Legislative Notice #30

July 21, 1997

Calendar No. 117

Reported from the Senate Appropriations Committee on July 17, 1997, by unanimous vote.

S. Rept. 105-52.

• It is likely the Senate will take up H.R. 2016, the FY 1998 Military Construction Appropriations Bill this week. The House passed H.R. 2016 on July 8, 1997, by a vote of 395-14.
• H.R. 2016 provides a total of $9.2 billion in new spending authority for military construction for FY 1998, $610 million less than was appropriated for FY 1997, reflecting a 6-percent reduction from last year. The bill exceeds the President's request by $799.6 million and is $100,000 under the House appropriation. The funding level meets the budget authority and outlay limits established in the 602(b) allocation. [See attached chart.]
• The bill provides the following funding levels for the following accounts: approximately $3.2 billion for military construction ($2.6 billion for active components and $568.7 million for reserve components); $3.8 billion for family housing; $659.9 million for barracks construction; $208.5 million for 20 medical facility projects; $103.6 million for 24 Class I (mandatory by law) violation environmental projects; $2.1 billion for base realignment and closure actions from the last three rounds of recommended base closings; and $152.6 million for the U.S. share of NATO construction costs.
• The Committee recommends funding only those most essential service priorities overseas, believing that there is a strong likelihood for additional force structure reductions in the next few years. The President's FY 1998 budget request proposes over $600 million for overseas military construction, almost 24 percent of the Administration's budget request.

• Overview: The military construction (MilCon) appropriations bill provides necessary funding for the planning, design, construction, alteration and improvement of military facilities worldwide, both for Active and Reserve Forces. It also finances construction, alteration, improvement, operation, and maintenance of military family housing, including payments against past housing mortgage indebtedness. The bill is also the source for the U.S. share of the NATO Security Investment Program. In addition, it provides funding to implement the base closures and realignments authorized by law.

-- All projects for which appropriations are recommended by the Committee are included in either the Senate- or House-passed versions of the Defense Authorization Act for FY 1998.

• Results Act: The Committee considers the full and effective implementation of the Government Performance and Results Act (GPRA), Public Law 103-62, to be a priority for all agencies of the Government. The GPRA is a law passed by Congress in 1993 that radically transforms the way agencies plan and budget their activities. Under the law, agencies are required to consult with Congress and then submit to Congress, by September 30, agency strategic plans. These strategic plans are intended to reflect a cultural change in how the agencies operate by focusing on results and outcomes rather than the processes or activities of an agency.

-- The Military Construction Appropriations Committee, after consultation with various agencies, has concluded that the DoD is pursuing accomplishment of the GPRA through the "Quadrennial Defense Review (QDR)", which was completed on May 15, 1997. The Secretary of Defense recently indicated that the QDR meets the strategic plan requirements of the act. The DoD has begun to incorporate the GPRA into the Department's planning, programming, and budgeting system (PPBS). It will conduct GPRA evaluations annually in the PPBS, which will take place in September and early October of this year.

-- The Committee expects the Department to monitor closely other agency plans and initiatives that could achieve significant improvements in military construction activities. In such areas as family housing operations, the base realignment and closure accounts, and overseas construction priorities, the Department can use the guidelines applied under the Results Act to achieve qualitative improvements.

• Revised Economic Assumptions: The Committee recommends reductions to specific appropriations for a total of $31 million due to the reestimation of inflation undertaken by the Office of Management and Budget in June. Because of existing shortfalls in the family housing accounts, the Committee directs that these savings be applied to these deficits.
• Use of Prior-Year Savings Denied: The budget request proposed the use of $40.2 million in prior-year savings to finance FY 1998 projects and programs. The Committee does not approve of this method of financing and reminds the Department that they should request rescissions of these funds by account and by Fiscal Year. The Committee rejects the proposed use of these funds for FY 1998 activities and projects and has determined that these funds are necessary to complete ongoing projects within the MilCon appropriations. Their proposed use for FY 1998 projects and programs could jeopardize the successful completion of projects appropriated in prior years.
• Barracks: The Committee recommends $659.9 million for barracks construction to provide single service members better and more modern barracks and dormitories. This level is $17.2 million more than the budget request.

• Environmental Compliance: The Committee fully funds the Administration request of $103.6 million for funding 24 Class I (mandated by law) violation environmental projects, and directs the DoD to devote the maximum amount of resources to actual cleanups and to limit resources expended on administration, support, studies, and investigations to the greatest extent possible.

Military Construction

• A total of approximately $3.2 billion is provided for military construction, of which $2.6 billion is for the active components, an aggregate reduction of $100.9 million from the amount enacted last year.
• Of the total military construction funding, $568.7 million is for the Guard and Reserve components, an increase of $395.9 million from the FY 1998 level and $240.9 million above the House allowance.

• The Committee appropriates $652 million for Army military construction activities, an increase of $56.8 million from the budget request and $69 million below the House allowance.

• For the Navy, Committee provides $605.7 million, $65.6 million over the budget request and $79.5 million below the House allowance.
• The bill directs the Navy to conduct an independent study of the decision to relocate F/A-18 aircraft from Cecil Field Naval Air Station, Florida. The study, to be provided to the Committee not later than November 15, 1997, is to provide a weighted comparison of the pros and cons of all scenarios in order to determine the optimal solution for relocation, and should include all issues related to readiness, environmental, noise, and other relevant matters.

• The bill provides $662.3 million for military construction activities of the Air Force, an increase of $166.5 to the budget request and equal to the House allowance.
• Recognizing the importance of maintaining a U.S. fighter presence in the southern region of NATO and concluding that Aviano Air Base, Italy, meets that requirement, $412 million of Air Force MilCon funds is appropriated for capital facility investment to convert Aviano from a forward-operating location to a main operating base with a permanent flying mission assigned.

• The Committee provides $690.9 million for the defense-wide account, an increase of $17.2 million from the budget request and $77.5 million above the House allowance.
• The Committee provides $76.5 million for chemical weapons demilitarization facility construction, a decrease of $44 million from the budget request and $19 million from the House allowance. The Committee finds that phase II of the ammunition demilitarization facility at Pine Bluff, Arkansas, will not be ready for award in FY 1998. The slippage is based on delays in receipt of required environmental permits. The Committee defers funding for this project at this time.
• The bill funds 20 medical facility projects for a total of $208.5 million. The budget request included $140.9 million for 15 projects and for unspecified minor construction to provide hospital and medical facilities, including treatment, training, and medical research and development facilities.

• The Committee recommends $152.6 million for the U.S. share of NATO construction costs, $23.7 million below the budget request and $13.7 million less than the amount recommended by the House. The Committee expects that approximately $23.7 million will be available from recoupments from prior-year U.S.-funded work, and from deobligation of NATO funds for previously obligated projects that were reduced in scope or canceled.
• In light of the decisions taken at the NATO summit in Madrid on July 9, 1997, the Committee directs the Secretary of Defense to provide a comprehensive report which provides in detail the additional funding requirements associated with the expansion of NATO, including logistical, communications, construction, and all other additional requirements anticipated for the NATO infrastructure account. The report is to be provided no later than October 15, 1997. The Committee further directs that $20 million of the amount provided for the NATO infrastructure account may not be obligated in any way, or expended, until 60 days after the receipt of the report.

Family Housing

• The bill provides $3.8 billion to improve existing family housing and build new family housing units within the Department of Defense. This is $152.3 million over the budget request, $125.4 million less than the House allowance, and a reduction of $301 million from the FY 1997 funding level.

• The bill provides approximately $2.1 billion for costs associated with base realignment and closure action from the last three rounds of BRAC, approximately 22 percent of the total funding contained in this bill. This includes full funding of the requirements for environmental cleanup at closing and realigning bases. The funding level represents a reduction of $312.6 million from the FY 1997 enacted level.
• The Committee again asks the General Accounting Office (GAO) to continue its annual review of the base closure accounts. In particular, the Committee seeks GAO's assistance in validating the requests for individual construction projects, the operation and maintenance costs, and the environmental cleanup costs associated with base closures and realignments. The Committee believes the annual GAO review will continue to give the Congress a better foundation for approving future requests.

According to the Congressional Budget Office, the projections of outlays associated with the recommendation are: FY 1998: $3.2 billion; 1999: $2.8 billion; 2000: $1.7 billion; 2001: $916 million; 2002 and future year: $504 million.

There were no known amendments at press time.

[See attached chart.]