I
105TH CONGRESS
1ST SESSION
H. R. 2364
To reduce Federal spending in several programs.
IN THE HOUSE OF REPRESENTATIVES
JULY 31, 1997
Mr. SHAYS introduced the following bill; which was referred to the Committee
on National Security, and in addition to the Committees on International
Relations, Science, Agriculture, Transportation and Infrastructure, Re-
sources, Education and the Workforce, Veterans’ Affairs, and Commerce,
for a period to be subsequently determined by the Speaker, in each case
for consideration of such provisions as fall within the jurisdiction of the
committee concerned
A BILL
To reduce Federal spending in several programs.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
TITLE I—DEFENSE
SEC. 101. REDUCTION OF NUCLEAR DELIVERY SYSTEMS.
The Secretary of Defense shall reduce the strategic
nuclear force of the Department of Defense by fiscal year
2003 to include a maximum of 300 Minuteman III inter-
continental ballistic missiles.
SEC. 102. TERMINATION OF PRODUCTION OF TRIDENT II
(D–5) MISSILES AND RETIREMENT OF TRI-
DENT I SUBMARINES.
(a) TERMINATION OF TRIDENT II MISSILE PRODUC-
TION.—No funds may be appropriated to the Department
of Defense for any fiscal year after fiscal year 1997 for
production of Trident II (D–5) missiles for the Depart-
ment of the Navy.
(b) RETIREMENT OF TRIDENT I SUBMARINES.—The
Secretary of Defense shall retire eight Trident I sub-
marines during fiscal years 2000 through 2003.
SEC. 103. REDUCTION IN THEATER MISSILE DEFENSE PRO-
GRAMS.
(a) TERMINATION OF PROGRAMS.—The Secretary of
Defense shall reduce theater missile defense programs by
terminating development of—
(1) the Navy sea-based area theater missile de-
fense system;
(2) the Army Medium Extended Air Defense
System (MEADS);
(3) the Air Force airborne laser for destruction
of missiles system; and
(4) the Space and Missile Tracking System
(Brilliant Eyes).
(b) PROHIBITION ON FUNDING FOR DEVELOPMENT
OF ARROW MISSILE FOR ISRAEL.—No funds may be ap-
propriated to the Department of Defense for any fiscal
year after fiscal year 1997 to provide assistance to Israel
for development of the Arrow missile.
SEC. 104. TERMINATION OF THE MARINE CORPS V–22
OSPREY AIRCRAFT PROGRAM.
No funds may be appropriated to the Department of
Defense for any fiscal year after fiscal year 1997 for re-
search, development, test, and evaluation or for procure-
ment for the Marine Corps V–22 Osprey aircraft program.
SEC. 105. RETIREMENT OF EXCESS KC–135 TANKERS.
The Secretary of Defense shall retire 20 Air Force
KC–135E aircraft during each of fiscal years 1998
through 2002.
SEC. 106. ASSIGNMENT OF WARTIME FUNCTION TO MILI-
TARY PERSONNEL IN TRAINING OR TRANSIT.
The Secretary of Defense shall assign to a unit of
the Armed Forces members of the Armed Forces—
(1) who are in transit during a scheduled move
from one military installation to another military in-
stallation; and
(2) who are undergoing military training other
than basic training.
SEC. 107. INCREASE IN SURCHARGE ON COMMISSARY
PRICES 
TO 
REDUCE 
NEED 
FOR 
APPRO-
PRIATED SUBSIDY.
The Secretary of Defense shall increase the surcharge
on sale prices of goods and services sold in commissary
store facilities so that commissary prices are increased by
at least 10 percent, as compared to commissary prices in
effect immediately before the date of the enactment of this
Act, and maintain such increased surcharge in order to
make the commissary store network more self-sufficient
and reduce the need to appropriate funds to subsidize the
commissary store network. Consistent with section
2486(c) of title 10, United States Code, the increased sur-
charge shall be applied as a uniform percentage of the
sales price of all goods and services sold in commissary
store facilities.
SEC. 
108. 
RECOVERY 
OF 
FULL 
COST 
OF 
MILITARY
EXPORTS.
(a) RECOUPMENT
OF
CERTAIN
NONRECURRING
COSTS IN COMMERCIAL EXPORT SALES OF MAJOR DE-
FENSE EQUIPMENT.—
(1) IN GENERAL.—Section 38 of the Arms Ex-
port Control Act (22 U.S.C. 2778) is amended by
adding at the end the following new subsection:
‘‘(i)(1) Any sale involving the export of major defense
equipment pursuant to a license or other approval granted
under this section shall include an appropriate charge for
a proportionate amount of the nonrecurring costs incurred
by the United States in the research, development, and
production of such equipment. Such charge shall be com-
parable to the charge imposed pursuant to section
21(e)(1)(B) of this Act relating to government-to-govern-
ment sales of major defense equipment.
‘‘(2) The charge provided for in paragraph (1) shall
not apply with respect to major defense equipment that
is wholly paid for from funds transferred under section
503(a)(3) of the Foreign Assistance Act of 1961 (22
U.S.C. 2311(a)(3)) or from funds made available on a
grant or other nonrepayable basis under section 23 of this
Act.’’.
(2) EFFECTIVE
DATE.—Section 38(i) of the
Arms Export Control Act, as added by paragraph
(1), applies with respect to major defense equipment
sold pursuant to a contract entered into on or after
the date of the enactment of this Act.
(b) RECOVERY OF CERTAIN ADMINISTRATIVE EX-
PENSES
IN
CONNECTION
WITH
FOREIGN
MILITARY
SALES.—Section 43(b) of the Arms Export Control Act
(22 U.S.C. 2792(b)) is amended—
(1) by adding ‘‘and’’ at the end of paragraph
(1);
(2) by striking ‘‘; and’’ at the end of paragraph
(2) and inserting a period; and
(3) by striking paragraph (3).
TITLE II—OTHER
DISCRETIONARY ACCOUNTS
SEC. 201. TERMINATION OF SPACE STATION PROGRAM.
(a) TERMINATION.—The Administrator of the Na-
tional Aeronautics and Space Administration shall termi-
nate the participation of the United States in the Inter-
national Space Station program.
(b) TERMINATION COSTS.—There are authorized to
be appropriated to the Administrator of the National Aer-
onautics and Space Administration $700,000,000 for fis-
cal year 1998 for costs associated with carrying out sub-
section (a).
SEC. 202. ELIMINATION OF LOAN SUBSIDIES AVAILABLE
UNDER THE RURAL ELECTRIFICATION ACT
OF 1936.
(a) IN GENERAL.—Title I of the Rural Electrification
Act of 1936 (7 U.S.C. 901–946) is amended by adding
at the end the following:
‘‘SEC. 19. INTEREST RATE ON LOANS AND ADVANCES
UNDER THIS ACT.
‘‘The rate of interest on any loan made under this
Act on or after the date of the enactment of this section,
and the rate of interest on any advance made under this
Act on or after such date under loan commitments made
at any time, shall equal the coupon equivalent yield on
obligations of the Treasury of the United States of com-
parable maturity, at the most recent auction of such obli-
gations by the Department of the Treasury.
‘‘SEC. 20. LOAN ORIGINATION FEES.
‘‘(a) IN GENERAL.—The Secretary and the Governor
of the telephone bank shall charge and collect a loan origi-
nation fee, in an amount determined by use of the sched-
ule prescribed under subsection (b), from each borrower
to whom a loan is made under this Act on or after the
date of the enactment of this section.
‘‘(b) FEE SCHEDULE.—The Secretary shall prescribe
a schedule of loan origination fees to be collected under
subsection (a), which shall be calculated so as to result
in the collection of amounts sufficent to cover the cost of
defaults on loans made under this Act on or after the date
of the enactment of this section.’’.
(b) CONFORMING AMENDMENTS.—
(1) Section 305(a) of such Act (7 U.S.C.
935(a)) is amended by striking ‘‘and at the interest
rates hereinafter provided’’.
(2) Section 305(c)(1) of such Act (7 U.S.C.
935(c)(1)) is amended by striking ‘‘of 5 percent per
year’’ each place it appears and inserting ‘‘deter-
mined pursuant to section 19’’.
(3) Section 305(c)(2)(A) of such Act (7 U.S.C.
935(c)(2)(A)) is amended—
(A) by striking ‘‘the interest rate described
in subparagraph (B)’’ and inserting ‘‘an inter-
est rate determined pursuant to section 19’’;
and
(B) by striking ‘‘(C)’’ and inserting ‘‘(B)’’;
(4) Section 305(c)(2)(C)(i) of such Act (7
U.S.C. 935(c)(2)(C)(i)) is amended by striking ‘‘sub-
paragraph (B)’’ and inserting ‘‘section 19’’.
(5) Section 305(c)(2) of such Act (7 U.S.C.
935(c)(2)) is amended by striking subparagraph (B)
and redesignating subparagraphs (C) and (D) as
subparagraphs (B) and (C), respectively.
(6) Section 305(d)(1)(A) of such Act (7 U.S.C.
935(d)) is amended by striking ‘‘of 5 percent per
year’’ and inserting ‘‘determined pursuant to section
19’’.
(7) Section 305(d)(2) of such Act (7 U.S.C.
935(d)(2)) is amended by striking ‘‘equal to the then
current cost of money to the Government of the
United States for loans of similar maturity, but not
more than 7 percent per year,’’ and inserting ‘‘deter-
mined pursuant to section 19’’.
(8) Section 305(d)(3)(C) of such Act (7 U.S.C.
935(d)(3)(C)) 
is 
amended 
by 
striking
‘‘408(b)(4)(C)’’ and inserting ‘‘408(b)(3)(C)’’.
(9) Section 306C(c)(1) of such Act (7 U.S.C.
936c(c)(1)) is amended—
(A) by striking ‘‘the interest rate described
in paragraph (2)’’ and inserting ‘‘an interest
rate determined pursuant to section 19’’; and
(B) by striking ‘‘(3)’’ and inserting ‘‘(2)’’.
(10) Section 306C(c)(3)(A) of such Act (7
U.S.C. 936c(c)(3)(A)) is amended by striking ‘‘para-
graph (2)’’ and inserting ‘‘section 19’’.
(11) Section 306C(c)(4) of such Act (7 U.S.C.
936c(c)(4)) is amended by striking ‘‘(3)’’ and insert-
ing ‘‘(2)’’.
(12) Section 306C(c) of such Act (7 U.S.C.
936c(c)) is amended by striking paragraph (2) and
redesignating paragraphs (3) and (4) as paragraphs
(2) and (3), respectively.
(13) Section 306C of such Act (7 U.S.C. 936c)
is amended by striking subsection (d).
(14) Section 310 of such Act (7 U.S.C. 940) is
amended by striking ‘‘provided in section 305’’ and
inserting ‘‘determined pursuant to section 19’’.
(15) Section 408(b)(2) of such Act (7 U.S.C.
948(b)(2)) is amended by striking ‘‘, however, to’’
and inserting ‘‘to section 19 and’’.
(16) Section 408(b) of such Act (7 U.S.C.
948(b)) is amended by striking paragraph (3) and
redesignating paragraphs (4) through (8) as para-
graphs (3) through (7), respectively.
(17) Section 408(e) of such Act (7 U.S.C.
948(e)) is amended by striking the 1st and 2nd sen-
tences.
SEC. 203. ELIMINATION OF BELOW-COST SALES OF TIMBER
FROM NATIONAL FOREST SYSTEM LANDS.
The National Forest Management Act of 1976 is
amended by inserting after section 14 (16 U.S.C. 472a)
the following new section:
‘‘SEC. 14A. ELIMINATION OF BELOW-COST TIMBER SALES
FROM NATIONAL FOREST SYSTEM LANDS.
‘‘(a) REQUIREMENT THAT SALE REVENUES EXCEED
COSTS.—On and after October 1, 2002, in appraising tim-
ber and setting a minimum bid for trees, portions of trees,
or forest products located on National Forest System
lands proposed for sale under section 14 or any other pro-
vision of law, the Secretary of Agriculture shall ensure
that the estimated cash returns to the United States
Treasury from each sale exceed the estimated costs to be
incurred by the Federal Government in the preparation
of the sale or as a result of the sale.
‘‘(b) COSTS TO BE CONSIDERED.—For purposes of
estimating under this section the costs to be incurred by
the Federal Government from each timber sale, the Sec-
retary shall assign to the sale the following costs:
‘‘(1) The actual appropriated expenses for sale
preparation and harvest administration incurred or
to be incurred by the Federal Government from the
sale and the payments to counties to be made as a
result of the sale.
‘‘(2) A portion of the annual timber resource
planning costs, silvicultural examination costs, other
resource support costs, road design and construction
costs, road maintenance costs, transportation plan-
ning costs, appropriated reforestation costs, timber
stand improvement costs, forest genetics costs, gen-
eral administrative costs (including administrative
costs of the national and regional offices of the For-
est Service), and facilities construction costs of the
Federal Government directly or indirectly related to
the timber harvest program conducted on National
Forest System lands.
‘‘(c) METHOD OF ALLOCATING COSTS.—The Sec-
retary shall allocate the costs referred to in subsection
(b)(2) to each unit of the National Forest System, and
each proposed timber sale in such unit, on the basis of
harvest volume.
‘‘(d) TRANSITIONAL REQUIREMENTS.—To ensure the
elimination of all below-cost timber sales by the date speci-
fied in subsection (a), the Secretary shall progressively re-
duce the number and size of below-cost timber sales on
National Forest System lands as follows:
‘‘(1) In fiscal years 1998 and 1999, the quan-
tity of timber sold in below-cost timber sales on Na-
tional Forest System lands shall not exceed 75 per-
cent of the quantity of timber sold in such sales in
the preceding fiscal year.
‘‘(2) In fiscal year 2000, the quantity of timber
sold in below-cost timber sales on National Forest
System lands shall not exceed 65 percent of the
quantity of timber sold in such sales in fiscal year
1998.
‘‘(3) In fiscal year 2001, the quantity of timber
sold in below-cost timber sales on National Forest
System lands shall not exceed 50 percent of the
SEC. 207. ELIMINATION OF APPALACHIAN REGIONAL COM-
MISSION.
Effective September 30, 1997, the Appalachian Re-
gional Development Act of 1965 (Public Law 89–4) is re-
pealed.
SEC. 208. ELIMINATION OF FEDERAL FUNDING FOR TVA.
Section 27 of the Tennessee Valley Authority Act of
1933 (16 U.S.C. 831z) is amended to read as follows:
‘‘SEC. 27. No appropriations are authorized to carry
out the provisions of this Act after September 30, 1997.’’.
TITLE III—ENTITLEMENTS
SEC. 301. SALE AND PURCHASE OF POWER BY FEDERAL
POWER MARKETING ADMINISTRATIONS.
(a) MARKET BASED RATES.—Notwithstanding sec-
tions 4 and 5 of the Bonneville Project Act of 1937 (16
U.S.C. 832), sections 9 and 10 of the Federal Columbia
River Transmission System Act (16 U.S.C. 838 and fol-
lowing), the Act of August 31, 1964 (16 U.S.C. 837–
837h), section 7 of the Pacific Northwest Electric Power
Planning and Conservation Act (16 U.S.C. 839–839h),
section 5 of the Flood Control Act of 1944, the Depart-
ment of Energy Organization Act (Public Law 93–454),
or any other authority of law, after October 1, 1997, for
any contract or other arrangement entered into by any
Federal Power Marketing Administration after October 1,
1997 for the sale of electric power, notwithstanding any
other provision of law—
(1) the rate for the sale of such power shall be
the market rate established by competitive bidding
and no discount or special rate shall be provided to
any purchaser; and
(2) no public body or cooperative, Federal agen-
cy, investor-owned utility, direct service industrial
customer, or other entity shall be entitled to any
preference or priority right to contract for or other-
wise purchase such power.
Nothing in this subsection shall affect any contract en-
tered into before October 1, 1997. Notwithstanding the
Federal Power Act or section 7 of the Pacific Northwest
Electric Power Planning and Conservation Act (16 U.S.C.
839–839h), the Federal Energy Regulatory Commission
shall not be authorized or required to approve or confirm
any rate for the sale of electric power or transmission serv-
ices established under this subsection.
(b) TERMINATION OF RESIDENTIAL EXCHANGE PRO-
GRAM.—Section 5(c) of the Pacific Northwest Power Plan-
ning and Conservation Act (16 U.S.C. 839–839h) shall
not apply to any contract or other arrangement for the
purchase or sale of electric power entered into after Octo-
ber 1, 1997.
(c) CONTRACT RENEWAL.—After the enactment of
this Act, no Federal Power Marketing Administration may
enter into or renew any power marketing contract for a
term that exceeds 5 years.
SEC. 302. ELIMINATION OF MARKET ACCESS PROGRAM.
Section 203 of the Agricultural Trade Act of 1978
(7 U.S.C. 5623) is repealed.
SEC. 303. INCREASE IN ASSESSMENTS UNDER TOBACCO
PRICE SUPPORT PROGRAM.
(a) INCREASE
IN
ASSESSMENT
RATE.—Section
106(g)(1) of the Agricultural Act of 1949 (7 U.S.C.
1445(g)(1)) is amended—
(1) in subparagraph (A), by striking ‘‘.5 per-
cent’’ and inserting ‘‘1 percent’’; and
(2) in subparagraph (B), by striking ‘‘1 per-
cent’’ and inserting ‘‘2 percent’’.
(b) DURATION OF ASSESSMENTS.—Such section is
further amended by striking ‘‘1998 crops’’ and inserting
‘‘2002 crops’’.
SEC. 304. PAYMENT OF IN-SCHOOL INTEREST BY STUDENT
LOAN BORROWERS.
Section 428(b)(7) of the Higher Education Act of
1965 (20 U.S.C. 1078(b)(7)) is amended—
(1) in subparagraph (A), by striking ‘‘In the
case’’ and inserting ‘‘Except as provided in subpara-
graph (D), in the case’’; and
(2) by adding at the end the following new sub-
paragraph:
‘‘(D) In the case of a loan made under section
427 or 428 after October 1, 1997, the repayment
period shall exclude any period of authorized
deferment or forbearance, and shall begin as de-
scribed in clause (i) or (ii) of subparagraph (A), but
interest shall begin to accrue or be paid by the bor-
rower at the beginning of the 6 month period de-
scribed in such clause (i).’’.
SEC. 305. COPAYMENT FOR PRESCRIPTION MEDICATIONS
FURNISHED TO VETERANS BY THE DEPART-
MENT OF VETERANS AFFAIRS.
(a) INCREASE IN COPYAMENT.—Subsection (a)(1) of
1722A of title 38, United States Code, is amended by
striking ‘‘$2’’ and inserting ‘‘$5’’.
(b) EXTENSION OF COPAYMENT REQUIREMENT.—
Subsection (c) of such section is amended by striking ’’Sep-
tember 30, 1998’’ and inserting ’’September 30, 2002’’.
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