Outcomes of the Comprehensive Review of Host Nation Support (HNS)
and the New Special Measures Agreement (SMA)

December 14, 2010

The Government of Japan (GOJ) and the Government of the United States of America (USG) have reached an understanding, in principle, on the following as a result of the comprehensive review of Host Nation Support (HNS) to make it more stable, efficient and effective.

1. Level of HNS

The overall level of HNS will be maintained at the current level (bearing in mind the budget of 188.1 billion yen in the Japanese fiscal year (JFY) 2010) over the new SMA period (five years from JFY2011 through 2015).

* The change of the wage based on the recommendation by the NPA will be reflected to the labor cost appropriately.

2. The new SMA

1. (1) Period of the new SMA will be 5 years
2. (2) Labor Costs

   The Upper Limit of the Number of Workers that the GOJ funds will be reduced from 23,055 to 22,625. The adjustment will be phased in over the new SMA period.

3. (3) Utilities Costs

   The GOJ will provide 72% (*) of the annual utilities costs up to ¥24.9 billion. The adjustment will be phased in over the new SMA period. (* Currently, Japan bears approximately 76%)

3. Facilities Improvement Program (FIP)

• The level of FIP funding will be no less than the current level (bearing in mind the budget of 20.6 billion yen in JFY2010) over the new SMA period.
• Any amount of reduction in the labor costs and the utilities costs resulting from the measures described in 2. (2) and (3) above will be added to the current level of FIP funding, noted above.
• Effort will be made as part of bilateral cooperation for the "Green Alliance" to ensure that programs are focused on the environment through such measures as the introduction of more energy-efficient and sustainable designs.
• Arrangements will be made to ensure stability and transparency in the process of adopting FIP projects.