To authorize the repair, overhaul, and refurbishment of defense articles for sale or transfer to eligible foreign countries and entities.

1. Adds SEC. 1246. PROGRAM ON REPAIR, OVERHAUL, AND REFURBISHMENT OF DEFENSE ARTICLES FOR SALE OR TRANSFER TO ELIGIBLE FOREIGN COUNTRIES AND ENTITIES at the end of subtitle D of title XII

   Adds a section

   In S. 3254 · Placed on Calendar Senate

   (e) Capital Project Defined.--In this section, the term "capital project" has the meaning given that term in section 308 of the Aid, Trade, and Competitiveness Act of 1992 (22 U.S.C. 2421e).

   Inserted: SEC. 1246. PROGRAM ON REPAIR, OVERHAUL, AND REFURBISHMENT OF DEFENSE ARTICLES FOR SALE OR TRANSFER TO ELIGIBLE FOREIGN COUNTRIES AND ENTITIES.

   Inserted: (a) Program Authorized.--The Secretary of Defense may carry out a program to repair, overhaul, or refurbish in-stock defense articles in anticipation of the sale or transfer of such defense articles to eligible foreign countries or international organizations under law.

   Inserted: (b) Fund for Support of Program Authorized.--The Secretary of Defense may establish and administer a fund to be known as the "Special Defense Repair Fund" (in this section referred to as the "Fund") to support the program authorized by subsection (a).

   Inserted: (c) Credits to Fund.--

   Inserted: (1) In general.--Subject to paragraphs (2) and (3), the following shall be credited to the Fund:

   Inserted: (A) Subject to applicable provisions of appropriations Acts, such amounts, not to exceed $48,400,000 per fiscal year, from amounts authorized to be appropriated for the Department of Defense for operation and maintenance for the Army as the Secretary of Defense considers appropriate.

   Inserted: (B) Notwithstanding section 114(c) of title 10, United States Code, any collection from the sale or transfer of defense articles from Department of Defense stocks repaired, overhauled, or refurbished with amounts from the Fund that are not intended to be replaced which sale or transfer is made pursuant to section 21(a)(1)(A) of the Arms Export Control Act (22 U.S.C. 2761(a)(1)(A)), the Foreign Assistance Act of 1961 (22 U.S.C. 2151 et seq.), or another provision of law.

   Inserted: (C) Notwithstanding section 37(a) of the Arms Export Control Act (22 U.S.C. 2777(a)), any cash payment from the sale or transfer of defense articles from Department of Defense stocks repaired, overhauled, or refurbished with amounts from the Fund that are intended to be replaced.

   Inserted: (2) Limitation on amounts creditable from sale or transfer of articles.--

   Inserted: (A) Credits in connection with articles not to be replaced.--The amount credited to the Fund under paragraph (1)(B) in connection with a collection from the sale or transfer of defense articles may not exceed the cost incurred by the Department of Defense in repairing, overhauling, or refurbishing such defense articles under the program authorized by subsection (a).

   Inserted: (B) Credits in connection with articles to be replaced.--The amount credited to the Fund under paragraph (1)(C) in connection with a sale or transfer of defense articles may not exceed the amounts from the Fund used to repair, overhaul, or refurbish such defense articles.

   Inserted: (3) Limitation on size of fund.--The total amount in the Fund at any time may not exceed $50,000,000.

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   Inserted: (4) Treatment of amounts credited.--Amounts credited to the Fund under this subsection shall be merged with amounts in the Fund, and shall remain available until expended.

   Inserted: (d) Nonavailability of Amounts in Fund for Storage, Maintenance, and Related Costs.--Following the repair, overhaul, or refurbishment of defense articles under the program authorized by subsection (a), amounts in the Fund may not be used to pay costs of storage and maintenance of such defense articles or any other costs associated with the preservation or preparation for sale or transfer of such defense articles.

   Inserted: (e) Sales or Transfers of Defense Articles.--

   Inserted: (1) In general.--Any sale or transfer of defense articles repaired, overhauled, or refurbished under the program authorized by subsection (a) shall be in accordance with--

   Inserted: (A) the Arms Export Control Act (22 U.S.C. 2751 et seq.);

   Inserted: (B) the Foreign Assistance Act of 1961; or

   Inserted: (C) another provision of law authorizing such sale or transfer.

   Inserted: (2) Secretary of state concurrence required for certain sales or transfers to foreign countries.--If the sale or transfer of defense articles occurs in accordance with a provision of law referred to in paragraph (1)(C) that does not otherwise require the concurrence of the Secretary of State for the sale or transfer, the sale or transfer may be made only with the concurrence of the Secretary of State.

   Inserted: (f) Transfers of Amounts.--

   Inserted: (1) Transfer to other department of defense accounts.--Amounts in the Fund may be transferred to any Department of Defense account used to carry out the program authorized by subsection (a). Any amount so transferred shall be merged with amounts in the account to which transferred, and shall be available for the same purposes and the same time period as amounts in the account to which transferred.

   Inserted: (2) Transfer from other department of defense accounts.--Upon a determination by the Secretary of Defense with respect to an amount transferred under paragraph (1) that all or part of such transfer is not necessary for the purposes transferred, such amount may be transferred back to the Fund. Any amount so transferred shall be merged with amounts in the Fund, and shall remain available until expended.

   Inserted: (g) Certain Excess Proceeds To Be Credited to Special Defense Acquisition Fund.--Any collection from the sale or transfer of defense articles that are not intended to be replaced in excess of the amount creditable to the Fund under subsection (c)(2)(A) shall be credited to the Special Defense Acquisition Fund established pursuant to chapter 5 of the Arms Export Control Act (22 U.S.C. 2795 et seq.).

   Inserted: (h) Reports.--

   Inserted: (1) Annual report.--Not later than 45 days after the end of each fiscal year through the date of expiration specified in subsection (j), the Secretary of Defense shall submit to the congressional defense committees a report on the authorities under this section during such fiscal year. Each report shall include, for the fiscal year covered by such report, the following:

   Inserted: (A) The types and quantities of defense articles repaired, overhauled, or refurbished under the program authorized by subsection (a).

   Inserted: (B) The value of the repair, overhaul, or refurbishment performed under the program.

   Inserted: (C) The amount of operation and maintenance funds credited to the Fund under subsection (c)(1)(A).

   Inserted: (D) The amount of any collections from the sale or transfer of defense articles repaired, overhauled, or refurbished under the program that was credited to the Fund under subsection (c)(1)(B).

   Inserted: (E) The amount of any cash payments from the sale or transfer of defense articles repaired, overhauled, or refurbished under the program that was credited to the Fund under subsection (c)(1)(C).

   Inserted: (2) Assessment report.--Not later than February 1, 2015, the Secretary of Defense shall submit to the congressional defense committees a report on the operation of the authorities in this section. The report shall include an assessment of the effectiveness of the authorities in meeting the objectives of the program authorized by subsection (a).

   Inserted: (i) Defense Article Defined.--In this section, the term "defense article" has the meaning given that term in section 47(3) of the Arms Export Control Act (22 U.S.C. 2794(3)).

   Inserted: (j) Expiration of Authority.--The authority to carry out the program authorized by subsection (a), and to use amounts in the Fund in support of the program, shall expire on September 30, 2015.

   Inserted: (k) Funding for Fiscal Year 2013.--Of the amounts authorized to be appropriated for fiscal year 2013 by section 1504 for Overseas Contingency Operations and available for operation and maintenance for the Army as specified in funding table in section 4302, $48,400,000 shall be available for deposit in the Fund pursuant to subsection (c)(1)(A), with the amount of the deposit to be attributable to amounts otherwise so available for the YMQ-18A unmanned aerial vehicle, which has been cancelled.

   Original wording

   At the end of subtitle D of title XII, add the following:

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As printed