To amend title 38, United States Code, to extend the period over which an individual must make payment to the Secretary to become entitled to educational assistance under the Montgomery GI Bill, to prospectively permit any servicemember to withdraw an election not to enroll under the Montgomery GI Bill, and to provide for certain servicemembers to become eligible for educational assistance under the Montgomery GI Bill.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Veterans Educational Opportunities 
Enhancement Act of 2001''.

SEC. 2. PERMITTING AN ELECTION TO REDUCE BASIC PAY OVER A PERIOD OF TWO 
              YEARS.

    (a) In General.--The first sentence of sections 3011(b) and 3012(c) 
of title 38, United States Code, are each amended by striking ``$100 
for each of the first 12 months'' and inserting ``$50 for each of the 
first 24 months''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to individuals who first become a member of the Armed Forces or 
first enter on active duty as a member of the Armed Forces on or after 
the date that is 90 days after the date of the enactment of this Act.

SEC. 3. PERMITTING WITHDRAWAL OF ELECTION NOT TO ENROLL UNDER THE 
              MONTGOMERY GI BILL.

    (a) In General.--Chapter 30 of title 38, United States Code, is 
amended by inserting after section 3018C the following new sections:
``Sec. 3018D. Opportunity for active-duty personnel to withdraw 
              election not to enroll
    ``(a) Notwithstanding any other provision of this chapter, each 
qualified individual (described in subsection (b)) may withdraw an 
election made under section 3011(c)(1) or 3012(d)(1) of this title not 
to receive educational assistance under this chapter during an open 
period (described in subsection (c)). The qualified individual shall 
withdraw such election in accordance with this section and on such form 
as the Secretary of Defense shall prescribe for such purpose.
    ``(b) A qualified individual referred to in subsection (a) is an 
individual who meets each of the following requirements:
            ``(1) The individual first became a member of the Armed 
        Forces or first entered on active duty as a member of the Armed 
        Forces on or after the date of the enactment of this section.
            ``(2) The individual continues to serve, without a break in 
        service, the period of service which, at the beginning of the 
        open period, such individual was obligated to serve.
            ``(3) The individual--
                    ``(A) serves the obligated period of service 
                described in paragraph (2);
                    ``(B) before completing such obligated period of 
                service, is discharged or released from active duty for 
                (i) a service-connected disability, (ii) a medical 
                condition which preexisted such service and which the 
                Secretary determines is  not service connected, (iii) 
hardship, or (iv) a physical or mental condition that was not 
characterized as a disability and did not result from the individual's 
own willful misconduct but did interfere with the individual's 
performance of duty, as determined by the Secretary of each military 
department in accordance with regulations prescribed by the Secretary 
of Defense (or by the Secretary of Transportation with respect to the 
Coast Guard when it is not operating as a service of the Navy); or
                    ``(C) before completing such obligated period of 
                service, is (i) discharged or released from active duty 
                for the convenience of the Government after completing 
                not less than 20 months of continuous active duty under 
                that period of obligated service, if such period was 
                less than three years, or 30 months of continuous 
                active duty under that period of obligated service, if 
                such period was at least three years, or (ii) 
                involuntarily discharged or released from active duty 
                for the convenience of the Government as a result of a 
                reduction in force, as determined by the Secretary 
                concerned in accordance with regulations prescribed by 
                the Secretary of Defense (or by the Secretary of 
                Transportation with respect to the Coast Guard when it 
                is not operating as a service in the Navy).
            ``(4) Before applying for benefits under this section, the 
        individual--
                    ``(A) completes the requirements of a secondary 
                school diploma (or equivalency certificate); or
                    ``(B) successfully completes (or otherwise receives 
                academic credit for) the equivalent of 12 semester 
                hours in a program of education leading to a standard 
                college degree.
            ``(5) Upon completion of such obligated period of service, 
        the individual--
                    ``(A) is discharged from service with an honorable 
                discharge, is placed on the retired list, is 
                transferred to the Fleet Reserve or Fleet Marine Corps 
                Reserve, or is placed on the temporary disability 
                retired list;
                    ``(B) continues on active duty; or
                    ``(C) is released from active duty for further 
                service in a reserve component of the Armed Forces 
                after service on active duty characterized by the 
                Secretary concerned as honorable service.
    ``(c) The open period referred to in subsection (a) with respect to 
a qualified individual is as follows:
            ``(1) Subject to paragraph (2), such period is the 90-day 
        period preceding the date of the termination of the initial 
        obligated period of active duty required of the individual 
        under section 3011 or 3012 of this title.
            ``(2) In the case of a discharge or release under 
        subparagraph (B) or (C) of subsection (b)(3), such period is 
        the 90-day period preceding the anticipated date of such 
        discharge or release.
    ``(d)(1) Subject to the succeeding provisions of this subsection, 
with respect to a qualified individual who withdraws, under subsection 
(a), an election under section 3011(c)(1) or 3012(d)(1) of this title--
            ``(A) the basic pay of the qualified individual shall be 
        reduced (in a manner determined by the Secretary concerned) 
        until the total amount by which such basic pay is reduced 
        equals $1,200; or
            ``(B) to the extent that basic pay is not so reduced before 
        the qualified individual's discharge or release from active 
        duty as specified in subsection (b)(5), the Secretary concerned 
        shall collect from the qualified individual an amount equal to 
        the difference between $1,200 and the total amount of 
        reductions under subparagraph (A), which shall be paid into the 
        Treasury of the United States as miscellaneous receipts.
    ``(2) In the case of an individual described in clause (B) or (C) 
of subsection (b)(3) whose discharge or release from active duty 
prevents the reduction of the basic pay of such individual by $1,200, 
an amount less than $1,200.
    ``(e) With respect to qualified individuals referred to in 
subsection (d)(1)(B), no amount of educational assistance allowance 
under this chapter shall be paid to the qualified individual until the 
earlier of the date on which the Secretary concerned collects the 
applicable amount under clause (i) of such subsection.
    ``(f) A withdrawal under subsection (a) is irrevocable.
    ``(g) The Secretary concerned shall provide for notice of the 
opportunity under this section to withdraw an election made under 
section 3011(c)(1) or 3012(d)(1) of this title.''.
    (b) Conforming Amendments.--(1) Sections 3011(c)(1) and 3012(d)(1) 
of such title are each amended by striking ``Any individual'' in the 
third sentence and inserting ``Subject to section 3018D, any 
individual''.
    (2) Section 3017(b)(1) of such title is amended to read as follows:
            ``(1) the total of--
                    ``(A) the amount reduced from the individual's pay 
                under section 3011(b), 3012(c), 3018(c), 3018A(b), 
                3018B(b), 3018C(b), 3018C(e), or 3018D(d) of this 
                title;
                    ``(B) the amount reduced from the individual's 
                retired pay under section 3018C(e) or 3018D(d) of this 
                title;
                    ``(C) the amount collected from the individual by 
                the Secretary under section 3018B(b), 3018C(b), 
                3018C(e), or 3018D(d) of this title; and
                    ``(D) the amount of any contribution made by the 
                individual under section 3011(e) or 3012(f) of this 
                title, less''.
    (c) Clerical Amendment.--The table of sections at the beginning of 
chapter 30 of such title is amended by inserting after the item 
relating to section 3018C the following new item:

``3018D. Opportunity for active-duty personnel to withdraw election not 
                            to enroll.''.

SEC. 4. OPPORTUNITY FOR CERTAIN ACTIVE-DUTY PERSONNEL TO ENROLL UNDER 
              THE MONTGOMERY GI BILL.

    (a) In General.--Chapter 30 of title 38, United States Code, as 
amended by section 3(a), is further amended by inserting after section 
3018D the following new section:
``Sec. 3018E. Opportunity for certain active-duty personnel to enroll
    ``(a)(1) Notwithstanding any other provision of this chapter, 
during the one-year period beginning on the date of the enactment of 
this section, a qualified individual (described in subsection (b)) may 
make an irrevocable election under this section to become entitled to 
basic educational assistance under this chapter.
    ``(2) The Secretary of each military department shall provide for 
procedures for a qualified individual to make an irrevocable election 
under this section in accordance with regulations prescribed by the 
Secretary of Defense for the purpose of carrying out this section or 
which the Secretary of Transportation shall provide for such purpose 
with respect to the Coast Guard when it is not operating as a service 
in the Navy.
    ``(b) A qualified individual referred to in subsection (a) is an 
individual who meets each of the following requirements:
            ``(1) The individual first became a member of the Armed 
        Forces or first entered on active duty as a member of the Armed 
        Forces before July 1, 1985.
            ``(2) The individual has served on active duty without a 
        break in service since the date the individual first became 
        such a member or first entered on active duty as such a member.
            ``(3) The individual is serving on active duty during the 
        one-year period referred to in subsection (a)(1).
            ``(4) The individual, before applying for benefits under 
        this section, has completed the requirements of a secondary 
        school diploma (or equivalency certificate) or has successfully 
        completed (or otherwise received academic credit for) the 
        equivalent of 12 semester hours in a program of education 
        leading to a standard college degree.
            ``(5) The individual, when discharged or released from 
        active duty, is discharged or released therefrom with an 
        honorable discharge.
    ``(c)(1) Subject to the succeeding provisions of this subsection, 
with respect to a qualified individual who makes an election under this 
section to become entitled to basic educational assistance under this 
chapter--
            ``(A) the basic pay of the qualified individual shall be 
        reduced (in a manner determined by the Secretary concerned) 
        until the total amount by which such basic pay is reduced is 
        $2,700; and
            ``(B) to the extent that basic pay is not so reduced before 
        the qualified individual's discharge or release from active 
        duty as specified in subsection (b)(5), at the election of the 
        qualified individual--
                    ``(i) the Secretary concerned shall collect from 
                the qualified individual; or
                    ``(ii) the Secretary concerned shall reduce the 
                retired or retainer pay of the qualified individual by,
        an amount equal to the difference between $2,700 and the total 
        amount of reductions under subparagraph (A), which shall be 
        paid into the Treasury of the United States as miscellaneous 
        receipts.
    ``(2)(A) The Secretary concerned shall provide for an 18-month 
period, beginning on the date the qualified individual makes an 
election under this section, for the qualified individual to pay that 
Secretary the amount due under paragraph (1).
    ``(B) Nothing in subparagraph (A) shall be construed as modifying 
the period of eligibility for and entitlement to basic educational 
assistance under this chapter applicable under section 3031 of this 
title.
    ``(d) With respect to qualified individuals referred to in 
subsection (c)(1)(B), no amount of educational assistance allowance 
under this chapter shall be paid to the qualified individual until the 
earlier of the date on which--
            ``(1) the Secretary concerned collects the applicable 
        amount under clause (i) of such subsection; or
            ``(2) the retired or retainer pay of the qualified 
        individual is first reduced under clause (ii) of such 
        subsection.
    ``(e) The Secretary, in conjunction with the Secretary of Defense, 
shall provide for notice of the opportunity under this section to elect 
to become entitled to basic educational assistance under this 
chapter.''.
    (b) Conforming Amendments.--Section 3017(b)(1) of such title, as 
amended by section 3(b), is further amended in each of subparagraphs 
(A), (B), and (C)--
            (1) by striking ``or'' before ``3018D(d)''; and
            (2) by inserting ``, or 3018E(c)'' before ``of this 
        title''.
    (c) Clerical Amendment.--The table of sections at the beginning of 
chapter 30 of such title, as amended by section 3(c), is further 
amended by inserting after the item relating to section 3018D the 
following new item:

``3018E. Opportunity for certain active-duty personnel to enroll.''.

Summary: Veterans Educational Opportunities Enhancement Act of 2001 - Amends Federal veterans' benefits provisions to allow the basic pay reduction for entitlement to veterans educational assistance under the Montgomery GI Bill to be taken over two years . Allows the withdrawal of an election not to receive such assistance during a specified open period for an individual who: (1) first becomes a member or enters into active service on or after the enactment of this Act. (2) continues to serve the period of obligated service without a service break. (3) before completing such period, is discharged or released from duty for a service-connected disability, a preexisting medical condition, a hardship, a physical or mental condition that did not result from the individual's own willful misconduct, or for the convenience of the Government. (4) completes the requirements of a secondary school diploma or equivalency certificate or 12 semester hours toward a standard college degree. And (5) is discharged honorably or placed on one of specified retirement lists. Provides a basic pay reduction for entitlement to such assistance. Provides an opportunity for certain active-duty military personnel who first became a member of the armed forces before July 1, 1985, to enroll for such assistance during an open period under eligibility requirements very similar to those above, and requires a similar basic pay reduction for such assistance.