231 
SEC. 652. LIMITATION ON USE OF DEPARTMENT OF DE-
FENSE LEASE AUTHORITY TO UNDERMINE 
COMMISSARIES AND EXCHANGES AND OTHER 
MORALE, WELFARE, AND RECREATION PRO-
GRAMS AND NONAPPROPRIATED FUND IN-
STRUMENTALITIES. 
Section 2667(f) of title 10, United States Code, is 
amended by adding at the end the following new paragraph: 
‘‘(5) Except in the case of a lease under this subsection, 
a lease of real property may not be entered into under this 
section to fascilitate the establishment or operation of an 
ancillary supporting facility (as defined in section 2871 of 
this title) if, as determined by the Secretary concerned, the 
facility is to be used for providing merchandise or services 
in direct competition with— 
‘‘(A) the Army and Air Force Exchange Service; 
‘‘(B) the Navy Exchange Service Command; 
‘‘(C) a Marine Corps exchange; 
‘‘(D) the Defense Commissary Agency; or 
‘‘(E) any nonappropriated fund activity of the 
Department of Defense for the morale, welfare, and 
recreation of members of the armed forces.’’. 
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232 
SEC. 653. USE OF NONAPPROPRIATED FUNDS TO SUPPLE-
MENT OR REPLACE APPROPRIATED FUNDS 
FOR CONSTRUCTION OF FACILITIES OF EX-
CHANGE STORES SYSTEM AND OTHER NON-
APPROPRIATED FUND INSTRUMENTALITIES, 
MILITARY LODGING FACILITIES, AND COMMU-
NITY FACILITIES. 
(a) IN GENERAL.—Subchapter III of chapter 147 of 
title 10, United States Code, is amended by inserting after 
section 2491c the following new section: 
‘‘§ 2491d. Use of nonappropriated funds to supplement 
or replace appropriated funds for con-
struction of facilities of exchange stores 
system and other nonappropriated fund 
instrumentalities, military lodging facili-
ties, and community facilities 
‘‘(a) USE OF NONAPPROPRIATED FUNDS.—The Sec-
retary of Defense may authorize the use of nonappropriated 
funds in lieu of or to supplement funds appropriated to 
the Department of Defense for the construction of the fol-
lowing: 
‘‘(1) Facilities of the exchange stores system and 
other revenue-generating facilities operated by non-
appropriated fund instrumentalities of the Depart-
ment of Defense for the morale, welfare, and recre-
ation of members of the armed forces. 
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233 
‘‘(2) Facilities of other nonappropriated fund in-
strumentalities of the Department of Defense for the 
morale, welfare, and recreation of members of the 
armed forces. 
‘‘(3) Military lodging facilities used to provide 
temporary lodging to authorized members of the 
armed forces, including temporary duty lodging, per-
manent change of station lodging, recreational lodg-
ing, and military treatment facility lodging. 
‘‘(4) Community facilities intended to supple-
ment mission activities, such as military museums 
and service academy extra-curricular activities, or to 
facilitate private organizations or enterprises, such as 
financial services, memorials, and thrift shop facili-
ties, on military installations. 
‘‘(b) USE CRITERIA.—The Secretary of Defense may 
prescribe by regulation the criteria under which non-
appropriated funds may be used under subsection (a). 
‘‘(c) CONGRESSIONAL NOTIFICATION.—When a deci-
sion is made to use nonappropriated funds under subsection 
(a), the Secretary of Defense shall submit a report to the 
congressional defense committees containing the reasons for 
using nonappropriated funds in lieu of or to supplement 
appropriated funds and the amount of nonappropriated 
funds to be used. The nonappropriated funds may be used 
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234 
only after the end of the 21-day period beginning on the 
date the report is received by such committees or, if earlier, 
the end of the 14-day period beginning on the date on which 
a copy of the report is provided in an electronic medium 
pursuant to section 480 of this title.’’. 
(b) CLERICAL AMENDMENT.—The table of sections at 
the beginning of such subchapter is amended by inserting 
after the item relating to section 2491c the end the following 
new item: 
‘‘2491d. Use of nonappropriated funds to supplement or replace appropriated 
funds for construction of facilities of exchange stores system and 
other nonappropriated fund instrumentalities, military lodging 
facilities, and community facilities.’’. 
SEC. 654. REPORT ON COST EFFECTIVENESS OF PUR-
CHASING 
COMMERCIAL 
INSURANCE 
FOR 
COMMISSARY 
AND 
EXCHANGE 
FACILITIES 
AND FACILITIES OF OTHER MORALE, WEL-
FARE, AND RECREATION PROGRAMS AND 
NONAPPROPRIATED FUND INSTRUMENTAL-
ITIES. 
(a) REPORT REQUIRED.—Not later than July 31, 
2007, the Secretary of Defense shall submit to Congress a 
report evaluating the cost effectiveness of the Defense Com-
missary Agency and the nonappropriated fund activities 
specified in subsection (b) purchasing commercial insur-
ance to protect financial interests in facilities operated by 
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the Defense Commissary Agency or those nonappropriated 
fund activities. 
(b) COVERED NONAPPROPRIATED FUND ACTIVITIES.— 
The report shall apply with respect to— 
(1) the Army and Air Force Exchange Service; 
(2) the Navy Exchange Service Command; 
(3) a Marine Corps exchange; and 
(4) any nonappropriated fund activity of the De-
partment of Defense for the morale, welfare, and 
recreation of members of the armed forces. 
Subtitle F—Other Matters 
SEC. 661. REPEAL OF ANNUAL REPORTING REQUIREMENT 
REGARDING EFFECTS OF RECRUITMENT AND 
RETENTION INITIATIVES. 
(a) REPEAL.—Section 1015 of title 37, United States 
Code, is repealed. 
(b) CLERICAL AMENDMENT.—The table of sections at 
the beginning of chapter 19 of title 37, United States Code, 
is amended by striking the item relating to section 1015. 
SEC. 662. PILOT PROJECT REGARDING PROVIDING GOLF 
CARTS ACCESSIBLE FOR DISABLED PERSONS 
AT MILITARY GOLF COURSES. 
(a) PILOT PROJECT REQUIRED.—The Secretary of De-
fense shall conduct a pilot project at not less than three 
military golf courses to evaluate the cost effectiveness and 
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