A bill to permit flexibility in the application of the budget sequester by Federal agencies.

SECTION 1. DEFINITION.

    In this Act, the term ``agency'' means--
            (1) an Executive agency (as defined in section 105 of title 
        5, United States Code);
            (2) an office, agency, or other establishment in the 
        legislative branch which is not a part of another office, 
        agency, or other establishment in the legislative branch; and
            (3) an office, agency, or other establishment in the 
        judicial branch which is not a part of another office, agency, 
        or other establishment in the judicial branch.

SEC. 2. 2013 SEQUESTER CANCELLATION.

    Notwithstanding any other provision of law, the sequestration of 
budgetary resources for fiscal year 2013 ordered on March 1, 2013, 
pursuant to section 251A of the Balanced Budget and Emergency Deficit 
Control Act of 1985 is cancelled.

SEC. 3. FLEXIBLE SEQUESTER IMPLEMENTED BY AGENCY HEADS.

    (a) In General.--Notwithstanding any other provision of law, the 
budget sequester for an account in the security and non-security 
categories required by section 251A of the Balanced Budget and 
Emergency Deficit Control Act of 1985 for fiscal year 2013 shall be 
implemented within each account as determined by the head of the agency 
with spending authority over such account.
    (b) Appropriations Oversight.--
            (1) In general.--The head of an agency may not exercise the 
        authority provided in subsection (a) unless the head has 
        submitted a notice of implementation describing the proposed 
        exercise of authority to the Committees on Appropriations of 
        both Houses not later than 15 days before exercising such 
        authority and each such committee approves the implementation 
        as provided in paragraph (2).
            (2) Appropriations approval.--After the committees receive 
        an executive branch proposal for administering the sequester 
        under paragraph (1) and not later than 5 days after such 
        receipt, each committee, using standard procedures for 
        reprogramming, shall accept or reject the proposal. If a 
        proposal is accepted by both committees, the proposal may be 
        implemented. If either committee rejects a proposal and 
        notwithstanding section 2, sequestration within the relevant 
        agency will be administered through across the board cuts 
        consistent with section 251A of the Balanced Budget and 
        Emergency Deficit Control Act of 1985.

SEC. 4. DEPARTMENT OF DEFENSE FLEXIBILITY IN MANAGEMENT OF MULTIYEAR 
              CONTRACTS.

    (a) In General.--In implementing under section 251(a)(1) of the 
Balanced Budget and Emergency Deficit Control Act of 1985 (2 U.S.C. 
901(a)(1)) the discretionary spending reductions required by section 
251A(7) of the Balanced Budget and Emergency Deficit Control Act of 
1985, the Secretary of Defense may, in consultation with the Director 
of the Office of Management and Budget, take appropriate actions in the 
management of current multiyear contracts of the Department of Defense 
to minimize the effects of such reductions in the carrying out of such 
contracts.
    (b) Authority for Commencement of Certain Programs, Projects, and 
Activities of the Department of Defense.--Notwithstanding section 102 
of the Continuing Appropriations Resolution, 2013 (Public Law 112-175), 
appropriations or funds made available or authority granted pursuant to 
section 101 of that Resolution for the Department of Defense may be 
used for the programs, projects, and activities specified in H.R. 5856, 
Department of Defense Appropriations Act, 2013, as reported with an 
amendment in the Senate on August 2, 2012 in the 112th Congress or the 
funding tables in division D of the National Defense Authorization Act 
for Fiscal Year 2013 (Public Law 112-239), including the following:
            (1) The new production of items not funded for production 
        in fiscal year 2012 or prior fiscal years.
            (2) The increase in production rates above those sustained 
        with fiscal year 2012 funds.
            (3) The initiation, resumption, or continuation of any 
        project, activity, operation, or organization for which 
        appropriations, funds, or other authority were not available 
        during fiscal year 2012.
    (c) Clarification of Availability of Multiyear Procurement 
Authority for the Department of Defense.--Notwithstanding section 102 
of the Continuing Appropriations Resolution, 2013 (Public Law 112-175), 
subsection (l)(3) of section 2306b of title 10, United States Code, or 
any other provision of law, the Secretary of Defense and the 
Secretaries of the military departments may enter into contracts for 
multiyear procurements that are authorized by the National Defense 
Authorization Act for Fiscal Year 2013 (Public Law 112-239).
    (d) Availability of Certain Shipbuilding and Conversion Funds.--Of 
the amounts provided by section 101 of the Continuing Appropriations 
Resolution, 2013 (Public Law 112-175) for ``Shipbuilding and 
Conversion, Navy'', $372,573,000 shall be available to fund prior year 
shipbuilding cost increases. The funds so available shall be 
transferred to, and merged with, the following appropriations accounts 
in the amounts specified:
            (1) ``Shipbuilding and Conversion, Navy, 2009/2013'' for 
        the CVN Refueling Overhauls Program, $135,000,000.
            (2) ``Shipbuilding and Conversion, Navy, 2007/2013'' for 
        the LHA Replacement Program, $156,685,000.
            (3) ``Shipbuilding and Conversion, Navy, 2008/2013'' for 
        the LPD-17 Amphibious Transport Dock Program, $80,888,000.

Summary: Cancels the sequestration of budgetary resources for FY2013 ordered on March 1, 2013, pursuant to the Balanced Budget and Emergency Deficit Control Act of 1985 (Balanced Budget Act).  Requires the budget sequester for an account in the security and non-security categories under the Balanced Budget Act for FY2013 to be implemented within each account as determined by the head of the agency with spending authority over such account. Requires: (1) the agency head to notify the Appropriations Committees of a proposed exercise of authority for implementing a sequester, and (2) the Appropriations Committees to approve any agency proposal. Authorizes the Secretary of Defense (DOD) to: (1) take appropriate actions in the management of current DOD multiyear contracts to minimize the effects of a sequester in carrying out such contracts; and (2) begin new programs, projects, and activities and enter into new contracts for multiyear procurements that are authorized by the National Defense Authorization Act for FY2013. Allocates funding for prior year shipbuilding cost increases for the Navy.