
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 10USC2216]

 
                         TITLE 10--ARMED FORCES
 
                    Subtitle A--General Military Law
 
                PART IV--SERVICE, SUPPLY, AND PROCUREMENT
 
                 CHAPTER 131--PLANNING AND COORDINATION
 
Sec. 2216. Defense Modernization Account

    (a) Establishment.--There is established in the Treasury an account 
to be known as the ``Defense Modernization Account''.
    (b) Transfers to Account.--(1)(A) Upon a determination by the 
Secretary of a military department or the Secretary of Defense with 
respect to Defense-wide appropriations accounts of the availability and 
source of funds described in subparagraph (B), that Secretary may 
transfer to the Defense Modernization Account during any fiscal year any 
amount of funds available to the Secretary described in that 
subparagraph. Such funds may be transferred to that account only after 
the Secretary concerned notifies the congressional defense committees in 
writing of the amount and source of the proposed transfer.
    (B) This subsection applies to the following funds available to the 
Secretary concerned:
        (i) Unexpired funds in appropriations accounts that are 
    available for procurement and that, as a result of economies, 
    efficiencies, and other savings achieved in carrying out a 
    particular procurement, are excess to the requirements of that 
    procurement.
        (ii) Unexpired funds that are available during the final 30 days 
    of a fiscal year for support of installations and facilities and 
    that, as a result of economies, efficiencies, and other savings, are 
    excess to the requirements for support of installations and 
    facilities.

    (C) Any transfer under subparagraph (A) shall be made under 
regulations prescribed by the Secretary of Defense.
    (2) Funds referred to in paragraph (1) may not be transferred to the 
Defense Modernization Account if--
        (A) the funds are necessary for programs, projects, and 
    activities that, as determined by the Secretary, have a higher 
    priority than the purposes for which the funds would be available if 
    transferred to that account; or
        (B) the balance of funds in the account, after transfer of funds 
    to the account, would exceed $1,000,000,000.

    (3) Amounts credited to the Defense Modernization Account shall 
remain available for transfer until the end of the third fiscal year 
that follows the fiscal year in which the amounts are credited to the 
account.
    (4) The period of availability of funds for expenditure provided for 
in sections 1551 and 1552 of title 31 may not be extended by transfer 
into the Defense Modernization Account.
    (c) Scope of Use of Funds.--Funds transferred to the Defense 
Modernization Account from funds appropriated for a military department, 
Defense Agency, or other element of the Department of Defense shall be 
available in accordance with subsections (f) and (g) only for transfer 
to funds available for that military department, Defense Agency, or 
other element.
    (d) Authorized Use of Funds.--Funds available from the Defense 
Modernization Account pursuant to subsection (f) or (g) may be used for 
the following purposes:
        (1) For increasing, subject to subsection (e), the quantity of 
    items and services procured under a procurement program in order to 
    achieve a more efficient production or delivery rate.
        (2) For research, development, test, and evaluation and for 
    procurement necessary for modernization of an existing system or of 
    a system being procured under an ongoing procurement program.

    (e) Limitations.--(1) Funds in the Defense Modernization Account may 
not be used to increase the quantity of an item or services procured 
under a particular procurement program to the extent that doing so 
would--
        (A) result in procurement of a total quantity of items or 
    services in excess of--
            (i) a specific limitation provided by law on the quantity of 
        the items or services that may be procured; or
            (ii) the requirement for the items or services as approved 
        by the Joint Requirements Oversight Council and reported to 
        Congress by the Secretary of Defense; or

        (B) result in an obligation or expenditure of funds in excess of 
    a specific limitation provided by law on the amount that may be 
    obligated or expended, respectively, for that procurement program.

    (2) Funds in the Defense Modernization Account may not be used for a 
purpose or program for which Congress has not authorized appropriations.
    (3) Funds may not be transferred from the Defense Modernization 
Account in any year for the purpose of--
        (A) making an expenditure for which there is no corresponding 
    obligation; or
        (B) making an expenditure that would satisfy an unliquidated or 
    unrecorded obligation arising in a prior fiscal year.

    (f) Transfer of Funds.--(1) The Secretary of Defense may transfer 
funds in the Defense Modernization Account to appropriations available 
for purposes set forth in subsection (d).
    (2) Funds in the Defense Modernization Account may not be 
transferred under paragraph (1) until 30 days after the date on which 
the Secretary concerned notifies the congressional defense committees in 
writing of the amount and purpose of the proposed transfer.
    (3) The total amount of transfers from the Defense Modernization 
Account during any fiscal year under this subsection may not exceed 
$500,000,000.
    (g) Availability of Funds by Appropriation.--In addition to 
transfers under subsection (f), funds in the Defense Modernization 
Account may be made available for purposes set forth in subsection (d) 
in accordance with the provisions of appropriations Acts, but only to 
the extent authorized in an Act other than an appropriations Act.
    (h) Secretary To Act Through Comptroller.--The Secretary of Defense 
shall carry out this section through the Under Secretary of Defense 
(Comptroller), who shall be authorized to implement this section through 
the issuance of any necessary regulations, policies, and procedures 
after consultation with the General Counsel and Inspector General of the 
Department of Defense.
    (i) Quarterly Reports.--(1) Not later than 15 days after the end of 
each calendar quarter, the Secretary of Defense shall submit to the 
congressional committees specified in paragraph (2) a report on the 
Defense Modernization Account. Each such report shall set forth the 
following:
        (A) The amount and source of each credit to the account during 
    that quarter.
        (B) The amount and purpose of each transfer from the account 
    during that quarter.
        (C) The balance in the account at the end of the quarter and, of 
    such balance, the amount attributable to transfers to the account 
    from each Secretary concerned.

    (2) The committees referred to in paragraph (1) are the 
congressional defense committees and the Committee on Governmental 
Affairs of the Senate and the Committee on Government Reform and 
Oversight of the House of Representatives.
    (j) Definitions.--In this section:
        (1) The term ``Secretary concerned'' includes the Secretary of 
    Defense with respect to Defense-wide appropriations accounts.
        (2) The term ``unexpired funds'' means funds appropriated for a 
    definite period that remain available for obligation.
        (3) The term ``congressional defense committees'' means--
            (A) the Committee on Armed Services and the Committee on 
        Appropriations of the Senate; and
            (B) the Committee on Armed Services and the Committee on 
        Appropriations of the House of Representatives.

(Added Pub. L. 104-106, div. A, title IX, Sec. 912(a)(1), Feb. 10, 1996, 
110 Stat. 407; amended Pub. L. 106-65, div. A, title X, Sec. 1067(1), 
Oct. 5, 1999, 113 Stat. 774.)

                          Codification

    Another section 2216 was renumbered section 2216a of this title and 
subsequently repealed.


                            Prior Provisions

    A prior section 2216, added Pub. L. 99-661, div. A, title XIII, 
Sec. 1307(a)(1), Nov. 14, 1986, 100 Stat. 3980, related to annual 
reports on budgeting for inflation, prior to repeal by Pub. L. 101-510, 
div. A, title XIII, Sec. 1301(8), Nov. 5, 1990, 104 Stat. 1668.


                               Amendments

    1999--Subsec. (j)(3)(B). Pub. L. 106-65 substituted ``Committee on 
Armed Services'' for ``Committee on National Security''.

                         Change of Name

    Committee on Government Reform and Oversight of House of 
Representatives changed to Committee on Government Reform of House of 
Representatives by House Resolution No. 5, One Hundred Sixth Congress, 
Jan. 6, 1999.


                             Effective Date

    Section 912(b) of Pub. L. 104-106 provided that: ``Section 2216 of 
title 10, United States Code (as added by subsection (a)), shall apply 
only to funds appropriated for fiscal years after fiscal year 1995.''


                   Expiration of Authority and Account

    Section 912(c) of Pub. L. 104-106 provided that:
    ``(1) The authority under section 2216(b) of title 10, United States 
Code (as added by subsection (a)), to transfer funds into the Defense 
Modernization Account terminates at the close of September 30, 2003.
    ``(2) Three years after the termination date specified in paragraph 
(1), the Defense Modernization Account shall be closed and any remaining 
balance in the account shall be canceled and thereafter shall not be 
available for any purpose.''


                               GAO Reviews

    Section 912(d) of Pub. L. 104-106 provided that:
    ``(1) The Comptroller General of the United States shall conduct two 
reviews of the administration of the Defense Modernization Account. In 
each review, the Comptroller General shall assess the operations and 
benefits of the account.
    ``(2) Not later than March 1, 2000, the Comptroller General shall--
        ``(A) complete the first review; and
        ``(B) submit to the specified committees of Congress an initial 
    report on the administration and benefits of the Defense 
    Modernization Account.
    ``(3) Not later than March 1, 2003, the Comptroller General shall--
        ``(A) complete the second review; and
        ``(B) submit to the specified committees of Congress a final 
    report on the administration and benefits of the Defense 
    Modernization Account.
    ``(4) Each such report shall include any recommended legislation 
regarding the account that the Comptroller General considers 
appropriate.
    ``(5) For purposes of this subsection, the term `specified 
committees of Congress' means the congressional committees referred to 
in section 2216(i)(2) of title 10, United States Code, as added by 
subsection (a).''
