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SECTION 1. REPORT ON ACTIONS TO ACHIEVE INTERNATIONAL COOPERATION IN
DEVELOPMENT OF THEATER MISSILE DEFENSES.

Not later than June 1, 1994, the Secretary of Defense shall submit
to Congress a report on steps that can be taken by the United States to
achieve greater cooperation from allies of the United States and
international organizations for the payment of the costs involved in
the development and production of Theater Missile Defense systems.

SEC. 2. FUNDING THEATER MISSILE DEFENSE PROGRAMS.

(a) Requirement for Annual Authorization of New Obligational
Authority for TMD Programs.--The Congress shall establish by law for
each fiscal year (beginning with fiscal year 1995) the level of new
obligational authority (stated as a single dollar amount) for research,
development, test, and evaluation and for procurement for Theater
Missile Defense programs of the Department of Defense for that fiscal
year.
(b) Limitation on United States Contribution for TMD Programs.--(1)
Not more than 80 percent of the amount established pursuant to
subsection (a) for any fiscal year may be provided from amounts
appropriated to the Department of Defense from the general fund of the
Treasury, and no appropriation may be made to the Department of Defense
for any fiscal year which would cause the total amount appropriated for
that fiscal year for research, development, test, and evaluation and
for procurement for Theater Missile Defense programs of the Department
of Defense to exceed 80 percent of such amount.
(2) Any additional funds for research, development, test, and
evaluation and for procurement for Theater Missile Defense programs for
any fiscal year for which an amount has been established pursuant to
subsection (a) shall be derived from the Theater Missile Defense
Cooperation Account under section 2610 of title 10, United States Code,
as added by section 3.
(3) The President may waive the limitation in paragraph (1) and the
requirement in paragraph (2) to the extent that the President
determines appropriate in the national security interest of the United
States.
(c) Policy Regarding Incremental Increases in Foreign Contributions
for TMD Programs.--It is the intent of Congress that, except as
provided in subsection (d), the percentage of the cost of the
development and production of Theater Missile Defense systems that is
borne by the United States should decrease incrementally, and the
percentage that is borne by allied nations and international
organizations should increase incrementally, over the fiscal years
after fiscal year 1995 so that the percentage actually borne by the
United States in later fiscal years is significantly less than the
maximum of 80 percent provided for under subsection (b).
(d) Exemption.--The financial contribution requirements established
for allied nations in the administration of this section shall not
apply to any foreign nation that, as of the date of the enactment of
this Act, is paying at least 20 percent of the total cost of the
contracts in existence under a theater missile defense interceptor
system program being carried out on such date in cooperation between
that foreign nation and the United States.

SEC. 3. THEATER MISSILE DEFENSE COOPERATION ACCOUNT.

(a) Establishment.--(1) Chapter 155 of title 10, United States
Code, is amended by adding at the end the following new section:
''Sec. 2610. Theater Missile Defense: acceptance of contributions from
allies; Theater Missile Defense Cooperation Account
''(a) Acceptance Authority.--The Secretary of Defense may accept
from any allied foreign government or any international organization
any contribution of money made by such foreign government or
international organization for use by the Department of Defense for
Theater Missile Defense programs.
''(b) Establishment of Theater Missile Defense Cooperation
Account.--(1) There is established in the Treasury a special account to
be known as the 'Theater Missile Defense Cooperation Account'.
''(2) Contributions accepted by the Secretary of Defense under
subsection (a) shall be credited to the Account.
''(c) Use of the Account.--Funds in the Account are hereby made
available for obligation for research, development, test, and
evaluation, and for procurement, for Theater Missile Defense programs
of the Department of Defense, subject to annual limitations provided by
law in total obligations for such purpose.
''(d) Investment of Money.--(1) Upon request by the Secretary of
Defense, the Secretary of the Treasury may invest money in the Account
in securities of the United States or in securities guaranteed as to
principal and interest by the United States.
''(2) Any interest or other income that accrues from investment in
securities referred to in paragraph (1) shall be deposited to the
credit of the Account.
''(e) Notification of Conditions.--The Secretary of Defense shall
notify Congress of any condition imposed by the donor on the use of any
contribution accepted by the Secretary under the authority of this
section.
''(f) Reporting Requirement.--Not later than 30 days after the end
of each quarter of each fiscal year, the Secretary of Defense shall
submit to Congress a report on the contributions accepted by the
Secretary under this section during the preceding quarter.
''(g) Annual Audit by GAO.--The Comptroller General of the United
States shall conduct an annual audit of money accepted by the Secretary
of Defense under this section and shall submit a copy of the results of
each such audit to Congress.
''(h) Regulations.--The Secretary of Defense shall prescribe
regulations to carry out this section.''.
(2) The table of sections at the beginning of such chapter is
amended by adding at the end the following new item:

''2610. Theater Missile Defense: acceptance of contributions from
allies; Theater Missile Defense Cooperation
Account.''.
(b) Effective Date.--Section 2610 of title 10, United States Code,
as added by subsection (a), shall take effect on October 1, 1994.
Directs the Secretary of Defense, by June 1, 1994, to report to the Congress on steps that can be taken by the United States to achieve greater cooperation from U.S. allies and international organizations for the payment of the costs involved in the development and production of theater missile defense (TMD) systems.
Establishes the annual fiscal year obligational authority, beginning with FY 1995, for research, development, test, and evaluation and for procurement for TMD programs. Limits the annual U.S. contribution for TMD programs, with a waiver by the President for national security purposes.
States that the percentage of development and production costs of TMD systems borne by the United States should decrease incrementally for fiscal years after 1995.
Authorizes the Secretary to accept from such allies and organizations contributions for such costs. Establishes in the Treasury the Theater Missile Defense Cooperation Account. Requires: (1) the Secretary to report quarterly on any such contributions; and (2) the Comptroller General to conduct and report to the Congress on annual audits of money accepted.