House Report 109-464, Part 1 - 109th Congress (2005-2006)
May 15, 2006, As Reported by the Appropriations Committee

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House Report 109-464 - MILITARY QUALITY OF LIFE AND VETERANS AFFAIRS, AND RELATED AGENCIES APPROPRIATIONS BILL, 2007




[House Report 109-464]
[From the U.S. Government Printing Office]



109th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     109-464

======================================================================



 
  MILITARY QUALITY OF LIFE AND VETERANS AFFAIRS, AND RELATED AGENCIES 
                       APPROPRIATIONS BILL, 2007

                                _______
                                

  May 15, 2006.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

    Mr. Walsh, from the Committee on Appropriations, submitted the 
                               following

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                        [To accompany H.R. 5385]

    The Committee on Appropriations submits the following 
report in explanation of the accompanying bill making 
appropriations for the military quality of life functions of 
the Department of Defense, military construction, the 
Department of Veterans Affairs, and related agencies for the 
fiscal year ending September 30, 2007.

                                CONTENTS

                                                                   Page
Purpose of the Bill..............................................     2
Conformance With Authorization Bill..............................     3
Summary of Committee Recommendation..............................     3
Items of Interest................................................    19
Department of Defense:
    Military Construction........................................    21
    NATO Security Investment Program.............................    27
    Family Housing Construction and Operation and Maintenance....    29
    Chemical Demilitarization Construction, Defense-Wide.........    32
    Department of Defense Base Closure Account 1990..............    32
    Department of Defense Base Closure Account 2005..............    32
    Basic Allowance for Housing..................................    33
    Facilities Sustainment, Restoration and Modernization........    35
    Environmental Restoration....................................    38
    Defense Health Program.......................................    39
    Administrative Provisions....................................    46
Department of Veterans Affairs:
    Overview.....................................................    48
    Veterans Benefits Administration.............................    51
    Veterans Health Administration...............................    54
    Departmental Administration..................................    59
    Administrative Provisions....................................    65
Related Agencies:
    American Battle Monuments Commission.........................    66
    U.S. Court of Appeals for Veterans Claims....................    68
    Cemeterial Expenses, Army....................................    68
    Armed Forces Retirement Home.................................    68
Additional Appropriations........................................    69
General Provisions...............................................    69
Changes in Application of Existing Law...........................    70
Appropriations Not Authorized by Law.............................    73
Transfer of Funds................................................    75
Rescissions......................................................    76
Constitutional Authority.........................................    76
Comparisons With Budget Resolution...............................    76
Five-Year Projection of Outlays..................................    77
Financial Assistance to State and Local Governments..............    77
Statement of General Performance Goals and Objectives............    77
Full Committee Votes.............................................    77
State List.......................................................    82
Additional Views.................................................   101

                          Purpose of the Bill

    The structure of this bill allows for a more comprehensive 
look at the quality of life for U.S. servicemen and women, from 
recruitment through retirement. Since the advent of the All 
Volunteer Force in 1973, quality of life has come to play an 
increasingly prominent role in preserving the unmatched 
professionalism and capability of the U.S. armed forces. All of 
the witnesses, including the Chief of Staff of the military 
services, who have testified before the Committee in 
preparation for this bill, have spoken in full support of the 
bill structure highlighting the importance of maintaining a 
suitable quality of life for soldiers, sailors, airmen and 
marines. This quality of life necessarily involves the 
construction and maintenance of military facilities and 
housing, the basic allowance for housing, the defense health 
program, and environmental restoration. Several witnesses 
affirmed the saying, ``you recruit the soldier and you retain 
the family,'' and all of these elements contribute to that 
purpose, while maintaining a high level of readiness.
    Quality of life should also be a guiding concept upon a 
service member's retirement, making veterans affairs another 
primary component in achieving the purpose of this bill. The 
Committee continues to hear repeatedly of gaps and flaws in the 
transition from active duty to retirement, particularly in the 
switch from active duty health care to veterans health care. 
Unacceptable in peacetime, this situation becomes intolerable 
in a time of war. Advances in battlefield medicine have 
resulted in dramatic increases over previous conflicts in the 
percentage of service personnel who survive their wounds. The 
Committee is deeply concerned that wounded veterans receive the 
treatment they require and deserve. The Committee is also 
concerned that the mental health needs of servicemenbers and 
veterans are properly addressed. Therefore, the Committee will 
continue to examine opportunities for improving quality of life 
for active and reserve personnel, veterans, and those making 
the transition from active to veteran status.
    The programs funded in the bill for the Department of 
Defense (DOD) include: military construction, including 
housing; operation and maintenance of family housing; the 
family housing improvement fund; the basic allowance for 
housing payment; facilities sustainment, restoration and 
modernization; environmental restoration; the defense health 
program; the U.S. share of the North Atlantic Treaty 
Organization Security Investment Program; funds to execute 
projects identified by the base realignment and closure 
authorities; and the chemical demilitarization construction 
program. The bill also funds the Department of Veterans Affairs 
(VA). Finally, the bill funds four related agencies, including 
the American Battle Monuments Commission, Cemeterial Expenses, 
Army, the U.S. Court of Appeals for Veterans Claims, and the 
Armed Forces Retirement Home.

                  Conformance With Authorization Bill

    On May 3, 2006, the Armed Services Committee reported out 
the National Defense Authorization Act for 2007. At this time, 
conference action on the legislation has not concluded; 
therefore, projects in this bill are approved subject to 
authorization.

                  Summary of Committee Recommendation

    The Committee recommends $136,120,452,000 in new budget 
authority for the programs and activities funded in the bill. 
This recommendation is $824,000,000 below the President's 
request and $13,923,359,000 above the fiscal year 2006 enacted 
level. Included in this amount is $41,415,643,000 in mandatory 
authority and $94,704,809,000 in discretionary authority. The 
following table compares amounts recommended in the bill to the 
President's request and amounts appropriated in fiscal year 
2006:
<GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT>

                           Items of Interest

    Budget Justifications.--The House Committee on 
Appropriations is committed to enactment of all appropriations 
bills prior to the start of the fiscal year. The Committee 
waited more than eight weeks after the release of the 
President's budget proposal to receive budget justifications 
for all the programs in this bill. This is unacceptable. For 
the Committee to adequately review the budget proposal and make 
informed decisions on the recommendations therein, 
justification material must arrive in a more timely manner. The 
Department of Defense is directed to submit detailed 
justification material to the Committee on the date the 
President's budget is released.
    Joint Incentives Program.--The Committee is concerned about 
the large amount of carryover funding in the Departments of 
Defense and Veterans Affairs Joint Incentive Fund and held a 
hearing on the issue this year. While the Committee believes 
that many of the issues that have precluded the funding from 
being spent have been resolved, there is still a large amount 
of funding that remains unobligated. This program has been 
authorized for four years and as of January of this year, only 
a small percentage of the funds had been obligated to projects. 
The Committee does not disagree with the rationale for having 
such a fund, but is waiting to see tangible results before 
continuing to provide additional funding. The Committee has not 
agreed to increase funding for payments into the fund in fiscal 
year 2007 and, in the case of the Department of Defense, has 
rescinded $15,042,000 in unobligated balances from the fund.
    Information Technology Data Sharing.--The Committee is 
concerned about the progress being made in implementing medical 
record data sharing between the Department of Defense and the 
Department of Veterans Affairs and also held a hearing on this 
issue earlier this year. While improvements are being made, 
problems with data sharing are still being experienced at the 
local level. In addition, the Department of Veterans Affairs is 
considering a new system for storing and housing individual 
medical records data. The Committee feels strongly that the two 
Departments should, to the maximum extent possible, use 
identical software platforms, data standards, and data 
repositories to increase the viability of data sharing and 
reduce system development costs. The Departments should report 
to the Committee on their plans for going forward with data 
sharing systems and standards no later than December 15, 2006.
    Incremental Funding for Military Construction Projects.--
The Committee understands that the Office of Management and 
Budget (OMB) has altered Administration policy on incremental 
funding of military construction projects. The Committee 
understands that approval of incremental funding in the past 
has been based on the following criteria: (1) the estimated 
cost of the project must be at least $50,000,000; (2) the 
construction schedule must be at least 24 months; (3) 
incrementally funded contracts must conform with Federal 
Acquisition Regulations; and (4) incremental funding will not 
significantly increase the cost of the project. The Committee 
further understands that OMB will now refuse to grant approval 
for incremental funding except for those projects subjectively 
determined by OMB to have a ``major national security impact.''
    It is the Committee's view that military construction 
projects should be fully funded or separated into stand-alone 
phases whenever practical. In some cases, however, incremental 
funding makes fiscal and programmatic sense, regardless of 
OMB's subjective judgments. While the appropriations for 
incrementally funded projects are spread across two or more 
fiscal years, the total cost must be authorized in the first 
year, which allows Congress to exercise oversight before 
committing to such projects. The Committee will continue to 
exercise its prerogative to recommend incremental funding where 
it is deemed appropriate, in accordance with authorizing 
legislation. The Committee has therefore recommended that two 
projects be incrementally funded: Hangar 5 Recapitalization, 
NAS Whidbey Island, Washington, under Military Construction, 
Navy and Marine Corps; and Clinic Replacement, MacDill AFB, 
under Military Construction, Defense-Wide.
    Facilities Sustainment, Restoration and Modernization 
(FSRM).--The Department is directed to continue describing on 
form 1390 the backlog of FSRM requirements at installations 
with future construction projects. For troop housing requests, 
form 1391 should describe any FSRM conducted in the past two 
years. Likewise, future requirements for unaccompanied housing 
at the corresponding installation should be included. 
Additionally, the forms should include English equivalent 
measurements for projects presented in metric measurement. 
Rules for funding repairs of facilities under the Operation and 
Maintenance account are described below:
          (1) components of the facility may be repaired by 
        replacement. Such replacement can be up to current 
        standards or codes;
          (2) interior arrangements and restorations may be 
        included as repair;
          (3) additions, new facilities, and functional 
        conversions must be performed as military construction 
        projects. Such projects may be done concurrently with 
        repair projects as long as the final conjunctively 
        funded project is a complete and usable facility; and
          (4) the appropriate service secretary shall notify 
        the appropriate committees 21 days prior to carrying 
        out any repair project with an estimated cost in excess 
        of $7,500,000.
    The Committee notes that, when adjusted for supplemental 
appropriations, funding for facilities sustainment, 
restoration, and modernization (FSRM) across the Department of 
Defense will be reduced by $319,106,000, or 4.9 percent from 
fiscal year 2006. The reduction for the active components and 
Defense agencies alone is 7.1 percent. The Committee believes 
that this decrease in funding does not result from a declining 
requirement, but rather from current fiscal pressures and the 
Department's historic unwillingness to fully fund FSRM in its 
request. The Committee notes that under the recommended account 
structure the Department will no longer have the option of 
reprogramming funds between FSRM and base operating support 
(which is also historically underfunded), as has been the usual 
practice. It is the Committee's intention to stop this 
practice, and therefore the Committee urges the Department to 
begin budgeting up front for full funding of the FSRM 
requirement.
    Reprogramming Criteria.--Reprogramming requests are 
required for military construction and family housing projects 
when the increase equals or exceeds 25 percent of the 
appropriated amount or $2,000,000, whichever is less.
    Impact of 2005 BRAC Round and Global Rebasing on Local 
Schools.--The Committee is deeply concerned by the impact that 
the 2005 Base Realignment and Closure process, as well as 
global rebasing, could have on school districts near recipient 
installations. The Committee urges the Department of Defense to 
be as proactive as possible in assisting local communities with 
planning for growth in school enrollment due to increases in 
personnel with children. The Department must share, to the 
greatest extent possible, information concerning the schedule 
of BRAC and global rebasing actions, as well as demographic 
data and housing plans. The Committee intends to monitor the 
Department's actions in this regard.
    Basic Allowance for Housing Rate Calculations.--The 
Committee is concerned that the annual process for determining 
basic allowance for housing (BAH) rates is too cumbersome to 
keep pace with a dynamic family housing market, leading to 
shortfalls in the year of execution that must be made up either 
with additional appropriations or funds from other accounts. 
This concern will grow as the number of government-owned family 
housing units decreases and more servicemembers move into 
privatized housing. The Committee believes that the BAH rate-
setting process should be part of the 10th Quadrennial Review 
of Military Compensation now underway. The Committee also 
directs the Department of Defense to provide a report on the 
execution of each BAH appropriation recommended in this bill 
for the five most recent fiscal years for which data is 
available. The report shall include for each year and 
appropriation the budget request, appropriated amount 
(including supplemental appropriations), and the actual 
executed amount. The report shall also note legislative and 
policy initiatives affecting any differences between the budget 
request and executed amount in each year. This report shall be 
submitted no later than September 1, 2006.

                                TITLE I


                         DEPARTMENT OF DEFENSE


                      Military Construction, Army


                    (INCLUDING RESCISSIONS OF FUNDS)




Fiscal year 2006 enacted level........................    $1,737,761,000
Fiscal year 2007 budget request.......................     2,059,762,000
Committee recommendation in the bill (including            1,712,950,000
 rescissions).........................................
Comparison with:
    Fiscal year 2006 enacted level....................      (24,811,000)
    Fiscal year 2007 budget request...................     (346,812,000)


    The Committee recommends an appropriation of $1,756,298,000 
and a rescission of $43,348,000 for Military Construction, 
Army, for fiscal year 2007. In addition, the Committee 
recommends an appropriation of $379,300,000 in Title IV for 
projects supporting contingency operations related to the 
global war on terrorism. Together this is an increase of 
$354,489,000 above the fiscal year 2006 enacted level and an 
increase of $32,488,000 above the budget request. The Committee 
recommends rescissions from previous appropriations to the 
account due to bid savings as follows:

------------------------------------------------------------------------
       Public Law/location            Project title        Recommended
------------------------------------------------------------------------
PL 109-114 (FY 2006):
    Korea: Camp Humphreys........  Barracks Complex         (11,898,000)
                                    (PN 058248).
    Korea: Camp Humphreys........  Barracks Complex         (17,044,000)
                                    (PN 058354).
    Korea: Camp Humphreys........  Barracks Complex         (14,406,000)
                                    (PN 058398).
                                                       -----------------
      Total......................  ...................      (43,348,000)
------------------------------------------------------------------------

    Arizona--Yuma Proving Ground: Special Operations Free Fall 
Simulator Facility. Of the funds provided for planning and 
design in this account, the Committee directs that not less 
than $365,000 be made available for the design of this project.
    Georgia--Fort Benning: Combat Pistol Qualification Course. 
Of the funds provided for minor construction in this account, 
the Committee directs that not less than $930,000 be made 
available for this project.
    Utah--Dugway Proving Ground: Community Dining Facility. Of 
the funds provided for planning and design in this account, the 
Committee directs that not less than $243,000 be made available 
for the design of this project.
    Virginia--Fort Belvoir: Sensitive Compartmented Information 
Facility. Of the funds provided for planning and design in this 
account, the Committee directs that not less than $1,260,000 be 
made available for the design of this project.
    Reducing Overhead for Army Military Construction Projects. 
The Committee is aware that cooperative efforts with the U.S. 
Army Corps of Engineers are underway to reduce design and 
overhead costs on military construction projects. The Committee 
understands that the increased use of standard designs and 
changes in Supervision, Inspection and Overhead (SIOH) 
practices will allow the Army to reduce the cost of projects. 
The Committee supports and encourages these efforts, and 
directs the Army to provide a status report on these efforts by 
October 2, 2006.

              Military Construction, Navy and Marine Corps


                    (INCLUDING RESCISSIONS OF FUNDS)




Fiscal year 2006 enacted level........................    $1,386,752,000
Fiscal year 2007 budget request.......................     1,162,038,000
Committee recommendation in the bill (including            1,155,834,000
 rescissions).........................................
Comparison with:
    Fiscal year 2006 enacted level....................     (230,918,000)
    Fiscal year 2007 budget request...................       (6,204,000)


    The Committee recommends an appropriation of $1,193,834,000 
and rescissions of $38,000,000 for Military Construction, Navy 
and Marine Corps, for fiscal year 2007. In addition, the 
Committee recommends an appropriation of $26,037,000 in Title 
IV for projects supporting contingency operations related to 
the global war on terrorism. Together this is a decrease of 
$204,881,000 below the fiscal year 2006 enacted level and an 
increase of $19,833,000 above the budget request. When adjusted 
for supplemental funding, the recommendation is an increase of 
$86,338,000 above the fiscal year 2006 enacted level. The 
Committee recommends rescissions from previous appropriations 
to the account due to cancelled or delayed projects as follows:

------------------------------------------------------------------------
       Public Law/location            Project title        Recommended
------------------------------------------------------------------------
PL 108-132 (FY 2004)
    Italy: La Maddalena..........  Consolidate Santo        (30,000,000)
                                    Stefano Facilities.
PL 108-324 (FY 2005)
    NC: OLF Washington County....  OLF Land                  (8,000,000)
                                    Acquisition (Phase
                                    I).
                                                       -----------------
      Total......................  ...................      (38,000,000)
------------------------------------------------------------------------

    Pennsylvania--Philadelphia: Full Scale Electric Test Drive 
Facility. Of the funds provided for planning and design in this 
account, the Committee directs that not less than $945,000 be 
made available for the design of this project.
    North Carolina: Outlying Landing Field. The Committee 
expects the Navy to comply with the requirements of federal law 
and relevant court decisions regarding the completion of a 
supplemental environmental impact statement (SEIS) for the 
Outlying Landing Field (OLF) in North Carolina. The Committee 
further directs that, no later than 30 days after completion of 
the draft SEIS, the Navy submit a report to the Committee 
detailing how the SEIS addresses the deficiencies in the 
initial EIS as identified by the relevant court decisions. That 
report shall also include the Navy's explanation of how it has 
complied with the Committee's previous direction to ``fully 
reconsider alternative sites in cooperation with the State of 
North Carolina.''

                    Military Construction, Air Force


                    (INCLUDING RESCISSIONS OF FUNDS)




Fiscal year 2006 enacted level........................    $1,299,157,000
Fiscal year 2007 budget request.......................     1,156,148,000
Committee recommendation in the bill (including            1,184,856,000
 rescissions).........................................
Comparison with:
    Fiscal year 2006 enacted level....................     (114,301,000)
    Fiscal year 2007 budget request...................        28,708,000


    The Committee recommends an appropriation of $1,187,550,000 
and a rescission of $2,694,000 for Military Construction, Air 
Force, for fiscal year 2007. In addition, the Committee 
recommends an appropriation of $49,923,000 in Title IV for 
projects supporting contingency operations related to the 
global war on terrorism. Together this is a decrease of 
$64,378,000 below the fiscal year 2006 enacted level and an 
increase of $78,631,000 above the budget request. When adjusted 
for supplemental funding, the recommendation is a decrease of 
$11,766,000 below the fiscal year 2006 enacted level. The 
Committee recommends rescissions from previous appropriations 
to the account due to bid savings and a cancelled project as 
follows:

------------------------------------------------------------------------
       Public Law/location            Project title        Recommended
------------------------------------------------------------------------
PL 108-324 (FY 2005):
    MD: Andrews AFB..............  ASA Munitions             (1,100,000)
                                    Storage Igloos.
    Italy: Aviano AB.............  Flight Simulator          (1,594,000)
                                    Facility.
                                                       -----------------
      Total......................  ...................       (2,694,000)
------------------------------------------------------------------------

    California--Travis AFB: C-17 and C-5 Squadron Operations 
and Aircraft Generation Squadron Facility. Of the funds 
provided for planning and design in this account, the Committee 
directs that not less than $1,134,000 be made available for the 
design of this project.
    Georgia--Robins AFB: Software Support Facility. Of the 
funds provided for planning and design in this account, the 
Committee directs that not less than $1,935,000 be made 
available for the design of this project.
    Idaho--Mountain Home AFB: Logistics Readiness Center. Of 
the funds provided for planning and design in this account, the 
Committee directs that not less than $1,530,000 be made 
available for the design of this project.
    New Mexico-Kirtland AFB: Parajumper/Combat Rescue Officers 
Rescue Recovery Training Center. Of the funds provided for 
planning and design in this account, the Committee directs that 
not less than $1,026,000 be made available for the design of 
this project.
    North Dakota-Grand Forks AFB: Fire Station. Of the funds 
provided for planning and design in this account, the Committee 
directs that not less than $1,071,000 be made available for the 
design of this project.
    Ohio-Wright-Patterson AFB: Information Technology Complex, 
Phase 1. Of the funds provided for planning and design in this 
account, the Committee directs that not less than $2,070,000 be 
made available for the design of this project.
    Energy Conservation.--In previous years, the Committee 
encouraged the Navy to expand opportunities for the use of 
advanced photovoltaic technology such as triple junction 
amorphous silicon photovoltaic roofing in military construction 
projects. The Committee believes that many Air Force projects 
would also benefit from a similar emphasis on renewable energy 
technology. The Committee directs the Air Force to provide a 
report on plans and opportunities to include photovoltaic 
capability in Military Construction projects no later than 
January 15, 2007.

                  Military Construction, Defense-Wide


                    (including rescissions of funds)





Fiscal year 2006 enacted level........................    $1,023,766,000
Fiscal year 2007 budget request.......................     1,208,198,000
Committee recommendation in the bill (including              997,377,000
 rescissions).........................................
Comparison with:
    Fiscal year 2006 enacted level....................      (26,389,000)
    Fiscal year 2007 budget request...................     (210,821,000)


    The Committee recommends an appropriation of $1,107,606,000 
and rescissions of $110,229,000 for Military Construction, 
Defense-Wide, for fiscal year 2007. In addition, the Committee 
recommends an appropriation of $44,500,000 in Title IV for 
projects supporting contingency operations related to the 
global war on terrorism. Together this is an increase of 
$63,111,000 above the fiscal year 2006 enacted level and a 
decrease of $166,321,000 below the budget request. When 
adjusted for supplemental funding, the recommendation is 
$63,111,000 above the fiscal year 2006 enacted level. Within 
this appropriation is $55,000,000 for the Energy Conservation 
Improvement Program, an increase of $5,000,000 above the fiscal 
year 2006 level and a decrease of $5,000,000 below the budget 
request. The Committee recommends rescissions from previous 
appropriations to the account due to bid savings and projects 
cancelled as a result of the 2005 base realignment and closure 
process. The rescissions are as follows:

------------------------------------------------------------------------
       Public Law/location            Project title        Recommended
------------------------------------------------------------------------
PL 108-132 (FY 2004):
    DC: Walter Reed AMC..........  Hospital Energy           (9,000,000)
                                    Plant Addition.
PL 108-324 (FY 2005):
    VA: Fort Belvoir.............  Hospital                 (43,000,000)
                                    Replacement, Phase
                                    I.
PL 109-114 (FY 2006):
    VA: Fort Belvoir.............  Alter Air Intakes..       (1,900,000)
    VA: Fort Belvoir.............  Hospital                 (56,329,000)
                                    Replacement, Phase
                                    II.
        Subtotal, PL 109-114.....  ...................      (58,229,000)
                                                       -----------------
            Total................  ...................     (110,229,000)
------------------------------------------------------------------------

    Florida: MacDill AFB--Clinic Replacement. The Committee 
recommends incremental funding of this project. The Committee 
understands that this project was originally programmed by the 
Department of Defense as an incrementally funded project. After 
the Office of Management and Budget denied the Department's 
request for incremental funding (see earlier in this report), 
the project was reprogrammed as two phases: the Clinic 
Replacement in fiscal year 2007, with a follow-on Pharmacare 
addition in fiscal year 2008. Programming the project as two 
separate phases increases overhead costs, as the two phases 
will have to be done under separate contracts. Furthermore, 
since the Pharmacare phase will not be awarded until fiscal 
year 2008, the overall cost of the complete facility may 
actually increase due to inflation. The Committee believes that 
the entire project, including the Pharmacare addition, should 
be done as a single project under one contract, which will both 
control costs and ensure that the facility will be completed in 
a timely manner as an integrated whole.

               Military Construction, Army National Guard





Fiscal year 2006 enacted level........................      $892,219,000
Fiscal year 2007 budget request.......................       473,197,000
Committee recommendation in the bill..................       512,873,000
Comparison with:
    Fiscal year 2006 enacted level....................     (379,346,000)
    Fiscal year 2007 budget request...................        39,676,000


    The Committee recommends an appropriation of $512,873,000 
for Military Construction, Army National Guard, for fiscal year 
2007. In addition, the Committee recommends an appropriation of 
$5,530,000 in Title IV for projects supporting contingency 
operations related to the global war on terrorism. Together 
this is a decrease of $373,816,000 below the fiscal year 2006 
enacted level and an increase of $45,206,000 above the budget 
request. When adjusted for supplemental funding, the 
recommendation is $484,000 above the fiscal year 2006 enacted 
level.
    New York--Camp Smith: Combined Support Maintenance Shop. Of 
the funds provided for planning and design in this account, the 
Committee directs that not less than $1,031,000 be made 
available for the design of this project.
    Oregon--Salem: Readiness Center Addition/Alteration. Of the 
funds provided for planning and design in this account, the 
Committee directs that not less than $749,000 be made available 
for the design of this project.
    North Carolina--Raleigh: Armed Forces Reserve Center (Joint 
Headquarters). The Committee has previously noted the 
importance of this project, which is currently programmed for 
fiscal year 2010 in the current Future Years Defense Plan 
(FYDP). The Committee recommends that the Army National Guard 
accelerate the programming of this project to fiscal year 2008, 
and directs the Guard to submit a status report on the planning 
and design for this project by December 1, 2006.

               Military Construction, Air National Guard





Fiscal year 2006 enacted level........................      $334,256,000
Fiscal year 2007 budget request.......................       125,788,000
Committee recommendation in the bill..................       207,088,000
Comparison with:
    Fiscal year 2006 enacted level....................     (127,168,000)
    Fiscal year 2007 budget request...................        81,300,000


    The Committee recommends an appropriation of $207,088,000 
for Military Construction, Air National Guard, for fiscal year 
2007. This is a decrease of $127,168,000 below the fiscal year 
2006 enacted level and an increase of $81,300,000 above the 
budget request. When adjusted for supplemental funding, the 
recommendation is $92,168,000 below the fiscal year 2006 
enacted level.
    New York--Gabreski ANGB: Replace Pararescue Complex. Of the 
funds provided for planning and design in this account, the 
Committee directs that not less than $502,000 be made available 
for the design of this project.
    South Carolina--McEntire JRB: Wing Operations and Training 
Complex. Of the funds provided for planning and design in this 
account, the Committee directs that not less than $1,000,000 be 
made available for the design of this project.
    Tennessee--McGhee-Tyson ANGB: Squadron Operations Facility/
Relocate Main Gate. Of the funds provided for planning and 
design in this account, the Committee directs that not less 
than $1,000,000 be made available for the design of this 
project.

                  Military Construction, Army Reserve





Fiscal year 2006 enacted level........................      $151,043,000
Fiscal year 2007 budget request.......................       166,487,000
Committee recommendation in the bill..................       167,774,000
Comparison with:
    Fiscal year 2006 enacted level....................        16,731,000
    Fiscal year 2007 budget request...................         1,287,000


    The Committee recommends an appropriation of $167,774,000 
for Military Construction, Army Reserve, for fiscal year 2007. 
In addition, the Committee recommends an appropriation of 
$1,713,000 in Title IV for projects supporting contingency 
operations related to the global war on terrorism. Together 
this is an increase of $18,444,000 above the fiscal year 2006 
enacted level and an increase of $3,000,000 above the budget 
request.
    California--Camp Parks: Combat Support Training Center 
Range Control Facility. Of the funds provided for planning and 
design in this account, the Committee directs that not less 
than $252,000 be made available for the design of this project.
    New York--Mattydale: Syracuse Armed Forces Reserve Center/
Organizational Maintenance Shop/Area Maintenance Support 
Activity/Unheated Storage. Of the funds provided for planning 
and design in this account, the Committee directs that not less 
than $2,414,000 be made available for the design of this 
project.

                  Military Construction, Navy Reserve





Fiscal year 2006 enacted level........................      $149,967,000
Fiscal year 2007 budget request.......................        48,408,000
Committee recommendation in the bill..................        55,158,000
Comparison with:
    Fiscal year 2006 enacted level....................      (94,809,000)
    Fiscal year 2007 budget request...................         6,750,000


    The Committee recommends an appropriation of $55,158,000 
for Military Construction, Navy Reserve, for fiscal year 2007. 
This is a decrease of $94,809,000 below the fiscal year 2006 
enacted level and an increase of $6,750,000 above the budget 
request. When adjusted for supplemental funding, the 
recommendation is $25,323,000 above the fiscal year 2006 
enacted level.

                Military Construction, Air Force Reserve





Fiscal year 2006 enacted level........................       $91,009,000
Fiscal year 2007 budget request.......................        44,936,000
Committee recommendation in the bill..................        56,836,000
Comparison with:
    Fiscal year 2006 enacted level....................      (34,173,000)
    Fiscal year 2007 budget request...................        11,900,000


    The Committee recommends an appropriation of $56,836,000 
for Military Construction, Air Force Reserve, for fiscal year 
2007. This is a decrease of $34,173,000 below the fiscal year 
2006 enacted level and an increase of $11,900,000 above the 
budget request.

     North Atlantic Treaty Organization Security Investment Program





Fiscal year 2006 enacted level........................      $174,789,000
Fiscal year 2007 budget request.......................       220,985,000
Committee recommendation in the bill..................       200,985,000
Comparison with:
    Fiscal year 2006 enacted level....................        26,196,000
    Fiscal year 2007 budget request...................      (20,000,000)


    NSIP consists of annual contributions by NATO member 
countries. The program finances the costs of construction 
needed to support the roles of the major NATO commands. The 
investments cover facilities such as airfields, fuel pipelines 
and storage, harbors, communications and information systems, 
radar and navigational aids, and military headquarters.
    The Committee recommends an appropriation of $200,985,000 
for the North Atlantic Treaty Organization Security Investment 
Program (NSIP) for fiscal year 2007. This is an increase of 
$26,196,000 above the fiscal year 2006 enacted level and 
$20,000,000 below the budget request. The Committee believes 
the exchange rate between the dollar and the euro will produce 
savings. The Committee expects projects will be prioritized 
with the highest priority given to NATO on-going missions such 
as those in Iraq and Afghanistan.
    Occasionally, the U.S. has been forced to delay temporarily 
the authorization of projects due to shortfalls in U.S. 
obligation authority. The Committee directs the Secretary of 
Defense to notify the Committee 30 days prior to taking such 
action.

                        Family Housing Overview


                    (INCLUDING RESCISSIONS OF FUNDS)




Fiscal year 2006 enacted level........................    $4,438,332,000
Fiscal year 2007 budget request.......................     4,084,040,000
Committee recommendation in the bill (including            3,989,353,000
 rescissions).........................................
Comparison with:
    Fiscal year 2006 enacted level....................     (448,979,000)
    Fiscal year 2007 budget request...................      (94,687,000)


    Family housing construction accounts provide funds for new 
construction, construction improvements, the Federal government 
costs for family housing privatization projects, and planning 
and design. The operation and maintenance accounts provide 
funds to pay for maintenance and repair, furnishings, 
management, services, utilities, leasing, interest, mortgage 
insurance, and miscellaneous expenses.
    The Committee recommends a total appropriation of 
$4,055,553,000 and rescissions of $66,200,000 for the family 
housing construction and operation and maintenance accounts for 
fiscal year 2007. This is a decrease of $448,979,000 below the 
fiscal year 2006 enacted level and a decrease of $94,687,000 
below the budget request. When adjusted for supplemental 
funding, the recommendation is $11,094,000 above the fiscal 
year 2006 enacted level.
    Family Housing Privatization Progress Reports.--The 
Committee directs the Department of Defense to continue 
submitting semi-annual progress reports on the family housing 
privatization program as directed by House Report 109-95.
    Foreign Currency Savings.--The Committee directs that 
savings from foreign currency re-estimates be used to maintain 
existing family housing units. The Comptroller is directed to 
report to the Committee on how these savings are allocated by 
December 1, 2006. Likewise, only 10 percent of funds made 
available to the construction and operation and maintenance 
sub-accounts may be transferred between the sub-accounts. Such 
transfers must be reported to the Committee within 30 days of 
such action.
    Leasing Reporting Requirement.--The Secretary of Defense is 
directed to report to the Committee quarterly on the details of 
all new or renewed domestic leases entered into during the 
previous quarter that exceed $20,000 per unit per year, 
including certification that less expensive housing was not 
available for lease. For foreign leases, the Department is 
directed to: (1) perform an economic analysis on all new leases 
or lease/contract agreements where more than 25 units are 
involved; (2) report the details of new or renewed lease 
agreements that exceed $30,000 per unit per year 21 days prior 
to entering into such an agreement; and (3) base leasing 
decisions on the economic analysis.
    Reprogramming Criteria.--The reprogramming criteria that 
apply to military construction projects (25 percent of the 
funded amount or $2,000,000, whichever is less) apply to new 
housing construction projects and improvement projects over 
$2,000,000 as well.

                   Family Housing Construction, Army





Fiscal year 2006 enacted level........................      $528,140,000
Fiscal year 2007 budget request.......................       594,991,000
Committee recommendation in the bill..................       578,791,000
Comparison with:
    Fiscal year 2006 enacted level....................        50,651,000
    Fiscal year 2007 budget request...................      (16,200,000)


    The Committee recommends an appropriation of $578,791,000 
for Family Housing Construction, Army, for fiscal year 2007. 
This is an increase of $50,651,000 above the fiscal year 2006 
enacted level and a decrease of $16,200,000 below the budget 
request. The reduction from the request is taken from family 
housing improvements construction for general officers quarters 
at Fort McNair. The appropriation includes $241,800,000 to 
construct new family housing units, $320,659,000 to improve 
existing units, and $16,332,000 for planning and design. This 
funding level supports the elimination of 9,925 inadequate 
family housing units.

             Family Housing Operation and Maintenance, Army





Fiscal year 2006 enacted level........................      $795,953,000
Fiscal year 2007 budget request.......................       676,829,000
Committee recommendation in the bill..................       674,657,000
Comparison with:
    Fiscal year 2006 enacted level....................     (121,296,000)
    Fiscal year 2007 budget request...................       (2,172,000)


    The Committee recommends an appropriation of $674,657,000 
for Family Housing Operation and Maintenance, Army, for fiscal 
year 2007. This is a decrease of $121,296,000 below the fiscal 
year 2006 enacted level and a decrease of $2,172,000 below the 
budget request for repair of general officers quarters in 
Stuttgart, Germany.

           Family Housing Construction, Navy and Marine Corps





Fiscal year 2006 enacted level........................      $302,918,000
Fiscal year 2007 budget request.......................       305,071,000
Committee recommendation in the bill..................       308,956,000
Comparison with:
    Fiscal year 2006 enacted level....................         6,038,000
    Fiscal year 2007 budget request...................         3,885,000


    The Committee recommends an appropriation of $308,956,000 
for Family Housing Construction, Navy and Marine Corps, for 
fiscal year 2007. This is an increase of $6,038,000 above the 
fiscal year 2006 enacted level and an increase of $3,885,000 
above the budget request. When adjusted for supplemental 
funding, the recommendation is $92,203,000 above the fiscal 
year 2006 enacted level. The appropriation includes 
$126,025,000 to construct new family housing units, 
$180,146,000 to improve existing units, and $2,785,000 for 
planning and design. This funding level supports the 
elimination of 7,811 inadequate family housing units.
    California--Twentynine Palms: Install Air Conditioning--
Vista Del Sol, Phase 1. Of the funds provided for construction 
improvements in this account, the Committee directs that no 
less than $3,700,000 be made available for this project.

    Family Housing Operation and Maintenance, Navy and Marine Corps





Fiscal year 2006 enacted level........................      $631,662,000
Fiscal year 2007 budget request.......................       509,126,000
Committee recommendation in the bill..................       509,126,000
Comparison with:
    Fiscal year 2006 enacted level....................     (122,536,000)
    Fiscal year 2007 budget request...................  ................


    The Committee recommends an appropriation of $509,126,000 
for Family Housing Operation and Maintenance, Navy and Marine 
Corps, for fiscal year 2007. This is a decrease of $122,536,000 
below the fiscal year 2006 enacted level and the same as the 
budget request. When adjusted for supplemental funding, the 
recommendation is $73,647,000 below the fiscal year 2006 
enacted level.

                 Family Housing Construction, Air Force


                    (INCLUDING RESCISSIONS OF FUNDS)




Fiscal year 2006 enacted level........................    $1,324,968,000
Fiscal year 2007 budget request.......................     1,183,138,000
Committee recommendation in the bill (including            1,102,938,000
 rescissions).........................................
Comparison with:
    Fiscal year 2006 enacted level....................     (222,030,000)
    Fiscal year 2007 budget request...................      (80,200,000)


    The Committee recommends an appropriation of $1,169,138,000 
and rescissions of $66,200,000 for Family Housing Construction, 
Air Force, for fiscal year 2007. This is a decrease of 
$222,030,000 below the fiscal year 2006 enacted level and a 
decrease of $80,200,000 below the budget request. When adjusted 
for supplemental funding, the recommendation is $55,970,000 
above the fiscal year 2006 enacted level. The recommendation 
includes a reduction from the request for an Air Force 
programming error. The appropriation includes $752,159,000 to 
construct new family housing units, $403,777,000 to improve 
existing units, and $13,202,000 for planning and design. This 
funding level supports the elimination of 17,457 inadequate 
family housing units.
    The Committee recommends rescissions from previous 
appropriations to the account. The Committee believes that 
these funds are not required to execute any currently scheduled 
family housing projects. The Committee notes that the Air Force 
frequently reprograms funds within the Family Housing 
Construction account. In order to allow the Air Force to 
maintain this flexibility, the Committee recommends general 
rescissions as follows: -$23,400,000 from P.L. 108-324 (fiscal 
year 2005), and -$42,800,000 from P.L. 109-114 (fiscal year 
2006).

          Family Housing Operation and Maintenance, Air Force





Fiscal year 2006 enacted level........................      $806,289,000
Fiscal year 2007 budget request.......................       755,071,000
Committee recommendation in the bill..................       755,071,000
Comparison with:
    Fiscal year 2006 enacted level....................      (51,218,000)
    Fiscal year 2007 budget request...................  ................


    The Committee recommends an appropriation of $755,071,000 
for Family Housing Operation and Maintenance, Air Force, for 
fiscal year 2007. This is a decrease of $51,218,000 below the 
fiscal year 2006 enacted level and the same as the budget 
request. When adjusted for supplemental funding, the 
recommendation is $4,199,000 below the fiscal year 2006 enacted 
level.

               Family Housing Construction, Defense-Wide





Fiscal year 2006 enacted level........................  ................
Fiscal year 2007 budget request.......................        $8,808,000
Committee recommendation in the bill..................         8,808,000
Comparison with:
    Fiscal year 2006 enacted level....................         8,808,000
    Fiscal year 2007 budget request...................  ................


    The Committee recommends an appropriation of $8,808,000 for 
Family Housing Construction, Defense-Wide, for fiscal year 
2007. This is an increase of $8,808,000 above the fiscal year 
2006 enacted level and the same as the budget request.

         Family Housing Operation and Maintenance, Defense-Wide





Fiscal year 2006 enacted level........................       $45,927,000
Fiscal year 2007 budget request.......................        48,506,000
Committee recommendation in the bill..................        48,506,000
Comparison with:
    Fiscal year 2006 enacted level....................         2,579,000
    Fiscal year 2007 budget request...................  ................


    The Committee recommends an appropriation of $48,506,000 
for Family Housing Operation and Maintenance, Defense-Wide, for 
fiscal year 2007. This is an increase of $2,579,000 above the 
fiscal year 2006 enacted level and the same as the budget 
request.

         Department of Defense Family Housing Improvement Fund





Fiscal year 2006 enacted level........................        $2,475,000
Fiscal year 2007 budget request.......................         2,500,000
Committee recommendation in the bill..................         2,500,000
Comparison with:
    Fiscal year 2006 enacted level....................            25,000
    Fiscal year 2007 budget request...................  ................


    The FHIF is authorized by section 2883, title 10, United 
States Code, and provides the Department of Defense with 
authority to finance joint ventures with the private sector to 
revitalize and to manage the Department's housing inventory. 
The statute authorizes the Department to use limited 
partnerships, make direct and guaranteed loans, and convey 
Department-owned property to stimulate the private sector to 
increase the availability of affordable, quality housing for 
military personnel.
    The FHIF is used to build or renovate family housing by 
mixing or matching various legal authorities, and by utilizing 
private capital and expertise to the maximum extent possible. 
The fund is administered as a single account without fiscal 
year limitations and contains appropriated and transferred 
funds from family housing construction accounts.
    The Committee recommends an appropriation of $2,500,000 for 
the Department of Defense Family Housing Improvement Fund 
(FHIF) for fiscal year 2007. This is an increase of $25,000 
above the fiscal year 2006 enacted level and the same as the 
budget request.

          Chemical Demilitarization Construction, Defense-Wide





Fiscal year 2006 enacted level........................  ................
Fiscal year 2007 budget request.......................      $130,993,000
Committee recommendation in the bill..................        90,993,000
Comparison with:
    Fiscal year 2006 enacted level....................        90,993,000
    Fiscal year 2007 budget request...................      (40,000,000)


    The Chemical Demilitarization Construction, Defense-Wide 
account provides funds for the design and construction of full-
scale chemical disposal facilities and associated projects to 
upgrade installation support facilities and infrastructures 
required to support the Chemical Demilitarization program.
    The Committee recommends an appropriation of $90,993,000 
for Chemical Demilitarization Construction, Defense-Wide, for 
fiscal year 2007. This is an increase of $90,993,000 above the 
fiscal year 2006 enacted level and a decrease of $40,000,000 
below the budget request.
    The Committee commends the Department for requesting funds 
for the Chemical Demilitarization program and is committed to 
the United States treaty obligations in this area. However, the 
Committee notes that there are currently sufficient funds to 
continue planning activities and begin construction in fiscal 
year 2007. Additionally, the Committee is awaiting the revised 
program baseline decisions that are due later this year. 
Therefore, the Committee has reduced the recommended funding 
level by $40,000,000.

               Base Realignment and Closure Account 1990





Fiscal year 2006 enacted level........................      $252,279,000
Fiscal year 2007 budget request.......................       191,220,000
Committee recommendation in the bill..................       216,220,000
Comparison with:
    Fiscal year 2006 enacted level....................      (36,059,000)
    Fiscal year 2007 budget request...................        25,000,000


    The Committee recommends an appropriation of $216,220,000 
for the Base Realignment and Closure Account 1990 for fiscal 
year 2007. This is a decrease of $36,059,000 below the fiscal 
year 2006 enacted level and an increase of $25,000,000 above 
the budget request to accelerate cleanup at closed 
installations. The Committee is aware that there is a backlog 
of remaining requirements, particularly for cleanup of 
unexploded ordnance, for closed installations dating back to 
the 1988 BRAC round. The Committee is concerned by the slow 
pace of progress in remediating these properties and directs 
the Department of Defense to make funding for previous BRAC 
rounds a higher priority.

               Base Realignment and Closure Account 2005





Fiscal year 2006 enacted level........................    $1,489,421,000
Fiscal year 2007 budget request.......................     5,626,223,000
Committee recommendation in the bill..................     5,309,876,000
Comparison with:
    Fiscal year 2006 enacted level....................     3,820,455,000
    Fiscal year 2007 budget request...................     (316,347,000)


    The Committee recommends an appropriation of $5,309,876,000 
for the Base Realignment and Closure Account 2005 for fiscal 
year 2007. This is an increase of $3,820,455,000 above the 
fiscal year 2006 enacted level and a decrease of $316,347,000 
below the budget request.

                   Basic Allowance for Housing, Army





Fiscal year 2006 enacted level........................    $3,880,723,000
Fiscal year 2007 budget request.......................     3,687,905,000
Committee recommendation in the bill..................     3,687,905,000
Comparison with:
    Fiscal year 2006 enacted level....................     (192,818,000)
    Fiscal year 2007 budget request...................  ................


    The Committee recommends an appropriation of $3,687,905,000 
for Basic Allowance for Housing, Army for fiscal year 2007. 
This is a decrease of $192,818,000 below the fiscal year 2006 
enacted level and the same as the budget request.

                   Basic Allowance for Housing, Navy





Fiscal year 2006 enacted level........................    $3,511,570,000
Fiscal year 2007 budget request.......................     4,135,061,000
Committee recommendation in the bill..................     4,135,061,000
Comparison with:
    Fiscal year 2006 enacted level....................       623,491,000
    Fiscal year 2007 budget request...................  ................


    The Committee recommends an appropriation of $4,135,061,000 
for Basic Allowance for Housing, Navy for fiscal year 2007. 
This is an increase of $623,491,000 above the fiscal year 2006 
enacted level and the same as the budget request.

               Basic Allowance for Housing, Marine Corps





Fiscal year 2006 enacted level........................    $1,166,686,000
Fiscal year 2007 budget request.......................     1,350,921,000
Committee recommendation in the bill..................     1,350,921,000
Comparison with:
    Fiscal year 2006 enacted level....................       184,235,000
    Fiscal year 2007 budget request...................  ................


    The Committee recommends an appropriation of $1,350,921,000 
for Basic Allowance for Housing, Marine Corps for fiscal year 
2007. This is an increase of $184,235,000 above the fiscal year 
2006 enacted level and the same as the budget request.

                 Basic Allowance for Housing, Air Force





Fiscal year 2006 enacted level........................    $3,168,599,000
Fiscal year 2007 budget request.......................     2,934,327,000
Committee recommendation in the bill..................     2,934,327,000
Comparison with:
    Fiscal year 2006 enacted level....................     (234,272,000)
    Fiscal year 2007 budget request...................  ................


    The Committee recommends an appropriation of $2,934,327,000 
for Basic Allowance for Housing, Air Force for fiscal year 
2007. This is a decrease of $234,272,000 below the fiscal year 
2006 enacted level and the same as the budget request. When 
adjusted for supplemental funding, the recommendation is 
$227,746,000 below the fiscal year 2006 enacted level.

            Basic Allowance for Housing, Army National Guard





Fiscal year 2006 enacted level........................      $477,113,000
Fiscal year 2007 budget request.......................       469,109,000
Committee recommendation in the bill..................       469,109,000
Comparison with:
    Fiscal year 2006 enacted level....................       (8,004,000)
    Fiscal year 2007 budget request...................  ................


    The Committee recommends an appropriation of $469,109,000 
for Basic Allowance for Housing, Army National Guard for fiscal 
year 2007. This is a decrease of $8,004,000 below the fiscal 
year 2006 enacted level and the same as the budget request. 
When adjusted for supplemental funding, the recommendation is 
$24,290,000 above the fiscal year 2006 enacted level.

            Basic Allowance for Housing, Air National Guard





Fiscal year 2006 enacted level........................      $248,685,000
Fiscal year 2007 budget request.......................       277,533,000
Committee recommendation in the bill..................       277,533,000
Comparison with:
    Fiscal year 2006 enacted level....................        28,848,000
    Fiscal year 2007 budget request...................  ................


    The Committee recommends an appropriation of $277,533,000 
for Basic Allowance for Housing, Air National Guard for fiscal 
year 2007. This is an increase of $28,848,000 above the fiscal 
year 2006 enacted level and the same as the budget request. 
When adjusted for supplemental funding, the recommendation is 
$39,137,000 above the fiscal year 2006 enacted level.

               Basic Allowance for Housing, Army Reserve





Fiscal year 2006 enacted level........................      $307,003,000
Fiscal year 2007 budget request.......................       347,607,000
Committee recommendation in the bill..................       347,607,000
Comparison with:
    Fiscal year 2006 enacted level....................        40,604,000
    Fiscal year 2007 budget request...................  ................


    The Committee recommends an appropriation of $347,607,000 
for Basic Allowance for Housing, Army Reserve for fiscal year 
2007. This is an increase of $40,604,000 above the fiscal year 
2006 enacted level and the same as the budget request. When 
adjusted for supplemental funding, the recommendation is 
$40,965,000 above the fiscal year 2006 enacted level.

               Basic Allowance for Housing, Navy Reserve





Fiscal year 2006 enacted level........................      $190,194,000
Fiscal year 2007 budget request.......................       208,838,000
Committee recommendation in the bill..................       208,838,000
Comparison with:
    Fiscal year 2006 enacted level....................        18,644,000
    Fiscal year 2007 budget request...................  ................


    The Committee recommends an appropriation of $208,838,000 
for Basic Allowance for Housing, Navy Reserve for fiscal year 
2007. This is an increase of $18,644,000 above the fiscal year 
2006 enacted level and the same as the budget request. When 
adjusted for supplemental funding, the recommendation is 
$19,697,000 above the fiscal year 2006 enacted level.

           Basic Allowance for Housing, Marine Corps Reserve





Fiscal year 2006 enacted level........................       $40,134,000
Fiscal year 2007 budget request.......................        43,082,000
Committee recommendation in the bill..................        43,082,000
Comparison with:
    Fiscal year 2006 enacted level....................         2,948,000
    Fiscal year 2007 budget request...................  ................


    The Committee recommends an appropriation of $43,082,000 
for Basic Allowance for Housing, Marine Corps Reserve for 
fiscal year 2007. This is an increase of $2,948,000 above the 
fiscal year 2006 enacted level and the same as the budget 
request.

             Basic Allowance for Housing, Air Force Reserve





Fiscal year 2006 enacted level........................       $69,442,000
Fiscal year 2007 budget request.......................        76,218,000
Committee recommendation in the bill..................        76,218,000
Comparison with:
    Fiscal year 2006 enacted level....................         6,776,000
    Fiscal year 2007 budget request...................  ................


    The Committee recommends an appropriation of $76,218,000 
for Basic Allowance for Housing, Air Force Reserve for fiscal 
year 2007. This is an increase of $6,776,000 above the fiscal 
year 2006 enacted level and the same as the budget request. 
When adjusted for supplemental funding, the recommendation is 
$6,861,000 above the fiscal year 2006 enacted level.

      Facilities Sustainment, Restoration and Modernization, Army





Fiscal year 2006 enacted level........................    $1,832,607,000
Fiscal year 2007 budget request.......................     1,810,774,000
Committee recommendation in the bill..................     1,810,774,000
Comparison with:
    Fiscal year 2006 enacted level....................      (21,833,000)
    Fiscal year 2007 budget request...................  ................


    The Committee recommends an appropriation of $1,810,774,000 
for facilities sustainment, restoration and modernization, Army 
for fiscal year 2007. This is a decrease of $21,833,000 below 
the fiscal year 2006 enacted level and the same as the budget 
request.

      Facilities Sustainment, Restoration and Modernization, Navy





Fiscal year 2006 enacted level........................    $1,547,020,000
Fiscal year 2007 budget request.......................     1,201,313,000
Committee recommendation in the bill..................     1,201,313,000
Comparison with:
    Fiscal year 2006 enacted level....................     (345,707,000)
    Fiscal year 2007 budget request...................  ................


    The Committee recommends an appropriation of $1,201,313,000 
for Facilities Sustainment, Restoration and Modernization, Navy 
for fiscal year 2007. This is a decrease of $345,707,000 below 
the fiscal year 2006 enacted level and the same as the budget 
request. When adjusted for supplemental funding, the 
recommendation is $130,208,000 below the fiscal year 2006 
enacted level.

  Facilities Sustainment, Restoration and Modernization, Marine Corps





Fiscal year 2006 enacted level........................      $548,420,000
Fiscal year 2007 budget request.......................       473,141,000
Committee recommendation in the bill..................       473,141,000
Comparison with:
    Fiscal year 2006 enacted level....................      (75,279,000)
    Fiscal year 2007 budget request...................  ................


    The Committee recommends an appropriation of $473,141,000 
for Facilities Sustainment, Restoration and Modernization, 
Marine Corps for fiscal year 2007. This is a decrease of 
$75,279,000 below the fiscal year 2006 enacted level and the 
same as the budget request.

    Facilities Sustainment, Restoration and Modernization, Air Force





Fiscal year 2006 enacted level........................    $1,896,251,000
Fiscal year 2007 budget request.......................     1,684,019,000
Committee recommendation in the bill..................     1,684,019,000
Comparison with:
    Fiscal year 2006 enacted level....................     (212,232,000)
    Fiscal year 2007 budget request...................  ................


    The Committee recommends an appropriation of $1,684,019,000 
for Facilities Sustainment, Restoration and Modernization, Air 
Force for fiscal year 2007. This is a decrease of $212,232,000 
below the fiscal year 2006 enacted level and the same as the 
budget request. When adjusted for supplemental funding, the 
recommendation is $143,227,000 below the fiscal year 2006 
enacted level.

  Facilities Sustainment, Restoration and Modernization, Defense-Wide





Fiscal year 2006 enacted level........................      $120,969,000
Fiscal year 2007 budget request.......................        86,386,000
Committee recommendation in the bill..................        86,386,000
Comparison with:
    Fiscal year 2006 enacted level....................      (34,583,000)
    Fiscal year 2007 budget request...................  ................


    The Committee recommends an appropriation of $86,386,000 
for Facilities Sustainment, Restoration and Modernization, 
Defense-Wide for fiscal year 2007. This is a decrease of 
$34,583,000 below the fiscal year 2006 enacted level and the 
same as the budget request. When adjusted for supplemental 
funding, the recommendation is $29,345,000 below the fiscal 
year 2006 enacted level.

 Facilities Sustainment, Restoration and Modernization, Army National 
                                 Guard





Fiscal year 2006 enacted level........................      $441,796,000
Fiscal year 2007 budget request.......................       387,882,000
Committee recommendation in the bill..................       387,882,000
Comparison with:
    Fiscal year 2006 enacted level....................      (53,914,000)
    Fiscal year 2007 budget request...................  ................


    The Committee recommends an appropriation of $387,882,000 
for Facilities Sustainment, Restoration and Modernization, Army 
National Guard for fiscal year 2007. This is a decrease of 
$53,914,000 below the fiscal year 2006 enacted level and the 
same as the budget request. When adjusted for supplemental 
funding, the recommendation is $4,697,000 below the fiscal year 
2006 enacted level.

  Facilities Sustainment, Restoration and Modernization, Air National 
                                 Guard





Fiscal year 2006 enacted level........................      $191,550,000
Fiscal year 2007 budget request.......................       255,322,000
Committee recommendation in the bill..................       255,322,000
Comparison with:
    Fiscal year 2006 enacted level....................        63,772,000
    Fiscal year 2007 budget request...................  ................


    The Committee recommends an appropriation of $255,322,000 
for Facilities Sustainment, Restoration and Modernization, Air 
National Guard for fiscal year 2007. This is an increase of 
$63,772,000 above the fiscal year 2006 enacted level and the 
same as the budget request. When adjusted for supplemental 
funding, the recommendation is $77,329,000 above the fiscal 
year 2006 enacted level.

  Facilities Sustainment, Restoration and Modernization, Army Reserve





Fiscal year 2006 enacted level........................      $203,454,000
Fiscal year 2007 budget request.......................       215,890,000
Committee recommendation in the bill..................       215,890,000
Comparison with:
    Fiscal year 2006 enacted level....................        12,436,000
    Fiscal year 2007 budget request...................  ................


    The Committee recommends an appropriation of $215,890,000 
for Facilities Sustainment, Restoration and Modernization, Army 
Reserve for fiscal year 2007. This is an increase of 
$12,436,000 above the fiscal year 2006 enacted level and the 
same as the budget request. When adjusted for supplemental 
funding, the recommendation is $13,564,000 above the fiscal 
year 2006 enacted level.

  Facilities Sustainment, Restoration and Modernization, Navy Reserve





Fiscal year 2006 enacted level........................      $377,134,000
Fiscal year 2007 budget request.......................        52,136,000
Committee recommendation in the bill..................        52,136,000
Comparison with:
    Fiscal year 2006 enacted level....................     (324,998,000)
    Fiscal year 2007 budget request...................  ................


    The Committee recommends an appropriation of $52,136,000 
for Facilities Sustainment, Restoration and Modernization, Navy 
Reserve for fiscal year 2007. This is a decrease of 
$324,998,000 below the fiscal year 2006 enacted level and the 
same as the budget request. When adjusted for supplemental 
funding, the recommendation is $14,974,000 below the fiscal 
year 2006 enacted level.

  Facilities Sustainment, Restoration and Modernization, Marine Corps 
                                Reserve





Fiscal year 2006 enacted level........................       $11,098,000
Fiscal year 2007 budget request.......................         9,579,000
Committee recommendation in the bill..................         9,579,000
Comparison with:
    Fiscal year 2006 enacted level....................       (1,519,000)
    Fiscal year 2007 budget request...................  ................


    The Committee recommends an appropriation of $9,579,000 for 
Facilities Sustainment, Restoration and Modernization, Marine 
Corps Reserve for fiscal year 2007. This is a decrease of 
$1,519,000 below the fiscal year 2006 enacted level and the 
same as the budget request. When adjusted for supplemental 
funding, the recommendation is $425,000 below the fiscal year 
2006 enacted level.

   Facilities Sustainment, Restoration and Modernization, Air Force 
                                Reserve





Fiscal year 2006 enacted level........................       $51,777,000
Fiscal year 2007 budget request.......................        59,849,000
Committee recommendation in the bill..................        59,849,000
Comparison with:
    Fiscal year 2006 enacted level....................         8,072,000
    Fiscal year 2007 budget request...................  ................


    The Committee recommends an appropriation of $59,849,000 
for Facilities Sustainment, Restoration and Modernization, Air 
Force Reserve for fiscal year 2007. This is an increase of 
$8,072,000 above the fiscal year 2006 enacted level and the 
same as the budget request. When adjusted for supplemental 
funding, the recommendation is $9,989,000 above the fiscal year 
2006 enacted level.

                    Environmental Restoration, Army





Fiscal year 2006 enacted level........................      $403,786,000
Fiscal year 2007 budget request.......................       413,794,000
Committee recommendation in the bill..................       413,794,000
Comparison with:
    Fiscal year 2006 enacted level....................        10,008,000
    Fiscal year 2007 budget request...................  ................


    The Committee recommends an appropriation of $413,794,000 
for Environmental Restoration, Army for fiscal year 2007. This 
is an increase of $10,008,000 above the fiscal year 2006 
enacted level and the same as the budget request.

                    Environmental Restoration, Navy





Fiscal year 2006 enacted level........................      $302,222,000
Fiscal year 2007 budget request.......................       304,409,000
Committee recommendation in the bill..................       304,409,000
Comparison with:
    Fiscal year 2006 enacted level....................         2,187,000
    Fiscal year 2007 budget request...................  ................


    The Committee recommends an appropriation of $304,409,000 
for Environmental Restoration, Navy for fiscal year 2007. This 
is an increase of $2,187,000 above the fiscal year 2006 enacted 
level and the same as the budget request.

                  Environmental Restoration, Air Force





Fiscal year 2006 enacted level........................      $402,396,000
Fiscal year 2007 budget request.......................       423,871,000
Committee recommendation in the bill..................       423,871,000
Comparison with:
    Fiscal year 2006 enacted level....................        21,475,000
    Fiscal year 2007 budget request...................  ................


    The Committee recommends an appropriation of $423,871,000 
for Environmental Restoration, Air Force for fiscal year 2007. 
This is an increase of $21,475,000 above the fiscal year 2006 
enacted level and the same as the budget request.

                Environmental Restoration, Defense-Wide





Fiscal year 2006 enacted level........................       $27,885,000
Fiscal year 2007 budget request.......................        18,431,000
Committee recommendation in the bill..................        18,431,000
Comparison with:
    Fiscal year 2006 enacted level....................       (9,454,000)
    Fiscal year 2007 budget request...................  ................


    The Committee recommends an appropriation of $18,431,000 
for Environmental Restoration, Defense-Wide for fiscal year 
2007. This is a decrease of $9,454,000 below the fiscal year 
2006 enacted level and the same as the budget request.

         Environmental Restoration, Formerly Used Defense Sites





Fiscal year 2006 enacted level........................      $254,352,000
Fiscal year 2007 budget request.......................       242,790,000
Committee recommendation in the bill..................       257,790,000
Comparison with:
    Fiscal year 2006 enacted level....................         3,438,000
    Fiscal year 2007 budget request...................        15,000,000


    The Committee recommends an appropriation of $257,790,000 
for Environmental Restoration, Formerly Used Defense Sites for 
fiscal year 2007. This is an increase of $3,438,000 above the 
fiscal year 2006 enacted level and an increase of $15,000,000 
above the budget request.
    The Committee understands that this is a large, nationwide 
issue and urges the Department to increase funding levels in 
future years.

                         Defense Health Program


                    (including rescissions of funds)





Fiscal year 2006 enacted level........................   $20,340,550,000
Fiscal year 2007 budget request.......................    21,025,121,000
Committee recommendation in the bill (including           21,025,121,000
 rescissions).........................................
Comparison with:
    Fiscal year 2006 enacted level....................       684,571,000
    Fiscal year 2007 budget request...................  ................


    The DHP appropriation provides for worldwide medical and 
dental services to active forces and other eligible 
beneficiaries, veterinary services, medical command 
headquarters, specialized services for the training of medical 
personnel, and occupational and industrial health care. The 
budget request for normal peacetime funding sustains the 
Military Health System (MHS) to ensure the nation has available 
at all times a healthy force supported by a combat ready health 
care system and to provide cost effective, quality healthcare. 
The program provides medical care for 9.2 million beneficiaries 
through a worldwide network of over 500 military hospitals and 
health clinics, and the Department of Defense's extensive 
private sector health care partners.
    The Committee recommends a total appropriation of 
$21,025,121,000 for the Defense Health Program (DHP) for fiscal 
year 2007. This is an increase of $684,571,000 above the fiscal 
year 2006 enacted level and the same as the budget request. 
When adjusted for supplemental funding, the recommendation is 
$1,006,121,000 above the fiscal year 2006 enacted level.
    Mental Health.--The Committee is very concerned about the 
mental health and wellness of troops returning from conflicts 
overseas. The full impact of the emotional toll that combat 
takes from our troops may not be fully realized for years into 
the future. The Committee believes that mental health and 
wellness need to be integrated into all aspects of military 
training, combat and support and that care cannot stop when the 
soldier returns home from the battlefield. The Department of 
Defense should be commended for the work it is doing and the 
improvements that have been made in the mental health area, but 
more needs to be done. The primary reason for soldiers failing 
to seek treatment for mental health issues is the stigma 
associated with seeking help. The Committee feels that the 
military needs to begin to integrate mandatory mental health 
services and counseling into the daily activities of soldiers 
and has included a $25,000,000 increase in funds for this 
purpose. By making these programs a mandatory part of a 
soldier's tour of duty, the stigma associated with seeking care 
is eliminated. The Committee directs the Department of Defense 
to use the increased funds to initiate programs that make 
mental health screening and counseling a mandatory part of the 
operating procedures of soldiers in battle. The Department of 
Defense should report to the Committee on the use of these 
funds and an assessment of future funding requirements for this 
initiative by December 15, 2006. Further, the Committee directs 
the Department to continue to work with the Department of 
Veterans Affairs to study mental health issues, particularly 
Post Traumatic Stress Disorder (PTSD). The Committee has 
included Post Traumatic Stress Disorder as a disease available 
for study under the Peer-Reviewed Medical Research Fund in the 
Research, Development, Test, and Evaluation section of this 
appropriation and encourages increased research in this area.
    Sustaining the Benefit.--The goal of the Committee is to 
ensure that the absolute highest quality health care is 
available to military personnel, retirees, and their families.
    The Defense Health Program, like the rest of the Nation, is 
facing the challenges of rising health care costs. This issue 
is not new. In addition to health care inflation, the program 
is experiencing an increase in the number of beneficiaries, 
increased beneficiary demand, and military transformation all 
of which are placing greater demands on the system. However, 
the Department of Defense has had existing authority to 
increase some fees and co-pays and has failed to use this 
authority to make modest annual fee adjustments over time. The 
result of this is that we are now faced with large fee 
increases for beneficiaries and an extreme funding deficit if 
fee increases are not enacted.
    The budget request assumes a number of legislative changes 
that have not been adopted by the Congress. The proposal to 
increase co-pays and enrollment fees to combat the rise in 
health care costs is a legislative proposal that is being 
considered by the Authorization Committees of the House and 
Senate. Additionally, the proposal to provide federal contract 
prices for drugs at TRICARE retail outlets has not yet been 
transmitted to Congress for consideration. The Committee cannot 
responsibly address the funding implications of these proposals 
until these legislative issues are resolved. The Committee will 
continue to monitor the progress of these proposals throughout 
the appropriations process.
    Military Health System Office of Transformation.--The 
Committee supports the establishment of the Office of 
Transformation for the Military Health System, but feels that 
this office should be working closely in conjunction with the 
Department of Veterans Affairs on issues that affect service 
men and women, specifically, seamless transition and co-
location of facilities. The Committee directs the Department to 
report on the extent to which the Department of Veterans 
Affairs is integrated into the Office of Transformation by 
December 15, 2006.
    Unified Medical Command.--The Committee understands that 
there has been some interest in creating a unified medical 
command structure to direct the management of health care 
services in the Department of Defense. The Committee directs 
the Department of Defense to report on the feasibility of this 
option and the potential costs savings associated with this 
command structure by December 15, 2006.
    Madigan Army Medical Trauma Center.--The Committee is aware 
of the critical needs at Madigan Army Medical Trauma Center and 
expects the Department of Defense to continue to support the 
needs of this facility at or above the fiscal year 2006 funding 
level.
    Avian Influenza.--The Committee is concerned about 
increased cases of avian influenza around the globe and the 
potential for pandemic influenza outbreak. Troops typically 
share close living quarters and work in situations where the 
spread of a virus could potentially impact overall troop 
readiness. The Committee understands that the Department is 
currently conducting basic research on avian influenza, but is 
unclear on what steps are being taken to protect active troop 
levels if there is an outbreak. The Committee directs the 
Department of Defense to report on its plans to protect troop 
readiness during an avian influenza outbreak scenario by 
December 15, 2006.
    Fort Drum Regional Health Planning Organization.--The 
Committee fully supports the Fort Drum Regional Health Planning 
Organization pilot project, authorized in last year's Defense 
Authorization bill. The Committee believes that innovative 
options for addressing health care needs in military 
communities need to be investigated, particularly as military 
transformation and the base realignment and closure process 
move forward. The Committee directs the Department of Defense 
to provide $400,000 for this pilot project and report on its 
progress by December 15, 2006.
    Armed Forces Institute of Pathology.--The Committee is 
aware that the Department is considering a realignment of the 
Armed Forces Institute of Pathology (AFIP), and that one option 
is the relocation of AFIP components to the Uniformed Services 
University of the Health Sciences. The Committee remains 
strongly committed to maintaining the AFIP Tissue Repository 
within the Department of Defense. The Tissue Repository is 
recognized for its tremendous national value, housing over a 
quarter of the nation's tissue that is available for cancer and 
drug research. Therefore, the Department is directed to report 
to the Committee on its plans for AFIP including plans to 
maintain the Tissue Repository, pathology consultations, 
training and education functions by November 1, 2006.
    Unobligated Balances.--The Committee is concerned with the 
amount of unobligated balances that are annually turned back to 
the Treasury. While the Committee understands the need to 
finalize remaining contracts and obligations, the amount of 
funds being canceled and returned to the Treasury is 
unacceptable. The Committee believes that the Department of 
Defense should be fiscally responsible in its budgeting of the 
Defense Health Program and should make annual adjustments to 
the budget activity groups based on prior year execution. The 
Committee does not agree with the proposal to increase the 
amount of funds that can be carried into the next fiscal year 
to three percent, and based upon the concerns stated above, has 
reduced that percentage to one percent. The Committee directs 
the Department to report on its plan to reduce the amount of 
funding returned to the Treasury by December 15, 2006.
    Special Items of Interest.--Programs or activities for 
which additional funds have been provided above the budget 
request are to be considered as congressional interest items 
for the purpose of the Base for Reprogramming Form (DD 1414). 
Therefore, each of these items must be submitted to the 
Committee on the DD 1414 at the stated amount. These items 
remain special interest items whether or not they are repeated 
in a subsequent conference report.
    Reprogramming Procedures.--The Committee has included 
language in the bill, similar to last year, to limit the funds 
available for Private Sector Care under the TRICARE program and 
make transfers above this limit subject to prior approval 
reprogramming procedures. This language should not be 
interpreted by the Department as limiting the amount of funds 
that may be transferred to the direct care system from other 
budget activities within the Defense Health Program.

                       Operation and Maintenance





Fiscal year 2006 enacted level........................   $19,399,747,000
Fiscal year 2007 budget request.......................    20,498,163,000
Committee recommendation in the bill..................    20,178,163,000
Comparison with:
    Fiscal year 2006 enacted level....................       778,416,000
    Fiscal year 2007 budget request...................     (320,000,000)


    The Committee recommends an appropriation of 
$20,178,163,000 for operation and maintenance for fiscal year 
2007. This is an increase of $778,416,000 above the fiscal year 
2006 enacted level and a decrease of $320,000,000 below the 
budget request. When adjusted for supplemental funding, the 
recommendation is $1,071,374,000 above the fiscal year 2006 
enacted level. The Committee's recommendations are as follows:

                        [In thousands of dollars]
------------------------------------------------------------------------
                                               Budget        Committee
                 Activity                      request    recommendation
------------------------------------------------------------------------
Operations and Maintenance................    20,249,163     20,178,163
In-House Care.............................     5,592,799      5,513,899
    Mental Health Initiative..............  ............         25,000
    Pharmacy Reduction....................  ............        -48,000
    Reversal of DOD/VA Joint Incentives     ............        -15,858
     Fund Payment.........................
    Unobligated Balances--Joint Incentive   ............        -15,042
     Fund.................................
    Unobligated Balances--Operations and    ............        -25,000
     Maintenance..........................
Private Sector Care.......................    10,638,784     10,638,784
Consolidated Health Care Support..........     1,219,873      1,219,873
Information Management....................       904,899        912,799
    Integrated Clinical Systems             ............          1,500
     Collaboration........................
    Medical Records Digital Conversion at   ............          1,000
     Bethesda and Walter Reed.............
    Interactive Internet at Bethesda......  ............          1,900
    Trauma Registry and Research Database.  ............          3,500
Management Activities.....................       237,388        237,388
Education and Training....................       460,082        460,082
Base Operations/Communications............     1,195,338      1,195,338
------------------------------------------------------------------------

    Mental Health Funding.--The Committee, as stated 
previously, has included an increase of $25,000,000 to begin to 
integrate mandatory mental health services and counseling into 
the standard operating procedures for soldiers.
    Pharmacy Reduction in Direct Care.--The Committee remains 
concerned that the current execution rate for pharmaceuticals 
does not justify the requested increase in funding. The 
Committee therefore reduces the amount provided for In-House 
Care by $48,000,000.
    TRICARE Mail Order Pharmacy.--The Committee believes that 
the Defense Health Program could realize additional savings by 
increased use of the mail-order pharmacy option. In previous 
years, the Committee asked the Defense Health Program to 
increase the use of this option for beneficiaries through 
marketing and education. This has had little effect. The 
Committee believes that the Defense Health Program should 
investigate the option of making the mail order pharmacy 
mandatory, to the maximum extent possible, for beneficiaries 
using long-term maintenance pharmaceuticals. The Department 
should report to the Committee on its plans to do this by 
December 15, 2006.
    Joint Incentive Fund.--The Committee is concerned about the 
large amount of carryover funding in the Departments of Defense 
and Veterans Affairs Joint Incentive Fund and held a hearing on 
the issue this year. While the Committee believes that many of 
the issues that have precluded the funding from being spent 
have been resolved, there is still a large amount of funding 
that remains unallocated after four years of authorization. The 
Committee does not agree to the proposed increase of 
$15,858,000 for payment into the fund for fiscal year 2007. In 
addition, the Committee has rescinded $15,042,000 from 
unobligated balances in the Joint Incentive Fund.
    Unobligated Balances.--The Committee has rescinded 
$25,000,000 in unobligated operation and maintenance funding 
and has shifted this funding to the mental health initiative 
described above.
    Information Technology.--The Committee has included funding 
in the Information Technology account to continue and complete 
several ongoing projects. Funds are included to continue the 
Integrated Systems Collaboration Project in North Carolina, 
continue digital conversion of medical records at Bethesda and 
Walter Reed, establish interactive internet capabilities for 
wounded soldiers at Bethesda Naval Hospital, and to complete 
the Trauma Registry and Research Database.
    The Committee fully supports the requested increase of 
$4,644,000 for the Defense Medical Logistics Standard Support 
(DMLSS) and Blood Standard Support.
    Carryover Funds.--The Committee does not agree to proposed 
bill language that increases the amount of funding available 
for carryover into the next fiscal year to three percent, and 
because of the amount of funding being cancelled and returned 
to the Treasury every year, has reduced this carryover 
percentage to one percent.

                              Procurement





Fiscal year 2006 enacted level........................      $403,920,000
Fiscal year 2007 budget request.......................       396,355,000
Committee recommendation in the bill..................       402,855,000
Comparison with:
    Fiscal year 2006 enacted level....................       (1,065,000)
    Fiscal year 2007 budget request...................         6,500,000


    The Committee recommends an appropriation of $402,855,000 
for procurement for fiscal year 2007. This is a decrease of 
$1,065,000 below the fiscal year 2006 enacted level and an 
increase of $6,500,000 above the budget request. When adjusted 
for supplemental funding, the recommendation is $27,527,000 
above the fiscal year 2006 enacted level. The Committee's 
recommendation is as follows:

                        [In thousands of dollars]
------------------------------------------------------------------------
                                               Budget        Committee
                 Activity                      request    recommendation
------------------------------------------------------------------------
Procurement...............................       396,355        402,855
------------------------------------------------------------------------
    Protected Health Information            ............          3,000
     Initiative...........................
    Air Force Surgeon General Server        ............          3,500
     Consolidation Initiative.............
------------------------------------------------------------------------

    The Committee has included funding to continue the 
protected health information initiative and the Air Force 
general server consolidation program. The Committee believes 
that in future years, these programs should be integrated into 
an overall Defense-Wide plan for upgrading and consolidating 
information technology hardware and developing data standards. 
The Committee directs the Department to report back to the 
Committee on its plan for upgrading, replacement, and 
consolidation of information technology hardware by March 1, 
2007.
    Procurement of Information Technology Systems.--The 
Committee is concerned with the increased number of requests it 
receives for procuring information technology systems for the 
Defense Health Program. Many of these requests are for 
geographically localized systems to improve information sharing 
with the Department of Veterans Affairs, consolidating and 
upgrading hardware, software packages for reviewing and 
auditing data, geographic information system tools, and 
assorted other information technology issues. While many of 
these requests represent worthy products, implementing multiple 
systems in multiple locations could ultimately lead to more 
problems with system interoperability rather than fewer 
problems. The Committee directs the Department to include a 
detailed report on its information technology needs in future 
budget submissions. The Committee will be reluctant to fund 
projects that are geographically localized or cannot be 
implemented Defense-Wide in the future.

                        Research and Development





Fiscal year 2006 enacted level.............      $536,883,000
Fiscal year 2007 budget request............       130,603,000
Committee recommendation in the bill.......       444,103,000
Comparison with:
    Fiscal year 2006 enacted level.........      (92,780,000)
    Fiscal year 2007 budget request........       313,500,000


    The Committee recommends an appropriation of $444,103,000 
for research and development for fiscal year 2007. This is a 
decrease of $92,780,000 below the fiscal year 2006 enacted 
level and an increase of $313,500,000 above the budget request. 
The Committee's recommendation is as follows:

                        [In thousands of dollars]
------------------------------------------------------------------------
                                               Budget        Committee
                 Activity                      request    recommendation
------------------------------------------------------------------------
Research, Development, Testing and               130,603        444,103
 Evaluation...............................
------------------------------------------------------------------------
    Peer Reviewed Breast Cancer Research    ............        115,000
     Program..............................
    Peer Reviewed Ovarian Cancer Research.  ............         15,000
    Peer Reviewed Prostate Cancer Research  ............         80,000
     Program..............................
    Peer Reviewed Medical Research Program  ............         45,000
    Advanced Military Wound Healing and     ............          1,900
     Treatment............................
    Amyotrophic Lateral Sclerosis (ALS)...  ............          2,000
    Bethesda Hospital Emergency             ............          5,000
     Preparedness Partnership.............
    Biomolecular Materials Composites       ............          1,000
     Research Program.....................
    Copper Antimicrobial Research Program.  ............          2,000
    DOD Global HIV/AIDS Prevention Program  ............          7,000
    Downed Pilot Forward Osmosis Water      ............          2,500
     Filtration System....................
    Early Diagnosis, Treatment and Care of  ............          2,500
     Cancer Patients......................
    Leukemia Research (CMLRP).............  ............          5,000
    Medical Surveillance Technology--       ............          2,100
     Clinical Looking Glass...............
    Metabolic Defense Research Program....  ............          2,500
    Microencapsulation and Vaccine          ............          3,000
     Delivery Research....................
    Muscle Research Consortium............  ............          3,500
    Periscopic Surgery Research...........  ............          2,500
    Post Traumatic Stress Disorder Center   ............          2,000
     at Phoebe Putney Medical Center......
    Stress Disorder Research Initiative at  ............          3,500
     Fort Hood............................
    Tuberous Sclerosis Complex (TSC)......  ............          5,000
    United States Military Cancer Care      ............          2,500
     Institute at WRAMC...................
    Water-Related Viral Disease             ............          3,000
     Countermeasures for Air Force Medical
     Service..............................
------------------------------------------------------------------------

    Peer Reviewed Cancer Research.--The Committee has provided 
$210,000,000 for Peer Reviewed Cancer Research for Breast, 
Ovarian, and Prostate Cancers.
    Peer Reviewed Medical Research Program.--The Committee has 
provided $45,000,000 for the Peer Reviewed Medical Research 
Program. The Committee recommends the following issues as 
candidates for research: autism, chronic epilepsy, tissue 
transplant technology, duchenne and limb girdle muscular 
dystrophy, hemastasis and thrombosis, immunology research, 
manganese research, obesity and nutritional factors in military 
health, polycystic kidney disease, prader-willi syndrome, 
pulmonary hypertension, post traumatic stress disorder, lupus, 
and eye and vision research.
    The Committee has included post traumatic stress disorder 
in this fund and encourages increased research in this area. 
Much more research needs to be initiated to determine the most 
effective treatment methods for this disorder as more troops 
return from operations in Iraq and Afghanistan.

                       ADMINISTRATIVE PROVISIONS

    The Administration proposed eliminating several 
administrative provisions enacted in the Military Construction, 
Military Quality of Life and Veterans Affairs Appropriations 
Act, 2006 (P.L. 109-114), including sections 111, 113, 118, 
121, 122, 125, 126, 128, 129, and 130.
    The Administration proposed eliminating three general 
provisions enacted in the Department of Defense Appropriations 
Act, 2006 (P.L. 109-148), including sections 8049, 8051, and 
8085(b).
    The Administration proposed one new administrative 
provision to allow for the transfer of expired funds to the 
``Foreign Currency Fluctuations, Construction, Defense'' 
account.
    The bill includes 34 provisions that were included in the 
fiscal year 2006 appropriations bill and one new provision 
proposed by the Administration. The administrative provisions 
included in the bill are as follows:
    Section 101 prohibits the use of funds for payments under a 
cost-plus-a-fixed-fee contract for construction where cost 
estimates exceed $25,000. An exception for Alaska is provided.
    Section 102 permits the hire of passenger motor vehicles.
    Section 103 permits funds to be expended on the 
construction of defense access roads under certain 
circumstances.
    Section 104 prohibits construction of new bases in the 
United States without a specific appropriation.
    Section 105 limits the use of funds for the purchase of 
land or land easements that exceed 100 percent of value except 
under certain conditions.
    Section 106 prohibits the use of funds to acquire land, 
prepare sites, or install utilities for family housing except 
housing for which funds have been appropriated.
    Section 107 limits the use of minor construction funds to 
be transferred or relocated from one installation to another.
    Section 108 prohibits the procurement of steel unless 
American producers, fabricators, and manufacturers have been 
allowed to compete.
    Section 109 prohibits the use of funds to pay real property 
taxes in foreign nations.
    Section 110 prohibits the use of funds to initiate a new 
installation overseas without prior notification.
    Section 111 establishes a preference for American 
architectural and engineering services where the services are 
in Japan, NATO member countries, and countries bordering the 
Arabian Gulf.
    Section 112 establishes a preference for American 
contractors for military construction in the United States 
territories and possessions in the Pacific and on Kwajalein 
Atoll, or in countries bordering the Arabian Gulf, except bids 
by Marshallese contractors for military construction on 
Kwajalein Atoll.
    Section 113 requires the Secretary of Defense to give prior 
notice to Congress of military exercises where construction 
costs, either temporary or permanent, exceed $100,000.
    Section 114 limits obligations to no more than 20 percent 
during the last two months of the fiscal year.
    Section 115 allows funds appropriated in prior years to be 
used for new projects authorized during the current session of 
Congress.
    Section 116 allows the use of expired or lapsed funds to 
pay the cost of supervision for any project being completed 
with lapsed funds.
    Section 117 provides that funds for military construction 
projects are available until the end of the fourth fiscal year 
following the fiscal year in which funds are appropriated, 
subject to certain conditions.
    Section 118 requires the Secretary of Defense to report 
annually on actions taken during the current fiscal year to 
encourage other member nations of the NATO, Japan, Korea, and 
United States allies bordering the Arabian Gulf to assume a 
greater share of defense costs.
    Section 119 allows for the transfer of proceeds from ``Base 
Realignment and Closure Account, Part I'' to the continuing 
Base Realignment and Closure accounts.
    Section 120 allows for the transfer of funds from Family 
Housing, Construction accounts to the Department of Defense 
Family Housing Improvement Fund.
    Section 121 prohibits the obligation of funds for 
Partnership for Peace Programs in the New Independent States of 
the former Soviet Union.
    Section 122 requires the Secretary of Defense to notify 
Congressional Committees sixty days prior to issuing a 
solicitation for a contract with the private sector for 
military family housing.
    Section 123 provides transfer authority to the Homeowners 
Assistance Program.
    Section 124 requires that funds in this title be the sole 
source of all operation and maintenance for flag and general 
officer quarter houses, except at military service academies, 
and limits the repair on these quarters to $35,000 per year 
without notification.
    Section 125 prohibits funds appropriated for the NATO 
Security Investment Program from being obligated or expended 
for the purpose of missile defense studies.
    Section 126 requires the Secretary of Defense or any other 
official of the Department of Defense to respond in writing to 
a question or inquiry submitted by the chairman or another 
member of the subcommittee within 21 days.
    Section 127 makes funds in the Ford Island Improvement Fund 
available until expended.
    Section 128 prohibits the use of funds for military 
construction, family housing, or land acquisition projects at 
installations closed or realigned under BRAC, except under 
certain conditions.
    Section 129 allows the transfer of expired funds to the 
``Foreign Currency Fluctuations, Construction, Defense'' 
account.
    Section 130 prohibits the reimbursement of any health care 
provider for inpatient mental health services for care received 
when a patient is referred to a provider of inpatient mental 
health care or residential treatment care by a medical or 
health care professional having an economic interest in the 
facility to which the patient is referred, except under certain 
conditions.
    Section 131 allows the distribution of surplus medical and 
dental equipment, at no cost to the Department of Defense, to 
Indian Health Service facilities and to federally qualified 
health centers.
    Section 132 allows the Secretary of Defense to adjust wage 
rates for civilian employees hired for certain health care 
occupations.
    Section 133 limits the amount of environmental remediation 
funds that can be obligated under indefinite delivery/
indefinite quantity contracts with a total contract value of 
$130,000,000 or higher.
    Section 134 allows for the transportation of medical 
supplies and equipment to American Samoa and the Indian Health 
Service under certain conditions.
    Section 135 allows the Secretary of Defense to exercise the 
provisions of section 7403(g) of title 38, United Stated Code.

                                TITLE II


                     DEPARTMENT OF VETERANS AFFAIRS





Fiscal year 2006 enacted level \1\....................   $70,871,913,000
Fiscal year 2007 budget request.......................    77,908,797,000
Committee recommendation in the bill..................    77,908,797,000
Comparison with:
    Fiscal year 2006 enacted level....................     7,036,884,000
    Fiscal year 2007 budget request...................  ................


\1\ Includes impact of 0.8% rescission totaling $246,828,040 pursuant to
  Public Law 108-447 and additional funding of $124,070,000 pursuant to
  Public Law 108-324, the Military Construction Appropriations and
  Emergency Hurricane Supplemental Appropriations Act, 2005.
All funding cited above excludes amounts in the Medical Care Collections
  Fund.

    The Department of Veterans Affairs is one of the largest 
Federal agencies in terms of employment with an average 
employment of approximately 223,327. It administers benefits 
for more than 24,600,000 veterans, and 37,840,000 family 
members of living veterans and survivors of deceased veterans. 
Thus, close to 64,400,000 people, comprising about 21 percent 
of the total population of the United States, are potential 
recipients of veterans benefits provided by the Federal 
government.
    The Committee recommends a total of $77,908,797,000 in new 
budget authority for programs in fiscal year 2007. This is an 
increase of $7,036,884,000 above the fiscal year 2006 enacted 
level and the same as the budget request. When adjusted for 
supplemental funding, the recommendation is $8,884,520,000 
above the fiscal year 2006 enacted level.
    The funds recommended provide compensation payments to 
3,215,492 veterans and survivors of deceased veterans with 
service-connected disabilities; pension payments to 519,809 
non-service-connected disabled veterans, widows and children in 
need of financial assistance; education training, tuition 
assistance, and vocational assistance to 589,478 veterans, 
service members, and reservists, and 83,235 eligible dependents 
of deceased veterans or seriously disabled veterans; housing 
credit assistance in the form of 230,000 guaranteed loans to 
veterans and servicepersons; administration or supervision of 
life insurance programs with 7,270,907 policies for veterans 
and active duty servicepersons providing coverage of 
$1,100,182,000,000; inpatient care and treatment of 
beneficiaries in 156 hospitals, 43 Department of Veterans 
Affairs domiciliary residential rehabilitation treatment 
programs (formerly called ``domiciliaries''), 135 nursing 
homes, and 935 outpatient clinics which includes independent, 
satellite, community-based, and rural outreach clinics 
involving 61,555,000 visits; and administration of the National 
Cemetery Administration for burial of eligible veterans, 
servicepersons and their survivors.
    Joint Research Initiatives.--The Committee understands that 
the Department has been involved in discussions with the 
Israeli Ministry of Defense regarding a number of research 
issues including Post Traumatic Stress Disorder, virtual 
reality rehabilitation for motor recovery and ambulatory 
training for veterans with prosthetic limbs, and robotic 
rehabilitation trials for the neurologically impaired and for 
veterans with missing limbs. The Committee is supportive of 
continued discussions regarding the possibility of developing a 
working group composed of the Veterans Health Administration, 
the Israeli Ministry of Defense, clinicians, and researchers 
that would guide collaborative research in these areas.
    Not later than March 1, 2007, the Secretary shall submit to 
the Committees on Appropriations of both Houses of Congress a 
report that describes: (1) the ways in which the Department of 
Veterans Affairs and Israel have cooperated on Post Traumatic 
Stress Disorder, virtual reality rehabilitation for motor 
recovery and ambulatory training for veterans with prosthetic 
limbs, and robotic rehabilitation trials for the neurologically 
impaired and for veterans with missing limbs; (2) projects 
initiated; and (3) plans for future cooperation and joint 
projects.
    Veterans' Transportation Services.--The Committee is 
concerned that veterans' transportation services are largely 
uncoordinated with the existing community and public 
transportation network and are heavily reliant upon a pool of 
volunteer services and drivers that has dwindled in many areas 
as fuel and insurance costs have soared. The current system is 
inefficient and in some cases veterans find themselves isolated 
from the vital health care they need. Further, studies have 
shown that veterans who need health care transportation, 
particularly those with long-term health care needs, are also 
likely to need transportation solutions to work, to shop, to 
socialize, and to otherwise enjoy a high quality of life. The 
Department spends about $170,000,000 annually on various 
transportation services for veterans, but has no uniform or 
consistent approach to their mobility needs. Some facilities 
work with local volunteers, others with available transit 
services, some provide no transportation at all. The lack of 
coordination of transportation services at the headquarters 
level has led to inconsistent and inefficient mobility for many 
veterans. Furthermore, the Department does not appear to have a 
way to communicate with hospitals, clinics, and Veterans 
Service Organizations on best practices in non-emergency 
transportation and the most cost efficient ways to get 
veterans, in both cities and rural areas, to hospitals and 
clinics.
    The Committee directs the Department to develop a program 
of coordination, information sharing, and technical assistance 
for veterans' transportation. In developing such a program, the 
Committee recommends that the Department consult with 
organizations, such as the Community Transportation Association 
of America (CTAA), which have expertise in transit program 
design and development and provides technical assistance to 
transit systems and community and human services transportation 
providers.
    Fort Ord Cemetery.--The Committee notes the success of the 
military housing Residential Communities Initiatives as a 
public/private partnership. The Committee encourages the 
Department of Veterans Affairs to work with the Fort Ord Reuse 
Authority in Monterey, California to develop a pilot program to 
demonstrate the cost effectiveness of using public/private 
partnerships in establishing a state veterans cemetery at Fort 
Ord.
    Centers of Excellence.--The Committee recommendation for 
Medical Services includes an additional $400,000,000 for mental 
health programs, when compared to the fiscal year 2006 program 
as adjusted for inflation. Within this amount, the Committee 
directs the Department to ensure adequate resources are 
dedicated to establishing and supporting the three Centers of 
Excellence established by Public Law 109-114.
    Veterans Centers.--The Committee has repeatedly noted its 
concerns regarding the Department's efforts to detect and treat 
increasing incidents of Post Traumatic Stress Disorder among 
returning soldiers. A recent Army report found that more than 
one in three soldiers and Marines who returned from service in 
Iraq later sought help for mental health problems. This data 
indicates a clear need to improve the mental health services we 
provide to our nation's service men and women. At the forefront 
of the Department's efforts to ensure that the needs of 
returning soldiers and their families are met are the Veterans 
Centers. Specifically, the Veterans Centers provide outreach 
and psychological counseling, war-related counseling, and 
marital and family counseling, in addition to many other 
services. An important step in addressing this need is to 
ensure adequate Veterans Centers are located throughout the 
nation, including rural areas, to ensure that veterans do not 
fall through the cracks. The Committee directs the Department 
to report to the Committees on Appropriations of both Houses of 
Congress on the plans for expanding the network of Veterans 
Centers over the next five years, with a particular emphasis on 
rural centers. The report shall be submitted no later than 
November 10, 2006.
    Design-Build Project Delivery.--The Committee notes that 
the Department has used the design-build project delivery 
method in the past and believes the Department should expand 
its use in order to expedite construction projects. In 
addition, the Committee understands that current Department 
regulations preclude the option of design-build when the 
Department provides grants and loans for capital projects. 
Since current Federal regulations allow the design-build 
process to be used for federal projects, the Committee feels 
the option should be available for grant-funded projects. 
Therefore, the Committee directs the Department to study this 
issue and report by March 1, 2007 on options for revising its 
regulations.
    Disability Determinations.--The Committee is concerned 
about the length of time it takes the Department to determine 
eligibility for disability compensation, in particular those 
cases that may take three years or longer. The Committee 
directs the Department to report, within 30 days of enactment, 
on the number of cases which take three years or longer for a 
final determination, and to report on those cases where the 
beneficiary is a retired military person.

                    Veterans Benefits Administration


                       COMPENSATION AND PENSIONS

                     (INCLUDING TRANSFER OF FUNDS)




Fiscal year 2006 enacted level........................   $33,897,787,000
Fiscal year 2007 budget request.......................    38,007,095,000
Committee recommendation in the bill..................    38,007,095,000
Comparison with:
    Fiscal year 2006 enacted level....................     4,109,308,000
    Fiscal year 2007 budget request...................  ................


    This appropriation provides funds for service-connected 
compensation payments to an estimated 3,215,492 beneficiaries 
and pension payments to another 519,809 beneficiaries with non-
service-connected disabilities. The average cost per 
compensation case in 2007 is estimated at $10,600, and pension 
payments are projected at a unit cost of $6,811.
    The Committee recommends an appropriation of 
$38,007,095,000 for compensation, pension and burial benefits 
for fiscal year 2007. This is an increase of $4,109,308,000 
above the fiscal year 2006 enacted level and the same as the 
budget request.
    The appropriation includes funding not to exceed 
$28,112,000 of which $13,536,000 is for the general operating 
expenses account and $14,576,000 is for the medical 
administration account for the administrative expenses of 
implementing cost saving provisions required by the Omnibus 
Budget Reconciliation Act of 1990, Public Law 101-508, the 
Veterans' Benefits Act of 1992, Public Law 102-568, and the 
Veterans' Benefits Improvements Act of 1994, Public Law 103-
446. These cost savings provisions include verifying pension 
income against Internal Revenue Service and Social Security 
Administration (SSA) data; establishing a match with the SSA to 
obtain verification of Social Security numbers; and the $90 
monthly VA pension cap for Medicaid-eligible single veterans 
and surviving spouses alone in Medicaid-covered nursing homes. 
The bill includes requested language permitting this 
appropriation to reimburse such sums as may be earned to the 
medical care collections fund to help defray the operating 
expenses of individual medical facilities for nursing home care 
provided to pensioners.
    The Administration has proposed to provide a cost-of-living 
adjustment, based on the change in the Consumer Price Index, to 
all compensation beneficiaries, including dependency and 
indemnity compensation for spouses and children. It is 
currently estimated at 2.6 percent. This is the same as the 
COLA that will be provided, under current law, to veterans' 
pension and Social Security recipients. The increase, effective 
December 1, 2006, has an estimated cost of $590,293,000 during 
fiscal year 2007 and is reflected in the Compensation and 
Pensions budget request, pending authorization approval.
    Claims Processing.--The Committee is concerned about the 
lengthy wait time veterans experience in receiving a benefit 
claims decision. The Committee directs the Department to report 
on their plan for resolving the backlog and the timeline for 
implementation of this plan, including any needs for additional 
personnel. The report shall be submitted no later than November 
10, 2006.

                         READJUSTMENT BENEFITS

                     (INCLUDING TRANSFER OF FUNDS)




Fiscal year 2006 enacted level........................    $3,309,234,000
Fiscal year 2007 budget request.......................     3,262,006,000
Committee recommendation in the bill..................     3,262,006,000
Comparison with:
    Fiscal year 2006 enacted level....................      (47,228,000)
    Fiscal year 2007 budget request...................  ................


    This appropriation finances the education and training of 
veterans and servicepersons whose initial entry on active duty 
took place on or after July 1, 1985. These benefits are 
included in the All-Volunteer Force Educational Assistance 
Program. Eligibility to receive this assistance began in 1987. 
Basic benefits are funded through appropriations made to the 
readjustment benefits appropriation and transfers from the 
Department of Defense. Supplemental benefits are also provided 
to certain veterans through education assistance to certain 
members of the Selected Reserve and are funded through 
transfers from the Departments of Defense and Homeland 
Security. In addition, certain disabled veterans are provided 
with vocational rehabilitation, specially adapted housing 
grants, and automobile grants with approved adaptive equipment.
    This account also finances educational assistance 
allowances for eligible dependents of those veterans who died 
from service-connected causes or have a total and permanent 
service-connected disability as well as dependents of 
servicepersons who were captured or missing-in-action.
    The Committee recommends an appropriation of $3,262,006,000 
for readjustment benefits for fiscal year 2007. This is a 
decrease of $47,228,000 below the fiscal year 2006 enacted 
level and the same as the budget request.

                   VETERANS INSURANCE AND INDEMNITIES

                     (INCLUDING TRANSFER OF FUNDS)




Fiscal year 2006 enacted level........................       $45,907,000
Fiscal year 2007 budget request.......................        49,850,000
Committee recommendation in the bill..................        49,850,000
Comparison with:
    Fiscal year 2006 enacted level....................         3,943,000
    Fiscal year 2007 budget request...................  ................


    The veterans insurance and indemnities appropriation is 
made up of the former appropriations for military and naval 
insurance, applicable to World War I veterans; national service 
life insurance (NSLI), applicable to certain World War II 
veterans; servicemen's indemnities, applicable to Korean 
conflict veterans; and the veterans mortgage life insurance, 
applicable to individuals who have received a grant for 
specially adapted housing.
    The Committee recommends an appropriation of $49,850,000 
for veterans insurance and indemnities for fiscal year 2007. 
This is an increase of $3,943,000 above the fiscal year 2006 
enacted level and the same as the budget request. The amount 
provided will enable the Department to transfer funding to the 
service-disabled veterans insurance fund and transfer 
additional amounts for payments for the 2,350 policies under 
the veterans mortgage life insurance program. These policies 
are identified under the veterans' insurance and indemnity 
appropriation since they provide insurance to service-disabled 
veterans unable to qualify under basic NSLI.

         VETERANS HOUSING BENEFIT PROGRAM FUND PROGRAM ACCOUNT

                     (INCLUDING TRANSFER OF FUNDS)

----------------------------------------------------------------------------------------------------------------
                                                                                   Limitation on
                                                                                   direct loans
                                                                      Program      for specially  Administrative
                                                                      account         adapted        expenses
                                                                                   housing loans
----------------------------------------------------------------------------------------------------------------
Fiscal year 2006 enacted level..................................  \1\ $64,586,00        $500,000    $153,575,000
                                                                               0
Fiscal year 2007 budget request.................................     196,692,000         500,000     153,185,000
Committee recommendation in the bill............................     196,692,000         500,000     153,185,000
Comparison with:
    Fiscal year 2006 enacted level..............................     132,106,000  ..............       (390,000)
    Fiscal year 2007 budget request.............................  ..............  ..............  ..............
----------------------------------------------------------------------------------------------------------------
\1\ Reflects subsidy estimate from last year's report. The new estimate for 2005 is $1,900,392.

    The purpose of the VA home loan guaranty program is to 
facilitate the extension of mortgage credit on favorable terms 
by private lenders to eligible veterans. This appropriation 
provides for all costs, with the exception of the native 
American veterans housing loan program, of the Department's 
direct and guaranteed loans programs. The Federal Credit Reform 
Act of 1990 requires budgetary resources to be available prior 
to incurring a direct loan obligation or a loan guaranty 
commitment. In addition, the bill requires all administrative 
expenses of a direct or guaranteed loan program to be funded 
through a program account. VA loan guaranties are made to 
service members, veterans, reservists, and single surviving 
spouses for the purchase of homes, condominiums, and 
manufactured homes and for refinancing loans. The Department 
guarantees part of the total loan, permitting the purchaser to 
obtain a mortgage with a competitive interest rate, even 
without a down payment if the lender agrees. The Department 
requires that a down payment be made for a manufactured home. 
With a Department guaranty, the lender is protected against 
loss up to the amount of the guaranty if the borrower fails to 
repay the loan.
    The Committee recommends such sums as may be necessary 
(currently estimated to total $42,892,000) for funding subsidy 
payments, $500,000 for the limitation on direct loans for 
specially adapted housing loans, and $153,185,000 for 
administrative expenses. The appropriation for administrative 
expenses may be transferred to and merged with the General 
Operating Expenses account.

            VOCATIONAL REHABILITATION LOANS PROGRAM ACCOUNT

                     (INCLUDING TRANSFER OF FUNDS)

----------------------------------------------------------------------------------------------------------------
                                                                      Program      Limitation on  Administrative
                                                                      account      direct loans      expenses
----------------------------------------------------------------------------------------------------------------
Fiscal year 2006 enacted level..................................         $53,000      $4,242,000        $305,000
Fiscal year 2007 budget request.................................          53,000       4,242,000         305,000
Committee recommendation in the bill............................          67,000           3,369         305,000
Comparison with:
    Fiscal year 2006 enacted level..............................  ..............  ..............  ..............
    Fiscal year 2007 budget request.............................  ..............  ..............  ..............
----------------------------------------------------------------------------------------------------------------

    This appropriation covers the funding subsidy cost of 
direct loans for vocational rehabilitation of eligible veterans 
and, in addition, it includes administrative expenses necessary 
to carry out the direct loan program. Loans of up to $977.00 
(based on indexed chapter 31 subsistence allowance rate) are 
available to service-connected disabled veterans enrolled in 
vocational rehabilitation programs when the veteran is 
temporarily in need of additional assistance. Repayment is made 
in monthly installments, without interest, through deductions 
from future payments of compensation, pension, subsistence 
allowance, educational assistance allowance, or retirement pay. 
Most loans are repaid in full in less than one year. The 
Federal Credit Reform Act of 1990 requires budgetary resources 
to be available prior to incurring a direct loan obligation. In 
addition, the Act requires all administrative expenses of a 
direct loan program to be funded through a program account.
    The Committee recommends $67,000 for funding subsidy 
program costs and $305,000 for administrative expenses. The 
administrative expenses may be transferred to and merged with 
the General Operating Expenses account.
    In addition, the Committee includes language limiting 
program direct loans to $3,369,000. It is estimated that the 
Department will make 4,630 loans in fiscal year 2007, with an 
average amount of $728.00.

          NATIVE AMERICAN VETERAN HOUSING LOAN PROGRAM ACCOUNT

                     (INCLUDING TRANSFER OF FUNDS)




Administrative expenses:
    Fiscal year 2006 enacted level....................          $580,000
    Fiscal year 2007 budget recommendation............           615,000
Committee recommendation in the bill..................           615,000
Comparison with:
    Fiscal year 2006 enacted level....................            35,000
    Fiscal year 2007 budget request...................  ................


    This program tests the feasibility of authorizing VA to 
make direct home loans to Native American veterans who live on 
U.S. trust land. This is a pilot program which began in 1993 
and expires on December 31, 2008. The Committee recommends the 
budget request of $615,000 for administrative expenses, which 
may be transferred to and merged with the General Operating 
Expenses account.

  GUARANTEED TRANSITIONAL HOUSING LOANS FOR HOMELESS VETERANS PROGRAM 
                                ACCOUNT

    Public Law 105-368, the Veterans Programs Enhancement Act 
of 1998, established this program. All funds authorized for 
this program were appropriated in fiscal year 2000. Therefore, 
no appropriation request has been included for fiscal year 
2007. Bill language is included allowing the use of funds in 
Medical Administration and General Operating Expenses to 
administer this program up to a total of $750,000.

                     Veterans Health Administration

    The Department of Veterans Affairs operates the largest 
Federal medical care delivery system in the country, with 156 
hospitals, 43 domiciliary residential rehabilitation treatment 
programs (formerly called `domiciliaries'), 135 nursing homes, 
and 935 outpatient clinics which includes independent, 
satellite, community-based, and rural outreach clinics.
    The Veterans Health Administration (VHA) is comprised of 
four accounts: medical services, medical administration, 
medical facilities, and medical and prosthetic research. For 
these four accounts, the Administration has requested total 
resources of $32,657,000,000 in direct appropriations and 
$2,329,000,000 in Medical Care Collections Fund appropriations, 
to fund the various operating programs of the VHA.

                            MEDICAL SERVICES

                     (INCLUDING TRANSFER OF FUNDS)




Fiscal year 2006 enacted level........................   $22,772,406,000
Fiscal year 2007 budget request.......................    25,512,000,000
Committee recommendation in the bill..................    25,412,000,000
Comparison with:
    Fiscal year 2006 enacted level....................     2,639,594,000
    Fiscal year 2007 budget request...................     (100,000,000)


    This appropriation provides for medical services of 
eligible veterans and beneficiaries in VA medical centers, 
outpatient clinic facilities, contract hospitals, State homes, 
and outpatient programs on a fee basis. Hospital and outpatient 
care is also provided by the private sector for certain 
dependents and survivors of veterans under the civilian health 
and medical programs for the Department of Veterans Affairs.
    The Committee recommends an appropriation of 
$25,412,000,000 for Medical Services for fiscal year 2007. This 
is an increase of $2,639,594,000 above the fiscal year 2006 
enacted level and a decrease of $100,000,000 below the budget 
request. When adjusted for supplemental funding, the 
recommendation is $2,864,859,000 above the fiscal year 2006 
enacted level.
    The Committee recommendation builds on the information 
provided in public hearings by the organizations responsible 
for development of the Independent Budget for the Department of 
Veterans Affairs. The Committee notes that during fiscal year 
2006, when significant medical services shortfalls were 
identified by the Department, there was general acceptance that 
the model used by the Independent Budget performed better than 
the model used by the Department of Veteran Affairs. With this 
in mind, the Committee recommendation takes as its baseline, 
the Independent Budget calculation of current services and 
anticipated workload increases to arrive at a core funding need 
of $24,821,600,000. To this baseline, the Committee 
recommendation adds program enhancements, including 
$400,000,000 for mental health initiatives, $100,000,000 for 
prosthetics, $32,000,000 for dental care, and $58,400,000 for 
activations and other operational changes not covered in the 
baseline program adjustment.
    Within the amount provided, not less that $2,800,000,000 is 
designated for specialty mental health care.
    The bill includes requested language in the Compensation 
and Pension appropriation transferring $14,576,000 for 
administrative expenses of implementing cost saving provisions 
required by the Omnibus Budget Reconciliation Act of 1990, and 
the Veterans' Benefits Act of 1992.
    The Committee has included bill language to make available 
through September 30, 2008, up to $1,100,000,000 of the Medical 
Services appropriation. This provides flexibility to the 
Department as it continues to implement significant program 
changes.
    The bill does not include requested language to allow for 
the transfer of $15,000,000 to the DoD/VA Health Care Sharing 
Incentive Fund, as authorized by section 721 of the Fiscal Year 
2003 National Defense Authorization Act, Public Law 107-314, to 
transfer a minimum of $15,000,000, for any purpose authorized 
by 38 U.S.C. 8111. The Committee notes that the Fund has a 
large unobligated balance in its fourth year of existence and 
additional funds are not recommended at this time.
    The Committee has included bill language under 
Administrative Provisions of this title to allow the Secretary 
to transfer funds among the Medical Services, Medical 
Administration, and Medical Facilities appropriations, after 
notifying the Committees on Appropriations of both Houses of 
Congress and receiving approval. This authority is to be used 
solely for the purpose of perfecting the accounts as the three-
account structure is implemented.
    The Committee directs the Department to continue the use of 
the long-employed Joslin Vision Network for its collaborative 
diabetes project.
    Telemedicine Programs.--The Committee notes that the 
Department started telemedicine pilot projects in the mid 1990s 
to confirm technical feasibility and started funding projects 
in 1998 to define telemedicine's role in supporting home care 
and making specialty consultations locally available. The 
Committee notes the significant benefits already received as a 
result of telemedicine programs and encourages the Department 
to expand such programs to gain even greater benefits.
    Genomic Medicine Program.--The Committee is aware the 
Veterans Health Administration has created a Committee to 
advise the Department on emerging issues in genomic medicine. 
The Committee is also aware of the Department's long-term 
relationship with the Research Foundation of the State 
University of New York on this issue and urges the Department 
to move forward with this important initiative.

                     MEDICAL CARE COLLECTIONS FUND

    The Department of Veterans Affairs Medical Care Collections 
Fund (MCCF) was established by the Balanced Budget Act of 1997 
(Public Law 105-33). The Department deposits first-party and 
pharmacy co-payments, third-party insurance payments and 
enhanced-use collections, long-term care co-payments, 
Compensated Work Therapy Program collections, Compensation and 
Pension Living Expenses Program collections, and Parking 
Program fees into the MCCF. The Congressional Budget Office 
(CBO) estimate of fees that will be collected in fiscal year 
2007 is $2,329,000,000. The original budget request anticipated 
collections of $2,832,778,000, which included new user fees 
which have not been enacted by the Congress and are not 
therefore included in the CBO scoring of the budget request. 
The bill does not include any language regarding the Medical 
Care Collections Fund since permanent authority was included in 
the fiscal year 2005 appropriations bill, Public Law 108-447.

                         MEDICAL ADMINISTRATION

                     (INCLUDING TRANSFER OF FUNDS)




Fiscal year 2006 enacted level........................    $2,858,442,000
Fiscal year 2007 budget request.......................     3,177,000,000
Committee recommendation in the bill..................     3,277,000,000
Comparison with:
    Fiscal year 2006 enacted level....................       418,558,000
    Fiscal year 2007 budget request...................       100,000,000


    The Medical Administration appropriation provides funds for 
the expenses of management and administration of the Department 
of Veterans Affairs health care system. Included under this 
heading are provisions for costs associated with operation of 
medical centers, other facilities, and VHA headquarters, plus 
the costs of Veteran's Integrated Service Network (VISN) 
offices and facility director offices, chief of staff 
operations, quality of care oversight, legal services, billing 
and coding activities, procurement, and medical program 
information technology personnel services, travel, and 
training.
    The Committee recommends an appropriation of $3,277,000,000 
for Medical Administration for fiscal year 2007. This is an 
increase of $418,558,000 above the fiscal year 2006 enacted 
level and an increase of $100,000,000 above the budget request.
    The Committee has included bill language to make available 
through September 30, 2008, up to $250,000,000 of the Medical 
Administration appropriation. This provides flexibility to the 
Department as it continues to implement significant program 
changes.
    The Committee has included bill language under 
Administrative Provisions of this title to allow the Secretary 
to transfer funds among the Medical Services, Medical 
Administration, and Medical Facilities appropriations, after 
notifying the Committees on Appropriations of both Houses of 
Congress and receiving approval. This authority is to be used 
solely for the purpose of perfecting the accounts as the three-
account structure is implemented.

                           MEDICAL FACILITIES

                     (INCLUDING TRANSFER OF FUNDS)




Fiscal year 2006 enacted level........................    $3,297,669,000
Fiscal year 2007 budget request.......................     3,569,000,000
Committee recommendation in the bill..................     3,594,000,000
Comparison with:
    Fiscal year 2006 enacted level....................       296,331,000
    Fiscal year 2007 budget request...................        25,000,000


    The Medical Facilities appropriation provides funds for the 
operation and maintenance of the Department's health care 
system's vast capital infrastructure. Included under this 
heading are provisions for costs associated with utilities, 
engineering, capital planning, leases, laundry and food 
services, groundskeeping, garbage, housekeeping, facility 
repair, and property disposition and acquisition.
    The Committee recommends an appropriation of $3,594,000,000 
for Medical Facilities for fiscal year 2007. This is an 
increase of $296,331,000 above the fiscal year 2006 enacted 
level and an increase of $25,000,000 above the budget request.
    The Committee has included bill language to make available 
through September 30, 2008, up to $250,000,000 of the Medical 
Facilities appropriation. This provides flexibility to the 
Department as it continues to implement significant program 
changes.
    The Committee has included bill language under 
Administrative Provisions of this title to allow the Secretary 
to transfer funds among the Medical Services, Medical 
Administration, and Medical Facilities appropriations, after 
notifying the Committees on Appropriations of both Houses of 
Congress and receiving approval. This authority is to be used 
solely for the purpose of perfecting the accounts as the three-
account structure is implemented.
    Community-Based Outpatient Clinics.--The Committee 
continues to receive conflicting information from the 
Department on the status of implementing the recommendations of 
the Capital Asset Realignment for Enhanced Services (CARES) 
Commission regarding new community-based outpatient clinics 
(CBOC). In response to direction of the fiscal year 2006 
appropriations conference report (H. Rept. 109-305), the 
Department submitted a report on the status of establishing 
CBOC's in various locations around the country. The report 
submitted to the Committee on March 17, 2006 was a convoluted 
discussion of the business plan review process, ``anticipate[d] 
possible activation'' schedules, and undefined national CBOC 
planning criteria. During the Committee's hearing on CARES last 
year, in response to a direct question asking how many CBOC's 
were opened in 2005, the Department did not provide a 
definitive answer. During the Committee's hearing earlier this 
year, the Secretary stated that 22 were opened in fiscal year 
2005, 31 are under analysis for opening in fiscal year 2006, 
and 27 are proposed for analysis in fiscal year 2007. Despite 
these definitive statements during the hearing, the budget 
material submitted to the Congress does not provide such 
definition, and in no case does it give a listing of sites 
under consideration. It is with this as background that the 
Committee recommends an addition of $25,000,000 to the budget 
request for the establishment of at least 10 new community-
based outpatient clinics in fiscal year 2007. This is in 
addition to the 27 funded in the budget submission. In order to 
have a clearer understanding about the status establishing new 
CBOC's, the Department is directed to provide a report to the 
Committees on Appropriations of both Houses of Congress on the 
location of CBOCs opened in each of the last three years and 
the cost of establishing each CBOC. In addition, the report 
shall include a listing of all business plans not approved for 
funding and the reasons for the rejection. The report shall be 
submitted no later than August 4, 2006.

                    MEDICAL AND PROSTHETIC RESEARCH




Fiscal year 2006 enacted level........................      $412,000,000
Fiscal year 2007 budget request.......................       399,000,000
Committee recommendation in the bill..................       412,000,000
Comparison with:
    Fiscal year 2006 enacted level....................  ................
    Fiscal year 2007 budget request...................        13,000,000


    This account includes medical, rehabilitative and health 
services research. Medical research is an important aspect of 
the Department's programs, providing complete medical and 
hospital services for veterans. The prosthetic research program 
is also essential in the development and testing of prosthetic, 
orthopedic and sensory aids for the purpose of improving the 
care and rehabilitation of eligible disabled veterans, 
including amputees, paraplegics and the blind. The health 
service research program provides unique opportunities to 
improve the effectiveness and efficiency of the health care 
delivery system. In addition, budgetary resources from a number 
of areas including appropriations from the medical care 
accounts; reimbursements from the Department of Defense; and 
grants from the National Institutes of Health, private 
proprietary sources, and voluntary agencies provide support for 
the Department's researchers.
    The Committee recommends an appropriation of $412,000,000 
for Medical and Prosthetic Research for fiscal year 2007. This 
is an increase of $13,000,000 above the budget request. This is 
the same amount as the fiscal year 2006 enacted level and 
within the Construction, Minor Projects account, the Committee 
recommendation includes $12,000,000 to begin an effort to 
modernize and upgrade research facilities.
    Smart Technologies for Electromechanical Prosthetic 
Systems.--Continued advances in microsystem technologies, gait 
analysis, computer-aided prosthetic design, and neurology may 
one day provide the means to fully restore physical and sensory 
capabilities lost as a result of amputation, injury, arthritis, 
arterial disease, diabetes, and other causes. Because of its 
competencies and extensive collaborative relationships, the 
Committee believes the Infotonics Technology Center of 
Rochester, New York is well positioned to work with the 
Department of Veterans Affairs to help disabled veterans take 
their first steps along this journey. The Committee urges the 
Department to establish a beneficial working relationship with 
the Center.
    Photon-Mediated Pain Treatment.--The Committee is aware of 
non-drug alternative treatments available for pain relief, in 
particular the option of using light-based treatments, also 
known as photon-mediated treatment for pain. The Committee 
believes that such treatment options deserve careful study and 
consideration by the Department and encourages the Department 
to work with qualified researchers to validate the possible 
benefits of such treatment.
    Technology Transfer.--The Committee directs the Department 
to continue its technology transfer activities with the West 
Virginia High Technology Consortium Foundation.

                      Departmental Administration


                       GENERAL OPERATING EXPENSES




Fiscal year 2006 enacted level........................    $1,435,391,000
Fiscal year 2007 budget request.......................     1,480,764,000
Committee recommendation in the bill..................     1,480,764,000
Comparison with:
    Fiscal year 2006 enacted level....................        45,373,000
    Fiscal year 2007 budget request...................  ................


    The General Operating Expenses appropriation provides for 
the administration of non-medical veterans benefits through the 
Veterans Benefits Administration (VBA) and Departmental 
management and support. The Federal Credit Reform Act of 1990 
changed the accounting of Federal credit programs and required 
that all administrative costs associated with such programs be 
included within the respective credit accounts. Beginning in 
fiscal year 1992, costs incurred by housing and vocational 
rehabilitation programs for administration of these credit 
programs are reimbursed by those accounts. The bill includes 
the budget requests totaling $132,374,000 in other accounts for 
these credit programs. In addition, $13,536,000 is transferred 
from the compensation and pensions account for administrative 
costs of implementing cost saving provisions required by the 
Omnibus Budget Reconciliation Act of 1990 and the Veterans' 
Benefits Act of 1992. Section 207 of the administrative 
provisions provides requested language which permits excess 
revenues in three insurance funds to be used for administrative 
expenses. The Department estimates that $39,863,000 will be 
utilized for such purposes in fiscal year 2007. Prior to fiscal 
year 1996, such costs were included in the general operating 
expenses appropriation. In total, $1,825,697,000 is requested 
in fiscal year 2007 for administrative costs of non-medical 
benefits.
    The Committee recommends an appropriation of $1,480,764,000 
for General Operating Expenses for fiscal year 2007. This is an 
increase of $45,373,000 above the fiscal year 2006 enacted 
level and the same as the budget request. When adjusted for 
Supplemental funding, the recommendation is $70,244,000 above 
the fiscal year 2006 enacted level.

                         INFORMATION TECHNOLOGY




Fiscal year 2006 enacted level........................    $1,213,820,000
Fiscal year 2007 budget request.......................     1,257,000,000
Committee recommendation in the bill..................     1,302,330,000
Comparison with:
    Fiscal year 2006 enacted level....................        88,510,000
    Fiscal year 2007 budget request...................        45,330,000


    The Information Technology Systems account was established 
in P.L. 109-114. The account encompasses the entire non-pay 
information technology portfolio for the Department of Veterans 
Affairs, including all automation efforts in all 
administrations. The Committee recommends an appropriation of 
$1,302,330,000 for Information Technology Systems. In addition, 
the bill includes $21,731,000 in other accounts for information 
technology in support of credit programs and $4,032,000 in 
excess revenues from three insurance funds for information 
technology support in fiscal year 2007. In total, 
$1,328,093,000 is requested in fiscal year 2007 for information 
technology.
    The Committee recommendation includes an additional 
$45,330,000, centrally managed by the Office of the Chief 
Information Officer, to continue the Regional Data Processing 
Center consolidation initiative, to include data center 
consolidation, as well as the telecommunication network 
enhancements necessary to support this initiative, and to 
achieve a valid continuity of operations capability. The 
Committee believes this will have significant benefit to the 
Department and will result in reduced cost of operations.

                    NATIONAL CEMETERY ADMINISTRATION




Fiscal year 2006 enacted level........................      $156,647,000
Fiscal year 2007 budget request.......................       160,733,000
Committee recommendation in the bill..................       160,733,000
Comparison with:
    Fiscal year 2006 enacted level....................         4,086,000
    Fiscal year 2007 budget request...................  ................


    The National Cemetery Administration was established in 
accordance with Public Law 93-43, the National Cemeteries Act 
of 1973. It has a fourfold mission: to provide for the 
interment in any national cemetery with available grave space 
the remains of eligible deceased servicepersons and discharged 
veterans, together with their spouses and certain dependents, 
and to permanently maintain their graves; to provide headstones 
for, and to mark graves of eligible persons in national, State, 
and private cemeteries; to administer the grant program for aid 
to States in establishing, expanding, or improving State 
veterans' cemeteries; and to administer the Presidential 
Memorial Certificate Program. This appropriation provides for 
the operation and maintenance of 158 cemeterial installations 
in 39 States, the District of Columbia, and Puerto Rico.
    The Committee recommends an appropriation of $160,733,000 
for the National Cemetery Administration for fiscal year 2007. 
This is an increase of $4,086,000 above the fiscal year 2006 
enacted level and the same as the budget request. When adjusted 
for Supplemental funding, the recommendation is $4,286,000 
above the fiscal year 2006 enacted level.

                      OFFICE OF INSPECTOR GENERAL




Fiscal year 2006 enacted level........................       $70,174,000
Fiscal year 2007 budget request.......................        69,499,000
Committee recommendation in the bill..................        69,499,000
Comparison with:
    Fiscal year 2006 enacted level....................         (675,000)
    Fiscal year 2007 budget request...................  ................


    The Office of Inspector General was established by the 
Inspector General Act of 1978 and is responsible for the audit, 
investigation and inspection of all Department of Veterans 
Affairs programs and operations. The overall operational 
objective is to focus available resources on areas which would 
help improve services to veterans and their beneficiaries, 
assist managers of Department programs to operate economically 
in accomplishing program goals, and prevent and deter recurring 
and potential fraud, waste and inefficiencies.
    The Committee recommends an appropriation of $69,499,000 
for the Office of Inspector General for fiscal year 2007. This 
is a decrease of $675,000 below the fiscal year 2006 enacted 
level and the same as the budget request.

                      CONSTRUCTION, MAJOR PROJECTS




Fiscal year 2006 enacted level........................      $974,600,000
Fiscal year 2007 budget request.......................       399,000,000
Committee recommendation in the bill..................       283,670,000
Comparison with:
    Fiscal year 2006 enacted level....................     (690,930,000)
    Fiscal year 2007 budget request...................     (115,330,000)


    The Construction, Major Projects appropriation provides for 
constructing, altering, extending, and improving any of the 
facilities under the jurisdiction or for the use of the 
Department of Veterans Affairs, including planning, 
architectural and engineering services, Capital Asset 
Realignment Enhanced Services (CARES) activities, assessments 
and site acquisition where the estimated cost of a project is 
$7,000,000 or more. Emphasis is placed on correction of life/
safety code deficiencies in existing Department medical 
facilities.
    The Committee recommends an appropriation of $283,670,000 
for Construction, Major Projects for fiscal year 2007. This is 
a decrease of $690,930,000 below the fiscal year 2006 enacted 
level and a decrease of $115,330,000 below the budget request. 
When adjusted for supplemental funding, the recommendation is 
$323,430,000 below the fiscal year 2006 enacted level.
    The Committee recommendation does not include funding for 
refurbishment of operating rooms at the Columbia, Missouri 
VAMC, and refurbishment of the Spinal Cord Injury Center at the 
Milwaukee, Wisconsin VAMC, both of which are relatively low 
priority projects. The estimate submitted in the budget for the 
Capital Region Data Center project includes a contingency 
reserve of over 25 percent, well in excess of needs for such a 
project. The funding for this project is therefore reduced by 
$5,000,000, leaving 12.5 percent for a contingency reserve. The 
Committee recommendation includes no funding for the 
replacement hospital in Denver, Colorado. The Committee notes 
that less than two years ago, when original planning funds were 
appropriated for the Denver facility, the estimated total cost 
of the project was $328,000,000. The current estimate for the 
project is in the range of $621,000,000, almost double the 
previous estimate. This is not the only instance of large cost 
growth for construction projects of the Department, but this is 
a project at a stage where work can be halted before 
significant and irreversible financial damage is done. The 
Committee is concerned with the rapid escalation in the cost of 
building new facilities and cautions the Department that few, 
if any, projects will be approved in the future if such costs 
are not brought under control.
    The Committee recommendation also includes a general 
provision which places restrictions on the use of funds 
previously appropriated for a new facility in Biloxi, 
Mississippi. It is the Committee's direction that no funds can 
be expended on a new facility unless it is a joint-use facility 
shared with Keesler Air Force Base.
    The specific amounts recommended by the Committee are as 
follows:

                        [In thousands of dollars]
------------------------------------------------------------------------
                                                 2007        Committee
          Location and description             request    recommendation
------------------------------------------------------------------------
Veterans Health Administration [VHA]:
    American Lake, WA Seismic Correction,        $38,220        $38,220
     NHCU & Dietetics......................
    Columbia, MO OR Replacement............       25,830              0
    Denver, CO Replacement Medical Center         52,000              0
     Facility..............................
    Long Beach, CA Seismic Correction,            97,545         97,545
     Bldg. 7 & 126.........................
    Milwaukee, WI Spinal Cord Injury (SCI)        32,500              0
     Center................................
    St. Louis (JB), MO Medical Facil Improv        7,000          7,000
     & Cem Exp.............................
    Advance planning fund: Various                39,255         39,255
     locations.............................
    Asbestos abatement: Various locations..        5,000          5,000
    Claims Analyses: Various locations.....        2,000          2,000
    Judgment Fund: Various locations.......        2,000          2,000
    Hazardous Waste: Various locations.....        2,000          2,000
    Facility Security Fund: Various                4,000          4,000
     locations.............................
                                            ----------------------------
        Total VHA construction, major            307,350        197,020
         projects..........................
National Cemetery Administration [NCA]:
    Dallas/Fort Worth, TX Phase 2 Gravesite       13,000         13,000
     Expansion.............................
    Gerald B. H. Solomon-Saratoga, NY Phase        7,600          7,600
     2 Gravesite Expansion.................
    Great Lakes, MI Phase 1B Development...       16,900         16,900
    Design Fund: Various locations.........        2,300          2,300
    Advance planning fund: Various                13,600         13,600
     locations.............................
                                            ----------------------------
        Total NCA construction, major             53,400         53,400
         projects..........................
General Administration (Staff Offices):
    Martinsburg, WV Capital Region Data           35,000         30,000
     Center................................
    Asset Management (APF) Various                 3,250          3,250
     Locations.............................
                                            ----------------------------
        Total construction, major projects.      399,000        283,670
------------------------------------------------------------------------

    San Juan Veterans Medical Center.--The Committee remains 
concerned that the need for medical facility improvements in 
San Juan, Puerto Rico is not being adequately addressed. The 
Committee urges the Department to explore all options, 
including the option of a public/private partnership, to 
construct and operate a facility which would replace the 
current hospital.

                      CONSTRUCTION, MINOR PROJECTS




Fiscal year 2006 enacted level........................      $200,737,000
Fiscal year 2007 budget request.......................       198,000,000
Committee recommendation in the bill..................       210,000,000
xlComparison with:....................................
    Fiscal year 2006 enacted level....................         9,263,000
    Fiscal year 2007 budget request...................        12,000,000


    The Construction, Minor Projects appropriation provides for 
constructing, altering, extending, and improving any of the 
facilities under the jurisdiction or for the use of the 
Department, including planning, CARES activities, assessment of 
needs, architectural and engineering services, and site 
acquisition, where the estimated cost of a project is less than 
$7,000,000.
    The Committee recommends an appropriation of $210,000,000 
for Construction, Minor Projects for fiscal year 2007. This is 
an increase of $9,263,000 above the fiscal year 2006 enacted 
level and an increase of $12,000,000 above the budget request. 
When compared to Supplemental funding, the recommendation is 
$11,063,000 above the fiscal year 2006 enacted level.
    The Committee received testimony earlier this year from a 
number of organizations concerned about the state of research 
facilities within the Department of Veterans Affairs 
organization. In the words of one witness, ``[S]tate-of-the-art 
research requires state-of-the-art technology, equipment, and 
facilities.'' Many Department research facilities have run out 
of space, and ventilation, electrical supply, and plumbing 
problems continue to fall at the bottom of the list when minor 
construction funds are allocated. This situation cannot 
continue long before serious problems begin to emerge. The 
Committee shares the concern of the research community and 
therefore has provided an increase of $12,000,000 to this 
account to be used solely for a program of upgrade and 
modernization of research facilities to ensure they maintain or 
attain state-of-the-art status. The Committee directs the 
Department to institute a process by which research 
infrastructure needs are given full and careful consideration 
for funding within this account. In addition, the Department is 
directed to report to the Committee by March 1, 2007 on the 
value of research infrastructure improvements, by project 
location, made in each of the last three fiscal years and the 
projects competing for the funding provided by this 
appropriation.

       GRANTS FOR CONSTRUCTION OF STATE EXTENDED CARE FACILITIES




Fiscal year 2006 enacted level........................       $85,000,000
Fiscal year 2007 budget request.......................        85,000,000
Committee recommendation in the bill..................       105,000,000
Comparison with:
    Fiscal year 2006 enacted level....................        20,000,000
    Fiscal year 2007 budget request...................        20,000,000


    This program provides grants to assist States to construct 
State home facilities, for furnishing domiciliary or nursing 
home care to veterans, and to expand, remodel or alter existing 
buildings for furnishing domiciliary, nursing home or hospital 
care to veterans in State homes. A grant may not exceed 65 
percent of the total cost of the project.
    The Committee recommends an appropriation of $105,000,000 
for Grants for Construction of State Extended Care Facilities 
for fiscal year 2007. This is an increase of $20,000,000 above 
the fiscal year 2006 enacted level and an increase of 
$20,000,000 above the budget request. The Committee 
recommendation also includes bill language specifying that not 
less that $20,000,000 shall be for grants for modifications to 
existing facilities, including life/patient safety 
improvements. The Committee has taken this action to ensure 
that while new construction in some areas of the country is 
urgently needed, such new construction will not crowd out 
necessary modifications to existing older facilities.

          GRANTS FOR CONSTRUCTION OF STATE VETERANS CEMETERIES




Fiscal year 2006 enacted level........................       $32,000,000
Fiscal year 2007 budget request.......................        32,000,000
Committee recommendation in the bill..................        32,000,000
Comparson with:
    Fiscal year 2006 enacted level....................  ................
    Fiscal year 2007 budget request...................  ................


    This program provides grants to assist States with the 
establishment, expansion, and improvement of State veterans' 
cemeteries which are operated and permanently maintained by the 
States. Grants under this program fund up to 100 percent of 
construction costs and the initial equipment expenses when the 
cemetery is established.
    The states remain responsible for providing the land and 
for paying all costs related to the operation and maintenance 
of the state cemeteries, including the costs for subsequent 
equipment purchases. The Committee recommends an appropriation 
of $32,000,000 for Grants for Construction of State Veterans 
Cemeteries for fiscal year 2007. This is the same as the fiscal 
year 2006 enacted level and the same as the budget request.
    The Committee encourages the Department to work with States 
for maximum usage of this grant program. Given that over ten 
percent of the nation's veterans reside in California, the 
Committee encourages the Department to work with the state of 
California as it applies for a grant.

                       ADMINISTRATIVE PROVISIONS

                     (INCLUDING TRANSFER OF FUNDS)

    The Administration proposed eliminating several 
administrative provisions enacted in the Military Construction, 
Military Quality of Life and Veterans Affairs Appropriations 
Act, 2006 (P.L. 109-114). Including section 203, 208, 211, 217, 
220, 221, 223-226, 228, and 229.
    The bill continues 22 administrative provisions, all of 
which were included in the fiscal year 2006 appropriations 
bill.
    Section 201 allows for the transfer of funds among three 
mandatory appropriations.
    Section 202 allows for salaries and expenses funds to be 
used for hire of passenger vehicles, lease of facilities or 
land, and purchase of uniforms.
    Section 203 provides that only funding in the 
``Construction, major projects'' and ``Construction, minor 
projects'' accounts can be used for the purchase of any site 
for any new hospital or home or to construct any new hospital 
or home.
    Section 204 requires the Department to be reimbursed for 
medical services it provides to any person not defined as a 
beneficiary to ensure the Department is receiving payment for 
all medical services provided.
    Section 205 allows for the use of funds appropriated in 
fiscal year 2007 for ``Compensation and pensions'', 
``Readjustment benefits'', and ``Veterans insurance and 
indemnities'' for payment of accrued obligations recorded in 
the last quarter of fiscal year 2006.
    Section 206 allows for the use of fiscal year 2007 funds to 
pay prior year obligations resulting from implementation of 
sections 3328(a), 3334, and 3712(a) of title 31, United States 
Code.
    Section 207 allows the Department to use surplus earning 
from the National service life insurance, U.S. Government life 
insurance, and veterans special life insurance program to 
administer these programs.
    Section 208 allows the Department to cover the 
administrative expenses of structuring enhanced-use leasing 
proposals and provides authority to obligate these 
reimbursements in the year funds are received.
    Section 209 limits the amount of reimbursement the Office 
of Resolution Management and the Office of Employment 
Discrimination Complaint Adjudication can charge other offices 
and accounts of the Department for services provided.
    Section 210 requires the Secretary to submit a report to 
the Committees on Appropriations to approve new leases of real 
property more than $300,000.
    Section 211 requires the Department to collect current, 
accurate third-party reimbursement information for the purposes 
of third-party insurance collections. If persons receiving care 
or medical services do not disclose this information, the 
Department is allowed to bill them reasonable charges for 
services provided.
    Section 212 allows the Department to use enhanced-use 
leasing funds for construction and alterations for medical 
facilities to facilitate the CARES efforts as the Department 
restructures the delivery of healthcare to veterans.
    Section 213 allows the Department to use the ``Medical 
services'' appropriation for expenses related to the broader 
mission of medical care to veterans.
    Section 214 allows the Department to transfer Medical Care 
Collections to the ``Medical services'' appropriation to be 
used for veterans' medical care.
    Section 215 allows the Department to transfer funding 
between the three medical care appropriations in fiscal year 
2007 to implement the three-account structure which was 
directed by Congress in fiscal year 2004.
    Section 216 allows veterans who reside in Alaska to obtain 
medical services from medical facilities supported by the 
Indian Health Services or tribal organizations, and provides 
for reimbursement for those services from the Department of 
Veterans Affairs.
    Section 217 allows the Department to transfer the proceeds 
received from the transfer of real property deposited into the 
Department of Veterans Affairs Capital Asset Fund (CAF) to the 
major and minor construction appropriations.
    Section 218 prohibits the expenditure of any funds 
available to the Department for implementation of a national 
standardized contract for diabetes monitoring systems.
    Section 219 provides that no funds may be used to prohibit 
Directors of Veterans Integrated Service Networks form 
conducting outreach or marketing programs.
    Section 220 requires the Secretary to submit quarterly 
reports on the financial status of the Veterans Health 
Administration.
    Section 221 requires the Department to request 
Congressional authority to transfer funding in excess of 
$1,000,000 between information technology system projects.
    Section 222 extends authorization for the Department of 
Veterans Affairs homeless programs until September 30, 2007.

                               TITLE III


                            RELATED AGENCIES


                  American Battle Monuments Commission


                         SALARIES AND EXPENSES




Fiscal year 2006 enacted level........................       $35,888,000
Fiscal year 2007 budget request.......................        35,838,000
Committee recommendation in the bill..................        37,088,000
Comparsion with:
    Fiscal year 2006 enacted level....................         1,200,000
    Fiscal year 2007 budget request...................         1,250,000


    The American Battle Monuments Commission is responsible for 
the administration, operation and maintenance of cemetery and 
war memorials to commemorate the achievements and sacrifices of 
the American Armed Forces where they have served since April 6, 
1917. In performing these functions, the Commission maintains 
twenty-four permanent American military cemetery memorials and 
thirty-one monuments, memorials, markers and offices in fifteen 
foreign countries, the Commonwealth of the Northern Mariana 
Islands, and the British dependency of Gibraltar. In addition, 
six memorials are located in the United States: the East Coast 
Memorial in New York; the West Coast Memorial, The Presidio in 
San Francisco; the Honolulu Memorial in the National Memorial 
Cemetery of the Pacific in Honolulu, Hawaii; and the American 
Expeditionary Forces Memorial and the World War II and Korean 
War Veterans Memorials in Washington, D.C.
    The Committee recommends an appropriation of $37,088,000 
for the American Battle Monuments Commission's fiscal year 2007 
salaries and expenses account. This is an increase of 
$1,200,000 above the fiscal year 2006 enacted level and 
$1,250,000 above the budget request. Included in the increase 
is $300,000 to continue the study being conducted to determine 
what, if any, action is warranted to preserve the stability of 
the site of the World War II Pointe du Hoc Ranger Monument 
located near the Normandy American Cemetery in France. Also 
included in the increase is additional funding for maintenance 
and repair work.
    Language is included allowing up to $7,500 to be used for 
official reception and representation expenses.
    Normandy Interpretive Center.--The recommendation includes 
funding for the Normandy Interpretive Center at the Normandy 
American Cemetery in France. The new center will provide a full 
array of interactive services to put the D-Day landings and the 
following battles in Europe in perspective as one of the 
greatest military achievements of all time. The Committee looks 
forward to the opening of this important facility on June 6, 
2007, the anniversary of D-Day.

                  FOREIGN CURRENCY FLUCTUATION ACCOUNT




Fiscal year 2006 enacted level........................       $15,098,000
Fiscal year 2007 budget request.......................         4,900,000
Committee recommendation in the bill..................         4,900,000
Comparison with:
    Fiscal year 2006 enacted level....................      (10,198,000)
    Fiscal year 2007 budget request...................  ................


    The Commission's foreign currency fluctuations account is 
authorized pursuant to 36 U.S.C. 2109 to pay the costs of 
salaries and expenses that exceed the amount appropriated for 
salaries and expenses because of fluctuations in currency 
exchange rates of foreign countries occurring after a budget 
request for the Commission is submitted to the Congress. The 
account may not be used for any other purpose.
    The Committee recommends an appropriation of $4,900,000 to 
re-capitalize the Commission's Foreign Currency Fluctuations 
account. This is a decrease of $10,198,000 below the fiscal 
year 2006 enacted level and the same as the budget request. Re-
capitalization of the account ensures that funds are available 
to offset dollar losses during fiscal year 2007.

           United States Court of Appeals for Veterans Claims


                         SALARIES AND EXPENSES




Fiscal year 2006 enacted level........................       $18,607,000
Fiscal year 2007 budget request.......................        19,790,000
Committee recommendation in the bill..................        19,790,000
Comparison with:
    Fiscal year 2006 enacted level....................         1,183,000
    Fiscal year 2007 budget request...................  ................


    The Veterans' Judicial Review Act established the Court of 
Appeals for Veterans Claims. The Court reviews appeals from 
Department of Veterans Affairs claimants seeking review of a 
benefit denial. The Court has the authority to overturn 
findings of fact, regulations and interpretations of law.
    The Committee recommends an appropriation of $19,790,000 
for the Court of Appeals for Veterans Claims for fiscal year 
2007. This is an increase of $1,183,000 above the fiscal year 
2006 enacted level and the same as the budget request.
    The bill also identifies $1,260,000 to be used for the pro 
bono representation program, the same as proposed in the budget 
request.

                      Department of Defense--Civil


                       Cemeterial Expenses, Army


                         SALARIES AND EXPENSES




Fiscal year 2006 enacted level........................       $28,760,000
Fiscal year 2007 budget request.......................        26,550,000
Committee recommendation in the bill..................        26,550,000
Comparison with:
    Fiscal year 2006 enacted level....................       (2,210,000)
    Fiscal year 2007 budget request...................  ................


    The Secretary of the Army is responsible for the 
administration, operation and maintenance of Arlington National 
Cemetery and the Soldiers' and Airmen's Home National Cemetery. 
In addition to its principal function as a national cemetery, 
Arlington is the site of approximately 3,100 non-funeral 
ceremonies each year and has approximately 4,000,000 visitors 
annually.
    The Committee recommends an appropriation of $26,550,000 
for salaries and expenses for fiscal year 2007. This is a 
decrease of $2,210,000 below the fiscal year 2006 enacted level 
and the same as the budget request.
    The Committee notes that the 1998 Master Plan for Arlington 
National Cemetery recommended relocating all utilities from 
under open space to below roadways. Such a change would yield 
between 8,000 and 10,000 additional gravesite spaces. The 
Committee believes the Department of the Army should actively 
pursue this course of action and directs the Department to 
report by March 1, 2007 on the cost and barriers to moving 
forward with this project.

                      Armed Forces Retirement Home





Fiscal year 2006 enacted level........................      $123,499,000
Fiscal year 2007 budget request.......................        54,846,000
Committee recommendation in the bill..................        54,846,000
Comparison with:
    Fiscal year 2006 enacted level....................      (68,653,000)
    Fiscal year 2007 budget request...................  ................


    The Armed Forces Retirement Home consists of two retirement 
communities, one in Washington, D.C. and the other in Gulfport, 
Mississippi. The Washington, D.C. facility was established in 
1851 as a soldiers' home for old and disabled veterans. The 
original home for Navy officers, sailors, and Marines was 
established in Philadelphia, Pennsylvania in 1811, and was 
relocated to Gulfport, Mississippi almost a century and a half 
later.
    The Committee recommendation provides authority to expend 
$54,846,000 from the Armed Forces Retirement Home Trust Fund 
for operations of the United States Soldiers' and Airmen's Home 
and the United States Naval Home. This is a decrease of 
$68,653,000 below the fiscal year 2006 enacted level and the 
same as the budget request.
    The bill does not provide authority to expend funding from 
the Armed Forces Retirement Home Trust Fund for capital 
activities at the Soldiers' and Airmen's Home and the United 
States Naval Home as proposed in the budget request. This is a 
decrease of $1,236,000 below the fiscal year 2006 enacted level 
and the same as the budget request.

                                TITLE IV


                         DEPARTMENT OF DEFENSE


                       Additional Appropriations

    The Committee recommends $507,003,000 in additional funds 
for military construction accounts for projects supporting 
contingency operations related to the global war on terrorism. 
In its recommendation, the Committee has emphasized projects 
related to urgent transformation efforts, as well as projects 
directly supporting operations in the theater and those that 
will enhance training in urban operations and close quarters 
combat.

------------------------------------------------------------------------
                                                         Recommendation
------------------------------------------------------------------------
Military Construction, Army...........................      $379,300,000
Military Construction, Navy and Marine Corps..........        26,037,000
Military Construction, Air Force......................        49,923,000
Military Construction, Defense-Wide...................        44,500,000
Military Construction, Army National Guard............         5,530,000
Military Construction, Army Reserve...................         1,713,000
                                                       -----------------
    Total.............................................       507,003,000
------------------------------------------------------------------------

                                TITLE V


                           GENERAL PROVISIONS

    The Administration proposed to delete two general 
provisions in the Military Construction, Military Quality of 
Life and Veterans Affairs Appropriations Act, 2006, including 
section 406 and 408.
    The bill includes seven provisions that were included in 
the fiscal year 2006 appropriations bill and one new provision. 
The general provisions included in the bill are as follows:
    Section 501 prohibits the obligation of funds beyond the 
current fiscal year unless expressly so provided.
    Section 502 requires pay raises to be absorbed within the 
levels appropriated.
    Section 503 prohibits the use of funds for programs, 
projects or activities not in compliance with Federal law 
relating to risk assessment, the protection of private property 
rights, or unfunded mandates.
    Section 504 prohibits the use of funds to support or defeat 
legislation pending before Congress.
    Section 505 encourages the expansion of E-Commerce 
technologies and procedures.
    Section 506 limits funds from being transferred from this 
appropriations measure to any instrumentality of the United 
States Government without authority from an appropriation Act.
    Section 507 specifies the congressional committees that are 
to receive all reports and notifications.
    Section 508 requires funds provided for medical facilities 
of the Department of Defense and the Department of Veterans 
Affairs in the Emergency Supplemental Appropriations Act to 
Address Hurricanes in the Gulf of Mexico and Pandemic 
Influenza, 2006 division of Public Law 109-148 to be used for 
joint-use and/or co-located facilities.

              House of Representatives Report Requirements

    The following items are included in accordance with various 
requirements of the rules of the House of Representatives.

                 Changes in Application of Existing Law

    Pursuant to clause 3(f)(1) of rule XIII of the Rules of the 
House of Representatives, the following statements are 
submitted describing the effect of provisions in the 
accompanying bill that directly or indirectly change the 
application of existing law.
    Language is included in various parts of the bill to 
continue on-going activities that require annual authorization 
or additional legislation, which to date have not been enacted.
    The bill includes a number of provisions which place 
limitations on the use of funds in the bill or change existing 
limitations and which might, under some circumstances, be 
construed as changing the application of existing law.
    Language is included that enables various appropriations to 
remain available for more than one year for some programs for 
which the basic authority legislation does not presently 
authorize such extended availability.
    Language is included in various parts of the bill which 
permits the transfer of funds to other accounts in the bill.
     Language is included in the Defense Health Program 
limiting the amount of funding available for contracts entered 
into under the TRICARE Program.
    Language is included in the Defense Health Program 
providing funds for HIV educational activities.
    Language is included under Title I, Administrative 
Provisions limiting payments for cost-plus-a-fixed-fee contract 
under certain circumstances.
    Language is included under Title I, Administrative 
Provisions allowing the hire of passenger motor vehicles.
    Language is included under Title I, Administrative 
Provisions allowing advances to the Federal Highway 
Administration, Department of Transportation under certain 
circumstances.
    Language is included under Title I, Administrative 
Provisions limiting funds for implementing construction of new 
bases in the United States without specific appropriations.
    Language is included under Title I, Administrative 
Provisions limiting funds for purchase of land or land 
easements under certain circumstances.
    Language is included under Title I, Administrative 
Provisions limiting funds for land acquisition, site 
preparation, and utility installation unless funds have been 
made available in annual appropriations acts.
     Language is included under Title I, Administrative 
Provisions limiting funds for the procurement of steel for any 
activity if American steel producers have been denied the 
opportunity to compete for such steel procurements.
    Language is included under Title I, Administrative 
Provisions limiting funds for initiating new installations 
overseas without notifying the Committees on appropriations.
    Language is included under Title I, Administrative 
Provisions limiting the use of funds for architect and engineer 
contracts under certain circumstances.
    Language is included under Title I, Administrative 
Provisions limiting funds for awarding contracts to foreign 
contractors under certain circumstances.
    Language is included under Title I, Administrative 
Provisions requiring the Department of Defense to notify the 
appropriate committees of Congress of any proposed military 
exercises under certain circumstances.
    Language is included under Title I, Administrative 
Provisions limiting funding obligations in the last two months 
of the fiscal year to 20 percent.
    Language is included under Title I, Administrative 
Provisions allowing prior year construction funding to be 
available for current year projects.
    Language is included under Title I, Administrative 
Provisions allowing payment for the cost associated with 
supervision, inspection, overhead, engineering and design on 
family housing or military construction projects that are being 
completed expired or lapsed funds.
    Language is included under Title I, Administrative 
Provisions allowing funds to be expended on military 
construction projects for four fiscal years after enactment 
under certain circumstances.
    Language is included under Title I, Administrative 
Provisions requiring the Secretary of Defense to provide the 
Committees on Appropriations and annual report on actions to 
encourage other member nations of the North Atlantic Treaty 
Organization to assume a greater share of common defense 
burden.
    Language is included under Title I, Administrative 
Provisions that limiting funds for the Partnership for Peace 
Programs in the New Independent States of the former Soviet 
Union.
    Language is included under Title I, Administrative 
Provisions that requiring the various military departments to 
submit notice to the Committee on Appropriations of 
solicitation for contracts with the private sector for military 
family housing under certain circumstances.
     Language is included under Title I, Administrative 
Provisions limiting funds for the operation and maintenance of 
family housing to those provided in this appropriations with 
exceptions under certain circumstances.
    Language is included under Title I, Administrative 
Provisions limiting funds for the North Atlantic Treaty 
Organization Security Investment Program for the conduct of 
missile defense studies.
    Language is included under Title I, Administrative 
Provisions requiring officials from the agencies covered in 
this appropriation to respond to requests within 21 days.
    Language is included under Title I, Administrative 
Provisions allowing funds for the Ford Island Improvement 
Account to be available until expended for certain purposes.
     Language is included under Title I, Administrative 
Provisions limiting funds for realignment of installations 
under certain circumstances.
    Language is included under Title I, Administrative 
Provisions allowing transfer of expired funding to the Foreign 
Currency Fluctuation Account under certain circumstances.
    Language is included under Title I, Administrative 
Provisions limiting funds for reimbursement for mental health 
services under certain circumstances.
    Language is included under Title I, Administrative 
Provisions allowing surplus medical equipment to be distributed 
to other federal agencies under certain circumstances.
    Language is included under Title I, Administrative 
Provisions allowing the Secretary of Defense to adjust wage 
rates for civilian medical employees under certain 
circumstances.
    Language is included under Title I, Administrative 
Provisions limiting the amount of funds for indefinite/
indefinite quantity contracts for environmental remediation 
under certain circumstances.
    Language is included under Title I, Administrative 
Provisions allowing funds to be used for transportation of 
medical supplies and equipment to American Samoa and the Indian 
Health Service.
    Language is included under Title I, Administrative 
Provisions allowing the Secretary of Defense to appoint and 
promote certain health care professionals.
    Language is included under the Department of Veterans 
Affairs, General Operating Expenses, providing for the 
reimbursement to the Department of Defense for the costs of 
overseas employee mail. This language has been carried 
previously and permits free mailing privileges for personnel 
stationed in the Philippines.
    Language is included under the Department of Veterans 
Affairs, Construction, Major Projects, establishing time 
limitations and reporting requirements concerning the 
obligation of major construction funds, limiting the use of 
funds, and allowing the use of funds for program costs.
    Language is included under the Department of Veterans 
Affairs, Construction, Major Projects, providing that 
unobligated balances of previous appropriations may be used for 
any project with an estimated cost of less than $4,000,000, 
allowing the use of funds for program costs, and making funds 
available for damage caused by natural disasters.
    Language is included under the Department of Veterans 
Affairs, Grants for Construction of State Extended Care 
Facilities, providing that not less than $20,000,000 may be 
used for modifications to existing facilities.
    Language is included under the Department of Veterans 
Affairs, Administrative Provisions, permitting transfers 
between mandatory and discretionary accounts, limiting and 
providing for the use of certain funds, funding administrative 
expenses associated with VA life insurance programs from excess 
program revenues, allowing reimbursement from enhanced-use 
leases, allowing for reimbursement for certain services, 
requiring notification of new lease agreements, requiring 
disclosure of insurance and income information, allowing the 
Secretary to establish a priority system for medical services, 
allowing a recovery audit collection program, prohibiting the 
use of funds for instituting a new standard for glucose 
monitoring systems, extending the authority to operate the 
homeless program, allowing veterans in the state of Alaska to 
use Indian Health Service facilities under certain conditions, 
and allowing medical services funds for recreational and 
funeral expenses.
    Language is included under the Court of Appeals for 
Veterans Claims, Salaries and Expenses, permitting the use of 
funds for a pro bono program.
    Language is included under Cemeterial Expenses, Army, 
Salaries and Expenses, permitting the use of funds for parking 
maintenance and repairs.
    Language is included under Title V, General Provisions 
requiring sums necessary for pay raises to be absorbed within 
levels appropriated.
    Language is included under Title V, General Provisions 
limiting the use of funds for federal entities when they are 
not in compliance with federal law relating to risk assessment, 
the protection of private property rights, or unfunded 
mandates.
    Language is included under Title V, General Provisions 
limiting funding for publicity or propaganda designed to 
support or defeat legislation pending before Congress.
    Language is included under Title V, General Provisions 
encouraging the expanded use of ``E-Commerce'' technology.
    Language is included under Title V, General Provisions 
delineating the recipients of reports required in this Act.
    Language is included under Title V, General Provisions 
limiting funding for construction of certain Department of 
Defense and Department of Veterans Affairs facilities unless 
these facilities are co-located.
    Language is included under the Department of Veterans 
Affairs, Information Technology Systems, limiting the 
obligation of funds until certain reporting requirements are 
met.
    Language is included under the Department of Veterans 
Affairs, Medical Services, designating $2,800,000,000 for 
specialty mental health care.

                  Appropriations Not Authorized by Law

    Pursuant to clause 3(f)(1) of rule XIII of the Rules of the 
House of Representatives, the following table lists the 
appropriations in the accompanying bill which are not 
authorized by law:
<GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT>

                           Transfer of Funds

    Pursuant to clause 3(f)(2) of rule XIII of the Rules of the 
House of Representatives, a statement is required describing 
the transfer of funds provided in the accompanying bill.
    Language under ``Military Construction, Defense-Wide'', 
``Environmental Restoration, Army'', ``Environmental 
Restoration, Navy'', ``Environmental Restoration, Air Force'', 
``Environmental Restoration, Defense-Wide'', ``Environmental 
Restoration, Formerly Used Defense Sites'', and sections 115, 
119, 120, 123, 128 of Administrative Provisions provide certain 
transfer authority.
    The Committee has included language transferring not to 
exceed $28,112,000 from Compensation and Pensions to General 
Operating Expenses and Medical Services. These funds are for 
the administrative costs of implementing cost-savings proposals 
required by the Omnibus Budget Reconciliation Act of 1990 and 
the Veterans' Benefits Act of 1992. Language is also included 
permitting necessary sums to be transferred to the medical 
facilities revolving fund to augment funding of medical centers 
for nursing home care provided to pensioners as authorized by 
the Veterans' Benefits Act of 1992.
    The Committee recommends transferring the following amounts 
to the Department of Veterans Affairs General Operating 
Expenses appropriation pursuant to the Federal Credit Reform 
Act of 1990: the Veterans Housing Benefit Program Fund Program 
Account ($153,185,000), the Vocational Rehabilitation Loans 
Program Account ($305,000) and the Native American Veteran 
Housing Loan Program Account ($615,000). In addition, the bill 
provides up to $750,000 in General Operating Expenses and 
Medical Services for administration of the Guaranteed 
Transitional Housing Loans for Homeless Veterans Program 
Account.
    The Committee recommends providing authority for the 
Department of Veterans Affairs for any funds appropriated in 
2007 for Compensation and Pensions, Readjustment Benefits, and 
Veterans Insurance and Indemnities to be transferred between 
those three accounts. This will provide the Department of 
Veterans Affairs flexibility in administering its entitlement 
programs.
    The Committee has included language permitting the funds 
from three life insurance funds to be transferred to General 
Operating Expenses for the costs of administering such 
programs.
    The Committee recommends language permitting up to 
$34,305,000 to be transferred to General Operating Expenses 
from any funds appropriated in 2007 to reimburse the Office of 
Resolution Management and the Office of Employment 
Discrimination Complaint Adjudication for services provided.
    The Committee has included language that would transfer 
certain funds derived from enhanced-use leasing activities to 
the Construction, Major Projects and Construction, Minor 
Projects accounts.
    The Committee has included language under the Department of 
Veterans Affairs that would transfer funds from the Medical 
Care Collections Fund to Medical Services.
    The Committee recommends providing authority for the 
Department of Veterans Affairs to transfer amounts among the 
Medical Services, Medical Administration and Medical Facilities 
accounts to the extent necessary to implement the restructuring 
of these accounts subject to certain notification and approval 
requirements.
    The Committee recommends providing authority for the 
Department of Veterans Affairs to transfer amounts among the 
programs within the Information Technology Systems account 
subject to certain notification and approval requirements.
    The Committee recommends language under the Department of 
Veterans Affairs that would allow the transfer of funds from 
the General Operating Expenses account to the Veterans Housing 
Benefit Program Fund Program Account for certain purposes.
    The Committee recommends language under the Department of 
Veterans Affairs that would allow the transfer of funds from 
the Capital Asset Fund to the Construction, Major Projects and 
Construction, Minor Projects accounts.

                              Rescissions

    Pursuant to clause 3(f)(2) of rule XIII of the Rules of the 
House of Representatives, the following is submitted describing 
the rescissions recommended in the accompanying bill:


------------------------------------------------------------------------
                                                             Amounts
                  Department/Activity                    recommended for
                                                           rescission
------------------------------------------------------------------------
Department of Defense, Military Construction, Army....       $43,348,000
Department of Defense, Military Construction, Navy....        38,000,000
Department of Defense, Military Construction, Air              2,694,000
 Force................................................
Department of Defense, Military Construction, Defense-       110,229,000
 Wide.................................................
Department of Defense, Family Housing Construction,           66,200,000
 Air Force............................................
Department of Defense, Defense Health Program.........        40,042,000
------------------------------------------------------------------------

                        Constitutional Authority

    Clause 3(d)(1) of rule XIII of the Rules of the House of 
Representatives states that:

          Each report of a committee on a bill or joint 
        resolution of a public character shall include a 
        statement citing the specific powers granted to the 
        Congress in the Constitution to enact the law proposed 
        by the bill or joint resolution.

    The Committee on Appropriations bases its authority to 
report this legislation from Clause 7 of Section 9 of Article I 
of the Constitution of the United States of America which 
states:

          No money shall be drawn from the Treasury but in 
        consequence of Appropriations made by law * * *

    Appropriations contained in this bill are made pursuant to 
this specific power granted by the Constitution.

                   Comparisons With Budget Resolution

    Clause 3(c)(2) of rule XIII of the Rules of the House of 
Representatives requires an explanation of compliance with 
section 308(a)(1)(A) of the Congressional Budget and 
Impoundment Control Act of 1974 (Public Law 93-344), as 
amended, which requires that the report accompanying a bill 
providing new budget authority contain a statement detailing 
how that authority compares with the reports submitted under 
section 302 of the Act for the most recently agreed to 
concurrent resolution on the budget for the fiscal year from 
the Committee's section of 302(a) allocation.

                                            [In millions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                                  302(b) allocation             This bill
                                                             ---------------------------------------------------
                                                                 Budget                    Budget
                                                               authority     Outlays     authority     Outlays
----------------------------------------------------------------------------------------------------------------
Discretionary...............................................       94,705       36,388       94,705       36,388
Mandatory...................................................       88,728       36,284       88,728       36,284
----------------------------------------------------------------------------------------------------------------

                    Five-Year Projection of Outlays

    In compliance with section 308(a)(1)(B) of the 
Congressional Budget and Impoundment Control Act of 1974 
(Public Law 93-344), as amended, the following table contains 
five-year projections associated with the budget authority 
provided in the accompanying bill:

                        [In millions of dollars]



Outlays:
    2007..............................................           106,267
    2008..............................................            16,013
    2009..............................................             6,708
    2010..............................................             2,964
    2011 and beyond...................................             1,287


    The bill will not affect the levels of revenues, tax 
expenditures, direct loan obligations, or primary loan 
guarantee commitments under existing law.

          Financial Assistance to State and Local Governments

    In accordance with section 308(a)(1)(C) of the 
Congressional Budget and Impoundment Control Act of 1974 
(Public Law 93-344), as amended, the financial assistance to 
State and local governments is as follows:

                        [In millions of dollars]



New budget authority..................................               692
Fiscal year 2007 outlays resulting therefrom..........               488


         Statement of General Performance Goals and Objectives

    Pursuant to clause 3(c)(4) of rule XIII of the Rules of the 
House of Representatives, the following is a statement of 
general performance goals and objectives for which this measure 
authorizes funding:
    The Committee on Appropriations considers program 
performance, including a program's success in developing and 
attaining outcome-related goals and objectives, in developing 
funding recommendations.

                          Full Committee Votes

    Pursuant to the provisions of clause 3(b) of rule XIII of 
the Rules of the House of Representatives, the results of each 
rollcall vote on an amendment or on the motion to report, 
together with the names of those voting for and those voting 
against, are printed below:
<GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT>


 ADDITIONAL VIEWS OF REPRESENTATIVES CHET EDWARDS, SAM FARR, AND DAVID 
                                R. OBEY

                              ----------                              


  Military Quality of Life and Veterans Affairs and Related Agencies 
                       Appropriations Bill, 2007

    The two most important decisions affecting the Military 
Quality of Life bill were not made while the bill was before 
the Committee.
    On May 9, 2006, on a party-line vote, Committee Republicans 
cut the allocation for this bill by $824 million below the 
President's request.
    The next day the Majority pushed a bill through the House 
that provides taxpayers with incomes greater than $1 million 
per year tax cuts of $42,000, while families with incomes of 
$50,000 a year would only get on average a $46 tax cut.
    Those two actions by the Republican Majority are the reason 
for this bare bones bill. While it provides a $635 million 
increase in veterans spending above the President's request it 
also has to rely on a $500 million budget gimmick; even with 
this fiscal sleight of hand the bill still fails military 
retirees' and veterans' medical needs.
    Democrats offered three amendments that would have 
significantly improved the bill by eliminating the budget 
gimmick, making certain military retirees would not face 
increased costs, and ensuring the quality and timeliness of VA 
medical care. These amendments were part of a fiscally 
disciplined, balanced Democratic approach that would return 
Congressional budgeting to the principle of ``paying-as-you-
go'', providing additional funding for key investments and 
reducing the deficit by scaling back the supersized tax cuts 
for those making more than $1 million a year.

                           MILITARY RETIREES

    The President proposed to increase enrollment fees, co-
payments and deductibles for military retirees less than 65 
years of age within the Defense Health Program. The President's 
proposal included:
          
 Raising the annual enrollment fees for 
        TRICARE Prime;
          
 Establishing annual enrollment fees for the 
        more basic TRICARE Standard;
          
 Increasing annual deductibles; and,
          
 Raising the mail-order and retail pharmacy 
        co-payments.
    The Administration's budget claimed that these increased 
costs imposed on military retirees would raise $735 million.
    Democrats wholly reject imposing these fee increases on 
military retirees. Thankfully, the House Committee on Armed 
Services agreed and rejected the proposal. However, this bill 
fails to deal with the President's proposal to increase fees, 
leaving a $735 million hole in the Defense Health Program.
    Mr. Edwards offered an amendment to provide the necessary 
$735 million that is needed to get the Defense Health Program 
through the next year, and to offset the costs proposed a minor 
reduction in the tax cut for those with annual incomes above a 
million dollars. A less than two percent reduction in the 
average tax cuts for people making over $1 million a year would 
ensure the Defense Health Program is fully funded. Presented 
with a choice between reducing the tax cut for millionaires or 
adequately funding healthcare for military retirees, 
Republicans voted to protect the super-sized tax cuts for 
millionaires and rejected Mr. Edwards' amendment on a party-
line vote.

                            BUDGET GIMMICKRY

    The second Democratic amendment would have eliminated the 
budget gimmick that designated $507 million for 20 routine 
military construction projects as an ``emergency'' so that this 
funding would not count against the bill's allocation.
    None of these projects were unforeseen. The Administration 
budget requested 310 military construction projects, including 
these 20 projects. They are all conventional military 
construction projects--things like hangars, barracks and unit 
headquarters. These projects are selected through long-term 
planning exercises developed by the services, coordinated by 
the Department of Defense, and then vetted by the Office of 
Management and Budget. None of these projects were designated 
by the Administration as emergency requirements.
    Democrats recognized these projects as valid and continue 
to support our service men and women. However, the Minority has 
a more fiscally disciplined and balanced approach to addressing 
these critical needs.
    Mr. Obey offered an amendment to pay for these 20 military 
construction projects by reducing the tax cuts for people 
making more than $1 million a year by $1,400 or one percent. 
Republicans defeated the amendment on a party-line vote.

                          VETERANS HEALTHCARE

    Last year, the Administration was twice forced to admit 
that it failed to adequately budget for veterans health care. 
Twice, at the urging of Democrats, Congress provided additional 
funding to close the shortfall. After that fiasco, Congress 
understandably cast a skeptical eye on the President's 2007 
request for VA healthcare.
    This year, the Committee wisely chose to set its mark to 
the estimates offered in the Independent Budget, which is 
drafted by veterans service organizations, rather than the 
request of the Administration. As this report notes, the 
Independent Budget provides a more reliable yardstick. In 
total, the Committee provided an additional $635 million above 
the President's budget.
    While this increase is necessary and commendable we still 
believe that the bill leaves much room for improvement. The 
bill's allocation is still too low to meet many of the 
Independent Budget's recommendations, high priority 
construction projects were cut, and increases recommended by 
the authorizers could not be accommodated.
    Mr. Farr offered an amendment to increase veterans health 
care funding by $1.82 billion. For example, the amendment would 
have provided:
          
 $300 million to fully fund the Independent 
        Budget's mental health and prosthetics initiatives;
          
 An additional $119 million to increase the 
        number of full-time employees as suggested by the 
        Independent Budget;
          
 An additional $48 million in medical and 
        prosthetic research;
          
 An additional $232 million to offset in 
        unjustifiable ``savings'' claimed by the President's 
        budget;
          
 An additional $471 million for long-term 
        care the VA is statutorily required to provide;
          
 An additional $341 million to enroll ``lower 
        priority'' veterans who, while often called high 
        income, are excluded from the VA healthcare system even 
        though they make as little as $27,000 a year;
          
 An additional $8 million to allow the 
        Inspector General to expand oversight efforts to make 
        certain that veterans get the best healthcare in a 
        timely manner;
          
 An additional $115 million to restore badly 
        needed hospital construction projects cut from the 
        Administration's request; and,
          
 An additional $73 million for General 
        Operating Expenses to help reduce the claims processing 
        backlog. Last year, 74,000 veterans waited more than 
        six months to resolve a claim; today, over 95,000 are 
        waiting.
    The Farr amendment was paid for by reducing the average tax 
cut for people making more than $1 million a year by slightly 
more than $5,000, leaving them with $109,025. The Majority 
defeated the amendment on a party-line vote.
    Time and again, the Majority prioritized the needs of 
people making more than $1 million a year ahead of key 
investments, such as health care for our veterans.
    As a result, veterans will continue to wait too long for 
care, many will not get the mental health assistance they need, 
prosthetic research and services will be under funded, and 
``wealthy'' lower priority veterans will continue to be denied 
access to VA healthcare altogether.
    Meanwhile, there are 362,000 taxpayers with annual incomes 
over $1 million who are scheduled to receive an average tax cut 
of $114,172.
    Committee Democrats only asked that we give a little bit 
less to those who already have much so that we could do a 
little bit better

by our veterans. We were told by the Majority that this was not 
``legitimate.''
    In a time of war, reducing a millionaire's tax cut in order 
to care for those ``who shall have borne the battle'' is not 
only legitimate, it is a moral imperative.

                                   Chet Edwards.
                                   Sam Farr.
                                   David R. Obey.