151
tracts, leases, and other agreements entered into
under the authority of this chapter.
‘‘(5) The term ‘Secretary’ means the Secretary
of the Army.
‘‘§ 4552. Policy
‘‘It is the policy of the United States—
‘‘(1) to encourage, to the maximum extent prac-
ticable, commercial firms to use Government-owned,
contractor-operated ammunition manufacturing fa-
cilities of the Department of the Army;
‘‘(2) to use such facilities for supporting pro-
grams, projects, policies, and initiatives that pro-
mote competition in the private sector of the United
States economy and that advance United States in-
terests in the global marketplace;
‘‘(3) to increase the manufacture of products
inside the United States;
‘‘(4) to support policies and programs that pro-
vide manufacturers with incentives to assist the
United States in making more efficient and economi-
cal use of eligible facilities for commercial purposes;
‘‘(5) to provide, as appropriate, small busi-
nesses (including socially and economically disadvan-
taged small business concerns and new small busi-
nesses) with incentives that encourage those busi-
152
nesses to undertake manufacturing and other indus-
trial processing activities that contribute to the pros-
perity of the United States;
‘‘(6) to encourage the creation of jobs through
increased investment in the private sector of the
United States economy;
‘‘(7) to foster a more efficient, cost-effective,
and adaptable armaments industry in the United
States;
‘‘(8) to achieve, with respect to armaments
manufacturing capacity, an optimum level of readi-
ness of the national technology and industrial base
within the United States that is consistent with the
projected threats to the national security of the
United States and the projected emergency require-
ments of the armed forces; and
‘‘(9) to encourage facility use contracting where
feasible.
‘‘§ 4553. Armament Retooling and Manufacturing
Support Initiative
‘‘(a) AUTHORITY FOR INITIATIVE.—The Secretary
may carry out a program to be known as the ‘Armament
Retooling and Manufacturing Support Initiative’.
‘‘(b) PURPOSES.—The purposes of the ARMS Initia-
tive are as follows:
153
‘‘(1) To encourage commercial firms, to the
maximum extent practicable, to use eligible facilities
for commercial purposes.
‘‘(2) To increase the opportunities for small
businesses (including socially and economically dis-
advantaged small business concerns and new small
businesses) to use eligible facilities for those pur-
poses.
‘‘(3) To maintain in the United States a work
force having the skills in manufacturing processes
that are necessary to meet industrial emergency
planned requirements for national security purposes.
‘‘(4) To demonstrate innovative business prac-
tices, to support Department of Defense acquisition
reform, and to serve as both a model and a labora-
tory for future defense conversion initiatives of the
Department of Defense.
‘‘(5) To the maximum extent practicable, to
allow the operation of eligible facilities to be rapidly
responsive to the forces of free market competition.
‘‘(6) To reduce or eliminate the cost of Govern-
ment ownership of eligible facilities, including the
costs of operations and maintenance, the costs of en-
vironmental remediation, and other costs.
154
‘‘(7) To reduce the cost of products of the De-
partment of Defense produced at eligible facilities.
‘‘(8) To leverage private investment at eligible
facilities through long-term facility use contracts,
property management contracts, leases, or other
agreements that support and advance the policies
and purposes of this chapter, for the following activi-
ties:
‘‘(A) Recapitalization of plant and equip-
ment.
‘‘(B) Environmental remediation.
‘‘(C) Promotion of commercial business
ventures.
‘‘(D) Other activities approved by the Sec-
retary.
‘‘(9) To foster cooperation between the Depart-
ment of the Army, property managers, commercial
interests, and State and local agencies in the imple-
mentation of sustainable development strategies and
investment in eligible facilities made available for
purposes of the ARMS Initiative.
‘‘(10) To reduce or eliminate the cost of asset
disposal that would be incurred if property at an eli-
gible facility was declared excess to the needs of the
Department of the Army.
155
‘‘(c) AVAILABILITY OF FACILITIES.—The Secretary
may make any eligible facility available for the purposes
of the ARMS Initiative.
‘‘(d) CONSIDERATION FOR LEASES.—Section 321 of
the Act of June 30, 1932 (40 U.S.C. 303b), shall not
apply to uses of property or facilities in accordance with
the ARMS Initiative.
‘‘(e) PROGRAM SUPPORT.—(1) Funds appropriated
for purposes of the ARMS Initiative may be used for ad-
ministrative support and management.
‘‘(2) A full annual accounting of such expenses for
each fiscal year shall be provided to the Committee on
Armed Services and the Committee on Appropriations of
the Senate and the Committee on Armed Services and the
Committee on Appropriations of the House of Representa-
tives not later than March 30 of the following fiscal year.
‘‘§ 4554. Property management contracts and leases
‘‘(a) IN GENERAL.—In the case of each eligible facil-
ity that is made available for the ARMS Initiative, the
Secretary—
‘‘(1) shall make full use of facility use con-
tracts, leases, and other such commercial contractual
instruments as may be appropriate;
‘‘(2) shall evaluate, on the basis of efficiency,
cost, emergency mobilization requirements, and the
156
goals and purposes of the ARMS Initiative, the pro-
curement of services from the property manager, in-
cluding maintenance, operation, modification, infra-
structure, environmental restoration and remedi-
ation, and disposal of ammunition manufacturing
assets, and other services; and
‘‘(3) may, in carrying out paragraphs (1) and
(2)—
‘‘(A) enter into contracts, and provide for
subcontracts, for terms up to 25 years, as the
Secretary considers appropriate and consistent
with the needs of the Department of the Army
and the goals and purposes of the ARMS Initia-
tive; and
‘‘(B) use procedures that are authorized to
be used under section 2304(c)(5) of this title
when the contractor or subcontractor is a
source specified in law.
‘‘(b) CONSIDERATION FOR USE.—(1) To the extent
provided in a contract entered into under this section for
the use of property at an eligible facility that is account-
able under the contract, the Secretary may accept consid-
eration for such use that is, in whole or in part, in a form
other than—
‘‘(A) rental payments; or
157
‘‘(B) revenue generated at the facility.
‘‘(2) Forms of consideration acceptable under para-
graph (1) for a use of an eligible facility or any property
at an eligible facility include the following:
‘‘(A) The improvement, maintenance, protec-
tion, repair, and restoration of the facility, the prop-
erty, or any property within the boundaries of the
installation where the facility is located.
‘‘(B) Reductions in overhead costs.
‘‘(C) Reductions in product cost.
‘‘(3) The authority under paragraph (1) may be exer-
cised without regard to section 3302(b) of title 31 and
any other provision of law.
‘‘§ 4555. ARMS Initiative loan guarantee program
‘‘(a) PROGRAM AUTHORIZED.—Subject to subsection
(b), the Secretary may carry out a loan guarantee pro-
gram to encourage commercial firms to use eligible facili-
ties under this chapter. Under any such program, the Sec-
retary may guarantee the repayment of any loan made to
a commercial firm to fund, in whole or in part, the estab-
lishment of a commercial activity to use an eligible facility
under this chapter.
‘‘(b) ADVANCED BUDGET AUTHORITY.—Loan guar-
antees under this section may not be committed except
to the extent that appropriations of budget authority to
158
cover their costs are made in advance, as required by sec-
tion 504 of the Federal Credit Reform Act of 1990 (2
U.S.C. 661c).
‘‘(c) PROGRAM ADMINISTRATION.—(1) The Secretary
may enter into an agreement with any of the officials
named in paragraph (2) under which that official may,
for the purposes of this section—
‘‘(A) process applications for loan guarantees;
‘‘(B) guarantee repayment of loans; and
‘‘(C) provide any other services to the Secretary
to administer the loan guarantee program.
‘‘(2) The officials referred to in paragraph (1) are
as follows:
‘‘(A) The Administrator of the Small Business
Administration.
‘‘(B) The head of any appropriate agency in the
Department of Agriculture, including—
‘‘(i) the Administrator of the Farmers
Home Administration; and
‘‘(ii) the Administrator of the Rural Devel-
opment Administration.
‘‘(3) Each official authorized to do so under an agree-
ment entered into under paragraph (1) may guarantee
loans under this section to commercial firms of any size,
notwithstanding any limitations on the size of applicants
159
imposed on other loan guarantee programs that the offi-
cial administers.
‘‘(4) To the extent practicable, each official proc-
essing loan guarantee applications under this section pur-
suant to an agreement entered into under paragraph (1)
shall use the same processing procedures as the official
uses for processing loan guarantee applications under
other loan guarantee programs that the official admin-
isters.
‘‘(d) LOAN LIMITS.—The maximum amount of loan
principal guaranteed during a fiscal year under this sec-
tion may not exceed—
‘‘(1) $20,000,000, with respect to any single
borrower; and
‘‘(2) $320,000,000 with respect to all bor-
rowers.
‘‘(e) TRANSFER
OF FUNDS.—The Secretary may
transfer to an official providing services under subsection
(c), and that official may accept, such funds as may be
necessary to administer the loan guarantee program under
this section.’’.
(2) The tables of chapters at the beginning of subtitle
B of such title and at the beginning of part IV of such
subtitle are amended by inserting after the item relating
to chapter 433 the following new item:
‘‘434. Armaments Industrial Base ................................................ 4551’’.
160
(b) IMPLEMENTATION REPORT.—Not later than July
1, 2001, the Secretary of Defense shall submit to the con-
gressional defense committees a report on the procedures
and controls implemented to carry out section 4554 of title
10, United States Code, as added by subsection (a).
(c) RELATIONSHIP TO NATIONAL DEFENSE TECH-
NOLOGY AND INDUSTRIAL BASE.—(1) Subchapter IV of
chapter 148 of title 10, United States Code, is amended—
(A) by redesignating section 2525 as section
2521; and
(B) by adding at the end the following new sec-
tion:
‘‘§ 2522. Armament retooling and manufacturing
‘‘The Secretary of the Army is authorized by chapter
434 of this title to carry out programs for the support
of armaments retooling and manufacturing in the national
defense industrial and technology base.’’.
(2) The table of sections at the beginning of such sub-
chapter is amended by striking the item relating to section
2525 and inserting the following new items:
‘‘2521. Manufacturing Technology Program.
‘‘2522. Armament retooling and manufacturing.’’.
(d) REPEAL OF SUPERSEDED LAW.—The Armament
Retooling and Manufacturing Support Act of 1992 (sub-
title H of title I of Public Law 102–484; 10 U.S.C. 2501
note) is repealed.
161
Subtitle E—Performance of Func-
tions by Private-Sector Sources
SEC. 351. INCLUSION OF ADDITIONAL INFORMATION IN RE-
PORTS TO CONGRESS REQUIRED BEFORE
CONVERSION OF COMMERCIAL OR INDUS-
TRIAL TYPE FUNCTIONS TO CONTRACTOR
PERFORMANCE.
(a) INFORMATION REQUIRED BEFORE COMMENCE-
MENT OF CONVERSION ANALYSIS.—Subsection (b)(1)(D)
of section 2461 of title 10, United States Code, is amend-
ed by inserting before the period the following: ‘‘, and a
specific identification of the budgetary line item from
which funds will be used to cover the cost of the analysis’’.
(b) INFORMATION REQUIRED IN NOTIFICATION OF
DECISION.—Subsection 
(c)(1) 
of 
such 
section 
is
amended—
(1) by redesignating subparagraphs (A), (B),
(C), (D), and (E) as subparagraphs (B), (C), (F),
(H), and (I), respectively;
(2) by inserting before subparagraph (B), as so
redesignated, the following new subparagraph:
‘‘(A) The date when the analysis of that com-
mercial or industrial type function for possible
change to performance by the private sector was
commenced.’’;
162
(3) by inserting after subparagraph (C), as so
redesignated, the following new subparagraphs:
‘‘(D) The number of Department of Defense ci-
vilian employees who were performing the function
when the analysis was commenced, the number of
such employees whose employment was terminated
or otherwise affected in implementing the most effi-
cient organization of the function, and the number
of such employees whose employment would be ter-
minated or otherwise affected by changing to per-
formance of the function by the private sector.
‘‘(E) The Secretary’s certification that the fac-
tors considered in the examinations performed under
subsection (b)(3), and in the making of the decision
to change performance, did not include any predeter-
mined personnel constraint or limitation in terms of
man years, end strength, full-time equivalent posi-
tions, or maximum number of employees.’’; and
(4) by inserting after subparagraph (F), as so
redesignated, the following new subparagraph:
‘‘(G) A statement of the potential economic ef-
fect of the change on each affected local community,
as determined in the examination under subsection
(b)(3)(B)(ii).’’.
163
SEC. 352. EFFECTS OF OUTSOURCING ON OVERHEAD
COSTS OF CENTERS OF INDUSTRIAL AND
TECHNICAL EXCELLENCE AND ARMY AMMU-
NITION PLANTS.
Section 2461(c) of title 10, United States Code, is
amended—
(1) by redesignating paragraph (2) as para-
graph (3); and
(2) by inserting after paragraph (1) the fol-
lowing new paragraph:
‘‘(2) If the commercial or industrial type function to
be changed to performance by the private sector is per-
formed at a Center of Industrial and Technical Excellence
designated under section 2474(a) of this title or an Army
ammunition plant—
‘‘(A) the report required by this subsection shall
also include a description of the effect that the per-
formance and administration of the resulting con-
tract will have on the overhead costs of the center
or ammunition plant, as the case may be; and
‘‘(B) 
notwithstanding 
paragraph 
(3), 
the
change of the function to contractor performance
may not begin until at least 60 days after the sub-
mission of the report.’’.
164
SEC. 
353. 
CONSOLIDATION, 
RESTRUCTURING, 
OR 
RE-
ENGINEERING OF DEPARTMENT OF DEFENSE
ORGANIZATIONS, 
FUNCTIONS, 
OR 
ACTIVI-
TIES.
(a) IN GENERAL.—Chapter 146 of title 10, United
States Code, is amended by adding at the end the fol-
lowing new section:
‘‘§ 2475. 
Consolidation, 
restructuring, 
or 
re-
engineering of organizations, functions,
or activities: notification requirements
‘‘(a) REQUIREMENT TO SUBMIT PLAN ANNUALLY.—
Concurrently with the submission of the President’s an-
nual budget request under section 1105 of title 31, the
Secretary of Defense shall submit to Congress each Stra-
tegic Sourcing Plan of Action for the Department of De-
fense (as identified in the Department of Defense Interim
Guidance dated February 29, 2000, or any successor De-
partment of Defense guidance or directive), for the fol-
lowing year.
‘‘(b) NOTIFICATION
OF DECISION TO EXECUTE
PLAN.—If a decision is made to consolidate, restructure,
or reengineer an organization, function, or activity of the
Department of Defense pursuant to a Strategic Sourcing
Plan of Action described in subsection (a), and such con-
solidation, restructuring, or reengineering would result in
a manpower reduction affecting 50 or more personnel of
165
the Department of Defense (including military and civilian
personnel)—
‘‘(1) the Secretary of Defense shall submit to
the Committees on Armed Services of the Senate
and the House of Representatives a report describ-
ing that decision, including—
‘‘(A) a projection of the savings that will
be realized as a result of the consolidation, re-
structuring, or reengineering, compared with
the cost incurred by the Department of Defense
to perform the function or to operate the orga-
nization or activity prior to such proposed con-
solidation, restructuring, or reengineering;
‘‘(B) a description of all missions, duties,
or military requirements that will be affected as
a result of the decision to consolidate, restruc-
ture, or reengineer the organization, function,
or activity that was analyzed;
‘‘(C) the Secretary’s certification that the
consolidation, restructuring, or reengineering
will not result in any diminution of military
readiness;
‘‘(D) a schedule for performing the consoli-
dation, restructuring, or reengineering; and
166
‘‘(E) the Secretary’s certification that the
entire analysis for the consolidation, restruc-
turing, or reengineering is available for exam-
ination; and
‘‘(2) the head of the Defense Agency or the
Secretary of the military department concerned may
not implement the plan until 30 days after the date
that the agency head or Secretary submits notifica-
tion to the Committees on Armed Services of the
Senate and House of Representatives of the intent
to carry out such plan.’’.
(b) CLERICAL AMENDMENT.—The table of sections
at the beginning of such chapter is amended by adding
at the end the following new item:
‘‘2475. Consolidation, restructuring, or reengineering of organizations, functions,
or activities: notification requirements.’’.
SEC. 354. MONITORING OF SAVINGS RESULTING FROM
WORKFORCE REDUCTIONS AS PART OF CON-
VERSION OF FUNCTIONS TO PERFORMANCE
BY PRIVATE SECTOR OR OTHER STRATEGIC
SOURCING INITIATIVES.
(a) REQUIREMENT FOR A MONITORING SYSTEM.—
Chapter 146 of title 10, United States Code, is amended
by inserting after section 2461 the following new section:
167
‘‘§ 2461a. Development of system for monitoring cost
savings resulting from workforce reduc-
tions
‘‘(a) WORKFORCE REVIEW DEFINED.—In this sec-
tion, the term ‘workforce review’, with respect to a func-
tion of the Department of Defense performed by Depart-
ment of Defense civilian employees, means a review con-
ducted under Office of Management and Budget Circular
A–76 (or any successor administrative regulation or pol-
icy), the Strategic Sourcing Program Plan of Action (or
any successor Department of Defense guidance or direc-
tive), or any other authority to determine whether the
function—
‘‘(1) should be performed by a workforce com-
posed of Department of Defense civilian employees
or by a private sector workforce; or
‘‘(2) should be reorganized or otherwise reengi-
neered to improve the effeciency or effectiveness of
the performance of the function, with a resulting de-
crease in the number of Department of Defense ci-
vilian employees performing the function.
‘‘(b) SYSTEM FOR MONITORING PERFORMANCE.—(1)
The Secretary of Defense shall establish a system for mon-
itoring the performance, including the cost of perform-
ance, of each function of the Department of Defense that,
168
after the date of the enactment of this section, is the sub-
ject of a workforce review.
‘‘(2) The monitoring system shall be designed to com-
pare the following:
‘‘(A) The costs to perform a function before the
workforce review to the costs actually incurred to
perform the function after implementing the conver-
sion, reorganization, or reengineering actions rec-
ommended by the workforce review.
‘‘(B) The anticipated savings to the actual sav-
ings, if any, resulting from conversion, reorganiza-
tion, or reengineering actions undertaken in re-
sponse to the workforce review.
‘‘(3) The monitoring of a function shall continue
under this section for at least five years after the conver-
sion, reorganization, or reengineering of the function.
‘‘(c) WAIVER
FOR
CERTAIN
WORKFORCE
RE-
VIEWS.—Subsection (b) shall not apply to a workforce re-
view that would result in a manpower reduction affecting
fewer than 50 Department of Defense civilian employees.
‘‘(d) ANNUAL REPORT.—Not later than February 1
of each fiscal year, the Secretary of Defense shall submit
to Congress a report on the results of the monitoring per-
formed under the system established under subsection (b).
169
For each function subject to monitoring during the pre-
vious fiscal year, the report shall indicate the following:
‘‘(1) The cost of the workforce review.
‘‘(2) The cost of performing the function before
the workforce review compared to the costs incurred
after implementing the conversion, reorganization, or
reengineering actions recommended by the workforce
review.
‘‘(3) The actual savings derived from the imple-
mentation of the recommendations of the workforce
review, if any, compared to the anticipated savings
that were to result from the conversion, reorganiza-
tion, or reengineering actions.
‘‘(e) CONSIDERATION IN PREPARATION OF FUTURE-
YEARS DEFENSE PROGRAM.—In preparing the future-
years defense program under section 221 of this title, the
Secretary of Defense shall, for the fiscal years covered by
the program, estimate and take into account the costs to
be incurred and the savings to be derived from the per-
formance of functions by workforces selected in workforce
reviews. The Secretary shall consider the results of the
monitoring under this section in making the estimates.’’.
(b) CLERICAL AMENDMENT.—The table of sections
at the beginning of such chapter is amended by inserting
170
after the item relating to section 2461 the following new
item:
‘‘2461a. Development of system for monitoring cost savings resulting from work-
force reductions.’’.
SEC. 355. PERFORMANCE OF EMERGENCY RESPONSE
FUNCTIONS AT CHEMICAL WEAPONS STOR-
AGE INSTALLATIONS.
(a) RESTRICTION ON CONVERSION.—The Secretary
of the Army may not convert to contractor performance
the emergency response functions of any chemical weapons
storage installation that, as of the date of the enactment
of this Act, are performed for that installation by employ-
ees of the United States until the certification required
by subsection (c) has been submitted in accordance with
that subsection.
(b) COVERED INSTALLATIONS.—For the purposes of
this section, a chemical weapons storage installation is any
installation of the Department of Defense on which lethal
chemical agents or munitions are stored.
(c) CERTIFICATION REQUIREMENT.—The Secretary
of the Army shall certify in writing to the Committee on
Armed Services of the Senate and the Committee on
Armed Services of the House of Representatives that, to
ensure that there will be no lapse of capability to perform
the chemical weapon emergency response mission at a
chemical weapons storage installation during any transi-
171
tion to contractor performance of those functions at the
installation, the plan for conversion of the performance of
those functions—
(1) is consistent with the recommendation con-
tained in General Accounting Office Report NSIAD–
00–88, entitled ‘‘DoD Competitive Sourcing’’, dated
March 2000;
(2) provides for a transition to contractor per-
formance of emergency response functions which en-
sures an adequate transfer of the relevant knowledge
and expertise regarding chemical weapon emergency
response to the contractor personnel; and
(3) complies with section 2465 of title 10,
United States Code.
SEC. 356. SUSPENSION OF REORGANIZATION OR RELOCA-
TION OF NAVAL AUDIT SERVICE.
(a) SUSPENSION.—During the period specified in
subsection (b), the Secretary of the Navy may not com-
mence or continue any consolidation, involuntary transfer,
buy-out, or other reduction in force of the workforce of
auditors and administrative support personnel of the
Naval Audit Service if the consolidation, involuntary
transfer, buy-out, or other reduction in force is associated
with the reorganization or relocation of the performance
of the auditing functions of the Naval Audit Service.
172
(b) DURATION.—Subsection (a) applies during the
period beginning on the date of the enactment of this Act
and ending 180 days after the date on which the Secretary
submits to the congressional defense committees a report
that sets forth in detail the Navy’s plans and justification
for the reorganization or relocation of the performance of
the auditing functions of the Naval Audit Service, as the
case may be.
Subtitle F—Defense Dependents
Education
SEC. 361. ELIGIBILITY OF DEPENDENTS OF AMERICAN RED
CROSS EMPLOYEES FOR ENROLLMENT IN DE-
PARTMENT OF DEFENSE DOMESTIC DEPEND-
ENT SCHOOLS IN PUERTO RICO.
Section 2164 of title 10, United States Code, is
amended by adding at the end the following new sub-
section:
‘‘(i) AMERICAN RED CROSS EMPLOYEE DEPEND-
ENTS IN PUERTO RICO.—(1) The Secretary may authorize
the dependent of an American Red Cross employee de-
scribed in paragraph (2) to enroll in an education program
provided by the Secretary pursuant to subsection (a) in
Puerto Rico if the American Red Cross agrees to reim-
burse the Secretary for the educational services so pro-
vided.
173
‘‘(2) An employee referred to in paragraph (1) is an
American Red Cross employee who—
‘‘(A) resides in Puerto Rico; and
‘‘(B) performs, on a full-time basis, emergency
services on behalf of members of the armed forces.
‘‘(3) In determining the dependency status of any
person for the purposes of paragraph (1), the Secretary
shall apply the same definitions as apply to the determina-
tion of such status with respect to Federal employees in
the administration of this section.
‘‘(4) Subsection (g) shall apply with respect to deter-
mining the reimbursement rates for educational services
provided pursuant to this subsection. Amounts received as
reimbursement for such educational services shall be treat-
ed in the same manner as amounts received under sub-
section (g).’’.
SEC. 362. ASSISTANCE TO LOCAL EDUCATIONAL AGENCIES
THAT BENEFIT DEPENDENTS OF MEMBERS
OF THE ARMED FORCES AND DEPARTMENT
OF DEFENSE CIVILIAN EMPLOYEES.
(a) CONTINUATION OF DEPARTMENT OF DEFENSE
PROGRAM FOR FISCAL YEAR 2001.—Of the amount au-
thorized to be appropriated by section 301(5) for oper-
ation and maintenance for Defense-wide activities,
$35,000,000 shall be available only for the purpose of pro-
174
viding educational agencies assistance (as defined in sub-
section (d)(1)) to local educational agencies.
(b) NOTIFICATION.—Not later than June 30, 2001,
the Secretary of Defense shall notify each local edu-
cational agency that is eligible for educational agencies as-
sistance for fiscal year 2001 of—
(1) that agency’s eligibility for educational
agencies assistance; and
(2) the amount of the educational agencies as-
sistance for which that agency is eligible.
(c) DISBURSEMENT OF FUNDS.—The Secretary of
Defense shall disburse funds made available under sub-
section (a) not later than 30 days after the date on which
notification to the eligible local educational agencies is
provided pursuant to subsection (b).
(d) DEFINITIONS.—In this section:
(1) The term ‘‘educational agencies assistance’’
means assistance authorized under section 386(b) of
the National Defense Authorization Act for Fiscal
Year 1993 (Public Law 102–484; 20 U.S.C. 7703
note).
(2) The term ‘‘local educational agency’’ has
the meaning given that term in section 8013(9) of
the Elementary and Secondary Education Act of
1965 (20 U.S.C. 7713(9)).
175
SEC. 363. IMPACT AID FOR CHILDREN WITH SEVERE DIS-
ABILITIES.
(a) PAYMENTS.—Subject to subsection (f), the Sec-
retary of Defense shall make a payment for fiscal years
after fiscal year 2001, to each local educational agency
eligible to receive a payment for a child described in sub-
paragraph (A)(ii), (B), (D)(i) or (D)(ii) of section
8003(a)(1) of the Elementary and Secondary Education
Act of 1965 (20 U.S.C. 7703(a)(1)) that serves two or
more such children with severe disabilities, for costs in-
curred in providing a free appropriate public education to
each such child.
(b) PAYMENT AMOUNT.—The amount of the pay-
ment under subsection (a) to a local educational agency
for a fiscal year for each child referred to in such sub-
section with a severe disability shall be—
(1) the payment made on behalf of the child
with a severe disability that is in excess of the aver-
age per pupil expenditure in the State in which the
local educational agency is located; less
(2) the sum of the funds received by the local
educational agency—
(A) from the State in which the child re-
sides to defray the educational and related serv-
ices for such child;
176
(B) under the Individuals with Disabilities
Education Act (20 U.S.C. 1400 et seq.) to de-
fray the educational and related services for
such child; and
(C) from any other source to defray the
costs of providing educational and related serv-
ices to the child which are received due to the
presence of a severe disabling condition of such
child.
(c) EXCLUSIONS.—No payment shall be made under
subsection (a) on behalf of a child with a severe disability
whose individual cost of educational and related services
does not exceed—
(1) five times the national or State average per
pupil expenditure (whichever is lower), for a child
who is provided educational and related services
under a program that is located outside the bound-
aries of the school district of the local educational
agency that pays for the free appropriate public edu-
cation of the student; or
(2) three times the State average per pupil ex-
penditure, for a child who is provided educational
and related services under a program offered by the
local educational agency, or within the boundaries of
177
the school district served by the local educational
agency.
(d) RATABLE REDUCTION.—If the amount available
for a fiscal year for payments under subsection (a) is in-
sufficient to pay the full amount all local educational agen-
cies are eligible to receive under such subsection, the Sec-
retary of Defense shall ratably reduce the amounts of the
payments made under such subsection to all local edu-
cational agencies by an equal percentage.
(e) REPORT.—Each local educational agency desiring
a payment under subsection (a) shall report to the Sec-
retary of Defense—
(1) the number of severely disabled children for
which a payment may be made under this section;
and
(2) a breakdown of the average cost, by place-
ment (inside or outside the boundaries of the school
district of the local educational agency), of providing
education and related services to such children.
(f) PAYMENTS SUBJECT TO APPROPRIATION.—Pay-
ments shall be made for any period in a fiscal year under
this section only to the extent that funds are appropriated
specifically for making such payments for that fiscal year.
(g) LOCAL EDUCATIONAL AGENCY DEFINED.—In
this section, the term ‘‘local educational agency’’ has the
178
meaning given that term in section 8013(9) of the Ele-
mentary and Secondary Education Act of 1965 (20 U.S.C.
7713(9)).
SEC. 364. ASSISTANCE FOR MAINTENANCE, REPAIR, AND
RENOVATION OF SCHOOL FACILITIES THAT
SERVE DEPENDENTS OF MEMBERS OF THE
ARMED FORCES AND DEPARTMENT OF DE-
FENSE CIVILIAN EMPLOYEES.
(a) REPAIR
AND RENOVATION ASSISTANCE.—(1)
During fiscal year 2001, the Secretary of Defense may
make a grant to an eligible local educational agency to
assist the agency to repair and renovate—
(A) an impacted school facility that is used by
significant numbers of military dependent students;
or
(B) a school facility that was a former Depart-
ment of Defense domestic dependent elementary or
secondary school.
(2) Authorized repair and renovation projects may in-
clude repairs and improvements to an impacted school fa-
cility (including the grounds of the facility) designed to
ensure compliance with the requirements of the Americans
with Disabilities Act of 1990 (42 U.S.C. 12101 et seq.)
or local health and safety ordinances, to meet classroom
179
size requirements, or to accommodate school population
increases.
(3) The total amount of assistance provided under
this subsection to an eligible local educational agency may
not exceed $2,500,000 during fiscal year 2001.
(b) MAINTENANCE ASSISTANCE.—(1) During fiscal
year 2001, the Secretary of Defense may make a grant
to an eligible local educational agency whose boundaries
are the same as a military installation to assist the agency
to maintain an impacted school facility, including the
grounds of such a facility.
(2) The total amount of assistance provided under
this subsection to an eligible local educational agency may
not exceed $250,000 during fiscal year 2001.
(c) DETERMINATION
OF ELIGIBLE LOCAL EDU-
CATIONAL AGENCIES.—(1) A local educational agency is
an eligible local educational agency under this section only
if the Secretary of Defense determines that the local edu-
cational agency has—
(A) one or more federally impacted school facili-
ties; and
(B) satisfies at least one of the following eligi-
bility requirements:
(i) The local educational agency is eligible
to receive assistance under subsection (f) of sec-
180
tion 8003 of the Elementary and Secondary
Education Act of 1965 (20 U.S.C. 7703) and
at least 10 percent of the students who were in
average daily attendance in the schools of such
agency during the preceding school year were
students described under paragraph (1)(A) or
(1)(B) of section 8003(a) of the Elementary
and Secondary Education Act of 1965.
(ii) At least 35 percent of the students who
were in average daily attendance in the schools
of the local educational agency during the pre-
ceding school year were students described
under paragraph (1)(A) or (1)(B) of section
8003(a) of the Elementary and Secondary Edu-
cation Act of 1965.
(iii) The State education system and the
local educational agency are one and the same.
(2) A local educational agency is also an eligible local
educational agency under this section if the local edu-
cational agency has a school facility that was a former
Department of Defense domestic dependent elementary or
secondary school, but assistance provided under subsection
(a) may only be used to repair and renovate that specific
facility.
181
(d) NOTIFICATION OF ELIGIBILITY.—Not later than
April 30, 2001, the Secretary of Defense shall notify each
local educational agency identified under subsection (c)
that the local educational agency is eligible to apply for
a grant under subsection (a), subsection (b), or both sub-
sections.
(e) RELATION TO IMPACT AID CONSTRUCTION AS-
SISTANCE.—A local education agency that receives a grant
under subsection (a) to repair and renovate a school facil-
ity may not also receive a payment for school construction
under section 8007 of the Elementary and Secondary
Education Act of 1965 (20 U.S.C. 7707) for fiscal year
2001.
(f) GRANT CONSIDERATIONS.—In determining which
eligible local educational agencies will receive a grant
under this section, the Secretary of Defense shall take into
consideration the following conditions and needs at im-
pacted school facilities of eligible local educational agen-
cies:
(1) The repair or renovation of facilities is
needed to meet State mandated class size require-
ments, including student-teacher ratios and instruc-
tional space size requirements.
(2) There is an increase in the number of mili-
tary dependent students in facilities of the agency
182
due to increases in unit strength as part of military
readiness.
(3) There are unhoused students on a military
installation due to other strength adjustments at
military installations.
(4) The repair or renovation of facilities is
needed to address any of the following conditions:
(A) The condition of the facility poses a
threat to the safety and well-being of students.
(B) The requirements of the Americans
with Disabilities Act of 1990.
(C) The cost associated with asbestos re-
moval, energy conservation, or technology up-
grades.
(D) Overcrowding conditions as evidenced
by the use of trailers and portable buildings and
the potential for future overcrowding because of
increased enrollment.
(5) The repair or renovation of facilities is
needed to meet any other Federal or State mandate.
(6) The number of military dependent students
as a percentage of the total student population in
the particular school facility.
(7) The age of facility to be repaired or ren-
ovated.
435
‘‘(2) The term ‘medicare-eligible’ means entitled
to benefits under part A of title XVIII of the Social
Security Act (42 U.S.C. 1395c et seq.).
‘‘(3) The term ‘dependent’ means a dependent
(as such term is defined in section 1072 of this title)
described in section 1076(b)(1) of this title.
‘‘§ 1112. Assets of Fund
‘‘There shall be deposited into the Fund the fol-
lowing, which shall constitute the assets of the Fund:
‘‘(1) Amounts paid into the Fund under section
1116 of this title.
‘‘(2) Any amount appropriated to the Fund.
‘‘(3) Any return on investment of the assets of
the Fund.
‘‘§ 1113. Payments from the Fund
‘‘(a) There shall be paid from the Fund amounts pay-
able for Department of Defense retiree health care pro-
grams for medicare-eligible beneficiaries.
‘‘(b) The assets of the Fund are hereby made avail-
able for payments under subsection (a).
‘‘§ 1114. Board of Actuaries
‘‘(a)(1) There is established in the Department of De-
fense a Department of Defense Medicare-Eligible Retiree
Health Care Board of Actuaries (hereinafter in this chap-
ter referred to as the ‘‘Board’’). The Board shall consist