< Back to H.R. 5259 (107th Congress, 2001–2002)

Text of the Budget Fraud Elimination Act of 2002

This bill was introduced on July 26, 2002, in a previous session of Congress, but was not enacted. The text of the bill below is as of Jul 26, 2002 (Referral Instructions in the House).

This is not the latest text of this bill.

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HR 5259 RIH

107th CONGRESS

2d Session

H. R. 5259

To reform Federal budget procedures to restrain congressional spending, foster greater oversight of the budget, account for accurate Government agency costs, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

JULY 26, 2002

Mr. RYAN of Wisconsin introduced the following bill; which was referred to the Committee on the Budget, for a period ending not later than August 31, 2002, and in addition to the Committees on Ways and Means, Rules, and Government Reform, for a period to be determined subsequently by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned


A BILL

To reform Federal budget procedures to restrain congressional spending, foster greater oversight of the budget, account for accurate Government agency costs, and for other purposes.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) SHORT TITLE- This Act may be cited at the ‘Budget Fraud Elimination Act of 2002’.

    (b) TABLE OF CONTENTS-

      Sec. 1. Short title; table of contents.

TITLE I--TRUTH IN BUDGETING

Subtitle A--Limit on the Public Debt

      Sec. 101. Findings.

      Sec. 102. Purpose.

      Sec. 103. Limit on public debt.

Subtitle B--Establishment of Biennial Budgeting

      Sec. 111. Findings.

      Sec. 112. Revision of timetable.

      Sec. 113. Amendments to the Congressional Budget and Impoundment Control Act of 1974.

      Sec. 114. Amendments to rules of House of Representatives.

      Sec. 115. Amendments to title 31, United States Code.

      Sec. 116. Two-year appropriations; title and style of appropriation acts.

      Sec. 117. Multiyear authorizations.

      Sec. 118. Government strategic and performance plans on a biennial basis.

      Sec. 119. Biennial appropriation bills.

      Sec. 120. Assistance by Federal agencies to standing committees of the Senate and the House of Representatives.

      Sec. 121. Report on two-year fiscal period.

      Sec. 122. Special transition period for the 108th Congress.

      Sec. 123. Effective date.

TITLE II--TRUTH IN SPENDING

Subtitle A--Emergency Spending Legislation

      Sec. 201. Emergency spending legislation and the baseline.

      Sec. 202. OMB emergency criteria.

      Sec. 203. Point of order to enforce definition of emergency.

Subtitle B--The Byrd Rule

      Sec. 211. Limitation on Byrd rule.

Subtitle C--Spending Accountability Reserve

      Sec. 231. Short title.

      Sec. 232. Spending accountability reserve ledger.

      Sec. 233. Downward adjustment of section 302(a) allocations and section 302(b) suballocations.

      Sec. 234. Periodic reporting of ledger statements.

      Sec. 235. Downward adjustment of discretionary spending limits.

      Sec. 236. Reduction in revenues.

Subtitle D--Enhanced Rescissions of Budget Authority Identified by the President as Wasteful Spending

      Sec. 251. Short title.

      Sec. 252. Enhanced consideration of certain proposed rescissions.

Subtitle E--Extension of Discretionary Spending Limits and Paygo

      Sec. 261. Amendments to sections 251, 252, and 275 of the Balanced Budget and Emergency Deficit Control Act of 1985.

Subtitle F--Paygo Requirements and the On-Budget Surplus

      Sec. 271. Paygo requirements and the on-budget surplus.

Subtitle G--Treatment of Extraneous Appropriations in Omnibus Appropriation Measures

      Sec. 281. Treatment of extraneous appropriations.

TITLE III--BUDGETING AND MANAGING FOR RESULTS: FULL FUNDING FOR FEDERAL RETIREE COSTS

Subtitle A--Accrual Funding of Pensions and Retirement Pay forederal Employees and Uniformed Services Personnel

      Sec. 301. Civil Service Retirement System.

      Sec. 302. Central Intelligence Agency Retirement and Disability System.

      Sec. 303. Foreign Service Retirement and Disability System.

      Sec. 304. Public Health Service Commissioned Corps Retirement System.

      Sec. 305. National Oceanic and Atmospheric Administration Commissioned Officer Corps Retirement System.

      Sec. 306. Coast Guard Military Retirement System.

Subtitle B--Accrual Funding of Post-Retirement Health Benefits Costs for Federal Employees

      Sec. 311. Federal employees health benefits fund.

      Sec. 312. Funding uniformed services health benefits for all retirees.

      Sec. 313. Effective date.

TITLE I--TRUTH IN BUDGETING

Subtitle A--Limit on the Public Debt

SEC. 101. FINDINGS.

    The Congress finds the following:

      (1) Since 1997, Congress has paid down and retired approximately $500,000,000,000 of the Government’s debt which was previously held by the public.

      (2) This reduction in the Government’s debt to the public should permit a lowering of the statutory debt ceiling. However, the statutory definition mingles both the public debt and intragovernment liabilities, the latter of which do not represent resource withdrawals for the economy.

      (3) Intragovernment accounts such as the social security trust funds, the Civil Service Retirement and Disability Fund, the Department of Defense Military Retirement Fund, and the Unemployment Trust Fund constitute accrued liabilities of the Government which will be paid from future receipts, taxes, or borrowing. If the Government issues debt to the public to fund such liabilities in the future, that debt will properly be subject to the debt ceiling.

      (4) Properly defining the debt of the Government would permit lowering the debt ceiling to take account of, and lock in, the fiscal progress that has been made.

SEC. 102. PURPOSE.

    It is the purpose of this subtitle to--

      (1) properly define the public debt to exclude intragovernment obligations; and

      (2) reduce the public debt ceiling in recognition of the reduction in outstanding public debt in recent years, and to encourage further fiscal responsibility

and progress toward eliminating the remaining outstanding debt.

SEC. 103. LIMIT ON PUBLIC DEBT.

    Section 3101 of title 31, United States Code, is amended to read as follows:

‘Sec. 3101. Public debt limit

    ‘(a) In this section, the current redemption value of an obligation issued on a discount basis and redeemable before maturity at the option of its holder is deemed to be the face amount of the obligation.

    ‘(b) The face amount of obligations issued under this chapter and the face amount of obligations whose principal and interest are guaranteed by the United States Government (except guaranteed obligations held by the Secretary of the Treasury and intragovernmental holdings) may not be more than $3,750,000,000,000 outstanding at one time, subject to changes periodically made in that amount as provided by law.

    ‘(c) For purposes of this section, the face amount, for any month, of any obligation issued on a discount basis that is not redeemable before maturity at the option of the holder of the obligation is an amount equal to the sum of--

      ‘(1) the original issue price of the obligation, plus

      ‘(2) the portion of the discount on the obligation attributable to periods before the beginning of such month (as determined under the principles of section 1272(a) of the Internal Revenue Code of 1986 without regard to any exceptions contained in paragraph (2) of such section).

    ‘(d) For purposes of this section, the term ‘intragovernment holding’ is any obligation issued by the Secretary of the Treasury to any Federal trust fund or Government account, whether in respect of public money, money otherwise required to be deposited in the Treasury, or amounts appropriated.’.

Subtitle B--Establishment of Biennial Budgeting

SECTION 111. FINDINGS.

    The Congress finds that--

      (1) the annual appropriations and budget process increasingly dominates the congressional agenda and Congress regularly fails to meet the deadlines of the Congressional Budget Act of 1974;

      (2) the design of the budget process has led to repetitive and time-consuming budget votes, decreasing the time available for the systematic and programmatic oversight of Federal programs and delaying the enactment of legislation necessary to fund the Government;

      (3) Congress’ responsibility to improve the efficiency, economy, and effectiveness of governmental operations, evaluate programs and performance, detect and prevent poor administration, waste, or abuse in Government programs, ensure that executive policies reflect the public interest, ensure administrative compliance with legislative intent, and prevent executive encroachment on legislative authority and prerogatives is undermined by the current time-consuming and repetitive budget process;

      (4) an annual budget process encourages inefficiency in the management, stability, and predictability of Federal funding, particularly for States and localities;

      (5) a biennial budget process will reduce the number of budget-related votes during each Congress, enhance congressional oversight of Government operations, encourage longer time horizons in policy planning and greater stability in fiscal policy;

      (6) a biennial budget process was a principal recommendation of the 1993 Joint Committee on the Organization of Congress and the Vice President’s National Performance Review;

      (7) since the enactment of the Congressional Budget Act of 1974, more than 50 bills addressing a two-year budget cycle have been introduced, 10 biennial budget related provisions were reported by congressional committees, 7 passed either chamber and 4 were enacted; more than 40 congressional or special committee hearings addressed the issue of biennial budgeting; and the Congressional Budget Office, the Office of Management and Budget, and 5 different special task forces or joint committees of Congress have either recommended biennial budgeting or further studies of it;

      (8) the adoption of a biennial budget process was recommended by President Reagan in the fiscal year 1989 budget submission, by President Bush in the fiscal year 1990 and 1991 budget submissions, by President Clinton in the fiscal year 1995, 2000, and 2001 budget submissions, and by President Bush in the fiscal year 2002 budget submission; and

      (9) a bipartisan majority of Members of the House of Representatives support a biennial budget process.

SEC. 112. REVISION OF TIMETABLE.

    Section 300 of the Congressional Budget Act of 1974 (2 U.S.C. 631) is amended to read as follows:

‘TIMETABLE

    ‘SEC. 300. (a) IN GENERAL- Except as provided by subsection (b), the timetable with respect to the congressional budget process for any Congress (beginning with the One Hundred Ninth Congress) is as follows:

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                                                             ‘First Session                                                                                                   
‘On or before:                                               Action to be completed:                                                                                          
First Monday in February                                     President submits budget recommendations.                                                                        
February 15                                                  Congressional Budget Office submits report to Budget Committees.                                                 
Not later than 6 weeks after budget submission               Committees submit views and estimates to Budget Committees.                                                      
April 1                                                      Budget Committees report concurrent resolution on the biennial budget.                                           
May 15                                                       Congress completes action on concurrent resolution on the biennial budget.                                       
May 15                                                       Biennial appropriation bills may be considered in the House.                                                     
June 10                                                      House Appropriations Committee reports last biennial appropriation bill.                                         
June 30                                                      House completes action on biennial appropriation bills.                                                          
October 1                                                    Biennium begins.                                                                                                 
                                                             ‘Second Session                                                                                                  
‘On or before:                                               Action to be completed:                                                                                          
February 15                                                  President submits budget review.                                                                                 
Not later than 6 weeks after President submits budget review Congressional Budget Office submits report to Budget Committees.                                                 
The last day of the session                                  Congress completes action on bills and resolutions authorizing new budget authority for the succeeding biennium. 
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    ‘(b) SPECIAL RULE- In the case of any first session of Congress that begins in any year during which the term of a President (except a President who succeeds himself) begins, the following dates shall supersede those set forth in subsection (a):

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                      ‘First Session                                                             
‘On or before:        Action to be completed:                                                    
First Monday in April President submits budget recommendations.                                  
April 20              Committees submit views and estimates to Budget Committees.                
May 15                Budget Committees report concurrent resolution on the biennial budget.     
June 1                Congress completes action on concurrent resolution on the biennial budget. 
June 1                Biennial appropriation bills may be considered in the House.               
July 1                House Appropriations Committee reports last biennial appropriation bill.   
July 20               House completes action on biennial appropriation bills.                    
October  1            Biennium begins.’.                                                         
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SEC. 113. AMENDMENTS TO THE CONGRESSIONAL BUDGET AND IMPOUNDMENT CONTROL ACT OF 1974.

    (a) DECLARATION OF PURPOSE- Section 2(2) of the Congressional Budget and Impoundment Control Act of 1974 (2 U.S.C. 621(2)) is amended by striking ‘each year’ and inserting ‘biennially’.

    (b) Definitions-

      (1) BUDGET RESOLUTION- Section 3(4) of such Act (2 U.S.C. 622(4)) is amended by striking ‘fiscal year’ each place it appears and inserting ‘biennium’.

      (2) BIENNIUM- Section 3 of such Act (2 U.S.C. 622) is amended by adding at the end the following new paragraph:

      ‘(11) The term ‘biennium’ means the period of 2 consecutive fiscal years beginning on October 1 of any odd-numbered year.’.

    (c) BIENNIAL CONCURRENT RESOLUTION ON THE BUDGET-

      (1) CONTENTS OF RESOLUTION- Section 301(a) of such Act (2 U.S.C. 632(a)) is amended--

        (A) in the matter preceding paragraph (1) by--

          (i) striking ‘April 15 of each year’ and inserting ‘May 15 of each odd-numbered year’;

          (ii) striking ‘the fiscal year beginning on October 1 of such year’ the first place it appears and inserting ‘the biennium beginning on October 1 of such year’; and

          (iii) striking ‘the fiscal year beginning on October 1 of such year’ the second place it appears and inserting ‘each fiscal year in such period’;

        (B) in paragraph (6), by striking ‘for the fiscal year’ and inserting ‘for each fiscal year in the biennium’; and

        (C) in paragraph (7), by striking ‘for the fiscal year’ and inserting ‘for each fiscal year in the biennium’.

      (2) ADDITIONAL MATTERS- Section 301(b) of such Act (2 U.S.C. 632(b)) is amended--

        (A) in paragraph (3), by striking ‘for such fiscal year’ and inserting ‘for either fiscal year in such biennium’; and

        (B) in paragraph (7), by striking ‘for the first fiscal year’ and inserting ‘for each fiscal year in the biennium’.

      (3) VIEWS OF OTHER COMMITTEES- Section 301(d) of such Act (2 U.S.C. 632(d)) is amended by inserting ‘(or, if applicable, as provided by section 300(b))’ after ‘United States Code’.

      (4) HEARINGS- Section 301(e)(1) of such Act (2 U.S.C. 632(e)) is amended by--

        (A) striking ‘fiscal year’ and inserting ‘biennium’; and

        (B) inserting after the second sentence the following: ‘On or before April 1 of each odd-numbered year (or, if applicable, as provided by section 300(b)), the Committee on the Budget of each House shall report to its House the concurrent resolution on the budget referred to in subsection (a) for the biennium beginning on October 1 of that year.’.

      (5) GOALS FOR REDUCING UNEMPLOYMENT- Section 301(f) of such Act (2 U.S.C. 632(f)) is amended by striking ‘fiscal year’ each place it appears and inserting ‘biennium’.

      (6) ECONOMIC ASSUMPTIONS- Section 301(g)(1) of such Act (2 U.S.C. 632(g)(1)) is amended by striking ‘for a fiscal year’ and inserting ‘for a biennium’.

      (7) SECTION HEADING- The section heading of section 301 of such Act is amended by striking ‘annual’ and inserting ‘biennial’.

      (8) TABLE OF CONTENTS- The item relating to section 301 in the table of contents set forth in section 1(b) of such Act is amended by striking ‘Annual’ and inserting ‘Biennial’.

    (d) COMMITTEE ALLOCATIONS- Section 302 of such Act (2 U.S.C. 633) is amended--

      (1) in subsection (a)(1) by--

        (A) striking ‘for the first fiscal year of the resolution,’ and inserting ‘for each fiscal year in the biennium,’;

        (B) striking ‘for that period of fiscal years’ and inserting ‘for all fiscal years covered by the resolution’; and

        (C) striking ‘for the fiscal year of that resolution’ and inserting ‘for each fiscal year in the biennium’;

      (2) in subsection (f)(1), by striking ‘for a fiscal year’ and inserting ‘for a biennium’;

      (3) in subsection (f)(1), by striking ‘first fiscal year’ and inserting ‘either fiscal year of the biennium’;

      (4) in subsection (f)(2)(A), by--

        (A) striking ‘first fiscal year’ and inserting ‘each fiscal year of the biennium’; and

        (B) striking ‘the total of fiscal years’ and inserting ‘the total of all fiscal years covered by the resolution’; and

      (5) in subsection (g)(1)(A), by striking ‘April’ and inserting ‘May’.

    (e) SECTION 303 POINT OF ORDER-

      (1) IN GENERAL- Section 303(a) of such Act (2 U.S.C. 634(a)) is amended by striking ‘for a fiscal year’ and inserting ‘for a biennium’ and by striking ‘the first fiscal year’ and inserting ‘each fiscal year of the biennium’.

      (2) EXCEPTIONS IN THE HOUSE- Section 303(b) of such Act (2 U.S.C. 634(b)) is amended--

        (A) in paragraph (1)(A), by striking ‘the budget year’ and inserting ‘the biennium’;

        (B) in paragraph (1)(B), by striking ‘the fiscal year’ and inserting ‘the biennium’; and

        (C) in paragraph (2), by inserting ‘(or June 1 whenever section 300(b) is applicable)’ after ‘May 15’.

      (3) APPLICATION TO THE SENATE- Section 303(c)(1) of such Act (2 U.S.C. 634(c)) is amended by--

        (A) striking ‘fiscal year’ and inserting ‘biennium’; and

        (B) striking ‘that year’ and inserting ‘each fiscal year of that biennium’.

    (f) PERMISSIBLE REVISIONS OF CONCURRENT RESOLUTIONS ON THE BUDGET- Section 304 of such Act (2 U.S.C. 635) is amended--

      (1) by striking ‘fiscal year’ the first two places it appears and inserting ‘biennium’;

      (2) by striking ‘for such fiscal year’; and

      (3) by inserting before the period ‘for such biennium’.

    (g) PROCEDURES FOR CONSIDERATION OF BUDGET RESOLUTIONS- Section 305(a)(3) of such Act (2 U.S.C. 636(b)(3)) is amended by striking ‘fiscal year’ and inserting ‘biennium’.

    (h) COMPLETION OF HOUSE COMMITTEE ACTION ON APPROPRIATION BILLS- Section 307 of such Act (2 U.S.C. 638) is amended--

      (1) by striking ‘each year’ and inserting ‘each odd-numbered year (or, if applicable, as provided by section 300(b), July 1)’;

      (2) by striking ‘annual’ and inserting ‘biennial’;

      (3) by striking ‘fiscal year’ and inserting ‘biennium’; and

      (4) by striking ‘that year’ and inserting ‘each odd-numbered year’.

    (i) QUARTERLY BUDGET REPORTS- Section 308 of such Act (2 U.S.C. 639) is amended by adding at the end the following new subsection:

    ‘(d) QUARTERLY BUDGET REPORTS- The Director of the Congressional Budget Office shall, as soon as practicable after the completion of each quarter of the fiscal year, prepare an analysis comparing revenues, spending, and the deficit or surplus for the current fiscal year to assumptions included in the congressional budget resolution. In preparing this report, the Director of the Congressional Budget Office shall combine actual budget figures to date with projected revenue and spending for the balance of the fiscal year. The Director of the Congressional Budget Office shall include any other information in this report that it deems useful for a full understanding of the current fiscal position of the Federal Government. The reports mandated by this subsection shall be transmitted by the Director to the Senate and House Committees on the Budget, and the Congressional Budget Office shall make such reports available to any interested party upon request.’.

    (j) COMPLETION OF HOUSE ACTION ON REGULAR APPROPRIATION BILLS- Section 309 of such Act (2 U.S.C. 640) is amended--

      (1) by striking ‘It’ and inserting ‘Except whenever section 300(b) is applicable, it’;

      (2) by inserting ‘of any odd-numbered calendar year’ after ‘July’;

      (3) by striking ‘annual’ and inserting ‘biennial’; and

      (4) by striking ‘fiscal year’ and inserting ‘biennium’.

    (k) RECONCILIATION PROCESS- Section 310 of such Act (2 U.S.C. 641) is amended--

      (1) in subsection (a), in the matter preceding paragraph (1), by striking ‘any fiscal year’ and inserting ‘any biennium’;

      (2) in subsection (a)(1), by striking ‘such fiscal year’ each place it appears and inserting ‘any fiscal year covered by such resolution’; and

      (3) by striking subsection (f) and redesignating subsection (g) as subsection (f).

    (l) SECTION 311 POINT OF ORDER-

      (1) IN THE HOUSE- Section 311(a)(1) of such Act (2 U.S.C. 642(a)) is amended--

        (A) by striking ‘for a fiscal year’ and inserting ‘for a biennium’;

        (B) by striking ‘the first fiscal year’ each place it appears and inserting ‘either fiscal year of the biennium’; and

        (C) by striking ‘that first fiscal year’ and inserting ‘each fiscal year in the biennium’.

      (2) IN THE SENATE- Section 311(a)(2) of such Act is amended--

        (A) in subparagraph (A), by striking ‘for the first fiscal year’ and inserting ‘for either fiscal year of the biennium’; and

        (B) in subparagraph (B)--

          (i) by striking ‘that first fiscal year’ the first place it appears and inserting ‘each fiscal year in the biennium’; and

          (ii) by striking ‘that first fiscal year and the ensuing fiscal years’ and inserting ‘all fiscal years’.

      (3) SOCIAL SECURITY LEVELS- Section 311(a)(3) of such Act is amended by--

        (A) striking ‘for the first fiscal year’ and inserting ‘each fiscal year in the biennium’; and

        (B) striking ‘that fiscal year and the ensuing fiscal years’ and inserting ‘all fiscal years’.

    (m) MAXIMUM DEFICIT AMOUNT POINT OF ORDER- Section 312(c) of the Congressional Budget Act of 1974 (2 U.S.C. 643) is amended--

      (1) by striking ‘for a fiscal year’ and inserting ‘for a biennium’;

      (2) in paragraph (1), by striking ‘first fiscal year’ and inserting ‘either fiscal year in the biennium’;

      (3) in paragraph (2), by striking ‘that fiscal year’ and inserting ‘either fiscal year in the biennium’; and

      (4) in the matter following paragraph (2), by striking ‘that fiscal year’ and inserting ‘the applicable fiscal year’.

SEC. 114. AMENDMENTS TO RULES OF HOUSE OF REPRESENTATIVES.

    (a) Clause 4(a)(1)(A) of rule X of the Rules of the House of Representatives is amended by inserting ‘odd-numbered’ after ‘each’.

    (b) Clause 4(a)(4) of rule X of the Rules of the House of Representatives is amended by striking ‘fiscal year’ and inserting ‘biennium’.

    (c) Clause 4(b)(2) of rule X of the Rules of the House of Representatives is amended by striking ‘each fiscal year’ and inserting ‘the biennium’.

    (d) Clause 4(b) of rule X of the Rules of the House of Representatives is amended by striking ‘and’ at the end of subparagraph (5), by striking the period and inserting ‘; and’ at the end of subparagraph (6), and by adding at the end the following new subparagraph:

      ‘(7) use the second session of each Congress to study issues with long-term budgetary and economic implications, which would include--

        ‘(A) hold hearings to receive testimony from committees of jurisdiction to identify problem areas and to report on the results of oversight; and

        ‘(B) by January 1 of each odd-number year, issuing a report to the Speaker which identifies the key issues facing the Congress in the next biennium.’.

    (e) Clause 11(i) of rule X of the Rules of the House of Representatives is amended by striking ‘the same or preceding fiscal year’.

    (f) Clause 4(e) of rule X of the Rules of the House of Representatives is amended by striking ‘annually’ each place it appears and inserting ‘biennially’ and by striking ‘annual’ and inserting ‘biennial’.

    (g) Clause 4(f) of rule X of the Rules of the House of Representatives is amended--

      (1) by inserting ‘during each odd-numbered year’ after ‘submits his budget’;

      (2) by striking ‘fiscal year’ the first place it appears and inserting ‘biennium’; and

      (3) by striking ‘that fiscal year’ and inserting ‘each fiscal year in such ensuing biennium’.

    (h) Clause 3(d)(2)(A) of rule XIII of the Rules of the House of Representatives is amended by striking ‘five’ both places it appears and inserting ‘six’.

    (i) Clause 5(a)(1) of rule XIII of the Rules of the House of Representatives is amended by striking ‘fiscal year after September 15 in the preceding fiscal year’ and inserting ‘biennium after September 15 of the year in which such biennium begins’.

SEC. 115. AMENDMENTS TO TITLE 31, UNITED STATES CODE.

    (a) DEFINITION- Section 1101 of title 31, United States Code, is amended by adding at the end the following new paragraph:

      ‘(3) ‘biennium’ has the meaning given to such term in paragraph (11) of section 3 of the Congressional Budget and Impoundment Control Act of 1974 (2 U.S.C. 622(11)).’.

    (b) BUDGET CONTENTS AND SUBMISSION TO THE CONGRESS-

      (1) SCHEDULE- The matter preceding paragraph (1) in section 1105(a) of title 31, United States Code, is amended to read as follows:

    ‘(a) On or before the first Monday in February of each odd-numbered year (or, if applicable, as provided by section 300(b) of the Congressional Budget Act of 1974), beginning with the One Hundred Ninth Congress, the President shall transmit to the Congress, the budget for the biennium beginning on October 1 of such calendar year. The budget transmitted under this subsection shall include a budget message and summary and supporting information. The President shall include in each budget the following:’.

      (2) EXPENDITURES- Section 1105(a)(5) of title 31, United States Code, is amended by striking ‘the fiscal year for which the budget is submitted and the 4 fiscal years after that year’ and inserting ‘each fiscal year in the biennium for which the budget is submitted and in the succeeding 4 years’.

      (3) RECEIPTS- Section 1105(a)(6) of title 31, United States Code, is amended by striking ‘the fiscal year for which the budget is submitted and the 4 fiscal years after that year’ and inserting ‘each fiscal year in the biennium for which the budget is submitted and in the succeeding 4 years’.

      (4) BALANCE STATEMENTS- Section 1105(a)(9)(C) of title 31, United States Code, is amended by striking ‘the fiscal year’ and inserting ‘each fiscal year in the biennium’.

      (5) GOVERNMENT FUNCTIONS AND ACTIVITIES- Section 1105(a)(12) of title 31, United States Code, is amended in subparagraph (A), by striking ‘the fiscal year’ and inserting ‘each fiscal year in the biennium’.

      (6) ALLOWANCES- Section 1105(a)(13) of title 31, United States Code, is amended by striking ‘the fiscal year’ and inserting ‘each fiscal year in the biennium’.

      (7) ALLOWANCES FOR UNANTICIPATED AND UNCONTROLLABLE EXPENDITURES- Section 1105(a)(14) of title 31, United States Code, is amended by striking ‘that year’ and inserting ‘each fiscal year in the biennium for which the budget is submitted’.

      (8) TAX EXPENDITURES- Section 1105(a)(16) of title 31, United States Code, is amended by striking ‘the fiscal year’ and inserting ‘each fiscal year in the biennium’.

      (9) ESTIMATES FOR FUTURE YEARS- Section 1105(a)(17) of title 31, United States Code, is amended--

        (A) by striking ‘the fiscal year following the fiscal year’ and inserting ‘each fiscal year in the biennium following the biennium’;

        (B) by striking ‘that following fiscal year’ and inserting ‘each such fiscal year’; and

        (C) by striking ‘fiscal year before the fiscal year’ and inserting ‘biennium before the biennium’.

      (10) PRIOR YEAR OUTLAYS- Section 1105(a)(18) of title 31, United States Code, is amended--

        (A) by striking ‘the prior fiscal year,’ and inserting ‘each of the 2 most recently completed fiscal years,’;

        (B) by striking ‘for that year’ and inserting ‘with respect to those fiscal years’; and

        (C) by striking ‘in that year’ and inserting ‘in those fiscal years’.

      (11) PRIOR YEAR RECEIPTS- Section 1105(a)(19) of title 31, United States Code, is amended--

        (A) by striking ‘the prior fiscal year’ and inserting ‘each of the 2 most recently completed fiscal years’;

        (B) by striking ‘for that year’ and inserting ‘with respect to those fiscal years’; and

        (C) by striking ‘in that year’ each place it appears and inserting ‘in those fiscal years’.

    (c) ESTIMATED EXPENDITURES OF LEGISLATIVE AND JUDICIAL BRANCHES- Section 1105(b) of title 31, United States Code, is amended by striking ‘each year’ and inserting ‘each even-numbered year’.

    (d) RECOMMENDATIONS TO MEET ESTIMATED DEFICIENCIES- Section 1105(c) of title 31, United States Code, is amended--

      (1) by striking ‘the fiscal year for’ the first place it appears and inserting ‘each fiscal year in the biennium for’;

      (2) by striking ‘the fiscal year for’ the second place it appears and inserting ‘each fiscal year of the biennium, as the case may be,’; and

      (3) by striking ‘that year’ and inserting ‘for each year of the biennium’.

    (e) CAPITAL INVESTMENT ANALYSIS- Section 1105(e)(1) of title 31, United States Code, is amended by striking ‘ensuing fiscal year’ and inserting ‘biennium to which such budget relates’.

    (f) SUPPLEMENTAL BUDGET ESTIMATES AND CHANGES-

      (1) IN GENERAL- Section 1106(a) of title 31, United States Code, is amended--

        (A) in the matter preceding paragraph (1), by--

          (i) inserting ‘and before February 15 of each even-numbered year’ after ‘Before July 16 of each year’; and

          (ii) striking ‘fiscal year’ and inserting ‘biennium’;

        (B) in paragraph (1), by striking ‘that fiscal year’ and inserting ‘each fiscal year in such biennium’;

        (C) in paragraph (2), by striking ‘4 fiscal years following the fiscal year’ and inserting ‘4 fiscal years following the biennium’; and

        (D) in paragraph (3), by striking ‘fiscal year’ and inserting ‘biennium’.

      (2) CHANGES- Section 1106(b) of title 31, United States Code, is amended by--

        (A) striking ‘the fiscal year’ and inserting ‘each fiscal year in the biennium’; and

        (B) inserting ‘and before February 15 of each even-numbered year’ after ‘Before July 16 of each year’.

    (g) CURRENT PROGRAMS AND ACTIVITIES ESTIMATES-

      (1) THE PRESIDENT- Section 1109(a) of title 31, United States Code, is amended--

        (A) by striking ‘On or before the first Monday after January 3 of each year (on or before February 5 in 1986)’ and inserting ‘At the same time the budget required by section 1105 is submitted for a biennium’; and

        (B) by striking ‘the following fiscal year’ and inserting ‘each fiscal year of such period’.

      (2) JOINT ECONOMIC COMMITTEE- Section 1109(b) of title 31, United States Code, is amended by striking ‘March 1 of each year’ and inserting ‘within 6 weeks of the President’s budget submission for each odd-numbered year (or, if applicable, as provided by section 300(b) of the Congressional Budget Act of 1974)’.

    (h) YEAR-AHEAD REQUESTS FOR AUTHORIZING LEGISLATION- Section 1110 of title 31, United States Code, is amended by--

      (1) striking ‘May 16’ and inserting ‘March 31’; and

      (2) striking ‘year before the year in which the fiscal year begins’ and inserting ‘calendar year preceding the calendar year in which the biennium begins’.

SEC. 116. TWO-YEAR APPROPRIATIONS; TITLE AND STYLE OF APPROPRIATION ACTS.

    Section 105 of title 1, United States Code, is amended to read as follows:

‘Sec. 105. Title and style of appropriations Acts

    ‘(a) The style and title of all Acts making appropriations for the support of the Government shall be as follows: ‘An Act making appropriations (here insert the object) for each fiscal year in the biennium of fiscal years (here insert the fiscal years of the biennium).’.

    ‘(b) All Acts making regular appropriations for the support of the Government shall be enacted for a biennium and shall specify the amount of appropriations provided for each fiscal year in such period.

    ‘(c) For purposes of this section, the term ‘biennium’ has the same meaning as in section 3(11) of the Congressional Budget and Impoundment Control Act of 1974 (2 U.S.C. 622(11)).’.

SEC. 117. MULTIYEAR AUTHORIZATIONS.

    (a) IN GENERAL- Title III of the Congressional Budget Act of 1974 is amended by adding at the end the following new section:

‘MULTIYEAR AUTHORIZATIONS OF APPROPRIATIONS

    ‘SEC. 316. (a) POINT OF ORDER- (1)(A) It shall not be in order in the House of Representatives or the Senate to consider any measure that contains a specific authorization of appropriations for any purpose unless the measure includes such a specific authorization of appropriations for that purpose for not less than each fiscal year in one or more bienniums.

    ‘(B) For purposes of this paragraph, a specific authorization of appropriations is an authorization for the enactment of an amount of appropriations or amounts not to exceed an amount of appropriations (whether stated as a sum certain, as a limit, or as such sums as may be necessary) for any purpose for a fiscal year.

    ‘(2) Paragraph (1) does not apply with respect to an authorization of appropriations for a single fiscal year for any program, project, or activity if the measure containing that authorization includes a provision expressly stating the following: ‘Congress finds that no authorization of appropriation will be required for [Insert name of applicable program, project, or activity] for any subsequent fiscal year.’.

    ‘(3) For purposes of this section, the term ‘measure’ means a bill, joint resolution, amendment, motion, or conference report’.

    (b) AMENDMENT TO TABLE OF CONTENTS- The table of contents set forth in section 1(b) of the Congressional Budget and Impoundment Control Act of 1974 is amended by adding after the item relating to section 315 the following new item:

      ‘Sec. 316. Multiyear authorizations of appropriations.’.

SEC. 118. GOVERNMENT STRATEGIC AND PERFORMANCE PLANS ON A BIENNIAL BASIS.

    (a) STRATEGIC PLANS- Section 306 of title 5, United States Code, is amended--

      (1) in subsection (a), by striking ‘September 30, 1997’ and inserting ‘September 30, 2003’;

      (2) in subsection (b)--

        (A) by striking ‘at least every three years’ and all that follows thereafter and inserting ‘at least every 4 years, except that strategic plans submitted by September 30, 2003, shall be updated and revised by September 30, 2006’; and

        (B) by striking ‘five years forward’ and inserting ‘six years forward’; and

      (3) in subsection (c), by inserting a comma after ‘section’ the second place it appears and adding ‘including a strategic plan submitted by September 30, 2003, meeting the requirements of subsection (a)’.

    (b) BUDGET CONTENTS AND SUBMISSION TO CONGRESS- Paragraph (28) of section 1105(a) of title 31, United States Code, is amended by striking ‘beginning with fiscal year 1999, a’ and inserting ‘beginning with fiscal year 2006, a biennial’.

    (c) PERFORMANCE PLANS- Section 1115 of title 31, United States Code, is amended--

      (1) in subsection (a)--

        (A) in the matter before paragraph (1)--

          (i) by striking ‘section 1105(a)(29)’ and inserting ‘section 1105(a)(28)’; and

          (ii) by striking ‘an annual’ and inserting ‘a biennial’;

        (B) in paragraph (1) by inserting after ‘program activity’ the following: ‘for both years 1 and 2 of the biennial plan’;

        (C) in paragraph (5) by striking ‘and’ after the semicolon,

        (D) in paragraph (6) by striking the period and inserting a semicolon; and inserting ‘and’ after the inserted semicolon; and

        (E) by adding after paragraph (6) the following:

      ‘(7) cover each fiscal year of the biennium beginning with the first fiscal year of the next biennial budget cycle.’;

      (2) in subsection (d) by striking ‘annual’ and inserting ‘biennial’; and

      (3) in paragraph (6) of subsection (f) by striking ‘annual’ and inserting ‘biennial’.

    (d) MANAGERIAL ACCOUNTABILITY AND FLEXIBILITY- Section 9703 of title 31, United States Code, relating to managerial accountability, is amended--

      (1) in subsection (a)--

        (A) in the first sentence by striking ‘annual’; and

        (B) by striking ‘section 1105(a)(29)’ and inserting ‘section 1105(a)(28)’;

      (2) in subsection (e)--

        (A) in the first sentence by striking ‘one or’ before ‘two years’;

        (B) in the second sentence by striking ‘a subsequent year’ and inserting ‘for a subsequent 2-year period’; and

        (C) in the third sentence by striking ‘three’ and inserting ‘four’.

    (e) STRATEGIC PLANS- Section 2802 of title 39, United States Code, is amended--

      (1) in subsection (a), by striking ‘September 30, 1997’ and inserting ‘September 30, 2003’;

      (2) in subsection (b), by striking ‘at least every three years’ and inserting ‘at least every 4 years except that strategic plans submitted by September 30, 2003, shall be updated and revised by September 30, 2006’;

      (3) in subsection (b), by striking ‘five years forward’ and inserting ‘six years forward’; and

      (4) in subsection (c), by inserting a comma after ‘section’ the second place it appears and inserting ‘including a strategic plan submitted by September 30, 2003, meeting the requirements of subsection (a)’.

    (f) PERFORMANCE PLANS- Section 2803(a) of title 39, United States Code, is amended--

      (1) in the matter before paragraph (1), by striking ‘an annual’ and inserting ‘a biennial’;

      (2) in paragraph (1), by inserting after ‘program activity’ the following: ‘for both years 1 and 2 of the biennial plan’;

      (3) in paragraph (5), by striking ‘and’ after the semicolon;

      (4) in paragraph (6), by striking the period and inserting ‘; and’; and

      (5) by adding after paragraph (6) the following:

      ‘(7) cover each fiscal year of the biennium beginning with the first fiscal year of the next biennial budget cycle.’.

    (g) COMMITTEE VIEWS OF PLANS AND REPORTS- Section 301(d) of the Congressional Budget Act (2 U.S.C. 632(d)) is amended by adding at the end ‘Each committee of the Senate or the House of Representatives shall review the strategic plans, performance plans, and performance reports, required under section 306 of title 5, United States Code, and sections 1115 and 1116 of title 31, United States Code, of all agencies under the jurisdiction of the committee. Each committee may provide its views

on such plans or reports to the Committee on the Budget of the applicable House.’.

    (h) EFFECTIVE DATE-

      (1) IN GENERAL- The amendments made by this section shall take effect on March 1, 2005.

      (2) AGENCY ACTIONS- Effective on and after the date of enactment of this Act, each agency shall take such actions as necessary to prepare and submit any plan or report in accordance with the amendments made by it.

SEC. 119. BIENNIAL APPROPRIATION BILLS.

    (a) IN THE HOUSE OF REPRESENTATIVES- (1) Clause 2(a) of rule XXI of the Rules of the House of Representatives is amended by adding at the end the following new subparagraph:

    ‘(3)(A) Except as provided by subdivision (B), an appropriation may not be reported in a general appropriation bill (other than a supplemental appropriation bill), and may not be in order as an amendment thereto, unless it provides new budget authority or establishes a level of obligations under contract authority for each fiscal year of a biennium.

    ‘(B) Subdivision (A) does not apply with respect to an appropriation for a single fiscal year for any program, project, or activity if the bill or amendment thereto containing that appropriation includes a provision expressly stating the following: ‘Congress finds that no additional funding beyond one fiscal year will be required and the [Insert name of applicable program, project, or activity] will be completed or terminated after the amount provided has been expended.’.

    ‘(C) For purposes of paragraph (b), the statement set forth in subdivision (B) with respect to an appropriation for a single fiscal year for any program, project, or activity may be included in a general appropriation bill or amendment thereto.’.

    (2) Clause 5(b)(1) of rule XXII of the House of Representatives is amended by striking ‘or (c)’ and inserting ‘or (3) or 2(c)’.

    (b) IN THE SENATE- (1) Title III of the Congressional Budget Act of 1974 (2 U.S.C. 631 et seq.) (as amended by section 117) is further amended by adding at the end the following:

‘CONSIDERATION OF BIENNIAL APPROPRIATION BILLS

    ‘SEC. 317. It shall not be in order in the Senate in any odd-numbered year to consider any regular appropriation bill providing new budget authority or a limitation on obligations under the jurisdiction of the Committee on Appropriations for only the first fiscal year of a biennium, unless the program, project, or activity for which the new budget authority or obligation limitation is provided will require no additional authority beyond one year and will be completed or terminated after the amount provided has been expended.’.

    (2) The table of contents set forth in section 1(b) of the Congressional Budget and Impoundment Control Act of 1974 is amended by adding after the item relating to section 316 the following new item:

      ‘Sec. 317. Consideration of biennial appropriation bills.’.

SEC. 120. ASSISTANCE BY FEDERAL AGENCIES TO STANDING COMMITTEES OF THE SENATE AND THE HOUSE OF REPRESENTATIVES.

    (a) INFORMATION REGARDING AGENCY APPROPRIATIONS REQUESTS- To assist each standing committee of the House of Representatives and the Senate in carrying out its responsibilities, the head of each Federal agency which administers the laws or parts of laws under the jurisdiction of such committee shall provide to such committee such studies, information, analyses, reports, and assistance as may be requested by the chairman and ranking minority member of the committee.

    (b) INFORMATION REGARDING AGENCY PROGRAM ADMINISTRATION- To assist each standing committee of the House of Representatives and the Senate in carrying out its responsibilities, the head of any agency shall furnish to such committee documentation, containing information received, compiled, or maintained by the agency as part of the operation or administration of a program, or specifically compiled pursuant to a request in support of a review of a program, as may be requested by the chairman and ranking minority member of such committee.

    (c) SUMMARIES BY COMPTROLLER GENERAL- Within thirty days after the receipt of a request from a chairman and ranking minority member of a standing committee having jurisdiction over a program being reviewed and studied by such committee under this section, the Comptroller General of the United States shall furnish to such committee summaries of any audits or reviews of such program which the Comptroller General has completed during the preceding six years.

    (d) CONGRESSIONAL ASSISTANCE- Consistent with their duties and functions under law, the Comptroller General of the United States, the Director of the Congressional Budget Office, and the Director of the Congressional Research Service shall continue to furnish (consistent with established protocols) to each standing committee of the House of Representatives or the Senate such information, studies, analyses, and reports as the chairman and ranking minority member may request to assist the committee in conducting reviews and studies of programs under this section.

SEC. 121. REPORT ON TWO-YEAR FISCAL PERIOD.

    Not later than 180 days after the date of enactment of this Act, the Director of the Office of Management and Budget shall--

      (1) determine the impact and feasibility of changing the definition of a fiscal year and the budget process based on that definition to a 2-year fiscal period with a biennial budget process based on the 2-year period; and

      (2) report the findings of the study to the Committees on the Budget of the House of Representatives and the Senate and the Committee on Rules of the House of Representatives.

SEC. 122. SPECIAL TRANSITION PERIOD FOR THE 108TH CONGRESS.

    (a) PRESIDENT’S BUDGET SUBMISSION FOR FISCAL YEAR 2004- The budget submission of the President pursuant to section 1105(a) of title 31, United States Code, for fiscal year 2004 shall include the following:

      (1) An identification of the budget accounts for which an appropriation should be made for each fiscal year of the fiscal year 2004-2005 biennium.

      (2) Budget authority that should be provided for each such fiscal year for the budget accounts identified under paragraph (1).

    (b) REVIEW AND RECOMMENDATIONS OF THE COMMITTEES ON APPROPRIATIONS- The Committee on Appropriations of the House of Representatives and the Senate shall review the items included pursuant to subsection (a) in the budget submission of the President for fiscal year 2004 and include its recommendations thereon in its views and estimates made under section 301(d) of the Congressional Budget Act of 1974 within 6 weeks of that budget submission.

    (c) ACTIONS BY THE COMMITTEES ON THE BUDGET- (1) The Committee on the Budget of the House of Representatives and the Senate shall review the items included pursuant to subsection (a) in the budget submission of the President for fiscal year 2004 and the recommendations submitted by the Committee on Appropriations of its House pursuant to subsection (b) included in its views and estimates made under section 301(d) of the Congressional Budget Act of 1974.

    (2) The report of the Committee on the Budget of each House accompanying the concurrent resolution on the budget for fiscal year 2004 and the joint explanatory statement of managers accompanying such resolution shall also include allocations to the Committee on Appropriations of its House of total new budget authority and total outlays (which shall be deemed to be made pursuant to section 302(a) of the Congressional Budget Act of 1974 for purposes of budget enforcement under section 302(f)) for fiscal year 2005 from which the Committee on Appropriations may report regular appropriation bills for fiscal year 2004 that include funding for certain accounts for each of fiscal years 2004 and 2005.

    (3) The report of the Committee on the Budget of each House accompanying the concurrent resolution on the budget for fiscal year 2004 and the joint explanatory statement of managers accompanying such resolution shall also include the assumptions upon which such allocations referred to in paragraph (2) are based.

    (d) GAO PROGRAMMATIC OVERSIGHT ASSISTANCE- (1) During the first session of the 108th Congress the committees of the House of Representatives and the Senate are directed to work with the Comptroller General of the United States to develop plans to transition program authorizations to a multi-year schedule.

    (2) During the 108th Congress, the Comptroller General of the United States will continue to provide assistance to the Congress with respect to programmatic oversight and in particular will assist the committees of Congress in designing and conforming programmatic oversight procedures for the fiscal year 2005-2006 biennium.

    (e) CBO AUTHORIZATION REPORT- On or before January 15, 2004, the Director of the Congressional Budget Office, after consultation with the appropriate committees of the House of Representatives and Senate, shall submit to the Congress a report listing (A) all programs and activities funded during fiscal year 2004 for which authorizations for appropriations have not been enacted for that fiscal year and (B) all programs and activities funded during fiscal year 2004 for which authorizations for appropriations will expire during that fiscal year, fiscal year 2005, or fiscal year 2006.

    (f) President’s Budget Submission for Fiscal Year 2005- The budget submission of the President pursuant to section 1105(a) of title 31, United States Code, for fiscal year 2005 shall include an evaluation of, and recommendations regarding, the transitional biennial budget process for the fiscal year 2004-2005 biennium that was carried out pursuant to this section.

    (g) CBO TRANSITIONAL REPORT- On or before March 31, 2004, the Director of the Congressional Budget Office shall submit to Congress an evaluation of, and recommendations regarding, the transitional biennial budget process for the fiscal year 2004-2005 biennium that was carried out pursuant to this section.

SEC. 123. EFFECTIVE DATE.

    Except as provided by sections 121 and 122, this title and the amendments made by it shall take effect on January 1, 2005, and shall apply to budget resolutions and appropriations for the biennium beginning with fiscal year 2006.

TITLE II--TRUTH IN SPENDING

Subtitle A--Emergency Spending Legislation

SEC. 201. EMERGENCY SPENDING LEGISLATION AND THE BASELINE.

    (a) IN GENERAL- Section 257(a) of the Balanced Budget and Emergency Deficit Control Act of 1985 is amended by inserting ‘, except for emergency appropriations covered by section 251(b)(2)(A) and emergency legislation covered by section 252(e)’ before the period.

    (b) DIRECT SPENDING AND RECEIPTS- Section 257(b)(2) of the Balanced Budget and Emergency Deficit Control Act of 1985 is amended by adding at the end the following new subparagraph:

      ‘(E) Emergency legislation covered by section 252(e) shall not be extended in the baseline.’.

    (c) DISCRETIONARY APPROPRIATIONS- Section 257(c) of the Balanced Budget and Emergency Deficit Control Act of 1985 is amended by adding at the end the following new paragraph:

      ‘(7) Emergency appropriations covered by section 251(b)(2)(A) shall not be extended in the baseline.’.

SEC. 202. OMB EMERGENCY CRITERIA.

    (a) DEFINITION OF EMERGENCY- Section 3 of the Congressional Budget and Impoundment Control Act of 1974 (as amended by section 113(b)) is further amended by adding at the end the following new paragraph:

      ‘(12)(A) The term ‘emergency’ means a situation that--

        ‘(i) requires new budget authority and outlays (or new budget authority and the outlays flowing therefrom) for the prevention or mitigation of, or response to, loss of life or property, or a threat to national security; and

        ‘(ii) is unanticipated.

      ‘(B) As used in subparagraph (A), the term ‘unanticipated’ means that the underlying situation is--

        ‘(i) sudden, which means quickly coming into being or not building up over time;

        ‘(ii) urgent, which means a pressing and compelling need requiring immediate action;

        ‘(iii) unforeseen, which means not predicted or anticipated as an emerging need; and

        ‘(iv) temporary, which means not of a permanent duration.’.

    (b) CONFORMING AMENDMENT- Section 250(c) of the Balanced Budget and Emergency Deficit Control Act of 1985 is amended by adding at the end the following new paragraph:

      ‘(20) The term ‘emergency’ has the meaning given to such term in section 3 of the Congressional Budget and Impoundment Control Act of 1974.’.

SEC. 203. POINT OF ORDER TO ENFORCE DEFINITION OF EMERGENCY.

    (a) IN GENERAL- Section 312 of the Congressional Budget Act of 1974 is amended by adding at the end the following new subsection:

    ‘(g) It shall not be in order in the House of Representatives or in the Senate to consider any bill or joint resolution, or an amendment thereto or a conference report thereon, which carries an emergency designation pursuant to section 251(b)(2)(A) or section 252(e) of the Balanced Budget and Emergency Deficit Control Act of 1985.’.

    (b) WAIVERS AND APPEALS IN THE SENATE- Sections 904(c)(2) and 904(d)(3) are amended by striking ‘, and 312(c)’ and by inserting ‘312(c), and 312(g)’.

Subtitle B--The Byrd Rule

SEC. 211. LIMITATION ON BYRD RULE.

    (a) PROTECTION OF CONFERENCE REPORTS- Section 313 of the Congressional Budget Act of 1974 is amended--

      (1) in subsection (b)(1), by striking subparagraph (E) through the semicolon at the end thereof and by redesignating subparagraph (F) as subparagraph (E);

      (2) in subsection (c), by striking ‘and again upon the submission of a conference report on such a reconciliation bill or resolution,’;

      (3) by striking subsection (d);

      (4) by redesignating subsection (e) as subsection (d); and

      (5) in subsection (e), as redesignated--

        (A) by striking ‘, motion, or conference report’ the first place it appears and inserting ‘, or motion’; and

        (B) by striking ‘, motion, or conference report’ the second and third places it appears and inserting ‘or motion’.

    (b) CONFORMING AMENDMENT- The first sentence of section 312(e) of the Congressional Budget Act of 1974 is amended by inserting ‘, except for section 313,’ after ‘Act’.

Subtitle C--Spending Accountability Reserve

SEC. 231. SHORT TITLE.

    This subtitle may be cited as the ‘Spending Accountability Reserve Act of 2002’.

SEC. 232. SPENDING ACCOUNTABILITY RESERVE LEDGER.

    (a) ESTABLISHMENT OF LEDGER- Title III of the Congressional Budget Act of 1974 (as amended by section 119(a)) is further amended by adding at the end the following new section:

‘SPENDING ACCOUNTABILITY RESERVE LEDGER

    ‘SEC. 318. (a) ESTABLISHMENT OF LEDGER- The chairman of the Committee on the Budget of the House of Representatives and the chairman of the Committee on the Budget of the Senate shall each maintain a ledger to be known as the ‘Spending Accountability Reserve Ledger’. The Ledger shall be divided into entries corresponding to the subcommittees of the Committees on Appropriations. Each entry shall consist of three components: the ‘House Reserve Balance’; the ‘Senate Reserve Balance’; and the ‘Joint House-Senate Reserve Balance’.

    ‘(b) COMPONENTS OF LEDGER- Each component in an entry shall consist only of amounts credited to it under subsection (c). No entry of a negative amount shall be made.

    ‘(c) CREDIT OF AMOUNTS TO LEDGER- (1) In the House of Representatives or the Senate, whenever a Member offers an amendment to an appropriation bill to reduce new budget authority in any account, that Member may state the portion of such reduction that shall be--

      ‘(A) credited to the House or Senate Reserve Balance, as applicable; or

      ‘(B) allowed to remain within the applicable section 302(b) suballocation.

    If no such statement is made, the amount of reduction in new budget authority resulting from the amendment shall be credited to the House or Senate Reserve Balance, as applicable, if the amendment is agreed to.

    ‘(2)(A) Except as provided by subparagraph (B), the chairmen of the Committees on the Budget shall, upon the engrossment of any appropriation bill by the House of Representatives and upon the engrossment of that bill by the Senate, credit to the applicable entry balance of that House amounts of new budget authority and outlays equal to the net amounts of reductions in new budget authority and in outlays resulting from amendments agreed to by that House to that bill.

    ‘(B) When computing the net amounts of reductions in new budget authority and in outlays resulting from amendments agreed to by the House of Representatives or the Senate to an appropriation bill, the chairmen of the Committees on the Budget shall only count those portions of such amendments agreed to that were so designated by the Members offering such amendments as amounts to be credited to the House or Senate Reserve Balance, as applicable, or that fall within the last sentence of paragraph (1).

    ‘(3) The chairmen of the Committees on the Budget shall, upon the engrossment of Senate amendments to any appropriation bill, credit to the applicable Joint House-Senate Reserve Balance the amounts of new budget authority and outlays equal to--

      ‘(A) an amount equal to one-half of the sum of (i) the amount of new budget authority in the House Reserve Balance plus (ii) the amount of new budget authority in the Senate Reserve Balance for that bill; and

      ‘(B) an amount equal to one-half of the sum of (i) the amount of outlays in the House Reserve Balance plus (ii) the amount of outlays in the Senate Reserve Balance for that bill.

    ‘(4) CALCULATION OF RESERVE SAVINGS IN SENATE- For purposes of calculating under this section the net amounts of reductions in new budget authority and in outlays resulting from amendments agreed to by the Senate on an appropriation bill, the amendments reported to the Senate by its Committee on Appropriations shall be considered to be part of the original text of the bill.

    ‘(d) DEFINITION- As used in this section, the term ‘appropriation bill’ means any general or special appropriation bill, and any bill or joint resolution making supplemental, deficiency, or continuing appropriations through the end of a fiscal year.

    ‘(e) TALLY DURING HOUSE CONSIDERATION- The chairman of the Committee on the Budget of the House of Representatives shall maintain a running tally of the amendments adopted reflecting increases and decreases budget authority in the bill as reported. This tally shall be available to Members in the House of Representatives during consideration of any appropriations bill by the House.’.

    (b) CONFORMING AMENDMENT- The table of contents set forth in section 1(b) of the Congressional Budget and Impoundment Control Act of 1974 is amended by inserting after the item relating to section 317 the following new item:

      ‘Sec. 318. Spending accountability reserve ledger.’.

SEC. 233. DOWNWARD ADJUSTMENT OF SECTION 302(a) ALLOCATIONS AND SECTION 302(b) SUBALLOCATIONS.

    (a) ALLOCATIONS- Section 302(a) of the Congressional Budget Act of 1974 is amended by adding at the end the following new paragraph:

      ‘(6) ADJUSTMENT OF ALLOCATIONS- Upon the engrossment of Senate amendments to any appropriation bill (as defined in section 318(d)) for a fiscal year, the amounts allocated under paragraph (1) or (2) to the Committee on Appropriations of each House upon the adoption of the most recent joint resolution on the budget for that fiscal year shall be adjusted downward by the amounts credited to the applicable Joint House-Senate Reserve Balance under section 318(c)(2). The revised levels of new budget authority and outlays shall be submitted to each House by the chairman of the Committee on the Budget of that House and shall be printed in the Congressional Record.’.

    (b) SUBALLOCATIONS- Section 302(b) of the Congressional Budget Act of 1974 is amended by adding at the end the following new sentence: ‘Whenever an adjustment is made under subsection (a)(6) to an allocation under that subsection, the Committee on Appropriations of each House shall make downward adjustments in the most recent suballocations of new budget authority and outlays under this subparagraph to the appropriate subcommittees of that committee in the total amounts of those adjustments under section 318(c)(2). The revised suballocations shall be submitted to each House by the chairman of the Committee on Appropriations of that House and shall be printed in the Congressional Record.’.

SEC. 234. PERIODIC REPORTING OF LEDGER STATEMENTS.

    Section 308(b)(1) of the Congressional Budget Act of 1974 is amended by adding at the end the following new sentence: ‘Such reports shall also include an up-to-date tabulation of the amounts contained in the ledger and each entry established by section 318(a).’.

SEC. 235. DOWNWARD ADJUSTMENT OF DISCRETIONARY SPENDING LIMITS.

    The discretionary spending limits for new budget authority and outlays for any fiscal year set forth in section 251(c) of the Balanced Budget and Emergency Deficit Control Act of 1985, shall be reduced by the amounts set forth in the final regular appropriation bill for that fiscal year or joint resolution making continuing appropriations through the end of that fiscal year. Those amounts shall be the sums of the Joint House-Senate Reserve Balances for that fiscal year, as calculated under section 302(a)(6) of the Congressional Budget Act of 1974. That bill or joint resolution shall contain the following statement of law: ‘As required by section 302(a)(6) of the Congressional Budget Act of 1974, for fiscal year [insert appropriate fiscal year] and each outyear, the adjusted discretionary spending limit for new budget authority shall be reduced by $ [insert appropriate amount of reduction] and the adjusted discretionary limit for outlays shall be reduced by $ [insert appropriate amount of reduction] for the fiscal year and each outyear.’. Notwithstanding section 904(c) of the Congressional Budget Act of 1974, section 306 as it applies to this statement shall not apply. This adjustment shall be reflected in reports under sections 254(e) and 254(f) of the Balanced Budget and Emergency Deficit Control Act of 1985.

SEC. 236. REDUCTION IN REVENUES.

    The level of total revenues set forth in the concurrent resolution on the budget shall be reduced by the amounts set forth in the final regular appropriation bill for that fiscal year or joint resolution making continuing appropriations through the end of that fiscal year shall be reduced by the amount by which the discretionary spending limit for outlays is reduced for that fiscal year pursuant to section 235. At the same time, such amount shall be credited to the pay-as-you-go scorecard pursuant to section 252(d) of the Balanced Budget and Emergency Deficit Control Act of 1985 for purposes receipts legislation only. This adjustment shall be reflected in reports under sections 254(e) and 254(f) of such Act. To the extent that the amount so credited is not used for purposes of receipts legislation enacted during such fiscal year, it shall be removed from such scorecard.

Subtitle D--Enhanced Rescissions of Budget Authority Identified by the President as Wasteful Spending

SEC. 251. SHORT TITLE.

    This title may be cited as the ‘Enhanced Rescissions Act of 2002’.

SEC. 252. ENHANCED CONSIDERATION OF CERTAIN PROPOSED RESCISSIONS.

    (a) IN GENERAL- Part B of title X of the Congressional Budget and Impoundment Control Act of 1974 (2 U.S.C. 681 et seq.) is amended by redesignating sections 1013 through 1017 as sections 1014 through 1018, respectively, and by inserting after section 1012 the following new section:

‘ENHANCED CONSIDERATION OF CERTAIN PROPOSED RESCISSIONS

    ‘SEC. 1013. (a) PROPOSED RESCISSION OF BUDGET AUTHORITY IDENTIFIED AS WASTEFUL SPENDING- The President may propose, at the time and in the manner

provided in subsection (b), the rescission of any budget authority provided in an appropriation Act that he identifies as wasteful spending. If the President proposes a rescission of budget authority, he may also propose to reduce the appropriate discretionary spending limits for new budget authority and outlays flowing therefrom set forth in section 251(c) of the Balanced Budget and Emergency Deficit Control Act of 1985 by an amount that does not exceed the amount of the proposed rescission. Funds made available for obligation under this procedure may not be proposed for rescission again under this section.

    ‘(b) TRANSMITTAL OF SPECIAL MESSAGE-

      ‘(1) The President may transmit to Congress a special message proposing to rescind amounts of budget authority and include with that special message a draft bill that, if enacted, would only rescind that budget authority unless the President also proposes a reduction in the appropriate discretionary spending limits set forth in section 251(c) of the Balanced Budget and Emergency Deficit Control Act of 1985. That bill shall clearly identify the amount of budget authority that is proposed to be rescinded for each program, project, or activity to which that budget authority relates.

      ‘(2) In the case of an appropriation Act that includes accounts within the jurisdiction of more than one subcommittee of the Committee on Appropriations, the President in proposing to rescind budget authority under this section shall send a separate special message and accompanying draft bill for accounts within the jurisdiction of each subcommittee.

      ‘(3) Each special message shall specify, with respect to the budget authority proposed to be rescinded, the following:

        ‘(A) The amount of budget authority which he proposes to be rescinded.

        ‘(B) Any account, department, or establishment of the Government to which such budget authority is available for obligation, and the specific project or governmental functions involved.

        ‘(C) The reasons why the budget authority should be rescinded, including why he considers it to be wasteful spending.

        ‘(D) To the maximum extent practicable, the estimated fiscal, economic, and budgetary effect (including the effect on outlays and receipts in each fiscal year) of the proposed rescission.

        ‘(E) All facts, circumstances, and considerations relating to or bearing upon the proposed rescission and the decision to effect the proposed rescission, and to the maximum extent practicable, the estimated effect of the proposed rescission upon the objects, purposes, and programs for which the budget authority is provided.

        ‘(F) A reduction in the appropriate discretionary spending limits set forth in section 251(c) of the Balanced Budget and Emergency Deficit Control Act of 1985, if proposed by the President.

    ‘(c) PROCEDURES FOR EXPEDITED CONSIDERATION-

      ‘(1)(A) Before the close of the second legislative day of the House of Representatives after the date of receipt of a special message transmitted to Congress under subsection (b), the majority leader or minority leader of the House of Representatives shall introduce (by request) the draft bill accompanying that special message. If the bill is not introduced as provided in the preceding sentence, then, on the third legislative day of the House of Representatives after the date of receipt of that special message, any Member of that House may introduce the bill.

      ‘(B) The bill shall be referred to the Committee on Appropriations. The committee shall report the bill without substantive revision and with or without recommendation. The bill shall be reported not later than the seventh legislative day of that House after the date of receipt of that special message. If that committee fails to report the bill within that period, that committee shall be automatically discharged from consideration of the bill, and the bill shall be placed on the appropriate calendar.

      ‘(C) A vote on final passage of the bill shall be taken in the House of Representatives on or before the close of the 10th legislative day of that House after the date of the introduction of the bill in that House. If the bill is passed, the Clerk of the House of Representatives shall cause the bill to be engrossed, certified, and transmitted to the Senate within one calendar day of the day on which the bill is passed.

      ‘(2)(A) A motion in the House of Representatives to proceed to the consideration of a bill under this section shall be highly privileged and not debatable. An amendment to the motion shall not be in order, nor shall it be in order to move to reconsider the vote by which the motion is agreed to or disagreed to.

      ‘(B) Debate in the House of Representatives on a bill under this section shall not exceed 4 hours, which shall be divided equally between those favoring and those opposing the bill. A motion further to limit debate shall not be debatable. It shall not be in order to move to recommit a bill under this section or to move to reconsider the vote by which the bill is agreed to or disagreed to.

      ‘(C) Appeals from decisions of the Chair relating to the application of the Rules of the House of Representatives to the procedure relating to a bill under this section shall be decided without debate.

      ‘(D) Except to the extent specifically provided in the preceding provisions of this subsection, consideration of a bill under this section shall be governed by the Rules of the House of Representatives. It shall not be in order in the House of Representatives to consider any rescission bill introduced pursuant to the provisions of this section under a suspension of the rules or under a special rule.

      ‘(3) A bill transmitted to the Senate pursuant to paragraph (1)(D) shall be referred to its Committee on Appropriations. That committee shall report the bill without substantive revision and with or without recommendation. The bill shall be reported not later than the seventh legislative day of the Senate after it receives the bill. A committee failing to report the bill within such period shall be automatically discharged from consideration of the bill, and the bill shall be placed upon the appropriate calendar.

      ‘(4)(A) A motion in the Senate to proceed to the consideration of a bill under this section shall be privileged and not debatable. An amendment to the motion shall not be in order, nor shall it be in order to move to reconsider the vote by which the motion is agreed to or disagreed to.

      ‘(B) Debate in the Senate on a bill under this section, and all debatable motions and appeals in connection therewith (including debate pursuant to subparagraph (C)), shall not exceed 10 hours. The time shall be equally divided between, and controlled by, the majority leader and the minority leader or their designees.

      ‘(C) Debate in the Senate or any debatable motion or appeal in connection with a bill under this section shall be limited to not more than 1 hour, to be equally divided between, and controlled by, the mover and the manager of the bill, except that in the event the manager of the bill is in favor of any such motion or appeal, the time in opposition thereto, shall be controlled by the minority leader or his designee. Such leaders, or either of them, may, from time under their control of the passage of a bill, allot additional time to any Senator during the consideration of any debatable motion or appeal.

      ‘(D) A motion in the Senate to further limit debate on a bill under this section is not debatable. A motion to recommit a bill under this section is not in order.

    ‘(d) AMENDMENT AND DIVISIONS PROHIBITED- No amendment to a bill considered under this section shall be in order in either the House of Representatives or the Senate. It shall not be in order to demand a division of the question in the House of Representatives (or in a Committee of the Whole) or in the Senate. No motion to suspend the application of this subsection shall be in order in either House, nor shall it be in order in either House to suspend the application of this subsection by unanimous consent.

    ‘(e) REQUIREMENT TO MAKE AVAILABLE FOR OBLIGATION- Any amount of budget authority proposed to be rescinded in a special message transmitted to Congress under subsection (b) shall be made available for obligation on the day after the date on which either House rejects the bill transmitted with that special message.

    ‘(f) DEFINITIONS- For purposes of this section:

      ‘(1) The term ‘appropriation Act’ means any general or special appropriation Act, and any Act or joint resolution making supplemental, deficiency, or continuing appropriations.

      ‘(2) The term ‘legislative day’ means, with respect to either House of Congress, any day of session.

      ‘(3) The term ‘rescind’ means, with respect to an appropriation Act, to reduce the amount of budget authority appropriated in that Act, and reducing budget authority shall include reducing obligation limitations set forth in that Act.’.

    (b) EXERCISE OF RULEMAKING POWERS- Section 904 of the Congressional Budget Act of 1974 (2 U.S.C. 621 note) is amended--

      (1) in subsection (a), by striking ‘and 1017’ and inserting ‘1012, and 1017’; and

      (2) in subsection (d), by striking ‘section 1017’ and inserting ‘sections 1012 and 1017’.

    (c) CONFORMING AMENDMENTS-

      (1) Section 1011 of the Congressional Budget Act of 1974 (2 U.S.C. 682(5)) is amended by repealing paragraphs (3) and (5) and by redesignating paragraph (4) as paragraph (3).

      (2) Section 1014 of such Act (2 U.S.C. 685) is amended--

        (A) in subsection (b)(1), by striking ‘or the reservation’; and

        (B) in subsection (e)(1), by striking ‘or a reservation’ and by striking ‘or each such reservation’.

      (3) Section 1015(a) of such Act (2 U.S.C. 686) is amended by striking ‘is to establish a reserve or’, by striking ‘the establishment of such a reserve or’, and by striking ‘reserve or’ each other place it appears.

      (4) Section 1017 of such Act (2 U.S.C. 687) is amended--

        (A) in subsection (a), by striking ‘rescission bill introduced with respect to a special message or’;

        (B) in subsection (b)(1), by striking ‘rescission bill or’, by striking ‘bill or’ the second place it appears, by striking ‘rescission bill with respect to the same special message or’, and by striking ‘, and the case may be,’;

        (C) in subsection (b)(2), by striking ‘bill or’ each place it appears;

        (D) in subsection (c), by striking ‘rescission’ each place it appears and by striking ‘bill or’ each place it appears;

        (E) in subsection (d)(1), by striking ‘rescission bill or’ and by striking ‘, and all amendments thereto (in the case of a rescission bill)’;

        (F) in subsection (d)(2)--

          (i) by striking the first sentence;

          (ii) by amending the second sentence to read as follows: ‘Debate on any debatable motion or appeal in connection with an impoundment resolution shall be limited to 1 hour, to be equally divided between, and controlled by, the mover and the manager of the resolution, except that in the event that the manager of the resolution is in favor of any such motion or appeal, the time in opposition thereto shall be controlled by the minority leader or his designee.’;

          (iii) by striking the third sentence; and

          (iv) in the fourth sentence, by striking ‘rescission bill or’ and by striking ‘amendment, debatable motion,’ and by inserting ‘debatable motion’;

        (G) in paragraph (d)(3), by striking the second and third sentences; and

        (H) by striking paragraphs (4), (5), (6), and (7) of paragraph (d).

    (d) CLERICAL AMENDMENTS- The table of sections for subpart B of title X of the Congressional Budget and Impoundment Control Act of 1974 is amended by redesignating the item relating to sections 1014 through 1018 as items 1015 through 1019, respectively, and by inserting after the item relating to section 1012 the following new item:

      ‘Sec. 1013. Enhanced consideration of certain proposed rescissions.’.

Subtitle E--Extension of Discretionary Spending Limits and Paygo

SEC. 261. AMENDMENTS TO SECTIONS 251, 252, AND 275 OF THE BALANCED BUDGET AND EMERGENCY DEFICIT CONTROL ACT OF 1985.

    (a) ADJUSTMENTS TO DISCRETIONARY SPENDING LIMITS- In the matter that precedes subparagraph (A) of section 251(b)(2) of the Balanced Budget and Emergency Deficit Control Act of 1985, strike ‘through 2002’.

    (b) DISCRETIONARY SPENDING LIMIT- Section 251(c) of the Balanced Budget and Emergency Deficit Control Act of 1985 is amended as follows:

      (1) Strike paragraphs (1) through (5) and redesignate paragraph (6) (which relates to fiscal year 2002) as paragraph (1).

      (2) Redesignate paragraph (7) (which relates to fiscal year 2003) as paragraph (2) and in such redesignated paragraph strike subparagraph (A), redesignate subparagraphs (B) and (C) as subparagraphs (C) and (D), respectively, and before subparagraph (C), insert the following new subparagraphs:

        ‘(A) for the discretionary category: $754,900,000,000 in new budget authority and $704,230,000,000 in outlays;’

        ‘(B) for the highway category: $27,728,000,000 in outlays;’.

      (3) Redesignate paragraph (8) as paragraph (3) and in such redesignated paragraph strike ‘with respect to fiscal year 2004’, redesignate the remaining matter as subparagraph (B), and before such redesignated matter insert the following:

      ‘(3) with respect to fiscal year 2004--

        ‘(A) for the discretionary category: $775,020,000,000 in new budget authority and $706,970,000,000 in outlays; and’.

      (4) Redesignate paragraph (9) as paragraph (4) and in such redesignated paragraph strike ‘with respect to fiscal year 2005’, redesignate the remaining matter as subparagraph (B), and before such redesignated matter insert the following:

      ‘(3) with respect to fiscal year 2005--

        ‘(A) for the discretionary category: $801,560,000,000 in new budget authority and $779,810,000,000 in outlays; and’.

      (5) Redesignate paragraph (10) as paragraph (5) and in such redesignated paragraph strike ‘with respect to fiscal year 2006’, redesignate the remaining matter as subparagraph (B), and before such redesignated matter insert the following:

      ‘(5) with respect to fiscal year 2006--

        ‘(A) for the discretionary category: $828,600,000,000 in new budget authority and $793,650,000,000 in outlays; and’.

      (6) Redesignate paragraphs (11) through (16) as paragraphs (7) through (12) and after paragraph (5) insert the following new paragraph:

      ‘(6) with respect to fiscal year 2007 for the discretionary category: $862,500,000,000 in new budget authority and $812,000,000,000 in outlays;’.

    (c) EXTENSION OF PAY-AS-YOU-GO REQUIREMENT- (1) Section 252(a) of the Balanced Budget and Emergency Deficit Control Act of 1985 is amended by striking ‘2002’ and inserting ‘2007’.

    (2) Section 252(b)(1) of such Act is amended by striking ‘2002’ and inserting ‘2007’.

    (d) EXPIRATION- Section 275(b) of the Balanced Budget and Emergency Deficit Control Act of 1985 is amended by striking ‘2002’ and inserting ‘2007’ and by striking ‘2006’ and inserting ‘2011’.

Subtitle F--Paygo Requirements and the On-Budget Surplus

SEC. 271. PAYGO REQUIREMENTS AND THE ON-BUDGET SURPLUS.

    (a) SEQUESTRATION- (1) Section 252(b)(1) of the Balanced Budget and Emergency Deficit Control Act of 1985 is amended by inserting ‘, minus the amount for the budget year, if any, estimated under paragraph (3)’ after ‘as calculated under paragraph (2)’.

    (2) Section 252(b) of such Act is amended by adding at the end the following new paragraph:

      ‘(3) ESTIMATE OF ON-BUDGET SURPLUS IN EXCESS OF SOCIAL SECURITY SURPLUS- OMB estimates for the budget year of the amount (if any) of the budget surplus as set forth in the OMB sequestration preview report as calculated pursuant to section 254(c)(3).’.

    (b) REPORTS- Section 254(c)(3) of the Balanced Budget and Emergency Deficit Control Act of 1985 is amended by adding at the end the following new subparagraph:

        ‘(D) The estimated excess of receipts over outlays for the budget year (if any).’.

Subtitle G--Treatment of Extraneous Appropriations in Omnibus Appropriation Measures

SEC. 281. TREATMENT OF EXTRANEOUS APPROPRIATIONS.

    (a) IN GENERAL- Title III of the Congressional Budget Act of 1974 (as amended by section 232)) is further amended by adding at the end the following new section:

‘TREATMENT OF EXTRANEOUS APPROPRIATIONS IN OMNIBUS APPROPRIATION MEASURES

    ‘SEC. 319. (a) POINT OF ORDER- It shall not be in order in the House of Representatives or the Senate to consider an omnibus appropriation measure, or any amendment thereto or conference report thereon, that appropriates funds for any program, project, or activity that is not within the subject matter jurisdiction of any subcommittee of the Committee on Appropriations of the House of Representatives or Senate, as applicable, with jurisdiction over any regular appropriation bill contained in such measure.

    ‘(b) DEFINITIONS- As used in this section:

      ‘(1) The term ‘omnibus appropriation measure’ means any bill or joint resolution making continuing appropriations for a fiscal year and that is comprised of more than one regular appropriation bill.

      ‘(2) The term ‘regular appropriation bill’ means any annual appropriation bill making appropriations, otherwise making funds available, or granting authority, for any of the following categories of projects and activities:

        ‘(A) Agriculture, rural development, and related agencies programs.

        ‘(B) The Departments of Commerce, Justice, and State, the judiciary, and related agencies.

        ‘(C) The Department of Defense.

        ‘(D) The government of the District of Columbia and other activities chargeable in whole or in part against the revenues of the District.

        ‘(E) The Departments of Labor, Health and Human Services, and Education, and related agencies.

        ‘(F) The Department of Housing and Urban Development, and sundry independent agencies, boards, commissions, corporations, and offices.

        ‘(G) Energy and water development.

        ‘(H) Foreign assistance and related programs.

        ‘(I) The Department of the Interior and related agencies.

        ‘(J) Military construction.

        ‘(K) The Department of Transportation and related agencies.

        ‘(L) The Treasury Department, the U.S. Postal Service, the Executive Office of the President, and certain independent agencies.

        ‘(M) The legislative branch.’.

    (b) CONFORMING AMENDMENT- The table of contents set forth in section 1(b) of the Congressional Budget and Impoundment Control Act of 1974 is amended by inserting after the item relating to section 318 the following new item:

      ‘Sec. 319. Treatment of extraneous appropriations in omnibus appropriation measures.’.

TITLE III--BUDGETING AND MANAGING FOR RESULTS: FULL FUNDING FOR FEDERAL RETIREE COSTS

Subtitle A--Accrual Funding of Pensions and Retirement Pay for Federal Employees and Uniformed Services Personnel

SEC. 301. CIVIL SERVICE RETIREMENT SYSTEM.

    (a) CIVIL SERVICE RETIREMENT AND DISABILITY FUND- Chapter 83 of title 5, United States Code, is amended--

      (1) in section 8331--

        (A) in paragraph (17)--

          (i) by striking ‘normal cost’ and inserting ‘normal cost percentage’; and

          (ii) by inserting ‘and standards (using dynamic assumptions)’ after ‘practice’;

        (B) by amending paragraph (18) to read as follows:

      ‘(18) ‘Fund balance’ means the current net assets of the Fund available for payment of benefits, as determined by the Office in accordance with appropriate accounting standards, but does not include any amount attributable to--

        ‘(A) the Federal Employees’ Retirement System; or

        ‘(B) contributions made under the Federal Employees’ Retirement Contribution Temporary Adjustment Act of 1983 by or on behalf of any individual who became subject to the Federal Employees’ Retirement System;’

        (C) by amending paragraph (19) to read as follows:

      ‘(19) ‘accrued liability’ means the estimated excess of the present value of all benefits payable from the Fund to employees and Members, and former employees and Members, subject to this subchapter, and their survivors, over the present value of deductions to be withheld from the future basic pay of employees and Members currently subject to this subchapter and of future agency contributions to be made in their behalf;’

        (D) in paragraph (27) by striking ‘and’ at the end;

        (E) in paragraph (28) by striking the period at the end and inserting a semicolon; and

        (F) by adding at the end the following paragraphs:

      ‘(29) ‘dynamic assumptions’ means economic assumptions that are used in determining actuarial costs and liabilities of a retirement system and in anticipating the effects of long-term future--

        ‘(A) investment yields;

        ‘(B) increases in rates of basic pay; and

        ‘(C) rates of price inflation; and

      ‘(30) ‘unfunded liability’ means the estimated excess of--

        ‘(A) the actuarial present value of all future benefits payable from the Fund under this subchapter based on the service of current or former employees or Members, over

        ‘(B) the sum of--

          ‘(i) the actuarial present value of deductions to be withheld from the future basic pay of employees and Members currently subject to this chapter pursuant to section 8334;

          ‘(ii) the actuarial present value of the future contributions to be made pursuant to section 8334 with respect to employees and Members currently subject to this subchapter;

          ‘(iii) the Fund balance, as defined in paragraph (18), as of the date the unfunded liability is determined; and

          ‘(iv) any other appropriate amount, as determined by the Office of Personnel Management in accordance with generally accepted actuarial practices and principles.’;

      (2) in section 8334--

        (A) in subsection (a)(1)--

          (i) by striking the last two sentences;

          (ii) by redesignating that subsection, as so amended, as (a)(1)(A); and

          (iii) by adding at the end the following new subparagraphs:

        ‘(B) Except as provided in subparagraph (E), each employing agency having any employees or Members subject to subparagraph (A) shall contribute from amounts available for salaries and expenses an amount equal to the sum of--

          ‘(i) the product of--

            ‘(I) the normal cost percentage, as determined for employees (other than employees covered by clause (ii)), multiplied by

            ‘(II) the aggregate amount of basic pay payable by the agency, for the period involved, to employees (under subclause (I)) who are within such agency; and

          ‘(ii) the product of--

            ‘(I) the normal cost percentage, as determined for Members, Congressional employees, law enforcement officers, firefighters, air traffic controllers, bankruptcy judges, Court of Federal Claims judges, United States magistrates, judges of the United States Court of Appeals for the Armed Forces, members of the Capitol Police, nuclear materials couriers, and members of the Supreme Court Police, multiplied by

            ‘(II) the aggregate amount of basic pay payable by the agency for the period involved, to employees and

Members (under subclause (I)) who are within such agency.

        ‘(C) In determining the normal cost percentage to be applied under subparagraph (B), amounts provided for under subparagraph (A) shall be taken into account.

        ‘(D) Contributions under this paragraph shall be paid--

          ‘(i) in the case of law enforcement officers, firefighters, air traffic controllers, bankruptcy judges, Court of Federal Claims judges, United States magistrates, judges of the United States Court of Appeals for the Armed Forces, members of the Supreme Court Police, nuclear materials couriers and other employees, from the appropriations or fund used to pay such law enforcement officers, firefighters, air traffic controllers, bankruptcy judges, Court of Federal Claims judges, United States magistrates, judges of the United States Court of Appeals for the Armed Forces, members of the Supreme Court Police, nuclear materials couriers and other employees, respectively;

          ‘(ii) in the case of elected officials, from an appropriation or fund available for payment of other salaries of the same office or establishment; and

          ‘(iii) in the case of employees of the legislative branch paid by the Clerk of the House of Representatives, from the contingent fund of the House.

        ‘(E) In the case of the United States Postal Service, the Metropolitan Washington Airports Authority, and the government of the District of Columbia an amount equal to that withheld under subparagraph (A) shall be contributed from the appropriation or fund used to pay the employee.’; and

        (B) in subsection (k)--

          (i) in paragraph (1)--

            (I) in subparagraph (A) by striking ‘the first sentence of subsection (a)(1) of this section’ and inserting ‘subsection (a)(1)(A)’; and

            (II) by amending subparagraph (B) to read as follows:

        ‘(B) the amount of the contribution under subsection (a)(1)(B) shall be the amount which would have been contributed under such subsection if this subsection had not been enacted.’; and

          (ii) in paragraph (2)(C)(iii) by striking ‘the first sentence of subsection (a)(1)’ and inserting ‘subsection (a)(1)(A)’; and

      (3) in section 8348--

        (A) by repealing subsection (f);

        (B) by amending subsection (g) to read as follows:

    ‘(g)(1)(A) Not later than June 30, 2003, the Office of the Actuary shall determine the unfunded liability of the Fund, as of September 30, 2002, attributable to benefits payable under this chapter and make recommendations regarding its liquidation. After considering such recommendations, the Office shall establish an amortization schedule, including a series of annual installments commencing October 1, 2003, which provides for the liquidation of such liability by October 1, 2042.

    ‘(B) The Office shall redetermine the unfunded liability of the Fund as of the close of the fiscal year, for each fiscal year beginning after September 30, 2002, through the fiscal year ending September 30, 2037, and shall establish a new amortization schedule, including a series of annual installments commencing on October 1 of the second subsequent fiscal year, which provides for the liquidation of such liability by October 1, 2042.

    ‘(C) The Office shall redetermine the unfunded liability of the Fund as of the close of the fiscal year for each fiscal year beginning after September 30, 2037, and shall establish a new amortization schedule, including a series of annual installments commencing on October 1 of the second subsequent fiscal year, which provides for the liquidation of such liability over five years.

    ‘(D) Amortization schedules established under this paragraph shall be set in accordance with generally accepted actuarial practices and principles, with interest computed at the rate used in the most recent valuation of the Civil Service Retirement System.

    ‘(2) At the beginning of each fiscal year, beginning on October 1, 2003, the Office shall notify the Secretary of the Treasury of the amount of the first installment under the most recent amortization schedule established under paragraph (1). The Secretary shall credit that amount to the Fund, as a Government contribution, out of any money in the Treasury of the United States not otherwise appropriated.

    ‘(3) For the purpose of carrying out paragraph (1) with respect to any fiscal year, the Office may--

      ‘(A) require the Board of Actuaries of the Civil Service Retirement System to make actuarial determinations and valuations, make recommendations, and maintain records in accordance with section 8347(f); and

      ‘(B) use the latest actuarial determinations and valuations made by such Board of Actuaries.’;

        (C) in subsections (h), (i), and (m) by striking ‘unfunded’ and inserting ‘accrued’ each time it appears; and

        (D) by adding at the end the following new subsection:

    ‘(n) Under regulations prescribed by the Office, the head of an agency may request reconsideration of any amount determined to be payable with respect to such agency under section 8334(a)(1)(B)-(D). Any such request shall be referred to the Board of Actuaries of the Civil Service Retirement System. The Board of Actuaries shall review the computations of the Office and may make any adjustment with respect to any such amount which the Board determines appropriate. A determination by the Board of Actuaries under this subsection shall be final.’.

    (b) GOVERNMENT CONTRIBUTIONS- Section 8423 of title 5, United States Code, is amended--

      (1) in subsection (a)(2) by striking ‘section 8422’ and inserting ‘section 8422(a)’; and

      (2) in subsection (b)(2) by striking ‘equal annual installments’ and inserting ‘annual installments set in accordance with generally accepted actuarial practices and principles’.

SEC. 302. CENTRAL INTELLIGENCE AGENCY RETIREMENT AND DISABILITY SYSTEM.

    The Central Intelligence Agency Retirement Act, Public Law 88-643, (50 U.S.C. 2001 et seq.), 78 Stat. 1043, as amended, is further amended--

      (a) in section 101 (50 U.S.C. 2001)--

        (1) by amending paragraph (5) to read as follows--

      ‘(5) UNFUNDED LIABILITY- The term ‘unfunded liability’ means the estimated excess of--

        ‘(A) the actuarial present value of all future benefits payable from the Fund under title II of this Act based on the service of current or former participants, over

        ‘(B) the sum of--

          ‘(i) the actuarial present value of deductions to be withheld from the future basic pay of participants currently subject to title II of this Act pursuant to section 211;

          ‘(ii) the actuarial present value of the future contributions to be made pursuant to section 211 with respect to participants currently subject to title II of this Act;

          ‘(iii) the Fund balance, as defined in paragraph (4), as of the date the unfunded liability is determined; and

          ‘(iv) any other appropriate amount, as determined by the Director in accordance with generally accepted actuarial practices and principles.’;

        (2) in paragraph (6)--

          (A) by striking ‘normal cost’ and inserting ‘normal cost percentage’; and

          (B) by inserting ‘and standards (using dynamic assumptions)’ after ‘practice’; and

        (3) by adding at the end the following paragraph:

      ‘(10) DYNAMIC ASSUMPTIONS- The term ‘dynamic assumptions’ means economic assumptions that are used in determining actuarial costs and liabilities of a retirement system and in anticipating the effects of long-term future--

        ‘(A) investment yields;

        ‘(B) increases in rates of basic pay; and

        ‘(C) rates of price inflation.’;

      (b) in section 202 (50 U.S.C. 2012) by adding at the end the following: ‘The Fund is appropriated for the payment of benefits as provided by this title.’;

      (c) by amending section 211(a)(2) (50 U.S.C. 2021) to read as follows:

      ‘(2) AGENCY CONTRIBUTIONS- The Agency shall contribute to the Fund the amount computed in a manner similar to that used under section 8334(a) of title 5, United States Code, pursuant to determinations of the normal cost percentage of the Central Intelligence Agency Retirement and Disability System by the Director. Contributions under this paragraph shall be paid from amounts available for salaries and expenses.’; and

      (d) in section 261 (50 U.S.C. 2091)--

        (1) by repealing subsection (c) and (d) and redesignating subsection (e) as subsection (c);

        (2) by amending subsection (c), as redesignated, to read as follows:

    ‘(c)(1) Not later than June 30, 2003, the Director shall cause to be made actuarial valuations of the Fund that determine the unfunded liability of the Fund, as of September 30, 2002, attributable to benefits payable under this title and make recommendations regarding its liquidation. After considering such recommendations, the Director shall establish an amortization schedule, including a series of annual installments commencing October 1, 2003, which provides for the liquidation of such liability by October 1, 2042.

    ‘(2) The Director shall redetermine the unfunded liability of the Fund as of the close of the fiscal year, for each fiscal year beginning after September 30, 2002, through the fiscal year ending September 30, 2037, and shall establish a new amortization schedule, including a series of annual installments commencing on October 1 of the second subsequent fiscal year, which provides for the liquidation of such liability by October 1, 2042.

    ‘(3) The Director shall redetermine the unfunded liability of the Fund as of the close of the fiscal year for each fiscal year beginning after September 30, 2037, and shall establish a new amortization schedule, including a series of annual installments commencing on October 1 of the second subsequent fiscal year, which provides for the liquidation of such liability over five years.

    ‘(4) Amortization schedules established under this subsection shall be set in accordance with generally accepted actuarial practices and principles, with interest computed at the rate used in the most recent valuation of the Civil Service Retirement and Disability System.’; and

        (3) by adding at the end the following new subsection:

    ‘(d) At the beginning of each fiscal year, beginning on October 1, 2003, the Director shall notify the Secretary of the Treasury of the amount of the first installment under the most recent amortization schedule established under subsection (c). The Secretary shall credit that amount to the Fund, as a Government contribution, out of any money in the Treasury of the United States not otherwise appropriated. For the purposes of Section 504 of the National Security Act of 1947, this amount shall be considered authorized.’; and

      (e) by adding at the end of the Central Intelligence Agency Retirement Act (50 U.S.C. 2001 et seq.) the following new section 308:

‘Sec. 308. Full funding of Retiree Costs for Employees Designated under Section 302

    ‘(a) In addition to other government contributions required by law, the Agency shall contribute to the Civil Service Retirement and Disability fund (hereinafter in this section referred to as the ‘Fund’) amounts calculated in accordance with section 8423 of title 5, United States Code, based on the projected number of employees to be

designated pursuant to section 302 of this Act. In addition, the Agency, in a manner similar to that established for employee contributions to the Fund by section 8422 of title 5, United States Code, will contribute an amount equal to the difference between that which would be contributed by the number of employees projected to be designated under section 302 and the amounts that are actually being deducted and contributed from the basic pay of an equal number of employees pursuant to section 8422. The amounts of the Agency’s contributions under this subsection shall be determined by the Director of the Office of Personnel Management, in consultation with the Director, and shall be paid by the Agency from funds available for salaries and expenses. Agency employees designated pursuant to section 302 of this Act shall, commencing with such designation, have deducted from their basic pay the full amount required by section 8422 of title 5, United States Code, and such deductions shall be contributed to the Fund.

    ‘(b)(1) The Director of the Office of Personnel Management, in consultation with the Director, shall determine the total amount of unpaid contributions (government and employee contributions) and interest attributable to the number of individuals employed with the Agency on September 30, 2003, who are projected to be designated under section 302 of this Act, but are not yet designated under that section as of that date. The amount shall be referred to as the section 302 unfunded liability.

    ‘(2) Not later than June 30, 2004, the Director of the Office of Personnel Management, in consultation with the Director, shall establish an amortization schedule, setting forth a series of annual installments commencing September 30, 2004, which provides for the liquidation of the section 302 unfunded liability by September 30, 2011.

    ‘(3) At the end of each fiscal year, beginning on September 30, 2004, the Director shall notify the Secretary of the Treasury of the amount of the annual installment under the amortization schedule established under paragraph (2) of this subsection. Before closing the accounts for that fiscal year, the Secretary shall credit that amount to the Fund, out of any money in the Treasury of the United States not otherwise appropriated.

    ‘(c) Amounts paid by the Agency pursuant to this section are deemed to be specifically authorized by the Congress for the purposes of section 504 of the National Security Act of 1947.’.

SEC. 303. FOREIGN SERVICE RETIREMENT AND DISABILITY SYSTEM.

    Chapter 8 of Title I of the Foreign Service Act of 1980, Public Law 96-465, (22 U.S.C. 4041 et seq.) 94 Stat. 2071, as amended, is further amended--

      (a) in section 804 (22 U.S.C. 4044)--

        (1) by amending paragraph (5) to read as follows:

      ‘(5) ‘normal cost percentage’ means the entry-age normal cost computed in accordance with generally accepted actuarial practice and standards (using dynamic assumptions) and expressed as a level percentage of aggregate basic pay;’;

        (2) by amending paragraph (14) to read as follows:

      ‘(14) ‘unfunded liability’ means the estimated excess of--

        ‘(A) the actuarial present value of all future benefits payable from the Fund under this part based on the service of current or former participants, over

        ‘(B) the sum of--

          ‘(i) the actuarial present value of deductions to be withheld from the future basic pay of participants currently subject to this part pursuant to section 805;

          ‘(ii) the actuarial present value of the future contributions to be made pursuant to section 805 with respect to participants currently subject to this part;

          ‘(iii) the Fund balance, as defined in paragraph (7), as of the date the unfunded liability is determined, excluding any amount attributable to the Foreign Service Pension System, or contributions made under the Federal Employees’ Retirement Contribution Temporary Adjustment Act of 1983 by or on behalf of any individual who became subject to the Foreign Service Pension System; and

          ‘(iv) any other appropriate amount, as determined by the Secretary of the Treasury in accordance with generally accepted actuarial practices and principles.’; and

        (3) by adding at the end the following new paragraph:

      ‘(15) ‘dynamic assumptions’ means economic assumptions that are used in determining actuarial costs and liabilities of a retirement system and in anticipating the effects of long-term future--

        ‘(A) investment yields;

        ‘(B) increases in rates of basic pay; and

        ‘(C) rates of price inflation.’;

      (b) in section 852 (22 U.S.C. 4071a)--

        (1) in paragraph (4)--

          (A) by striking ‘normal cost’ and inserting ‘normal cost percentage’; and

          (B) by striking ‘by the Secretary of State’;

        (2) in paragraph (7)--

          (A) by striking ‘supplemental’ and inserting ‘unfunded’;

          (B) in subparagraph (B)(i) by striking ‘(I)’ and ‘and (II) contributions for past civilian and military service’; and

          (C) in subparagraph (B)(ii) by inserting before the semicolon ‘with respect to participants currently subject to this part’; and

        (3) by adding at the end the following new paragraph:

      ‘(9) ‘dynamic assumptions’ means economic assumptions that are used in determining actuarial costs and liabilities of a retirement system and in anticipating the effects of long-term future--

        ‘(A) investment yields;

        ‘(B) increases in rates of basic pay; and

        ‘(C) rates of price inflation.’;

      (c) in section 805(a)(1) (22 U.S.C. 4045(a)(i))--

        (1) by striking the second sentence;

        (2) (by redesignating that subsection, as so amended, as (a)(1)(A);

        (3) by redesignating the last sentence of that subsection, as so amended as (a)(1)(C);

        (4) by inserting after subparagraph (A) the following new subparagraph:

        ‘(B) Each employing agency having participants shall contribute to the Fund the amount computed in a manner similar to that used under section 8334(a) of title 5, United States Code, pursuant to determinations of the normal cost percentage of the Foreign Service Retirement and Disability System. Contributions under this subparagraph shall be paid from the appropriations or fund used for payment of the salary of the participant.’;

        (5) in subsection (a)(2)(A) by striking ‘An equal amount shall be contributed by the Department’ and inserting in its place ‘Each employing agency having participants shall contribute to the Fund the amount computed in a manner similar to that used under section 8334(a) of title 5, United States Code, pursuant to determinations of the normal cost percentage of the Foreign Service Retirement and Disability System’; and

        (6) in subsection (a)(2)(B) by striking ‘An equal amount shall be contributed by the Department’ and inserting in its place ‘Each employing agency having participants shall contribute to the Fund from amounts available for salaries and expenses the amount computed in a manner similar to that used under section 8334(a) of title 5, United States Code, pursuant to determinations of the normal cost percentage of the Foreign Service Retirement and Disability System’;

      (d) by repealing sections 821 and 822 (22 U.S.C. 4061 and 4062) and by adding the following new section:

‘Sec. 821. Unfunded liability

    ‘(a)(1) Not later than June 30, 2003, the Secretary of State shall cause to be made actuarial valuations of the Fund that determine the unfunded liability of the Fund, as of September 30, 2002, attributable to benefits payable under this subchapter and make recommendations regarding its liquidation. After considering such recommendations, the Secretary of State shall establish an amortization schedule, including a series of annual installments commencing October 1, 2003, which provides for the liquidation of such liability by October 1, 2042.

    ‘(2) The Secretary of State shall redetermine the unfunded liability of the Fund as of the close of the fiscal year, for each fiscal year beginning after September 30, 2002, through the fiscal year ending September 30, 2037, and shall establish a new amortization schedule, including a series of annual installments commencing on October 1 of the second subsequent fiscal year, which provides for the liquidation of such liability by October 1, 2042.

    ‘(3) The Secretary of State shall redetermine the unfunded liability of the Fund as of the close of the fiscal year for each fiscal year beginning after September 30, 2037, and shall establish a new amortization schedule, including a series of annual installments commencing on October 1 of the second subsequent fiscal year, which provides for the liquidation of such liability over five years.

    ‘(4) Amortization schedules established under this subsection shall be set in accordance with generally accepted actuarial practices and principles, with interest computed at the rate used in the most recent valuation of the Foreign Service Retirement and Disability System.

    ‘(b) At the beginning of each fiscal year, beginning on October 1, 2003, the Secretary of State shall notify the Secretary of the Treasury of the amount of the first installment under the most recent amortization schedule established under paragraph (1). The Secretary of the Treasury shall credit that amount to the Fund, as a Government contribution, out of any money in the Treasury of the United States not otherwise appropriated.’;

      (e) in section 857 (22 U.S.C. 4071f(b)(1)) by striking ‘equal annual installments’ and inserting ‘annual installments set in accordance with generally accepted actuarial practices and principles’;

      (f) in section 859 (22 U.S.C. 4071h(b)(1)) by adding ‘percentage’ after ‘normal cost’;

      (g) in section 802 (22 U.S.C. 4042) by adding at the end the following: ‘The Fund is appropriated for the payment of benefits as provided by this subchapter.’; and

      (h) in section 818 (22 U.S.C. 4058) by striking ‘System’ and inserting ‘Systems under this subchapter’.

SEC. 304. PUBLIC HEALTH SERVICE COMMISSIONED CORPS RETIREMENT SYSTEM.

    (a) IN GENERAL- Title II of the Public Health Service Act (42 U.S.C. 202 et seq.) is amended by adding at the end the following new part:

‘PART C--PUBLIC HEALTH SERVICE COMMISSIONED CORPS RETIREMENT SYSTEM

‘ESTABLISHMENT AND PURPOSE OF FUND

    ‘SEC. 251. There is established on the books of the Treasury a fund to be known as the Public Health Service Commissioned Corps Retirement Fund (hereinafter in this part referred to as the ‘Fund’), which shall be administered by the Secretary of Health and Human Services (hereinafter in this part referred to as the ‘Secretary’). The Fund shall be used for the accumulation of funds in order to finance on an actuarially sound basis liabilities of the Department of Health and Human Services for benefits payable on account of retirement, disability, or death to commissioned officers of the Public Health Service and to their survivors pursuant to part A of this title.

‘ASSETS OF THE FUND

    ‘SEC. 252. There shall be deposited into the Fund the following, which shall constitute the assets of the Fund:

      ‘(1) Amounts paid into the Fund under section 255.

      ‘(2) Any return on investment of the assets of the Fund.

      ‘(3) Amounts transferred into the Fund pursuant to section 304(c) of the Budget Fraud Elimination Act of 2002.

‘PAYMENT FROM THE FUND

    ‘SEC. 253. There shall be paid from the Fund benefits payable on account of retirement, disability, or death to commissioned officers of the Public Health Service and to their survivors pursuant to part A of this title.

‘DETERMINATION OF CONTRIBUTIONS TO THE FUND

    ‘SEC. 254. (a)(1) Not later than June 30, 2003, the Secretary shall determine the unfunded liability of the Fund attributable to service performed as of September 30, 2002, which is ‘active service’ for the purpose of section 212. The Secretary shall establish an amortization schedule, including a series of annual installments commencing October 1, 2003, which provides for the liquidation of such liability by October 1, 2042.

    ‘(2) The Secretary shall redetermine the unfunded liability of the Fund as of the close of the fiscal year, for each fiscal year beginning after September 30, 2002, through the fiscal year ending September 30, 2037, and shall establish a new amortization schedule, including a series of annual installments commencing on October 1 of the second subsequent fiscal year, which provides for the liquidation of such liability by October 1, 2042.

    ‘(3) The Secretary shall redetermine the unfunded liability of the Fund as of the close of the fiscal year for each fiscal year beginning after September 30, 2037, and shall establish a new amortization schedule, including a series of annual installments commencing on October 1 of the second subsequent fiscal year, which provides for the liquidation of such liability over 5 years.

    ‘(b) The Secretary shall determine each fiscal year, in sufficient time for inclusion in the budget request for the following fiscal year, the total amount of Department of Health and Human Services contributions to be made to the Fund during the fiscal year under section 255(a). That amount shall be the sum of--

      ‘(1) the product of--

        ‘(A) the current estimate of the value of the single level percentage of basic pay to be determined under subsection (c)(1) at the time of the most recent actuarial valuation under subsection (c); and

        ‘(B) the total amount of basic pay expected to be paid during that fiscal year to commissioned officers of the Public Health Service on active duty (other than active duty for training); and

      ‘(2) the product of--

        ‘(A) the current estimate of the value of the single level percentage of basic pay and of compensation (paid pursuant to section 206 of title 37, United States Code) to be determined under subsection (c)(2) at the time of the most recent actuarial valuation under subsection (c); and

        ‘(B) the total amount of basic pay and of compensation (paid pursuant to section 206 of title 37, United States Code) expected to be paid during the fiscal year to commissioned officers of the Reserve Corps of the Public Health Service (other than officers on full-time duty other than for training) who are not otherwise described in subparagraph (A).

    ‘(c) Not less often than every four years thereafter (or by the fiscal year end prior to the effective date of any statutory change affecting benefits payable on account of retirement, disability, or death to commissioned officers or their survivors), the Secretary shall carry out an actuarial valuation of benefits payable on account of retirement, disability, or death to commissioned officers of the Public Health Service and to their survivors pursuant to part A of this title. Each such actuarial valuation shall be signed by an enrolled Actuary and shall include--

      ‘(1) a determination (using the aggregate entry-age normal cost method) of a single level percentage of basic pay for commissioned officers of the Public Health Service on active duty (other than active duty for training); and

      ‘(2) a determination (using the aggregate entry-age normal cost method) of a single level percentage of basic pay and of compensation (paid pursuant to section 206 of title 37, United States Code) of commissioned officers of the Reserve Corps of the Public Health Service (other than officers on full time duty other than for training) who are not otherwise described in paragraph (1).

    ‘(d) All determinations under this section shall be in accordance with generally accepted actuarial principles and practices and, where appropriate, shall follow the general pattern of methods and assumptions approved by the Department of Defense Retirement Board of Actuaries.

    ‘(e) The Secretary shall provide for the keeping of such records as are necessary for determining the actuarial status of the Fund.

‘PAYMENTS INTO THE FUND

    ‘SEC. 255. (a) From amounts available to the Department of Health and Human Services for salaries and expenses, the Secretary shall pay into the Fund at the end of each month the amount that is the sum of--

      ‘(1) the product of--

        ‘(A) the level percentage of basic pay determined using all the methods and assumptions approved for the most recent (as of the first day of the current fiscal year) actuarial valuation under sections 254(c)(1) (except that any statutory change affecting benefits payable on account of retirement, disability, or death to commissioned officers or their survivors that is effective after the date of that valuation and on or before the first day of the current fiscal year shall be used in such determination); and

        ‘(B) the total amount of basic pay accrued for that month by commissioned officers of the Public Health Service on active duty (other than active duty for training); and

      ‘(2) the product of--

        ‘(A) the level percentage of basic pay and of compensation (paid pursuant to section 206 of title 37, United States Code) determined using all the methods and assumptions approved for the most recent (as of the first day of the current fiscal year) actuarial valuation under section 254(c)(2) (except that any statutory change affecting benefits payable on account of retirement, disability, or death to commissioned officers or their survivors that is effective after the date of that valuation and on

or before the first day of the current fiscal year shall be used in such determinations); and

        ‘(B) the total amount of basic pay and of compensation (paid pursuant to section 206 of title 37, United States Code) accrued for that month by commissioned officers of the Reserve Corps of the Public Health Service (other than officers on full-time duty other than for training).

    ‘(b) At the beginning of each fiscal year, beginning on October 1, 2003, the Secretary shall certify to the Secretary of the Treasury the amount of the first installment under the most recent amortization schedule established under section 254(a). The Secretary of the Treasury shall pay into the Fund from the General Fund of the Treasury the amount so certified. Such payment shall be the contribution to the Fund for that fiscal year.

‘INVESTMENTS OF ASSETS OF FUND

    ‘SEC. 256. The Secretary may request the Secretary of the Treasury to invest such portion of the Fund as is not, in the judgment of the Secretary, required to meet the current needs of the Fund. Such investments shall be made by the Secretary of the Treasury in public debt securities with maturities suitable to the needs of the Fund, as determined by the Secretary, and bearing interest at rates determined by the Secretary of the Treasury, taking into consideration current market yields on outstanding marketable obligations of the United States of comparable maturities. The income on such investments shall be credited to and form a part of the Fund.

‘IMPLEMENTATION YEAR EXCEPTIONS

    ‘SEC. 257. (a) To avoid funding shortfalls in the first year should formal actuarial determinations not be available in time for budget preparation, the amounts used in the first year in sections 255(a)(1)(A) and 255(a)(2)(A) shall be set equal to those estimates in sections 254(b)(1)(A) and 254(b)(2)(A) if final determinations are not available. The original unfunded liability as defined in section 254(a) shall include an adjustment to correct for this difference between the formal actuarial determinations and the estimates in sections 254(b)(1)(A) and 254(b)(2)(A).’.

    (b) Conforming Amendments-

      (1) CONDITION OF DETAIL- Section 214 of the Public Health Service Act (42 U.S.C. 215) is amended by adding at the end the following new subsection:

    ‘(e) The Secretary shall condition any detail under subsection (a), (b), or (c) upon the agreement of the executive department, State, subdivision, Committee of the Congress, or institution concerned to pay to the Department of Health and Human Services, in advance or by way of reimbursement, for the full cost of the detail including that portion of the contributions under section 255(a) that is attributable to the detailed personnel.’.

      (2) EXEMPTION FROM SEQUESTRATION- Section 255(g)(1) of the Balanced Budget and Emergency Deficit Control Act of 1985 (2 U.S.C. 905(g)(1)) is amended--

        (A) in subparagraph (A), by inserting after the item relating to ‘payment to the foreign service retirement and disability fund’ the following item: ‘Payment to the Public Health Service Commissioned Corps Retirement Fund (75-0380-0-1-551);’; and

        (B) in subparagraph (B), by inserting after the item relating to the ‘Pensions for former Presidents’ the following item: ‘Public Health Service Commissioned Corps Retirement Fund (75-8274-0-7-602);’.

    (c) TRANSFER OF APPROPRIATIONS- There shall be transferred on October 1, 2004, into the fund established under section 251 of the Public Health Service Act, as added by subsection (a), any obligated or unobligated balances of appropriations made to the Department of Health and Human Services that are currently available for benefits payable on account of retirement, disability, or death to commissioned officers of the Public Health Service and to their survivors pursuant to part A of title II of the Public Health Service Act, and amounts so transferred shall be part of the assets of the Fund.

SEC. 305. NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION COMMISSIONED OFFICER CORPS RETIREMENT SYSTEM.

    (a) IN GENERAL- The Coast and Geodetic Survey Commissioned Officers’ Act of 1948 is amended by inserting after section 8 (33 U.S.C. 853g) the following new section:

    ‘SEC. 8A. (a) ESTABLISHMENT AND PURPOSE OF THE NOAA COMMISSIONED OFFICER CORPS RETIREMENT FUND- (1) There is established on the books of the Treasury a fund to be known as the National Oceanic and Atmospheric Administration Commissioned Officer Corps Retirement Fund (hereinafter in this section referred to as the ‘Fund’), which shall be administered by the Secretary of Commerce (hereinafter in this section referred to as ‘the Secretary’). The Fund shall be used for the accumulation of funds in order to finance on an actuarially sound basis liabilities of the Department of Commerce under military retirement and survivor benefit programs for the commissioned officers corps of the National Oceanic and Atmospheric Administration (hereinafter in this section referred to as ‘NOAA’).

    ‘(2) The term ‘military retirement and survivor benefit program’ means--

      ‘(A) the provisions of this Act and title 10, United States Code, creating entitlement to, or determining, the amount of retired pay;

      ‘(B) the programs under the jurisdiction of the Department of Defense providing annuities for survivors and members and former members of the armed forces, including chapter 73 of title 10, section 4 of Public Law 92-425, and section 5 of Public Law 96-202, as made applicable to the NOAA Commissioned Officer Corps by section 3 of the Act of August 10, 1956 (33 U.S.C. 857a).

    ‘(b) ASSETS OF THE FUND- There shall be deposited into the Fund the following, which shall constitute the assets of the Fund:

      ‘(1) Amounts paid into the Fund under subsection (e).

      ‘(2) Any return on investment of the assets of the Fund.

      ‘(3) Amounts transferred into the Fund pursuant to section 305(c) of the Budget Fraud Elimination Act of 2002.

    ‘(c) PAYMENTS FROM THE FUND- There shall be paid from the Fund benefits payable on account of military retirement and survivor benefit programs to commissioned officers of the NOAA Commissioned Officer Corps and their survivors.

    ‘(d)(1)(A) DETERMINATION OF CONTRIBUTIONS TO THE FUND- Not later than June 30, 2003, the Secretary shall determine the unfunded liability of the Fund attributable to service performed as of September 30, 2002, which is ‘active service’ for the purpose of this Act. The Secretary shall establish an amortization schedule, including a series of annual installments commencing October 1, 2003, which provides for the liquidation of such liability by October 1, 2042.

    ‘(B) The Secretary shall redetermine the unfunded liability of the Fund as of the close of the fiscal year, for each fiscal year beginning after September 30, 2002, through the fiscal year ending September 30, 2037, and shall establish a new amortization schedule, including a series of annual installments commencing on September 30 of the subsequent fiscal year, which provides for the liquidation of such liability by October 1, 2042.

    ‘(C) The Secretary shall redetermine the unfunded liability of the Fund as of the close of the fiscal year for each fiscal year beginning after September 30, 2037, and shall establish a new authorization schedule, including series of annual installments commencing on October 1 of the second subsequent fiscal year, which provides for the liquidation of such liability over 5 years.

    ‘(2) The Secretary shall determine each fiscal year, in sufficient time for inclusion in the budget request for the following fiscal year, the total amount of Department of Commerce contributions to be made to the Fund during that fiscal year under (e). The amount shall be the product of--

      ‘(A) the current estimate of the value of the single level percentage of basic pay to be determined under subsection (e) at the time of the most recent actuarial valuation under paragraph (3); and

      ‘(B) the total amount of basic pay expected to be paid during that fiscal year to commissioned officers of NOAA on active duty.

    ‘(3) Not less often then every four years (or by the fiscal year end prior to the effective date of any statutory change affecting benefits payable on account of retirement, disability, or death to commissioned officers or their survivors), the Secretary shall carry out an actuarial valuation of benefits payable on account of military retirement and survivor benefit programs to commissioned officers of the NOAA Commissioned Officer Corps and to their survivors. Each such actuarial valuation shall be signed by an enrolled Actuary and shall include a determination (using the aggregate entry-age normal cost method) of a single level percentage of basic pay for commissioned officers of NOAA on active duty.

    ‘(4) All determinations under this section shall be in accordance with generally accepted actuarial principles and practices, and, where appropriate, shall follow the general pattern of methods and assumptions approved by the Department of Defense Retirement Board of Actuaries.

    ‘(5) The Secretary shall provide for the keeping of such records as are necessary for determining the actuarial status of the Fund.

    ‘(e)(1) PAYMENTS INTO THE FUND- From amounts appropriated to the National Oceanic Atmospheric Administration for salaries and expenses, the Secretary shall pay into the Fund at the end of each month the amount that is the product of--

      ‘(A) the level percentage of basic pay determined using all the methods and assumptions approved for the most recent (as of the first day of the current fiscal year) actuarial valuation under subsection (d) (except that any statutory change affecting benefits payable on account of military retirement and survivor benefit programs to commissioned officers of the NOAA Commissioned Officer Corps and to their survivors that is effective date after the date of that valuation and on or before the first day of the current fiscal year shall be used in such determination); and

      ‘(B) the total amount of basic pay accrued for that month by commissioned officers of NOAA on active duty.

    ‘(2)(A) At the beginning of each fiscal year, the Secretary shall determine the sum of--

      ‘(i) the amount of the payment for that year under the amortization of the original unfunded liability of the Fund;

      ‘(ii) the amount (including any negative amount) for that year under the most recent amortization schedule determined by the Secretary for the amortization of any cumulative actuarial gain or loss to the Fund, resulting from changes in benefits; and

      ‘(iii) the amount (including any negative amount) for that year under the most recent amortization schedule determined by the Secretary for the amortization or any cumulative actuarial gain or loss to the Fund resulting from changes in actuarial assumptions and from experience different from the assumed since the last valuation.

    The Secretary shall promptly certify the amount of the sum to the Secretary of the Treasury.

    ‘(B) Upon receiving the certification pursuant to paragraph (1), the Secretary of the Treasury shall promptly pay into the Fund from the General Fund of the Treasury the amount so certified. Such payment shall be the contribution to the Fund for that fiscal year.

    ‘(f) INVESTMENT OF ASSETS OF THE FUND- The Secretary may request the Secretary of the Treasury to invest such portion of the Fund as is not, in the judgment of the Secretary, required to meet the current needs of the Fund. Such investments shall be made by the Secretary of the Treasury in public debt securities with maturities suitable to the needs of the Fund, as determined by the Secretary, and bearing interest at rates determined by the Secretary of the Treasury, taking into consideration current market yields on outstanding marketable obligations of the United States of comparable maturities. The income of such investments shall be credited to and form a part of the Fund.

    ‘(g)(1) IMPLEMENTATION YEAR EXCEPTIONS- To avoid funding shortfalls in the first year should formal actuarial determinations not be available in time for budget

preparation, the amounts used in the first year in section 105(a)(1) shall be set equal to the estimate in section 104(b)(1) if final determinations are not available. The original unfunded liability as determined in section 104(a) shall include an adjustment to correct for this difference between the formal actuarial determinations and the estimates in section 104(b)(1).’.

    (b) EXEMPTION FROM SEQUESTRATION- Section 255(g)(1)(B) of the Balanced Budget and Emergency Deficit Control Act of 1985 (2 U.S.C. 905(g)(1)(B)) is amended by striking ‘National Oceanic and Atmospheric Administration retirement (13-1450-0-1-306);’ and inserting ‘National Oceanic and Atmospheric Administration Commissioned Officer Corps Retirement Fund;’.

    (c) TRANSFER OF APPROPRIATIONS- There shall be transferred on October 1, 2004, into the fund established under section 8A(a) of the Coast and Geodetic Survey Commissioned Officers’ Act of 1948, as added by subsection (a), any obligated and unobligated balance of appropriations made to the Department of Commerce that are available as of the date of the enactment of this Act for benefits payable on account of military retirement and survivor benefit programs to commissioned officers of the NOAA Commissioned Officer Corps and to their survivors, and amounts so transferred shall be part of the assets of the Fund, effective October 1, 2004.

    (d) EFFECTIVE DATE- Subsection (c) (relating to payments from the Fund) and (e) (relating to payments into the Fund) of section 8A of the Coast and Geodetic Survey Commissioned Officers’ Act of 1948, as added by subsection (a), shall take effect on October 1, 2004.

SEC. 306. COAST GUARD MILITARY RETIREMENT SYSTEM.

    (a) ACCRUAL FUNDING FOR COAST GUARD RETIREMENT-

      (1) IN GENERAL- Chapter 11 of title 14, United States Code, is amended by adding at the end the following new subchapter:

‘SUBCHAPTER V--COAST GUARD MILITARY RETIREMENT FUND

‘Sec. 441. Establishment and purpose of Fund; definitions

    ‘(a) ESTABLISHMENT OF FUND; PURPOSE- There is established on the books of the Treasury a fund to be known as the Coast Guard Military Retirement Fund (hereinafter in this subchapter referred to as the ‘Fund’), which shall be administered by the Secretary. The Fund shall be used for the accumulations of funds in order to finance on an actuarially sound basis liabilities of the Coast Guard under military retirement and survivor benefit programs.

    ‘(b) MILITARY RETIREMENT AND SURVIVOR BENEFIT PROGRAMS DEFINED- In this subchapter, the term ‘military retirement and survivor benefit programs’ means--

      ‘(1) the provisions of this title and title 10 creating entitlement to, or determining the amount of, retired pay;

      ‘(2) the programs providing annuities for survivors of members and former members of the armed forces, including chapter 73 of title 10, section 4 of Public Law 92-425, and section 5 of Public Law 96-402; and

      ‘(3) the authority provided in section 1048(h) of title 10.

    ‘(c) SECRETARY DEFINED- In this subchapter, the term ‘Secretary’ means the Secretary of Transportation when the Coast Guard is not operating as a service in the Navy and the Secretary of Defense when the Coast Guard is operating as a service in the Navy.

‘Sec. 442. Assets of the Fund

    ‘There shall be deposited into the Fund the following, which shall constitute the assets of the Fund:

      ‘(1) Amounts paid into the Fund under section 445 of this title.

      ‘(2) Any return on investment of the assets of the Fund.

      ‘(3) Amounts transferred into the Fund pursuant to section 306(d) of the Budget Fraud Elimination Act of 2002.

‘Sec. 443. Payments from the Fund

    ‘(a) IN GENERAL- There shall be paid from the Fund the following:

      ‘(1) Retired pay payable to persons on the retired list of the Coast Guard.

      ‘(2) Retired pay payable under chapter 1223 of title 10 to former members of the Coast Guard and the former United States Lighthouse Service.

      ‘(3) Benefits payable under programs that provide annuities for survivors of members and former members of the armed forces, including chapter 73 of title 10, section 4 of Public Law 92-425, and section 5 of Public Law 96-402.

      ‘(4) Amounts payable under section 1048(h) of title 10.

    ‘(b) AVAILABILITY OF ASSETS OF THE FUND- The assets of the Fund are hereby made available for payments under subsection (a).

‘Sec. 444. Determination of contributions to the Fund

    ‘(a) INITIAL UNFUNDED LIABILITY- (1) Not later than June 30, 2003, the Secretary shall determine the unfunded liability of the Fund attributable to service performed as of September 30, 2002, which is ‘active service’ for the purposes of section 212. The Secretary shall establish an amortization schedule, including a series of annual installments commencing October 1, 2003, which provides for the liquidation of such liability by October 1, 2042.

    ‘(2) The Secretary shall redetermine the unfunded liability of the Fund as of the close of the fiscal year, for each beginning after September 30, 2002, through the fiscal year ending September 30, 2037, and shall establish a new amortization schedule, including a series of annual installments commencing on October 1 of the second subsequent fiscal year, which provides for the liquidation of such liability by October 1, 2042.

    ‘(3) The Secretary shall redetermine the unfunded liability of the Fund as of the close of the fiscal year for each fiscal year beginning after September 30, 2037, and shall establish a new amortization schedule, including a series of annual installments commencing on October 1 of the second subsequent fiscal year, which provides for the liquidation of such liability over five years.

    ‘(b) ANNUAL CONTRIBUTIONS FOR CURRENT SERVICES- (1) The Secretary shall determine each fiscal year,

in sufficient time for inclusion in the budget request for the following fiscal year, the total amount of Department of Transportation, or Department of Defense, contributions to be made to the Fund during that fiscal year under section 445(a) of this title. That amount shall be the sum of the following:

      ‘(A) The product of--

        ‘(i) the current estimate of the value of the single level percentage of basic pay to be determined under subsection (c)(1)(A) at the time of the most recent actuarial valuation under subsection (c); and

        ‘(ii) the total amount of basic pay expected to be paid during that fiscal year to members of the Coast Guard on active duty (other than active duty for training).

      ‘(B) The product of--

        ‘(i) the current estimate of the value of the single level percentage of basic pay and of compensation (paid pursuant to section 206 of title 37) to be determined under subsection (c)(1)(B) at the time of the most recent actuarial valuation under subsection (c); and

        ‘(ii) the total amount of basic pay and compensation (paid pursuant to section 206 of title 37) expected to be paid during that fiscal year to members of the Coast Guard Ready Reserve (other than members on full-time Reserve duty other than for training) who are not otherwise described in subparagraph (A)(ii).

    ‘(2) The amount determined under paragraph (1) for any fiscal year is the amount needed to be appropriated to the Department of Transportation for that fiscal year for payments to be made to the Fund during that year under section 445(a) of this title. The President shall include not less than the full amount so determined in the budget transmitted to Congress for that fiscal year under section 1105 of title 31. The President may comment and make recommendations concerning any such amount.

    ‘(c) PERIODIC ACTUARIAL VALUATIONS- (1) Not less often than every four years (or before the effective date of any statutory change affecting benefits payable on account of retirement, disability, or death to members of the Coast Guard or their survivors), the Secretary shall carry out an actuarial valuation of the Coast Guard military retirement and survivor benefit programs. Each actuarial valuation of such programs shall be signed by an enrolled actuary and shall include--

      ‘(A) a determination (using the aggregate entry-age normal cost method) of a single level percentage of basic pay for members of the Coast Guard on active duty (other than active duty for training); and

      ‘(B) a determination (using the aggregate entry-age normal cost method) of single level percentage of basic pay and of compensation (paid pursuant to section 206 of title 37) for members of the Ready Reserve of the Coast Guard (other than members on full-time Reserve duty other than for training) who are not otherwise described in subparagraph (A).

    ‘(2) Such single level percentages shall be used for the purposes of subsection (b) and section 445(a) of this title.

    ‘(d) USE OF GENERALLY ACCEPTED ACTUARIAL PRINCIPLES AND PRACTICES- All determinations under this section shall be in accordance with generally accepted actuarial principles and practices and, where appropriate, shall follow the general pattern of methods and assumptions approved by the Department of Defense Retirement Board of Actuaries.

    ‘(e) RECORDS- The Secretary shall provide for the keeping of such records as are necessary for determining the actuarial status of the Fund.

‘Sec. 445. Payments into the Fund

    ‘(a) MONTHLY ACCRUAL CHARGE FOR CURRENT SERVICES- From amounts appropriated to the Coast Guard for salaries and expenses, the Secretary shall pay into the Fund at the end of each month as the Department of Transportation, or Department of Defense, contribution to the Fund for that month the amount that is the sum of the following:

      ‘(1) The product of--

        ‘(A) the level percentage of basic pay determined using all the methods and assumptions approved for the most recent (as of the first day of the current fiscal year) actuarial valuation under section 444(c)(1)(A) of this title (except that any statutory change in the military retirement and survivor benefit systems that is effective after the date of that valuation and on or before the first day of the current fiscal year shall be used in such determination); and

        ‘(B) the total amount of basic pay accrued for that month by members of the Coast Guard on active duty (other than active duty for training).

      ‘(2) The product of--

        ‘(A) the level percentage of basic pay and compensation (accrued pursuant to section 206 of title 37) determined using all the methods and assumptions approved for the most recent (as of the first day of the current fiscal year) actuarial valuation under section 444(c)(1)(B) of this title (except that any statutory change in the military retirement and survivor benefit systems that is effective after the date of that valuation and on or before the first day of the current fiscal year shall be used in such determination); and

        ‘(B) the total amount of basic pay and of compensation (paid pursuant to section 206 of title 37) accrued for that month by members of the Ready Reserve (other than members of full-time Reserve duty other than for training) who are not otherwise described in paragraph (1)(B).

    ‘(b) ANNUAL PAYMENT FOR UNFUNDED LIABILITIES- (1) At the beginning of each fiscal year, beginning on October 1, 2003, the Secretary shall certify to the Secretary of the Treasury the amount of the first installment under the most recent amortization schedule established under section 254(a). The Secretary of the Treasury shall

promptly pay into the Fund from the General Fund of the Treasury the amount so certified. Such payment shall be the contribution to the Fund for that fiscal year.

‘Sec. 446. Investment of assets of the Fund

    ‘The Secretary may request the Secretary of the Treasury to invest such portion of the Fund as is not, in the judgment of the Secretary, required to meet the current needs of the Fund. Such investments shall be made by the Secretary of the Treasury in public debt securities with maturities suitable to the needs of the Fund, as determined by the Secretary, and bearing interest at rates determined by the Secretary of the Treasury, taking into consideration current market yields on outstanding marketable obligations of the United States of comparable maturities. The income on such investments shall be credited to and form a part of the Fund.’.

      (2) TECHNICAL AMENDMENTS- Such chapter is further amended--

        (A) by amending the center heading after the table of sections to read as follows:

‘SUBCHAPTER I--OFFICERS’;

        (B) by amending the center heading after section 336 to read as follows:

‘SUBCHAPTER II--ENLISTED MEMBERS’;

        (C) by amending the center heading after section 373 to read as follows:

‘SUBCHAPTER III--GENERAL PROVISIONS’;

      and

        (D) by amending the center heading after section 425 to read as follows:

‘SUBCHAPTER IV--SPECIAL PROVISIONS’.

      (3) CLERICAL AMENDMENTS- The table of sections at the beginning of such chapter is amended--

        (A) by striking ‘OFFICERS’ at the beginning of the table and inserting ‘SUBCHAPTER I--OFFICERS’;

        (B) by striking ‘ENLISTED MEMBERS’ after the item relating to section 336 and inserting ‘SUBCHAPTER II--ENLISTED MEMBERS’;

        (C) by striking ‘GENERAL PROVISIONS’ after the item relating to section 373 and inserting ‘SUBCHAPTER III--GENERAL PROVISIONS’;

        (D) by striking ‘SPECIAL PROVISIONS’ after the item relating to section 425 and inserting ‘SUBCHAPTER IV--SPECIAL PROVISIONS’; and

        (E) by adding at the end the following:

‘SUBCHAPTER V--COAST GUARD MILITARY RETIREMENT FUND

      ‘441. Establishment and purpose of Fund; definitions.

      ‘442. Assets of the Fund.

      ‘443. Payments from the Fund.

      ‘444. Determination of contributions to the Fund.

      ‘445. Payments into the Fund.

      ‘446. Investment of assets of the Fund.’.

    (b) IMPLEMENTATION YEAR EXCEPTIONS- To avoid funding shortfalls in the first year of implementation of subchapter V of chapter 11 of title 14, United States Code, as added by subsection (a), if formal actuarial determinations are not available in time for budget preparation, the amounts used in the first year under sections 445(a)(1)(A) and 445(a)(2)(A) of such title shall be set equal to those estimates in sections 444(b)(1)(A)(i) and 444(b)(1)(B)(i), respectively, of such title if final determinations are not available. The original unfunded liability, as defined in section 444(a) of such title, shall include an adjustment to correct for this difference between the formal actuarial determinations and the estimates in sections 444(b)(1)(A)(i) and 444(b)(1)(B)(i) of such title.

    (c) CONFORMING AMENDMENT- Subparagraph (B) of section 255(g)(1) of the Balanced Budget and Emergency Deficit Control Act of 1985 (2 U.S.C. 905(g)(1)) is amended by striking ‘Retired Pay, Coast Guard (69-0241-0-1-403)’ and inserting ‘Coast Guard Military Retirement Fund (69-0241-01-403)’.

    (d) TRANSFER OF EXISTING BALANCES-

      (1) TRANSFER- There shall be transferred into the Fund on October 1, 2003, any obligated and unobligated balances of appropriations made to the Department of Transportation that are currently available for retired pay, and amounts so transferred shall be part of the assets of the Fund.

      (2) FUND DEFINED- For purposes of paragraph (1), the term ‘Fund’ means the Coast Guard Military Retirement Fund established under section 441 of title 14, United States Code, as added by subsection (a).

    (e) EFFECTIVE DATE- Sections 443 (relating to payments from the Fund) and 445 (relating to payments into the Fund) of title 14, United States Code, as added by subsection (a), shall take effect on October 1, 2003.

Subtitle B--Accrual Funding of Post-Retirement Health Benefits Costs for Federal Employees

SEC. 311. FEDERAL EMPLOYEES HEALTH BENEFITS FUND.

    (a) Section 8906 of title 5, United States Code, is amended--

      (1) by redesignating subsection (c) as subsection (c)(1) and by adding at the end the following new paragraphs:

      ‘(2) In addition to Government contributions required by subsection (b) and paragraph (1), each employing agency shall contribute amounts as determined by the Office to be necessary to prefund the accruing actuarial cost of post-retirement health benefits for each of the agency’s current employees who are eligible for Government contributions under this section. Amounts under this paragraph shall be paid by the employing agency separate from other contributions under this section, from the appropriations or fund used for payment of the salary of the employee, on a schedule to be determined by the Office.

      ‘(3) Paragraph (2) shall not apply to the United States Postal Service or the Government of the District of Columbia.’; and

      (2) by amending paragraph 1 of subsection (g) to read:

    ‘(1) Except as provided in paragraphs (2) and (3), all government contributions authorized by this section for health benefits for an annuitant shall be paid from the Employees Health Benefits Fund to the extent that funds are available in accordance with section 8909(j)(6) and, if necessary, from annual appropriations which are authorized to be made for that purpose and which may be made available until expended.’.

    (b) Section 8909 of title 5, United States Code, is amended by adding at the end the following new subsection:

    ‘(j)(1) Not later than June 30, 2004, the Office shall determine the existing liability of the Fund for post-retirement health benefits, excluding the liability of the United States Postal Service for service under section 8906(g)(2), under this chapter as of September 30, 2003. The Office shall establish an amortization schedule, including a series of annual installments commencing September 30, 2004, which provides for the liquidation of such liability by September 30, 2041.

    ‘(2) At the close of each fiscal year, for fiscal years beginning after September 30, 2003, the Office shall determine the supplemental liability of the Fund for post-retirement health benefits, excluding the liability attributable to the United States Postal Service for service subject to section 8906(g)(2), and shall establish an amortization schedule, including a series of annual installments commencing on September 30 of the subsequent fiscal year, which provides for liquidation of such supplemental liability over 30 years.

    ‘(3) Amortization schedules established under this paragraph shall be set in accordance with generally accepted actuarial practices and principles.

    ‘(4) At the end of each fiscal year on and after September 30, 2004, the Office shall notify the Secretary of the Treasury of the amounts of the next installments under the most recent amortization schedules established under paragraphs (1) and (2). Before closing the accounts for the fiscal year, the Secretary shall credit the sum of these amounts (including in that sum any negative amount for the amortization of the supplemental liability) to the Fund, as a Government contribution, out of any money in the Treasury of the United States not otherwise appropriated.

    ‘(5) For the purpose of carrying out paragraphs (1) and (2), the Office shall perform or arrange for actuarial determinations and valuations and shall prescribe retention of such records as it considers necessary for making periodic actuarial valuations of the Fund.

    ‘(6) Notwithstanding subsection (b), the amounts deposited into the Fund pursuant to this subsection and section 8906(c)(2) to prefund post-retirement health benefits costs shall be segregated within the Fund so that such amounts, as well as earnings and proceeds under subsection (c) attributable to them, may be used exclusively for the purpose of paying Government contributions for post-retirement health benefits costs. When such amounts are used in combination with amounts withheld from annuitants to pay for health benefits, a portion of the contributions shall then be set aside in the Fund as described in subsection (b).

    ‘(7) Under this subsection, ‘supplemental liability’ means--

      ‘(A) the actuarial present value for future post-retirement health benefits that are the liability of the Fund, less

      ‘(B) the sum of--

        ‘(i) the actuarial present value of all future contributions by agencies and annuitants to the Fund toward those benefits pursuant to section 8906;

        ‘(ii) the present value of all scheduled amortization payments to the Fund pursuant to paragraphs (1) and (2);

        ‘(iii) the Fund balance as of the date the supplemental liability is determined, to the extent that such balance is attributable to post-retirement benefits; and

        ‘(iv) any other appropriate amount, as determined by the Office in accordance with generally accepted actuarial practices and principles.’.

SEC. 312. FUNDING UNIFORMED SERVICES HEALTH BENEFITS FOR ALL RETIREES.

    Title 10, United States Code, is amended--

      (1) in the title of chapter 56, by striking ‘DEPARTMENT OF DEFENSE MEDICARE-ELIGIBLE’ and inserting ‘UNIFORMED SERVICES’;

      (2) in section 1111--

        (A) in subsection (a)--

          (i) by striking ‘Department of Defense Medicare-Eligible’ and inserting ‘Uniformed Services’;

          (ii) by striking ‘Department of Defense under’; and

          (iii) by striking ‘for medicare-eligible beneficiaries’;

        (B) in subsection (c)--

          (i) by striking ‘The Secretary of Defense may’ and inserting ‘The Secretary of Defense shall’;

          (ii) by striking ‘with any other’ and inserting ‘with each’;

          (iii) by striking ‘Any such agreement’ and inserting ‘Such agreements’; and

          (iv) by striking ‘administering Secretary may’ and inserting ‘administrative Secretary shall’;

      (3) in section 1113--

        (A) in subsection (a)--

          (i) by striking ‘and are medicare eligible’;

          (ii) by striking ‘who are medicare eligible’; and

          (iii) by adding at the end the following new sentence: ‘For the fiscal year starting October 1, 2002, only, the payments will be solely for the costs of members or former members of a uniformed service who are entitled to retired or retainer pay and are medicare-eligible, and eligible dependents or survivors who are medicare-eligible.’;

        (B) in subsection (c)(1), by striking ‘who are medicare-eligible’;

        (C) in subsection (d), by striking ‘who are medicare-eligible’; and

        (D) in subsection (f), by striking ‘If’ and inserting ‘When’;

      (4) in section 1114, in subsection (a)(1), by striking ‘Department of Defense Medicare-Eligible’ and inserting ‘Uniformed Services’;

      (5) in section 1115--

        (A) in subsection (b)(2), by striking ‘The amount determined under paragraph (1) for any fiscal year is the amount needed to be appropriated to the Department of Defense (or to the other executive department having jurisdiction over the participating uniformed service)’ and inserting ‘The amount determined under paragraph (1), or the amount determined under section 1111(c) for a participating uniformed service, for any fiscal year, is the amount needed to be appropriated to the Department of Defense (or to any other executive department having jurisdiction over a participating uniformed service)’;

        (B) in subsection (c)(2), by striking ‘for medicare eligible beneficiaries’; and

        (C) by adding at the end the following new subsection:

    ‘(f) For the fiscal year starting October 1, 2002, only, the amounts in this section shall be based solely on the costs of medicare-eligible benefits of beneficiaries and the costs for their eligible dependents or survivors who are medicare-eligible, and shall be recalculated thereafter to reflect the cost of beneficiaries defined in section 1111.’;

      and

      (6) in section 1116--

        (A) in subsection (a)(1)(A), by striking ‘for medicare-eligible beneficiaries’;

        (B) in subsection (a)(2)(A), by striking ‘for medicare-eligible beneficiaries’; and

        (C) in subsection (c), by striking ‘subsection (a) shall be paid from funds available for the health care programs’ and inserting ‘subsection (a) and section 1111(c) shall be paid from funds available for the pay of members of the participating uniformed services under the jurisdiction of the respective administering secretaries’.

SEC. 313. EFFECTIVE DATE.

    Except as otherwise provided, this title shall take effect upon enactment with respect to fiscal years beginning after 2003.