.—Section 1076c(b)(6) of title
10, United States Code, as added by subsection (a), shall
take effect on the date of the enactment of this Act.
SEC. 718. WAIVER OF COLLECTION OF PAYMENTS DUE
FROM CERTAIN PERSONS UNAWARE OF LOSS
OF CHAMPUS ELIGIBILITY.
(a) AUTHORITY TO WAIVE COLLECTION.—The Sec-
retary of Defense may waive (in whole or in part) the col-
lection of payments otherwise due from a person described
in subsection (b) as a result of the receipt by the person
of health benefits under section 1086 of title 10, United
331
States Code, after the termination of the person’s eligi-
bility for such benefits and may also authorize continued
coverage of benefits under section 1086 of such title for
such person for the period described in subsection (c).
(b) PERSONS ELIGIBLE.—A person shall be eligible
for relief under subsection (a) if the person—
(1) is a person described in paragraph (1) of
subsection (d) of section 1086, of title 10, United
States Code;
(2) in the absence of such paragraph, would
have been eligible for health benefits under such sec-
tion;
(3) at the time of the receipt of such benefits,
satisfies the criteria specified in subparagraph (B) of
paragraph (2) of such subsection; and
(4) was unaware of the loss of eligibility to re-
ceive health benefits at the time they were received.
(c) EXTENT OF AUTHORITY.—The authority to waive
the collection of payments and to continue coverage of
benefits under this section shall apply during the period
beginning on July 1, 1999, and ending on December 31,
2004, under terms established by the Secretary of De-
fense.
(d) QUARTERLY REPORTS.—(1) The Secretary of
Defense shall provide quarterly reports to the Committees
332
on Armed Services of the Senate and House of Represent-
atives regarding—
(A) efforts by the Department of Defense to
identify persons who satisfy the criteria specified in
subparagraph (B) of subsection (d)(2) of section
1086 of title 10, United States Code, and would be
eligible for health benefits under such section if the
criteria specified in subparagrpah (A) were also sat-
isfied; and
(B) actions taken by the Department with re-
spect to persons identified under subparagraph (B)
of this paragraph.
(2) The first report under paragraph (1) shall be sub-
mitted not later than 30 days after the end of the first
quarter of fiscal year 2005.
Subtitle C—Planning,
Programming, and Management
SEC. 721. PILOT PROGRAM FOR TRANSFORMATION OF
HEALTH CARE DELIVERY.
(a) FINDINGS.—(1) Congress finds the following:
(A) Historically, providing military health care
to military beneficiaries has centered on building a
military medical treatment facility and providing a
full range of services on a military installation.
333
(B) Traditionally, in many locations the major-
ity of military personnel and their dependents who
are eligible beneficiaries of the military health care
system do not live on military installations.
(C) As the cost of repairing, replacing, recapi-
talizing, or expanding aging military treatment fa-
cilities and maintaining adequate health care serv-
ices on military installations increases, the Depart-
ment of Defense will be challenged to find new, more
cost-effective ways of providing enhanced health care
for military and civilian beneficiaries of the Depart-
ment of Defense health care system.
(2) In view of these findings, the Secretary of De-
fense is directed to examine feasible and cost-effective
methods for leveraging and expanding non-military health
care resources to provide health care to military bene-
ficiaries. Furthermore, the Secretary of Defense shall con-
duct a pilot program in accordance with this section.
(b) PILOT PROGRAM PURPOSES.—The Secretary of
Defense shall conduct a pilot program at one or more mili-
tary installations for purposes of testing—
(1) the feasibility and cost effectiveness of ex-
panding use of non-military health care resources,
particularly in cases in which such use would reduce
334
or eliminate the need for military medical construc-
tion projects;
(2) initiatives that build cooperative health care
arrangements and agreements between military in-
stallations and local and regional non-military health
care systems; and
(3) development of an integrated, long range
business plan for the delivery of health care services
for military beneficiaries, incorporating present and
potential future capabilities in the non-military
health care sector.
(c) REQUIREMENTS OF PILOT PROGRAM.—In con-
ducting the pilot program, the Secretary of Defense
shall—
(1) identify and analyze health care delivery op-
tions that range from outsourcing all health care de-
livery services to the private sector to providing some
health care services in military facilities located on
the installation;
(2) determine the cost avoidance or savings re-
sulting from innovative partnerships between the
Department of Defense and the private sector and
limiting recapitalization costs in military facilities;
(3) study the potential, viability, cost efficiency,
and health care effectiveness of Department of De-
335
fense health care providers delivering health care in
civilian community hospitals;
(4) determine the opportunities for and barriers
to coordinating and leveraging the use of existing
health care resources, including Federal, State, local,
and contractor assets; and
(5) develop recommendations for a model health
care delivery system that may be used at other mili-
tary installations.
(d) CONSULTATION REQUIREMENTS.—The Secretary
of Defense shall develop the pilot program in consultation
with the Secretaries of the military departments, rep-
resentatives from the military installation selected for the
pilot program, Federal, State, and local entities, and the
TRICARE managed care support contractor with respon-
sibility for that installation.
(e) SELECTION OF MILITARY INSTALLATION.—The
pilot program shall be implemented at one or more mili-
tary installations selected by the Secretary of Defense. At
least one of the selected military installations shall meet
the following criteria:
(1) The military installation is an Army instal-
lation located in a rural area.
(2) The military installation has members of
the Armed Forces on active duty and members of re-
336
serve components of the Armed Forces that use the
installation as a training and operational base, with
members routinely deploying in support of the global
war on terrorism.
(3) The number of members of the Armed
Forces on active duty permanently assigned to the
military installation is expected to increase over the
next five years.
(4) One or more partnerships exist at the mili-
tary installation with civilian health care entities in
the form of limited specialty care services in the
military medical treatment facility on the installa-
tion.
(5) There is a military treatment facility on the
installation that does not have inpatient or trauma
center care capabilities.
(6) There is a civilian community hospital with-
in 15 miles of the military installation with limited
capability to expand inpatient care beds, intensive
care, and specialty services.
(7) There is no civilian hospital with a trauma
center within 50 miles from the military installation.
(f) DURATION OF PILOT PROGRAM.—Implementation
of the pilot program developed under this subsection shall
337
begin not later than May 1, 2005, and shall be conducted
during fiscal years 2005, 2006, and 2007.
(g) FUNDS.—For fiscal year 2005, not more than
$5,000,000 of the amount appropriated pursuant to the
authorization for operations and maintenance for the De-
fense Health Program in section 303(a) may be used to
conduct the pilot program under this section.
(h) REPORTS.—Not later than July 1, 2005, the Sec-
retary of Defense shall submit an interim report to the
Committees on Armed Services of the Senate and of the
House of Representatives describing the details of the
pilot program. Not later than July 1, 2007, the Secretary
of Defense shall submit to such committees a final report
describing the results of the pilot program with rec-
ommendations for a model health care delivery system for
other military installations.
SEC. 722. STUDY OF PROVISION OF TRAVEL REIMBURSE-
MENT TO HOSPITALS FOR CERTAIN MILI-
TARY DISABILITY RETIREES.
(a) STUDY.—The Secretary of Defense shall conduct
a study of the feasibility, and of the desirability, of pro-
viding that a member of the uniformed services retired
under chapter 61 of title 10, United States Code, for a
combat-related disability (as defined in section 1413a(e)
of that title) shall be provided reimbursement for the trav-
338
el expenses of such member for travel, during the two-
year period beginning on the date of the retirement of the
member, to a military treatment facility for medical care.
The Secretary shall include in that study consideration of
whether reimbursement under such a plan should, as near-
ly as practicable, be under the same terms and conditions,
and at the same rate, as apply to beneficiary travel reim-
bursement provided by the Secretary of Veterans Affairs
under section 111 of title 38, United States Code.
(b) REPORT.—The Secretary of Defense shall submit
to the congressional defense committees a report providing
the results of the study under subsection (a). Such report
shall be submitted not later than March 1, 2005.
SEC. 723. STUDY OF MENTAL HEALTH SERVICES.
(a) STUDY REQUIRED.—The Secretary of Defense
shall conduct a study of mental health services available
to members of the Armed Forces.
(b) PERSONS COVERED.—The study shall evaluate
the availability and effectiveness of existing mental health
treatment and screening resources—
(1) for members of the Armed Forces during a
deployment to a combat theater;
(2) for members of the Armed Forces returning
from a deployment to a combat theater, both—
339
(A) in the short-term, post-deployment pe-
riod; and
(B) in the long-term, following the post-de-
ployment period;
(3) for the families of members of the Armed
Forces who have been deployed to a combat theater
during the time of the deployment;
(4) for the families of members of the Armed
Forces who have been deployed to a combat theater
after the member has returned from the deployment;
and
(5) for members of the Armed Forces and their
families described in this subsection who are mem-
bers of Reserve components.
(c) ASSESSMENT OF OBSTACLES.—The study shall
provide an assessment of existing obstacles that prevent
members of the Armed Forces and military families in
need of mental health services from obtaining these serv-
ices, including—
(1) the extent to which existing confidentiality
regulations, or lack thereof, inhibit members of the
Armed Forces from seeking mental health treat-
ment;
(2) the implications that a decision to seek
mental health services can have on a military career;
340
(3) the extent to which a social stigma exists
within the Armed Forces that prevents members of
the Armed Forces and military families from seeking
mental health treatment within the Department of
Defense and the individual Armed Forces;
(4) the extent to which logistical obstacles, par-
ticularly with respect to members of the Armed
Forces and families residing in rural areas, deter
members in need of mental health services from ob-
taining them; and
(5) the extent to which members of the Armed
Forces and their families are prevented or hampered
from obtaining mental health treatment due to the
cost of such services.
(d) IDENTIFICATION OF PROBLEMS UNIQUE TO RE-
SERVES.—The study shall identify potential problems in
obtaining mental health treatment that are unique to
members of Reserve components.
(e) REPORT.—The Secretary of Defense shall submit
to Congress a report on the study conducted under this
section not later than 90 days after the date of the enact-
ment of this Act. The report shall contain the results of
the study and make specific recommendations—
(1) for improving the effectiveness and accessi-
bility of mental health services provided by Depart-
341
ment of Defense to the persons listed in subsection
(b), including recommendations to ensure appro-
priate referrals and a seamless transition to the care
of the Department of Veterans Affairs following sep-
aration from the Armed Forces;
(2) for removing or mitigating any obstacles
identified under subsection (c); and
(3) for steps that can be taken by the Depart-
ment of Defense or Congress to bring parity to men-
tal health services available to members of Reserve
components and members of the Armed Forces on
active duty.
TITLE VIII—ACQUISITION POL-
ICY, ACQUISITION MANAGE-
MENT, AND RELATED MAT-
TERS
Subtitle A—Amendments to Gen-
eral 
Contracting 
Authorities,
Procedures, and Limitations
SEC. 801. RAPID ACQUISITION AUTHORITY TO RESPOND TO
COMBAT EMERGENCIES.
(a) IN GENERAL.—Chapter 141 of title 10, United
States Code, is amended by adding at the end the fol-
lowing new section:
342
‘‘§ 2410p. Rapid acquisition authority to respond to
combat emergencies
‘‘(a) RAPID ACQUISITION AUTHORITY.—The Sec-
retary of Defense may rapidly acquire, in accordance with
this section, equipment needed by a combatant com-
mander to eliminate a combat capability deficiency that
has resulted in combat fatalities.
‘‘(b) PROCESS FOR RAPID ACQUISITION.—Not later
than 30 days after the date of the enactment of this sec-
tion, the Secretary of Defense shall develop a process for
the rapid acquisition authority provided by subsection (a)
and submit to Congress a detailed explanation of the proc-
ess, including procedures to be followed in carrying out
the process. The process shall provide for the following:
‘‘(1) A requirement that the process may be
used only to acquire the minimum amount of equip-
ment needed until the needs of the combatant com-
mander can be fulfilled under existing acquisition
statutes, policies, directives, and regulations.
‘‘(2) A goal of awarding a contract for the
equipment within 15 days after receipt of a request
from a commander.
‘‘(3) In a case in which the equipment cannot
be acquired without an extensive delay, a require-
ment for an interim solution to minimize the combat
343
capability deficiency and combat fatalities until the
equipment can be acquired.
‘‘(4) Waiver of the applicability of all policies,
directives, and regulations related to—
‘‘(A) the establishment of the requirement
for the equipment;
‘‘(B) the research, development, test, and
evaluation of the equipment; and
‘‘(C) the solicitation and selection of
sources, and the award of the contract, for pro-
curement of the equipment.
‘‘(5) Such other procedures or requirements as
the Secretary considers appropriate.
‘‘(c) WAIVER OF CERTAIN STATUTES.—For purposes
of exercising the authority provided by subsection (a) with
respect to equipment, laws relating to the following shall
not apply:
‘‘(A) The establishment of the requirement for
the equipment.
‘‘(B) The research, development, test, and eval-
uation of the equipment.
‘‘(C) The solicitation and selection of sources,
and the award of the contract, for procurement of
the equipment.
344
‘‘(d) LIMITATIONS.—The rapid acquisition authority
provided by subsection (a) may be used only—
‘‘(1) after the Secretary of Defense, without
delegation, determines in writing that there exists a
combat capability deficiency that has resulted in
combat fatalities; and
‘‘(2) to acquire equipment in an amount aggre-
gating not more than $100,000,000 during a fiscal
year.
‘‘(e) SOURCE OF FUNDS.—For acquisitions under
this section to be made during any fiscal year, the Sec-
retary may use any funds made available to the Depart-
ment of Defense for that fiscal year.
‘‘(f) NOTIFICATION TO CONGRESS AFTER EACH USE
OF AUTHORITY.—The Secretary of Defense shall notify
the congressional defense committees within 15 days after
each use of the authority provided by subsection (a). Each
such notice shall identify the equipment to be acquired,
the amount to be expended for such acquisition, and the
source of funds for such acquisition.
‘‘(g) COMBATANT COMMANDER.—In this section, the
term ‘combatant commander’ means the commander of a
unified combatant command with authority for the con-
duct of operations in a specific area of responsibility or
345
who otherwise has authority to conduct operations at the
direction of the President or Secretary of Defense.’’.
(b) CLERICAL AMENDMENT.—The table of sections
at the beginning of such chapter is amended by adding
at the end the following new item:
‘‘2410p. Rapid acquisition authority to respond to combat emergencies.’’.
SEC. 802. DEFENSE ACQUISITION WORKFORCE CHANGES.
(a) SELECTION CRITERIA AND PROCEDURES.—Sec-
tion 1732(b)(1)(A) of title 10, United States Code, is
amended by striking ‘‘within grade GS–13 or above of the
General Schedule’’ and inserting ‘‘in any position des-
ignated by the Secretary of Defense’’.
(b) CRITICAL
ACQUISITION
POSITIONS.—Section
1733 of such title is amended by striking subsection (b)
and inserting the following:
‘‘(b) DESIGNATION OF CRITICAL ACQUISITION.—(1)
The Secretary of Defense shall designate the acquisition
positions in the Department of Defense that are critical
acquisition positions. Such positions shall include the fol-
lowing:
‘‘(A) Program executive officer.
‘‘(B) Program manager of a major defense ac-
quisition program (as defined in section 2430 of this
title) or of a significant nonmajor defense acquisition
program (as defined in section 1737(a)(3) of this
title).
346
‘‘(C) Deputy program manager of a major de-
fense acquisition program.
‘‘(D) Any other acquisition position of signifi-
cant responsibility determined by the Secretary to be
critical.
‘‘(2) The Secretary shall annually publish a list of
the positions designated under this subsection.’’.
(c) SCHOLARSHIP PROGRAMS.—Section 1742 of such
title is amended—
(1) by inserting ‘‘(a) PROGRAMS.—’’ at the be-
ginning of the text; and
(2) by adding at the end the following new sub-
section:
‘‘(b) SCHOLARSHIP
PROGRAM
REQUIREMENTS.—
With respect to any scholarship program conducted under
this section, the Secretary of Defense and the participant
shall agree in writing to the terms of the scholarship. The
agreement shall include the obligations of the Secretary
and the participant, as well as actions available for either
party to take if there is a failure to meet the obligations
under the agreement.’’.
SEC. 803. LIMITATION ON TASK AND DELIVERY ORDER
CONTRACTS.
Subsection 2304a(f) of title 10, United States Code,
is amended to read as follows:
347
‘‘(f) CONTRACT PERIOD.—The head of an agency en-
tering into a task or delivery order contract under this
section may provide for the contract to cover any base pe-
riod up to five years and may extend the contract period
for one or more successive periods pursuant to an option
provided in the contract or a modification to the con-
tract.’’.
SEC. 804. FUNDING FOR CONTRACT CEILINGS FOR CER-
TAIN 
MULTIYEAR 
PROCUREMENT 
CON-
TRACTS.
(a) MULTIYEAR CONTRACTS RELATING TO PROP-
ERTY.—Section 2306b(g) of title 10, United States Code,
is amended—
(1) by inserting ‘‘(1)’’ before ‘‘Before any’’;
(2) by striking ‘‘Committee’’ through ‘‘House of
Representatives’’ and inserting ‘‘congressional de-
fense committees’’; and
(3) by adding at the end the following new
paragraph:
‘‘(2) In the case of a contract described in subsection
(a) with a cancellation ceiling described in paragraph (1),
if the budget for the contract does not include proposed
funding for the costs of contract cancellation up to the
cancellation ceiling established in the contract, the head
of the agency concerned shall, as part of the certification
348
required by subsection (i)(1)(A), give written notification
to the congressional defense committees of—
‘‘(A) the cancellation ceiling amounts planned
for each program year in the proposed multiyear
procurement contract, together with the reasons for
the amounts planned;
‘‘(B) the extent to which costs of contract can-
cellation are not included in the budget for the con-
tract; and
‘‘(C) a financial risk assessment of not includ-
ing budgeting for costs of contract cancellation, in-
cluding proposed funding sources to meet such can-
cellation costs if the contract is canceled.’’.
(b) MULTIYEAR CONTRACTS RELATING TO SERV-
ICES.—Section 2306c(d) of title 10, United States Code,
is amended—
(1) in paragraphs (1), (3), and (4), by striking
‘‘committees of Congress named in paragraph (5)’’
and inserting ‘‘congressional defense committees’’
each place it appears; and
(2) by amending paragraph (5) to read as fol-
lows:
‘‘(5) In the case of a contract described in subsection
(a) with a cancellation ceiling described in paragraph (4),
if the budget for the contract does not include proposed
349
funding for the costs of contract cancellation up to the
cancellation ceiling established in the contract, the head
of the agency concerned shall give written notification to
the congressional defense committees of—
‘‘(A) the cancellation ceiling amounts planned
for each program year in the proposed multiyear
procurement contract, together with the reasons for
the amounts planned;
‘‘(B) the extent to which costs of contract can-
cellation are not included in the budget for the con-
tract; and
‘‘(C) a financial risk assessment of not includ-
ing budgeting for costs of contract cancellation, in-
cluding proposed funding sources to meet such can-
cellation costs if the contract is canceled.’’
SEC. 805. INCREASED THRESHOLD FOR REQUIRING CON-
TRACTORS 
TO 
PROVIDE 
SPECIFIED 
EM-
PLOYEE 
INFORMATION 
TO 
COOPERATIVE
AGREEMENT HOLDERS.
Section 2416(d) of title 10, United States Code, is
amended 
by 
striking 
‘‘$500,000’’ 
and 
inserting
‘‘$1,000,000’’.
350
SEC. 806. EXTENSION OF AUTHORITY FOR USE OF SIM-
PLIFIED ACQUISITION PROCEDURES.
Section 4202(e) of the Clinger-Cohen Act (division D
of Public Law 104–106; 110 Stat. 652; 10 U.S.C. 2304
note) is amended by striking ‘‘January 1, 2006’’ and in-
serting ‘‘October 1, 2009’’.
SEC. 807. AUTHORITY TO ADJUST ACQUISITION-RELATED
DOLLAR THRESHOLDS FOR INFLATION.
(a) INFLATION
ADJUSTMENT
AUTHORITY.—The
FAR Council and the heads of executive agencies may ad-
just the dollar thresholds in procurement laws in order to
maintain the constant dollar value of the threshold, taking
into account the effect of inflation on the threshold.
(b) LIMITATION ON EXERCISE OF AUTHORITY.—Ad-
justments of dollar thresholds under subsection (a) may
be carried out—
(1) by the FAR Council only with respect to
procurement laws that apply to executive agencies
generally; and
(2) by the head of an executive agency only
with respect to procurement laws that apply to that
agency exclusively.
(c) ADDITIONAL REQUIREMENTS.—In adjusting a
threshold under subsection (a), the FAR Council and the
head of an agency shall—
351
(2) consult with the Director of the Office of
Management and Budget;
(3) round the threshold, to facilitate implemen-
tation; and
(4) publish the adjusted threshold in the Fed-
eral Register.
(d) EXCLUSIONS.—This section does not apply to—
(1) dollar thresholds in sections 3141 through
3144, 3146, and 3147 of title 40, United States
Code;
(2) dollar thresholds in the Service Contract
Act of 1965 (41 U.S.C. 351, et seq.); or
(3) dollar thresholds established by the United
States Trade Representative pursuant to title III of
the Trade Agreements Act of 1979 (19 U.S.C. 2511
et seq.).
(e) DEFINITIONS.—In this section:
(1) The term ‘‘procurement law’’ means any
provision of law that sets forth policies, procedures,
requirements, or restrictions for the procurement of
property or services by the Federal Government.
(2) The terms ‘‘executive agency’’ and ‘‘pro-
curement’’ have the meanings provided by section
4(1) of the Office of Federal Procurement Policy
Act (41 U.S.C. 403(1))
352
(3) The term ‘‘FAR Council’’ means the Fed-
eral Acquisition Regulatory Council established
under section 25 of the Office of Federal Procure-
ment Policy Act (41 U.S.C. 421)).
Subtitle B—United States Defense
Industrial Base Provisions
SEC. 811. DEFENSE TRADE RECIPROCITY.
(a) IN GENERAL.—Chapter 148 of title 10, United
States Code, is amended by inserting after section 2532
the following new section:
‘‘§ 2532a. Defense trade reciprocity
‘‘(a) POLICY.—(1) It is the policy of Congress that
procurement regulations used in the conduct of trade in
defense articles and defense services shall be based on the
principle of fair trade and reciprocity consistent with
United States national security, including the need to en-
sure comprehensive manufacturing capability in the
United States defense industrial base for military system
essential items.
‘‘(2) The Secretary of Defense shall make every effort
to ensure that the policies and practices of the Depart-
ment of Defense reflect the goal of establishing an equi-
table trading relationship between the United States and
its foreign defense trade partners, including ensuring that
United States firms and United States employment in the
353
defense sector are not disadvantaged by unilateral pro-
curement practices by foreign governments, such as the
imposition of offset agreements or similar requirements in
defense procurements by those governments. In pursuing
this goal, the Secretary shall—
‘‘(A) develop a comprehensive defense acquisi-
tion trade policy that provides the necessary guid-
ance and incentives for the elimination of offset
agreements as an accepted practice in defense trade;
and
‘‘(B) review and make necessary modifications
to existing acquisition policies and strategies, and re-
view and seek to make necessary modifications to ex-
isting memoranda of understanding, cooperative
project agreements, or related agreements with for-
eign defense trade partners, to reflect this goal.
‘‘(b) REQUIREMENT.—The Secretary of Defense may
not enter into a contract, or approve or permit any sub-
contract under a contract entered into by the Department
of Defense, for the procurement of any defense article or
defense service from a foreign firm unless the country in
which the foreign firm performs substantially all of its
manufacturing, production, and research and development
activities in the performance of the contract (or sub-
contract) agrees to apply offset agreements to the procure-
354
ment of defense articles and defense services from the
United States firms in the same manner and to the same
degree as such agreements are applied by the Department
of Defense to the procurement of defense articles and de-
fense services from that country.
‘‘(c) EXCEPTION.—Subsection (b) does not apply to
a contract or subcontract for the procurement of a defense
article or defense service from a foreign firm if the Sec-
retary of Defense determines in writing, with respect to
the specific contract or subcontract, that an exception to
subsection (b) is necessary for the Department to be able
to meet national security objectives.
‘‘(d) NOTIFICATION REQUIRED WHEN EXCEPTION
APPLIED.—The Secretary of Defense may not apply an
exception under subsection (c) until—
‘‘(1) a notification of the intent to apply such
exception is submitted to the congressional defense
committees and published in the Federal Register;
and
‘‘(2) a period of 30 days has expired after the
date on which such notification is so submitted and
published.
‘‘(e) AUTHORITY TO APPLY EXCEPTION NOT DELE-
GABLE.—The authority of the Secretary to apply the ex-
ception under subsection (c) may not be delegated to any
356
‘‘(A) a memorandum of understanding or
related agreement described in section 2531(a)
of title 10, United States Code; or
‘‘(B) a cooperative project agreement de-
scribed in section 27 of the Arms Export Con-
trol Act (22 U.S.C. 2767).
‘‘(4) The term ‘offset agreement’ has the mean-
ing provided that term by section 36(e) of the Arms
Export Control Act (22 U.S.C. 2776(e)).
‘‘(5) The terms ‘defense article’ and ‘defense
service’ have the meanings provided those terms by
section 47(7) of the Arms Export Control Act (22
U.S.C. 2794(7)).
‘‘(6) The term ‘military system essential item’
means an item on the military system essential item
breakout list produced pursuant to section 813(b) of
the National Defense Authorization Act for Fiscal
Year 2004 (P.L. 108–136; 117 Stat. 1544).’’.
(b) CLERICAL AMENDMENT.—The table of sections
at the beginning of such chapter is amended by adding
at the end the following new item:
‘‘2532a. Defense trade reciprocity.’’.
357
SEC. 812. AMENDMENTS TO DOMESTIC SOURCE REQUIRE-
MENTS.
(a) NOTICE.—Section 2533a of title 10, United
States Code, is amended by adding at the end the fol-
lowing new subsection:
‘‘(k) NOTIFICATION REQUIRED WHEN CERTAIN EX-
CEPTIONS APPLIED.—(1) Funds appropriated or other-
wise available to the Department of Defense may not be
used to enter into a contract to procure an item described
in subsection (b) pursuant to an exception set forth in sub-
section (c) or (e) until—
‘‘(A) a notification of the intent to apply such
exception is submitted to Congress and posted on
the website maintained by the General Services Ad-
ministration known as FedBizOpps.gov (or any suc-
cessor site); and
‘‘(B) a period of 15 days has expired after the
date on which such notification is so submitted and
published.
‘‘(2) In any case in which the Secretary of Defense
or the Secretary of the military department concerned in-
tends to apply or applies the exception set forth in sub-
section (d)(1), the Secretary concerned shall submit to
Congress a notification of such intent or such application
during the period beginning six months before the date
358
of application of such exception and ending six months
after the date of application of such exception.’’.
(b) CLOTHING MATERIALS AND COMPONENTS COV-
ERED.—Subsection (b) of section 2533a of title 10, United
States Code, is amended in paragraph (1)(B) by inserting
before the semicolon the following: ‘‘and the materials and
components thereof, other than sensors, electronics, or
other items added to, and not normally associated with,
clothing (and the materials and components thereof)’’.
SEC. 813. THREE-YEAR EXTENSION OF RESTRICTION ON AC-
QUISITION OF POLYACRYLONITRILE (PAN)
CARBON FIBER FROM FOREIGN SOURCES.
The Secretary of Defense shall delay by three years
the phase-out of the restriction on acquisition of
polyacrylonitrile (PAN) carbon fiber from foreign sources
(described in subpart 225.7103 of the Department of De-
fense supplement to the Federal Acquisition Regulation).
In implementing such delay, the Secretary shall revise the
appplicable regulations to ensure that such restriction ap-
plies to—
(1) solicitations and contracts issued on or be-
fore May 31, 2006, for major systems that are not
yet in production; and
(2) solicitations and contracts issued during the
period beginning June 1, 2006, and ending May 31,
359
2008, for major systems that are not yet in engi-
neering and manufacturing development.
SEC. 814. GRANT PROGRAM FOR DEFENSE CONTRACTORS
TO 
IMPLEMENT 
STRATEGIES 
TO 
AVOID
OUTSOURCING OF JOBS.
(a) GRANT PROGRAM AUTHORIZED.—The Secretary
of Defense may make grants under this section for fiscal
year 2005 to qualified defense contractor groups for the
purposes described in subsection (b).
(b) GRANT PURPOSES.—A grant may be made under
this section for the purpose of implementing a strategy
to avoid the outsourcing of jobs by a defense contractor,
including the following strategies:
(1) Cost-cutting measures.
(2) Retraining programs.
(3) Technology development.
(4) Plant upgrades.
(c) APPLICATION.—A grant may not be awarded
under this section unless an application is submitted to,
and approved by, the Secretary. Such an application—
(1) shall be submitted by a qualified defense
contractor group in such form and manner as the
Secretary may require; and
(2) shall contain—
360
(A) a description of the strategy proposed
for avoiding the outsourcing of at least 10 jobs
in the performance of a defense contract by the
defense contractor concerned; and
(B) such other information as the Sec-
retary may require.
(d) DEFINITIONS.—In this section:
(1) The term ‘‘qualified defense contractor
group’’, with respect to a defense contractor, is a
group or person representing—
(A) management of the contractor;
(B) a labor organization that represents
employees of the contractor; or
(C) employees of the contractor.
(2) The term ‘‘outsourcing’’, with respect to a
defense contract, includes the performance outside
the United States of work under the contract.
(e) FEDERAL SHARE.—The Federal share of the
costs of the strategy carried out with a grant under this
section may not exceed 50 percent.
(f) USE
OF DEFENSE INDUSTRIAL CAPABILITIES
FUND FOR GRANTS.—(1) Notwithstanding section 814(c)
of the National Defense Authorization Act for Fiscal Year
2004 (P.L. 108–136; 117 Stat. 1545), amounts in the De-
361
fense Industrial Base Capabilities Fund may be used for
grants under this section.
(2) For fiscal year 2005, up to $50,000,000 of
amounts available in such Fund may be used to carry out
this section.
(g) AUTHORIZATION OF FUNDS.—There are author-
ized to be appropriated to the Defense Industrial Base Ca-
pabilities Fund $50,000,000 for purposes of providing
grants under this section.
SEC. 815. PREFERENCE FOR DOMESTIC FREIGHT FOR-
WARDING SERVICES.
(a) PREFERENCE.—In the procurement of transpor-
tation services described in subsection (b), the Secretary
of Defense shall give preference to any freight forwarder
that—
(1) certifies to the Department of Defense that
it is owned and controlled by citizens of the United
States; and
(2) offers services at fair and reasonable rates.
(b) SERVICES COVERED.—Subsection (a) applies to
transportation services to, from, or within Iraq or Afghan-
istan, and warehousing, logistics, or other similar services
performed within Iraq or Afghanistan.
364
‘‘(B) A modernization plan and budget re-
quirements necessary to maintain mission capa-
bility against the relevant threats.
‘‘(C) A modernization plan and budget re-
quirements necessary—
‘‘(i) to transfer mature technologies
from the new system or other systems so
that the mission capability of the existing
system 
is 
enhanced 
against 
relevant
threats; and
‘‘(ii) to provide interoperability with
the new system during the period from ini-
tial fielding until the new system assumes
the majority of responsibility for the mis-
sion of the existing system.
‘‘(c) ANNUAL REVIEW.—Each fiscal year, before the
submission to Congress of the President’s budget for the
next fiscal year, the Secretary of Defense shall review the
schedule performance of each replacement major defense
acquisition program for which a sustainment and mod-
ernization plan has been developed under this section to
compare that performance with the schedule set forth
under subsection (b)(1). If the schedule for the program
has changed, then the Secretary shall notify the congres-
sional defense committees of such change.
365
‘‘(d) EXCEPTIONS.—Subsection (a) shall not apply to
a major defense acquisition program if the Secretary of
Defense determines that—
‘‘(1) the existing system is no longer relevant to
the mission;
‘‘(2) the mission has been eliminated;
‘‘(3) the mission has been consolidated with an-
other mission in such a manner that another exist-
ing system can adequately meet the mission require-
ments; or
‘‘(4) the duration of time until the new system
assumes the majority of responsibility for the exist-
ing system’s mission is sufficiently short so that mis-
sion availability, capability, interoperability, and
force protection requirements are maintained.
‘‘(e) WAIVER.—The Secretary of Defense may waive
the applicability of subsection (a) to a major defense ac-
quisition program if the Secretary determines that, but for
such a waiver, the Department would be unable to meet
national security objectives. Whenever the Secretary
makes such a determination and authorizes such a waiver,
the Secretary shall submit notice of such waiver and of
the Secretary’s determination and the reasons therefor in
writing to the congressional defense committees.’’.
366
(2) The table of sections at the beginning of such
chapter is amended by inserting after the item relating
to section 2436 the following new item:
‘‘2437. Development of major defense acquisition programs: sustainment and
modernization of system to be replaced.’’.
(b) APPLICATION TO EXISTING PROGRAMS IN DE-
VELOPMENT.—Section 2437 of title 10, United States
Code, as added by subsection (a), shall apply with respect
to a major defense acquisition program that is under de-
velopment as of the date of the enactment of this Act and
is not expected to reach initial operational capability be-
fore October 1, 2008. The Secretary of Defense shall re-
quire that a sustainment and modernization plan under
that section be developed not later than one year after the
date of the enactment of this Act for the existing system
that the system under development is intended to replace.
SEC. 822. REVIEW AND DEMONSTRATION PROJECT RELAT-
ING TO CONTRACTOR EMPLOYEES.
(a) GENERAL REVIEW.—(1) The Secretary of De-
fense shall conduct a review of policies, procedures, prac-
tices, and penalties of the Department of Defense relating
to employees of defense contractors for purposes of ensur-
ing that the Department of Defense is in compliance with
Executive Order No. 12989 (relating to a prohibition on
entering into contracts with contractors that are not in
compliance with the Immigration and Nationality Act).
367
(2) In conducting the review, the Secretary shall—
(A) identify potential weaknesses and areas for
improvement in existing policies, procedures, prac-
tices, and penalties;
(B) develop and implement reforms to strength-
en, upgrade, and improve policies, procedures, prac-
tices, and penalties of the Department of Defense
and its contractors; and
(C) review and analyze reforms developed pur-
suant to this paragraph to identify for purposes of
national implementation those which are most effi-
cient and effective.
(3) The review under this subsection shall be com-
pleted not later than 180 days after the date of the enact-
ment of this Act.
(b) DEMONSTRATION PROJECT.—The Secretary of
Defense shall conduct a demonstration project in accord-
ance with this section, in one or more regions selected by
the Secretary, for purposes of promoting greater con-
tracting opportunities for contractors offering effective,
reliable staffing plans to perform defense contracts that
ensure all contract personnel employed for such projects,
including management employees, professional employees,
craft labor personnel, and administrative personnel, are
lawful residents or persons properly authorized to be em-
368
ployed in the United States and properly qualified to per-
form services required under the contract. The demonstra-
tion project shall focus on contracts for construction, ren-
ovation, maintenance, and repair services for military in-
stallations.
(c) DEMONSTRATION PROJECT PROCUREMENT PRO-
CEDURES.—As part of the demonstration project under
subsection (b), the Secretary of Defense shall conduct a
competition in which there is a provision in contract solici-
tations and request for proposal documents to require sig-
nificant weight or credit be allocated to—
(1) reliable, effective workforce programs of-
fered by prospective contractors that provide
background checks and other measures to ensure the
contractor is in compliance with the Immigration
and Nationality Act; and
(2) reliable, effective project staffing plans of-
fered by prospective contractors that specify for all
contract employees (including management employ-
ees, professionals, and craft labor personnel) the
skills, training, and qualifications of such persons
and the labor supply sources and hiring plans or
procedures used for employing such persons.
(d) 
IMPLEMENTATION
OF
DEMONSTRATION
PROJECT.—The Secretary of Defense shall begin oper-
369
ation of the demonstration project required under this sec-
tion after completion of the review under subsection (a),
but in no event later than 270 days after the date of the
enactment of this Act.
(e) REPORT
ON DEMONSTRATION PROJECT.—Not
later than six months after award of a contract under the
demonstration project, the Secretary of Defense shall sub-
mit to the Committees on Armed Services of the Senate
and House of Representatives a report setting forth a re-
view of the demonstration project and recommendations
on the actions, if any, that can be implemented to ensure
compliance by the Department of Defense with Executive
Order No. 12989.
(f) DEFINITION.—In this section, the term ‘‘military
installation’’ means a base, camp, post, station, yard, cen-
ter, homeport facility for any ship, or other activity under
the jurisdiction of the Department of Defense, including
any leased facility, which is located within any of the sev-
eral States, the District of Columbia, the Commonwealth
of Puerto Rico, American Samoa, the Virgin Islands, or
Guam. Such term does not include any facility used pri-
marily for civil works, rivers and harbors projects, or flood
control projects.
370
SEC. 823. DEFENSE ACQUISITION WORKFORCE LIMITATION
AND REPORTS.
(a) DEFENSE ACQUISITION
AND SUPPORT PER-
SONNEL LIMITATION.—(1) Effective October 1, 2005, the
number of defense acquisition and support personnel in
the Department of Defense may not exceed 95 percent of
the baseline number.
(2) For purposes of paragraph (1), the baseline num-
ber is the number of defense acquisition and support per-
sonnel as of October 1, 2004.
(3) All determinations of personnel strengths for pur-
poses of this section shall be on the basis of full-time
equivalent positions.
(b) GAO STUDY AND REPORT ON DEFENSE ACQUISI-
TION AND SUPPORT PERSONNEL.—(1) The Comptroller
General shall conduct a study of Department of Defense
management of defense acquisition and support personnel.
The study shall include—
(A) an analysis of the number and structure of
defense acquisition and support personnel; and
(B) an assessment of the size, mission, com-
position, and projected workload requirements of de-
fense acquisition and support personnel.
(2) The Comptroller General shall submit to the
Committees on Armed Services of the Senate and the
House of Representatives a report on the results of the
371
study conducted under this subsection not later than
March 1, 2005.
(c) DEFENSE ACQUISITION UNIVERSITY STUDY AND
REPORT ON DEFENSE ACQUISITION AND SUPPORT PER-
SONNEL.—(1) The Defense Acquisition University shall
conduct a study of all the training programs offered to
defense acquisition and support personnel.
(2) The Defense Acquisition University shall submit
to the Committees on Armed Services of the Senate and
the House of Representatives a report on the results of
the study conducted under this subsection not later than
March 1, 2005. The report shall include—
(A) the number of individuals currently cer-
tified within the field they are working in; and
(B) recommendations on how to improve edu-
cation and productivity for defense acquisition and
support personnel, including recommendations for
additional training program requirements.
(d) DEFINITION.—In this section, the term ‘‘defense
acquisition and support personnel’’ means members of the
Armed Forces and civilian personnel (other than civilian
personnel who are employed at a maintenance depot) who
are assigned to, or employed in, acquisition organizations
of the Department of Defense (as specified in Department
of Defense Instruction numbered 5000.58, dated January
372
14, 1992), and any other organization that, as determined
by the Secretary, has acquisition as its predominant mis-
sion.
SEC. 824. PROVISION OF INFORMATION TO CONGRESS TO
ENHANCE TRANSPARENCY IN CONTRACTING.
Upon request of the chairman or ranking member of
the Committee on Armed Services of the Senate or House
of Representatives, the Secretary of Defense shall provide,
with respect to any contract or task or delivery order
under a task or delivery order contract entered into by
the Department of Defense, within 14 days after receipt
of the request, unredacted copies of any documents re-
quired to be maintained in the contracting office contract
file, the contract administration office contract file, and
the paying office contract file pursuant to subpart 4.8 of
the Federal Acquisition Regulation, including—
(1) copies of the contract and all modifications;
(2) orders issued under the contract;
(3) justifications and approvals;
(4) any government estimate of contract price;
(5) source selection documentation;
(6) cost or price analysis;
(7) audit reports;
(8) justification for type of contract;
373
(9) authority for deviations from regulations,
statutory requirements, or other restrictions;
(10) bills, invoices, vouchers, and supporting
documents; and
(11) records of payments or receipts.
SEC. 825. REQUIREMENT TO TREAT SURETIES IN SAME
MANNER AS FINANCING INSTITUTIONS WHEN
CONTRACTORS DEFAULT.
(a) AMENDMENT TO TITLE 31.—Section 3727(c) of
title 31, United States Code, is amended by inserting
‘‘surety on a bond provided in connection with a contract
or other’’ before ‘‘financing institution’’.
(b) AMENDMENT TO REVISED STATUTES.—Section
3737(b) of the Revised Statutes (41 U.S.C. 15) is amend-
ed in the first sentence by inserting ‘‘surety on a bond
provided in connection with a contract,’’ before ‘‘or other
financing institution’’.
SEC. 826. PROVISIONS RELATING TO CREATION OF JOBS IN
THE UNITED STATES BY DEFENSE CONTRAC-
TORS.
(a) AUTHORITY TO EXCLUDE CERTAIN SOURCES ON
BASIS OF CREATION OF JOBS IN UNITED STATES.—Sec-
tion 2304(b)(1) of title 10, United States Code, is
amended—
374
(1) by striking ‘‘or’’ at the end of subparagraph
(E);
(2) by striking the period at the end of sub-
paragraph (F) and inserting ‘‘; or’’; and
(3) by adding at the end the following new sub-
paragraph:
‘‘(G) would create jobs in the United States.’’.
(b) REQUIREMENT TO INCLUDE CREATION OF JOBS
IN UNITED STATES AS EVALATION FACTOR.—(1) Section
2305(a)(3)(A) of title 10, United States Code, is
amended—
(A) by striking ‘‘and’’ at the end of clause (ii);
(B) by redesignating clause (iii) as clause (iv);
and
(C) by inserting after clause (ii) the following
new clause:
‘‘(iii) shall include the creation of jobs in the
United States as an evaluation factor that must be
considered in the evaluation of proposals; and’’.
(2) Section 2305(a)(3)(B) of such title is amended
by striking ‘‘clause (iii)’’ and inserting ‘‘clause (iv)’’.
375
TITLE 
IX—DEPARTMENT 
OF
DEFENSE 
ORGANIZATION
AND MANAGEMENT
SEC. 901. CHANGE IN TITLE OF SECRETARY OF THE NAVY
TO SECRETARY OF THE NAVY AND MARINE
CORPS.
(a) CHANGE IN TITLE.—The position of the Sec-
retary of the Navy is hereby redesignated as the Secretary
of the Navy and Marine Corps.
(b) REFERENCES.—Any reference to the Secretary of
the Navy in any law, regulation, document, record, or
other paper of the United States shall be considered to
be a reference to the Secretary of the Navy and Marine
Corps.
SEC. 902. TRANSFER OF CENTER FOR THE STUDY OF CHI-
NESE MILITARY AFFAIRS FROM NATIONAL
DEFENSE UNIVERSITY TO UNITED STATES-
CHINA ECONOMIC AND SECURITY REVIEW
COMMISSION.
(a) TRANSFER.—The Center for the Study of Chinese
Military Affairs established by section 914 of the National
Defense Authorization Act for Fiscal Year 2000 (10
U.S.C. 2165 note) is transferred from the National De-
fense University of the Department of Defense to the
376
United States-China Economic and Security Review Com-
mission.
(b) CONFORMING AMENDMENT.—Subsection (a) of
section 914 of the National Defense Authorization Act for
2000 (10 U.S.C. 2165 note) is amended to read as follows:
‘‘(a) ESTABLISHMENT.—There shall be a Center for
the Study of Chinese Military Affairs organized under the
United States-China Economic and Security Review Com-
mission established by section 1238 of the Floyd D.
Spence National Defense Authorization Act for Fiscal
Year 2001 (22 U.S.C. 7002).’’.
(c) REPEAL OF OBSOLETE PROVISIONS.—Such sec-
tion is further amended by striking subsections (d) and
(e).
(d) TECHNICAL
AMENDMENTS
TO
COMMISSION
CHARTER.—(1) Section 1238(c) of the Floyd D. Spence
National Defense Authorization Act for Fiscal Year 2001
(22 U.S.C. 7002) is amended—
(1) in paragraph (1)—
(A) by striking ‘‘(beginning in 2002)’’; and
(B) by adding at the end the following new
sentence: ‘‘The report shall include a full dis-
cussion of the activities of the Commission
under each of the subparagraphs of paragraph
(2).’’; and
377
(2) in paragraph (2)—
(A) by striking the matter preceding sub-
paragraph (A) and inserting the following:
‘‘(2) AREAS OF FOCUS.—The Commission shall
focus, in lieu of any other area of work or study, on
the following:’’; and
(B) 
by 
replacing 
subparagraphs 
(A)
through (J) with the text of subparagraphs (A)
through (I) of section 2(c)(2) of division P of
Public Law 108–7 (22 U.S.C. 7002 note).
(2) Section 2(c)(2) of division P of Public Law 108–
7 (22 U.S.C. 7002 note) is repealed.
(e) EFFECTIVE
DATE.—Subsection (a) and the
amendment made by subsection (b) shall take effect at the
end of the 90-day period beginning on the date of the en-
actment of this Act.
SEC. 903. TRANSFER TO SECRETARY OF THE ARMY OF RE-
SPONSIBILITY FOR ASSEMBLED CHEMICAL
WEAPONS ALTERNATIVES PROGRAM.
Effective January 1, 2005, the text of section 142
of the Strom Thurmond National Defense Authorization
Act for Fiscal Year 1999 (Public Law 105–261; 50 U.S.C.
1521 note) is amended to read as follows:
378
‘‘(a) PROGRAM MANAGEMENT.—(1) The program
manager for the Assembled Chemical Weapons Alter-
natives program shall report to the Secretary of the Army.
‘‘(2) The Secretary of the Army shall provide for that
program to be managed as part of the management orga-
nization within the Department of the Army specified in
section 1412(e) of Public Law 99–145 (50 U.S.C.
1521(e)).
‘‘(b) CONTINUED IMPLEMENTATION OF PREVIOUSLY
SELECTED ALTERNATIVE TECHNOLOGIES.—(1) In car-
rying out the destruction of lethal chemical munitions at
Pueblo Chemical Depot, Colorado, the Secretary of the
Army shall continue to implement fully the alternative
technology for such destruction at that depot selected by
the Under Secretary of Defense for Acquisition, Tech-
nology, and Logistics on July 16, 2002.
‘‘(2) In carrying out the destruction of lethal chem-
ical munitions at Blue Grass Army Depot, Kentucky, the
Secretary of the Army shall continue to implement fully
the alternative technology for such destruction at that
depot selected by the Under Secretary of Defense for Ac-
quisition, Technology, and Logistics on February 3,
2003.’’.
379
SEC. 904. MODIFICATION OF OBLIGATED SERVICE RE-
QUIREMENTS UNDER NATIONAL SECURITY
EDUCATION PROGRAM.
(a) IN GENERAL.—Subsection (b)(2) of section 802
of the David L. Boren National Security Education Act
of 1991 (50 U.S.C. 1902) is amended by striking subpara-
graphs (A) and (B), as added by section 925(a) of the
National Defense Authorization Act for Fiscal Year 2004
(Public Law 108–136; 117 Stat. 1578), and inserting the
following:
‘‘(A) in the case of a recipient of a scholar-
ship, as soon as practicable but in no case later
than three years after the completion by the re-
cipient of the study for which scholarship as-
sistance was provided under the program, the
recipient shall work for a period of one year—
‘‘(i) in a national security position
that the Secretary certifies is appropriate
to use the unique language and region ex-
pertise acquired by the recipient pursuant
to such study in the Department of De-
fense, in any element of the intelligence
community, in the Department of Home-
land Security, or in the Department of
State; or
380
‘‘(ii) in such a position in any other
Federal department or agency not referred
to in clause (i) if the recipient dem-
onstrates to the Secretary that no position
is available in a Federal department or
agency specified in clause (i); or
‘‘(B) in the case of a recipient of a fellow-
ship, as soon as practicable but in no case later
than two years after the completion by the re-
cipient of the study for which fellowship assist-
ance was provided under the program, the re-
cipient shall work for a period equal to the du-
ration of assistance provided under the pro-
gram, but in no case less than one year—
‘‘(i) in a position described in sub-
paragraph (A)(i) that the Secretary cer-
tifies is appropriate to use the unique lan-
guage and region expertise acquired by the
recipient pursuant to such study; or
‘‘(ii) in such a position in any other
Federal department or agency not referred
to in clause (i) if the recipient dem-
onstrates to the Secretary that no position
is available in a Federal department or
agency specified in clause (i); and’’.
381
(b) REGULATIONS.—The Secretary of Defense shall
prescribe regulations to carry out the amendment made
by subsection (a). In prescribing such regulations, the Sec-
retary shall establish standards that recipients of scholar-
ship and fellowship assistance under the program under
such section 802 are required to demonstrate to satisfy
the requirement of a good faith effort to gain employment
as required under subparagraphs (A) and (B) of sub-
section (b)(2) of such section.
(c) APPLICABILITY.—(1) The amendment made by
subsection (a) shall apply with respect to service agree-
ments entered into under the David L. Boren National
Security Education Act of 1991 on or after the date of
the enactment of this Act.
(2) The amendment made by subsection (a) shall not
affect the force, validity, or terms of any service agreement
entered into under the David L. Boren National Security
Education Act of 1991 before the date of the enactment
of this Act that is in force as of that date.
SEC. 905. CHANGE OF MEMBERSHIP OF CERTAIN COUN-
CILS.
(a) MEMBERSHIP OF ARMED FORCES POLICY COUN-
CIL.—Section 171(a) of title 10, United States Code, is
amended by adding at the end the following new para-
graph:
382
‘‘(14) The Commandant of the Coast Guard,
for discussion of matters pertaining to the Coast
Guard.’’.
(b) MEMBERSHIP
OF COUNCIL UNDER SECTION
179.—Subsection (a) of section 179 of title 10, United
States Code, is amended by adding at the end the fol-
lowing new paragraph:
‘‘(4) The Under Secretary of Defense for Pol-
icy.’’.
(b) CONFORMING AND CLARIFYING AMENDMENTS.—
Such subsection is further amended in the matter pre-
ceding paragraph (1)—
(1) by striking ‘‘Joint’’; and
(2) by striking ‘‘composed of three members as
follows:’’ and inserting ‘‘operated as a joint activity
of the Department of Defense and the Department
of Energy. The membership of the Council is com-
prised of the following officers of those depart-
ments:’’.
(c) OTHER TECHNICAL AND CLARIFYING AMEND-
MENTS.—Such section is further amended as follows:
(1) Subsection (c)(3)(B) is amended by striking
‘‘appointed’’ and inserting ‘‘designated’’.
383
(2) Subsection (e) is amended by striking ‘‘In
addition’’ and all that follows through ‘‘also’’ and in-
serting ‘‘The Council shall’’.
(3) Subsection (f) is amended by striking
‘‘Committee on’’ the first place it appears and all
that follows through ‘‘Representatives’’ and inserting
‘‘congressional defense committees’’.
(d) STYLISTIC AMENDMENTS.—Such section is fur-
ther amended as follows:
(1) Subsection (a) is amended by inserting ‘‘ES-
TABLISHMENT; MEMBERSHIP.—’’ after ‘‘(a)’’.
(2) Subsection (b) is amended by inserting
‘‘CHAIRMAN; MEETINGS.—’’ after ‘‘(b)’’.
(3) Subsection (c) is amended by inserting
‘‘STAFF
AND ADMINISTRATIVE SERVICES; STAFF
DIRECTOR.—’’ after ‘‘(c)’’.
(4) Subsection (d) is amended by inserting
‘‘RESPONSIBILITIES.—’’ after ‘‘(d)’’.
(5) Subsection (e) is amended by inserting
‘‘REPORT ON DIFFICULTIES RELATING TO SAFETY
OR RELIABILITY.—’’ after ‘‘(e)’’.
(6) Subsection (f) is amended by inserting ‘‘AN-
NUAL REPORT.—’’ after ‘‘(f)’’.
384
(e) FURTHER CONFORMING AMENDMENT.—Section
3212(e) of the National Nuclear Security Administration
Act (50 U.S.C. 2402(e)) is amended—
(1) by striking ‘‘JOINT’’ in the subsection head-
ing; and
(2) by striking ‘‘Joint’’.
SEC. 906. ACTIONS TO PREVENT THE ABUSE OF DETAIN-
EES.
(a) POLICIES REQUIRED.—The Secretary of Defense
shall prescribe policies regarding procedures for the
Armed Forces and other elements of the Department of
Defense and contractor personnel of the Department of
Defense intended to prevent the conditions leading to acts
of abuse of detainees who are held by the United States
as part of the Global War on Terrorism. Policies under
this subsection shall be prescribed not later than 120 days
after the date of the enactment of this Act.
(b) MATTERS TO BE INCLUDED.—In order to achieve
the objective stated in subsection (a), the policies on the
prevention of abuse of detainees under that subsection
shall specify, at a minimum, procedures for the following:
(1) Ensuring that commanders of detention fa-
cilities and commanders of interrogation facilities
provide all assigned personnel (including contractor
personnel) with training, and documented acknowl-
385
edgement of receiving training, regarding the Gene-
va Convention Relative to the Treatment of Pris-
oners of War and established Standing Operating
Procedures for the treatment of detainees. Training
provided under this paragraph to contractor per-
sonnel shall be at least comparable in degree to that
provided to members of the Armed Forces.
(2) Providing all detainees with information, in
their own language, of the protections afforded
under the Geneva Convention Relative to the Treat-
ment of Prisoners of War.
(3) Conducting periodic unannounced and an-
nounced inspections of prisons and other areas
where detainees are held in order to provide contin-
ued oversight of interrogation and detention oper-
ations.
(4) Prohibiting contact between male guards
and female detainees and between female guards
and male detainees, except under exigent cir-
cumstances.
(c) REPORTS TO CONGRESS.—The Secretary of De-
fense shall submit to the Committees on Armed Services
of the Senate and House of Representatives—
386
(1) a copy of the policies prescribed pursuant to
subsection (a), immediately after those policies are
prescribed; and
(2) a report on the implementation of those
policies, not later than one year after the date on
which those policies are prescribed.
SEC. 907. RESPONSES TO CONGRESSIONAL INQUIRIES.
(a) IN GENERAL.—(1) Chapter 3 of title 10, United
States Code, is amended by inserting after section 113a
the following new section:
‘‘§ 113b. Response to congressional inquiries
‘‘Whenever the Secretary of Defense or any other of-
ficial of the Department of Defense is requested by the
chairman of the Committee on Armed Services of the Sen-
ate or the chairman of the Committee on Armed Services
of the House of Representatives to respond to a question
or inquiry submitted by the chairman or another member
of that committee pursuant to a committee hearing or
other activity, the Secretary (or other official) shall re-
spond to the request, in writing, within 21 days of the
date on which the request is transmitted to the Secretary
(or other official).’’.
(b) CLERICAL AMENDMENT.—The table of sections
at the beginning of such chapter is amended by inserting
387
after the item relating to section 113a the following new
item:
‘‘113b. Response to congressional inquiries.’’.
SEC. 908. SECRETARY OF DEFENSE GUIDANCE ON IDENTI-
FICATION AND INTERNAL TRANSMISSION OF
CRITICAL INFORMATION.
(a) DEFENSE GUIDANCE.—The Secretary of Defense
shall establish criteria for determining the types of critical
information required to be made known expeditiously to
senior decision makers in the Department of Defense. The
types of information specified should be matters of ex-
traordinary significance and potential strategic impact
and should be immediately necessary to facilitate timely
information management in the high-level, decision-mak-
ing process affecting successful mission accomplishment.
The Secretary may from time to time modify the list to
suit the current strategic situation, as necessary. The Sec-
retary should provide to the Secretaries of the military de-
partments, the commanders of deployed forces, and other
elements of the Department of Defense guidance for the
purposes of identifying those critical information require-
ments.
(b) MATTERS TO BE INCLUDED.—The guidance
under subsection (a) shall include, at a minimum, require-
ment for identification of the following:
388
(1) Any incident that may require a military
contingency based on the incident’s nature, gravity,
or potential for significant adverse consequences to
United States citizens, military personnel, or assets,
including an incident that provides opportunities for
significant adverse publicity of a nature that could
have a strategic impact.
(2) Any event, development, or situation that
can be reasonably assumed to escalate into a signifi-
cant adverse incident described in paragraph (1).
(3) Any deficiency or error in policy, standards,
or training that can be reasonably assumed to foster
significant adverse incidents described in paragraph
(1).
(c) POLICY FOR TRANSMISSION OF INFORMATION TO
OSD.—The Secretary of Defense shall establish a policy
for the transmission from any element of the Department
of Defense as expeditiously as possible to the Secretary
of Defense and the Joint Chiefs of Staff of any report,
assessment, or evaluation commissioned from any level
within the Department of Defense that results in the iden-
tification of any of the items on the list required by sub-
section (a). As part of that policy, the Secretary should
establish a timetable for transmission of any such report,
assessment, or evaluation to the responsible major com-
389
mand upon receipt of the final document by the commis-
sioning authority.
(d) TIME FOR ISSUANCE OF GUIDANCE.—The Sec-
retary of Defense shall establish the list required by sub-
section (a) and issue the guidance required by that sub-
section not later than 90 days after the date of the enact-
ment of this Act.
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 Sec-
retary may transfer amounts of authorizations made avail-
able to the Department of Defense in this division for fis-
cal year 2005 between any such authorizations for that
fiscal year (or any subdivisions thereof). Amounts of au-
thorizations 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 Sec-
retary may transfer under the authority of this section
may not exceed $3,000,000,000. Of such amount,
$500,000,000 may be used only for a transfer from an
account for an active component to an account for a re-
390
serve component, or from an account of a reserve compo-
nent to an account of an active component, of the same
Armed Force.
(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;
(2) may not be used to provide authority for an
item that has been denied authorization by Con-
gress; and
(3) may not be combined with the authority
provided under section 1519.
(c) EFFECT
ON
AUTHORIZATION
AMOUNTS.—A
transfer made from one account to another under the au-
thority 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 trans-
ferred.
(d) NOTICE
TO CONGRESS.—The Secretary shall
promptly notify Congress of each transfer made under
subsection (a).
391
SEC. 1002. BUDGET JUSTIFICATION DOCUMENTS FOR OP-
ERATION AND MAINTENANCE.
(a) IN GENERAL.—(1) Chapter 9 of title 10, United
States Code, is amended by adding at the end the fol-
lowing new section:
‘‘§ 232. Operations and maintenance budget presen-
tation
‘‘(a) IN GENERAL.—In this section
‘‘(1) The term ‘O&M justification documents’
means Department of Defense budget justification
documents with respect to accounts for operation
and maintenance submitted to the congressional de-
fense committees in support of the Department of
Defense component of the President’s budget for
any fiscal year.
‘‘(2) The term ‘President’s budget’ means the
budget of the President submitted to Congress
under section 1105 of title 31 for any fiscal year.
‘‘(3) The term ‘current year’ means the fiscal
year during which the President’s budget is sub-
mitted in any year.
‘‘(b) IDENTIFICATION
OF BASELINE AMOUNTS
IN
O&M JUSTIFICATION DOCUMENTS.—In any case in which
the amount requested in the President’s budget for a fiscal
year for a Department of Defense operations and mainte-
nance program, project, or activity is different from the
392
amount appropriated for that program, project, or activity
for the current year, the O&M justification documents
supporting that budget shall identify that appropriated
amount and the difference between that amount and the
amount requested in the budget, stated as an amount and
as a percentage.
‘‘(c) PERSONAL SERVICE CONTRACTS.—In the O&M
justification documents for any fiscal year, costs pro-
grammed in the budget for that fiscal year for Department
of Defense for personal service contracts, and the number
of personal service contractors to be used by the Depart-
ment of Defense during that fiscal year who will be com-
pensated at an annual rate in excess of the annual rate
of salary of the Vice President under section 104 of title
3, shall be separately set forth and identified.
‘‘(d) NAVY SUBACTIVITIES FOR SHIP DEPOT MAIN-
TENANCE
AND
FOR
INTERMEDIATE
SHIP
MAINTE-
NANCE.—In the O&M justification documents for the
Navy for any fiscal year, amounts requested for ship depot
maintenance and amounts requested for intermediate ship
maintenance shall be set forth as separate budget sub-
activity groups.
‘‘(e) CIVILIAN AVERAGE SALARY COSTS.—In the
O&M justification documents for any fiscal year, average
civilian salary costs, shown by subactivity group, shall be
393
set forth as a component of the personnel summary ex-
hibit.’’.
(2) The table of sections at the beginning of such
chapter is amended by adding at the end the following
new item:
‘‘232. Operations and maintenance budget presentation.’’.
(b) COMPONENTS OF LINE ITEMS FOR OTHER COSTS
AND OTHER CONTRACTS.—Not later than March 1, 2005,
the Secretary of Defense shall submit to the congressional
defense committees a report setting forth the component
elements of the line items identified as ‘‘Other Costs’’ and
‘‘Other Contracts’’ in the exhibit identified as ‘‘Summary
of Price and Program Changes’’ in the budget justification
materials submitted to those committees in support of the
budget for fiscal year 2006.
SEC. 1003. RETENTION OF FEES FROM INTELLECTUAL
PROPERTY LICENSES.
(a) IN GENERAL.—Chapter 165 of title 10, United
States Code, is amended by adding at the end the fol-
lowing new section:
‘‘§ 2788. Licensing of intellectual property of the mili-
tary departments; authority to charge
and retain fees
‘‘(a) AUTHORITY TO RETAIN FEES.—(1) Under reg-
ulations prescribed by the Secretary of Defense, the Sec-
retary concerned may license trademarks, service marks,
394
certification marks, and collective marks owned by a mili-
tary department and may retain and expend fees received
from such licensing in accordance with subsection (b).
‘‘(2) In this section, the terms ‘trademark’, ‘service
mark’, ‘certification mark’, ‘collective mark’, and ‘mark’
have the meanings given those terms in section 45 of the
Trademark Act of 1946 (15 U.S.C. 1127).
‘‘(b) USE OF LICENSING FEES.—(1) Funds received
by a military department from licensing under subsection
(a)(1) shall be used for the expenses incurred by the de-
partment in securing the registration of marks owned by
the department and in licensing those marks.
‘‘(2) If the amount of fees received by a military de-
partment during any fiscal year from the licensing of
marks exceeds the anticipated expenses under paragraph
(1) during that year, the Secretary concerned may des-
ignate those funds as excess and expend them as provided
in paragraph (3).
‘‘(3) Not more than 50 percent of any such excess
funds shall be available for military personnel recruiting
and retention activities of the department. The remainder
of such funds shall be available for morale, welfare, and
recreation activities of the department.
395
‘‘(4) Funds received pursuant to subsection (a)(1)
shall remain available for two years after the end of the
fiscal year during which the funds are received.’’.
(b) CLERICAL AMENDMENT.—The table of sections
at the beginning of such chapter is amended by adding
at the end the following new item:
‘‘2788. Licensing of intellectual property of the military departments; authority
to charge and retain fees.’’.
SEC. 1004. AUTHORITY TO WAIVE CLAIMS OF THE UNITED
STATES WHEN AMOUNTS RECOVERABLE ARE
LESS THAN COSTS OF COLLECTION.
(a) AUTHORITY.—Chapter 165 of title 10, United
States Code, is amended by inserting after section 2780
the following new section:
‘‘§ 2780a. Debt collection: general waiver authority
for small amounts owed the United States
‘‘(a) AUTHORITY.—In the case of an indebtedness to
the United States described in subsection (b) that is for
an amount that is less than the threshold amount specified
in subsection (c), the Secretary of Defense may, under
regulations prescribed under this section, cancel the in-
debtedness and waive recovery of the amount owed. Such
authority may be used only when, based on a cost-benefit
analysis, the Secretary determines that the costs of collec-
tion are expected to exceed the amount recoverable.
396
‘‘(b) COVERED DEBTS.—(1) Except as provided in
paragraph (2), this section applies with respect to
amounts owed to the United States that arise out of the
activities of, or that are referred to, the Department of
Defense (including amounts owed by members of the
armed forces and Department of Defense civilian per-
sonnel).
‘‘(2) The authority under this section does not apply
to amounts owed to the United States arising out of activi-
ties of the Department of Defense that have been referred
to another executive agency for collection action or that
are otherwise within the purview of another executive
agency.
‘‘(c) MAXIMUM AMOUNT WAIVABLE.—The threshold
amount referred to in subsection (a) is the micropurchase
threshold amount in effect under section 32 of the Office
of Federal Procurement Policy Act (41 U.S.C. 428).
‘‘(d) REGULATIONS.—The Secretary of Defense shall
prescribe regulations for the purposes of this section.’’.
(b) CLERICAL AMENDMENT.—The table of sections
at the beginning of such chapter is amended by inserting
after the item relating to section 2780 the following new
item:
‘‘2780a. Debt collection: general waiver authority for small amounts owed the
United States.’’.
397
SEC. 1005. REPEAL OF FUNDING RESTRICTIONS CON-
CERNING DEVELOPMENT OF MEDICAL COUN-
TERMEASURES AGAINST BIOLOGICAL WAR-
FARE THREATS.
(a) REPEAL.—Section 2370a of title 10, United
States Code, is repealed.
(b) CLERICAL AMENDMENT.—The table of sections
at the beginning of chapter 139 of such title is amended
by striking the item relating to that section.
SEC. 1006. REPORT ON BUDGETING FOR EXCHANGE RATES
FOR FOREIGN CURRENCY FLUCTUATIONS.
(a) SECRETARY
OF DEFENSE REPORT.—(1) Not
later than December 1, 2004, the Secretary Defense shall
submit to the Committees on Armed Services of the Sen-
ate and House of Representatives a report on the foreign
currency exchange rate projection used in annual Depart-
ment of Defense budget presentations.
(2) In the report under paragraph (1), the Secretary
shall—
(A) identify alternative approaches for selecting
foreign currency exchange rates that would produce
more realistic estimates of amounts required to be
appropriated or otherwise made available for the De-
partment of Defense to accommodate foreign cur-
rency exchange rate fluctuations;
398
(B) address the advantages and disadvantages
of each approach identified pursuant to subpara-
graph (A);
(C) identify the Secretary’s preferred approach
among the alternatives identified pursuant to sub-
paragraph (A) and provide the Secretary’s rationale
for preferring that approach.
(3) In identifying alternative approaches pursuant to
paragraph (2)(A), the Secretary shall examine—
(A) approaches used by other Federal depart-
ments and agencies; and
(B) the feasibility of using private economic
forecasting.
(b) COMPTROLLER GENERAL REVIEW
AND RE-
PORT.—The Comptroller General of the United States
shall review the report under subsection (a), including the
basis for the Secretary’s conclusions stated in the report,
and shall submit to the Committees on Armed Services
of the Senate and House of Representatives a report con-
taining the Comptroller General’s conclusions with respect
to that report. Such report shall be submitted not later
than January 15, 2005.
SEC. 1007. FISCAL YEAR 2004 TRANSFER AUTHORITY.
Section 1001(a)(2) of the National Defense Author-
ization Act for Fiscal Year 2004 (Public Law 108–136;
399
117 Stat. 1582) is amended by striking ‘‘$2,500,000,000’’
and inserting ‘‘$3,000,000,000’’.
SEC. 1008. REPORT ON AMOUNTS REMITTED AND REIM-
BURSED DURING FISCAL YEAR 2004 UNDER
SECTION 1007 OF PUBLIC LAW 108–136.
Not later than 30 days after the end of fiscal year
2004, the Secretary of Defense shall submit to the con-
gressional defense committees a report on amounts remit-
ted and reimbursed during fiscal year 2004 under section
1007 of the National Defense Authorization Act for Fiscal
Year 2004 (Public Law 108–136; 117 Stat. 1585; 10
U.S.C. 2241 note).
Subtitle B—Naval Vessels and
Shipyards
SEC. 1011. AUTHORITY FOR AWARD OF CONTRACTS FOR
SHIP DISMANTLING ON NET-COST BASIS.
(a) IN GENERAL.—Chapter 633 of title 10, United
States Code, is amended by inserting after section 7305
the following new section:
‘‘§ 7305a. Vessels stricken from Naval Vessel Register:
contracts for dismantling on net-cost
basis
‘‘(a) AUTHORITY
FOR
NET-COST
BASIS
CON-
TRACTS.—When the Secretary of the Navy awards a con-
tract for the dismantling of a vessel stricken from the
400
Naval Vessel Register, the Secretary may award the con-
tract on a net-cost basis.
‘‘(b) RETENTION BY CONTRACTOR OF PROCEEDS OF
SALE OF SCRAP AND REUSABLE ITEMS.—When the Sec-
retary awards a contract on a net-cost basis under sub-
section (a), the Secretary shall provide in the contract that
the contractor may retain the proceeds from the sale of
scrap and reusable items removed from the vessel disman-
tled under the contract.
‘‘(c) DEFINITIONS.—In this section:
‘‘(1) The term ‘net-cost basis’, with respect to
a contract for the dismantling of a vessel, means
that the amount to be paid to the contractor under
the contract for dismantling and for removal and
disposal of hazardous waste material is discounted
by the offeror’s estimate of the value of scrap and
reusable items that the contractor will remove from
the vessel during performance of the contract.
‘‘(2) The term ‘scrap’ means personal property
that has no value except for its basic material con-
tent.
‘‘(3) The term ‘reusable item’ means a demili-
tarized component or a removable portion of a vessel
or equipment that the Secretary of the Navy has
identified as excess to the needs of the Navy but
401
which has potential resale value on the open mar-
ket.’’.
(b) CLERICAL AMENDMENT.—The table of sections
at the beginning of such chapter is amended by inserting
after the item relating to section 7305 the following new
item:
‘‘7305a. Vessels stricken from Naval Vessel Register: contracts for dismantling
on net-cost basis.’’.
SEC. 1012. INDEPENDENT STUDY TO ASSESS COST EFFEC-
TIVENESS OF THE NAVY SHIP CONSTRUC-
TION PROGRAM.
(a) STUDY.—The Secretary of Defense shall provide
for a study, to be conducted by an entity independent of
the Department of Defense, of the cost effectiveness of
the ship construction program of the Navy. The purpose
of the study shall be to examine both—
(1) a variety of approaches by which the Navy
ship construction program could be made more effi-
cient in the near term; and
(2) a variety of approaches by which, with a na-
tionally integrated effort over the next decade, the
United States shipbuilding industry might be made
competitive globally.
(b) NEAR TERM IMPROVEMENTS IN EFFICIENCY.—
With respect to the examination under subsection (a)(1)
of approaches by which the Navy ship construction pro-
402
gram could be made more efficient in the near term, the
Secretary shall provide for the entity conducting the
study—
(1) to determine, with respect to each approach
so examined, the cost savings that could result from
implementation of that approach over each of the
next 10 years;
(2) to recommend one or more of the ap-
proaches examined under subsection (a)(1) for im-
plementation; and
(3) for each approach recommended under
paragraph (2) for implementation, to develop a con-
cept and implementation plan by which the rec-
ommended improvements could best be phased into
the naval ship construction program.
(c) GLOBAL COMPETITIVENESS OF UNITED STATES
SHIPBUILDING INDUSTRY.—With respect to the examina-
tion under subsection (a)(2) of approaches by which, with
a nationally integrated effort over the next decade, the
United States shipbuilding industry might be made com-
petitive globally, the Secretary shall provide for the entity
conducting the study—
(1) to develop a plan to modernize the United
States shipbuilding infrastructure within the next
403
decade in order to make the United States ship-
building industry more competitive globally; and
(2) to estimate the resources required to carry
out a modernization plan developed under paragraph
(1).
(d) REPORT.—Not later than June 1, 2005, the Sec-
retary of Defense shall submit to the congressional defense
committees a report providing the results of the study
under subsection (a). The report shall include the matters
specified in subsections (b) and (c).
SEC. 1013. AUTHORITY TO TRANSFER SPECIFIED FORMER
NAVAL VESSELS TO CERTAIN FOREIGN COUN-
TRIES.
(a) AUTHORITY
TO
TRANSFER
BY GRANT.—The
Prsident is authorized to transfer vessels to foreign coun-
tries on a grant basis under section 516 of the Foreign
Assistance Act of 1961 (22 U.S.C. 2321j), as follows:
(1) CHILE.—The ‘‘SPRUANCE’’ class de-
stroyer O’BANNON (DD–987) to the Government
of Chile.
(2) PORTUGAL.—The ‘‘OLIVER HAZARD
PERRY’’ class guided missile frigate GEORGE
PHILIP (FFG–12) to the Government of Portugal.
(b) AUTHORITY TO TRANSFER BY SALE.—The Presi-
dent is authorized to transfer on a sale basis under section
404
21 of the Arms Export Control Act (22 U.S.C. 2761) the
‘‘ANCHORAGE’’ class dock landing ship ANCHORAGE
(LSD–36) to the Taipei Economic and Cultural Rep-
resentative Office in the United States (which is the Tai-
wan instrumentality designated pursuant to section 10(a)
of the Taiwan Relations Act).
(c) GRANTS NOT COUNTED IN ANNUAL TOTAL OF
TRANSFERRED EXCESS DEFENSE ARTICLES.—The value
of a vessel transferred to another country on a grant basis
under section 516 of the Foreign Assistance Act of 1961
(22 U.S.C. 2321j) pursuant to authority provided by sub-
section (a) shall not be counted for the purposes of sub-
section (g) of that section in the aggregate value of excess
defense articles transferred to countries under that section
in any fiscal year.
(d) COSTS OF TRANSFERS.—Any expense incurred by
the United States in connection with a transfer authorized
by this section shall be charged to the recipient (notwith-
standing section 516(e) of the Foreign Assistance Act of
1961 (22 U.S.C. 2321j (e)) in the case of a transfer au-
thorized to be made on a grant basis under subsection
(a)).
(e) REPAIR
AND
REFURBISHMENT
IN
UNITED
STATES SHIPYARDS.—To the maximum extent prac-
ticable, the President shall require, as a condition of the
405
transfer of a vessel under this section, that the country
to which the vessel is transferred have such repair or re-
furbishment of the vessel as is needed, before the vessel
joins the naval forces of that country, performed at a ship-
yard located in the United States, including a United
States Navy shipyard.
(f) EXPIRATION OF AUTHORITY.—The authority to
transfer a vessel under this section shall expire at the end
of the two-year period beginning on the date of the enact-
ment of this Act.
SEC. 1014. LIMITATION ON LEASING OF FOREIGN-BUILT
VESSELS.
(a) IN GENERAL.—(1) Chapter 141 of title 10,
United States Code, is amended by inserting after section
2401a the following new section:
‘‘§ 2401b. Limitation on lease of foreign-built vessels
‘‘(a) LIMITATION.—The Secretary of a military de-
partment may not make a contract for a lease or charter
of a vessel for a term of more than 12 months (including
all options to renew or extend the contract) if the hull,
a major component of the hull, or superstructure of the
vessel is constructed in a foreign shipyard.
‘‘(b) PRESIDENTIAL WAIVER FOR NATIONAL SECU-
RITY INTEREST.—(1) The President may authorize excep-
tions to the limitation in subsection (a) when the President
406
determines that it is in the national security interest of
the United States to do so.
‘‘(2) The President shall transmit notice to Congress
of any such determination, and no contract may be made
pursuant to the exception authorized until the end of the
30-day period beginning on the date on which the notice
of the determination is received by Congress.’’.
(2) The table of sections at the beginning of such
chapter is amended by inserting after the item relating
to section 2401a the following new item:
‘‘2401b. Limitation on lease of foreign-built vessels.’’.
(b) EFFECTIVE DATE.—Section 2401b of title 10,
United States Code, as added by subsection (a), shall
apply with respect to contracts entered into after the date
of the enactment of this Act.
Subtitle C—Sunken Military Craft
SEC. 1021. PRESERVATION OF TITLE TO SUNKEN MILITARY
CRAFT AND ASSOCIATED CONTENTS.
Right, title, and interest of the United States in and
to any United States sunken military craft shall not be
extinguished by the passage of time, regardless of when
the sunken military craft sank.
SEC. 1022. PROHIBITIONS.
(a) UNAUTHORIZED
ACTIVITIES
DIRECTED
AT
SUNKEN MILITARY CRAFT.—No person shall engage in
or attempt to engage in any activity directed at a sunken
407
military craft that disturbs, removes, or injures any sunk-
en military craft, except—
(1) as authorized by a permit under this sub-
title;
(2) as authorized by regulations issued under
this subtitle; or
(3) as otherwise authorized by law.
(b) POSSESSION OF SUNKEN MILITARY CRAFT.—No
person may possess, disturb, remove, or injure any sunken
military craft in violation of—
(1) this section; or
(2) any prohibition, rule, regulation, ordinance,
or permit that applies under any other applicable
Federal, foreign, or other law.
(c) LIMITATIONS ON APPLICATION.—
(1) ACTIONS BY UNITED STATES.—This section
shall not apply to actions taken by, or at the direc-
tion of, the United States.
(2) FOREIGN PERSONS.—This section shall not
apply to any action by a person who is not a citizen,
national, or resident alien of the United States, ex-
cept in accordance with—
(A) generally recognized principles of inter-
national law;
408
(B) an agreement between the United
States and the foreign country of which the
person is a citizen; or
(C) in the case of an individual who is a
crew member or other individual on a foreign
vessel or foreign aircraft, an agreement between
the United States and the flag State of the for-
eign vessel or aircraft that applies to the indi-
vidual.
(3) LOAN OF SUNKEN MILITARY CRAFT.—This
section does not prohibit the loan of United States
sunken military craft in accordance with regulations
issued by the Secretary concerned.
SEC. 1023. PERMITS.
(a) IN GENERAL.—The Secretary concerned may
issue a permit authorizing a person to engage in an activ-
ity otherwise prohibited by section 1022 with respect to
a United States military craft, for archaeological, histor-
ical, or educational purposes, in accordance with regula-
tions issued by such Secretary that implement this section.
(b) CONSISTENCY WITH OTHER LAWS.—The Sec-
retary concerned shall require that any activity carried out
under a permit issued by such Secretary under this section
must be consistent with all requirements and restrictions
that apply under any other provision of Federal law.
409
(c) CONSULTATION.—In carrying out this section (in-
cluding the issuance after the date of the enactment of
this Act of regulations implementing this section), the Sec-
retary concerned shall consult with the head of each Fed-
eral agency having authority under Federal law with re-
spect to activities directed at sunken military craft or the
locations of such craft.
SEC. 1024. PENALTIES.
(a) IN GENERAL.—Any person who violates this sub-
title, or any regulation or permit issued under this sub-
title, shall be liable to the United States for a civil penalty
under this section.
(b) ASSESSMENT AND AMOUNT.—The Secretary con-
cerned may assess a civil penalty under this section, after
notice and an opportunity for a hearing, of not more than
$100,000 for each violation.
(c) CONTINUING VIOLATIONS.—Each day of a contin-
ued violation of this subtitle or a regulation or permit
issued under this subtitle shall constitute a separate viola-
tion for purposes of this section.
SEC. 1025. LIABILITY FOR DAMAGES.
(a) IN GENERAL.—Any person who engages in an ac-
tivity in violation of section 1022 or any regulation or per-
mit issued under this subtitle that disturbs, removes, or
injures any United States sunken military craft shall pay
410
the United States enforcement costs and damages result-
ing from such disturbance, removal, or injury.
(b) INCLUDED DAMAGES.—Damages referred to in
subsection (a) may include—
(1) the reasonable costs incurred in storage,
restoration, care, maintenance, conservation, and
curation of any sunken military craft that is dis-
turbed, removed, or injured in violation of section
1022 or any regulation or permit issued under this
subtitle; and
(2) the cost of retrieving, from the site where
the sunken military craft was disturbed, removed, or
injured, any information of an archaeological, histor-
ical, or cultural nature.
SEC. 1026. RELATIONSHIP TO OTHER LAWS.
(a) IN GENERAL.—Except to the extent that an ac-
tivity is undertaken as a subterfuge for activities prohib-
ited by this subtitle, nothing in this subtitle is intended
to affect—
(1) any activity that is not directed at a sunken
military craft; or
(2) the traditional high seas freedoms of navi-
gation, including—
(A) the laying of submarine cables and
pipelines;
411
(B) operation of vessels;
(C) fishing; or
(D) other internationally lawful uses of the
sea related to such freedoms.
(b) INTERNATIONAL LAW.—This subtitle and any
regulations implementing this subtitle shall be applied in
accordance with generally recognized principles of inter-
national law and in accordance with the treaties, conven-
tions, and other agreements to which the United States
is a party.
(c) LAW OF FINDS.—The law of finds shall not apply
to any United States sunken military craft, wherever lo-
cated.
(d) LAW OF SALVAGE.—No salvage rights or awards
shall be granted with respect to any sunken military craft
without the express permission of the United States.
(e) LAW OF CAPTURE OR PRIZE.—Nothing in this
subtitle is intended to alter the international law of cap-
ture or prize with respect to sunken military craft.
(f) LIMITATION OF LIABILITY.—Nothing in sections
4281 through 4287 and 4289 of the Revised Statutes (46
U.S.C. App. 181 et seq.) or section 3 of the Act of Feb-
ruary 13, 1893 (chapter 105; 27 Stat. 445; 46 U.S.C.
App. 192), shall limit the liability of any person under this
section.
412
(g) AUTHORITIES OF THE COMMANDANT OF THE
COAST GUARD.—Nothing in this subtitle is intended to
preclude or limit the application of any other law enforce-
ment authorities of the Commandant of the Coast Guard.
(h) PRIOR DELEGATIONS, AUTHORIZATIONS, AND
RELATED REGULATIONS.—Nothing in this subtitle shall
invalidate any prior delegation, authorization, or related
regulation that is consistent with this subtitle.
(i) CRIMINAL LAW.—Nothing in this subtitle is in-
tended to prevent the United States from pursuing crimi-
nal sanctions for plundering of wrecks, larceny of Govern-
ment property, or violation of any applicable criminal law.
SEC. 1027. ENCOURAGEMENT OF AGREEMENTS WITH FOR-
EIGN COUNTRIES.
The Secretary of State, in consultation with the Sec-
retary of Defense, is encouraged to negotiate and conclude
bilateral and multilateral agreements with foreign coun-
tries with regard to sunken military craft consistent with
this subtitle.
SEC. 1028. DEFINITIONS.
In this subtitle:
(1) ASSOCIATED CONTENTS.—The term ‘‘asso-
ciated contents’’ means—
413
(A) the equipment, cargo, and contents of
a sunken military craft that are within its de-
bris field; and
(B) the remains and personal effects of the
crew and passengers of a sunken military craft
that are within its debris field.
(2) SECRETARY.—The term ‘‘Secretary’’ means
the Secretary of a military department.
(3) SUNKEN
MILITARY
AIRCRAFT.—The term
‘‘sunken military aircraft’’ means any sunken mili-
tary aircraft that was owned or operated by the
United States when it sank.
(4) SUNKEN
MILITARY
CRAFT.—The term
‘‘sunken military craft’’ means any sunken military
vessel, sunken military aircraft, or associated con-
tents, or any portion thereof, the title to which has
not been abandoned or transferred in a manner pre-
scribed by the United States.
(5) SUNKEN
MILITARY
VESSEL.—The term
‘‘sunken military vessel’’ means any sunken warship
or naval auxiliary of the United States that is a pub-
lic vessel as that term is used in the Act of March
3, 1925 (chapter 428; 46 U.S.C. App. 781 et seq.),
popularly known as the Public Vessels Act.
414
(6) UNITED STATES CONTIGUOUS ZONE.—The
term ‘‘United States contiguous zone’’ means the
contiguous zone of the United States under Presi-
dential Proclamation 7219, dated September 2,
1999.
(7) UNITED STATES INTERNAL WATERS.—The
term ‘‘United States internal waters’’ means all wa-
ters of the United States on the landward side of the
baseline from which the breadth of the United
States territorial sea is measured.
(8) UNITED STATES TERRITORIAL SEA.—The
term ‘‘United States territorial sea’’ means the wa-
ters of the United States territorial sea under Presi-
dential Proclamation 5928, dated December 27,
1988.
(9) UNITED
STATES
WATERS.—The 
term
‘‘United States waters’’ means United States inter-
nal waters, the United States territorial sea, and the
United States contiguous zone.
415
Subtitle D—Counter-Drug
Activities
SEC. 1031. CONTINUATION OF AUTHORITY TO USE DEPART-
MENT OF DEFENSE FUNDS FOR UNIFIED
COUNTERDRUG 
AND 
COUNTERTERRORISM
CAMPAIGN IN COLOMBIA.
(a) AUTHORITY TO PROVIDE ASSISTANCE.—During
fiscal years 2005 and 2006, the Secretary of Defense may
use funds made available to the Department of Defense
for drug interdiction and counter-drug activities to provide
assistance to the Government of Colombia—
(1) to support a unified campaign against nar-
cotics trafficking in Colombia;
(2) to support a unified campaign against ac-
tivities by designated terrorist organizations, such as
the Revolutionary Armed Forces of Colombia
(FARC), the National Liberation Army (ELN), and
the United Self-Defense Forces of Colombia (AUC);
and
(3) to take actions to protect human health and
welfare in emergency circumstances, including un-
dertaking rescue operations.
(b) RELATION
TO OTHER ASSISTANCE AUTHOR-
ITY.—The authority provided by subsection (a) is in addi-
416
tion to other provisions of law authorizing the provision
of assistance to the Government of Colombia.
SEC. 1032. LIMITATION ON NUMBER OF UNITED STATES
MILITARY PERSONNEL IN COLOMBIA.
(a) LIMITATION.—None of the funds available to the
Department of Defense for any fiscal year may be used
to support or maintain more than 500 members of the
Armed Forces on duty in the Republic of Colombia at any
time.
(b) EXCLUSION OF CERTAIN MEMBERS.—For pur-
poses of determining compliance with the limitation in
subsection (a), the Secretary of Defense may exclude the
following military personnel:
(1) A member of the Armed Forces in the Re-
public of Colombia for the purpose of rescuing or re-
trieving United States military or civilian Govern-
ment personnel, except that the period for which
such a member may be so excluded may not exceed
30 days unless expressly authorized by law.
(2) A member of the Armed Forces assigned to
the United States Embassy in Colombia as an
attache´, as a member of the security assistance of-
fice, or as a member of the Marine Corps security
contingent.
417
(3) A member of the Armed Forces in Colombia
to participate in relief efforts in responding to a nat-
ural disaster.
(4) Nonoperational transient military personnel.
(5) A member of the Armed Forces making a
port call from a military vessel in Colombia.
Subtitle E—Reports
SEC. 1041. STUDY OF CONTINUED REQUIREMENT FOR TWO-
CREW MANNING FOR BALLISTIC MISSILE
SUBMARINES.
(a) STUDY AND DETERMINATION.—The Secretary of
Defense shall conduct a study of whether the practice of
using two alternating crews (referred to as the ‘‘Gold
Crew’’ and the ‘‘Blue Crew’’) for manning of ballistic mis-
sile submarines (SSBNs) continues to be justified under
the changed circumstances since the end of the Cold War
and, based on that study, shall make a determination of
whether that two-crew manning practice should be contin-
ued or should be modified or terminated.
(b) REPORT.—Not later than six months after the
date of the enactment of this Act, the Secretary shall sub-
mit to the Committees on Armed Services of the Senate
and House of Representatives a report providing notice
of the Secretary’s determination under subsection (a) and
the reasons for that determination.
418
SEC. 1042. STUDY OF EFFECT ON DEFENSE INDUSTRIAL
BASE OF ELIMINATION OF UNITED STATES
DOMESTIC 
FIREARMS 
MANUFACTURING
BASE.
Not later than 60 days after the date of the enact-
ment of this Act, the Secretary of Defense shall submit
to the congressional defense committees a report describ-
ing in detail the effect on both military readiness and the
defense industrial base that would result from the elimi-
nation of the United States domestic firearms manufac-
turing base.
SEC. 1043. STUDY OF EXTENT AND QUALITY OF TRAINING
PROVIDED TO MEMBERS OF THE ARMED
SERVICES TO PREPARE FOR POST-CONFLICT
OPERATIONS.
(a) STUDY REQUIRED.—The Secretary of Defense
shall conduct a study to determine the extent to which
members of the Armed Forces assigned to duty in support
of contingency operations receive training in preparation
for post-conflict operations and to evaluate the quality of
such training
(b) MATTERS INCLUDED IN STUDY.—As part of the
study under subsection (a), the Secretary shall specifically
evaluate the following:
(1) The doctrine, training, and leader-develop-
ment system necessary to enable members of the
419
Armed Forces to successfully operate in post-conflict
operations.
(2) The adequacy of curricula at military edu-
cational facilities to ensure that the Armed Forces
has a cadre of members skilled in post-conflict du-
ties, foreign languages, and foreign cultures.
(3) The training time and resources available to
members and units to develop cultural awareness
about ethnic backgrounds, religious beliefs, and po-
litical loyalties of the people living in areas in which
the Armed Forces operate.
(4) The organization of the combatant com-
mands to conduct post-conflict operations.
(c) SUBMISSION
OF STUDY RESULTS.—Not later
than March 15, 2005, the Secretary of Defense shall sub-
mit to the Committee on Armed Services of the Senate
and the Committee on Armed Services of the House of
Representatives a report containing the results of the
study conducted under this section.
Subtitle F—Security Matters
SEC. 1051. USE OF NATIONAL DRIVER REGISTER FOR PER-
SONNEL SECURITY INVESTIGATIONS AND DE-
TERMINATIONS.
Section 30305(b) of title 49, United States Code, is
amended—
420
(1) by redesignating paragraphs (9) through
(11) as paragraphs (10) through (12), respectively;
and
(2) by inserting after paragraph (8) the fol-
lowing new paragraph:
‘‘(9) An individual who has or is seeking access to
national security information for purposes of Executive
Order No. 12968, or any successor Executive order, or
an individual who is being investigated for Federal em-
ployment under authority of Executive Order No. 10450,
or any successor Executive order, may request the chief
driver licensing official of a State to provide information
about the individual pursuant to subsection (a) of this sec-
tion to a Federal department or agency that is authorized
to investigate the individual for the purpose of assisting
in the determination of the eligibility of the individual for
access to national security information or for Federal em-
ployment. A Federal department or agency that receives
such information about an individual may use it in accord-
ance with applicable law.’’.
SEC. 1052. STANDARDS FOR DISQUALIFICATION FROM ELI-
GIBILITY FOR DEPARTMENT OF DEFENSE SE-
CURITY CLEARANCE.
(a) DISQUALIFIED PERSONS.—Subsection (c)(1) of
section 986 of title 10, United States Code, is amended—
421
(1) by striking ‘‘and’’ and inserting ‘‘, was’’;
and
(2) and inserting before the period at the end
the following: ‘‘, and was incarcerated as a result of
that sentence for not less than one year’’.
(b) WAIVER AUTHORITY.—Subsection (d) of such
section is amended to read as follows:
‘‘(d) WAIVER AUTHORITY.—In a meritorious case, an
exception to the prohibition in subsection (a) may be au-
thorized for a person described in paragraph (1) or (4)
of subsection (c) if there are mitigating factors. Any such
waiver may be authorized only in accordance with stand-
ards and procedures prescribed by, or under the authority
of, an Executive orders or other guidance issued by the
President.’’.
Subtitle G—Transportation-Related
Matters
SEC. 1061. USE OF MILITARY AIRCRAFT TO TRANSPORT
MAIL TO AND FROM OVERSEAS LOCATIONS.
(a) AUTHORITY FOR USE OF MILITARY AIRCRAFT.—
Section 3401 of title 39, United States Code, is
amended—
(1) in subsection (b)—
(A) in the matter preceding paragraph
(1)(A), by striking ‘‘title 49,’’ and inserting
422
‘‘title 49, or on military aircraft at rates not to
exceed those so fixed and determined for sched-
uled United States air carriers,’’; and
(B) in the sentence following paragraph
(3), by striking ‘‘carriers’’ each place it appears
and inserting ‘‘carriers and military aircraft’’;
and
(2) in subsection (c)—
(A) in the first sentence, by striking ‘‘title
49,’’ and inserting ‘‘title 49, or on military air-
craft at rates not to exceed those so fixed and
determined for scheduled United States air car-
riers,’’; and
(B) in the second sentence—
(i) by inserting ‘‘and military air-
craft’’ after ‘‘carriers’’ the first place it ap-
pears; and
(ii) by striking ‘‘by air carriers other
than scheduled United States air carriers’’
and inserting ‘‘by other than scheduled
United States air carriers and military air-
craft’’.
(b) DEFINITION.—Such section is further amended
by adding at the end the following new subsection:
423
‘‘(g) In this section, the term ‘military aircraft’
means an aircraft owned, operated, or chartered by the
Department of Defense.’’.
SEC. 1062. REORGANIZATION AND CLARIFICATION OF CER-
TAIN PROVISIONS RELATING TO CONTROL
AND 
SUPERVISION 
OF 
TRANSPORTATION
WITHIN THE DEPARTMENT OF DEFENSE.
(a) TRANSFER OF CERTAIN TRANSPORTATION AU-
THORITIES.—Sections 4744, 4745, 4746, and 4747 of
title 10, United States Code, are transferred to chapter
157 of such title, inserted (in that order) at the end of
such chapter, and redesignated as sections 2648, 2649,
2650, and 2651, respectively.
(b) CLARIFICATION OF APPLICABILITY OF TRANS-
FERRED AUTHORITIES THROUGHOUT THE DEPARTMENT
OF DEFENSE.—(1) Section 2648 of such title, as trans-
ferred and redesignated by subsection (a), is amended—
(A) by striking ‘‘Secretary of the Army’’ in the
matter preceding paragraph (1) and inserting ‘‘Sec-
retary of Defense’’;
(B) by striking ‘‘Army transport agencies’’ in
the matter preceding paragraph (1) and all that fol-
lows through ‘‘military transport agency of’’; and
(C) by striking paragraphs (1), (2), and (3);
424
(D) by redesignating paragraph (4), (5), (6),
and (7) as paragraphs (1), (2), (3), and (4), respec-
tively;
(E) by redesignating paragraph (8) as para-
graph (5) and in that paragraph striking ‘‘persons
described in clauses (1), (2), (4), (5), and (7)’’ and
inserting ‘‘members of the armed forces, officers and
employees of the Department of Defense or the
Coast Guard, and persons described i paragraphs
(1), (2), and (4)’’; and
(F) by striking ‘‘clause (7) or (8)’’ in the last
sentence and inserting ‘‘paragraph (4) or (5)’’.
(2) Section 2649 of such title, as transferred and re-
designated by subsection (a), is amended—
(A) by striking the section heading and insert-
ing the following:
‘‘§ 2649. Civilian passengers and commercial cargoes:
transportation on Department of Defense
vessels’’;
(B) by striking ‘‘(1) on vessels’’ and all that
follows through ‘‘Department of the Army’’;
(C) by striking ‘‘any transport agency of’’; and
(D) by striking ‘‘Secretary of the Army’’ and all
that follows through ‘‘be transported’’ and inserting
‘‘Secretary of Defense, be transported’’.
425
(3) Section 2650 of such title, as transferred and re-
designated by subsection (a), is amended—
(A) in the matter preceding paragraph (1), by
striking ‘‘Army transport agencies’’ and all that fol-
lows through ‘‘military transport agency of’’;
(B) in paragraph (1), by striking ‘‘Secretary of
the Army’’ and inserting ‘‘Secretary of Defense’’;
and
(C) in paragraph (4), by striking ‘‘by air—’’
and all that follows through ‘‘the transportation can-
not’’ and inserting ‘‘by air, the transportation can-
not’’.
(4) Section 2651 of such title, as transferred and re-
designated by subsection (a), is amended by striking
‘‘Army transport agencies’’ and all that follows and insert-
ing ‘‘the Department of Defense, under regulations and
at rates to be prescribed by the Secretary of Defense.’’.
(c) REPEAL OF SUPERSEDED AND OBSOLETE PROVI-
SIONS.—The following sections of such title are repealed:
sections 4741, 4743, 9741, 9743, and 9746.
(d) CLERICAL AMENDMENTS.—
(1) The table of sections at the beginning of
chapter 157 of such title is amended by adding at
the end the following new items:
‘‘2648. Persons and supplies: sea transportation.
‘‘2649. Civilian passengers and commercial cargoes: transportation on Depart-
ment of Defense vessels.
426
‘‘2650. Civilian personnel in Alaska.
‘‘2651. Passengers and merchandise to Guam: sea transport.’’.
(2) The table of sections at the beginning of
chapter 447 of such title is amended by striking the
items relating to sections 4741, 4743, 4744, 4745,
4746, and 4747.
(3) The table of sections at the beginning of
chapter 947 of such title is amended by striking the
items relating to sections 9741, 9743, and 9746.
SEC. 1063. DETERMINATION OF WHETHER PRIVATE AIR
CARRIERS ARE CONTROLLED BY UNITED
STATES CITIZENS FOR PURPOSES OF ELIGI-
BILITY FOR GOVERNMENT CONTRACTS FOR
TRANSPORTATION OF PASSENGERS OR SUP-
PLIES.
Section 2710 of the Emergency Wartime Supple-
mental Appropriations Act, 2003 (Public Law 108–11;
117 Stat. 601), is amended by adding at the end the fol-
lowing new sentence: ‘‘Any determination for purposes of
this section of whether (in accordance with the first pro-
viso of this section) an air carrier is effectively controlled
by citizens of the United States shall be made by, or shall
be based on determinations made by, the Secretary of
Transportation.’’.
427
SEC. 1064. EVALUATION OF WHETHER TO PROHIBIT CER-
TAIN OFFERS FOR TRANSPORTATION OF SE-
CURITY-SENSITIVE CARGO.
(a) EVALUATION REQUIREMENT.—The Secretary of
Defense shall evaluate whether, and under what cir-
cumstances, in the award of service contracts for domestic
freight transportation for security-sensitive cargo (such as
arms, ammunitions, explosive, and classified material), the
Secretary should not consider an offer or tender from
more than one motor carrier that is part of a group of
motor carriers under common financial or administrative
control. In conducting the evaluation, the Secretary shall
seek industry comment.
(b) REPORT.—Not later than January 1, 2005, the
Secretary of Defense shall submit to the Committees on
Armed Services of the House of Representatives and the
Senate a report on the results of the evaluation conducted
under subsection (a).
SEC. 1065. PHASED IMPLEMENTATION OF NEW PROGRAM
FOR TRANSPORTING HOUSEHOLD GOODS OF
MEMBERS OF THE ARMED FORCES.
The Secretary of Defense may not implement the new
program for the transportation of household goods of
members of the Armed Forces and their dependents be-
yond phase I of the program, which includes the testing
of electronic bill processing at 14 sites, until the Secretary
428
submits to Congress a report evaluating whether Phase
I met its objectives and whether it is in the best interest
of the Department of Defense and members of the Armed
Forces to move forward to Phase II of the program.
Subtitle H—Other Matters
SEC. 1071. TWO-YEAR EXTENSION OF AUTHORITY OF THE
SECRETARY OF DEFENSE TO ENGAGE IN
COMMERCIAL ACTIVITIES AS SECURITY FOR
INTELLIGENCE 
COLLECTION 
ACTIVITIES
ABROAD.
Section 431(a) of title 10, United States Code, is
amended by striking ‘‘December 31, 2004’’ and inserting
‘‘December 31, 2006’’.
SEC. 1072. ASSISTANCE FOR STUDY OF FEASIBILITY OF BI-
ENNIAL INTERNATIONAL AIR TRADE SHOW
IN THE UNITED STATES AND FOR INITIAL IM-
PLEMENTATION.
(a) ASSISTANCE
FOR
COMMUNITY
FEASIBILITY
STUDY.—(1) The Secretary of Defense shall provide as-
sistance to a community selected under subsection (d) for
expenses of a study by that community of the feasibility
of the establishment and operation of a biennial inter-
national air trade show in the area of that community.
(2) The Secretary shall provide for the community
to submit to the Secretary a report containing the results
429
of the study not later than September 30, 2005. The Sec-
retary shall promptly submit the report to Congress, to-
gether with such comments on the report as the Secretary
considers appropriate.
(b) ASSISTANCE
FOR
IMPLEMENTATION.—If the
community conducting the study under subsection (a) de-
termines that the establishment and operation of such an
air show is feasible and should be implemented, the Sec-
retary shall provide assistance to the community for the
initial expenses of implementing such an air show in the
selected community.
(c) AMOUNT OF ASSISTANCE.—The amount of assist-
ance provided by the Secretary under subsections (a) and
(b)—
(1) may not exceed a total of $1,000,000, to be
derived from amounts available for operation and
maintenance for the Air Force for fiscal year 2005
or later fiscal years; and
(2) may not exceed one-half of the cost of the
study and may not exceed one-half the cost of such
initial implementation.
(d) SELECTION
OF COMMUNITY.—The Secretary
shall select a community for purposes of subsection (a)
through the use of competitive procedures. In making such
selection, the Secretary shall give preference to those com-
430
munities that already sponsor an air show, have dem-
onstrated a history of supporting air shows with local re-
sources, and have a significant role in the aerospace com-
munity. The community shall be selected not later than
March 1, 2005.
SEC. 1073. TECHNICAL AND CLERICAL AMENDMENTS.
(a) CLARIFICATION
OF DEFINITION
OF ‘‘OPER-
ATIONAL RANGE’’.—Section 101(e)(3) of title 10, United
States Code, is amended by striking ‘‘Secretary of De-
fense’’ and inserting ‘‘Secretary of a military depart-
ment’’.
(b) AMENDMENTS RELATING
TO DEFINITION
OF
CONGRESSIONAL DEFENSE COMMITTEES.—
(1) Chapter 169 of such title is amended as fol-
lows:
(A) Paragraph (4) of section 2801(c) is
amended to read as follows:
‘‘(4) The term ‘congressional defense commit-
tees’ includes, with respect to any project to be car-
ried out by, or for the use of, an intelligence compo-
nent of the Department of Defense—
‘‘(A) the Permanent Select Committee on
Intelligence of the House of Representatives;
and
431
‘‘(B) the Select Committee on Intelligence
of the Senate.’’.
(B) The following sections are amended by
striking ‘‘appropriate committees of Congress’’
each place it appears and inserting ‘‘congres-
sional defense committees’’: sections 2803(b),
2804(b), 
2805(b)(2), 
2806(c)(2), 
2807(b),
2807(c), 
2808(b), 
2809(f)(1), 
2811(d),
2812(c)(1)(A), 
2813(c), 
2814(a)(2)(A),
2814(g)(1), 
2825(b)(1), 
2827(b), 
2828(f),
2835(g), 
2836(f), 
2837(c)(2), 
2853(c)(2),
2854(b), 2854a(c)(1), 2865(e)(2), 2866(c)(2),
2875(e), 2881a(d)(2), 2881a(e), 2883(f), and
2884(a).
(2) Section 2215 is amended—
(A) by striking ‘‘(a) CERTIFICATION RE-
QUIRED.—’’;
(B) by striking ‘‘congressional committees
specified in subsection (b)’’ and inserting ‘‘con-
gressional defense committees’’; and
(C) by striking subsection (b).
(3) Section 2306b(g) is amended by striking
‘‘Committee on’’ the first place it appears and all
that follows through ‘‘House of Representatives’’
and inserting ‘‘congressional defense committees’’.
432
(4) Section 2515(d) is amended—
(A) by striking ‘‘(1)’’ before ‘‘The Sec-
retary’’;
(B) by striking ‘‘congressional committees
specified in paragraph (2)’’ and inserting ‘‘con-
gressional defense committees’’; and
(C) by striking paragraph (2).
(5) Section 2676(d) is amended by striking
‘‘appropriate committees of Congress’’ at the end of
the first sentence and inserting ‘‘congressional de-
fense committees’’.
(6) Section 2694a is amended by striking ‘‘ap-
propriate committees of Congress’’ in subsections (e)
and (i)(1) and inserting ‘‘congressional defense com-
mittees’’.
(c) AMENDMENTS RELATING
TO DEFINITION
OF
BASE CLOSURE LAWS.—
(1) Section 2694a(i) of title 10, United States
Code, is amended by striking paragraph (2).
(2) Paragraph (1) of section 1333(i) of the Na-
tional Defense Authorization Act for Fiscal Year
1994 (Public Law 103–160; 10 U.S.C. 2701 note)
is amended to read as follows:
433
‘‘(1) BASE CLOSURE LAW.—The term ‘base clo-
sure law’ has the meaning given such term in section
101(a)(17) of title 10, United States Code.’’.
(3) Subsection (b) of section 2814 of the Mili-
tary Construction Authorization Act for Fiscal Year
1995 (division B of Public Law 103–337; 10 U.S.C.
2687 note) is amended to read as follows:
‘‘(b) BASE CLOSURE LAW DEFINED.—In this sec-
tion, the term ‘base closure law’ has the meaning given
such term in section 101(a)(17) of title 10, United States
Code.’’.
(4) Subsection (c) of section 3341 of title 5,
United States Code, is amended to read as follows:
‘‘(c) For purposes of this section, the term ‘base clo-
sure law’ has the meaning given such term in section
101(a)(17) of title 10.’’.
(5)(A) Paragraph (1) of section 554(a) of title
40, United States Code, is amended to read as fol-
lows:
‘‘(1) BASE CLOSURE LAW.—The term ‘base clo-
sure law’ has the meaning given that term in section
101(a)(17) of title 10.’’.
(B) Subparagraph (B) of section 572(b)(1) of
title 40 is amended to read as follows:
434
‘‘(B) BASE
CLOSURE
LAW.—The term
‘base closure law’ has the meaning given that
term in section 101(a)(17) of title 10.’’.
(d) DEFINITION OF STATE FOR PURPOSES OF SEC-
TION 2694A.—Subsection (i) of section 2694a of title 10,
United States Code, as amended by subsections (b)(6) and
(c)(1), is further amended—
(1) by inserting after paragraph (1) the fol-
lowing new paragraph (2):
‘‘(2) The term ‘State’ includes the District of
Columbia, the Commonwealth of Puerto Rico, the
Commonwealth of the Northern Mariana Islands,
Guam, the Virgin Islands, and American Samoa.’’;
and
(2) by striking paragraph (4).
(e) MISCELLANEOUS AMENDMENTS TO TITLE 10,
UNITED STATES CODE.—Title 10, United States Code, is
amended as follows:
(1) The tables of chapters at the beginning of
subtitle A, and at the beginning of part I of subtitle
A, are amended by striking ‘‘481’’ in the item relat-
ing to chapter 23 and inserting ‘‘480’’.
(2) Section 130a is amended—
(A) by striking ‘‘Effective October 1, 2002,
the’’ in subsection (a) and inserting ‘‘The’’;
435
(B) by striking ‘‘baseline number’’ in sub-
section (a) and all that follows through ‘‘means
the’’ in subsection (c);
(C) by transferring subsection (e) so as to
appear before subsection (d) and redesignating
that subsection as subsection (b);
(D) by redesignating subsections (d) and
(f) as subsection (c) and (d), respectively; and
(E) by striking subsection (g).
(3) Section 437(c) is amended by inserting ‘‘(50
U.S.C. 415b)’’ after ‘‘National Security Act of
1947’’.
(4) Section 487(d) is amended by striking
‘‘OTHER DEFINITIONS’’ and inserting ‘‘INAPPLICA-
BILITY TO COAST GUARD’’.
(5) Section 503(c)(1)(B) is amended by striking
‘‘education’’ in the second sentence and inserting
‘‘educational’’.
(6) Section 632(c)(1) is amended—
(A) by striking ‘‘paragraph (2)’’ and in-
serting ‘‘paragraph (3)’’; and
(B) by striking ‘‘under that paragraph’’
and inserting ‘‘under that subsection’’.
436
(7) The item relating to section 1076b in the
table of sections at the beginning of chapter 55 is
amended to read as follows:
‘‘1076b. TRICARE program: coverage for members of the Ready Reserve.’’.
(8) Section 1108(e) is amended by striking
‘‘heath’’ and inserting ‘‘health’’.
(9) Section 1406(g) is amended—
(A) by striking ‘‘section 305’’ and insert-
ing ‘‘section 245’’; and
(B) by inserting ‘‘(33 U.S.C. 3045)’’ after
‘‘of 2002’’.
(10) Sections 1448(b)(1)(F), 1448(d)(2)(B),
1448(d)(6)(A), and 1458(j) are amended by striking
‘‘on or after the date of the enactment of the Na-
tional Defense Authorization Act for Fiscal Year
2004’’ and inserting ‘‘after November 23, 2003,’’.
(11) 
Sections 
1463(a), 
1465(c)(1)(A),
1465(c)(1)(B), 1465(c)(4)(A), 1465(c)(4)(B), and
1466(b)(2)(D) are amended by striking ‘‘1413,
1413a,’’ and inserting ‘‘1413a’’.
(12) Section 1557(b) is amended by striking
‘‘Effective October 1, 2002, final’’ and inserting
‘‘Final’’.
(13) Section 1566 is amended—
(A) in subsection (g)(2), by striking ‘‘the
date that is 6 months after the date of the en-
437
actment of the Help America Vote Act of
2002’’ in the last sentence and inserting ‘‘April
29, 2003’’; and
(B) in subsections (h), (i)(1), and (i)(3),
by striking ‘‘Armed Forces’’ and inserting
‘‘armed forces’’.
(14) Sections 1724(d) and 1732(d)(1) are
amended by striking ‘‘its decision’’ in the second
sentence and inserting ‘‘the decision of the Sec-
retary’’.
(15) Section 1761(b) is amended—
(A) in the matter preceding paragraph (1),
by striking ‘‘provide for—’’ and inserting ‘‘pro-
vide for the following:’’;
(B) in paragraphs (1), (2), and (3), by
capitalizing the first letter of the first word;
(C) at the end of paragraphs (1) and (2),
by striking the semicolon and inserting a pe-
riod;
(D) at the end of paragraph (3), by strik-
ing ‘‘; and’’ and inserting a period; and
(E) by striking paragraph (4).
(16) Section 2193b(c)(2) is amended by strik-
ing ‘‘the date of the enactment of this section’’ and
inserting ‘‘October 5, 1999’’.
438
(17) Section 2224(c) is amended in the matter
preceding paragraph (1) by striking ‘‘subtitle II of
chapter 35’’ and inserting ‘‘subchapter II of chapter
35’’.
(18) Section 2349(d) is amended by striking
‘‘section 
2350a(i)(3)’’ 
and 
inserting 
‘‘section
2350a(i)(2)’’.
(19) Section 2350b(g) is amended—
(A) in the matter preceding paragraph (1),
by inserting ‘‘the Secretary of Defense’’ after
‘‘authorizing’’; and
(B) in paragraph (1), by striking ‘‘the Sec-
retary of Defense’’.
(20) Section 2540(b)(2) is amended by insert-
ing ‘‘, as in effect on that date’’ before the period
at the end.
(21) Section 2662(a)(2) is amended—
(A) in the first sentence, by striking ‘‘must
include a summarization’’ and inserting ‘‘shall
include a summary’’; and
(B) in the second sentence, by inserting
‘‘of paragraph (1)’’ after ‘‘in subparagraph
(E)’’.
(22) Section 2672a(a) is amended—
439
(A) in the matter preceding paragraph (1),
by inserting ‘‘in any case in which the Secretary
determines’’ after ‘‘in land’’;
(B) in paragraph (1), by striking ‘‘the Sec-
retary determines’’ and inserting ‘‘the acquisi-
tion’’; and
(C) in paragraph (2), by inserting ‘‘the ac-
quisition’’ after ‘‘(2)’’.
(23) Section 2701 is amended—
(A) in subsection (a)(2), by inserting ‘‘(42
U.S.C. 9620)’’ before the period at the end;
(B) in subsection (c)(2), by striking ‘‘of
CERCLA (relating to settlements)’’ and insert-
ing ‘‘(relating to settlements) of CERCLA (42
U.S.C. 9622)’’;
(C) in subsection (e), by inserting ‘‘(42
U.S.C. 9619)’’ after ‘‘CERCLA’’; and
(D) in subsection (j)(2), by striking ‘‘the
Comprehensive’’ and all the follows through ‘‘of
1980’’ and inserting ‘‘CERCLA’’.
(24) Section 2702 is amended by inserting ‘‘(42
U.S.C. 9660(a)(5))’’ in the second sentence of sub-
section (a) before the period at the end.
(25) Section 2703(b) is amended by striking
‘‘The terms’’ at the beginning of the second sentence
440
and inserting ‘‘For purposes of the preceding sen-
tence, the terms’’.
(26) Section 2704 is amended by inserting ‘‘(42
U.S.C. 9604(i))’’ in subsections (c), (e), and (f)
after ‘‘CERCLA’’.
(27) The second section 3755, added by section
543(b)(1) of the Bob Stump National Defense Au-
thorization Act for Fiscal Year 2003 (Public Law
107–314; 116 Stat. 2549), is redesignated as section
3756, and the item relating to that section in the
table of sections at the beginning of chapter 357 is
revised to reflect such redesignation.
(28) Section 4689 is amended by striking
‘‘Building’’ after ‘‘Capitol’’.
(29) The second section 6257, added by section
543(c)(1) of the Bob Stump National Defense Au-
thorization Act for Fiscal Year 2003 (Public Law
107–314; 116 Stat. 2549), is redesignated as section
6258, and the item relating to that section in the
table of sections at the beginning of chapter 567 is
revised to reflect such redesignation.
(30) Section 7102 is amended—
(A) by striking ‘‘AUTHORITY’’ at the begin-
ning of subsection (a) and inserting ‘‘MASTER
OF MILITARY STUDIES’’;
441
(B) by striking ‘‘MARINE CORPS WAR
COLLEGE’’ at the beginning of subsection (b)
and inserting ‘‘MASTER OF STRATEGIC STUD-
IES’’;
(C) by striking ‘‘COMMAND
AND STAFF
COLLEGE
OF
THE MARINE CORPS UNIVER-
SITY’’ at the beginning of subsection (c) and in-
serting ‘‘MASTER OF OPERATIONAL STUDIES’’;
and
(D) by striking ‘‘subsections (a) and (b)’’
in subsection (d) and inserting ‘‘this section’’.
(31) Section 8084 is amended by striking
‘‘capabilty’’ and inserting ‘‘capability’’.
(32) The second section 8755, added by section
543(d)(1) of the Bob Stump National Defense Au-
thorization Act for Fiscal Year 2003 (Public Law
107–314; 116 Stat. 2550), is redesignated as section
8756, and the item relating to that section in the
table of sections at the beginning of chapter 857 is
revised to reflect such redesignation.
(33) The table in section 12012(a) is amended
by inserting a colon after ‘‘Air National Guard’’.
(f) TITLE 37, UNITED STATES CODE.—Section
323(h) of title 37, United States Code, is amended by
442
striking ‘‘Secretary of Transportation’’ and inserting
‘‘Secretary of Homeland Security’’.
(g) PUBLIC LAW 108–136.—Effective as of Novem-
ber 24, 2003, and as if included therein as enacted, the
National Defense Authorization Act for Fiscal Year 2004
(Public Law 108–136) is amended as follows:
(1) Sections 832(a) and 834(a) (117 Stat.
1550) are each amended by striking ‘‘such title’’ and
inserting ‘‘title 10, United States Code,’’
(2) Section 931(a)(1) (117 Stat. 1580) is
amended by striking ‘‘and donations’’ in the first
quoted matter and inserting ‘‘or donations’’.
(3) Section 2204(b) (117 Stat. 1706) is amend-
ed by striking ‘‘section 2101(a)’’ each place it ap-
pears and inserting ‘‘section 2201(a)’’.
(h) PUBLIC LAW 107–314.—Effective as of Decem-
ber 2, 2002, and as if included therein as enacted, section
1064(a)(2) of the Bob Stump National Defense Author-
ization Act for Fiscal Year 2003 (Public Law 107–314;
116 Stat. 2654) is amended by inserting ‘‘the item relat-
ing to’’ after ‘‘is amended by inserting after’’.
(i) PUBLIC LAW 101–510.—Section 2902(e)(2)(B) of
the Defense Base Closure and Realignment Act of 1990
(part A of title XXIX of Public Law 101–510; 10 U.S.C.
2687 note) is amended—
443
(1) in clause (i), by striking ‘‘Subcommittee on
Readiness, Sustainability, and Support’’ and insert-
ing ‘‘Subcommittee on Readiness and Management
Support’’; and
(2) in clause (ii), by striking ‘‘Subcommittee on
Military Installations and Facilities’’ and inserting
‘‘Subcommittee on Readiness’’.
(j) NATIONAL SECURITY ACT OF 1947.—Sections
702(a)(6)(B)(iv)(I), 
703(a)(6)(B)(iv)(I), 
and
704(f)(2)(D)(i) of the National Security Act of 1947 are
amended by striking ‘‘responsible records’’ and inserting
‘‘responsive records’’.
(k) CODIFICATION RELATING TO LEAVE FOR AT-
TENDANCE AT CERTAIN HEARINGS.—Subsection (b) of
section 363 of the Personal Responsibility and Work Op-
portunity Reconciliation Act of 1996 (10 U.S.C. 704 note)
is—
(1) transferred to section 704 of title 10,
United States Code;
(2) inserted at the end of that section;
(3) redesignated as subsection (c); and
(4) amended—
(A) by striking ‘‘Armed Forces’’ each place
it appears and inserting ‘‘armed forces’’;
(B) in paragraph (1)—