STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
(Senate - June 29, 2001)

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[Pages S7195-S7257]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. HATCH (for himself, Mr. Feingold, Mr. Grassley, Mr. Leahy, 
        Mr. Warner, Mr. Breaux, Mr. Burns, Mr. Reid, Mr. Craig, Mr. 
        Torricelli, Mr. Bennett, Ms. Snowe, Mr. DeWine, Mr. Thomas, and 
        Mr. Hutchinson):
  S. 1140. A bill to amend chapter 1 of title 9, United States Code, to 
provide for greater fairness in the arbitration process relating to 
motor vehicle franchise contracts; to the Committee on the Judiciary.
  Mr. HATCH. Mr. President, I rise today to introduce S. 1140, ``The 
Motor Vehicle Franchise Contract Arbitration Fairness Act of 2001.'' I 
am pleased to be joined in cosponsorship of this legislation by 
Senators Feingold, Grassley, Leahy, Warner, Breaux, Burns, Reid, Craig, 
Torricelli, Bennett, Snowe, DeWine, Thomas, and Hutchinson. Our bill is 
intended to allow automobile dealers their day in court when they have 
disputes with the manufacturers.
  As automobile dealers throughout Utah have pointed out to me, the 
motor vehicle dealer contract often includes mandatory arbitration 
clauses, and they also point out their unequal bargaining power. This 
is usually the result of various factors, including the manufacturers' 
discretion to allocate vehicle inventory and control on the timing of 
delivery. Manufacturers can, thus, determine the dealer's financial 
future with the allocation of the best-selling models. Manufacturers 
can also exercise leverage over the flow of revenue to dealers, such as 
warranty payments. Manufacturers can limit dealers' rights to transfer 
ownership or control of the business, even to family members. And 
manufacturers have tried, arbitrarily, to take businesses away from 
dealers without cause.
  I recognize the efficiencies of mandatory arbitration clauses in 
general, but the specific circumstances in the manufacturer-dealer 
relationship justifies this widely-supported bipartisan proposal. It is 
worthy to note that Congress in 1956 enacted the Automobile Dealer Day 
in Court Act, which provided a small business dealer in limited 
circumstances the right to proceed in Federal court when faced with 
abuses by manufacturers. And State legislatures have enacted 
significant protections for auto dealers.
  S. 1140 amends Title 9 of the U.S. Code and make arbitration of 
disputes in motor vehicle franchise contracts optional. This would 
allow dealers to opt voluntarily for arbitration or use procedures and 
remedies available under State law, such as state-established 
administrative boards specifically established to resolve dealer/
manufacturer disputes.
  I must note that this legislation is extremely narrow and affects 
only the unique relationship between small business auto dealers and 
motor vehicle manufacturers, which is strictly governed by State law. 
This legislation is necessary to protect the States' interest in 
regulating the motor vehicle dealer/manufacturer relationship.
  All States, except for Alaska, have enacted laws specifically 
designed to regulate the economic relationship between motor vehicle 
dealers and manufacturers to prevent unfair manufacturer contract terms 
and practices. In most States, including my home State of Utah, 
effective State administrative forums already exist to handle dealer/
manufacturer disputes outside of the court system. Indeed, in the 
majority of States, a special State agency or forum is charged with 
administering and enforcing motor vehicle franchise law. These State 
forums provide an inexpensive, speedy, and non-judicial resolution of 
disputes.
  I urge my colleagues to support this worthwhile legislation.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1140

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

[[Page S7196]]

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Motor Vehicle Franchise 
     Contract Arbitration Fairness Act of 2001''.

     SEC. 2. ELECTION OF ARBITRATION.

       (a) Motor Vehicle Franchise Contracts.--Chapter 1 of title 
     9, United States Code, is amended by adding at the end the 
     following:

     ``Sec. 17. Motor vehicle franchise contracts

       ``(a) For purposes of this section, the term--
       ``(1) `motor vehicle' has the meaning given such term under 
     section 30102(6) of title 49; and
       ``(2) `motor vehicle franchise contract' means a contract 
     under which a motor vehicle manufacturer, importer, or 
     distributor sells motor vehicles to any other person for 
     resale to an ultimate purchaser and authorizes such other 
     person to repair and service the manufacturer's motor 
     vehicles.
       ``(b) Whenever a motor vehicle franchise contract provides 
     for the use of arbitration to resolve a controversy arising 
     out of or relating to the contract, arbitration may be used 
     to settle such controversy only if after such controversy 
     arises both parties consent in writing to use arbitration to 
     settle such controversy.
       ``(c) Whenever arbitration is elected to settle a dispute 
     under a motor vehicle franchise contract, the arbitrator 
     shall provide the parties to the contract with a written 
     explanation of the factual and legal basis for the award.''.
       (b) Technical and Conforming Amendment.--The table of 
     sections for chapter 1 of title 9, United States Code, is 
     amended by adding at the end the following:

``17. Motor vehicle franchise contracts.''.

     SEC. 3. EFFECTIVE DATE.

       The amendments made by section 2 shall apply to contracts 
     entered into, amended, altered, modified, renewed, or 
     extended after the date of the enactment of this Act.

  Mr. GRASSLEY. Mr. President, over the years, I have been in the 
forefront of promoting alternative dispute resolution, (ADR), 
mechanisms to encourage alternatives to litigation when disputes arise. 
Such legislation includes the permanent use of ADR by Federal agencies. 
Last Congress, we also passed legislation to authorize Federal court-
annexed arbitration. These statutes are based, in part, on the premise 
that arbitration should be voluntary rather than mandatory.
  While arbitration often serves an important function as an efficient 
alternative to court, some trade offs must be considered by both 
parties, such a limited judicial review and less formal procedures 
regarding discovery and rules of evidence. When mandatory binding 
arbitration is forced upon a party, for example when it is placed in a 
boiler-plate agreement, it deprives the weaker party the opportunity to 
elect any other forum. As a proponent of arbitration I believe it is 
critical to ensure that the selection of arbitration is voluntary and 
fair.
  Unequal bargaining power exists in contracts between automobile and 
truck dealers and their manufacturers. The manufacturer drafts the 
contract and presents it to dealers with no opportunist to negotiate. 
Increasingly, these manufacturers are including compulsory binding 
arbitration in their agreements, and dealers are finding themselves 
with no choice but to accept it. If they refuse to sign the contract 
they have no franchise. This clause then binds the dealer to 
arbitration as the exclusive procedure for resolving any dispute. The 
purpose of arbitration is to reduce costly, time-consuming litigation, 
not to force a party to an adhesion contract to waive access to 
judicial or administrative forums for the pursuit of rights under State 
law.
  I am extremely concerned with this industry practice that conditions 
the granting or keeping of motor vehicle franchises on the acceptance 
of mandatory and binding arbitration. While several States have enacted 
statutes to protect weaker parties in ``take it or leave it'' contracts 
and attempted to prevent hits type of inequitable practice, these State 
laws have been held to conflict with the federal Arbitration Act (FAA).
  In 1925, when the FAA was enacted to make arbitration agreements 
enforceable in Federal courts, it did not expressly provide for 
preemption of State law. Nor is there any legislative history to 
indicate Congress intended to occupy the entire field of arbitration. 
However, in 1984 the Supreme Court interpreted the FAA to preempt state 
law in Southland Corporation v. Keating. This, State laws that protect 
weaker parties from being forced to accept arbitration and to waive 
State rights, such as Iowa's law prohibiting manufacturers from 
requiring dealers to submit to mandatory binding arbitration, are 
preempted by the FAA.
  With mandatory binding arbitration agreements becoming increasingly 
common in motor vehicle franchise agreements, now is the time to 
eliminate the ambiguity in the FAA statute. The purpose of the 
legislation we are introducing is to ensure that in disputes between 
manufacturers and dealers, both parties must voluntarily elect binding 
arbitration. This approach would continue to recognize arbitration as a 
valuable alternative to court, but would provide an option to pursue 
other forums such as administrative bodies that have been established 
in a majority of States, including Iowa, to handle dealer/manufacturer 
disputes.
  This legislation will go a long way toward ensuring that parties will 
not be forced into binding arbitration and thereby lose important 
statutory rights. I am confident that given its many advantages 
arbitration will often be elected. But it is essential for public 
policy reasons and basic fairness that both parties to this type of 
contract have the freedom to make their own decisions based on the 
circumstances of the case.
  I urge my colleagues to join me in supporting this legislation to 
address this unfair franchise practice.
  Mr. FEINGOLD. Mr. President, I rise today to introduce, with my 
distinguished colleague from Utah, Senator Hatch, the Motor Vehicle 
Franchise Contract Arbitration Fairness Act of 2001. I want to 
recognize the efforts of the Senator from Iowa, Senator Grassley, in 
advancing this legislation in the last Congress, and note how pleased I 
am that the distinguished ranking member and former chairman of the 
Judiciary Committee has decided to take the lead on this bill this 
year. By the time the 106th Congress concluded, we had the support of 
56 Senators for this bill. So I believe we have an excellent 
opportunity to pass this bill this year, and I look forward to working 
with the Senator from Utah to make that happen.
  While alternative methods of dispute resolution such as arbitration 
can serve a useful purpose in resolving disputes between parties, I am 
extremely concerned about the increasing trend of stronger parties to a 
contract forcing weaker parties to waive their rights and agree to 
arbitrate any future disputes that may arise. In every Congress since 
1994, I have introduced the Civil Rights Procedures Protection Act, 
which amends certain civil rights statutes to prevent the involuntary 
imposition of arbitration to claims that arise from unlawful employment 
discrimination and sexual harassment.
  A few years ago, it came to my attention that the automobile and 
truck manufacturers, which often present dealers with ``take it or 
leave it'' contracts, are increasingly including mandatory and binding 
arbitration clauses as a condition of entering into or maintaining an 
auto or truck franchise. This practice forces dealers to submit their 
disputes with manufacturers to arbitration. As a result, dealers are 
required to waive access to judicial or administrative forums, 
substantive contract rights, and statutorily provided protection. In 
short, this practice clearly violates the dealers' fundamental due 
process rights and runs directly counter to basic principles of 
fairness.
  Franchise agreements for auto and truck dealerships are typically not 
negotiable between the manufacturer and the dealer. The dealer accepts 
the terms offered by the manufacturer, or it loses the dealership, 
plain and simple. Dealers, therefore, have been forced to rely on the 
States to pass laws designed to balance the manufacturers' far greater 
bargaining power and to safeguard the rights of dealers. The first 
State automobile statute was enacted in my home State of Wisconsin in 
1937 to protect citizens from injury caused when a manufacturer or 
distributor induced a Wisconsin citizen to invest considerable sums of 
money in dealership facilities, and then canceled the dealership 
without cause. Since then, all States except Alaska have enacted 
substantive law to balance the enormous bargaining power enjoyed by 
manufacturers over dealers and to safeguard small business dealers from 
unfair automobile and truck manufacturer practices.

[[Page S7197]]

  A little known fact is that under the Federal Arbitration Act, FAA, 
arbitrators are not required to apply the particular Federal or State 
law that would be applied by a court. That enables the stronger party, 
in this case the auto or truck manufacturer, to use arbitration to 
circumvent laws specifically enacted to regulate the dealer/
manufacturer relationship. Not only is the circumvention of these laws 
inequitable, it also eliminates the deterrent to prohibited acts that 
State law provides.
  The majority of States have created their own alternative dispute 
resolution mechanisms and forums with access to auto industry expertise 
that provide inexpensive, efficient, and non-judicial resolution of 
disputes. For example, in Wisconsin, mandatory mediation is required 
before the start of an administrative hearing or court action. 
Arbitration is also an option if both parties agree. These State 
dispute resolution forums, with years of experience and precedent, are 
greatly responsible for the small number of manufacture-dealer 
lawsuits. When mandatory binding arbitration is included in dealer 
agreements, these specific State laws and forums established to resolve 
auto dealer and manufacturer disputes are effectively rendered null and 
void with respect to dealer agreements.
  Besides losing the protection of Federal and State law and the 
ability to use State forums, there are numerous reasons why a dealer 
may not want to agree to binding arbitration. Arbitration lacks some of 
the important safeguards and due process offered by administrative 
procedures and the judicial system: 1. arbitration lacks the formal 
court supervised discovery process often necessary to learn facts and 
gain documents; 2. an arbitrator need not follow the rules of evidence; 
3. arbitrators generally have no obligation to provide factual or legal 
discussion of the decision in a written opinion; and 4. arbitration 
often does not allow for judicial review.
  The most troubling problem with this sort of mandatory binding 
arbitration is the absence of judicial review. Take for instance a 
dispute over a dealership termination. To that dealer, that small 
business person, this decision is of commercial life or death 
importance. Even under this scenario, the dealer would not have 
recourse to substantive judicial review of the arbitrators' ruling. Let 
me be very clear on this point; in most circumstances an arbitration 
award cannot be vacated, even if the arbitration panel disregarded 
state law that likely would have produced a different result.
  The use of mandatory binding arbitration is increasing in many 
industries, but nowhere is it growing more steadily than the auto/truck 
industry. Currently, at least 11 auto and truck manufacturers require 
some form of such arbitration in their dealer contracts.
  In recognition of this problem, many States have enacted laws to 
prohibit the inclusion of mandatory binding arbitration clauses in 
certain agreements. The Supreme Court, however, held in Southland Corp. 
v. Keating, 104 S. Ct. 852 (1984), that the FAA by implication preempts 
these State laws. This has the effect of nullifying many State 
arbitration laws that were designed to protect weaker parties in 
unequal bargaining positions from involuntarily signing away their 
rights.
  The legislative history of the FAA indicates that Congress never 
intended to have the Act used by a stronger party to force a weaker 
party into binding arbitration. Congress certainly did not intend the 
FAA to be used as a tool to coerce parties to relinquish important 
protections and rights that would have been afforded them by the 
judicial system. Unfortunately, this is precisely the current 
situation.
  Although contract law is generally the province of the States, the 
Supreme Court's decision in Southland Corp. has in effect made any 
State action on this issue moot. Therefore, along with Senator Hatch, I 
am introducing this bill today to ensure that dealers are not coerced 
into waiving their rights. Our bill, the Motor Vehicle Franchise 
Contract Arbitration Fairness Act of 2001, would simply provide that 
each party to an auto or truck franchise contract has the option of 
selecting arbitration, but cannot be forced to do so.
  The bill would not prohibit arbitration. On the contrary, the bill 
would encourage arbitration by making it a fair choice that both 
parties to a franchise contract may willingly and knowingly select. In 
short, this bill would ensure that the decision to arbitrate is truly 
voluntary and that the rights and remedies provided for by our judicial 
system are not waived under coercion.
  In effect, if small business owners today want to obtain or keep 
their auto or truck franchise, they may be able to do so only by 
relinquishing their legal rights and foregoing the opportunity to use 
the courts or administrative forums. I cannot say this more strongly, 
this is unacceptable; this is wrong. It is at great odds with our 
tradition of fair play and elementary notions of justice. I therefore 
urge my colleagues to join in this bipartisan effort to put an end to 
this invidious practice.
                                 ______
                                 
      By Mr. LIEBERMAN:
  S. 1142. A bill to amend the Internal Revenue Code of 1986 to repeal 
the minimum tax preference for exclusion for incentive stock options; 
to the Committee on Finance.
  Mr. LIEBERMAN. Mr. President, today I am reintroducing a proposal 
with regard to the perverse impact of the Alternative Minimum Tax, AMT, 
on Incentive Stock Options, ISOs. I previously introduced this proposal 
on April 30, 2001, as Section 5 of S. 798, the Productivity, 
Opportunity, and Prosperity Act of 2001. I am reintroducing this 
proposal as a separate bill to highlight the importance of this issue.
  Incentive stock options and the AMT did not exist when Franz Kafka's 
``The Castle'' was published in 1926. The book describes the relentless 
but futile efforts of the protagonist, K., to gain recognition from the 
mysterious authorities ruling from their castle a village where K. 
wants to establish himself. The world he inhabits is both absurd and 
real. Kafka's characters are trapped, and punished or threatened with 
punishment before they even have offended the authorities.
  The AMT/ISO interaction would be one that Kafka would appreciate. In 
the case of ISOs an employee who receives ISOs as an incentive can be 
taxed on the phantom paper gains the tax code deems to exist when he or 
she exercises an option, and be required to pay the AMT tax on these 
``gains'' even if the ``gains'' do not, in fact, exist when the tax is 
paid. This means the taxpayer may have no gains, no profits or assets, 
with which to pay the AMT and might even have to borrow funds to pay 
the tax or even go into default on his or her AMT liability.
  This Kafkaesque situation is unfair. It is not fair to impose tax on 
``income'' or ``gains'' unless the income or gains exist. With the AMT 
tax on ISOs, it is not relevant if the ``gains'' exist in a financial 
sense. That they exist on paper is sufficient to trigger the tax.
  This situation is also inconsistent with many well-established 
Federal Government policies. For example, our country favors stock 
options as an incentive for hard-working and productive employees of 
entrepreneurial companies. In most cases, entrepreneurs take enormous 
risks, receive less compensation than employees working for established 
companies, and have no company-sponsored pension plan. In addition, our 
country favors employee-ownership of firms. This ownership gives these 
employees a huge stake in the success of the company and motivates them 
to dedicate themselves to the firm's success. Finally, our country also 
favors long-term investments that generate growth. We know that growth 
is most likely to arise when entrepreneurs take risks over the long-
term and build fundamental value for their companies and shareholders 
and owners. The policy favoring long-term investments is reflected in 
the fact that capital gains incentives are available only if an 
investment is held for at least one year. An investment sold before the 
end of this ``holding period'' receives no capital gains benefit. The 
application of the AMT to ISOs is inconsistent with all three of these 
public policies.
  Let me explain the difference between ISOs and NSOs. Incentive stock 
options are sanctioned by the Internal Revenue code. Under current law 
the employee pays no tax when he or she exercises the option and buys 
the company's shares at the stock option price. The company receives no 
tax deduction

[[Page S7198]]

on the spread, the difference between the option price and the market 
price of the stock. If the employee holds the stock for two years after 
the grant of the option and one year after the exercise of the option, 
he or she pays the capital gains tax on the difference between the 
exercise and sale price on the sale of the stock. The tax payment is 
deferred until the stock is sold and the tax is paid on the real gains 
that are realized from the sale.
  NSOs are stock options that do not satisfy the tax code requirements 
for ISOs. They are ``non-qualifying stock options'' or NSOs. With NSOs 
the employee is taxed immediately when the option is exercised on the 
spread between the grant and exercised price. This forces an employee 
to sell stock as soon as he or she exercise their options so that they 
can pay the tax on the spread. This is a zero sum game for the 
employee, selling the stock he or she has just bought to pay a tax on 
the spread. Even worse, because the stock is not ``held'' for one year, 
this tax is paid at the ordinary income tax rates, not the preferential 
capital gains tax rates. The company receives a business expense 
deduction on the spread.
  If this were the whole story, it is clear that companies would tend 
to offer ISOs rather than NSOs to their employees. Employees would be 
encouraged to hold their shares for at least a year after the option is 
exercised, which helps to bind them to the company. They would then 
qualify for capital gains tax rates on the realized gains.
  The problem is that ISOs come with a major liability, the application 
of the Alternative Minimum Tax, AMT, to the spread at the time of 
exercise. This tax is due to be paid even if the stock is held for the 
required period and even if the stock is eventually sold at a fraction 
of its value at the time the option is exercised. This tax at the time 
of exercise is inconsistent with the rule that applies to all other 
capital gains transactions, where the tax is paid when the gains are 
``realized,'' when the investment is sold with gains or losses. This 
tax at the time of exercise defeats the purpose of ISOs, forces 
employees to sell their stock, to pay the AMT tax, before the end of 
the holding period, and pay ordinary income tax rates. The difference 
between ordinary income tax rates and capital gains tax rates can be 15 
percent or more.
  The AMT tax is imposed on the spread at the time the option is 
exercised and it is irrelevant if the stock price at the time when the 
AMT tax is paid or when the stock is sold is a fraction of this price. 
The ``gains'' at the time of exercise are what count, not real gains in 
a financial sense when the investment is finally sold.
  The application of the AMT at the time of exercise to ISOs is a major 
disincentive for companies to offer ISOs to their employees. The 
purpose of the ISO law when it was enacted by Congress back in 1981 was 
to encourage long-term holdings of the stock. This purpose is defeated 
by the AMT application at the time of exercise. Even if firms could 
educate their employees about the AMT liability, the fact that this tax 
is imposed at the time of exercise on phantom gains would remain a 
major disincentive for them to offer ISOs. The risks are too great that 
the employee will have no real gains with which to pay the tax, that 
employee will have to sell stock immediately at ordinary income tax 
rates to make sure that funds are available to pay the tax when it is 
due, or take the risk of holding the stock.

  My understanding is that the firms that are most likely to grant ISOs 
are those firms that have no ability to use the corporate deduction 
that is available for NSOs. These are small firms with no tax liability 
for which the deduction is simply a tax loss carryforward with no 
current year value. With these firms the ISO held out the possibility 
of the employees receiving capital gains tax treatment of their gains. 
It is particularly sad that it is these firms and these employees which 
are feeling the brunt of the AMT/ISO problem.
  The application of the AMT to ISOs is strange because long-term 
holdings of stock, as required by the ISO law, are classic capital 
gains transactions and we do not apply the AMT to the tax benefit 
conferred by the capital gains tax. Under the AMT only ``tax preference 
items'' enumerated in the AMT are included when the AMT calculation is 
made. The capital gains differential, the difference between the 
ordinary tax rate on income and the lower capital gains rate, is a tax 
benefit but that differential is not included in the AMT. Given all the 
problems we are now seeing with the AMT the capital gains differential 
should not be included as a preference item. But, by an accident of 
history, the AMT is still applied to ISOs. This makes no sense and it 
is an anomaly in the tax code. When the Congress restored the capital 
gains differential, and did not include it as an AMT tax preference 
item, we should have enacted a conforming amendment regarding the AMT 
and ISOs. We didn't, and we should do so now.
  With the AMT applied to ISOs, taxpayers are caught in a Catch-22 
situation. If they hold the stock for the required year, they can 
qualify for capital gains treatment on the eventual sale of the stock. 
But, in doing so they are taking a huge risk that the AMT tax bill will 
exceed the value of the stock when the AMT is paid. If the tax is too 
large, they may have to sell their stock before the capital gains 
holding period has run and pay ordinary income tax rates on any gains. 
This is a form of lottery that serves no public policy.
  The AMT was created to ensure the rich cannot use tax shelters to 
avoid paying their ``fair share.'' Taxpayers are supposed to calculate 
both their regular tax and the AMT bill, then pay whichever is higher. 
The AMT is likely to snare 1.5 million taxpayers this year and nearly 
36 million by 2010. But the case with ISOs is one where the taxpayers 
may never see the ``gains,'' and noneless owe a tax on them. Whatever 
the merits might be for the AMT for taxpayers with real gains, they 
have no bearing on taxpayers who may never see the gains. It is simply 
unfair to impose a tax on gains that exist only on paper. If the 
employee does realize gains, they should and will pay tax on them, but 
only if and when the gains are realized.
  Of course, with the recent huge drop in values for some stocks, many 
entrepreneurs are now being hit with immense AMT tax bills on the paper 
gains on stocks that are now worth a fraction of the price at the time 
of exercise. At a townhall meeting held in California by Representative 
Lofgren and Representative Bob Matsui, Kathy Swartz, a Mountain View 
woman, six months pregnant and soon to sell her ``dream house'' because 
she and her husband Karl owe $2.4 million in AMT, asked, ``How many 
victims do you need before you say it's horrible?'' We are talking 
about taxpayers who in fact owe five- to seven-figure tax bills on 
gains they never realized.
  My bill would change those tax rules so that the AMT no longer 
applies to ISOs and no tax is owed at the time when the entrepreneur 
exercises the option. This change would eliminate the unfair taxation 
of paper gains on ISOs. This would encourage long-term holdings of 
stock, not immediate sale of the stock as a hedge against AMT tax 
liability. It would do nothing to exempt entrepreneurs from paying tax 
on their real gains when they eventually sell the stock.
  My bill would solve this problem going forward. It would not, as 
drafted, provide relief to the taxpayers who already have been hit with 
AMT taxes on phantom gains. There is a bipartisan group in the House 
and Senate focusing on this group of taxpayers. This group has a strong 
claim for relief based on the inherent unfairness of the AMT as applied 
to ISOs. The unfairness of this law leads me to call for reform going 
forward should be remedied for current, as well as future taxpayers.
  Let me be clear about the cost and budget implications of my bill. 
The Joint Tax Committee on Taxation has found that my proposal would 
reduce government tax revenues by $12.412 billion over ten years. I am 
puzzled by this estimate, but there is no way for me to appeal it. The 
JTC does not provide explanations for its estimates, but I would assume 
that this estimate is based on the likelihood that there would be fewer 
tax payments at the time options are exercised as firms move from NSOs 
to ISOs, those employees with ISOs would not be paying the AMT, and 
there will be more employees who hold the stock and pay capital gains 
tax rates. Offsetting this,

[[Page S7199]]

there will be fewer companies taking the deduction for NSOs. The 
revenue loss year-by-year is as follows: --$1.821 billion (2002), --
$1.126 (2003), --$858 (2004), --$825 (2005), --$941 (2006), --$1.106 
(2007), --$1.341 (2009), --$1.620 (2010), and $1.910 (2011). The loss 
during the 2002-2006 period is --$5.494 billion. I will not propose to 
enact my bill unless this sum is financed and will have no impact on 
the Federal budget.
  I am pleased that Rep. Zoe Lofgren (D-CA) has introduced legislation 
on AMT/ISO in the other body (H.R. 1487). Her bill has attracted a 
bipartisan group of cosponsors. I look forward to working with her and 
other Members to remedy this inequity in the tax code and to do so with 
regard to current as well as future taxpayers.
  Let me note that I have proposed in S. 798 to provide a special 
capital gains tax rate, in fact to set a zero tax rate, for stock 
purchased by employees in stock option plans, by investors in Initial 
Public Offerings, and similar purchases of company treasury stock. This 
zero rate would be effective, however, only if the shares are held for 
at least three years, so the AMT gamble would be even more dramatic. 
During the first year of that holding period, the AMT would have to be 
paid and during the remaining period the value of the stock could well 
dive from the exercise price creating an even more invidious trap.
  Kafka ``The Castle'' should remain as magnificent fiction. We have no 
place for taxes on phantom income and paper gains. Our taxpayers should 
be able to communicate effectively with the castle, not be caught in a 
bureaucratic nightmare that makes no sense and serves no policy.
                                 ______
                                 
      By Mr. CAMPBELL:
  S. 1143. A bill to require the Secretary of the Treasury to mint 
coins in commemoration of former President Ronald Reagan; to the 
Committee on Banking, Housing, and Urban Affairs.
  Mr. CAMPBELL. Mr. President, today I introduce the ``Ronald Reagan 
Commemorative Coin Act of 2001.''
  The bill I am introducing today would accomplish two worthy goals. 
First, it would help honor Ronald Reagan, the 40th President of the 
United States. Second, it would also help raise much needed resources 
to help families across the United States provide care for their loved 
ones who have been stricken by Alzheimer's disease.
  I believe that a commemorative coin program would honor Ronald 
Reagan's life and contributions to our Nation, while also raising funds 
to help American families in their day to day struggle against this 
terrible disease.
  This legislation's worthiness and timeliness were underscored just 
last night when ABC televised a powerful program in which Diane Sawyer 
interviewed Nancy Reagan. Watching Mrs. Reagan as she so openly and 
eloquently shared touching insights about their ongoing struggle with 
Alzheimer's disease was moving. There is no doubt about the truly deep 
bonds that unite Ronald and Nancy Reagan and that we need to do what we 
can to fight the disease that has slowly taken its terrible toll on the 
Reagans and so many other American families.
  Ronald Reagan has worn many hats in his life, including endeavors as 
a sports announcer, actor, governor and President of the United States. 
He was first elected president in 1980 and served two terms, becoming 
the first president to serve two full terms since Dwight Eisenhower.
  Ronald Reagan's boundless optimism and deep-seated belief in the 
people of the United States and the American Dream helped restore our 
Nation's pride in itself and brought about a new ``Morning in 
America.'' His challenge to Gorbachev to ``tear down this wall,'' his 
successful revival of our economic power, his determination to rebuild 
our armed forces in order to contain the spread of communism, and his 
international summitry skills as seen at Reykjavik, Iceland, combined 
to help bring an end to the Cold War. Ronald Reagan left our Nation in 
much better shape than it was when he took office.
  As Alzheimer's sets in, brain cells gradually deteriorate and die. 
People afflicted by the disease gradually lose their cognitive ability. 
Patients eventually become completely helpless and dependent on those 
around them for even the most basic daily needs. Each of the millions 
of Americans who is now affected will eventually, barring new 
discoveries in treatment, lose their ability to remember recent and 
past events, family and friends, even simple things like how to take a 
bath or turn on lights. Ronald Reagan, one of the most courageous and 
optimistic Presidents in American history, is no exception.
  Shortly after being shot in an assassination attempt, Ronald Reagan's 
courage and good humor in the face of a life threatening situation were 
evident when he famously apologized to his wife Nancy saying ``Sorry 
honey. I forgot to duck.'' Unfortunately, once Alzheimer's disease 
takes hold, it delivers a slow mind destroying bullet that none of us 
can duck to avoid. As Ronald Reagan wrote shortly after learning of his 
diagnosis ``I only wish there was some way I could spare Nancy from 
this painful experience.'' From the moment of diagnosis, it's ``a truly 
long, long, goodbye,'' Nancy Reagan said.
  Fortunately for all of us, when Ronald Reagan courageously announced 
in such an honest and public manner that he had Alzheimer's, rather 
than covering it up, he did a great deal to help alleviate the negative 
stigma that has long faced those suffering from this terrible disease. 
Much of the shame and pity traditionally associated with Alzheimer's 
was transformed almost overnight into sympathy and understanding as 
public awareness suddenly shot up and those suffering from Alzheimer's, 
and their families, knew that they were not alone.

  While Ronald Reagan's health didn't deteriorate right away, according 
to Mrs. Reagan, he had his good days and bad days, ``just like 
everybody else.'' In recent years, however, Reagan's condition has 
completely deteriorated. ``It's frightening and it's cruel,'' Nancy 
said, speaking of the disease and what it has done to her husband and 
family. ``It's sad to see somebody you love and have been married to 
for so long, with Alzheimer's, and you can't share memories,'' Mrs. 
Reagan said.
  In the introduction to a recently released book based on the touching 
love letters exchanged between herself and Reagan, Nancy elaborated on 
her sense of loss when she wrote, ``You know that it's a progressive 
disease and that there's no place to go but down, no light at the end 
of the tunnel. You get tired and frustrated, because you have no 
control and you feel helpless.'' She also said, ``There are so many 
memories that I can no longer share, which makes it very difficult.''
  Nancy Reagan has earned our Nation's admiration for her steadfast and 
loving dedication to her husband as she has watched her beloved husband 
slowly fade away. Likewise, families all across our Nation, day in and 
day out, choose to personally provide care for their loved ones 
suffering from Alzheimer's, rather than putting them in institutions. 
They deserve our respect and support.
  Fortunately, Nancy Reagan has had access to vital resources that help 
her care for her husband. This is how it should be. Unfortunately, 
there are many American families out there who do not have access to 
these resources. This bill will help alleviate that by raising money to 
help American families who are struggling while providing care for 
their loved ones.
  Fortunately, funding for Alzheimer's research has increased 
significantly over the past several years. Ronald Reagan's courage in 
coming forward and publically announcing his condition played an 
important role in raising public awareness of Alzheimer's and paved the 
way for the recent increases in research funding. This bill would 
complement these efforts.
  Once again, the legislation I am introducing today authorizes the 
U.S. Mint to produce commemorative coins honoring Ronald Reagan while 
raising funds to help families care for their family members suffering 
from Alzheimer's disease. I urge my colleagues to support passage of 
this legislation.
  Ronald Reagan's eternal optimism and deep seated belief in an even 
better future for our Nation was underscored when he said, ``I know 
that for America, there will always be a bright future ahead.'' This 
bill, in keeping with this quote's spirit, will help provide for a 
better future for many American families.

[[Page S7200]]

  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1143

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Ronald Reagan Commemorative 
     Coin Act of 2001''.

     SEC. 2. COIN SPECIFICATIONS.

       (a) Denominations.--The Secretary of the Treasury 
     (hereafter in this Act referred to as the ``Secretary'') 
     shall mint and issue the following coins:
       (1) $5 gold coins.--Not more than 100,000 $5 coins, which 
     shall--
       (A) weigh 8.359 grams;
       (B) have a diameter of 0.850 inches; and
       (C) contain 90 percent gold and 10 percent alloy.
       (2) $1 silver coins.--Not more than 500,000 $1 coins, which 
     shall--
       (A) weigh 26.73 grams;
       (B) have a diameter of 1.500 inches; and
       (C) contain 90 percent silver and 10 percent copper.
       (b) Bimetallic Coins.--The Secretary may mint and issue not 
     more than 200,000 $10 bimetallic coins of gold and platinum 
     instead of the gold coins required under subsection (a)(1), 
     in accordance with such specifications as the Secretary 
     determines to be appropriate.
       (c) Legal Tender.--The coins minted under this Act shall be 
     legal tender, as provided in section 5103 of title 31, United 
     States Code.

     SEC. 3. SOURCES OF BULLION.

       (a) Platinum and Gold.--The Secretary shall obtain platinum 
     and gold for minting coins under this Act from available 
     sources.
       (b) Silver.--The Secretary may obtain silver for minting 
     coins under this Act from stockpiles established under the 
     Strategic and Critical Materials Stock Piling Act and from 
     other available sources.

     SEC. 4. DESIGN OF COINS.

       (a) Design Requirements.--
       (1) In general.--The design of the coins minted under this 
     Act shall--
       (A) be emblematic of the presidency and life of former 
     President Ronald Reagan;
       (B) bear the likeness of former President Ronald Reagan on 
     the obverse side; and
       (C) bear a design on the reverse side that is similar to 
     the depiction of an American eagle carrying an olive branch, 
     flying above a nest containing another eagle and hatchlings, 
     as depicted on the 2001 American Eagle Gold Proof coins.
       (2) Designation and inscriptions.--On each coin minted 
     under this Act, there shall be--
       (A) a designation of the value of the coin;
       (B) an inscription of the year ``2005''; and
       (C) inscriptions of the words ``Liberty'', ``In God We 
     Trust'', ``United States of America'', and ``E Pluribus 
     Unum''.
       (b) Design Selection.--The design for the coins minted 
     under this Act shall be--
       (1) selected by the Secretary, after consultation with the 
     Commission of Fine Arts; and
       (2) reviewed by the Citizens Commemorative Coin Advisory 
     Committee.

     SEC. 5. ISSUANCE OF COINS.

       (a) Quality of Coins.--Coins minted under this Act shall be 
     issued in uncirculated and proof qualities.
       (b) Mint Facility.--Only one facility of the United States 
     Mint may be used to strike any particular combination of 
     denomination and quality of the coins minted under this Act.
       (c) Period for Issuance.--The Secretary may issue coins 
     minted under this Act only during the period beginning on 
     January 1, 2005 and ending on December 31, 2005.

     SEC. 6. SALE OF COINS.

       (a) Sale Price.--The coins issued under this Act shall be 
     sold by the Secretary at a price equal to the sum of--
       (1) the face value of the coins;
       (2) the surcharge provided in subsection (d) with respect 
     to such coins; and
       (3) the cost of designing and issuing the coins (including 
     labor, materials, dies, use of machinery, overhead expenses, 
     marketing, and shipping).
       (b) Bulk Sales.--The Secretary shall make bulk sales of the 
     coins issued under this Act at a reasonable discount.
       (c) Prepaid Orders.--
       (1) In general.--The Secretary shall accept prepaid orders 
     for the coins minted under this Act before the issuance of 
     such coins.
       (2) Discount.--Sale prices with respect to prepaid orders 
     under paragraph (1) shall be at a reasonable discount.
       (d) Surcharges.--All sales of coins issued under this Act 
     shall include a surcharge established by the Secretary, in an 
     amount equal to not more than--
       (1) $50 per coin for the $10 coin or $35 per coin for the 
     $5 coin; and
       (2) $10 per coin for the $1 coin.

     SEC. 7. DISTRIBUTION OF SURCHARGES.

       (a) In General.--Subject to section 5134(f) of title 31, 
     United States Code, the proceeds from the surcharges received 
     by the Secretary from the sale of coins issued under this Act 
     shall be paid promptly by the Secretary to the Department of 
     Health and Human Services to be used by the Secretary of 
     Health and Human Services for the purposes of--
       (1) providing grants to charitable organizations that 
     assist families in their efforts to provide care at home to a 
     family member with Alzheimer's disease; and
       (2) increasing awareness and educational outreach regarding 
     Alzheimer's disease.
       (b) Audits.--Any organization or entity that receives funds 
     from the Secretary of Health and Human Services under 
     subsection (a) shall be subject to the audit requirements of 
     section 5134(f)(2) of title 31, United States Code, with 
     regard to such funds.

     SEC. 8. FINANCIAL ASSURANCES.

       (a) No Net Cost to the Government.--The Secretary shall 
     take such actions as may be necessary to ensure that minting 
     and issuing coins under this Act will not result in any net 
     cost to the United States Government.
       (b) Payment for Coins.--A coin shall not be issued under 
     this Act unless the Secretary has received--
       (1) full payment for the coin;
       (2) security satisfactory to the Secretary to indemnify the 
     United States for full payment; or
       (3) a guarantee of full payment satisfactory to the 
     Secretary from a depository institution, the deposits of 
     which are insured by the Federal Deposit Insurance 
     Corporation or the National Credit Union Administration 
     Board.
                                 ______
                                 

By Mr. LIEBERMAN (for himself, Ms. Collins, Mr. Levin, Mr. Durbin, and 
                              Mr. Akaka):

  S. 1144. A bill to amend title III of the Stewart B. McKinney 
Homeless Assistance Act (42 U.S.C. 11331 ed seq.) to reauthorize the 
Federal Emergency Management Food and Shelter Program, and for other 
purposes; to the Committee on Governmental Affairs.
  Mr. LIEBERMAN. Mr. President, I rise to introduce a bill that will 
re-authorize a small but highly effective program, the Emergency Food 
and Shelter Program, or EFS for short. The EFS program, which is 
administered by the Federal Emergency Management Agency, supplements 
community efforts to meet the needs of the homeless and hungry in all 
fifty States. I am very pleased that my colleagues on the Committee on 
Governmental Affairs, Senators Collins, Levin, Durbin, and Akaka, are 
joining me as original co-sponsors of this legislation. Our committee 
has jurisdiction over the EFS program, and it is my hope that together 
we can generate even more bipartisan support for a program that makes a 
real difference with its tiny budget. The EFS program is a great help 
not only to the Nation's homeless population but also to working people 
who are trying to feed and shelter their families at entry-level wages. 
Services supplemented by the EFS funding, such as food banks and 
emergency rent/utility assistance programs, are especially helpful to 
families with big responsibilities but small paychecks.
  One of the things that distinguishes the EFS program is the extent to 
which it relies on non-profit organizations. Local boards in counties, 
parishes, and municipalities across the country advertise the 
availability of funds, decide on non-profit and local government 
agencies to be funded, and monitor the recipient agencies. The local 
boards, like the program's National Board, are made up of charitable 
organizations including the National Council of Churches, the United 
Jewish Communities, Catholic Charities, USA, the Salvation Army, and 
the American Red Cross. By relying on community participation, the 
program keeps administrative overhead to an unusually low amount, less 
than 3 percent.
  The EFS program has operated without authorization since 1994 but has 
been sustained by annual appropriations. The proposed bill will re-
authorize the program for the next three years. It will also authorize 
modest funding increases over the amounts appropriated in recent years. 
A similar bill introduced by Senator Thompson and me in the last 
Congress, S. 1516, passed the Senate by Unanimous Consent.
  In summary, FEMA's Emergency Food and Shelter Program is a highly 
efficient example of the government relying on the country's non-profit 
organizations to help people in innovative ways. The EFS program aids 
the homeless and the hungry in a majority of the Nation's counties and 
in all fifty States, and I ask my colleagues to support this program 
and our re-authorizing legislation.
  I ask unanimous consent that the text of the bill be printed in the 
Record.

[[Page S7201]]

  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1144

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. AUTHORIZATION OF APPROPRIATIONS.

       Section 322 of the Stewart B. McKinney Homeless Assistance 
     Act (42 U.S.C. 11352) is amended to read as follows:

     ``SEC. 322. AUTHORIZATION OF APPROPRIATIONS.

       ``There are authorized to be appropriated to carry out this 
     title $150,000,000 for fiscal year 2002, $160,000,000 for 
     fiscal year 2003, and $170,000,000 for fiscal year 2004.''.

     SEC. 2. NAME CHANGE TO NOMINATING ORGANIZATION.

       Section 301(b) of the Stewart B. McKinney Homeless 
     Assistance Act (42 U.S.C. 11331(b)) is amended by striking 
     paragraph (5) and inserting the following:
       ``(5) United Jewish Communities.''.

     SEC. 3. PARTICIPATION OF HOMELESS INDIVIDUALS ON LOCAL 
                   BOARDS.

       Section 316(a) of the Stewart B. McKinney Homeless 
     Assistance Act (42 U.S.C. 11346(a)) is amended by striking 
     paragraph (6) and inserting the following:
       ``(6) guidelines requiring each local board to include in 
     their membership not less than 1 homeless individual, former 
     homeless individual, homeless advocate, or recipient of food 
     or shelter services, except that such guidelines may waive 
     such requirement for any board unable to meet such 
     requirement if the board otherwise consults with homeless 
     individuals, former homeless individuals, homeless advocates, 
     or recipients of food or shelter services.''.
                                 ______
                                 
      By Mrs. BOXER:
  S. 1145. A bill to amend the Internal Revenue Code of 1986 to extend 
the work opportunity credit to encourage the hiring of certain 
veterans, and for other purposes; to the Committee on Finance.
  Mrs. BOXER. Mr. President, I am introducing legislation to help the 
estimated 1.5 million veterans who are now living in poverty by giving 
a tax credit to those employers who hire them and put them on the road 
to financial independence. This idea was proposed and is supported by 
the National Coalition for Homeless Veterans and the Non-Commissioned 
Officers Association.
  This legislation is based upon the current tax credit offered for 
employers who hire those coming off welfare. Veterans groups tell me 
that the current tax credit is underutilized by veterans because many 
are not receiving food stamps or are not on welfare. Because the bill I 
am introducing today bases eligibility on the poverty level, more 
veterans will be able to benefit from this credit.
  My bill would allow employers to receive a hiring tax credit of 50 
percent of the veteran's first year wages and a retention credit of 25 
percent of the veteran's second year wages. Only the first $20,000 of 
wages per year will count toward the credit.
  I offered this legislation as an amendment to the tax bill. While my 
amendment failed on a procedural vote, 49-50, opponents indicated that 
enacting this legislation would be a good thing to do. This being the 
case, I am hopeful that the Senate will take up and pass the bill I am 
introducing today in a bipartisan manner. It is the least we can do for 
our veterans who so bravely served our Nation and deserve our help.
  I ask unanimous consent that the text of this bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1145

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Veterans Opportunity to Work 
     Act.''

     SEC. 2. EXPANSION OF WORK OPPORTUNITY TAX CREDIT.

       (a) In General.--Section 51(d)(1) of the Internal Revenue 
     Code of 1986 (relating to members of targeted groups) is 
     amended by striking ``or'' at the end of subparagraph (G), by 
     striking the period at the end of subparagraph (H) and 
     inserting ``, or'', and by adding at the end the following:
       ``(I) a qualified low-income veteran.''
       (b) Qualified Low-Income Veteran.--Section 51(d) of the 
     Internal Revenue Code of 1986 (relating to members of 
     targeted groups) is amended by redesignating paragraphs (10) 
     through (12) as paragraphs (11) through (13), respectively, 
     and by inserting after paragraph (9) the following:
       ``(10) Qualified low-income veteran.--
       ``(A) In general.--The term `qualified low-income veteran' 
     means any veteran whose gross income for the taxable year 
     preceding the taxable year including the hiring date, was 
     below the poverty line (as defined by the Office of 
     Management and Budget) for such preceding taxable year.
       ``(B) Veteran.--The term `veteran' has the meaning given 
     such term by paragraph (3)(B).
       ``(C) Special rules for determining amount of credit.--For 
     purposes of applying this subpart to wages paid or incurred 
     to any qualified low-income veteran--
       ``(i) subsection (a) shall be applied by substituting `50 
     percent of the qualified first-year wages and 25 percent of 
     the qualified second-year wages' for `40 percent of the 
     qualified first year wages', and
       ``(ii) in lieu of paragraphs (2) and (3) of subsection (b), 
     the following definitions and special rule shall apply:

       ``(I) Qualified first-year wages.--The term `qualified 
     first-year wages' means, with respect to any individual, 
     qualified wages attributable to service rendered during the 
     1-year period beginning with the day the individual begins 
     work for the employer.
       ``(II) Qualified second-year wages.--The term `qualified 
     second-year wages' means, with respect to any individual, 
     qualified wages attributable to service rendered during the 
     1-year period beginning on the day after the last day of the 
     1-year period with respect to such individual determined 
     under subclause (I).
       ``(III) Only first $20,000 of wages per year taken into 
     account.--The amount of the qualified first and second year 
     wages which may be taken into account with respect to any 
     individual shall not exceed $20,000 per year.''.

       (c) Permanence of Credit.--Section 51(c)(4) of the Internal 
     Revenue Code of 1986 (relating to termination) is amended by 
     inserting ``(except for wages paid to a qualified low-income 
     veteran)'' after ``individual''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to individuals who begin work for the employer 
     after the date of the enactment of this Act.
                                 ______
                                 
      By Mr. ALLARD:
  S. 1146. A bill to amend the Act of March 3, 1875, to permit the 
State of Colorado to use land held in trust by the State as open space; 
to the Committee on Energy and Natural Resources.
  Mr. ALLARD. Mr. President, today I am introducing legislation to 
fulfill the wishes of my fellow Coloradans to allow the State to 
protect 300,000 acres of State land as open space.
  The origins of this issue date back to 1875 when Congress passed the 
legislation which authorized the Territory of Colorado to form a 
constitution, State government and be admitted into the Union. The 1875 
Enabling Act established that Sections 16 and 36 of each township in 
the new State would be ``granted to said State for the support of 
common schools.'' The Federal directive to the State was clear: provide 
a sound financial basis for the long-term benefit of public schools. 
The Colorado State Constitution further strengthened this position and 
required that the new State Board of Land Commissioners manage its land 
holdings ``in such a matter as will secure the maximum possible 
amount'' for the public school fund.
  Today, there are some three million surface acres of State trust 
lands which are leased for ranching, farming, oil and gas production 
and other uses. Some of these lands are the most beautiful parcels in 
the state and offer a tremendous natural resource.
  Through the years, the lands have been a reliable, but a dwindling 
source of funds to the overall education budget. Currently, the State 
of Colorado spends approximately $3.5 billion annually on public 
schools, of this amount revenues from State trust lands account for 
about $22 million.
  Now, however, Coloradans priorities have changed, including a strong 
desire to protect open space and the environment. These changes became 
evident in a 1996 voter approved State Constitutional Amendment which 
gave more flexibility in the management of the trust lands. Among other 
things, the Amendment established a 300,000 acre Stewardship Trust. The 
voters recognized that certain State trust lands may be more valuable 
in the future if they are kept in the trust land portfolio rather than 
disposed of for a short term financial gains. The lands in the new 
Stewardship Trust will be managed ``to maximize options for continued 
stewardship, public use or future disposition'' by protecting and 
enhancing the ``beauty, natural values, open space and wildlife 
habitat'' on these parcels. Further, it struck the provision requiring 
``maximizing revenue'' and replaced it with a requirement that the land 
board to manage its land holdings ``in order to produce reasonable and 
consistent income over time.''

[[Page S7202]]

  While the Amendment has withstood court challenges, it still remains 
that the Stewardship Trust could, in the future, cause a breach of the 
Enabling Act. In order to correct this potential breach, I am 
introducing this legislation with the full support of the State of 
Colorado to ensure that the wishes of the voters are upheld and the 
Stewardship Trust is fully implemented. There are two key points of the 
legislation. First, the bill allows 300,000 acres of state trust lands 
to be used for open space, wildlife habitat, scenic value or other 
natural value. Second, it exempts these lands from the requirement that 
they generate income for the common schools.
  The Colorado State Land Board has a clear mission for implementing 
the Stewardship Trust: to protect the crown jewels of the state trust 
lands and ensure that these lands receive special protection from sale 
or development.
  It is also clear that Colorado voters wanted to set aside 300,000 
acres from potential development. I want to help the State fulfill 
these goals.
  This is a unique bill and ensures the state's flexibility in managing 
the trust lands. It does not change the intent of the Stewardship 
Trust, just ensures that the Enabling Act and the State Constitution 
are consistent.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record as follows:

                                S. 1146

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. COLORADO TRUST LAND.

       Section 7 of the Act of March 3, 1875 (18 Stat. 475, 
     chapter 139) (commonly known as the ``Colorado Enabling 
     Act''), is amended by inserting before the period at the end 
     the following: ``and for use for open space, wildlife 
     habitat, scenic value, or other natural value, regardless of 
     whether the land generates income for the common schools as 
     described under section 14, except that the amount of land 
     used for natural value shall not exceed 300,000 acres''.
                                 ______
                                 
      By Mr. NICKLES:
  S. 1147. A bill to amend title X and title XI of the Energy Policy 
Act of 1992; to the Committee on Energy and Natural Resources.
  Mr. NICKLES. Mr. President, I rise today to introduce legislation, 
the Thorium Remediation Reauthorization Act of 2001. This bill will 
provide authorization for the Federal Government to pay its share of 
decommissioning and remediation costs for a thorium facility in West 
Chicago, Illinois. In a DOE proceeding, it was determined that the 
government is responsible for 55.2 percent of all West Chicago cleanup 
costs because 55.2 percent of West Chicago tailings resulted from 
Federal contracts. Under Title X of the Energy Policy Act of 1992 
(``EPACT''), the thorium licensee pays for all West Chicago cleanup 
costs, and is then reimbursed, though annual appropriations, the 
government's share of those costs.
  There is already more than a $60 million shortage in authorized 
funding for the Federal share of West Chicago cleanup costs. Despite 
that, the thorium licensee has continued to pay all decommissioning 
costs at the West Chicago factory site, as well as remediation costs at 
vicinity properties known as Reed-Keppler Park, Residential Properties, 
and Kress Creek. Remediation of Reed-Keppler Park was finished late 
last year and remediation of more than 600 Residential Properties is 
expected to be substantially complete by the end of this year. 
Decommissioning of the factory site, with the exception of groundwater, 
is expected to conclude in 2004. Cleanup requirements at Kress Creek 
have not been determined, and until those are established, the costs 
associated with the cleanup of that vicinity property cannot be 
accurately projected.
  The significant costs associated with the West Chicago cleanup are a 
result, in large part, of extensive government use of the facility 
during the development of our country's nuclear defense program, 
including the Manhattan project. With the exception of Kress Creek and 
groundwater, total cleanup costs at the factory site and all vicinity 
properties can now be estimated with reasonable certainty. The $123 
million authorized by this bill will permit the government to begin 
reimbursing the amount it is already in arrears to the thorium 
licensee. It also will provide the authorization necessary for the 
government to pay its share of costs, excluding costs for Kress Creek 
and for groundwater, that will be incurred by the licensee through 
completion of West Chicago cleanup.
  Funding for this reauthorization would come from the General 
Treasury. Thus, this legislation will not diminish the availability of 
funds in the DOE's Decontamination and Decommissioning Fund, from which 
both Title X uranium licensees and the DOE's gaseous diffusion plants 
receive funding.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1147

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. REAUTHORIZATION OF THORIUM REIMBURSEMENT.

       (a) Section 1001(b)(2)(C) of the Energy Policy Act of 1992 
     (42 U.S.C. 2296a) is amended by striking ``$140,000,000'' and 
     inserting ``$263,000,000''.
       (b) Section 1003(a) of such Act (42 U.S.C. 2296a-2) is 
     amended by striking ``$490,000,000'' and inserting 
     ``$613,000,000''.
       (c) Section 1802(a) of the Atomic Energy Act of 1954 (42 
     U.S.C. 2297g-1) is amended by striking ``$488,333,333'' and 
     inserting ``$508,833,333''.
                                 ______
                                 
      By Mr. BURNS:
  S. 1148. A bill to convey the Lower Yellowstone Irrigation Project, 
the Savage Unit of the Pick-Sloan Missouri Basin Program, and the 
Intake Irrigation Project to the appurtenant irrigation districts; to 
the Committee on Energy and Natural Resources.
  Mr. BURNS. Mr. President, I rise today to introduce a piece of 
legislation that helps a large number of family farmers on the border 
of Montana and North Dakota. The Lower Yellowstone Irrigation Projects 
Title Transfer moves ownership of these irrigation projects from 
Federal control to local control. Both the Bureau of Reclamation and 
those relying on the projects for their livelihood agree there is 
little value in having the Federal Government retain ownership.
  I introduced this legislation in the last Congress, and continue to 
believe it helps us to achieve the long term goals of Montana 
irrigators, and the mission of the Bureau of Reclamation. Just this 
week I attended the confirmation hearing of John W. Keys, III, who is 
the designate for Commissioner of the Bureau of Reclamation. I asked 
his position on title transfers of irrigation projects like the Lower 
Yellowstone, where local irrigation districts have successfully managed 
the Federal properties, and where the Bureau has encouraged the 
transfer of title to the Districts. His response to me was very 
encouraging. He stated this type of title transfer ``makes sense and is 
an opportunity to move facilities from Federal ownership to more 
appropriate control.'' He has promised to work with me and the 
Irrigation District to make this a reality, and I look forward to it.
  The history of these projects dates to the early 1900's with the 
original Lower Yellowstone project being built by the Bureau of 
Reclamation between 1906 and 1910. The Savage Unit was added in 1947-
48. The end result was the creation of fertile, irrigated land to help 
spur economic development in the area. To this day, agriculture is the 
number one industry in the area.
  The local impact of the projects is measurable in numbers, but the 
greatest impacts can only be seen by visiting the area. About 500 
family farms rely on these projects for economic substance, and the 
entire area relies on them to create stability in the local economy. In 
an area that has seen booms and busts in oil, gas, and other 
commodities, these irrigated lands continued producing and offering a 
foundation for the businesses in the area.
  As we all know, the agricultural economy is not as strong as we'd 
like it to be, but these irrigated lands offer a reasonable return over 
time and are the foundation for strong communities based upon the 
ideals that have made this country successful. The 500 families 
impacted are hard working, honest producers, and I can think of no 
better people to manage their own irrigation projects.

[[Page S7203]]

  Every day, we see an example of where the Federal Government is 
taking on a new task. We can debate the merits of these efforts on an 
individual basis, but I think we can all agree that while the 
government gets involved in new projects there are many that we can 
safely pass on to state or local control. The Lower Yellowstone 
Projects are a prime example of such an opportunity, and I ask my 
colleagues to join me in seeing this legislation passed as quickly as 
possible.
                                 ______
                                 
      By Mr. SMITH of New Hampshire:
  S. 1150. A bill to waive tolls on the Interstate System during peak 
holiday travel periods; to the Committee on Environment and Public 
Works.
  Mr. SMITH of New Hampshire. Mr. President, I rise to introduce the 
Interstate Highway System Toll-Free Holiday Act.
  As we move into this Fourth of July holiday to celebrate our nation's 
225th birthday, many will do so in true American fashion by loading up 
the kids and the dog in the family car and heading out for a fun 
holiday vacation. Unfortunately, many of those family trips will 
quickly turn into frustration. Just as you get on the road and begin 
that family outing, you are greeted by a screeching halt, faced with 
what seems to be an endless line that is not moving. Soon, the kids 
will grow restless and angry. You've just reached the end of the line 
of the first toll booth and the delay and frustration begins. Of 
course, when you do finally make it to the booth, they take your money. 
Every holiday, no exception. I want to help make those holiday driving 
vacations more enjoyable by removing that toll booth frustration. My 
legislation will provide the much deserved relief from all of that 
holiday grief.
  The Interstate Highway System Toll-Free Holiday Act provides that no 
tolls will be collected and no vehicles will be stopped at toll booths 
on the Interstate System during peak holiday travel periods. The exact 
duration of the toll waivers will be left to the States to determine, 
but will include, at a minimum, the entire 24 hour period of each legal 
Federal holiday. The bill will also authorize the Secretary of 
Transportation to reimburse the State, at the State's request, for lost 
toll revenues out of the Highway Trust Fund, which is funded by the tax 
that we all pay when we purchase gas for our cars. I want to keep the 
State highway funds whole, and, at the same time, provide relief to all 
those who simply want a hassle-free holiday trip.
  There are currently some 2,200 miles of toll facilities on the 42,800 
mile Interstate System. On peak holiday travel days, traffic increases 
up to 50 percent over a typical weekday. In New Hampshire last year, 
the I-95 Hampton toll booth had a 10 percent average increase in 
traffic over the four-day Fourth of July weekend compared to the 
previous weekend. That is equivalent to an additional 8,000 vehicles 
passing through this one toll booth every day. That increase in volume 
at the toll sites is not only an inconvenience in time and money, but 
also adds to safety concerns and, because vehicle emissions are higher 
when idling, air quality suffers. I am pleased that this bill will 
alleviate the headaches and problems associated with increased toll 
booth traffic on holidays.
  This is just one of what will be a series of bills that I will be 
introducing, as the Ranking Member of the Environment and Public Works 
Committee, to address transportation needs in New Hampshire and across 
the Nation, as we prepare for the reauthorization of the next major 
comprehensive highway bill in 2003.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1150

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Interstate Highway System 
     Toll-Free Holiday Act''.

     SEC. 2. WAIVER OF TOLLS ON THE INTERSTATE SYSTEM DURING PEAK 
                   HOLIDAY TRAVEL PERIODS.

       (a) Definitions.--In this section, the terms ``Interstate 
     System'', ``public authority'', ``Secretary'', ``State'', and 
     ``State transportation department'' have the meanings given 
     the terms in section 101(a) of title 23, United States Code.
       (b) Waiver.--
       (1) In general.--No tolls shall be collected, and no 
     vehicle shall be required to stop at a toll booth, for any 
     toll highway, bridge, or tunnel on the Interstate System 
     during any peak holiday travel period determined under 
     paragraph (2).
       (2) Peak holiday travel periods.--For the purposes of 
     paragraph (1), the State transportation department or the 
     public authority having jurisdiction over the toll highway, 
     bridge, or tunnel shall determine the number and duration of 
     peak holiday travel periods, which shall include, at a 
     minimum, the 24-hour period of each legal public holiday 
     specified in section 6103(a) of title 5, United States Code.
       (c) Federal Reimbursement.--
       (1) In general.--For each fiscal year, upon request by a 
     State or public authority and approval by the Secretary, the 
     Secretary shall reimburse the State or public authority for 
     the amount of toll revenue not collected by reason of 
     subsection (b).
       (2) Requests for reimbursement.--On or before September 30 
     of a fiscal year, each State or public authority that desires 
     a refund described in paragraph (1) shall submit to the 
     Secretary a request for reimbursement, based on actual 
     traffic data, for the amount of toll revenue not collected by 
     reason of subsection (b) during the fiscal year.
       (3) Use of reimbursed funds.--A request for reimbursement 
     under paragraph (2) shall include a certification by the 
     State or public authority that the amount of the 
     reimbursement will be used only for debt service or for 
     operation and maintenance of the toll facility, including 
     reconstruction, resurfacing, restoration, and rehabilitation.
       (4) Authorization of appropriations.--There are authorized 
     to be appropriated from the Highway Trust Fund (other than 
     the Mass Transit Account) such sums as are necessary to carry 
     out this subsection.
                                 ______
                                 
      By Mr. REID (for himself and Mr. Ensign):
  S. 1151. A bill to amend the method for achieving quiet technology 
specified in the National Parks Air Tour Management Act of 2000; to the 
Committee on Commerce, Science, and Transportation.
  Mr. REID. Mr. President, I rise today along with my good friend and 
colleague from Nevada, Senator Ensign because I am deeply concerned 
that the Federal Aviation Administration has failed to develop the 
incentives for quiet technology aircraft.
  The bill we are introducing today, the ``Grand Canyon Quiet 
Technology Implementation Act,'' completes the Congressional mandates 
contained in the National Park Air Tour Management Act of 2000 which 
called for the implementation of ``reasonably achievable'' quiet 
technology standards for the Grand Canyon air tour operators.
  Key provisions of the Act called for the Federal Aviation 
Administration, by April 5th of this year, to: 1. Designate reasonably 
achievable requirements for fixed-wing and helicopter aircraft 
necessary for such aircraft to be considered as employing quiet 
aircraft technology; and 2. establish corridors for commercial air tour 
operations by fixed-wing and helicopter aircraft that employ quiet 
aircraft technology, or explain to Congress why they can't. The agency 
has failed to comply with any of these provisions.
  The Act also provides that operators employing quiet technology shall 
be exempted from operational flight caps. This relief is essential to 
the very survival of many of these air tour companies. By not complying 
with these Congressional mandates, the Federal Aviation Administration 
places the viability of the Grand Canyon air tour industry in jeopardy.
  While Senator Ensign and I along with the air tour community have 
sought to work with the Federal agencies in a cooperative manner, our 
repeated overtures have been summarily ignored, which forces us to take 
further legislative action.
  Our bill simply requires the Federal Aviation Administration to do 
its job. It identifies ``reasonably achievable'' quiet technology 
standards and provides relief for air tour operators who have spent 
many years and millions of dollars of their money voluntarily 
transitioning to quieter aircraft to help restore natural quiet to the 
Grand Canyon.
  I would like to compliment my good friend from Arizona, Senator John 
McCain for his vision and leadership in the Senate in recognizing that 
quieter aircraft was the key to restoring natural quiet to the Grand 
Canyon. During his tenure as chairman of the Senate Commerce Committee, 
it was Senator McCain who insisted on the quiet technology provisions 
contained in the National Park Air Tour Management Act

[[Page S7204]]

of 2000. It was Senator McCain who wanted to ensure that those air tour 
companies which already have made huge investments in current 
technology quiet aircraft modifications were rewarded for their 
initiative. It was Senator McCain, an advocate for restoring natural 
quiet to the Grand Canyon, who took the lead in seeking to ensure that 
the elderly, disabled and time-constrained visitor still would be able 
to enjoy the magnificence of the Grand Canyon by air. The legislation 
we are introducing today, supports Senator McCain's vision.
  The National Park Air Tour Management Act of 2000 is clear. It calls 
for the implementation of ``reasonably achievable'' quiet technology 
incentives. Our Grand Canyon Quiet Technology Implementation 
legislation is based on today's best aircraft technology.
  Some may ask what is ``reasonably achievable?'' It constitutes the 
following: replacing smaller aircraft with larger and quieter aircraft 
with more seating capacity reducing the number of flights needed to 
carry the same number of passengers; adding propellers on turbine-
powered airplanes or main rotor blades on helicopters which reduces 
prop tip speeds by reducing engine RPMs; modifying engine exhaust 
systems with high-tech mufflers to absorb engine noise; modifying 
helicopter tail rotors with high-tech components for quieter operation.
  These modifications typically reduce the sound generated by these 
aircraft by more than 50 percent.
  This is what is ``reasonably achievable'' in aviation technology. In 
the year 2001, this is essentially all that can be done to make 
aircraft quieter. Operators which have spent millions of dollars to 
make these modifications, in our view, have complied with the intent of 
the law and deserve relief.
  Let us not forget the original intent of this legislation to help 
restore natural quiet to the Grand Canyon and, as the 1916 Organic Act 
directs, to provide for the enjoyment of our national parks ``in such 
manner and by such means as will leave them unimpaired for the 
enjoyment of future generations.''
  Air touring is consistent with the Park Service mission.
  Based on current air tour restrictions, more than 1.7 million 
tourists will be denied access to the Grand Canyon during the next 
decade at a cost to air tour operators conservatively estimated at $250 
million.
  Senator Ensign and I agree that, to the extent possible and 
practical, that the quieter these air tour aircraft can be made to be, 
the better for everyone. That's why it is so important that the Grand 
Canyon Quiet Technology Implementation Act become the law.
  I ask unanimous consent that the text of the Grand Canyon Quiet 
Technology Implementation Act be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1151

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be referred to as the ``Grand Canyon Quiet 
     Technology Implementation Act''.

     SEC. 2. AMENDMENTS TO QUIET AIRCRAFT TECHNOLOGY.

       (a) In General.--Section 804 of the National Parks Air Tour 
     Management Act of 2000 (49 U.S.C. 40128 note) is amended by 
     adding at the end the following new subsection:
       ``(f) Alternative Quiet Aircraft Technology.--
       ``(1) General rule.--Notwithstanding any other provision of 
     law, an air tour operator based in Clark County, Nevada or at 
     the Grand Canyon National Park Airport shall be treated as 
     having met the requirements for quiet aircraft technology 
     that apply with respect to commercial air tour operations for 
     tours described in subsection (b), if the air tour operator 
     has met the following requirements:
       ``(A) The aircraft used by the air tour operator for such 
     tours--
       ``(i) meet the requirements designated under subsection 
     (a); or
       ``(ii) if not previously powered by turbine engines, have 
     been modified to be powered by turbine engines and, after the 
     conversion--

       ``(I) have a higher number of propellers (in the case of 
     fixed-wing aircraft) or main rotor blades (in the case of 
     helicopters) than the aircraft had before the conversion, 
     thereby resulting in a reduction in prop or blade tip speeds 
     and engine revolutions per minute;
       ``(II) have current technology engine exhaust mufflers;
       ``(III) in the case of helicopters, have current technology 
     quieter tail rotors; or
       ``(IV) have any other modifications, approved by the 
     Federal Aviation Administration, that significantly reduce 
     the aircraft's sound.

       ``(B) The air tour operator has replaced, for use for the 
     tours, smaller aircraft with larger aircraft that have more 
     seating capacity, thereby reducing the number of flights 
     needed to transport the same number of passengers.
       ``(C) The air tour operator can safely demonstrate, through 
     flight testing administered by the Federal Aviation 
     Administration that applies a sound measurement methodology 
     accepted as standard, that the tour operator can fly existing 
     aircraft in a manner that achieves a sound signature in the 
     same noise range or having the same or similar sound effect 
     as the aircraft that satisfy the requirements of subparagraph 
     (A) or (B).
       ``(2) Exemption from flight caps.--Any air tour operator 
     that meets the requirements described in paragraph (1), shall 
     be--
       ``(A) exempt from the operational flight allocations 
     referred to in subsection (c) and from flight curfews and any 
     other requirement not imposed solely for reasons of aviation 
     safety; and
       ``(B) granted air tour routes that are preferred for the 
     quality of the scenic views for--
       ``(i) tours from Clark County, Nevada to the Grand Canyon 
     National Park Airport; and
       ``(ii) `local loop' tours referred to in subsection 
     (b)(2).''.
       (b) Reinstatement of Certain Air Tour Routes.--Any air tour 
     route from Clark County, Nevada, to the Grand Canyon National 
     Park Airport, Tusayan, Arizona, that was eliminated, or 
     altered in any way, by regulation or by action by the Federal 
     Aviation Administration, on or after January 1, 2001, and 
     before the date of enactment of this Act shall be reinstated 
     effective as of such date of enactment and no further 
     changes, modifications, or elimination of any other air tour 
     route flown by an air tour company based in Clark County, 
     Nevada or at the Grand Canyon National Park Airport, Tusayan, 
     Arizona may be made after such date of enactment without the 
     approval of Congress.
                                 ______
                                 
      By Mr. CRAIG (for himself and Mrs. Feinstein):
  S. 1153. A bill to amend the Food Security Act of 1985 to establish a 
grassland reserve program to assist owners in restoring and protecting 
grassland; to the Committee on Agriculture, Nutrition, and Forestry.
  Mr. CRAIG. Mr. President, I rise today to introduce the ``Grassland 
Reserve Act'', a bill to authorize a voluntary program to purchase 
permanent or 30 year easement from willing producers in exchange for 
protection of ranches, grasslands, and lands of high resource value. I 
am pleased that Senators Feingold, and Thomas, have joined as original 
cosponsors.
  Grasslands provided critical habitat for complex plant and animal 
communities throughout much of North America. However, many of these 
lands have been, and are under pressure to be, converted to other uses, 
threatening and eliminating plant and animal communities unique to this 
continent. A significant portion of the remaining grasslands occur on 
working ranches. Ranchland provides important open-space buffers for 
animal and plant habitat. Moreover, ranching forms the economic 
backbone for much of rural western United States. Loss of this economic 
activity will invariably lead to the loss of the open space that is 
indispensable for plant and animal communities and for citizens who 
love the western style of life.
  As a rancher from a rural community in Idaho, I have noticed the 
changes taking place in some parts of my State where, for a number of 
reasons, working ranchers have been sold into ranchetts leaving the 
landscape divided by fences and homes where cattle and wildlife once 
roamed. Currently, no Federal programs exist to conserve grasslands, 
ranches, and other lands of high resource values, other than wetlands, 
on a national scale. I believe the United States needs a voluntary 
program to conserve these lands, and the Grasslands Reserve Act does 
just that.
  Specifically, this bill establishes the Grasslands Reserve program 
through the Natural Resources Conservation Service to assist owners in 
restoring and conserving eligible land. To be eligible to participate 
in the program an owner must enroll 100 contiguous acres of land west 
of the 90th meridian or 50 contiguous acres of land east of the 90th 
meridian. A maximum of 1,000,000 acres may be enrolled in the program 
in the form of a permanent or a 30-year easement. Land eligible for the 
program includes: native grasslands,

[[Page S7205]]

working ranches, other areas that contain animal or plant populations 
of significant ecological value, and land that is necessary for the 
efficient administration of the easement.
  The terms of the easements allow for grazing in a manner consistent 
with maintaining the viability of native grass species. All uses other 
than grazing, such as hay production, may be implemented according to 
the terms of a written agreement between the landowner and easement 
holder. Easements prohibit the production of row crops, and other 
activities that disturb the surface of the land covered by the 
easement. The Secretary will work with the State technical committees 
to establish criteria to evaluate and rank applications for easements 
which will emphasize support for grazing operations, plant and animal 
biodiversity, and native grass and shrubland under the greatest threat 
of conversion. The Secretary may prescribe terms to the easement 
outlining how the land shall be restored including duties of the land 
owner and the Secretary. If the easement is violated, the Secretary may 
require the owner to refund all or part of the payments including 
interest. The Secretary may also conduct periodic inspections, after 
providing notice to the owner, to determine that the landowner is in 
compliance with the terms of the easement. The easement may be held and 
enforced by a private conservation, land trust organization, or a State 
agency in lieu of the Secretary, if the Secretary determines that 
granting such permission will promote grassland protection and the 
landowner agrees.
  This legislation requires the Secretary to make payments for 
permanent easements based on the fair market value of the land less the 
grazing value of the land encumbered by the easement, and for 30 year 
easements the payment will be 30 percent of the fair market value of 
the land less the grazing value of the land encumbered by the easement. 
Payments may be made in one lump sum or over a 10 year period. 
Landowners may also choose to enroll their land in a 30-year rental 
agreement instead of a 30-year easement where the Secretary would make 
thirty annual payments which approximate the value of a lump sum 
payment the owner would receive under a 30-year easement. The Secretary 
is required to assess the payment schedule every five years to make 
sure that the payments do approximate the value of a 30-year easement. 
USDA is also required to cover up to 75 percent of the cost of 
restoration and provide owners with technical assistance to execute the 
easement and restore the land.
  I believe this legislation fills a need we have in our agriculture 
policy and I look forward to working with other members to include the 
Grasslands Reserve program in a responsible and balanced farm bill.
  Mrs. FEINSTEIN. Mr. President, today I am pleased to join my 
colleague from Idaho to introduce legislation that provides fair 
compensation to producers and other landowners who maintain open spaces 
for plants and animals to thrive.
  This bill creates a voluntary program authorizing the United States 
Department of Agriculture, USDA, to obtain either 30-year or permanent 
easements from landowners in exchange for a cash payment. Easements 
allow for grazing while maintaining the viability of native grass 
species. Moreover, these uses must only occur upon the conclusion of 
the local bird nesting season.
  Vast amounts of grassland are being lost to urban development every 
year in large part because of economic pressures faced by ranchers, 
livestock producers, and other grassland owners.
  Currently, there are no long-term programs to protect grasslands on a 
national scale. The Grassland Reserve Act provides real options to 
financially-strapped land owners of grasslands who wish to keep their 
lands in a natural state. There is a need for this bill because 
existing programs to protect lands, such as the Forest Legacy program, 
target forested lands only.
  This legislation represents a win-win situation for both the 
environment and people who make their livelihood on grasslands. The 
loss of grassland is a serious problem for preserving wildlife habitat 
and a rural way of life. This bill is a step in the right direction to 
protect these lands from future development.
  I have always felt that protecting our Nation's unique natural areas, 
including grasslands, should be one of our highest priorities. I invite 
my colleagues to join Senator Craig and me in supporting this 
legislation.
                                 ______
                                 
      By Mr. LEVIN (for himself and Mr. Warner) (by request):
  S. 1155. A bill to authorize appropriations for fiscal year 2002 for 
military activities of the Department of Defense, to prescribe military 
personnel strengths for fiscal year 2002, and for other purposes; to 
the Committee on Armed Services.
  Mr. LEVIN. Mr. President, I ask unanimous consent that the text of 
the President's request for Defense and the text of the bill be printed 
in the Record, including the section-by-section analysis.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1155

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``National Defense 
     Authorization Act for Fiscal Year 2002''.

     SEC. 2. TABLE OF CONTENTS.

       The table of contents for this Act is as follows:

Sec. 1. Table of contents.

                          TITLE I--PROCUREMENT

                    Authorization of Appropriations

Sec. 101. Army.
Sec. 102. Navy and Marine Corps.
Sec. 103. Air Force.
Sec. 104. Defense-Wide Activities.
Sec. 105. Defense Inspector General.
Sec. 106. Defense Health Program.

          TITLE II-RESEARCH, DEVELOPMENT, TEST, AND EVALUATION

Sec. 201. Authorization of Appropriations.

                  TITLE III--OPERATION AND MAINTENANCE

              Subtitle A--Authorization of Appropriations

Sec. 301. Operation and Maintenance Funding.
Sec. 302. Working Capital Funds.
Sec. 303. Armed Forces Retirement Home.
Sec. 304. Acquisition of Logistical Support for Security Forces.
Sec. 305. Contract Authority for Defense Working Capital Funds.

                  Subtitle B--Environmental Provisions

Sec. 310. Reimburse EPA for Certain Costs in Connection with Hooper 
              Sands Site, in South Berwick, Maine.
Sec. 311. Extension of Pilot Program for the Sale of Air Pollution 
              Emission Reduction Incentives.
Sec. 312. Elimination of Report on Contractor Reimbursement Costs.

  Subtitle C--Commissaries and Nonappropriated Fund Instrumentalities

Sec. 315. Costs Payable to the Department of Defense and Other Federal 
              Agencies for Services Provided to the Defense Commissary 
              Agency.
Sec. 316. Reimbursement for Non-Commissary Use of Commissary 
              Facilities.
Sec. 317. Commissary Contracts and Other Agencies and 
              Instrumentalities.
Sec. 318. Operation of Commissary Stores.

                       Subtitle D--Other Matters

Sec. 320. Reimbursement, for Reserve Intelligence Support.
Sec. 321. Disposal of Obsolete and Excess Materials Contained in the 
              National Defense Stockpile.

              TITLE IV--MILITARY PERSONNEL AUTHORIZATIONS

                       Subtitle A--Active Forces

Sec. 401. End Strengths for Active Forces.

                       Subtitle B--Reserve Forces

Sec. 405. End Strengths for Selected Reserve.
Sec. 406. End Strengths for Reserves on Active Duty in Support of the 
              Reserves.
Sec. 407. End Strengths for Military Technicians (Dual Status).
Sec. 408. Fiscal Year 2002 Limitation on Number of Non-Dual Status 
              Technicians.
Sec. 409. Authorized Strengths: Reserve Officers and Senior Enlisted 
              Members on Active Duty or Full-time National Guard Duty 
              for Administration of the Reserves or National Guard.
Sec. 410. Increase in Authorized Strengths for Air Force Officers on 
              Active Duty in the Grade of Major.

                   TITLE V--MILITARY PERSONNEL POLICY

                  Subtitle A--Officer Personnel Policy

Sec. 501. Elimination of Certain Medical and Dental Requirements for 
              Army Early-Deployers.
Sec. 502. Medical Deferment of Mandatory Retirement or Separation.
Sec. 503. Officer in Charge; United States Navy Band.
Sec. 504. Removal of Requirement for Certification for Certain Flag 
              Officers to Retire in Their Highest Grade.

[[Page S7206]]

Sec. 505. Three-Year Extension of Certain Force Drawdown Transition 
              Authorities Relating to Personnel Management and 
              Benefits.
Sec. 506. Judicial Review of Selection Boards.

             Subtitle B--Reserve Component Personnel Policy

See. 511. Retirement of Reserve Personnel.
Sec. 512. Amendment to Reserve PERS- TEMPO Definition.
See. 513. Individual Ready Reserve Physical Examination Requirement.
Sec. 514. Benefits and Protections for Members in a Funeral Honors Duty 
              Status.
Sec. 515. Funeral Honors Duty Performed by Members of the National 
              Guard.
Sec. 516. Strength and Grade Ceiling Accounting for Reserve Component 
              Members on Active Duty in Support of a Contingency 
              Operation.
Sec. 517. Reserve Health Professionals Stipend Program Expansion.
Sec. 518. Reserve Officers on Active Duty for a Period of Three Years 
              or Less.
Sec. 519. Active Duty End Strength Exemption for National Guard and 
              Reserve Personnel Performing Funeral Honors Functions,
See. 520. Clarification of Functions That May Be Assigned to Active 
              Guard and Reserve Personnel on Full-Time National Guard 
              Duty.
See. 521. Authority for Temporary Waiver of the Requirement for a 
              Baccalaureate Degree for Promotion of Certain Reserve 
              Officers of the Army.
Sec. 522. Authority of the President to Suspend Certain Laws Relating 
              to Promotion, Retirement and Separation; Duties.

                   Subtitle C--Education and Training

Sec. 531. Authority for the Marine Corps University to Award the Degree 
              of Master of Strategic Studies.
Sec. 532. Reserve Component Distributed Learning.
Sec. 533. Repeal of Limitation on Number of Junior Reserve Officers' 
              Training Corps (JROTC) Units.
Sec. 534. Modification of the Nurse Officer Candidate Accession Program 
              Restriction on Students Attending Civilian Educational 
              Institutions with Senior Reserve Officers' Training 
              Programs.
Sec. 535. Defense Language Institute Foreign Language Center.

           Subtitle D--Decorations, Awards, and Commendations

Sec. 541. Authority for Award of the Medal of Honor to Humbert R. 
              Versace for Valor During the Vietnam War.
Sec. 542. Issuance of Duplicate Medal of Honor.
Sec. 543. Repeal of Limitation on Award of Bronze Star to Members in 
              Receipt of Special Pay.

              Subtitle E--Uniform Code of Military Justice

Sec. 551. Revision of Punitive UCMJ Article Regarding Drunken Operation 
              of Vehicle, Aircraft, or Vessel.

          TITLE VI--COMPENSATION AND OTHER PERSONNEL BENEFITS

                     Subtitle A--Pay and Allowances

Sec. 601. Increase in basic pay for fiscal year 2002.
Sec. 602. Partial Dislocation Allowance Authorized Under Certain 
              Circumstances.
Sec. 603. Funeral Honors Duty Allowance for Retirees.
Sec. 604. Basic Pay Rate for Certain Reserve Commissioned Officers with 
              Prior Service as an Enlisted Member or Warrant Officer.
Sec. 605. Family Separation Allowance.
Sec. 606. Housing Allowance for the Chaplain for the Corps of Cadets, 
              United States Military Academy.
Sec. 607. Clarifying Amendment that Space-Required Travel for Annual 
              Training Reserve Duty Does Not Obviate Transportation 
              Allowances.

           Subtitle B--Bonuses and Special and Incentive Pays

Sec. 611. Authorize the Secretary of the Navy to Prescribe Submarine 
              Duty Incentive Pay Rates.
Sec. 612. Extension of Authorities Relating to Payment of Other Bonuses 
              and Special Pays.
Sec. 613. Extension of Certain Bonuses and Special Pay Authorities for 
              Nurse Officer Candidates, Registered Nurses, Nurse 
              Anesthetists, and Dental Officers.
Sec. 614. Extension of Authorities Relating to Nuclear Officer Special 
              Pays.
See. 615. Extension of Special and Incentive Pays.
Sec. 616. Accession Bonus for Officers in Critical Skills.
Sec. 617. Critical Wartime Skill Requirement for Eligibility for the 
              Individual Ready Reserve Bonus.
Sec. 618. Hazardous Duty Incentive Pay: Maritime Board and Search.

            Subtitle C--Travel and Transportation Allowances

Sec. 621. Funded Student Travel: Exchange Programs.
Sec. 622. Payment of Vehicle Storage Costs in Advance.
Sec. 623. Travel and Transportation Allowances for Family Members to 
              Attend the Burial of a Deceased Member of the Armed 
              Forces.
Sec. 624. Shipment of Privately Owned Vehicles When Executing CONUS 
              Permanent Change of Station Moves.

                           Subtitle D--Other

See. 631. Montgomery G I Bill--Selected Reserve Eligibility Period.
Sec. 632. Improved Disability Benefits for Certain Reserve Component 
              Members.
Sec. 633. Acceptance of Scholarships by Officers Participating in the 
              Funded Legal Education Program.

        TITLE VII--ACQUISITION POLICY AND ACQUISITION MANAGEMENT

                     Subtitle A--Acquisition Policy

Sec. 701. Acquisition Milestone Changes.
Sec. 702. Clarification of Inapplicability of the Requirement for Core 
              Logistics Capabilities Standards to the Nuclear Refueling 
              of an Aircraft Carrier.
Sec. 703. Depot Maintenance Utilization Waiver.

                   Subtitle B--Acquisition Workforce

Sec. 705. Acquisition Workforce Qualifications.
See. 706. Tenure Requirement for Critical Acquisition Positions.

       Subtitle C--General Contracting Procedures and Limitations

Sec. 710. Amendment of Law Applicable to Contracts for Architectural 
              and Engineering Services and Construction Design.
Sec. 711. Streamlining Procedures for the Purchase of Certain Goods.
Sec. 712. Repeal of the Requirement for the Limitations on the Use of 
              Air Force Civil Engineering Supply Function Contracts.
Sec. 713. One-Year Extension of Commercial Items Test Program.
Sec. 714. Modification of Limitation on Retirement or Dismantlement of 
              Strategic Nuclear Delivery Systems.

          Subtitle D--Military Construction General Provisions

Sec. 715. Exclusion of Unforeseen Environmental Hazard Remediation from 
              the Limitation on Cost Increases for Military 
              Construction and Family Housing Construction Projects.
Sec. 716. Increase of Overseas Minor Construction Threshold Using 
              Operations and Maintenance Funds.
Sec. 717. Leasebacks of Base Closure Property.
Sec. 718. Alternative Authority For Acquisition and Improvement of 
              Military Housing.
Sec. 719. Annual Report to Congress on Design And Construction.

     TITLE VIII--DEPARTMENT OF DEFENSE ORGANIZATION AND MANAGEMENT

     Subtitle A--Department of Defense Organizations and Positions

Sec. 801. Organizational Alignment Change for Director for 
              Expeditionary Warfare.
Sec. 802. Consolidation of Authorities Relating to Department of 
              Defense Regional Centers for Security Studies.
Sec. 803. Change of Name for Air Mobility Command.
See. 804. Transfer of Intelligence Positions in Support of the National 
              Imagery and Mapping Agency.

                          Subtitle B--Reports

Sec. 811. Amendment to National Guard and Reserve Component Equipment: 
              Annual Report to Congress.
Sec. 812. Elimination of Triennial Report on the Roles and Missions of 
              the Armed Forces.
Sec. 813. Change in Due Date of Commercial Activities Report.

                       Subtitle C--Other Matters

Sec. 821. Documents, Historical Artifacts, and Obsolete or Surplus 
              Materiel: Loan, Donation, or Exchange.
See. 822. Charter Air Transportation of Members of the Armed Forces.

                      TITLE IX--GENERAL PROVISIONS

             Subtitle A--Matters Relating to Other Nations

Sec. 901. Test and Evaluation Initiatives.
Sec. 902. Cooperative Research and Development Projects: Allied 
              Countries.
Sec. 903. Recognition of Assistance from Foreign Nationals.
Sec. 904. Personal Service Contracts in Foreign Areas.

[[Page S7207]]

          Subtitle B--Department of Defense Civilian Personnel

Sec. 911. Removal of Limits on the Use of Voluntary Early Retirement 
              Authority and Voluntary Separation Incentive Pay for 
              Fiscal Years 2002 and 2003.
Sec. 912. Authority for Designated Civilian Employees Abroad to Act as 
              a Notary.
Sec. 913. Inapplicability of Requirement for Studies and Reports When 
              All Directly Affected Department of Defense Civilian 
              Employees Are Reassigned to Comparable Federal Positions.
Sec. 914. Preservation of Civil Service Rights for Employees of the 
              Former Defense Mapping Agency.
Sec. 915. Financial Assistance to Certain Employees in Acquisition of 
              Critical Skills.
Sec. 916. Pilot Program for Payment of Retraining Expenses.

                       Subtitle C--Other Matters

Sec. 921. Authority to Ensure Demilitarization of Significant Military 
              Equipment Formerly Owned by the Department of Defense.
Sec. 922. Motor Vehicles: Documentary Requirements for Transportation 
              for Military Personnel and Federal Employees on Change of 
              Permanent Station.
Sec. 923. Department of Defense Gift Initiatives.
Sec. 924. Repeal of the Joint Requirements Oversight Council Semi-
              Annual Report.
Sec. 925. Access to Sensitive Unclassified Information.
Sec. 926. Water Rights Conveyance, Andersen Air Force Base, Guam.
Sec. 927. Repeal of Requirement For Separate Budget Request For 
              Procurement of Reserve Equipment.
Sec. 928. Repeal of Requirement for Two-year Budget Cycle for the 
              Department of Defense.
                          TITLE I--PROCUREMENT
                    Authorization of Appropriations
Sec. 101. Army.
Sec. 102. Navy and Marine Corps.
Sec. 103. Air Force.
Sec. 104. Defense-Wide Activities.
Sec. 105. Defense Inspector General.
Sec. 106. Defense Health Program.

     SEC. 101. ARMY.

       Funds are hereby authorized to be appropriated for fiscal 
     year 2002 for procurement for the Army as follows:
       (1) For aircraft, $1,925,491,000.
       (2) For missiles, $1,859,634,000.
       (3) For weapons and tracked combat vehicles, 
     $2,276,746,000.
       (4) For ammunition, $1,193,365,000.
       (5) For other procurement, $3,961,737,000.
       (6) For chemical agents and munitions destruction, 
     $1,153,557,000 for--
       (A) the destruction of lethal chemical weapons in 
     accordance with section 1412 of the Department of Defense 
     Authorization Act, 1986 (50 U.S.C. 1521) and
       (B) the destruction of chemical warfare material of the 
     United States that is not covered by section 1412 of such 
     Act.

     SEC. 102. NAVY AND MARINE CORPS.

       (a) Navy.--Funds axe hereby authorized to be appropriated 
     for fiscal year 2002 for procurement for the Navy as follows:
       (1) For aircraft, $8,252,543,000.
       (2) For weapons, including missiles and torpedoes, 
     $1,433,475,000.
       (3) For shipbuilding and conversion, $9,344,121,000.
       (4) For other procurement, $4,097,576,000.
       (b) Marine Corps.--Funds are hereby authorized to be 
     appropriated for fiscal year 2002 for procurement for the 
     Marine Corps in the amount of $981,724,000.
       (c) Navy and Marine Corps Ammunition.--Funds are hereby 
     authorized to be appropriated for fiscal year 2002 for 
     procurement of ammunition for the Navy and Marine Corps in 
     the amount of $457,099,000.

     SEC. 103. AIR FORCE.

       Funds are hereby authorized to be appropriated for fiscal 
     year 2002 for procurement for the Air Force as follows:
       (1) For aircraft, $10,744,458,000.
       (2) For missiles, $3,233,536,000.
       (3) For procurement of ammunition, $865,344,000.
       (4) For other procurement, $8,158,521,000.

     SEC. 104. DEFENSE-WIDE ACTIVITIES.

       Funds are hereby authorized to be appropriated for fiscal 
     year 2002 for defense-wide procurement in the amount of 
     $1,603,927,000.

     SEC. 105. DEFENSE INSPECTOR GENERAL.

       Funds are hereby authorized to be appropriated for fiscal 
     year 2002 for procurement for the Defense Inspector General 
     in the amount of $1,800,000.

     SEC. 106. DEFENSE HEALTH PROGRAM.

       Funds are hereby authorized to be appropriated for fiscal 
     year 2002 for the Department of Defense for procurement for 
     carrying out health care programs, projects, and activities 
     of the Department of Defense in the total amount of 
     $267,915,000.
         TITLE II--RESEARCH, DEVELOPMENT, TEST, AND EVALUATION
Sec. 201. Authorization of Appropriations.

     SEC. 201. AUTHORIZATION OF APPROPRIATIONS.

       Funds are hereby authorized to be appropriated for fiscal 
     year 2002 for the use of the Armed Forces for research, 
     development, test, and evaluation, as follows:
       (1) For the Army, $6,693,920,000.
       (2) For the Navy, $11,123,389,000.
       (3) For the Air Force, $14,343,982,000.
       (4) For Defense-wide research, development, test, and 
     evaluation, $15,268,142,000, of which $217,355,000 is 
     authorized for the Director of Operational Test and 
     Evaluation.
       (5) For the Defense Health Program, $65,304,000.
                  TITLE III--OPERATION AND MAINTENANCE
              Subtitle A--Authorization of Appropriations
Sec. 301. Operation and Maintenance Funding.
Sec. 302. Working Capital Funds.
Sec. 303. Armed Forces Retirement Home.
Sec. 304. Acquisition of Logistical Support for Security Forces.
Sec. 305. Contract Authority for Defense Working Capital Funds.

     SEC. 301. OPERATION AND MAINTENANCE FUNDING.

       Funds are hereby authorized to be appropriated for fiscal 
     year 2002 for the use of the Armed Forces of the United 
     States and other activities and agencies of the Department of 
     Defense, for expenses, not otherwise provided for, for 
     operation and maintenance, in amounts as follows:
       (1) For the Army, $21,191,680,000.
       (2) For the Navy, $26,961,382,000.
       (3) For the Marine Corps, $2,892,314,000.
       (4) For the Air Force, $26,146,770,000.
       (5) For the Defense-wide activities, $12,518,631,000.
       (6) For the Army Reserve, $1,787,246,000.
       (7) For the Naval Reserve, $1,003,690,000.
       (8) For the Marine Corps Reserve, $144,023,000.
       (9) For the Air Force Reserve, $2,029,866,000.
       (10) For the Army National Guard, $3,677,359,000.
       (11) For the Air National Guard, $3,867,361,000.
       (12) For the Defense Inspector General, $150,221,000.
       (13) For the United States Court of Appeals for the Armed 
     Forces, $9,096,000.
       (14) For Environmental Restoration, Army, $389,800,000.
       (15) For Environmental Restoration, Navy, $257,517,000.
       (16) For Environmental Restoration, Air Force, 
     $385,437,000.
       (17) For Environmental Restoration, Defense-wide, 
     $23,492,000.
       (18) For Environmental Restoration, Formerly Used Defense 
     Sites, $190,255,000.
       (19) For Overseas Humanitarian, Disaster, and Civic Aid 
     programs, $49,700,000.
       (20) For Drug Interdiction and Counter-drug Activities, 
     Defense-wide, $820,381,000.
       (21) For the Kaho'olawe Island Conveyance, Remediation, and 
     Environmental Restoration Trust Fund, $25,000,000.
       (22) For the Defense Health Program, $17,565,750,000.
       (23) For Cooperative Threat Reduction programs, 
     $403,000,000.
       (24) For Overseas Contingency Operations Transfer Fund, 
     $2,844,226,000.
       (25) For Support for International Sporting Competitions, 
     Defense, $15,800,000.

     SEC. 302. WORKING CAPITAL FUNDS.

       Funds are hereby authorized to be appropriated for fiscal 
     year 2002 for the use of the Armed Forces of the United 
     States and other activities and agencies of the Department of 
     Defense for providing capital for working capital and 
     revolving funds in amounts as follows:
       (1) For the Defense Working Capital Funds, $1,951,986,000.
       (2) For the National Defense Sealift Fund, $506,408,000.

     SEC. 303. ARMED FORCES RETIREMENT HOME.

       There is hereby authorized to be appropriated for fiscal 
     year 2002 from the Armed Forces Retirement Home Trust Fund 
     the sum of $71,440,000 for the operation of the Armed Forces 
     Retirement Home, including the United States Soldiers' and 
     Airmen's Home and the Naval Home.

     SEC. 304. ACQUISITION OF LOGISTICAL SUPPORT FOR SECURITY 
                   FORCES.

       Section 5 of the Multinational Force and Observers 
     Participation Resolution (Public Law 97-132; 95 Stat. 1695; 
     22 U.S.C. 3424) is amended by adding at the end the following 
     new subsection:
       ``(d) The United States may use contractors or other means 
     to provide logistical support to the Multinational Force and 
     Observers under this section in lieu of providing such 
     support through a logistical support unit comprised of 
     members of the armed forces. Notwithstanding subsections (a) 
     and (b) and section 7(b), support by a contractor or other 
     means under this subsection may be provided without 
     reimbursement, whenever the President determines that such 
     action enhances or supports the national security interests 
     of the United States.''.

     SEC. 305. CONTRACT AUTHORITY FOR DEFENSE WORKING CAPITAL 
                   FUNDS.

       Contract authority in the amount of $427, 100,000, to 
     remain available until September 30, 2002, is hereby 
     authorized and appropriated to the Defense Working Capital 
     Fund for the procurement, lease-purchase with substantial 
     private sector risk, capital or operating multiple-year 
     lease, of a capital asset, multiple-year time charter of a 
     commercial craft or vessel and associated services.
                  Subtitle B--Environmental Provisions
Sec.  310.  Reimburse EPA for Certain Costs in Connection with Hooper 
              Sands Site, in South Berwick, Maine.

[[Page S7208]]

Sec.  311.  Extension of Pilot Program for the Sale of Air Pollution 
              Emission Reduction Incentives.
Sec.  312.  Elimination of Report on Contractor Reimbursement Costs.

     SEC. 310. REIMBURSE EPA FOR CERTAIN COSTS IN CONNECTION WITH 
                   HOOPER SANDS SITE, IN SOUTH BERWICK, MAINE.

       (a) Authority to Reimburse EPA.--Using funds described in 
     subsection (b), the Secretary of the Navy may pay 
     $1,005,478.00 to the Hooper Sands Special Account within the 
     Hazardous Substance Superfund established by section 9507 of 
     the Internal Revenue Code of 1986 (26 U.S.C. 9507) to 
     reimburse the Environmental Protection Agency in full for the 
     Remaining Past Response Costs incurred by the agency for 
     actions taken pursuant to the Comprehensive Environmental 
     Response, Compensation and Liability Act of 1980 (42 
     U.S.C. 9601, et seq.) at the Hooper Sands site in South 
     Berwick, Maine, pursuant to an Interagency Agreement 
     entered into by the Department of the Navy and the 
     Enviromental Protection Agency in January 2001.
       (b) Source of Funds.--Any payment under subsection (a) 
     shall be made using the amounts authorized to be appropriated 
     by paragraph (15) of section 301 to the Enviromental 
     Restoration, Navy account, established by section 2703(a)(3) 
     of title 10, United States Code.

     SEC. 311. EXTENSION OF PILOT PROGRAM FOR THE SALE OF AIR 
                   POLLUTION EMISSION REDUCTION INCENTIVES

       Section 351(a) of the National Defense Authorization Act 
     for Fiscal Year 1998 (Public Law. 105-85; 111 Stat. 1629, 
     1692) is amended to read as follows:
       ``(2) The Secretary may carry out the pilot program during 
     the period beginning on the date of enactment of this Act 
     through September 30, 2003.''.

     SEC. 312. ELIMINATION OF REPORT ON CONTRACTOR REIMBURSEMENT 
                   COSTS.

       Section 2706 of title 10, United States Code, is amended by 
     striking subsection (c) and redesignating subsections (d) and 
     (e) as subsections (c) and (d), respectively.
  Subtitle C--Commissaries and Nonappropriated Fund Instrumentalities
Sec. 315. Costs Payable to the Department of Defense and Other Federal 
              Agencies for Services Provided to the Defense Commissary 
              Agency.
Sec. 316. Reimbursement for Non-Commissary Use of Commissary 
              Facilities.
Sec. 317. Commissary Contracts and Other Agencies and 
              Instrumentalities.
Sec. 318. Operation of Commissary Stores.

     SEC. 315. COSTS PAYABLE TO THE DEPARTMENT OF DEFENSE AND 
                   OTHER FEDERAL AGENCIES FOR SERVICES PROVIDED TO 
                   THE DEFENSE COMMISSARY AGENCY.

       Section 2482(b)(1) of title 10, United States Code, is 
     amended by striking ``However, the Defense Commissary Agency 
     may not pay for any such service provided by the United 
     States Transportation Command any amount that exceeds the 
     price at which the service could be procured through full and 
     open competition, as such term is defined in section 4(6) of 
     the Office of Federal Procurement Policy Act (41 U.S.C. 
     403(6)).'' and inserting ``The Defense Commissary Agency may 
     not pay for any service provided by a Defense working capital 
     fund activity which exceeds the price at which the service 
     could be procured through full and open competition by the 
     Defense Commissary Agency, as such term is defined in section 
     4(6) of the Office of Federal Procurement Policy Act (41 
     U.S.C. 403(6)). In determining the cost for providing such 
     service the Defense Commissary Agency may pay a Defense 
     working capital fund activity those administrative and 
     handling costs it would be required to pay for the provision 
     of such services had the Defense Commissary Agency acquired 
     them under full and open competition. Under no circumstances 
     will any costs associated with mobilization requirements, 
     maintenance of readiness, or establishment or maintenance of 
     infrastructure to support such mobilization or readiness 
     requirements, be included in rates charged the Defense 
     Commissary Agency.''.

     SEC. 316. REIMBURSEMENT FOR NON-COMMISSARY USE OF COMMISSARY 
                   FACILITIES.

       (a) In General.--Chapter 147 of title 10, United States 
     Code, is amended by inserting at the beginning of the chapter 
     the following new section:

     ``Sec. 2481. Reimbursement for non-commissary use of 
       commissary facilities

       ``If a commissary facility acquired, constructed or 
     improved (in whole or in part) with commissary surcharge 
     revenues is used for non-commissary purposes, the Secretary 
     of the military department concerned shall reimburse the 
     commissary surcharge revenues for the commissary's share of 
     the depreciated value of the facility.''.
       (b) Clerical Amendment.--The table of sections at the 
     beginning of such chapter 147 is amended by inserting before 
     the item relating to section 2482 the following new item:
``2481. Reimbursement for non-commissary use of commissary 
              facilities.''.

     SEC. 317. COMMISSARY CONTRACTS AND OTHER AGENCIES AND 
                   INSTRUMENTALITIES.

       Section 2482(b) of title 10, United States Code, is 
     amended--
       (1) by redesignating paragraph (2) as paragraph (3); and
       (2) by inserting after paragraph (1) the following new 
     paragraph (2):
       ``(2) Where the Secretary of Defense authorizes the Defense 
     Commissary Agency to sell limited exchange merchandise as 
     commissary store inventory under section 2486(b)(11) of this 
     title, the Defense Commissary Agency shall enter into a 
     contract or other agreement to obtain such merchandise 
     available from the Armed Service Exchanges, provided that 
     such merchandise shall be obtained at a cost of no more than 
     the exchange retail price less the amount of commissary 
     surcharge authorized to be collected by section 2486 of this 
     title. If such merchandise is procured by the Defense 
     Commissary Agency from other than the Armed Service 
     Exchanges, the limitations provided in section 2486(e) of 
     this title apply.''.

     SEC. 318. OPERATION OF COMMISSARY STORES.

       Section 2482(a) of title 10, United States Code, is amended 
     by striking ``A contract with a private person'' and all that 
     remains to the end of the subsection.
                       Subtitle D--Other Matters
Sec. 320.  Reimbursement for Reserve Intelligence Support.
Sec. 321.  Disposal of Obsolete and Excess Materials Contained in the 
              National Defense Stockpile.

     SEC. 320. REIMBURSEMENT FOR RESERVE INTELLIGENCE SUPPORT.

       (a) Appropriations available to the Department of Defense 
     for operations and maintenance may be used to reimburse 
     National Guard and Reserve units or organizations for the 
     pay, allowances and other expenses which are incurred by such 
     National Guard and Reserve units or organizations when 
     members of the National Guard or Reserve provide 
     intelligence, including counterintelligence, support to 
     Combatant Commands, Defense Agencies and Joint Intelligence 
     Activities, including the activities and programs included 
     within the National Foreign Intelligence Program, the Joint 
     Military Intelligence Program, and the Tactical Intelligence 
     and Related Activities aggregate.
       (b) Nothing in this section authorizes deviation from 
     established Reserve and National Guard personnel and training 
     procedures.

     SEC. 321. DISPOSAL OF OBSOLETE AND EXCESS MATERIALS CONTAINED 
                   IN THE NATIONAL DEFENSE STOCKPILE.

       Subject to the conditions specified in section 10(c) of the 
     Strategic and Critical Materials Stock Piling Act (50 U.S.C. 
     Sec. 98h-1(c)), the President may dispose of the following 
     obsolete and excess materials contained in the National 
     Defense Stockpile in the following quantities:
       Bauxite, Refractory, 40,000 short tons.
       Chromium Metal, 3,512 short tons.
       Iridium, 25,140 troy ounces.
       Jewel Bearings, 30,273,221 pieces.
       Manganese, Ferro HC, 209,074 short tons.
       Palladium, 11 troy ounces.
       Quartz Crystal, 216,648 pounds.
       Tantalum Metal Ingot, 120,228 pounds contained tantalum.
       Tantalum Metal Powder, 36,020 pounds contained tantalum.
       Thorium Nitrate, 600,000 pounds.
              TITLE IV--MILITARY PERSONNEL AUTHORIZATIONS
                       Subtitle A--Active Forces
Sec. 401. End Strengths for Active Forces.

     SEC. 401. END STRENGTHS FOR ACTIVE FORCES.

       The Armed Forces are authorized strengths for active duty 
     personnel as of September 30, 2002, as follows:
       (1) The Army, 480,000.
       (2) The Navy, 376,000.
       (3) The Marine Corps, 172,600.
       (4) The Air Force, 358,800.
                       Subtitle B--Reserve Forces
See. 405. End Strengths for Selected Reserve.
Sec. 406. End Strengths for Reserves on Active Duty in Support of the 
              Reserves.
Sec. 407. End Strengths for Military Technicians (Dual Status).
Sec. 408. Fiscal Year 2002 Limitation on Number of Non-Dual Status 
              Technicians.
Sec. 409. Authorized Strengths: Reserve Officers and Senior Enlisted 
              Members on Active Duty or Full-time National Guard Duty 
              for Administration of the Reserves or National Guard.
Sec. 410. Increase in Authorized Strengths for Air Force Officers on 
              Active Duty in the Grade of Major.

     SEC. 405. END STRENGTHS FOR SELECTED RESERVE.

       (a) In General.--The Armed Forces are authorized strengths 
     for Selected Reserve personnel of the reserve components as 
     of September 30, 2002, as follows:
       (1) The Army National Guard of the United States, 350,000.
       (2) The Army Reserve, 205,000.
       (3) The Naval Reserve, 87,000.
       (4) The Marine Corps Reserve, 39,558.
       (5) The Air National Guard of the United States, 108,400.
       (6) The Air Force Reserve, 74,700.
       (7) The Coast Guard Reserve, 8,000.
       (b) Adjustments.--The end strengths prescribed by 
     subsection (a) for the Selected Reserve of any reserve 
     component shall be proportionately reduced by--
       (1) the total authorized strength of units organized to 
     serve as units of the Selected Reserve of such component 
     which are on active duty (other than for training) at the end 
     of the fiscal year, and

[[Page S7209]]

       (2) the total number of individual members not in units 
     organized to serve as units of the Selected Reserve of such 
     component who are on active duty (other than for training or 
     for unsatisfactory participation in training) without their 
     consent at the end of the fiscal year.
       Whenever such units or such individual members are released 
     from active duty during any fiscal year, the end strength 
     prescribed for such fiscal year for the Selected Reserve of 
     such reserve component shall be increased proportionately by 
     the total authorized strengths of such units and by the total 
     number of such individual members.

     SEC. 406. END STRENGTHS FOR RESERVES ON ACTIVE DUTY IN 
                   SUPPORT OF THE RESERVES.

       Within the end strengths prescribed in section 411(a), the 
     reserve components of the Armed Forces are authorized, as of 
     September 30, 2002, the following number of Reserves to be 
     serving on full-time active duty or, in the case of members 
     of the National Guard, full-time National Guard duty for the 
     purpose of organizing, administering, recruiting, 
     instructing, or training the reserve components:
       (1) The Army National Guard of the United States, 22,974.
       (2) The Army Reserve, 13,108.
       (3) The Naval Reserve, 14,811.
       (4) The Marine Corps Reserve, 2,261.
       (5) The Air National Guard of the United States, 11,591.
       (6) The Air Force Reserve, 1,437.

     SEC. 407. END STRENGTHS FOR MILITARY TECHNICIANS (DUAL 
                   STATUS).

       The Reserve Components of the Army and the Air Force are 
     authorized strengths for military technicians (dual status) 
     as of September 30, 2002, as follows:
       (1) For the Army Reserve, 5,999.
       (2) For the Army National Guard of the United States, 
     23,128.
       (3) For the Air Force Reserve, 9,818.
       (4) For the Air National Guard of the United States, 
     22,422.

     SEC. 408. FISCAL YEAR 2002 LIMITATION ON NUMBER OF NON-DUAL 
                   STATUS TECHNICIANS.

       The number of civilian employees who are non-dual status 
     technicians of a reserve component of the Army or Air Force 
     as of September 30, 2002, may not exceed the following:
       (1) For the Army Reserve, 1,095.
       (2) For the Army National Guard of the United States, 
     1,600.
       (3) For the Air Force Reserve, 0.
       (4) For the Air National Guard of the United States, 350.

     SEC. 409. AUTHORIZED STRENGTHS: RESERVE OFFICERS AND SENIOR 
                   ENLISTED MEMBERS ON ACTIVE DUTY OR FULL-TIME 
                   NATIONAL GUARD DUTY FOR ADMINISTRATION OF THE 
                   RESERVES OR NATIONAL GUARD.

       (a) In General.--Section 12011 of title 10, United States 
     Code, is amended by amending the body of the section to read 
     as follows:
       ``(a) Ceilings for Full-Time Reserve Component Field Grade 
     Officers.--The number of reserve officers of the reserve 
     components of the Army, Navy, Air Force, and Marine Corps who 
     may be on active duty in the pay grades of O-4, O-5, O-6 for 
     duty described in sections 10211, 10302 through 10305, 123 
     10, or 12402 of this title, or full-time National Guard duty 
     (other than for training) under section 502(f) of title 32, 
     or section 708 of title 32, may not, at the end of any fiscal 
     year, exceed a number for that grade and reserve component in 
     accordance with the following tables:

                          ``Army National Guard
------------------------------------------------------------------------
        AGR Population            O-4 (MAJ)     O-5 (LTC)     O-6 (COL)
------------------------------------------------------------------------
20,000........................        1,500           850           325
22,000........................        1,650           930           350
24,000........................        1,790         1,010           370
26,000........................        1,930         1,085           385
28,000........................        2,070         1,160           400
30,000........................        2,200         1,235           405
32,000........................        2,330         1,305           408
34,000........................        2,450         1,375           411
36,000........................        2,570         1,445           411
38,000........................        2,670         1,515           411
40,000........................        2,770         1,580           411
42,000........................        2,837         1,644           411
------------------------------------------------------------------------


                           ``U.S. Army Reserve
------------------------------------------------------------------------
        AGR Population            O-4 (MAJ)     O-5 (LTC)     O-6 (COL)
------------------------------------------------------------------------
10,000........................        1,390           740           230
11,000........................        1,529           803           242
12,000........................        1,668           864           252
13,000........................        1,804           924           262
14,000........................        1,940           984           272
15,000........................        2,075         1,044           282
16,000........................        2,210         1,104           291
17,000........................        2,345         1,164           300
18,000........................        2,479         1,223           309
19,000........................        2,613         1,282           318
20,000........................        2,747         1,341           327
21,000........................        2,877         1,400           336
------------------------------------------------------------------------


                          ``U.S. Naval Reserve
------------------------------------------------------------------------
        AGR Population            O-4 (MAJ)     O-5 (LTC)     O-6 (COL)
------------------------------------------------------------------------
10,000........................          807           447           141
11,000........................          867           467           153
12,000........................          924           485           163
13,000........................          980           503           173
14,000........................        1,035           521           183
15,000........................        1,088           538           193
16,000........................        1,142           555           203
17,000........................        1,195           565           213
18,000........................        1,246           575           223
19,000........................        1,291           585           233
20,000........................        1,334           595           242
21,000........................        1,364           603           250
22,000........................        1,384           610           258
23,000........................        1,400           615           265
24,000........................        1,410           620           270
------------------------------------------------------------------------


                       ``U.S. Marine Corps Reserve
------------------------------------------------------------------------
        AGR Population            O-4 (MAJ)     O-5 (LTC)     O-6 (COL)
------------------------------------------------------------------------
1,100.........................          106            56            20
1,200.........................          110            60            21
1,300.........................          114            63            22
1,400.........................          118            66            23
1,500.........................          121            69            24
1,600.........................          124            72            25
1,700.........................          127            75            26
1,800.........................          130            78            27
1,900.........................          133            81            28
2,000.........................          136            84            29
2,100.........................          139            87            30
2,200.........................          141            90            31
2,300.........................          143            92            32
2,400.........................          145            94            33
2,500.........................          147            96            34
2,600.........................          149            98            35
------------------------------------------------------------------------


                          ``Air National Guard
------------------------------------------------------------------------
        AGR Population            O-4 (MAJ)     O-5 (LTC)     O-6 (COL)
------------------------------------------------------------------------
5,000.........................          333           335           251
6,000.........................          403           394           260
7,000.........................          472           453           269
8,000.........................          539           512           278
9,000.........................          606           571           287
10,000........................          673           630           296
11,000........................          740           688           305
12,000........................          807           742           314
13,000........................          873           795           323
14,000........................          939           848           332
15,000........................        1,005           898           341
16,000........................        1,067           948           350
17,000........................        1,126           998           359
18,000........................        1,185         1,048           368
19,000........................        1,235         1,098           377
20,000........................        1,283         1,148           380
------------------------------------------------------------------------


                        ``U.S. Air Force Reserve
------------------------------------------------------------------------
        AGR Population            O-4 (MAJ)     O-5 (LTC)     O-6 (COL)
------------------------------------------------------------------------
500...........................           83            85            50
1,000.........................          155           165            95
1,500.........................          220           240           135
2,000.........................          285           310           170
2,500.........................          350           369           203
3,000.........................          413           420           220
3,500.........................          473           464           230
4,000.........................          530           500           240
4,500.........................          585           529           247
5,000.........................          638           550           254
5,500.........................          688           565           261
6,000.........................          735           575           268
7,000.........................          770           595           280
8,000.........................          805           615           290
10,000........................          835           635           300
------------------------------------------------------------------------

       ``(b) Grade Substitutions for Lower Grade Ceilings.--
     Whenever the number of officers serving in any grade for duty 
     described in subsection (a) is less than the 
     number authorized for that grade under this section, the 
     difference between the two numbers may be applied to 
     increase the number authorized under this section for any 
     lower grade.
       ``(c) Determination of Authorized Ceilings.--If the total 
     number of members serving in the grades prescribed in the 
     above tables is between any two consecutive numbers in the 
     first column of the appropriate table, the corresponding 
     authorized strengths for each of the grades shown in that 
     table, for that component, are determined by mathematical 
     interpolation between the respective numbers of the two 
     strengths. If the total numbers of members serving on AGR 
     duty in the first column are greater or less than the figures 
     listed in the first column of the appropriate table, the 
     Secretary concerned shall fix the corresponding strengths for 
     the grades shown in that table at the same proportion as 
     reflected in the nearest limit shown in the table.
       ``(d) Secretarial Waiver.--Upon determination by the 
     Secretary of Defense that such action is in the national 
     interest, the Secretary may increase the number of reserve 
     officers that may be on active duty or full-time National 
     Guard duty in a controlled grade authorized pursuant to 
     subsection (a) for the current fiscal year for any of the 
     Reserve components by a number equal to not more than 5% of 
     the authorized strength in that controlled grade.''.
       (b) In General.--Section 12012 of title 10, United States 
     Code, is amended by amending the body of the section to read 
     as follows:
       C4 (a) Ceilings for Full-Time Reserve Component Senior 
     Enlisted Members.--The number of enlisted members in pay 
     grades of E-8 and E-9 for who may be on active duty under 
     section 10211 or 12310, or on full-time National Guard duty 
     under the authority of section 502(f) of title 32 (other than 
     for training) in connection with organizing, administering, 
     recruiting, instructing, or training the reserve components 
     or the National Guard may not, at the end of any fiscal year, 
     exceed a number determined in accordance with the following 
     tables:

                          ``Army National Guard
------------------------------------------------------------------------
               AGR Population                   E-8 (MSG)     E-9 (SGM)
------------------------------------------------------------------------
20,000......................................        1,650           550
22,000......................................        1,775           615
24,000......................................        1,900           645
26,000......................................        1,945           675
28,000......................................        1,945           705
30,000......................................        1,945           725
32,000......................................        1,945           730
34,000......................................        1,945           735
36,000......................................        1,945           738
38,000......................................        1,945           741
40,000......................................        1,945           743
42,000......................................        1,945           743
------------------------------------------------------------------------


                           ``U.S. Army Reserve
------------------------------------------------------------------------
               AGR Population                   E-8 (MSG)     E-9 (SGM)
------------------------------------------------------------------------
10,000......................................        1,052           154
11,000......................................        1,126           168
12,000......................................        1,195           180

[[Page S7210]]

 
13,000......................................        1,261           191
14,000......................................        1,327           202
15,000......................................        1,391           213
16,000......................................        1,455           224
17,000......................................        1,519           235
18,000......................................        1,583           246
19,000......................................        1,647           257
20,000......................................        1,711           268
21,000......................................        1,775           278
------------------------------------------------------------------------


                          ``U.S. Naval Reserve
------------------------------------------------------------------------
             AGR Population                 E-8 (SCPO)      E-9 (MCPO)
------------------------------------------------------------------------
10,000..................................            340             143
11,000..................................            364             156
12,000..................................            386             169
13,000..................................            407             182
14,000..................................            423             195
15,000..................................            435             208
16,000..................................            447             221
17,000..................................            459             234
18,000..................................            471             247
19,000..................................            483             260
20,000..................................            495             273
21,000..................................            507             286
22,000..................................            519             299
23,000..................................            531             312
24,000..................................            540             325
------------------------------------------------------------------------


                       ``U.S. Marine Corps Reserve
------------------------------------------------------------------------
            AGR Population               E-8 (IST SGT)     E-9 (SGTMAJ)
------------------------------------------------------------------------
1,100.................................              50               11
1,200.................................              55               12
1,300.................................              60               13
1,400.................................              65               14
1,500.................................              70               15
1,600.................................              75               16
1,700.................................              80               17
1,800.................................              85               18
1,900.................................              89               19
2,000.................................              93               20
2,100.................................              96               21
2,200.................................              99               22
2,300.................................             101               23
2,400.................................             103               24
2,500.................................             105               25
2,600.................................             107               26
------------------------------------------------------------------------


                          ``Air National Guard
------------------------------------------------------------------------
            AGR Population                E-8 (SMSGT)      E-9 (CMSGT)
------------------------------------------------------------------------
5,000.................................           1,020              405
6,000.................................           1,070              435
7,000.................................           1,120              465
8,000.................................           1,170             490,
9,000.................................           1,220              510
10,000................................           1,270              530
11,000................................           1,320              550
12,000................................           1,370              570
13,000................................           1,420              589
14,000................................           1,470              608
15,000................................           1,520              626
16,000................................           1,570              644
17,000................................           1,620              661
18,000................................           1,670              678
19,000................................           1,720              695
  20,000..............................           1,770              712
------------------------------------------------------------------------


                        ``U.S. Air Force Reserve
------------------------------------------------------------------------
            AGR Population                E-8 (SMSGT)      F-9 (CMSGT)
------------------------------------------------------------------------
500...................................              75               40
1,000.................................             145               75
1,500208..............................             105
2,000.................................             270              130
2,500.................................             325              150
3,000.................................             375              170
3,500.................................             420              190
4,000.................................             460              210
4,500.................................             495              230
5,000.................................             530              250
05,500................................             565              270
6,000.................................             600              290
7,000.................................             670              330
8,000.................................             740              370
10,000................................             800              400
------------------------------------------------------------------------

       ``(b) Grade Substitution for Lower Grade Ceilings.--
     Whenever the number of members serving in pay grade E-9 for 
     duty described in subsection (a) is less than the number 
     authorized for that grade under this section, the difference 
     between the two numbers may be applied to increase the number 
     authorized under this section for pay grade E-8.
       ``(c) Determination of Authorized Ceilings.--If the total 
     number of members serving in the grades prescribed in the 
     above tables is between, any two consecutive numbers in the 
     first column of the appropriate table, the corresponding 
     authorized strengths for each of the grades shown in that 
     table, for that component, are determined by mathematical 
     interpolation between the respective numbers of the two 
     strengths. If the total numbers of members serving on AGR 
     duty in the first column are greater or less than the 
     figures listed in the first column of the appropriate 
     table, the Secretary concerned shall fix the corresponding 
     strengths for the grades shown in that table at the same 
     proportion as reflected in the nearest limit shown in the 
     table.
       ``(d) Secretarial Waiver.--Upon determination by the 
     Secretary of Defense that such action is in the national 
     interest, the Secretary may increase the number of senior 
     reserve enlisted members that may be on active duty or full-
     time National Guard duty in a controlled grade authorized 
     pursuant to subsection (a) for the current fiscal year for 
     any of the Reserve components by a number equal to not more 
     than 5% of the authorized strength in that controlled 
     grade.''.

     SEC. 410. INCREASE IN AUTHORIZED STRENGTHS FOR AIR FORCE 
                   OFFICERS ON ACTIVE DUTY IN THE GRADE OF MAJOR.

       The table in section 523(a)(1) of title 10, United States 
     Code, is amended by striking the figures under the heading 
     ``Major'' relating to the Air Force and inserting the 
     following:

    ``9,861
    ``10,727
    ``11,593
    ``12,460
    ``13,326
    ``14,192
    ``15,058
    ``15,925
    ``16,792
    ``17,657
    ``18,524
    ``19,389
    ``20,256
    ``21,123
    ``21,989
    ``22,855
    ``23,721
    ``24,588
    ``25,454.''.
                   TITLE V--MILITARY PERSONNEL POLICY
                  Subtitle A--Officer Personnel Policy
Sec. 501. Elimination of Certain Medical and Dental Requirements for 
              Army Early-Deployers.
Sec. 502. Medical Deferment of Mandatory Retirement or Separation.
Sec. 503. Officer in Charge; United States Navy Band.
Sec. 504. Removal of Requirement for Certification for Certain Flag 
              Officers to Retire in Their Highest Grade.
Sec. 505. Three-Year Extension of Certain Force Drawdown Transition 
              Authorities Relating to Personnel Management and 
              Benefits.
Sec. 506. Judicial Review of Selection Boards.

     SEC. 501. ELIMINATION OF CERTAIN MEDICAL AND DENTAL 
                   REQUIREMENTS FOR ARMY EARLY-DEPLOYERS.

       Section 1074a of title 10, United States Code, is amended--
       (1) by striking subsection (d); and
       (2) by redesignating subsection (e) as subsection (d).

     SEC. 502. MEDICAL DEFERMENT OF MANDATORY RETIREMENT OR 
                   SEPARATION.

       Section 640 of title 10, United States Code, is amended----
       (1) by inserting ``(a)'' at the beginning of the paragraph;
       (2) by striking ``cannot'' and inserting ``may not''; and
       (3) by adding at the end the following new subparagraph 
     (b):
       ``(b) An officer whose mandatory retirement or separation 
     under this chapter or chapter 63 of this title is subject to 
     deferral under this section, may be extended for a period not 
     to exceed 30 days following completion of the evaluation 
     requiring hospitalization or medical observation.''.

     SEC. 503. OFFICER IN CHARGE; UNITED STATES NAVY BAND.

       (a) Detail and Grade.--Chapter 565 of title 10, United 
     States Code, is amended by inserting after section 6221 the 
     following new section:

     Sec. 6221a. United States Navy Band: officer in charge

       ``An officer serving in a grade not below lieutenant 
     commander may be detailed as Officer in Charge of the United 
     States Navy Band. While so serving, an officer who holds a 
     grade lower than captain shall hold the grade of captain if 
     he is appointed to that grade by the President, by and with 
     the advice and consent of the Senate. Such appointment may 
     occur notwithstanding the limitation of subsection 5596(d) of 
     this title.''.
       (b) Clerical Amendment.--The table of sections at the 
     beginning of such chapter 565 is amended by inserting after 
     the item referring to section 6221 the following new item:
``6221a. United States Navy Band: officer in charge.''.

     SEC. 504. REMOVAL OF REQUIREMENT FOR CERTIFICATION FOR 
                   CERTAIN FLAG OFFICERS TO RETIRE IN THEIR 
                   HIGHEST GRADE.

       Section 1370(c)(1) of title 10, United States Code, is 
     amended----
       (1) by striking ``certifies in writing to the President and 
     Congress'' and inserting ``determines in writing''; and
       (2) by adding at the end of the paragraph the following new 
     sentence:
       ``The Secretary of Defense shall issue regulations to 
     implement this paragraph.''.

     SEC. 505. THREE-YEAR EXTENSION OF CERTAIN FORCE DRAWDOWN 
                   TRANSITION AUTHORITIES RELATING TO PERSONNEL 
                   MANAGEMENT AND BENEFITS.

       (a) Extension of Early Retirement Authority for Active Duty 
     Members.--Section 4403(i) of the National Defense 
     Authorization Act for Fiscal Year 1993 (10 U.S.C. 1293 note) 
     is amended by striking ``October 1, 2001 ``and inserting 
     ``October 1, 2004''.
       (b) Extension of Authority for Special Separation Benefit 
     and Voluntary Early Separation Incentive.--(I) Section 
     1174a(h)(1) of title 10, United States Code, is amended by 
     striking ``December 31, 2001'' and inserting ``September 30, 
     2004''.
       (2) Section 1175(d)(3) of such title is amended by striking 
     ``December 31, 2001 and inserting ``September 30, 2004''.
       (c) Extension of Authority for Selective Early Retirement 
     Boards.--Section 63 8a(a) of such title is amended by 
     striking ``December 31, 2001 `` and inserting ``September 30, 
     2004''.
       (d) Time-in-Grade Requirement for Retention of Grade upon 
     Voluntary Retirement.--(I) Section 1370(a)(2)(A) of such 
     title is amended by striking ``December 31, 2001'' and 
     inserting ``September 30, 2004''.
       (2) Section 1370(d)(5) of such title is amended by striking 
     ``December 31, 2001 and inserting ``September 30, 2004''.
       (e) Minimum Commissioned Service for Voluntary Retirement 
     as an Officer.--
       (1) Army.--Section 3911(b) of such title is amended by 
     striking ``December 31, 2001'' and inserting ``September 30, 
     2004''.

[[Page S7211]]

       (2) Navy.--Section 6323(a)(2) of such title is amended by 
     striking ``December 31, 2001'' and inserting ``September 30, 
     2004''.
       (3) Air force.--Section 8911(b) of such title is amended by 
     striking ``December 31, 2001'' and inserting ``September 30, 
     2004''.
       (f) Travel, Transportation, and Storage Benefits.--(1) 
     Section 404(c)(1)(C) of title 37, United States Code, is 
     amended by striking ``December 31, 2001'' and inserting 
     ``September 30, 2004''.
       (2) Section 404(f)(2)(B)(v) of such title is amended by 
     striking ``December 31, 2001'' and inserting ``September 30, 
     2004''.
       (3) Section 406(a)(2)(B)(v) of such title is amended by 
     striking ``December 31, 2001'' and inserting ``September 30, 
     2004''.
       (4) Section 406(g)(1)(C) of such title is amended by 
     striking ``December 31, 2001'' and inserting ``September 30, 
     2004''.
       (5) Section 503(c)(1) of the National Defense Authorization 
     Act for Fiscal Year 1991 (37 U.S.C. 406 note) is amended by 
     striking ``December 31, 2001 ``and inserting ``September 30, 
     2004''.
       (g) Educational Leave for Public and Community Service.--
     Section 4463(f) of the National Defense Authorization Art for 
     Fiscal Year 1993 (10 U.S.C. 1143a note) is amended by 
     striking ``December 31, 2001'' and inserting ``September 30, 
     2004''.
       (h) Transitional Health Benefits.--Section 1145 of title 
     10, United States Code, is amended--
       (1) in subsection (a)(i), by striking ``December 31, 2001'' 
     and inserting ``September 30, 2004''.
       (2) in subsection (c)(1), by striking ``December 31, 2001'' 
     and inserting ``September 30, 2004''.
       (3) in subsection (e), by striking ``December 31, 2001'' 
     and inserting ``September 30, 2004''.
       (i) Transitional Commissary and Exchange Benefits.--Section 
     1146 of such title is amended by striking ``December 31, 
     2001'' both places it appears and inserting ``September 30, 
     2004''.
       (j) Transitional Use of Military Housing.--Section 1147(a) 
     of such title is amended--
       (1) in paragraph (1), by striking ``December 31, 2001'' and 
     inserting ``September 30, 2004''.
       (2) in paragraph (2), by striking ``December 31, 2001'' and 
     inserting ``September 30, 2004''.
       (k) Continued Enrollment of Dependents in Defense 
     Dependents Education System.--Section 1407(c)(1) of the 
     Defense Dependents' Education Act of 1978 (20 U.S.C. 
     926(c)(1)) is amended by striking ``December 31, 2001'' and 
     inserting ``September 30, 2004''.
       (l) Force Reduction Transition Period Definition.--Section 
     4411 of the National Defense Authorization Act for Fiscal 
     Year 1993 (10 U.S.C. 12681 note) is amended by striking 
     ``December 31, 2001'' and inserting ``September 30, 2004''.
       (m) Temporary Special Authority for Force Reduction Period 
     Retirements.--Section 4416(b)(1) of the National Defense 
     Authorization Act for Fiscal Year 1993 (10 U.S.C. 12681 note) 
     is amended by striking ``October 1, 2001'' and inserting 
     ``October 1, 2004''.
       (n) Retired Pay for Non-regular Service.--(1) Section 
     12731(f) of title 10, United States Code, is amended by 
     striking ``December 31, 2001'' and inserting ``September 30, 
     2004''.
       (2) Section 12731a of such title is amended--
       (A) in subsection (a)(1)(B), by striking ``the end of the 
     period described in subsection (b)'' and inserting ``October 
     1, 2004''.
       (B) in subsection (b), by striking ``December 31, 2001'' 
     and inserting ``October 1, 2004''.
       (o) Affiliation with Guard and Reserve Units; Waiver of 
     Certain Limitations.--Section 1150(a) of such title is 
     amended by striking ``December 31, 2001'' and inserting 
     ``'September 30, 2004''.
       (p) Reserve Montgomery GI Bill.--Section 16133(b)(1)(B) of 
     such title is amended by striking ``December 31, 2001'' and 
     inserting ``September 30, 2004''.

     SEC. 506. REVIEW OF ACTIONS OF SELECTION BOARDS.

       (a) In General.--Chapter 79 of title 10, United States 
     Code, is amended by adding at the end the following:

     ``Sec. 1558. Exclusive remedies in cases involving selection 
       boards

       ``(a) Correction of Military Records.--The Secretary 
     concerned may correct a person's military records in 
     accordance with a recommendation made by a special board. Any 
     such correction shall be effective, retroactively, as of the 
     effective date of the action taken on a report of a previous 
     selection board that resulted in the action corrected in the 
     person's military records.
       ``(b) Relief Associated with Corrections of Certain 
     Actions.--(1) The Secretary concerned shall ensure that a 
     person receives relief under paragraph (2) or (3), as the 
     person may elect, if the person--
       ``(A) was separated or retired from an armed force, or 
     transferred to the retired reserve or to inactive status in a 
     reserve component, as a result of a recommendation of a 
     selection board; and
       ``(B) becomes entitled to retention on or restoration to 
     active duty or active status in a reserve component as a 
     result of a correction of the person's military records under 
     subsection (a).
       ``(2)(A) With the consent of a person referred to in 
     paragraph (1), the person shall be retroactively and 
     prospectively restored to the same status, rights, and 
     entitlements (less appropriate offsets against back pay and 
     allowances) in the person's armed force as the person would 
     have had if the person had not been selected to be separated, 
     retired, or transferred to the retired reserve or to inactive 
     status in a reserve component, as the case may be, as a 
     result of an action corrected under subsection (a). An action 
     under this subparagraph is subject to subparagraph (B).
       ``(B) Nothing in subparagraph (A) shall be construed to 
     permit a person to be on active duty or in an active status 
     in a reserve component after the date on which the person 
     would have been separated, retired, or transferred to the 
     retired reserve or to inactive status in a reserve component 
     if the person had not been selected to be separated, retired, 
     or transferred to the retired reserve or to inactive status 
     in a reserve component, as the case may be, in an action of a 
     selection board that is corrected under subsection (a).
       ``(3) If the person does not consent to a restoration of 
     status, rights, and entitlements under paragraph (2), the 
     person shall receive back pay and allowances (less 
     appropriate offsets) and service credit for the period 
     beginning on the date of the person's separation, retirement, 
     or transfer to the retired reserve or to inactive status in a 
     reserve component, as the case may be, and ending on the 
     earlier of--
       ``(A) the date on which the person would have been so 
     restored under paragraph (2), as determined by the Secretary 
     concerned; or
       ``(B) the date on which the person would otherwise have 
     been separated, retired, or transferred to the retired 
     reserve or to inactive status in a reserve component, as the 
     case may be.
       ``(c) Finality of Unfavorable Action.--If a special board 
     makes a recommendation not to correct the military records of 
     a person regarding action taken in the case of that person on 
     the basis of a previous report of a selection board, the 
     action previously taken on that report shall be considered as 
     final as of the date of the action taken on that report.
       ``(d) Regulations.--(1) The Secretary concerned may 
     prescribe regulations to carry out this section (other than 
     subsection (e)) with respect to the armed force or armed 
     forces under the jurisdiction of the Secretary.
       ``(2) The Secretary may prescribe in the regulations the 
     circumstances under which consideration by a special board 
     may be provided for under this section, including the 
     following:
       ``(A) The circumstances under which consideration of a 
     person's case by a special board is contingent upon 
     application by or for that person.
       ``(B) Any time limits applicable to the filing of an 
     application for consideration.
       ``(3) Regulations prescribed by the Secretary of a military 
     department under this subsection shall be subject to the 
     approval of the Secretary of Defense.
       ``(e) Judicial Review.--(l) A person challenging for any 
     reason the action or recommendation of a selection board, or 
     the action taken by the Secretary concerned on the report of 
     a selection board, is not entitled to relief in any judicial 
     proceeding unless the person has first been considered by a 
     special board under this section or the Secretary concerned 
     has denied such consideration.
       ``(2) A court of the United States may review a 
     determination by the Secretary concerned under this section 
     not to convene a special board. A court may set aside such 
     determination only if it finds the determination to be 
     arbitrary or capricious, not based on substantial evidence, 
     or otherwise contrary to law. If a court sets aside a 
     determination not to convene a special board, it shall remand 
     the case to the Secretary concerned, who shall provide for 
     consideration of the person by a special board under this 
     section.
       ``(3) A court of the United States may review the 
     recommendation of a special board convened under this section 
     and any action taken by the Secretary concerned on the report 
     of such special board. A court may set aside such 
     recommendation or action, as the case may be, only if it 
     finds that the recommendation or action was contrary to law 
     or involved a material error of fact or a material 
     administrative error. If a court sets aside the 
     recommendation of a special board, it shall remand the case 
     to the Secretary concerned, who shall provide for 
     reconsideration of the person by another special board. If a 
     court sets aside the action of the Secretary concerned on the 
     report of a special board, it shall remand the case to the 
     Secretary concerned for a new action on the report of the 
     special board.
       ``(f) Exclusivity of Remedies.--Notwithstanding any other 
     provision of law, but subject to subsection (g), the remedies 
     provided under this section are the only remedies available 
     to a person for correcting an action or recommendation of a 
     selection board regarding that person or an action taken on 
     the report of a selection board regarding that person.
       ``(g) Existing Jurisdiction.--(1) Nothing in this section 
     limits the jurisdiction of any court of the United States 
     under any provision of law to determine the validity of any 
     statute, regulation, or policy relating to selection boards, 
     except that, in the event that any such statute, regulation, 
     or policy is held invalid, the remedies prescribed in this 
     section shall be the sole and exclusive remedies available to 
     any person challenging the recommendation of a special board 
     on the basis of the invalidity.

[[Page S7212]]

       ``(2) Nothing in this section limits authority to correct a 
     military record under section 1552 of this title.
       ``(h) Timeliness of Action.--(1) For the purposes of 
     subsection (e)--
       ``(A) If, not later than six months after receipt of a 
     complete application for consideration by a special board, 
     the Secretary concerned shall have neither convened a special 
     board nor denied consideration by a special board, the 
     Secretary shall be deemed to have been denied such 
     consideration.
       ``(B) If, not later than one year after the convening of a 
     special board, the Secretary concerned shall not have taken 
     final action on the report of such board, the Secretary shall 
     be deemed to have denied relief to the person applying for 
     consideration by the board.
       ``(2) Under regulations prescribed in accordance with 
     subsection (d), the Secretary concerned may exclude an 
     individual application from the time limits prescribed in 
     this subsection if the Secretary determines that the 
     application warrants a longer period of consideration. The 
     authority of the Secretary of a military department under 
     this paragraph may not be delegated.
       ``(i) Inapplicability to Coast Guard.--This section does 
     not apply to the Coast Guard when it is not operating as a 
     service in the Navy.
       ``(j) Definitions.--In this section:
       ``(1) The term `special board'--
       ``(A) means a board that the Secretary concerned convenes 
     under any authority to consider whether to recommend a person 
     for appointment, enlistment, reenlistment, assignment, 
     promotion, retention, separation, retirement, or transfer to 
     inactive status in a reserve component instead of referring 
     the records of that person for consideration by a previously 
     convened selection board which considered or should have 
     considered that person;
       ``(B) includes a board for the correction of military or 
     naval records convened under section 1552 of this title, if 
     designated as a special board by the Secretary concerned; and
       ``(C) does not include a promotion special selection board 
     convened under section 628 or 14502 of this title.
       ``(2) The term `selection board'--
       ``(A) means a selection board convened under section 
     573(c), 580, 580a, 581, 611(b), 637, 638, 638a, 14101(b), 
     14701, 14704, or 14705 of this title, and any other board 
     convened by the Secretary concerned under any authority to 
     recommend persons for appointment, enlistment, reenlistment, 
     assignment, promotion, or retention in the armed forces or 
     for separation, retirement, or transfer to inactive status in 
     a reserve component for the purpose of reducing the number of 
     persons serving in the armed forces; and
       ``(B) does not include--
       ``(i) a promotion board convened under section 573(a), 
     611(a), or 14101(a) of this title;
       ``(ii) a special board;
       ``(iii) a special selection board convened under section 
     628 of this title; or
       ``(iv) a board for the correction of military records 
     convened under section 1552 of this title.''.
       (b) Clerical Amendment.--The table of sections at the 
     beginning of such chapter 79 is amended by adding at the end 
     the following:

``1558. Exclusive remedies in cases involving selection boards.''.

       (c) Special Selection Boards.--Section 628 of such title is 
     amended--
       (1) by redesignating subsection (g) as subsection (j); and
       (2) by inserting after subsection (f) the following new 
     subsections:
       ``(g) Limitations of Other Jurisdiction.--No official or 
     court of the United States may--
       ``(1) consider any claim based to any extent on the failure 
     of an officer or former officer of the armed forces to be 
     selected for promotion by a promotion board until--
       ``(A) the claim has been referred by the Secretary 
     concerned to a special selection board convened under this 
     section and acted upon by that board and the report of the 
     board has been approved by the President; or
       ``(B) the claim has been rejected by the Secretary 
     concerned without consideration by a special selection board; 
     or
       ``(2) except as provided in subsection (h), grant any 
     relief on such a claim unless the officer or former officer 
     has been selected for promotion by a special selection board 
     convened under this section to consider the officer's claim 
     and the report of the board has been approved by the 
     President.
       ``(h) Judicial Review.--(1) A court of the United States 
     may review a determination by the Secretary concerned under 
     subsection (a)(1) or (b)(1) not to convene a special 
     selection board. If a court finds the determination to be 
     arbitrary or capricious, not based on substantial evidence, 
     or otherwise contrary to law, it shall remand the case to the 
     Secretary concerned, who shall provide for consideration of 
     the officer or former officer by a special selection board 
     under this section.
       ``(2) A court of the United States may review the action of 
     a special selection board convened under this section on a 
     claim of an officer or former officer and any action taken by 
     the President on the report of the board. If a court finds 
     that the action was contrary to law or involved a material 
     error of fact or a material administrative error, it shall 
     remand the case to the Secretary concerned, who shall provide 
     for reconsideration of the officer or former officer by 
     another special selection board.
       ``(i) Existing Jurisdiction.--(1) Nothing in this section 
     limits the jurisdiction of any court of the United States 
     under any provision of law to determine the validity of any 
     statute, regulation, or policy relating to selection boards, 
     except that, in the event that any such statute, regulation, 
     or policy is held invalid, the remedies prescribed in this 
     section shall be the sole and exclusive remedies available to 
     any person challenging the recommendation of a selection 
     board on the basis of the invalidity.
       ``(2) Nothing in this section limits the authority of the 
     Secretary of a military department to correct a military 
     record under section 1552 of this title.''.
       (c) Effective Date and Applicability.--(1) The amendments 
     made by this section shall take effect on the date of the 
     enactment of this Act and, except as provided in paragraph 
     (2), shall apply with respect to any proceeding pending on or 
     after that date without regard to whether a challenge to an 
     action of a selection board of any of the Armed Forces being 
     considered in such proceeding was initiated before, on, or 
     after that date.
       (2) The amendments made by this section shall not apply 
     with respect to any action commenced in a court of the United 
     States before the date of the enactment of this Act.
             Subtitle B--Reserve Component Personnel Policy
Sec. 511. Retirement of Reserve Personnel.
Sec. 512. Amendment to Reserve PERSTEMPO Definition.
Sec. 513. Individual Ready Reserve Physical Examination Requirement.
Sec. 514. Benefits and Protections for Members in a Funeral Honors Duty 
              Status.
Sec. 515. Funeral Honors Duty Performed by Members of the National 
              Guard.
Sec. 516. Strength and Grade Ceiling Accounting for Reserve Component 
              Members on Active Duty in Support of a Contingency 
              Operation.
Sec. 517. Reserve Health Professionals Stipend Program Expansion.
Sec. 518. Reserve Officers on Active Duty for a Period of Three Years 
              or Less.
Sec. 519. Active Duty End Strength Exemption for National Guard and 
              Reserve Personnel Performing Funeral Honors Functions.
Sec. 520. Clarification of Functions That May Be Assigned to Active 
              Guard and Reserve Personnel on Full-Time National Guard 
              Duty.
Sec. 521. Authority for Temporary Waiver of the Requirement for a 
              Baccalaureate Degree for Promotion of Certain Reserve 
              Officers of the Army.
Sec. 522. Authority of the President to Suspend Certain Laws Relating 
              to Promotion, Retirement and Separation; Duties.

     SEC. 511. RETIREMENT OF RESERVE PERSONNEL.

       (a) Retired Reserve.--Section 10154(2) of title 10, United 
     States Code, is amended by striking ``upon their request''.
       (b) Retirement for Failure of Selection of Promotion.--(1) 
     Section 14513 of such title 10 is amended--
       (A) in the heading, by inserting ``or retirement'' after 
     ``Separation''; and
       (B) in paragraph (2), by striking ``'and applies'' and 
     inserting ``unless the officer requests not to be transferred 
     to the Retired Reserve'' before the semicolon.
       (2) The table of sections at the beginning of chapter 1407 
     of such title 10 is amended by striking the item relating to 
     section 14513 and inserting the following new item:
``14513. Separation or retirement for failure of selection for 
              promotion.''.
       (c) Retirement for Years of Service or After Selection for 
     Early Removal.--Section 14514 of such title 10 is amended--
       (1) in paragraph (1), by striking ``and applies'' and 
     inserting `` unless the officer requests not to be 
     transferred to the Retired Reserve'' before the semicolon; 
     and
       (2) in paragraph (2), by striking ``does not apply for such 
     transfer'' and inserting ``has requested not to be 
     transferred to the Retired Reserve'' after ``is not qualified 
     or''.
       (d) Retirement for Age.--Section 14515 of such title 10 is 
     amended--
       (1) in paragraph (1), by striking ``and applies'' and 
     inserting ``unless the officer requests not to be transferred 
     to the Retired Reserve'' before the semicolon; and
       (2) in paragraph (2), by striking ``does not apply for 
     transfer'' and inserting ``has requested not to be 
     transferred'' following ``is riot qualified or''.
       (e) Discharge or retirement of warrant officers for years 
     of service or age.--(1) Chapter 1207 of such title 10 is 
     amended by adding at the end the following new section:

     ``12244. Warrant officers: discharge or retirement for years 
       of service or for age

       ``Each reserve warrant officer of the Army, Navy, Air 
     Force, or Marine Corps who is in an active status and has 
     reached the maximum years of service or age prescribed by the 
     Secretary concerned shall--
       ``(1) be transferred to the Retired Reserve, if the warrant 
     officer is so qualified for such transfer, unless the warrant 
     officer requests not to be transferred to the Retired 
     Reserve; or
       ``(2) if the warrant officer is not qualified for such 
     transfer or requests not to be 42 transferred to the Retired 
     Reserve, be discharged.''.

[[Page S7213]]

       (2) The table of sections at the beginning of such chapter 
     1207 of title 10 is amended by adding at the end the 
     following new item:
``12244. Warrant officers: discharge or retirement for years of service 
              or for age.''.
       (f) Discharge, or Retirement of Enlisted Members for Years 
     of Service or Age.--(1) Chapter 1203 of such title 10 is 
     amended by addinc, at the end the following new section:

     ``12108. Enlisted members: discharge or retirement for years 
       of service or for age

       ``Each reserve enlisted member of the Army, Navy, Air 
     Force, or Marine Corps who is in an active status and has 
     reached the maximum years of service or age prescribed by the 
     Secretarv concerned shall--
       ``(1) be transferred to the Retired Reserve, if the member 
     is so qualified for such transfer, unless the member requests 
     not to be transferred to the Retired Reserve; or
       ``(2) if the member is not qualified for such transfer or 
     requests not to be transferred to the Retired Reserve, be 
     discharged.''.
       (2) The table of sections at the beginning of such chapter 
     is amended by adding at the end the following new item:
``12108. Enlisted members: discharge or retirement for years of service 
              or for age.''.

     SEC. 512. AMENDMENT TO RESERVE PERSTEMPO DEFINITION.

       Section 991(b) of title 10, United States Code, is 
     amended--
       (1) in paragraph (1), by inserting ``active'' before 
     ``service'' and adding at the end the following new sentence:
       ``For the purpose of this definition, the housing in which 
     a member of a reserve component resides is either the housing 
     the member normally occupies when on garrison duty or the 
     member's permanent civilian residence.'';
       (2) by striking paragraph (2);
       (3) by redesignating paragraphs (3) and (4) as paragraphs 
     (2) and (3) respectively; and
       (4) in paragraph (3) (as redesignated), by striking ``in 
     paragraphs (1) and (2).'' and inserting ``in paragraph 
     (1).''.

     SEC. 513. INDIVIDUAL READY RESERVE PHYSICAL EXAMINATION 
                   REQUIREMENT.

       Section 10206 of title 10, United States Code, is amended--
       (1) in subsection (a), by striking ``Ready Reserve'' and 
     inserting ``Selected Reserve'';
       (2) by redesignating subsection (b) as subsection (c); and
       (3) by inserting after subsection (a) the following new 
     subsection:
       ``(b) As determined by the Secretary concerned, each member 
     of the Individual Ready Reserve or Inactive National Guard 
     shall be provided a physical examination, if required--
       ``(1) to determine the member's fitness for military duty; 
     or
       ``(2) for promotion, attendance at a military school or 
     other career progression requirements.''.

     SEC. 514. BENEFITS AND PROTECTIONS FOR MEMBERS IN A FUNERAL 
                   HONORS DUTY STATUS.

       (a) Persons Subject to the Uniformed Code of Military 
     Justice.--Section 802 of title 10, United States Code, is 
     amended--
       (1) in subsection (a)(3), by inserting ``or in a funeral 
     honors duty status'' after ``on inactive-duty training''; and
       (2) in subsection (d)(2)(B), by inserting ``or in a funeral 
     honors duty status'' after ``on inactive-duty training''.
       (b) Benefits for Dependents of a Deceased Reserve Component 
     Member.--Section 1061 of such title 10 is amended--
       (1) in subsection (b)(1), by striking ``or'' the first time 
     it appears and inserting ``, or funeral honors duty'' before 
     the semicolon; and
       (2) in subsection (b)(2), by striking ``or'' the first time 
     it appears and inserting ``, or funeral honors duty'' before 
     the period.
       (c) Payment of a Death Gratuity.--(1) Section 1475(a) of 
     such title 10 is amended--
       (A) by redesignating paragraphs (3), (4) and (5) as 
     paragraphs (4), (5) and (6), respectively;
       (B) by inserting after paragraph (2) the following new 
     paragraph:
       ``(3) a Reserve of an armed force who dies while performing 
     funeral honors duty;''; and
       (C) in paragraph (4) (as redesignated in subsection (c)(1)) 
     by--
       (i) striking ``or'' both time it appears;
       (ii) inserting ``or funeral honors duty'' after ``Public 
     Health Service),'';
       (iii) inserting a comma before and after ``inactive duty 
     training'' the second time it appears in the sentence; and
       (iv) inserting ``or funeral honors duty'' before the 
     semicolon.
       (2) Section 1476(a) of such title 10 is amended--
       (A) in paragraph (1)(A), by striking ``or'';
       (B) in paragraph (1)(B), by striking the period and 
     inserting ``; or'';
       (C) by adding at the end of paragraph (1) the following new 
     subparagraph:
       ``(C) funeral honors duty.''; and
       (D) in paragraph (2)(A), by striking ``or'' the first time 
     it appears and inserting ``, or funeral honors duty'' after 
     ``inactive-duty training''.
       (d) Military Authority for Members of the Coast Guard 
     Reserve.--Section 704 of title 14, United States Code, is 
     amended by--
       (1) striking ``or'' the first time it appears in the second 
     sentence; and
       (2) inserting ``, or funeral honors duty'' after 
     ``inactive-duty training''.
       (E) Benefits for Members of the Coast Guard Reserve.--
     Section 705(a) of such title 14 is amended by inserting ``on 
     funeral honors duty,'' after ``on inactive-duty training,''.
       (f) Definitions.--Section 101 of title 38, United States 
     Code, is amended--(l) in paragraph (24), by striking ``and'' 
     following ``aggravated in the line of duty,'' and inserting 
     ``, and any period of funeral honors duty during which the 
     individual concerned was disabled or died from an injury 
     incurred or aggravated in line of duty'' before the period; 
     and
       (2) by adding at the end the following new paragraph:
       ``(34) The term ``Funeral Honors Duty'' means--
       ``(A) duty prescribed for Reserves by the Secretary 
     concerned under section 12503 of title 10 to prepare for or 
     perform funeral honors functions at the funeral of a veteran;
       `` (B) in the case of members of the Army National Guard or 
     Air National Guard of any State, duty under section 115 of 
     title 32 to prepare for or perform funeral honors functions 
     at the funeral of a veteran; and
       ``(C) Authorized travel to and from such duty.''.

     SEC. 515. FUNERAL HONORS DUTY PERFORMED BY MEMBERS OF THE 
                   NATIONAL GUARD.

       Section 1491 (b) of title 10, United States Code, is 
     amended by inserting after paragraph (2) the following new 
     paragraph:
       ``(3) A member of the Army National Guard of the United 
     States or Air National Guard of the United States who serves 
     as a member of a funeral honors detail while serving in a 
     duty status authorized under state law shall be considered to 
     be a member of the armed forces for the purpose of fulfilling 
     the two member funeral honors detail requirement in paragraph 
     (2).''.

     SEC. 516. STRENGTH AND GRADE CEILING ACCOUNTING FOR RESERVE 
                   COMPONENT MEMBERS ON ACTIVE DUTY IN SUPPORT OF 
                   A CONTINGENCY OPERATION.

       (a) Active Duty Strength Accounting--Section 11 5(c) of 
     title 10, United States Code is amended--
       (1) in subparagraph (1), by striking ``and'' at the end of 
     the subparagraph;
       (2) in subparagraph (2), by striking the period and adding 
     ``; and'' at the end of the subparagraph; and
       (3) by adding the following new subparagraph:
       ``(3) increase the end strength authorized pursuant to 
     subsection (a)(1)(A) for a fiscal year for any of the armed 
     forces by a number equal to the number of members of the 
     reserve components on active duty under section 12301(d) of 
     this title in support of a contingency operation as defined 
     in section 101(a)(13) of this title.''.
       (b) Increase in Authorized Daily Average for Members in Pay 
     Grades E-8 and E-9 on Active Duty Under Certain 
     Circumstances.--Section 517 of such title 10 is amended at 
     the end by adding the following new paragraph:
       ``(d) The Secretary of Defense may increase the authorized 
     daily average number of enlisted members on active duty in an 
     armed force in pay grades E-8 and E-9 in a fiscal year 
     pursuant to subsection (a) by the number of enlisted members 
     of a reserve component in that armed force in the pay grades 
     of E-8 and E-9 on active duty under section 12301(d) of this 
     title in support of a contingency operation as defined in 
     section 101(a)(13) of this title,''.
       (c) Increase in Authorized Strengths for Commissioned 
     Officers in Pay Grades O-4, O-5 and O-6 on Active Duty Under 
     Certain Circumstances.--Section 523 of such title 10 is 
     amended----
       (1) in paragraphs (a)(1) and (a)(2), by striking 
     ``subsection (c)'' and inserting subsections (c) and (e)''; 
     and
       (2) by adding at the end the following new subsection:
       ``(e) The Secretary of Defense may increase the authorized 
     total number of commissioned officers serving on active duty 
     at the end of any fiscal year pursuant to subsection (a) by 
     the number of commissioned officers of a reserve component of 
     the Army, Navy, Air Force, or Marine Corps on active duty 
     under section 12301(d) of this title in support of a 
     contingency operation as defined in section 101(a)(13) of 
     this title.''.
       (d) Increase, in Authorized Strengths for General and Flag 
     Officers on Active Duty Under Certain Circumstances.--Section 
     526(a) of such title 10 is amended by----
       (1) striking ``the'' the first time it appears;
       (2) inserting ``(1) Except as provided in paragraph (2), 
     the'' following ``Limitations.----'';
       (3) redesignating paragraphs (1), (2), (3) and (4) as 
     subparagraphs (A), (B), (C) and (D), respectively; and
       (4) inserting after subparagraph (D) (as redesignated by 
     section (d)(3)) the following new paragraph:
       ``(2) The Secretary of Defense may increase the number of 
     general and flag officers on active duty pursuant to 
     paragraph (1) by the number of reserve component general and 
     flag officers on active duty under section 12301(d) of this 
     title in support of a contingency operation as defined in 
     section 101(a)(13) of this title.''.

     SEC. 517. RESERVE HEALTH PROFESSIONALS STIPEND PROGRAM 
                   EXPANSION.

       (a) Purpose of Program.--Section 16201(a) of title 10, 
     United States Code, is amended to read as follows:
       ``(a) Establishment of Program.--For the purposes of 
     obtaining adequate numbers of

[[Page S7214]]

     commissioned officers in the reserve components who are 
     qualified in health professions, the Secretary of each 
     military department may establish and maintain a program to 
     provide financial assistance under this chapter to persons 
     engaged in training that leads to a degree in medicine or 
     dentistry, and to a health professions specialty critically 
     needed in wartime. Under such a program, the Secretary 
     concerned may agree to pay a financial stipend to persons 
     engaged in health care education and training in return for a 
     commitment to subsequent service in the Ready Reserve.''
       (b) Medical and Dental Student Stipend.--Section 16201 of 
     such title 10 is amended by----
       (1) redesignating subsections (b), (c), (d) and (e) as 
     subsections (c), (d), (e) and (f);
       (2) inserting the following new subsection:
       ``(b) Medical and Dental School Students.--(1) Under the 
     stipend program under this chapter, the Secretary of the 
     military department concerned may enter into an agreement 
     with a person who----
       ``(A) is eligible to be appointed as an officer in a 
     Reserve component;
       ``(B) is enrolled or has been accepted for enrollment in an 
     institution in a course of study that results in a degree in 
     medicine or dentistry;
       ``(C) signs an agreement that, unless sooner separated, the 
     person will----
       ``(i) complete the educational phase of the program;
       ``(ii) accept a reappointment or redesignation within his 
     reserve component, if tendered, based upon his health 
     profession, following satisfactory completion of the 
     educational and intern programs; and
       ``(iii) participate in a residency program; and
       (D) if required by regulations prescribed by the Secretary 
     of Defense, agrees to apply for, if eligible, and accept, if 
     offered, residency training in a health profession skill 
     which has been designated by the Secretary of Defense as a 
     critically needed wartime skill.
       ``(2) Under the agreement----
       ``(A) the Secretary of the military department concerned 
     shall agree to pay the participant a stipend, in the amount 
     determined under subsection (f), for the period or the 
     remainder of the period the student is satisfactorily 
     progressing toward a degree in medicine or dentistry while 
     enrolled in an accredited medical or dental school;
       ``(B) the participant shall not be eligible to receive such 
     stipend before appointment, designation, or assignment as an 
     officer for service in the Ready Reserve;
       (C) the participant shall be subject to such active duty 
     requirements as may be specified in the agreement and to 
     active duty in time of war or national emergency as provided 
     by law for members of the Ready Reserve; and
       ``(D) the participant shall agree to serve, upon successful 
     completion of the program, one year in the Selected Reserve 
     for each six months, or part thereof, for which the stipend 
     is provided. In the case of a participant who enters into a 
     subsequent agreement under subsection (c) and successfully 
     completes residency training in a specialty designated by the 
     Secretary of Defense as a specialty critically needed by the 
     military department in wartime, the requirement to serve in 
     the Selected Reserve may be reduced to one year for each 
     year, or part thereof, for which the stipend was provided 
     while enrolled in medical or dental school.''
       (c) Wartime Critical Skills.--Section 16201(c), (as 
     redesignated by section (b)), is amended----
       (1) by inserting ``WARTIME'' following ``CRITICAL'' in the 
     heading; and
       (2) in paragraph (1)(B) by inserting ``or has been 
     appointed as a medical or dental officer in the Reserve of 
     the armed force concerned'' before the semicolon at the end 
     of the paragraph.
       (d) Service Obligation Requirement.--Subparagraph (2)(D) of 
     subsection (c), (as redesignated by section (b)), and 
     subparagraph (2)(D) of subsection (d), (as redesignated by 
     section (b)), are amended by striking ``two years in the 
     Ready Reserve for each year,'' and inserting ``one year in 
     the Ready Reserve for each six months,''.
       (e) Clerical Amendments.--Subparagraphs (2)(A) of 
     subsection (c), (as redesignated by section (b)), and 
     subparagraph (2)(A) of subsection (d), (as redesignated by 
     section (b)), are amended by striking ``subsection (e)'' and 
     inserting ``subsection (f)''.

     SEC. 518. RESERVE OFFICERS ON ACTIVE DUTY FOR A PERIOD OF 
                   THREE YEARS OR LESS.

       (a) Clarification of Exemption.--Section 641(l)(D) of title 
     10, United States Code, is amended to read as follows:
       ``(D) on active duty under section 12301(d) of this title, 
     other than as provided under subparagraph (C), provided the 
     call or order to active duty, as prescribed in regulations of 
     the Secretary concerned, specifies a period of three years or 
     less and continued placement on the reserve active-status 
     list;''.
       (b) Retroactive Application.--(1) Officers who were placed 
     on the reserve active status list under section 641(1)(D), as 
     amended by section 521 of the Floyd D. Spence National 
     Defense Authorization Act for Fiscal Year 2001 (Public Law 
     106-398; 114 Stat. 1654A-108), may be considered, as 
     determined by the Secretary concerned, to have been on the 
     active-duty list during the period beginning on the date of 
     enactment of Public Law 106-398 through the date of enactment 
     of this Act.
         (2) Officers who were placed on the active duty list on 
     or after October 30, 1997, may, at the discretion of the 
     Secretary concerned, be placed on the reserve active-status 
     list upon enactment of this Act, provided they otherwise meet 
     the conditions specified in section 641(1)(D) as amended by 
     this Act.

     SEC. 519. ACTIVE DUTY END STRENGTH EXEMPTION FOR NATIONAL 
                   GUARD AND RESERVE PERSONNEL PERFORMING FUNERAL 
                   HONORS FUNCTIONS.

       Section 115(d) of title 10, United States Code, is amended 
     by adding at the end the following new paragraphs:
       ``(10) Members of reserve components on active duty to 
     prepare for and to perform funeral honors functions for 
     funerals of veterans in accordance with section 1491 of this 
     title.
       ``(11) Members on full-time National Guard duty to prepare 
     for and to perform funeral honors functions for funerals of 
     veterans in accordance with section 1491 of this title.''.

     SEC. 520. CLARIFICATION OF FUNCTIONS THAT MAY BE ASSIGNED TO 
                   ACTIVE GUARD AND RESERVE PERSONNEL ON FULL-TIME 
                   NATIONAL GUARD DUTY.

       Section 12310(b) of title 10, United States Code, is 
     amended by inserting ``, or a Reserve who is a member of the 
     National Guard serving on full-time National Guard duty under 
     section 502(f) of title 32 in connection with functions 
     referred to in subsection (a),'' after ``on active duty as 
     described in subsection (a)''.

     SEC. 521. AUTHORITY FOR TEMPORARY WAIVER OF THE REQUIREMENT 
                   FOR A BACCALAUREATE DEGREE FOR PROMOTION OF 
                   CERTAIN RESERVE OFFICERS OF THE ARMY.

       Section 516 of the Strom Thurmond National Defense 
     Authorization Act for Fiscal Year 1999 (Public Law 105-261; 
     112 Stat. 1920, 2008) is amended----
       (1) in subsection (a), by striking ``(a) Waiver Authority 
     for Army OCS Graduates.--'' and ``before the date of the 
     enactment of this Act''; and
       (2) in subsection (b), by striking ``2000'' and inserting 
     ``2003''.

     SEC. 522. AUTHORITY OF THE PRESIDENT TO SUSPEND CERTAIN LAWS 
                   RELATING TO PROMOTION, RETIREMENT AND 
                   SEPARATION; DUTIES.

       Section 12305 of title 10, United States Code, is amended 
     by adding at the end the following new subsection (c):
       ``(c) Active duty members whose mandatory separations or 
     retirements incident to section 1251 or sections 632-637 of 
     this title are delayed pursuant to invocation of this 
     section, will be afforded up to 90 days following termination 
     of the suspension before being separated of retired.''.
                   Subtitle C--Education and Training
Sec. 531. Authority for the Marine Corps University to Award the 
    Degree of Master of Strategic Studies.
Sec. 532. Reserve Component Distributed Learning.
Sec. 533. Repeal of Limitation on Number of Junior Reserve Officers' 
              Training Corps (JROTC) Units.
Sec. 534. Modification of the Nurse Officer Candidate Accession Program 
              Restriction on Students Attending Civilian Educational 
              Institutions with Senior Reserve Officers' Training 
              Programs.
Sec. 535. Defense Language Institute Foreign Language Center.

     SEC.531. AUTHORITY FOR THE MARINE CORPS UNIVERSITY TO AWARD 
                   THE DEGREE OF MASTER OF STRATEGIC STUDIES.

       (a) Authority to Confer Degree.--Upon the recommendation of 
     the Director and faculty of the Marine Corps War College of 
     the Marine Corps University, the President of the Marine 
     Corps University may confer the degree of master of strategic 
     studies upon graduates of the college who fulfill the 
     requirements for the degree.
       (b) Regulation.--The Secretary of the Navy shall promulgate 
     regulations under which the Director of the faculty of the 
     Marine Corps War College of the Marine Corps University shall 
     administer the authority in subsection (a).
       (e) Effective Date.--The authority to award degrees 
     provided by subsection (a) shall become effective on the date 
     on which the Secretary of Education determines that the 
     requirements established by the Marine Corps War College of 
     the Marine Corps University for the degree of master of 
     strategic studies are in accordance with generally applicable 
     requirements for a degree of master of arts.

     SEC. 532. RESERVE COMPONENT DISTRIBUTED LEARNING.

       (a) Compensation for Distributed Learning.--Section 206(d) 
     of title 37, United States Code, is amended to read as 
     follows:
       ``(d) A member of a Reserve Component may be paid 
     compensation under this section for the successful completion 
     of courses of instruction undertaken by electronic, paper-
     based, or other distributed learning. Distributed Leaming is 
     structured leaming that takes place without 55 requiring the 
     physical presence of an instructor. To be compensable, the 
     instruction must be required by law, Department of Defense 
     policy, or service regulation and may be accomplished either 
     independently or as part of a group.''.
       (b) Definition of Inactive-Duty Training.--Section 101(22) 
     of title 37, United States Code, is amended by striking ``, 
     but does not include work or study in connection with a 
     correspondence course of a uniformed service''.

[[Page S7215]]

     SEC. 533. REPEAL OF LIMITATION ON NUMBER OF JUNIOR RESERVE 
                   OFFICERS' TRAINING CORPS (JROTC) UNITS.

       Section 2031(a)(1) of title 10, United States Code, is 
     amended by striking the second sentence.

     SEC. 534. MODIFICATION OF THE NURSE OFFICER CANDIDATE 
                   ACCESSION PROGRAM RESTRICTION ON STUDENTS 
                   ATTENDING CIVILIAN EDUCATIONAL INSTITUTIONS 
                   WITH SENIOR RESERVE OFFICERS' TRAINING 
                   PROGRAMS.

       Section 2130a of title 10, United States Code, is amended--
       (1) in paragraph (a)(2), by striking ``that does not have a 
     Senior Reserve Officers'' Training Program established under 
     section 2102 of this title;'' and
       (2) in paragraph (b)(1), by adding at the end ``or that has 
     a Senior Reserve Officers'' Training Program for which the 
     student is ineligible.''.

     SEC. 535. DEFENSE LANGUAGE INSTITUTE FOREIGN LANGUAGE CENTER.

       (a) Subject to subsection (b), the Commandant of the 
     Defense Language Institute Foreign Language Center 
     (Institute) may confer an Associate of Arts degree in Foreign 
     Language upon graduates of the Institute who fulfill the 
     requirements for the degree.
       (b) No degree may be conferred upon any student under this 
     section unless the Provost certifies to the Commandant of the 
     Institute that the student has satisfied all the requirements 
     prescribed for such degree.
       (c) The authority provided by subsection (a) shall be 
     exercised under regulations prescribed by the Secretary of 
     Defense.
           Subtitle D--Decorations, Awards, and Commendations
Sec. 541. Authority for Award of the Medal of Honor to Humbert R. 
              Versace for Valor During the Vietnam War.
Sec. 542. Issuance of Duplicate Medal of Honor.
Sec. 543. Repeal of Limitation on Award of Bronze Star to Members in 
              Receipt of Special Pay.

     SEC. 541. AUTHORITY FOR AWARD OF THE MEDAL OF HONOR TO 
                   HUMBERT R. VERSACE FOR VALOR DURING THE VIETNAM 
                   WAR.

       (a) Waiver of Time Limitations.--Notwithstanding the time 
     limitations specified in section 3744 of title 10, United 
     States Code, or any other time limitation with respect to the 
     awarding of certain medals to persons who served in the 
     military service, the President may award the Medal of Honor 
     under section 3741 of that title to Humbert R. Versace for 
     the acts of valor referred to in subsection (b).
       (b) Action Described.--The acts of valor referred to in 
     subsection (a) are the actions of Humbert R. Versace between 
     October 29, 1963, and September 26, 1965, while interned as a 
     prisoner of war by the Vietnamese Communist National 
     Liberation Front (Viet Cong) in the Republic of Vietnam.

     SEC. 542. ISSUANCE OF DUPLICATE MEDAL OF HONOR.

       (a) Section 3747 of title 10, United States Code, is 
     amended--
      (1) in the section heading, by adding at the end''; issuance 
     of duplicate medal of honor'';
       (2) by striking ``Any medal of honor'' and inserting ``(a) 
     Replacement of Medals.--Any medal of honor'';
       (3) by inserting ``stolen,'' before ``lost or destroyed,''; 
     and
       (4) by adding at the end the following new subsection:
       ``(b) Issuance of Duplicate Medal of Honor.--Upon written 
     application by a person to whom a medal of honor has been 
     awarded under this chapter, the Secretary of the Army may 
     issue such person, without charge, one duplicate medal of 
     honor, with ribbons and appurtenances. Such duplicate shall 
     be marked, in a manner the Secretary may determine, as a 
     duplicate or for display purposes only. The issuance of a 
     duplicate medal of honor under the authority of this 
     subsection shall not constitute the award of more than one 
     medal of honor within the meaning of section 3744(a) of this 
     title.''.
       (b) Section 6253 of such title is amended--
       (1) in the section heading, by adding at the end ``; 
     issuance of duplicate medal of honor'';
       (2) by striking ``The Secretary of the Navy may replace'' 
     and inserting ``(a) Replacement of Medals.--The Secretary of 
     the Navy may replace'';
      (3) by inserting ``stolen,'' before ``lost or destroyed''; 
     and
      (4) by adding at the end the following new subsection:
        ``(b) Issuance of Duplicate Medal of Honor.--Upon written 
     application by a person to whom a medal of honor has been 
     awarded under this chapter, the Secretary of the Navy may 
     issue such person, without charge, one duplicate medal of 
     honor, with ribbons and appurtenances. Such duplicate shall 
     be marked, in a manner the Secretary may determine, as a 
     duplicate or for display purposes only. The issuance of a 
     duplicate medal of honor under the authority of this 
     subsection shall not constitute the award of more than one 
     medal of honor within the meaning of section 6247 of this 
     title.''.
       (c) Section 8747 of such title is amended--
       (1) in the section heading, by adding at the end''; 
     issuance of duplicate medal of honor'';
       (2) by striking ``Any medal of honor'' and inserting ``(a) 
     Replacement of Medals.--Any medal of honor'';
       (3) by inserting ``stolen,'' before ``lost or destroyed,''; 
     and
       (4) by adding at the end the following new subsection:
       ``(b) Issuance of Duplicate Medal of Honor.--Upon written 
     application by a person to whom a medal of honor has been 
     awarded under this chapter, the Secretary of the Air Force 
     may issue such person, without charge, one duplicate medal of 
     honor, with ribbons and appurtenances. Such duplicate shall 
     be marked, in a manner the Secretary may determine, as a 
     duplicate or for display purposes only. The issuance of a 
     duplicate medal of honor under the authority of this 
     subsection shall not constitute the award of more than one 
     medal of honor within the meaning of section 8744(a) of this 
     title.''.
       (d) Clerical Amendments.--(1) The item relating to section 
     3747 of such title in the table of sections at the beginning 
     of chapter 357 of such title is amended to read as follows:

``3747. Medal of honor; distinguished-service cross; distinguished-
              service medal; silver star: replacement; issuance of 
              duplicate medal of honor.'';

       (2) The item relating to section 6253 of such title in the 
     table of sections at the beginning of chapter 567 of such 
     title is amended to read as follows:
``6253. Replacement; issuance of duplicate medal of honor.''; and

       (3) The item relating to section 8747 of such title in the 
     table of sections at the beginning of chapter 857 of such 
     title is amended to read as follows:

``8747. Medal of honor; Air Force cross; distinguished-service cross; 
              distinguished-service medal; silver star: replacement; 
              issuance of duplicate medal of honor.''.

     SEC. 543. REPEAL OF LIMITATION ON AWARD OF BRONZE STAR TO 
                   MEMBERS IN RECEIPT OF SPECIAL PAY.

       Section 1133 of title 10, United States Code, is repealed.
              Subtitle E--Uniform Code of Military Justice
Sec. 551. Revision of Punitive UCMJ Article Regarding Drunken Operation 
              of Vehicle, Aircraft, or Vessel.

     SEC. 551. REVISION OF PUNITIVE UCMJ ARTICLE REGARDING DRUNKEN 
                   OPERATION OF VEHICLE, AIRCRAFT, OR VESSEL.

       (a) Standard for Drunken Operation of Vehicle, Aircraft, or 
     Vessel.--Paragraph (2) of section 911 of title 10, United 
     States Code (article III of the Uniform Code of Military 
     Justice), is amended by striking ``0.10 grams or more of 
     alcohol'' and inserting ``0.08 grams or more of alcohol'' 
     both places such term appears.
       (b) Effective Date.--The amendments made by subsection (a) 
     shall take effect on the date of the enactment of this Act 
     and shall apply to offenses committed on or after that date.
          TITLE V1--COMPENSATION AND OTHER PERSONNEL BENEFITS
                     Subtitle A--Pay and Allowances
Sec. 601. Increase in Basic Pay for Fiscal Year 2002.
Sec. 602. Partial Dislocation Allowance Authorized Under Certain 
              Circumstances.
Sec. 603. Funeral Honors Duty, Allowance for Retirees.
See. 604. Basic Pay Rate for Certain Reserve Commissioned Officers with 
              Prior Service as an Enlisted Member or Warrant Officer.
Sec. 605. Family Separation Allowance.
Sec. 606. Housing Allowance for the Chaplain for the Corps of Cadets, 
              United States Military Academy.
Sec. 607. Clarify Amendment that Space-Required Travel for Annual 
              Training Reserve Duty Does Not Obviate Transportation 
              Allowances.

     SEC. 601. INCREASE IN BASIC PAY FOR FISCAL YEAR 2002.

       (a) Waiver of Section 1009 Adjustment.--The adjustment to 
     become effective during fiscal year 2002 required by section 
     1009 of title 37, United States Code, in the rates of monthly 
     basic pay authorized members of the uniformed services shall 
     not be made.
       (b) Increase in Basic Pay.--Effective on January 1, 2002, 
     the rates of monthly basic pay for members of the uniformed 
     services shall be as follows:

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