H. R. 1530—197
as apply to payments for similar services under title XVIII
of the Social Security Act (42 U.S.C. 1395 et seq.).’’.
(b) COMPARISON TO MEDICARE PAYMENTS.—Such subsection is
further amended by adding at the end the following new paragraph:
‘‘(3) For the purposes of paragraph (1)(B), the appropriate pay-
ment amount shall be determined by the Secretary of Defense,
in consultation with the other administering Secretaries.’’.
(c) EXCEPTIONS AND LIMITATIONS.—Such subsection is further
amended by inserting after paragraph (3), as added by subsection
(b), the following new paragraphs:
‘‘(4) The Secretary of Defense, in consultation with the other
administering Secretaries, shall prescribe regulations to provide
for such exceptions to the payment limitations under paragraph
(1) as the Secretary determines to be necessary to assure that
covered beneficiaries retain adequate access to health care services.
Such exceptions may include the payment of amounts higher than
the amount allowed under paragraph (1) when enrollees in managed
care 
programs 
obtain 
covered 
emergency 
services 
from
nonparticipating providers. To provide a suitable transition from
the payment methodologies in effect before the date of the enact-
ment of this paragraph to the methodology required by paragraph
(1), the amount allowable for any service may not be reduced
by more than 15 percent below the amount allowed for the same
service during the immediately preceding 12-month period (or other
period as established by the Secretary of Defense).
‘‘(5) The Secretary of Defense, in consultation with the other
administering Secretaries, shall prescribe regulations to establish
limitations (similar to the limitations established under title XVIII
of the Social Security Act (42 U.S.C. 1395 et seq.)) on beneficiary
liability for charges of an individual health care professional (or
other noninstitutional health care provider).’’.
(d) CONFORMING AMENDMENT.—Paragraph (2) of such sub-
section is amended by striking out ‘‘paragraph (1)’’ and inserting
in lieu thereof ‘‘paragraph (1)(A)’’.
(e) REPORT ON EFFECT OF AMENDMENTS.—Not later than March
1, 1996, the Secretary of Defense shall submit to Congress a report
analyzing the effect of the amendments made by this section on
the ability or willingness of individual health care professionals
and other noninstitutional health care providers to participate in
the Civilian Health and Medical Program of the Uniformed Services.
SEC. 732. NOTIFICATION OF CERTAIN CHAMPUS COVERED BENE-
FICIARIES OF LOSS OF CHAMPUS ELIGIBILITY.
Section 1086(d) of title 10, United States Code, is amended
by adding at the end the following new paragraph:
‘‘(4) The administering Secretaries shall develop a mechanism
by which persons described in paragraph (1) who satisfy only the
criteria specified in subparagraphs (A) and (B) of paragraph (2),
but not subparagraph (C) of such paragraph, are promptly notified
of their ineligibility for health benefits under this section. In devel-
oping the notification mechanism, the administering Secretaries
shall consult with the administrator of the Health Care Financing
Administration.’’.
SEC. 733. PERSONAL SERVICES CONTRACTS FOR MEDICAL TREAT-
MENT FACILITIES OF THE COAST GUARD.
(a) CONTRACTING AUTHORITY.—Section 1091(a) of title 10,
United States Code, is amended—
H. R. 1530—198
(1) by inserting after ‘‘Secretary of Defense’’ the following:
‘‘, with respect to medical treatment facilities of the Department
of Defense, and the Secretary of Transportation, with respect
to medical treatment facilities of the Coast Guard when the
Coast Guard is not operating as a service in the Navy,’’; and
(2) by striking out ‘‘medical treatment facilities of the
Department of Defense’’ and inserting in lieu thereof ‘‘such
facilities’’.
(b) RATIFICATION
OF EXISTING CONTRACTS.—Any exercise of
authority under section 1091 of title 10, United States Code, to
enter into a personal services contract on behalf of the Coast Guard
before the effective date of the amendments made by subsection
(a) is hereby ratified.
(c) EFFECTIVE DATE.—The amendments made by subsection
(a) shall take effect as of October 1, 1995.
SEC. 734. IDENTIFICATION OF THIRD-PARTY PAYER SITUATIONS.
Section 1095 of title 10, United States Code, is amended by
adding at the end the following new subsection:
‘‘(k)(1) To improve the administration of this section and sec-
tions 1079(j)(1) and 1086(d) of this title, the Secretary of Defense,
in consultation with the other administering Secretaries, may pre-
scribe regulations providing for the collection of information regard-
ing insurance, medical service, or health plans of third-party payers
held by covered beneficiaries.
‘‘(2) The collection of information under regulations prescribed
under paragraph (1) shall be conducted in the same manner as
is provided in section 1862(b)(5) of the Social Security Act (42
U.S.C. 1395y(b)(5)). The Secretary may provide for obtaining from
the Commissioner of Social Security employment information com-
parable to the information provided to the Administrator of the
Health Care Financing Administration pursuant to such section.
Such regulations may require the mandatory disclosure of Social
Security account numbers for all covered beneficiaries.
‘‘(3) The Secretary may disclose relevant employment informa-
tion collected under this subsection to fiscal intermediaries or other
designated contractors.
‘‘(4) The Secretary may provide for contacting employers of
covered beneficiaries to obtain group health plan information com-
parable to the information authorized to be obtained under section
1862(b)(5)(C) of the Social Security Act (42 U.S.C. 1395y(b)(5)(C)).
Notwithstanding clause (iii) of such section, clause (ii) of such
section regarding the imposition of civil money penalties shall apply
to the collection of information under this paragraph.
‘‘(5) Information obtained under this subsection may not be
disclosed for any purpose other than to carry out the purpose
of this section and sections 1079(j)(1) and 1086(d) of this title.’’.
SEC. 735. REDESIGNATION OF MILITARY HEALTH CARE ACCOUNT AS
DEFENSE HEALTH PROGRAM ACCOUNT AND TWO-YEAR
AVAILABILITY OF CERTAIN ACCOUNT FUNDS.
(a) REDESIGNATION.—Section 1100 of title 10, United States
Code, is amended—
(1) in subsection (a)(1)—
(A) by striking out ‘‘Military Health Care Account’’
and inserting in lieu thereof ‘‘Defense Health Program
Account’’; and
H. R. 1530—199
(B) by striking out ‘‘the Civilian Health and Medical
Program of the Uniformed Services’’ and inserting in lieu
thereof ‘‘medical and health care programs of the Depart-
ment of Defense’’; and
(2) in subsection (b)—
(A) by striking out ‘‘entering into a contract’’ and insert-
ing in lieu thereof ‘‘conducting programs and activities
under this chapter, including contracts entered into’’; and
(B) by inserting a comma after ‘‘title’’.
(b) TWO YEAR AVAILABILITY
OF CERTAIN APPROPRIATIONS.—
Subsection (a)(2) of such section is amended to read as follows:
‘‘(2) Of the total amount appropriated for a fiscal year for
programs and activities carried out under this chapter, the amount
equal to three percent of such total amount shall remain available
for obligation until the end of the following fiscal year.’’.
(c) CONFORMING
AMENDMENTS.—Such section is further
amended—
(1) by striking out subsections (c), (d), and (f); and
(2) by redesignating subsection (e) as subsection (c).
(d) CLERICAL AMENDMENTS.—(1) The heading of such section
is amended to read as follows:
‘‘§ 1100. Defense Health Program Account’’.
(2) The item relating to such section in the table of sections
at the beginning of chapter 55 of such title is amended to read
as follows:
‘‘1100. Defense Health Program Account.’’.
SEC. 736. EXPANSION OF FINANCIAL ASSISTANCE PROGRAM FOR
HEALTH-CARE 
PROFESSIONALS 
IN 
RESERVE 
COMPO-
NENTS TO INCLUDE DENTAL SPECIALTIES.
Section 16201(b) of title 10, United States Code, is amended—
(1) in the subsection heading, by inserting ‘‘AND DENTISTS’’
after ‘‘PHYSICIANS’’;
(2) in paragraph (1)(A), by inserting ‘‘or dental school’’
after ‘‘medical school’’;
(3) in paragraphs (1)(B) and (2)(B), by inserting ‘‘or dental
officer’’ after ‘‘medical officer’’; and
(4) in paragraph (1)(C), by striking out ‘‘physicians in a
medical specialty’’ and inserting in lieu thereof ‘‘physicians
or dentists in a medical or dental specialty’’.
SEC. 737. APPLICABILITY OF LIMITATION ON PRICES OF PHARMA-
CEUTICALS PROCURED FOR COAST GUARD.
(a) INCLUSION OF COAST GUARD.—Section 8126(b) of title 38,
United States Code, is amended by adding at the end the following
new paragraph:
‘‘(4) The Coast Guard.’’.
(b) EFFECTIVE
DATE; APPLICATION
OF
AMENDMENT.—The
amendment made by subsection (a) shall take effect as if included
in the enactment of section 603 of the Veterans Health Care Act
of 1992 (Public Law 102–585; 106 Stat. 4971).
SEC. 738. RESTRICTION ON USE OF DEPARTMENT OF DEFENSE
FACILITIES FOR ABORTIONS.
(a) IN GENERAL.—Section 1093 of title 10, United States Code,
is amended—
H. R. 1530—200
(1) 
by 
inserting 
‘‘(a) 
RESTRICTION
ON
USE
OF
FUNDS.—’’ before ‘‘Funds available’’; and
(2) by adding at the end the following:
‘‘(b) RESTRICTION ON USE OF FACILITIES.—No medical treatment
facility or other facility of the Department of Defense may be
used to perform an abortion except where the life of the mother
would be endangered if the fetus were carried to term or in a
case in which the pregnancy is the result of an act of rape or
incest.’’.
(b) CLERICAL AMENDMENTS.—(1) The heading of such section
is amended to read as follows:
‘‘§ 1093. Performance of abortions: restrictions’’.
(2) The item relating to such section in the table of sections
at the beginning of chapter 55 of such title is amended to read
as follows:
‘‘1093. Performance of abortions: restrictions.’’.
Subtitle E—Other Matters
SEC. 741. TRISERVICE NURSING RESEARCH.
(a) PROGRAM AUTHORIZED.—Chapter 104 of title 10, United
States Code, is amended by adding at the end the following new
section:
‘‘§ 2116. Military nursing research
‘‘(a) DEFINITIONS.—In this section:
‘‘(1) The term ‘military nursing research’ means research
on the furnishing of care and services by nurses in the armed
forces.
‘‘(2) The term ‘TriService Nursing Research Program’
means the program of military nursing research authorized
under this section.
‘‘(b) PROGRAM AUTHORIZED.—The Secretary of Defense may
establish at the University a program of military nursing research.
‘‘(c) TRISERVICE RESEARCH GROUP.—The TriService Nursing
Research Program shall be administered by a TriService Nursing
Research Group composed of Army, Navy, and Air Force nurses
who are involved in military nursing research and are designated
by the Secretary concerned to serve as members of the group.
‘‘(d) DUTIES
OF GROUP.—The TriService Nursing Research
Group shall—
‘‘(1) develop for the Department of Defense recommended
guidelines for requesting, reviewing, and funding proposed mili-
tary nursing research projects; and
‘‘(2) make available to Army, Navy, and Air Force nurses
and Department of Defense officials concerned with military
nursing research—
‘‘(A) information about nursing research projects that
are being developed or carried out in the Army, Navy,
and Air Force; and
‘‘(B) expertise and information beneficial to the
encouragement of meaningful nursing research.
‘‘(e) RESEARCH TOPICS.—For purposes of this section, military
nursing research includes research on the following issues:
H. R. 1530—201
‘‘(1) Issues regarding how to improve the results of nursing
care and services provided in the armed forces in time of
peace.
‘‘(2) Issues regarding how to improve the results of nursing
care and services provided in the armed forces in time of
war.
‘‘(3) Issues regarding how to prevent complications associ-
ated with battle injuries.
‘‘(4) Issues regarding how to prevent complications associ-
ated with the transporting of patients in the military medical
evacuation system.
‘‘(5) Issues regarding how to improve methods of training
nursing personnel.
‘‘(6) Clinical nursing issues, including such issues as
prevention and treatment of child abuse and spouse abuse.
‘‘(7) Women’s health issues.
‘‘(8) Wellness issues.
‘‘(9) Preventive medicine issues.
‘‘(10) Home care management issues.
‘‘(11) Case management issues.’’.
(b) CLERICAL AMENDMENT.—The table of sections at the begin-
ning of chapter 104 of such title is amended by adding at the
end the following:
‘‘2116. Military nursing research.’’.
SEC. 742. TERMINATION 
OF 
PROGRAM 
TO 
TRAIN 
MILITARY
PSYCHOLOGISTS TO PRESCRIBE PSYCHOTROPIC MEDICA-
TIONS.
(a) TERMINATION.—Not later than June 30, 1997, the Secretary
of Defense shall terminate the demonstration pilot program for
training military psychologists in the prescription of psychotropic
medications, which is referred to in section 8097 of the Department
of Defense Appropriations Act, 1991 (Public Law 101–511; 104
Stat. 1897).
(b) PROHIBITION ON ADDITIONAL ENROLLEES PENDING TERMI-
NATION.—After the date of the enactment of this Act, the Secretary
of Defense may not enroll any new participants for the demonstra-
tion pilot program described in subsection (a).
(c) EFFECT ON CURRENT PARTICIPANTS.—The requirement to
terminate the demonstration pilot program described in subsection
(a) shall not be construed to affect the training or utilization of
military psychologists in the prescription of psychotropic medica-
tions who are participating in the demonstration pilot program
on the date of the enactment of this Act or who have completed
such training before that date.
(d) EVALUATION.—As soon as possible after the date of the
enactment of this Act, but not later than April 1, 1997, the
Comptroller General of the United States shall submit to Congress
a report evaluating the success of the demonstration pilot program
described in subsection (a). The report shall include—
(1) a cost-benefit analysis of the program;
(2) a discussion of the utilization requirements under the
program; and
(3) recommendations regarding—
(A) whether the program should be extended so as
to continue to provide training to military psychologists
in the prescription of psychotropic medications; and
H. R. 1530—202
(B) any modifications that should be made in the man-
ner in which military psychologists are trained and used
to prescribe psychotropic medications so as to improve the
training provided under the program, if the program is
extended.
SEC. 743. WAIVER OF COLLECTION OF PAYMENTS DUE FROM CERTAIN
PERSONS UNAWARE OF LOSS OF CHAMPUS ELIGIBILITY.
(a) AUTHORITY TO WAIVE COLLECTION.—The administering Sec-
retaries may waive the collection 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 States Code, after the termination of the person’s eligibility
for such benefits.
(b) PERSONS ELIGIBLE FOR WAIVER.—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 section; and
(3) at the time of the receipt of such benefits, satisfied
the criteria specified in subparagraphs (A) and (B) of paragraph
(2) of such subsection.
(c) EXTENT OF WAIVER AUTHORITY.—The authority to waive
the collection of payments pursuant to this section shall apply
with regard to health benefits provided under section 1086 of title
10, United States Code, to persons described in subsection (b)
during the period beginning on January 1, 1967, and ending on
the later of—
(1) the termination date of any special enrollment period
provided under title XVIII of the Social Security Act (42 U.S.C.
1395 et seq.) specifically for such persons; and
(2) July 1, 1996.
(d) DEFINITIONS.—For purposes of this section, the term ‘‘admin-
istering Secretaries’’ has the meaning given such term in section
1072(3) of title 10, United States Code.
SEC. 744. DEMONSTRATION PROGRAM TO TRAIN MILITARY MEDICAL
PERSONNEL IN CIVILIAN SHOCK TRAUMA UNITS.
(a) DEMONSTRATION PROGRAM.—(1) Not later than April 1,
1996, the Secretary of Defense shall implement a demonstration
program to evaluate the feasibility of providing shock trauma train-
ing for military medical personnel through one or more public
or nonprofit hospitals. The Secretary shall carry out the program
pursuant to an agreement with such hospitals.
(2) Under the agreement with a hospital, the Secretary shall
assign military medical personnel participating in the demonstra-
tion program to temporary duty in shock trauma units operated
by the hospitals that are parties to the agreement.
(3) The agreement shall require, as consideration for the serv-
ices provided by military medical personnel under the agreement,
that the hospital provide appropriate care to members of the Armed
Forces and to other persons whose care in the hospital would
otherwise require reimbursement by the Secretary. The value of
the services provided by the hospitals shall be at least equal to
the value of the services provided by military medical personnel
under the agreement.
H. R. 1530—203
(b) TERMINATION OF PROGRAM.—The authority of the Secretary
of Defense to conduct the demonstration program under this section,
and any agreement entered into under the demonstration program,
shall expire on March 31, 1998.
(c) REPORT AND EVALUATION OF PROGRAM.—(1) Not later than
March 1 of each year in which the demonstration program is con-
ducted under this section, the Secretary of Defense shall submit
to Congress a report describing the scope and activities of the
demonstration program during the preceding year.
(2) Not later than May 1, 1998, the Comptroller General of
the United States shall submit to Congress a report evaluating
the effectiveness of the demonstration program in providing shock
trauma training for military medical personnel.
SEC. 745. STUDY REGARDING DEPARTMENT OF DEFENSE EFFORTS TO
DETERMINE APPROPRIATE FORCE LEVELS OF WARTIME
MEDICAL PERSONNEL.
(a) STUDY REQUIRED.—The Comptroller General of the United
States shall conduct a study to evaluate the reasonableness of
the models used by each military department for determining the
appropriate wartime force level for medical personnel in the depart-
ment. The study shall include the following:
(1) An assessment of the modeling techniques used by
each department.
(2) An analysis of the data used in the models to identify
medical personnel requirements.
(3) An identification of the ability of the models to integrate
personnel 
of 
reserve 
components 
to 
meet 
department
requirements.
(4) An evaluation of the ability of the Secretary of Defense
to integrate the various modeling efforts into a comprehensive,
coordinated plan for obtaining the optimum force level for war-
time medical personnel.
(b) REPORT
OF STUDY.—Not later than June 30, 1996, the
Comptroller General shall report to Congress on the results of
the study conducted under subsection (a).
SEC. 746. REPORT ON IMPROVED ACCESS TO MILITARY HEALTH CARE
FOR COVERED BENEFICIARIES ENTITLED TO MEDICARE.
Not later than March 1, 1996, the Secretary of Defense shall
submit to Congress a report evaluating the feasibility, costs, and
consequences for the military health care system of improving access
to the system for covered beneficiaries under chapter 55 of title
10, United States Code, who have limited access to military medical
treatment facilities and are ineligible for the Civilian Health and
Medical Program of the Uniformed Services under section 1086(d)(1)
of such title. The alternatives that the Secretary shall consider
to improve access for such covered beneficiaries shall include—
(1) whether CHAMPUS should serve as a second payer
for covered beneficiaries who are entitled to hospital insurance
benefits under part A of title XVIII of the Social Security
Act (42 U.S.C. 1395c et seq.); and
(2) whether such covered beneficiaries should be offered
enrollment in the Federal Employees Health Benefits program
under chapter 89 of title 5, United States Code.
H. R. 1530—204
SEC. 747. REPORT ON EFFECT OF CLOSURE OF FITZSIMONS ARMY
MEDICAL CENTER, COLORADO, ON PROVISION OF CARE
TO MILITARY PERSONNEL, RETIRED MILITARY PERSON-
NEL, AND THEIR DEPENDENTS.
(a) EFFECT OF CLOSURE ON MEMBERS EXPERIENCING HEALTH
DIFFICULTIES ASSOCIATED WITH PERSIAN GULF SYNDROME.—Not
later than 90 days after the date of the enactment of this Act,
the Secretary of Defense shall submit to Congress a report that—
(1) assesses the effects of the closure of Fitzsimons Army
Medical Center, Colorado, on the capability of the Department
of Defense to provide appropriate and adequate health care
to members and former members of the Armed Forces who
suffer from undiagnosed illnesses (or combination of illnesses)
as a result of service in the Armed Forces in the Southwest
Asia theater of operations during the Persian Gulf conflict;
and
(2) describes the plans of the Secretary of Defense and
the Secretary of the Army to ensure that adequate and appro-
priate health care is provided to such members for such ill-
nesses (or combination of illnesses).
(b) EFFECT OF CLOSURE ON OTHER COVERED BENEFICIARIES.—
The report required by subsection (a) shall also include—
(1) an assessment of the effects of the closure of Fitzsimons
Army Medical Center on the capability of the Department
of Defense to provide appropriate and adequate health care
to the dependents of members and former members of the
Armed Forces and retired members and their dependents who
currently obtain care at the medical center; and
(2) a description of the plans of the Secretary of Defense
and the Secretary of the Army to ensure that adequate and
appropriate health care is provided to such persons, as called
for in the recommendations of the Secretary of Defense for
the closure of Fitzsimons Army Medical Center.
SEC. 748. SENSE OF CONGRESS ON CONTINUITY OF HEALTH CARE
SERVICES FOR COVERED BENEFICIARIES ADVERSELY
AFFECTED BY CLOSURES OF MILITARY MEDICAL TREAT-
MENT FACILITIES.
(a) FINDINGS.—Congress finds the following:
(1) Military installations selected for closure in the 1991
and 1993 rounds of the base closure process will soon close.
(2) Additional military installations have been selected for
closure in the 1995 round of the base closure process.
(3) Some of the military installations selected for closure
include military medical treatment facilities.
(4) As a result of these base closures, tens of thousands
of covered beneficiaries under chapter 55 of title 10, United
States Code, who reside in the vicinity of such installations
will be left without immediate access to military medical treat-
ment facilities.
(b) SENSE
OF CONGRESS.—In light of the findings specified
in subsection (a), it is the sense of Congress that the Secretary
of Defense should take all appropriate steps necessary to ensure
the continuation of medical and pharmaceutical benefits for covered
beneficiaries adversely affected by the closure of military
installations.
H. R. 1530—205
SEC. 749. STATE RECOGNITION OF MILITARY ADVANCE MEDICAL
DIRECTIVES.
(a) REQUIREMENT FOR RECOGNITION BY STATES.—(1) Chapter
53 of title 10, United States Code, is amended by inserting after
section 1044b the following new section:
‘‘§ 1044c. Advance 
medical 
directives 
of 
members 
and
dependents: requirement for recognition by
States
‘‘(a) INSTRUMENTS TO BE GIVEN LEGAL EFFECT WITHOUT
REGARD TO STATE LAW.—An advance medical directive executed
by a person eligible for legal assistance—
‘‘(1) is exempt from any requirement of form, substance,
formality, or recording that is provided for advance medical
directives under the laws of a State; and
‘‘(2) shall be given the same legal effect as an advance
medical directive prepared and executed in accordance with
the laws of the State concerned.
‘‘(b) ADVANCE MEDICAL DIRECTIVES.—For purposes of this sec-
tion, an advance medical directive is any written declaration that—
‘‘(1) sets forth directions regarding the provision, with-
drawal, or withholding of life-prolonging procedures, including
hydration and sustenance, for the declarant whenever the
declarant has a terminal physical condition or is in a persistent
vegetative state; or
‘‘(2) authorizes another person to make health care deci-
sions for the declarant, under circumstances stated in the dec-
laration, whenever the declarant is incapable of making
informed health care decisions.
‘‘(c) STATEMENT TO BE INCLUDED.—(1) Under regulations pre-
scribed by the Secretary concerned, an advance medical directive
prepared by an attorney authorized to provide legal assistance
shall contain a statement that sets forth the provisions of subsection
(a).
‘‘(2) Paragraph (1) shall not be construed to make inapplicable
the provisions of subsection (a) to an advance medical directive
that does not include a statement described in that paragraph.
‘‘(d) STATES
NOT
RECOGNIZING
ADVANCE
MEDICAL
DIREC-
TIVES.—Subsection (a) does not make an advance medical directive
enforceable in a State that does not otherwise recognize and enforce
advance medical directives under the laws of the State.
‘‘(e) DEFINITIONS.—In this section:
‘‘(1) The term ‘State’ includes the District of Columbia,
the Commonwealth of Puerto Rico, and a possession of the
United States.
‘‘(2) The term ‘person eligible for legal assistance’ means
a person who is eligible for legal assistance under section
1044 of this title.
‘‘(3) The term ‘legal assistance’ means legal services author-
ized under section 1044 of this title.’’.
(2) The table of sections at the beginning of such chapter
is amended by inserting after the item relating to section 1044b
the following:
‘‘1044c. Advance medical directives of members and dependents: requirement for
recognition by States.’’.
(b) EFFECTIVE DATE.—Section 1044c of title 10, United States
Code, shall take effect on the date of the enactment of this Act
H. R. 1530—206
and shall apply to advance medical directives referred to in that
section that are executed before, on, or after that date.
TITLE VIII—ACQUISITION POLICY, AC-
QUISITION MANAGEMENT, AND RE-
LATED MATTERS
Subtitle A—Acquisition Reform
SEC. 801. INAPPLICABILITY OF LIMITATION ON EXPENDITURE OF
APPROPRIATIONS TO CONTRACTS AT OR BELOW SIM-
PLIFIED ACQUISITION THRESHOLD.
Section 2207 of title 10, United States Code, is amended—
(1) by inserting ‘‘(a)’’ before ‘‘Money appropriated’’; and
(2) by adding at the end the following new subsection:
‘‘(b) This section does not apply to a contract that is for an
amount not greater than the simplified acquisition threshold (as
defined in section 4(11) of the Office of Federal Procurement Policy
Act (41 U.S.C. 403(11))).’’.
SEC. 802. AUTHORITY TO DELEGATE CONTRACTING AUTHORITY.
(a) REPEAL OF DUPLICATIVE AUTHORITY AND RESTRICTION.—
Section 2356 of title 10, United States Code, is repealed.
(b) CLERICAL AMENDMENT.—The table of sections at the begin-
ning of chapter 139 of title 10, United States Code, is amended
by striking out the item relating to section 2356.
SEC. 803. CONTROL IN PROCUREMENTS OF CRITICAL AIRCRAFT AND
SHIP SPARE PARTS.
(a) REPEAL.—Section 2383 of title 10, United States Code, is
repealed.
(b) CLERICAL AMENDMENT.—The table of sections at the begin-
ning of chapter 141 of such title is amended by striking out the
item relating to section 2383.
SEC. 804. FEES FOR CERTAIN TESTING SERVICES.
Section 2539b(c) of title 10, United States Code, is amended
by inserting ‘‘and indirect’’ after ‘‘recoup the direct’’ in the second
sentence.
SEC. 805. COORDINATION 
AND 
COMMUNICATION 
OF 
DEFENSE
RESEARCH ACTIVITIES.
Section 2364 of title 10, United States Code, is amended—
(1) in subsection (b)(5), by striking out ‘‘milestone O, mile-
stone I, and milestone II’’ and inserting in lieu thereof ‘‘acquisi-
tion program’’; and
(2) in subsection (c), by striking out paragraphs (2), (3),
and (4) and inserting in lieu thereof the following:
‘‘(2) The term ‘acquisition program decision’ has the mean-
ing prescribed by the Secretary of Defense in regulations.’’.
SEC. 806. ADDITION OF CERTAIN ITEMS TO DOMESTIC SOURCE
LIMITATION.
(a) LIMITATION.—(1) Paragraph (3) of section 2534(a) of title
10, United States Code, is amended to read as follows:
H. R. 1530—207
‘‘(3) COMPONENTS FOR NAVAL VESSELS.—(A) The following
components:
‘‘(i) Air circuit breakers.
‘‘(ii) Welded shipboard anchor and mooring chain with
a diameter of four inches or less.
‘‘(iii) Vessel propellers with a diameter of six feet or
more.
‘‘(B) The following components of vessels, to the extent
they are unique to marine applications: gyrocompasses, elec-
tronic navigation chart systems, steering controls, pumps,
propulsion and machinery control systems, and totally enclosed
lifeboats.’’.
(2) Subsection (b) of section 2534 of such title is amended
by adding at the end the following:
‘‘(3) MANUFACTURER OF VESSEL PROPELLERS.—In the case
of a procurement of vessel propellers referred to in subsection
(a)(3)(A)(ii), the manufacturer of the propellers meets the
requirements of this subsection only if—
‘‘(A) the manufacturer meets the requirements set forth
in paragraph (1); and
‘‘(B) all castings incorporated into such propellers are
poured and finished in the United States.’’.
(3) Paragraph (1) of section 2534(c) of such title is amended
to read as follows:
‘‘(1) COMPONENTS FOR NAVAL VESSELS.—Subsection (a) does
not apply to a procurement of spare or repair parts needed
to support components for naval vessels produced or manufac-
tured outside the United States.’’.
(4) Section 2534 of such title is amended by adding at the
end the following new subsection:
‘‘(h) IMPLEMENTATION OF NAVAL VESSEL COMPONENT LIMITA-
TION.—In implementing subsection (a)(3)(B), the Secretary of
Defense—
‘‘(1) may not use contract clauses or certifications; and
‘‘(2) shall use management and oversight techniques that
achieve the objective of the subsection without imposing a
significant management burden on the Government or the con-
tractor involved.’’.
(5) Subsection (a)(3)(B) of section 2534 of title 10, United States
Code, as amended by paragraph (1), shall apply only to contracts
entered into after March 31, 1996.
(b) EXTENSION OF LIMITATION RELATING TO BALL BEARINGS
AND ROLLER BEARINGS.—Section 2534(c)(3) of such title is amended
by striking out ‘‘October 1, 1995’’ and inserting in lieu thereof
‘‘October 1, 2000’’.
(c) TERMINATION OF VESSEL PROPELLER LIMITATION.—Section
2534(c) of such title is amended by adding at the end the following
new paragraph:
‘‘(4) VESSEL PROPELLERS.—Subsection (a)(3)(A)(iii) and this
paragraph shall cease to be effective on the date occurring
two years after the date of the enactment of the National
Defense Authorization Act for Fiscal Year 1996.’’.
(d) ADDITIONAL WAIVER AUTHORITY.—Section 2534(d) of such
title is amended by adding at the end the following new paragraph:
‘‘(9) Application of the limitation would result in a retalia-
tory trade action by a foreign country against the United States,
H. R. 1530—208
as determined by the Secretary of Defense after consultation
with the United States Trade Representative.’’.
(e) INAPPLICABILITY OF SIMPLIFIED ACQUISITION LIMITATION TO
CONTRACTS FOR BALL BEARINGS AND ROLLER BEARINGS.—Section
2534(g) of title 10, United States Code, is amended—
(1) by inserting ‘‘(1)’’ before ‘‘This section’’; and
(2) by adding at the end the following new paragraph:
‘‘(2) Paragraph (1) does not apply to contracts for items
described in subsection (a)(5) (relating to ball bearings and roller
bearings), notwithstanding section 33 of the Office of Federal
Procurement Policy Act (41 U.S.C. 429).’’.
SEC. 807. ENCOURAGEMENT OF USE OF LEASING AUTHORITY.
(a) IN GENERAL.—(1) Section 2401a of title 10, United States
Code, is amended—
(A) by inserting before ‘‘The Secretary of Defense’’ the
following subsection heading: ‘‘(b) LIMITATION ON CONTRACTS
WITH TERMS OF 18 MONTHS OR MORE.—’’;
(B) by inserting after the section heading the following:
‘‘(a) LEASING OF COMMERCIAL VEHICLES AND EQUIPMENT.—The
Secretary of Defense may use leasing in the acquisition of commer-
cial vehicles and equipment whenever the Secretary determines
that leasing of such vehicles is practicable and efficient.’’; and
(C) by amending the section heading to read as follows:
‘‘§ 2401a. Lease of vehicles, equipment, vessels, and aircraft’’.
(2) The item relating to section 2401a in the table of sections
at the beginning of chapter 141 of such title is amended to read
as follows:
‘‘2401a. Lease of vehicles, equipment, vessels, and aircraft.’’.
(b) REPORT.—Not later than 90 days after the date of the
enactment of this Act, the Secretary of Defense shall submit to
the Committee on Armed Services of the Senate and the Committee
on National Security of the House of Representatives a report
setting forth changes in legislation that would be required to facili-
tate the use of leasing in the acquisition of equipment by the
Department of Defense.
(c) PILOT PROGRAM.—(1) The Secretary of the Army may con-
duct a pilot program for leasing commercial utility cargo vehicles
in accordance with this subsection.
(2) Under the pilot program—
(A) the Secretary may trade existing commercial utility
cargo vehicles of the Army for credit against the costs of leasing
new replacement commercial utility cargo vehicles for the Army;
(B) the quantities and trade-in value of commercial utility
cargo vehicles to be traded in shall be subject to negotiation
between the Secretary and the lessors of the new replacement
commercial utility cargo vehicles;
(C) the lease agreement for a new commercial utility cargo
vehicle may be executed with or without an option to purchase
at the end of the lease period;
(D) the lease period for a new commercial utility cargo
vehicle may not exceed the warranty period for the vehicle;
and
(E) up to 40 percent of the validated requirement for
commercial utility cargo vehicles may be satisfied by leasing
such vehicles, except that one or more options for satisfying
H. R. 1530—209
the remainder of the validated requirement may be provided
for and exercised (subject to the requirements of paragraph
(6)).
(3) In awarding contracts under the pilot program, the Sec-
retary shall comply with section 2304 of title 10, United States
Code.
(4) The pilot program may not be commenced until—
(A) the Secretary submits to the Committee on Armed
Services of the Senate and the Committee on National Security
of the House of Representatives a report that contains the
plans of the Secretary for implementing the program and that
sets forth in detail the savings in operating and support costs
expected to be derived from retiring older commercial utility
cargo vehicles, as compared to the expected costs of leasing
newer commercial utility cargo vehicles; and
(B) a period of 30 calendar days has elapsed after submis-
sion of such report.
(5) Not later than one year after the date on which the first
lease under the pilot program is entered into, the Secretary of
the Army shall submit to the Committee on Armed Services of
the Senate and the Committee on National Security of the House
of Representatives a report on the status of the pilot program.
Such report shall be based on at least six months of experience
in operating the pilot program.
(6) The Secretary may exercise an option provided for under
paragraph (2) only after a period of 60 days has elapsed after
the submission of the report.
(7) No lease of commercial utility cargo vehicles may be entered
into under the pilot program after September 30, 2000.
SEC. 808. COST 
REIMBURSEMENT 
RULES 
FOR 
INDIRECT 
COSTS
ATTRIBUTABLE TO PRIVATE SECTOR WORK OF DEFENSE
CONTRACTORS.
(a) DEFENSE CAPABILITY PRESERVATION AGREEMENT.—The Sec-
retary of Defense may enter into an agreement, to be known as
a ‘‘defense capability preservation agreement’’, with a defense con-
tractor under which the cost reimbursement rules described in
subsection (b) shall be applied. Such an agreement may be entered
into in any case in which the Secretary determines that the applica-
tion of such cost reimbursement rules would facilitate the achieve-
ment of the policy objectives set forth in section 2501(b) of title
10, United States Code.
(b) COST REIMBURSEMENT RULES.—(1) The cost reimbursement
rules applicable under an agreement entered into under subsection
(a) are as follows:
(A) The Department of Defense shall, in determining the
reimbursement due a contractor for its indirect costs of perform-
ing a defense contract, allow the contractor to allocate indirect
costs to its private sector work only to the extent of the contrac-
tor’s allocable indirect private sector costs, subject to subpara-
graph (C).
(B) For purposes of subparagraph (A), the allocable indirect
private sector costs of a contractor are those costs of the contrac-
tor that are equal to the sum of—
(i) the incremental indirect costs attributable to such
work; and
H. R. 1530—210
(ii) the amount by which the revenue attributable to
such private sector work exceeds the sum of—
(I) the direct costs attributable to such private
sector work; and
(II) the incremental indirect costs attributable to
such private sector work.
(C) The total amount of allocable indirect private sector
costs for a contract in any year of the agreement may not
exceed the amount of indirect costs that a contractor would
have allocated to its private sector work during that year in
accordance 
with 
the 
contractor’s 
established 
accounting
practices.
(2) The cost reimbursement rules set forth in paragraph (1)
may be modified by the Secretary of Defense if the Secretary of
Defense determines that modifications are appropriate to the
particular situation to facilitate achievement of the policy set forth
in section 2501(b) of title 10, United States Code.
(c) IMPLEMENTATION.—Not later than 90 days after the date
of the enactment of this Act, the Secretary of Defense shall establish
application procedures and procedures for expeditious consideration
of defense capability preservation agreements as authorized by this
section.
(d) CONTRACTS COVERED.—An agreement entered into with a
contractor under subsection (a) shall apply to each Department
of Defense contract with the contractor in effect on the date on
which the agreement is entered into and each Department of
Defense contract that is awarded to the contractor during the
term of the agreement.
(e) REPORTS.—Not later than one year after the date of the
enactment of this Act, the Secretary of Defense shall submit to
the congressional defense committees a report setting forth—
(1) the number of applications received and the number
of applications approved for defense capability preservation
agreements; and
(2) any changes to the authority in this section that the
Secretary recommends to further facilitate the policy set forth
in section 2501(b) of title 10, United States Code.
SEC. 809. SUBCONTRACTS FOR OCEAN TRANSPORTATION SERVICES.
Notwithstanding any other provision of law, neither section
901(b) of the Merchant Marine Act, 1936 (46 U.S.C. 1241(b)) nor
section 2631 of title 10, United States Code, shall be included
before May 1, 1996, on any list promulgated under section 34(b)
of the Office of Federal Procurement Policy Act (41 U.S.C. 430(b)).
SEC. 810. PROMPT RESOLUTION OF AUDIT RECOMMENDATIONS.
Section 6009 of the Federal Acquisition Streamlining Act of
1994 (Public Law 103–355; 108 Stat. 3367) is amended to read
as follows:
‘‘SEC. 6009. PROMPT MANAGEMENT DECISIONS AND IMPLEMENTA-
TION OF AUDIT RECOMMENDATIONS.
‘‘(a) MANAGEMENT DECISIONS.—(1) The head of a Federal
agency shall make management decisions on all findings and rec-
ommendations set forth in an audit report of the inspector general
of the agency within a maximum of six months after the issuance
of the report.