The President submitted his fiscal year 2003 budget request to Congress on February 4, 2002.The House Subcommittee on Military Construction forwarded its markup to the full AppropriationsCommittee on June 12, which completed its mark on June 24. The bill ( H.R. 5011 , H.Rept. 107-533 ) was introduced to the House on June 25, considered on June 27, and passed 426-1(Roll No. 277). The Senate received the bill on June 28. The Senate Appropriations Committeemarked its version ( S. 2709 , S.Rept. 107-202 ) on June 27 and reported on July 3. TheSenate substituted the text of S. 2709 and passed the amended H.R. 5011 on July 18 (96-3), appointed conferees, and informed the House of its action. The House rejected theSenate amendment on September 10, 2002, and appointed conferees. Conferees met on October 8.The House accepted the conference report ( H.Rept. 107-731 ) 419-0 on October 10 (Roll No. 458).The Senate adopted the conference report by unanimous consent on October 11. The bill was sentto the President on October 18 and enacted on October 23 as P.L. 107-249 , one of the twoappropriations bills enacted during the second session of the 107th Congress. Defense authorization legislation ( H.R. 4546 ) cleared the House Committee on Armed Services and passed by recorded vote (359-58) on May 10. (1) It was received by the Senateon May 14. Equivalent authorization legislation ( S. 2514 ) was marked up by the SenateCommittee on the Armed Services on May 9 and reported with additional and minority views onMay 15 ( S.Rept. 107-151 ). S. 2514 was debated and amended in the Senate betweenJune 19 and June 27, when it passed with amendments 97-2 (Record Vote No. 165). Its text wasincorporated into H.R. 4546 and passed by unanimous consent. On July 25, the Houseamended the Senate amendment and appointed conferees. The Senate disagreed to the amendmentand appointed conferees. Conferees met on September 5 and reported the bill to the House onNovember 12 ( H.Rept. 107-772 ), where it was agreed to by voice vote. The Defense AuthorizationBill was enacted into law ( P.L. 107-314 ) by the President on December 2, 2002. Text relating to military construction was added by the Senate to H.J.Res. 2 (Omnibus Appropriation, introduced at the opening of the 108th Congress). Conferees began meetingon February 10, 2003 (see below). 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 some of the facilitysustainment, restoration and modernization of the active Army, Navy and Marine Corps, Air Force,and their reserve components; (2) additionaldefense-wide construction; U.S. contributions to theNATO Security Investment Program (formerly known as the NATO Infrastructure Program); (3) andmilitary family housing operations and construction. The bill also provides funding for the BaseRealignment and Closure (BRAC) account, which finances most base realignment and closure costs,including construction of new facilities for transferred personnel and functions and environmentalcleanup at closing sites. (4) 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. (5) No funds may be expended by any agency of the federal government before they are appropriated. (6) In addition, for nearly half a centuryCongress has forbidden the Department ofDefense to obligate funds for any project or program until specific authorization is granted. (7) Thisexplains why, for defense funds, both authorization and appropriations bills are required. Twoseparate defense appropriations bills are written annually, a "Military Construction AppropriationsAct" dedicated to military construction, and a "National Defense Appropriations Act" covering allother defense appropriations. (8) Normally only one"National Defense Authorization Act" is passedeach year to authorize both of these appropriations. (9) Therefore, major debates over defense policyand funding issues, including military construction, can be associated with any of these bills.Because issues in the defense authorization and appropriations bills intertwine, this report includessalient parts of the authorization bill in its discussion of the military construction appropriationprocess. The separate military construction appropriations bill dates to the late 1950s. Traditionally, military construction was funded through annual defense or supplemental appropriations bills. However, the Korean War prompted a surge of military construction, followed by a steady increasein military construction appropriations. Given the strong and enduring security threat posed by theSoviet Union, a relatively high level of spending on military infrastructure appeared likely tocontinue. The appropriations committees established military construction subcommittees andcreated a separate military construction bill. The first stand-alone military construction bill waswritten for FY1959 (P.L. 85-852). Military construction appropriations are not the sole source of funds available to defense agencies for facility investment. The defense appropriations bill funds so-called minor constructionand property maintenance within its operations and maintenance accounts. In addition, constructionand maintenance of Morale, Welfare, and Recreation-related facilities are partially funded throughproceeds of commissaries, recreation user fees, and other non-appropriated income. Several special accounts are included within the military construction appropriation. Among these are the Homeowners Assistance Fund (Defense), (10) and the Department of Defense FamilyHousing Improvement Fund, (11) both of whichperform functions ancillary to the direct building ofmilitary infrastructure. 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. Consideration of the military construction budget begins when the President's budget is delivered to Congress each year, usually in early February. This year, the President submitted hisbudget request on February 4, 2002. Elective Quality of Life Construction. In recent years, attention has been focused on funding improvements to military housing, workplaces, andinstallation infrastructure (such as roads, utility services, and the like). Subcommittee hearingsduring previous congressional sessions contained lengthy discussions of the leveraging ofappropriated funds through the privatization of utility services at military installations and of somemilitary family housing. (12) Subcommittees havealso addressed the allocation of sufficient budgetauthority to support improved housing and workplace quality at overseas bases. During the mid-1990s, the Department of Defense evaluated more than half of its existing family housing as being substandard. In 1996, then-Secretary of Defense William Cohen set FY2010as the target date for the elimination of all substandard military housing. Private development wasseen as a way to speed refurbishment or replacement while concurrently reducing the burden onappropriated funds, and Congress authorized DOD to use a set of "alternative" business practicesin its negotiations with private contractors, to include the creation of long-term public-private jointventures at locations where they might prove beneficial. Since 1996, when the first agreement was concluded at Naval Air Station Corpus Christi/Naval Air Station Kingsville, Texas, contracts for sixteen separate projects have been awarded under this"Military Housing Privatization Initiative." These range in size from 150 housing units in Phase IIof the venture at Naval Air Station Kingsville, Texas, to 5,912 units at Fort Hood, Texas. Projectscovering 24,518 housing units are now underway at installations operated by all four militaryservices. An additional 41,503 units in 26 projects are currently pending solicitation, and another 32projects with 54,193 units are being planned. (13) DOD is exploring ways to extend the privatizationprogram to include the improvement of some unaccompanied housing. (14) In 1996, DOD set a target of FY2010 for the elimination of all substandard military housing. With recent increases in budget authority appropriated by Congress, DOD has revised this target dateto bring it forward to FY2007. The FY2003 budget authority request of $4.25 billion for militaryfamily housing exceeds the FY2002 enactment by $151 million. DOD also created a Defense Reform Initiative (DRI) during the 1990s in order remove itself from ownership, management, and responsibility for the operation of the public utilities at as manymilitary bases as feasible. (15) Congress authorizedthe service secretaries to do this by conveying theseutilities to private ownership by a local utility company or other entity. (16) The award of privatizationcontracts is expected to be completed by September 30, 2003. (17) Integrated with quality of life construction is the consolidation of overseas military facilities.