The House Appropriations Committee marked up the Military Construction Appropriations billfor FY2002 ( H.R. 2904 ) on September 20, 2001, with House passage the next day ona 401-0 vote (vote no. 344). The Senate Appropriations Committee marked up its version of the bill( S. 1460 ) on September 25 and passed it the next day on a unanimous vote of 97-0 (voteno. 288). Although both bills appropriated $10.5 billion, falling within adjusted 302(b) budgetallocations, they differed in how the funding was allocated. Conferees met on October 16, 2001, andissued the conference report ( H.Rept. 107-246 ) on H.R. 2904 . The House approved thereport on October 17 with a vote of 409-1 (vote no. 394). The Senate approved the report on October18 with a vote of 96-1 (vote no. 305), clearing the measure for the President. The President signedthe bill on November 5, 2001, enacting it as P.L. 107-64 (115 Stat. 474). The Department of Defense (DOD) manages the world's largest dedicated infrastructure,covering more than 40,000 square miles of land and a physical plant worth more than $500 billion. The military construction appropriations bill provides a large part of the funding to enhance andmaintain this infrastructure. The bill funds construction projects and real property maintenance ofthe active Army, Navy and Marine Corps, Air Force, and their reserve components; additionaldefense-wide construction; U.S. contributions to the NATO Security Investment Program (formerlyknown as the NATO Infrastructure Program); and military family housing operations andconstruction. (1) The bill also provides funding for theBase Realignment and Closure (BRAC)account, which finances most base realignment and closure costs, including construction of newfacilities for transferred personnel and functions and environmental cleanup at closing sites. The military construction appropriations bill is one of several annual pieces of legislation that provide funding for national defense. Other major appropriation legislation includes the defenseappropriations bill, which provides funds for all non-construction military activities of theDepartment of Defense and constitutes more than 90% of national security-related spending, and theenergy and water development appropriations bill, which provides funding for atomic energy defenseactivities of the Department of Energy and for civil projects carried out by the U.S. Army Corps ofEngineers. Two other appropriations bills, VA-HUD-Independent Agencies andCommerce-Justice-State, also include small amounts for national defense. (2) The annual defense authorization bill authorizes all of the activities in the defense appropriation measures described above. Therefore, major debates over defense policy and funding issues,including military construction, can be also found in the authorization bill. Since issues in thedefense authorization and appropriations bills intertwine, this report includes salient parts of theauthorization bill in its discussion of the military construction appropriation process. The separate military construction appropriations bill dates to the late 1950s and early 1960s when Congress funded a large defense infrastructure build-up precipitated by the heightened securitythreat posed by the Soviet Union. Defense construction spending soared as facilities were hardenedagainst potential nuclear attack, missile silos were constructed, and other infrastructure was built.The appropriations committees established military construction subcommittees to deal with thisnew level of activity, and the separate military construction bill was created. The first stand-alonemilitary construction bill was written for FY1959 (P.L. 85-852). Previously, militaryconstruction funding was provided through annual defense appropriations or supplementalappropriations bills. Military construction appropriations are the major, but not the sole, source of funds for facility investments by the military services and defense agencies. The defense appropriations bill providessome funds for real property maintenance in operation and maintenance and minor constructionaccounts. In addition, funds for construction and maintenance of Morale, Welfare, andRecreation-related facilities are partially provided through proceeds of commissaries, recreation userfees, and other non-appropriated income. Most funds appropriated by Congress each year must be obligated in that fiscal year. Military construction appropriations, though, are an exception. Because of the long-term nature ofconstruction projects, these funds can generally be obligated for up to five fiscal years, reflecting thelong-term nature of capital building programs. Consideration of the military construction budget starts when the President's budget is delivered to Congress each year, usually in early February. This year is unusual, though, because the Presidentdid not submit his amended DOD FY2002 budget request until June 27, 2001. Table 1 shows the key legislative steps necessary for the enactment of the FY2002 militaryconstruction appropriations. It will be updated as the appropriation process moves forward. Table 1. Status of Military Construction Appropriations, FY2002 House Appropriations Action. The House passed the FY2002 Military Construction Appropriations Act( H.R. 2904 , H.Rept. 107-207 , CR H5868-5875) without amendment onSeptember 21, 2001, by a 401-0 vote. As passed by the House, the $10.500 billionbill increased the military construction budget by $1.035 billion, or 11%, above theFY2001 enactment. It decreased the current "facility replacement rate" of 192 yearsto 101 years and kept the Department of Defense on track to bring barracks andfamily housing up to acceptable habitability standards by 2008 and 2010,respectively. (3) This bill exceeded the president'srequest by $528.7 million, allocating$5.6 billion to military construction, $163 million to the NATO Security InvestmentProgram, $4.1 billion to family housing, and $552 million to Base Realignment andClosure (BRAC). It also required an upward adjustment of 302(b) budget allocationfrom $10.2 billion to $10.5 billion. Senate Appropriations Action. The Senate passed the FY2002 Military Construction Appropriations Act( S. 1460 , S.Rept. 107-68 , CR S9828-9833) with amendment in thenature of a substitute of the House bill on September 26, 2001, by a 97-0 vote. Aspassed by the Senate, the $10.500 billion bill exceeded the president's request by$528.7 million, allocating $5.5 billion to military construction, $163 million to theNATO Security Investment Program, $4.1 billion to family housing, and $682million to Base Realignment and Closure (BRAC). The bill was within the 302(b)allocation (see Table 4 for side-by-side comparisons by appropriation account of thebudget request, House and Senate bills). Conference Action. Senate conferees were appointed on September 26. House conferees were appointed onOctober 2. The conferees met on October 16 and issued the conference report( H.Rept. 107-246 ). Their report was forwarded to the House floor on October 17,where it was approved with a vote of 409-1. The report was sent to the Senate floor,where it was approved with a vote of 96-1, clearing the bill for the President. Elective Quality of LifeConstruction. Budget actions affect service member perceptions ofthe quality of military life through its impact on matters such as pay and benefits,health care, deployment schedules, and the like. In recent years, quality of life,including the use of military construction funds, has been a focus of the defensedebate. Recent committee attention has focused on improvements to housing, workplaces, and installation infrastructure (such as water, sewer, and electricitysystems), through both new construction and improved operations and maintenanceof existing facilities. Subcommittee hearings have discussed at length the applicationof military construction funds to housing and workplace improvements at basesoverseas and within the continental United States. Efforts to leverage appropriatedfunds through the partial privatization of military housing and installation utilityservices have also been subjected to protracted dialogue in committee hearings. Foran in-depth discussion of the privatization of housing see CRS Report RL31039(pdf) , Military Housing Privatization Initiative: Background and Issues , by [author name scrubbed]. Requested Congressional Additions to the Military Construction Budget. In recent years, some analysts have criticizedthe military construction appropriations process for being prone to the insertion ofunwanted and unnecessary undertakings. Others, though, have supported theaddition of construction projects not requested by the Department of Defense asbeing necessary for military viability. An historical comparison shows that thedivergence between DOD budget requests and congressional appropriationenactments originated relatively recently and has mainly affected the less than 20 %of military construction funding dedicated to the National Guard and Reserves (see Table 5 at the end of this report). Military construction funding since the mid 1980s can be broken into three distinct periods: prior to fiscal year 1989; fiscal years 1989 - 1994; and fiscal year1995 to the present. Before FY1989, the relationship between funding requested bythe Administration and budget authority enacted by Congress appeared stable.Congress typically appropriated approximately 80 % of DOD requests for militaryconstruction funds. Beginning with FY1989, Regular (i.e., active duty) componentfunding continued in the established pattern, but Reserve component requests (whichinclude the federal reserves and the Army and Air National Guard) took a sudden andsharp downturn (see Figures 1 and 2 ). Congress responded by adding morethan35% to that year's budget Reserve component submission. This gap between reserveconstruction requests and appropriations has remained and widened. Finally, withFY1995, the pattern of funding for the Regular forces inverted.