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[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2131 Introduced in House (IH)]

109th CONGRESS
  1st Session
                                H. R. 2131

 To improve benefits for members of the Armed Forces and veterans and 
                  for their dependents and survivors.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                              May 5, 2005

Mr. Edwards (for himself, Mr. Abercrombie, Mr. Ackerman, Mr. Allen, Mr. 
Baca, Ms. Baldwin, Mr. Becerra, Ms. Berkley, Mr. Berman, Mr. Berry, Mr. 
    Bishop of Georgia, Mr. Bishop of New York, Mr. Blumenauer, Ms. 
 Bordallo, Mr. Boyd, Ms. Corrine Brown of Florida, Mr. Brown of Ohio, 
Mr. Butterfield, Mrs. Capps, Mr. Capuano, Mr. Cardin, Mr. Cardoza, Mr. 
   Carnahan, Mr. Case, Mr. Chandler, Mrs. Christensen, Mr. Clay, Mr. 
Cleaver, Mr. Clyburn, Mr. Conyers, Mr. Costa, Mr. Costello, Mr. Cramer, 
 Mr. Crowley, Mr. Cuellar, Mr. Cummings, Mrs. Davis of California, Mr. 
    DeFazio, Mr. Delahunt, Ms. DeLauro, Mr. Dicks, Mr. Dingell, Mr. 
 Doggett, Mr. Emanuel, Mr. Engel, Ms. Eshoo, Mr. Etheridge, Mr. Evans, 
    Mr. Faleomavaega, Mr. Farr, Mr. Filner, Mr. Ford, Mr. Frank of 
Massachusetts, Mr. Gonzalez, Mr. Gene Green of Texas, Mr. Grijalva, Mr. 
   Gutierrez, Mr. Hastings of Florida, Ms. Herseth, Mr. Higgins, Mr. 
Hinchey, Mr. Hinojosa, Mr. Holden, Mr. Holt, Mr. Honda, Mr. Hoyer, Mr. 
Inslee, Mr. Israel, Mr. Jackson of Illinois, Ms. Jackson-Lee of Texas, 
Mr. Jefferson, Ms. Eddie Bernice Johnson of Texas, Mrs. Jones of Ohio, 
Ms. Kaptur, Mr. Kennedy of Rhode Island, Mr. Kildee, Ms. Kilpatrick of 
Michigan, Mr. Kind, Mr. Langevin, Mr. Lantos, Mr. Larsen of Washington, 
 Mr. Larson of Connecticut, Ms. Lee, Mr. Levin, Mr. Lewis of Georgia, 
  Mr. Lipinski, Ms. Zoe Lofgren of California, Mrs. Lowey, Mr. Lynch, 
 Mrs. Maloney, Mr. Markey, Ms. Matsui, Mrs. McCarthy, Ms. McCollum of 
Minnesota, Mr. McDermott, Mr. McGovern, Mr. McIntyre, Mr. McNulty, Mr. 
 Meehan, Mr. Meek of Florida, Mr. Meeks of New York, Mr. Menendez, Mr. 
 Michaud, Mr. George Miller of California, Mr. Mollohan, Mr. Moore of 
   Kansas, Mr. Murtha, Mr. Nadler, Mrs. Napolitano, Ms. Norton, Mr. 
Oberstar, Mr. Olver, Mr. Ortiz, Mr. Owens, Mr. Pallone, Mr. Payne, Ms. 
  Pelosi, Mr. Peterson of Minnesota, Mr. Price of North Carolina, Mr. 
   Rahall, Mr. Rangel, Mr. Reyes, Mr. Ross, Mr. Rothman, Ms. Roybal-
  Allard, Mr. Ruppersberger, Mr. Rush, Mr. Ryan of Ohio, Ms. Linda T. 
   Sanchez of California, Ms. Schakowsky, Mr. Schiff, Ms. Wasserman 
Schultz, Ms. Schwartz of Pennsylvania, Mr. Scott of Georgia, Mr. Scott 
of Virginia, Mr. Serrano, Mr. Sherman, Mr. Skelton, Ms. Slaughter, Mr. 
Smith of Washington, Ms. Solis, Mr. Spratt, Mr. Stark, Mr. Strickland, 
 Mr. Stupak, Mr. Thompson of Mississippi, Mr. Tierney, Mr. Towns, Mr. 
   Udall of New Mexico, Mr. Van Hollen, Ms. Waters, Ms. Watson, Mr. 
 Waxman, Mr. Weiner, Mr. Wexler, Ms. Woolsey, and Mr. Wynn) introduced 
 the following bill; which was referred to the Committee on Veterans' 
Affairs, and in addition to the Committees on Ways and Means and Armed 
Services, for a period to be subsequently determined by the Speaker, in 
   each case for consideration of such provisions as fall within the 
                jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL

 
 To improve benefits for members of the Armed Forces and veterans and 
                  for their dependents and survivors.

    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 as the ``New GI Bill of 
Rights for the 21st Century Act''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
                     TITLE I--VETERANS HEALTH CARE

                    Subtitle A--Increase in Funding

Sec. 101. Authorization of additional funding for veterans medical 
                            care.
    Subtitle B--Equitable Medication Copayments and Enrollment Fees

Sec. 111. Prohibition on increases in medication copayment for veterans 
                            and imposition of healthcare enrollment fee 
                            for veterans.
                   Subtitle C--Mental Health Benefits

Sec. 121.  Definition.
                Chapter 1--Veterans of past deployments

Sec. 125. Six-year extension of eligibility for readjustment counseling 
                            services for Vietnam-era veterans.
                       Chapter 2--Military issues

Sec. 131. Department of Veterans Affairs-Department of Defense Health 
                            Care Sharing Incentive Fund.
Sec. 132. Collection of data from pre- and post-deployment health 
                            assessments.
Sec. 133. Preventative maintenance post-deployment intervention.
  Chapter 3--Prevention, early detection, and treatment for returning 
                                 troops

Sec. 141. Study to identify factors that decrease the likelihood of the 
                            development of chronic PTSD despite combat 
                            exposure.
Sec. 142. Extension of period of enhanced eligibility for VA health 
                            services for veterans who served in combat 
                            theaters of operations.
Sec. 143. Demonstration project to station Department of Veterans 
                            Affairs psychologists and psychiatrists at 
                            major demobilization sites and military 
                            treatment facilities.
Sec. 144. Model programs for post-deployment mental health practice.
Sec. 145. Performance measures for Department of Veterans Affairs 
                            health care administrators.
Chapter 4--Department of Defense/Department of Veterans Affairs Council 
                    on Post-Deployment Mental Health

Sec. 151. Establishment of Council.
Sec. 152. Duties of Council.
     Chapter 5--Capacity Building in Department of Veterans Affairs

Sec. 161. Plan for expansion of Department of Veterans Affairs system 
                            to expand access to specialized PTSD care.
Sec. 162. Additional Department of Veterans Affairs resources.
                       Chapter 6--Family therapy

Sec. 165. Eligibility for family counseling and bereavement counseling.
                   Chapter 7--Educational initiatives

Sec. 171. Training program for health-care providers.
Sec. 172. Curriculum and protocols for cross-training of Department of 
                            Veterans Affairs clinicians.
Sec. 173. Publication of state-of-the-art post-deployment mental health 
                            problems diagnosis and treatment.
Sec. 174. Protocols for pain management for PTSD and war-related pain.
Sec. 175. Protocols for treatment of substance use disorders.
Sec. 176. Protocols for diagnosis of post-traumatic stress disorder.
        Chapter 8--National Steering Committee on PTSD Education

Sec. 181. National Steering Committee.
Sec. 182. Funding support for National Center for PTSD.
Sec. 183. Continuing education to mental health providers.
Sec. 184. Web-based curriculum to sponsor clinician training 
                            initiatives.
                          Chapter 9--Benefits

Sec. 191. Identification of deficiencies in PTSD disability 
                            examinations.
Sec. 192. Criteria for determining medical conditions associated with 
                            PTSD.
                      Chapter 10--Public awareness

Sec. 195. Public awareness program.
Sec. 196. Web site and materials for general campaign of awareness of 
                            PTSD.
                      TITLE II--DISABLED VETERANS

                      Subtitle A--Payment Matters

Sec. 201. Eligibility for payment of both retired pay and veterans' 
                            disability compensation for certain 
                            additional military retirees with 
                            compensable service-connected disabilities.
Sec. 202. Coordination of service eligibility for combat-related 
                            special compensation and concurrent 
                            receipt.
Sec. 203. Interim payments under certain veterans claims when decision 
                            is delayed following remand.
                          Subtitle B--Outreach

Sec. 211. Rescission of Department of Veterans Affairs memorandum.
Sec. 212. Outreach activities.
Sec. 213. Requirement for outreach efforts and dedicated staff at each 
                            regional office.
                  TITLE III--SURVIVORS AND DEPENDENTS

Sec. 301. Repeal of dependency and indemnity compensation offset from 
                            survivor benefit plan surviving spouse 
                            annuities.
Sec. 302. Increase in monthly dependency and indemnity compensation 
                            payable to a surviving spouse for so long 
                            as there are minor children.
      TITLE IV--ADDITIONAL SUPPORT FOR ACTIVE DUTY SERVICEMEMBERS

Sec. 401. One-time bonus for certain service in connection with 
                            Operation Iraqi Freedom or Operation 
                            Enduring Freedom.
Sec. 402. Increase in active-duty end-strength levels for the Armed 
                            Forces.
Sec. 403. Additional fiscal year 2006 pay increase for middle- and 
                            senior-level enlisted members and warrant 
                            officers.
            TITLE V--EDUCATION, EMPLOYMENT AND COMPENSATION

               Subtitle A--Active Duty Montgomery GI Bill

Sec. 501. Enhanced benefits under the Montgomery GI Bill for four years 
                            of active-duty service.
Sec. 502. Increase in rates of basic educational assistance under the 
                            Montgomery GI Bill.
Sec. 503. Repeal of pay reduction and high school graduation 
                            requirement for participation in basic 
                            educational assistance under the Montgomery 
                            GI Bill.
Sec. 504. Repeal of delimiting date for use of entitlement to basic 
                            educational assistance under the Montgomery 
                            GI Bill.
Sec. 505. Elimination of limitation to critical military skills for 
                            authority to transfer entitlement.
Sec. 506. Increase in repayment amounts under the student loan 
                            repayment programs for servicemembers.
Sec. 507. Expansion of programs of education eligible for accelerated 
                            payments of educational assistance under 
                            the Montgomery GI Bill.
                 Subtitle B--Reserve Montgomery GI Bill

Sec. 511. Educational assistance under Montgomery GI Bill for members 
                            of the Selected Reserve who aggregate more 
                            than 2 years of active duty service during 
                            any 5-year period.
        Subtitle C--Employment Assistance for Homeless Veterans

Sec. 521. Reauthorization of appropriations for Homeless Veterans 
                            Reintegration Program.
Sec. 522. Expansion of Homeless Veterans Reintegration Program to 
                            include veterans at imminent risk for 
                            homelessness.
                      Subtitle D--Payment Matters

Sec. 531. No reduction in monthly military pay and allowances for 
                            members of the uniformed services wounded 
                            or injured in combat zones.
Sec. 532. Repeal of time limitation on exclusion of combat zone 
                            compensation by reason of hospitalization.
 TITLE VI--RESERVE COMPONENTS AND RECRUITMENT AND RETENTION INITIATIVES

                        Subtitle A--Health Care

Sec. 601. Expanded Eligibility of selected reserve members under 
                            TRICARE program.
            Subtitle B--Recruitment and Retention Incentives

Sec. 611. Increase in authorized maximum annual amount of special pay 
                            for Selected Reserve health care 
                            professionals in critically short wartime 
                            specialties and authorized duration of pay.
Sec. 612. Reenlistment bonus for members of Selected Reserve.
Sec. 613. Increase in authorized maximum amount of Selected Reserve 
                            enlistment bonus.
Sec. 614. Increase in authorized maximum amount for reserve affiliation 
                            bonus under reserve affiliation agreements 
                            entered into during fiscal year 2006.
Sec. 615. Increase in authorized maximum amount of general enlistment 
                            bonus.
Sec. 616. Use of referral bonus to promote enlistments in Selected 
                            Reserve.
Sec. 617. Extension of active-duty retention bonuses and special pays 
                            for health care professionals to reserve 
                            component officers.
Sec. 618. Critical-skills accession bonus for persons enrolled in 
                            Senior Reserve Officers' Training Corps who 
                            are obtaining nursing degrees.
                      Subtitle C--Payment Matters

Sec. 621. Nonreduction in pay while Federal employee is serving on 
                            active duty in a reserve component of the 
                            uniformed services.
Sec. 622. Active-duty reserve component employee credit added to 
                            general business credit.
Sec. 623. Differential wage payments.
Sec. 624. Credit for income differential for employment of activated 
                            military reservist and replacement 
                            personnel.
Sec. 625. Employer contributions to IRAs of certain members of the 
                            uniformed services.
                           TITLE VII--FUNDING

Sec. 701. Repeal of 2001 tax cut for high income taxpayers.
Sec. 702. Repeal of scheduled termination of phaseout of personal 
                            exemptions.
Sec. 703. Repeal of scheduled phaseout of overall limitation on 
                            itemized deductions.

                     TITLE I--VETERANS HEALTH CARE

                    Subtitle A--Increase in Funding

SEC. 101. AUTHORIZATION OF ADDITIONAL FUNDING FOR VETERANS MEDICAL 
              CARE.

    (a) Authorization.--There are authorized to be appropriated to the 
Department of Veterans Affairs, in addition to amounts otherwise 
authorized to be appropriated, the amount of $3,200,000,000 for fiscal 
year 2006.
    (b) Improved Access to Care.--Amounts appropriated pursuant to the 
authorization of appropriations in subsection (a) shall be used to 
ensure that veterans seeking healthcare from the Department of Veterans 
Affairs receive their initial appointment for healthcare for a date 
that is not later than 30 days after the date on which the request is 
made.

    Subtitle B--Equitable Medication Copayments and Enrollment Fees

SEC. 111. PROHIBITION ON INCREASES IN MEDICATION COPAYMENT FOR VETERANS 
              AND IMPOSITION OF HEALTHCARE ENROLLMENT FEE FOR VETERANS.

    (a) Medication Copayments.--During the period beginning on the date 
of the enactment of this Act and ending on October 1, 2007, the 
Secretary of Veterans Affairs may not implement under subsection (b) of 
section 1722A of title 38, United States Code, an increase in the 
copayment for medications required under subsection (a) of that 
section.
    (b) Enrollment Fee.--During the period beginning on the date of the 
enactment of this Act and ending on October 1, 2007, the Secretary of 
Veterans Affairs may not implement an enrollment fee for veterans 
enrolling (or renewing enrollment) in the Department of Veterans 
Affairs healthcare system under section 1705 of such title.

                   Subtitle C--Mental Health Benefits

SEC. 121. DEFINITION.

    In this subtitle, the term ``PTSD'' means post-traumatic stress 
disorder.

                CHAPTER 1--VETERANS OF PAST DEPLOYMENTS

SEC. 125. SIX-YEAR EXTENSION OF ELIGIBILITY FOR READJUSTMENT COUNSELING 
              SERVICES FOR VIETNAM-ERA VETERANS.

    Section 1712A(a)(1)(B)(ii) of title 38, United States Code, is 
amended by striking ``January 1, 2004'' and inserting ``January 1, 
2010''.

                       CHAPTER 2--MILITARY ISSUES

SEC. 131. DEPARTMENT OF VETERANS AFFAIRS-DEPARTMENT OF DEFENSE HEALTH 
              CARE SHARING INCENTIVE FUND.

    (a) In General.--The Secretary of Veterans Affairs and the 
Secretary of Defense shall jointly take such steps as necessary to 
implement the proposal of the Center for the Study of Traumatic Stress 
at the Uniformed Services University of the Health Sciences for a 
Department of Veterans Affairs-Department of Defense Health Care 
Sharing Incentive Fund.
    (b) Telecommunications Support.--As part of the implementation of 
the proposal referred to in subsection (a), the two Secretaries shall 
provide for a system of telecommunications to support the following:
            (1) Continuing education and support for front-line 
        (forward-deployed) providers of health-care services.
            (2) Enhanced treatment capacity for addressing acute 
        episodes of PTSD and other mental health disorders in combat 
        theaters, including--
                    (A) real-time access to clinical specialty support;
                    (B) web-based information on state-of-the-art 
                protocols for the treatment and diagnosis of PTSD and 
                other mental health disorders; and
                    (C) educational programs concerning PTSD and other 
                mental health disorders commonly associated with 
                deployment.

SEC. 132. COLLECTION OF DATA FROM PRE- AND POST-DEPLOYMENT HEALTH 
              ASSESSMENTS.

    (a) Data Collection.--The Secretary of Defense shall take 
appropriate steps to assist the Secretary of Veterans Affairs with the 
collection of data from pre- and post-deployment health assessments of 
members of the Armed Forces that may be relevant for identification and 
treatment by the Secretary of Veterans Affairs of PTSD and other post-
deployment mental health issues. The Secretary of Defense may provide 
such information in aggregate, unidentified format and may provide such 
information on a monthly basis or on such other schedule as the two 
Secretaries may agree to.
    (b) Consent Forms.--The Secretary of Defense shall develop forms 
for use in obtaining the written consent of members of the Armed Forces 
to allow the Department of Veterans Affairs to collect data contained 
on pre-deployment and post-deployment health assessment forms with 
relevant treatment information concerning PTSD and other mental health 
problems that may be associated with combat stress or readjustment to 
civilian life from those members of the Armed Forces to be discharged 
or demobilized within 90 days. Such consent forms shall be developed 
and made available for use by members of the Armed Forces covered by 
the preceding sentence not later than 60 days after the date of the 
enactment of this Act.
    (c) Identification of Substance Use Disorders.--The Secretary of 
Defense shall include in pre-deployment and post-deployment health 
assessments questions to assist in identification of existing or 
potential substance use disorders among members of the Armed Forces.

SEC. 133. PREVENTATIVE MAINTENANCE POST-DEPLOYMENT INTERVENTION.

    (a) In General.--The Secretary of Veterans Affairs shall conduct 
routine preventative maintenance intervention for all members of the 
Armed Forces returning from deployment in a combat theater. Such 
intervention shall be conducted between 90 and 180 days after such 
members return from such deployment.
    (b) Personnel.--For purposes of such intervention, the Secretary of 
Veterans Affairs may use--
            (1) staff of the Department of Veterans Affairs, including 
        readjustment counseling staff; and
            (2) persons trained by the Department of Veterans Affairs, 
        including volunteers from military unit associations, veteran 
        service organizations, or other nonprofit organizations.
    (c) Size.--Such intervention shall be conducted with no more than 
six returning servicemembers at a time.
    (d) Purpose.--The purpose of such intervention shall be the 
following:
            (1) To identify and distinguish symptoms of ``common'' 
        acute stress reactions from those of chronic and severe post-
        traumatic stress disorder.
            (2) To discuss concerns of combat personnel and those 
        expressed by their family members.
            (3) To refer returning servicemembers to appropriate 
        services, as necessary.
            (4) To disseminate educational materials about post-
        deployment mental health issues, including PTSD to 
        servicemembers.
            (5) To provide follow-up educational materials by mail to 
        family members.
            (6) To provide information concerning homelessness, 
        including risk factors, awareness assessment, and contact 
        information for preventative assistance associated with 
        homelessness.
    (e) VA Participation in Additional Demobilization Activities.--The 
Secretary of Defense shall provide for the Secretary of Veterans 
Affairs to participate in additional demobilization activities, 
including the Transitional Assistance Program, that are conducted 
within the Department of Defense for the purposes specified in 
subsection (d).

  CHAPTER 3--PREVENTION, EARLY DETECTION, AND TREATMENT FOR RETURNING 
                                 TROOPS

SEC. 141. STUDY TO IDENTIFY FACTORS THAT DECREASE THE LIKELIHOOD OF THE 
              DEVELOPMENT OF CHRONIC PTSD DESPITE COMBAT EXPOSURE.

    (a) Study.--The Secretary of Veterans Affairs shall provide for a 
study, to be conducted by an entity other than the Department of 
Veterans Affairs and the Department of Defense, to identify factors 
that decrease the likelihood of the development of chronic post-
traumatic stress disorder (PTSD) in servicemembers and veterans who 
have had combat exposure, including exposure to guerilla warfare.
    (b) Report.--The Secretary shall provide for the entity conducting 
the study under subsection (a) to submit a report on the results of the 
study to the Secretary and the Congress not later than one year after 
the date of the enactment of this Act.

SEC. 142. EXTENSION OF PERIOD OF ENHANCED ELIGIBILITY FOR VA HEALTH 
              SERVICES FOR VETERANS WHO SERVED IN COMBAT THEATERS OF 
              OPERATIONS.

    Section 1710(e)(3)(C) of title 38, United States Code, is amended 
by striking ``2 years'' and inserting ``five years''.

SEC. 143. DEMONSTRATION PROJECT TO STATION DEPARTMENT OF VETERANS 
              AFFAIRS PSYCHOLOGISTS AND PSYCHIATRISTS AT MAJOR 
              DEMOBILIZATION SITES AND MILITARY TREATMENT FACILITIES.

    (a) Demonstration Project.--The Secretary of Defense and the 
Secretary of Veterans Affairs shall jointly provide for the conduct of 
a demonstration project under which Department of Veterans Affairs 
psychologists and psychiatrists are stationed at major demobilization 
sites and military treatment facilities.
    (b) Purpose.--The purposes of the demonstration project shall be as 
follows:
            (1) Identify, on an aggregate level, need for mental health 
        services among active-duty, Reserve, and National Guard 
        members.
            (2) Provide such services or refer members for necessary 
        services.
            (3) Advise servicemembers of the need for continuous 
        services.
            (4) Identify the obstacles servicemembers have in seeking 
        appropriate mental health care.
    (c) Funding.--There is authorized to be appropriated such sums as 
may be necessary for each of fiscal years 2006, 2007, and 2008 for the 
conduct of the demonstration project. Amounts for the conduct of the 
project shall be provided equally by the Secretary of Veterans Affairs 
and the Secretary of Defense.
    (d) Eligibility Criteria.--Based on the results of the 
demonstration project, the Secretaries shall identify appropriate 
eligibility criteria for programs to best respond to the needs of 
veterans, servicemembers, and their families for post-deployment mental 
health services. The criteria identified shall be included in the 
report under subsection (e).
    (e) Report.--The Secretary of Veterans Affairs shall submit to the 
Committees on Veterans' Affairs of the Senate and House of 
Representatives a report providing the results of the demonstration 
project. The report shall be submitted not later than 18 months after 
the date of the enactment of this Act.

SEC. 144. MODEL PROGRAMS FOR POST-DEPLOYMENT MENTAL HEALTH PRACTICE.

    (a) Model Programs.--The Secretary of Veterans Affairs, in 
consultation with the Secretary of Defense, shall develop model 
programs to respond to a variety of mental health disorders prevalent 
among veterans of service in Operation Iraqi Freedom and Operation 
Enduring Freedom. The program shall be implemented at three sites 
selected by the Secretary, of which--
            (1) at least one site shall assign case managers to 
        veterans receiving care under such program; and
            (2) at least one site shall use an integrated mental health 
        and primary care model for post-deployment mental health 
        practice.
    (b) Purpose.--The purpose of the model program shall be as follows:
            (1) Development of training protocols for involved 
        clinicians.
            (2) Identification of medical conditions which may be 
        associated with post-deployment mental health problems 
        including PTSD.
            (3) Identification of ``best practices'' for treatment of 
        post-deployment mental health problems including PTSD.
            (4) Dissemination of results to the Veterans Health 
        Administration and the Veterans Benefits Administration of the 
        Department of Veterans Affairs.
    (c) Authorization.--There is authorized to be appropriated for the 
purposes of subsection (a) the amount of $5,000,000 for each of fiscal 
years 2006, 2007, and 2008.

SEC. 145. PERFORMANCE MEASURES FOR DEPARTMENT OF VETERANS AFFAIRS 
              HEALTH CARE ADMINISTRATORS.

    (a) Performance Measures.--The Secretary of Defense and the 
Secretary of Veterans Affairs, acting through the Department of 
Defense/Department of Veterans Affairs Council on Post-Deployment 
Mental Health established under section 151, shall develop performance 
measures for Department of Veterans Affairs regional health-care 
directors (referred to as VISN directors) and Department of Defense 
TRICARE regional managers to ensure the appropriate deployment of 
resources to implement the treatment protocols referred to as ``Iraq 
War Clinical Practice Guidelines''.
    (b) Use of Performance Measures.--The performance measures under 
subsection (a) shall be designed to assess--
            (1) access and availability of PTSD treatment for 
        servicemembers returned from deployment in a combat theater; 
        and
            (2) implementation of protocols referred to in subsection 
        (a).

CHAPTER 4--DEPARTMENT OF DEFENSE/DEPARTMENT OF VETERANS AFFAIRS COUNCIL 
                    ON POST-DEPLOYMENT MENTAL HEALTH

SEC. 151. ESTABLISHMENT OF COUNCIL.

    The Secretary of Defense and the Secretary of Veterans Affairs 
shall jointly establish a council to be known as the Department of 
Defense/Department of Veterans Affairs Council on Post-Deployment 
Mental Health. The council shall be composed of leadership of the two 
departments in the areas of mental health, PTSD, substance abuse, and 
military sexual trauma. The council shall be established not later than 
120 days after the date of the enactment of this Act.

SEC. 152. DUTIES OF COUNCIL.

    (a) Duties.--The Department of Defense/Department of Veterans 
Affairs Council on Post-Deployment Mental Health shall have the 
following duties:
            (1) Review of the continuum of care between the Department 
        of Defense and the Department of Veterans Affairs for mental 
        health, PTSD, substance abuse, and military sexual trauma.
            (2) Identification of gaps in the treatment capability of 
        the health-care systems of the Department of Defense and 
        Department of Veterans Affairs for mental health, PTSD, 
        substance abuse, and military sexual trauma and expected gaps 
        in such continuum, with emphasis on access to services in rural 
        areas, to meet the expected demand from current users and 
        servicemembers returning from Operation Iraqi Freedom and 
        Operation Enduring Freedom and other deployments.
            (3) Promotion, within both systems, of an educational 
        program to implement the jointly developed Iraq War Clinical 
        Practice Guidelines.
            (4) Development of outcome monitors and quality improvement 
        instruments to ensure that internal policy regarding PTSD is 
        implemented (including TRICARE and VISN directors' performance 
        measures under section 307).
            (5) Recommendation of policies to reduce the stigma 
        associated with the seeking of mental health care by active-
        duty, Reserve, and National Guard members.
            (6) Identification of the highest post-deployment mental 
        health research priorities for the two departments.
            (7) Communications to inform active-duty servicemembers and 
        veterans of matters relating to PTSD.
    (b) Annual Meeting With Stakeholders.--The Council shall meet at 
least annually with stakeholder groups comprised of veterans, veterans 
service organizations, and family members of veterans receiving care 
from the Department of Veterans Affairs mental health programs, and 
mental health associations.
    (c) Report.--The Council shall prepare a report based on the 
reviews under paragraphs (1) and (2) of subsection (a) to identify the 
necessary resources to create or enhance PTSD treatment capabilities. 
The report shall be made available to the Secretary of both Departments 
for comment. The Secretaries shall indicate recommendations in which 
they concur or disagree and include specific plans for implementation 
of any recommendations accepted. The report, with the comments and 
recommendations of the two Secretaries shall be submitted to the 
Committees on Veterans' Affairs and the Committees on Armed Services of 
the Senate and House of Representatives not later than one year after 
the date of the enactment of this Act. The report shall include 
priority listing of sites which require investments according to the 
greatest perceived need for PTSD services.

     CHAPTER 5--CAPACITY BUILDING IN DEPARTMENT OF VETERANS AFFAIRS

SEC. 161. PLAN FOR EXPANSION OF DEPARTMENT OF VETERANS AFFAIRS SYSTEM 
              TO EXPAND ACCESS TO SPECIALIZED PTSD CARE.

    (a) Development of Plan.--Based upon the report under section 
152(b), the Secretary of Veterans Affairs shall develop a plan for the 
Department of Veterans Affairs to expand access to specialized PTSD 
care through--
            (1) Readjustment Counseling Service centers operated under 
        section 1712A of title 38, United States Code;
            (2) community-based outpatient clinics; and
            (3) telemedicine.
    (b) Inspector General Investigation.--The Inspector General of the 
Department of Veterans Affairs shall investigate specialized programs 
of the Department of Veterans Affairs for the treatment of post-
traumatic stress disorder in order to determine--
            (1) the current workloads of those programs;
            (2) staff associated with each of those programs;
            (3) funds obligated for those programs; and
            (4) any waiting times associated with those programs.
    (c) Report.--The Inspector General shall submit to the Committees 
on Veterans' Affairs of the Senate and House of Representatives a 
report containing the Inspector General's findings under subsection 
(b), together with an assessment of the ability of the Department of 
Veterans Affairs to address such findings, along with recommendations 
for accommodating--
            (1) the current workload of the Department in specialized 
        treatment program;
            (2) 102 percent of the current workload of the Department; 
        and
            (3) 110 percent of the current workload of the Department.

SEC. 162. ADDITIONAL DEPARTMENT OF VETERANS AFFAIRS RESOURCES.

    In order to improve access to mental health services, the Secretary 
of Veterans Affairs shall provide the following:
            (1) 100 additional full-time equivalent employees to 
        Readjustment Counseling Service outstations.
            (2) A PTSD clinical team at every medical center of the 
        Veterans Health Administration.
            (3) A family therapist at each Vet Center under section 
        1712A of title 38, United States Code.
            (4) A PTSD coordinator in each regional network referred to 
        as a Veterans Integrated Service Network (VISN ) whose duties 
        shall include--
                    (A) development of plans for meeting PTSD and other 
                post-deployment mental health treatment needs 
                consistent with the report under section 152(b);
                    (B) assurance of implementation of clinical 
                practice guidelines throughout the VISN;
                    (C) liaison among all health-care sites in the VISN 
                and the Department Central Office on matters relating 
                to PTSD.
            (5) A PTSD coordinator in each regional office of the 
        Readjustment Counseling Service whose duties shall include 
        liaison with regional office staff and medical centers for 
        veterans seeking service-connection for PTSD.

                       CHAPTER 6--FAMILY THERAPY

SEC. 165. ELIGIBILITY FOR FAMILY COUNSELING AND BEREAVEMENT COUNSELING.

    (a) Counseling for Family Members of Veterans Being Treated for 
Service-Connected Disabilities.--Section 1782(a) of title 38, United 
States Code, is amended by adding at the end the following new 
sentence: ``In addition, the Secretary shall provide to an individual 
described in subsection (c) such professional counseling and mental 
health services as are necessary as a consequence of a disability of a 
veteran described in the preceding sentence. Counseling and mental 
health services under the preceding sentence shall be provided (if so 
requested by the individual) for a period of two years from the date on 
which the individual first receives such counseling or mental health 
services under the preceding sentence.''.
    (b) Bereavement Counseling.--Section 1783 of such title is 
amended--
            (1) by striking ``may provide'' in subsections (a) and (b) 
        and inserting ``shall, upon request, provide''; and
            (2) by adding at the end the following new subsection:
    ``(d) Duration of Counseling.--Counseling under subsection (a) or 
with respect to the death of a veteran or under subsection (b) with 
respect to the death of a member who dies in the active military, 
naval, or air service shall be provided to an individual eligible for 
such counseling (if so requested by that individual) for a period of 
two years from the date on which the individual first receives 
counseling under this section with respect to that death.''.

                   CHAPTER 7--EDUCATIONAL INITIATIVES

SEC. 171. TRAINING PROGRAM FOR HEALTH-CARE PROVIDERS.

    The Secretary of Veterans Affairs and the Secretary of Defense 
shall jointly develop a broad training program for all health-care 
providers in the Department of Veterans Affairs and the Department of 
Defense to familiarize those providers with mental health-care issues 
that are likely to arise among persons deployed to combat theaters 
during the five years after such a deployment.

SEC. 172. CURRICULUM AND PROTOCOLS FOR CROSS-TRAINING OF DEPARTMENT OF 
              VETERANS AFFAIRS CLINICIANS.

    The Secretary of Veterans Affairs shall develop a curriculum and 
required protocols for cross-training to allow the following clinicians 
of the Department of Veterans Affairs to screen for post-deployment 
mental health problems, including PTSD, and, as appropriate, provide 
information and appropriate referral to--
            (1) primary care providers;
            (2) practitioners assigned as Gulf War points-of-contact; 
        and
            (3) clinicians assigned as case managers.

SEC. 173. PUBLICATION OF STATE-OF-THE-ART POST-DEPLOYMENT MENTAL HEALTH 
              PROBLEMS DIAGNOSIS AND TREATMENT.

    The Secretary of Veterans Affairs and the Secretary of Defense 
shall jointly develop a plan for the production and dissemination of 
publications to advise clinicians on state-of-the-art diagnosis and 
treatment of PTSD and other mental health disorders experienced after 
deployment, including any medical conditions associated with such 
disorders.

SEC. 174. PROTOCOLS FOR PAIN MANAGEMENT FOR PTSD AND WAR-RELATED PAIN.

    The Secretary of Veterans Affairs and the Secretary of Defense 
shall jointly develop protocols for pain management for PTSD and war-
related pain.

SEC. 175. PROTOCOLS FOR TREATMENT OF SUBSTANCE USE DISORDERS.

    The Secretary of Defense shall develop appropriate substance use 
disorder treatment protocols for assistance in combat areas of 
operations and on return to the United States.

SEC. 176. PROTOCOLS FOR DIAGNOSIS OF POST-TRAUMATIC STRESS DISORDER.

    (a) Findings.--The Congress finds as follows:
            (1) The symptoms of post-traumatic stress disorder are 
        often similar to those of traumatic brain injury and some 
        neurological disorders.
            (2) Some veterans with PTSD have co-morbidities that may 
        mask or compound the symptoms associated with PTSD.
            (3) Correct diagnosis of PTSD and other disorders is 
        critical to effective treatment of those disorders.
    (b) Clinical Practice Guidelines.--The Secretary of Veterans 
Affairs shall develop clinical practice guidelines to ensure that 
clinicians are able to effectively distinguish between diagnoses with 
similar symptoms that may manifest as post-traumatic stress disorder.

        CHAPTER 8--NATIONAL STEERING COMMITTEE ON PTSD EDUCATION

SEC. 181. NATIONAL STEERING COMMITTEE.

    (a) Establishment.--There is a National Steering Committee on PTSD 
Education, to be appointed by the joint council established under 
section 151. The committee shall be comprised of mental health and 
other health professionals and health educators involved in the care of 
veterans of a deployment to a theater of combat on or after the date of 
the enactment of this Act.
    (b) Purpose.--The committee shall review training protocols for 
health-care providers and plans for dissemination of educational 
materials to veterans, their families, and other relevant parties and 
shall identify the resources available to provide for those purposes.
    (c) Meetings.--The committee shall meet at least once annually.

SEC. 182. FUNDING SUPPORT FOR NATIONAL CENTER FOR PTSD.

    There is authorized to be appropriated to the Secretary of Veterans 
Affairs for the National Center for PTSD to assist in carrying out a 
joint educational initiative with the Uniformed Services University of 
the Health Sciences the amount of $5,000,000 for each of fiscal years 
2005 through 2014.

SEC. 183. CONTINUING EDUCATION TO MENTAL HEALTH PROVIDERS.

    The National Steering Committee established under section 181 shall 
provide continuing education to mental health providers in the 
Department of Veterans Affairs and the Department of Defense.

SEC. 184. WEB-BASED CURRICULUM TO SPONSOR CLINICIAN TRAINING 
              INITIATIVES.

    The National Steering Committee established under section 181 shall 
develop a Web-based curriculum to sponsor clinician training 
initiatives.

                          CHAPTER 9--BENEFITS

SEC. 191. IDENTIFICATION OF DEFICIENCIES IN PTSD DISABILITY 
              EXAMINATIONS.

    (a) Evaluation of Adjudication of Claims.--The Secretary of 
Veterans Affairs, in consultation with the National Center for PTSD, 
shall obtain an evaluation of the quality and consistency of 
adjudication of claims for PTSD, including the adequacy of service-
connected compensation examinations for rating purposes and the extent 
to which veterans who are service-connected for PTSD are actually 
employed and employable.
    (b) Report.--Not later than 12 months after the date of the 
enactment of this Act, the Secretary shall submit to the Committees on 
Veterans Affairs of the Senate and House of Representatives a report 
that includes the following information and recommendations:
            (1) The types of evidence sufficient to confirm combat 
        experience for veterans filing claims for PTSD based on combat.
            (2) The policies and procedures used to obtain confirmation 
        of a stressor, including documentation of service in combat for 
        claims based on PTSD.
            (3) Based on a representative national sample, the number 
        and percentage of veterans for each period of war whose claims 
        for PTSD have been denied based upon the lack of a credible 
        stressor.
            (4) Based on a representative national sample, the number 
        and percentage of veterans for each period of war whose claims 
        for PTSD have been denied based upon the lack of a diagnosis of 
        PTSD.
            (5) Based on a representative national sample, the number 
        and percentage of veterans for each period of war whose claims 
        for PTSD have been granted and the rating which was initially 
        awarded for that claim.
            (6) The number of initial and subsequent claims and average 
        time to process claims for PTSD which have been granted 
        (including the rating assigned and any determination as to 
        employability) and denied for each regional office for a 
        consecutive six month period.
            (7) The number and percentage of initial claims for PTSD 
        selected from a representative national sample during a 
        consecutive six month period which had a compensation and 
        pension examination conducted in compliance with best practices 
        for PTSD examinations.
            (8) The number and percentage of examinations selected from 
        a representative national sample during a consecutive six month 
        period in which the compensation and pension examinations for 
        PTSD were judged to be inadequate.
            (9) The number and percentage of claims for PTSD selected 
        from a representative national sample during that consecutive 
        six month period for which the examination was returned as 
        inadequate.
            (10) The maximum, minimum and average time based upon a 
        representative national sample allocated for completion of an 
        initial compensation and pension examination for PTSD.
            (11) An assessment comparing the employment of veterans 
        rated for psychiatric impairments with similar ratings based 
        upon physical impairments including, the number of veterans in 
        each sample who are employed on a full time or part time basis, 
        the average time such veterans have been unemployed and a 
        comparison of the amount of work lost from employment due to 
        disability and the average earnings of veterans in each group.
            (12) Taking into account criteria such as the information 
        in the Dictionary of Occupational Titles (DOT), including its 
        companion publication, the Selected Characteristics of 
        Occupations Defined in the Revised Dictionary of Occupational 
        Titles (SCO), published by the Department of Labor, examples of 
        the types of employment that an average veteran rated at 30 
        percent, at 50 percent, and at 70 percent disabled for PTSD can 
        be expected to obtain and retain.
            (13) The number of claims for PTSD appealed to the Board of 
        Veterans Appeals during fiscal year 2005, including the 
        specific issue appealed (service-connection, effective date, 
        rating) and the results of such appeals (affirmed, denied, 
        remanded, other disposition).
            (14) Recommendations for improving the accuracy and 
        consistency of PTSD examinations, claim development and 
        decisions.
            (15) Barriers to successful employment for veterans who 
        have been service-connected for PTSD.
            (16) Recommendations for removing barriers to employment 
        for veterans who have been service-connected for PTSD.
            (17) Recommendations for legislative changes which could 
        improve the potential for vocational rehabilitation and 
        employment of persons service-connected for PTSD.

SEC. 192. CRITERIA FOR DETERMINING MEDICAL CONDITIONS ASSOCIATED WITH 
              PTSD.

    The Secretary of Veterans Affairs shall develop--
            (1) criteria for determining those medical conditions that 
        are as likely as not to be associated with PTSD; and
            (2) standards for determining when secondary service-
        connection should be granted for those conditions.

                      CHAPTER 10--PUBLIC AWARENESS

SEC. 195. PUBLIC AWARENESS PROGRAM.

    The Secretary of Veterans Affairs shall conduct an aggressive, 
comprehensive outreach program to enhance the awareness of veterans, 
and the public in general, of the symptoms of PTSD and of the services 
available for veterans with those symptoms. The Secretary of Defense 
shall provide the Secretary of Veterans Affairs with such assistance as 
may be required for the purposes of such program. To the extent 
practicable, the program shall be conducted through the joint council 
established under section 151.

SEC. 196. WEB SITE AND MATERIALS FOR GENERAL CAMPAIGN OF AWARENESS OF 
              PTSD.

    As part of the program under this title, the Secretary of Veterans 
Affairs shall develop and continually update a Web site and materials, 
including pamphlets, news releases, fact sheets, and other materials, 
for the purposes of a general campaign of awareness of post-traumatic 
stress disorder.

                      TITLE II--DISABLED VETERANS

                      Subtitle A--Payment Matters

SEC. 201. ELIGIBILITY FOR PAYMENT OF BOTH RETIRED PAY AND VETERANS' 
              DISABILITY COMPENSATION FOR CERTAIN ADDITIONAL MILITARY 
              RETIREES WITH COMPENSABLE SERVICE-CONNECTED DISABILITIES.

    (a) Extension of Concurrent Receipt Authority to Retirees With 
Service-Connected Disabilities Rated Less Than 50 Percent.--Section 
1414 of title 10, United States Code, is amended by striking paragraph 
(2) of subsection (a).
    (b) Repeal of Phase-in of Concurrent Receipt of Retired Pay and 
Veterans' Disability Compensation.--Such section is further amended--
            (1) in subsection (a), by striking the final sentence of 
        paragraph (1);
            (2) by striking subsection (c) and redesignating 
        subsections (d) and (e) as subsections (c) and (d), 
        respectively; and
            (3) in subsection (d) (as so redesignated), by striking 
        subparagraph (4).
    (c) Clerical Amendments.--
            (1) The heading for section 1414 of such title is amended 
        to read as follows:
``Sec. 1414. Members eligible for retired pay who are also eligible for 
              veterans' disability compensation: concurrent payment of 
              retired pay and disability compensation''.
            (2) The item relating to such section in the table of 
        sections at the beginning of chapter 71 of such title is 
        amended to read as follows:

``1414. Members eligible for retired pay who are also eligible for 
                            veterans' disability compensation: 
                            concurrent payment of retired pay and 
                            disability compensation.''.
    (d) Effective Date.--The amendments made by this section shall take 
effect as of January 1, 2006, and shall apply to payments for months 
beginning on or after that date.

SEC. 202. COORDINATION OF SERVICE ELIGIBILITY FOR COMBAT-RELATED 
              SPECIAL COMPENSATION AND CONCURRENT RECEIPT .

    (a) Eligibility for TERA Retirees.--Subsection (c) of section 1413a 
of title 10, United States Code, is amended by striking ``entitled to 
retired pay who--'' and all that follows and inserting ``who--
            ``(1) is entitled to retired pay, other than a member 
        retired under chapter 61 of this title with less than 20 years 
        of service creditable under section 1405 of this title and less 
        than 20 years of service computed under section 12732 of this 
        title; and
            ``(2) has a combat-related disability''.
    (b) Amendments to Standardize Similar Provisions.--
            (1) Clerical amendment.--The heading for paragraph (3) of 
        section 1413a(b) of such title is amended by striking ``rules'' 
        and inserting ``rule''.
            (2) Specification of qualified retirees for concurrent 
        receipt purposes.--Subsection (a) of section 1414 of such 
        title, as amended by section 2(a), is amended--
                    (A) by striking ``a member or'' and all that 
                follows through ``retiree')'' and inserting ``an 
                individual who is a qualified retiree for any month'';
                    (B) by inserting ``retired pay and veterans' 
                disability compensation'' after ``both''; and
                    (C) by adding at the end the following new 
                paragraph:
            ``(2) Qualified retirees.--For purposes of this section, a 
        qualified retiree, with respect to any month, is a member or 
        former member of the uniformed services who--
                    ``(A) is entitled to retired pay, other than in the 
                case of a member retired under chapter 61 of this title 
                with less than 20 years of service creditable under 
                section 1405 of this title and less than 20 years of 
                service computed under section 12732 of this title; and
                    ``(B) is also entitled for that month to veterans' 
                disability compensation.''.
            (3) Standardization with crsc rule for chapter 61 
        retirees.--Subsection (b) of section 1414 of such title is 
        amended--
                    (A) by striking ``Special Rules'' in the subsection 
                heading and all that follows through ``is subject to'' 
                in paragraph (1) and inserting ``Special Rule for 
                Chapter 61 Disability Retirees.--In the case of a 
                qualified retiree who is retired under chapter 61 of 
                this title, the retired pay of the member is subject 
                to''; and
                    (B) by striking paragraph (2).
    (c) Effective Date.--The amendments made by this section shall take 
effect as of January 1, 2006, and shall apply to payments for months 
beginning on or after that date.

SEC. 203. INTERIM PAYMENTS UNDER CERTAIN VETERANS CLAIMS WHEN DECISION 
              IS DELAYED FOLLOWING REMAND.

    (a) In General.--(1) Chapter 53 of title 38, United States Code, is 
amended by adding at the end the following new section:

``SEC. 5320. INTERIM BENEFITS UNDER CERTAIN REMANDED CASES.

    ``(a) Interim Benefits.--When a claim for benefits under the 
jurisdiction of the Secretary is remanded by the United States Court of 
Appeals for Veterans Claims or by the Board for Veterans' Appeals in a 
case involving a claim under chapters 11, 13 or 15 of this title and to 
which sections 5109B or 7112 of this title applies, if the Secretary 
does not make a decision on the matter within 180 days of the date of 
the remand decision, then until such matter is finally decided, the 
Secretary shall pay an interim benefit in the amount of $500 per month 
to each claimant under the claim. Such payments shall commence as of 
the first month beginning after the end of such 180-day period.
    ``(b) Effect on Interim Benefit Payments of Final Decision on 
Claim.--When a claim with respect to which interim benefits are being 
paid under subsection (b) is finally decided--
            ``(1) if the final decision is to award benefits, the 
        amounts paid as interim benefits shall be considered to be an 
        advance payment of benefits owed for any period before the date 
        of such final decision (except that if the total amount of 
        interim benefits paid is greater than the amount of retroactive 
        benefits, the amount of the difference shall not be considered 
        to be an overpayment for any purpose); and
            ``(2) if the final decision is not to award benefits, the 
        amounts paid as interim benefits shall not be considered to be 
        an overpayment for any purpose.''.
    (2) The table of sections at the beginning of such chapter is 
amended by adding at the end the following new item:

``Sec. 5320. Interim benefits under certain remanded cases.''.
    (b) Effective Date.--Section 5320 of title 38, United States Code, 
as added by subsection (a), shall apply with respect to any decision 
remanded by the Court of Appeals for Veterans Claims or the Board of 
Veterans' Appeals on or after the date of the enactment of this Act.
    (c) Report.--Not later than 6 months after the date of the 
enactment of this Act, the Secretary of Veterans Affairs shall submit 
to Congress a report on measures the Secretary intends to take to 
expedite the processing of remanded claims for veterans benefits.

                          Subtitle B--Outreach

SEC. 211. RESCISSION OF DEPARTMENT OF VETERANS AFFAIRS MEMORANDUM.

    (a) Rescission of Memorandum.--The memorandum of the Department of 
Veterans Affairs dated July 18, 2002, from the Deputy Under Secretary 
for Health for Operations and Management with the subject ``Status of 
VHA Enrollment and Associated Issues'' is hereby rescinded. Marketing 
activities of directors of health service networks (known as ``Veterans 
Integrated Service Networks'') of the Department of Veterans Affairs to 
enroll new veterans within their respective networks shall be carried 
out without regard to such memorandum.
    (b) Funding Limitation.--No funds available to the Department of 
Veterans Affairs may be used to carry out the memorandum referred to in 
subsection (a) or otherwise to implement the policy contained in that 
memorandum.

SEC. 212. OUTREACH ACTIVITIES.

    (a) Annual Plan Required.--Subchapter II of chapter 77 of title 38, 
United States Code, is amended by adding at the end the following new 
sections:
``Sec. 7728. Annual plan on outreach activities
    ``(a) Annual Plan Required.--The Secretary shall prepare each year 
a plan for the outreach activities of the Department for the following 
year.
    ``(b) Elements.--Each annual plan under subsection (a) shall 
include the following:
            ``(1) Plans for efforts to identify veterans who are not 
        enrolled or registered with the Department for benefits or 
        services under the programs administered by the Secretary.
            ``(2) Plans for informing veterans and their dependents of 
        modifications of the benefits and services under the programs 
        administered by the Secretary, including eligibility for 
        medical and nursing care and services.
    ``(c) Coordination in Development.--In developing an annual plan 
under subsection (a), the Secretary shall consult with the following:
            ``(1) Directors or other appropriate officials of 
        organizations recognized by the Secretary under section 5902 of 
        this title.
            ``(2) Directors or other appropriate officials of State and 
        local education and training programs.
            ``(3) The Administration on Aging of the Department of 
        Health and Human Services.
            ``(4) Representatives of nongovernmental organizations that 
        carry out veterans outreach programs.
            ``(5) Representatives of State and local veterans 
        employment organizations.
            ``(6) Businesses and professional organizations.
            ``(7) Other individuals and organizations that assist 
        veterans in adjusting to civilian life.
    ``(d) Incorporation of Assessment of Previous Annual Plans.--In 
developing an annual plan under subsection (a), the Secretary shall 
take into account the lessons learned from the implementation of 
previous annual plans under that subsection and program evaluations 
from the Office of Policy, Planning, and Preparedness of the 
Department.
``Sec. 7729. Outreach activities: coordination of activities within 
              Department
    ``(a) The Secretary shall establish and maintain procedures for 
ensuring the effective coordination of the outreach activities of the 
Department between and among the following:
            ``(1) The Office of the Secretary.
            ``(2) The Office of Public Affairs.
            ``(3) The Veterans Health Administration.
            ``(4) The Veterans Benefits Administration.
            ``(5) The National Cemetery Administration.
    ``(b) The Secretary shall--
            ``(1) periodically review the procedures maintained under 
        subsection (a) for the purpose of ensuring that such procedures 
        meet the requirement in that subsection; and
            ``(2) make such modifications to such procedures as the 
        Secretary considers appropriate in light of such review in 
        order to better achieve that purpose.''.
    (b) Clerical Amendment.--The table of sections at the beginning of 
such chapter is amended by inserting after the item relating to section 
7727 the following new items:

``7728. Annual plan on outreach activities.
``7729. Outreach activities: coordination of activities within 
                            Department.''.
    (c) Initial Annual Plan.--The first annual outreach activities plan 
under section 7728 of title 38, United States Code, as added by 
subsection (a), shall be prepared for the first year beginning after 
the date of the enactment of this Act.

SEC. 213. REQUIREMENT FOR OUTREACH EFFORTS AND DEDICATED STAFF AT EACH 
              REGIONAL OFFICE.

    (a) Findings.--Congress and the Department of Veterans Affairs 
historically have targeted certain specific populations for outreach 
efforts concerning benefits under laws administered by the Secretary of 
Veterans Affairs. Groups currently targeted for such outreach efforts 
and for which program outreach coordinators have been designated at 
each regional office of the Department of Veterans Affairs are the 
following:
            (1) Former prisoners of war.
            (2) Women veterans.
            (3) Minority veterans.
            (4) Active duty personnel.
            (5) Homeless veterans.
            (6) Elderly veterans.
            (7) Recently separated veterans.
    (b) Eligible Dependent Defined.--Paragraph (2) of section 7721(b) 
of title 38, United States Code, is amended to read as follows:
            ``(2) the term `eligible dependent' means a spouse, 
        surviving spouse (whether or not remarried), child (regardless 
        of age or marital status), or parent of a person who served in 
        the active military, naval, or air service.''.
    (c) Improved Outreach Program.--Section 7727 of title 38, United 
States Code, is amended to read as follows:
``Sec. 7727. Outreach for eligible dependents
    ``(a) In carrying out this subchapter, the Secretary shall ensure 
that the needs of eligible dependents are fully addressed.
    ``(b)(1) In order to carry out subsection (a), the Secretary shall 
assign such employees of the Veterans Benefits Administration as the 
Secretary considers appropriate to conduct outreach programs and 
provide outreach services for eligible dependents. In areas where the 
number of eligible dependents warrant doing so, the Secretary shall 
assign at least one employee in the Veterans Benefits Administration 
regional office to serve as a full-time coordinator of outreach 
programs and services for eligible dependents in that region.
    ``(2) Responsibilities of employees assigned to outreach functions 
under paragraph (1) shall include providing eligible dependents with--
            ``(A) information about benefits under laws administered by 
        the Secretary; and
            ``(B) contacting responsible regional office employees to 
        facilitate--
                    ``(i) assistance in claims preparation and inquiry 
                resolution; and
                    ``(ii) in the case of a dependent of a deceased 
                veteran for whom necessary records are incomplete, 
                assistance in obtaining such records and other 
                necessary information concerning the veteran.
    ``(c)(1) Information provided an eligible dependent under this 
section shall include information on how to apply for benefits for 
which the dependent may be eligible, including information about 
assistance available under subsection (b) and section 7722(d) of this 
title.
    ``(2) In the case of eligible dependents who are members of 
distinct beneficiary populations (such as survivors of deceased 
veterans), the Secretary shall ensure that information provided under 
this section includes specific information about benefits relating to 
that population.
    ``(d) For any geographic area in which there is a significant 
population of eligible dependents whose primary language is a language 
other than English, the Secretary shall make information provided under 
this subsection available to those dependents in the dominant language 
in that area (in addition to English).
    ``(e) Outreach services and assistance shall be provided for 
eligible dependents through the same means that are used for other 
specially targeted groups.
    ``(f) The Secretary shall ensure that the availability of outreach 
services and assistance for eligible dependents under this subchapter 
is made known through a variety of means, including the Internet, 
correspondence of the Department, announcements in veterans 
publications, announcements to the media, telephone directories, direct 
correspondence to congressional offices, military bases, public affairs 
offices, military retiree affairs offices, and United States embassies.
    ``(g) The Secretary shall support the Department's periodic 
evaluation under section 527 of this title concerning the Department's 
efforts to address the needs of eligible dependents.
    ``(h) The Secretary shall include in the Secretary's annual report 
under section 529 of this title an assessment of the programs of the 
Department addressing the information and assistance needs of veterans 
and eligible dependents. The Secretary shall include in each such 
report the following:
            ``(1) Information about expenditures, costs, and workload 
        under the program of the Department directed towards the 
        information and assistance needs of veterans and eligible 
        dependents.
            ``(2) Information about outreach efforts directed toward 
        veterans and eligible dependents.
            ``(3) Information about emerging needs within the program 
        that relate to other provisions of law, including section 7725 
        of this title with respect to language needs of veterans and 
        eligible dependents.
            ``(4) Information as to the timeline for implementation of 
        improvements to meet existing and emerging needs of veterans 
        and eligible dependents in addition to those specified in this 
        section.''.

                  TITLE III--SURVIVORS AND DEPENDENTS

SEC. 301. REPEAL OF DEPENDENCY AND INDEMNITY COMPENSATION OFFSET FROM 
              SURVIVOR BENEFIT PLAN SURVIVING SPOUSE ANNUITIES.

    (a) Repeal.--Subsections (c), (e), and (k) of section 1450 of title 
10, United States Code, and subsection (c)(2) of section 1451 of such 
title are repealed.
    (b) Effective Date.--The amendments made by subsection (a)--
            (1) shall take effect on the later of October 1, 2005, or 
        the date of the enactment of this Act; and
            (2) shall apply with respect to payment of annuities under 
        subchapter II of chapter 73 of title 10, United States Code, 
        for months beginning on or after that date.
    (c) Recoupment of Certain Amounts Previously Refunded to SBP 
Recipients.--(1) A surviving spouse who is in receipt of an SBP annuity 
that is in effect before the date specified in subsection (b) and that 
is adjusted by reason of the amendments made by subsection (a) and who 
had previously received an SBP retired pay refund shall repay an amount 
determined under paragraph (2). Any such repayment shall be made in the 
same manner as a repayment under subsection (k)(2) of section 1450 of 
title 10, United States Code, as in effect on the day before the date 
of the enactment of this Act.
    (2) The amount of a repayment under paragraph (1) shall be the 
amount that bears the same ratio to the amount of that refund as the 
surviving spouse's life expectancy (determined in accordance with 
standard actuarial practices) bears to the anticipated total duration 
of the annuity (determined as the sum of such life expectancy and the 
duration of the annuity already received).
    (3) In this subsection:
            (A) The term ``SBP annuity'' means an annuity under the 
        program established under subchapter II of chapter 73 of title 
        10, United States Code.
            (B) The term ``SBP retired pay refund'' means a refund 
        under subsection (e) of section 1450 of title 10, United States 
        Code, as in effect before the date specified in subsection (b).

SEC. 302. INCREASE IN MONTHLY DEPENDENCY AND INDEMNITY COMPENSATION 
              PAYABLE TO A SURVIVING SPOUSE FOR SO LONG AS THERE ARE 
              MINOR CHILDREN.

    (a) Increase in DIC.--Subsection (b) of section 1311 of title 38, 
United States Code, is amended by inserting ``$250, plus'' after 
``shall be increased by''.
    (b) Conforming Repeal of Two-Year Limitation.--Subsection (e) of 
such section is repealed.
    (c) Effective Date.--The amendment made by subsection (a) shall 
take effect with respect to payments of dependency and indemnity 
compensation under section 1311 of title 38, United States Code, for 
the first month beginning on or after the date of the enactment of this 
Act.

      TITLE IV--ADDITIONAL SUPPORT FOR ACTIVE DUTY SERVICEMEMBERS

SEC. 401. ONE-TIME BONUS FOR CERTAIN SERVICE IN CONNECTION WITH 
              OPERATION IRAQI FREEDOM OR OPERATION ENDURING FREEDOM.

    (a) Army, Navy, Air Force, and Marine Corps.--The Secretary of 
Defense shall provide for the payment of a bonus under this section to 
each member of the Army, Navy, Air Force, or Marine Corps who, at any 
time during the service of the member in connection with Operation 
Iraqi Freedom or Operation Enduring Freedom, satisfied or satisfies the 
eligibility criteria for receipt of special pay under section 310 of 
title 37, United States Code, for duty subject to hostile fire or 
imminent danger.
    (b) Coast Guard.--The Secretary of Homeland Security shall provide 
for the payment of a bonus under this section to each member of the 
Coast Guard who, at any time during the service of the member in 
connection with Operation Iraqi Freedom or Operation Enduring Freedom, 
satisfied or satisfies the eligibility criteria for receipt of special 
pay under such section.
    (c) Amount of Bonus.--The amount of the bonus paid under this 
section shall be equal to $1,000.
    (d) Entitlement Limited to Single Bonus Payment.--A member may not 
receive more than one bonus under the authority of this section.

SEC. 402. INCREASE IN ACTIVE-DUTY END-STRENGTH LEVELS FOR THE ARMED 
              FORCES.

    (a) In General.--The Armed Forces are authorized strengths for 
active duty personnel as of September 30, 2006, as follows:
            (1) The Army, 512,400.
            (2) The Navy, 365,900.
            (3) The Marine Corps, 180,000.
            (4) The Air Force, 359,700.
    (b) Revision in Permanent Active Duty End Strength Minimum 
Levels.--Section 691(b) of title 10, United States Code, is amended by 
striking paragraphs (1) through (4) and inserting the following:
            ``(1) For the Army, 512,400.
            ``(2) For the Navy, 365,900.
            ``(3) For the Marine Corps, 180,000.
            ``(4) For the Air Force, 359,700.''.

SEC. 403. ADDITIONAL FISCAL YEAR 2006 PAY INCREASE FOR MIDDLE- AND 
              SENIOR-LEVEL ENLISTED MEMBERS AND WARRANT OFFICERS.

    (a) Targeted Pay Increase.--The Secretary of Defense shall increase 
the rates of monthly basic pay for enlisted members of the Armed Forces 
in the pay grades E-5 through E-9 and all warrant officers of the Armed 
Forces as necessary to ensure that, by the end of fiscal year 2006, the 
compensation received by such enlisted members and warrant officers is 
equal to not less than 80 percent of the compensation for persons in 
the private sector with comparable educational levels and experience, 
as determined by the Secretary.
    (b) Relation to Other Pay Increases.--The pay increase required by 
subsection (a) shall be in addition to any other adjustment to become 
effective during fiscal year 2006 in the rates of monthly basic pay 
authorized members of the Armed Forces, whether made pursuant to 
section 1009 of title 37, United States Code, or a law authorizing 
appropriations for the Department of Defense for fiscal year 2006.

            TITLE V--EDUCATION, EMPLOYMENT AND COMPENSATION

               Subtitle A--Active Duty Montgomery GI Bill

SEC. 501. ENHANCED BENEFITS UNDER THE MONTGOMERY GI BILL FOR FOUR YEARS 
              OF ACTIVE-DUTY SERVICE.

    (a) In General.--Chapter 30 of title 38, United States Code, is 
amended by adding at the end the following new subchapter:

            ``SUBCHAPTER V--ENHANCED EDUCATIONAL ASSISTANCE

``Sec. 3041. Enhanced educational assistance entitlement
    ``(a) Entitlement.--An eligible individual is entitled to enhanced 
educational assistance under this subchapter.
    ``(b) Eligible Individual Defined.--(1) For purposes of this 
subchapter, the term `eligible individual' means an individual who 
meets the service requirement described in subsection (c) and whose 
status after completion of such service is described in section 
3011(a)(3) of this title (relating to continuation on active duty, 
honorable discharge, or honorable service, as the case may be).
    ``(2) Such term does not include an individual described in 
paragraph (1) or (2) of section 3011(c) of this title (relating to 
individuals not electing basic educational assistance under subchapter 
II of this chapter or certain commissioned officers, respectively).
    ``(c) Service Requirement.--(1) The service requirement referred to 
in subsection (b) is as follows:
            ``(A) After September 30, 2005, the individual--
                    ``(i) first enters on active duty;
                    ``(ii) reenlists or extends an enlistment on active 
                duty as a member of the Armed Forces; or
                    ``(iii) in the case of an officer, continues to 
                serve on active duty after that date.
            ``(B) From the date of such entry, reenlistment, extension, 
        or continuation, as the case may be, the individual--
                    ``(i) serves a continuous period of active duty of 
                at least four years in the Armed Forces; or
                    ``(ii) serves on active duty in the Armed Forces 
                and is discharged or released from active duty--
                            ``(I) as provided in subclause (I) of 
                        section 3011(a)(1)(A)(ii) of this title 
                        (relating to service-connected disabilities and 
                        other medical conditions);
                            ``(II) for the convenience of the 
                        Government, after having completed not less 
                        than 42 months of continuous active duty; or
                            ``(III) as provided in subclause (III) of 
                        section 3011(a)(1)(A)(ii) of this title 
                        (relating to involuntary discharge or release 
                        for the convenience of the Government as a 
                        result of a reduction in force).
    ``(2) In determining service under paragraph (1), the following 
rules apply:
            ``(A) Any period of service described in paragraph (2) or 
        (3) of section 3011(d) of this title (relating to periods of 
        service terminated because of a defective enlistment and 
        periods of service on active duty which individuals in the 
        Selected Reserve were ordered to perform under certain 
        provisions of chapter 1209 of title 10, respectively) that 
        applies to an eligible individual under this section shall not 
        be considered a part of the individual's period of active duty.
            ``(B) A member described in paragraph (2) of section 
        3011(f) of this title (relating to certain members discharged 
        or released who subsequently reenlist or re-enter on a period 
        of active duty) who serves the periods of active duty referred 
        to in such paragraph shall be deemed to have served a 
        continuous period of active duty the length of which is the 
        aggregate length of the periods of active duty referred to in 
        such paragraph.
            ``(C) Subsections (g) and (h) of section 3011 of this title 
        (relating to assignment full time at a civilian institution for 
        courses of education and to commencement of courses of 
        education at a service academy, respectively) apply with 
        respect to an eligible individual under this section in the 
        same manner as they apply to an individual under section 3011 
        of this title.
    ``(d) Election of Basic Educational Assistance.--(1) An eligible 
individual entitled to enhanced educational assistance under this 
subchapter may elect (in a form and manner prescribed by the Secretary) 
to receive basic educational assistance under subchapter II in lieu of 
such enhanced educational assistance for an enrollment period. Such an 
election shall be made by not later than 30 days before the beginning 
of the enrollment period.
    ``(2) An eligible individual may revoke an election made pursuant 
to paragraph (1), but in no case may such revocation be made later than 
30 days before the beginning of the enrollment period.
``Sec. 3042. Duration of enhanced educational assistance
    ``(a) In General.--Subject to section 3695 of this title and except 
as provided in subsection (b), each individual entitled to enhanced 
educational assistance under section 3041 of this title is entitled to 
a monthly enhanced educational assistance allowance under this 
subchapter for a period or periods not to exceed a total of 36 months 
(or the equivalent thereof in part-time enhanced educational 
assistance).
    ``(b) Special Rule for Certain Early Separations.--Subject to 
section 3695 of this title, in the case of an individual described in 
subclause (I) or (III) of section 3041(c)(1)(B)(ii) of this title 
(relating to individuals discharged for service-connected disabilities 
or medical conditions or whose service is involuntarily terminated for 
the convenience of the Government as a result of a reduction in force, 
respectively) who does not serve a continuous period of active duty of 
at least four years in the Armed Forces (as described in section 
3041(c)(1)(B)(i) of this title), the individual is entitled to one 
month of enhanced educational assistance benefits under this subchapter 
(not to exceed a total of 36 months (or the equivalent thereof in part-
time enhanced educational assistance)) for each month of continuous 
active duty served by the individual beginning with the date on which 
the entry on active duty, reenlistment, enlistment extension, or 
continuation applicable to that individual under section 3041(c)(1)(A) 
of this title begins.
``Sec. 3043. Payment of educational expenses
    ``(a) In General.--(1) Subject to paragraph (2), the Secretary 
shall pay to the educational institution providing a course under an 
approved program of education to an eligible individual under this 
subchapter who is enrolled in the course the actual cost of tuition and 
fees otherwise payable by the individual.
    ``(2) Such cost may not exceed the amount charged to nonveterans in 
similar circumstances.
    ``(b) Stipend; Costs of Books and Supplies.--The Secretary shall 
pay to each eligible individual under this subchapter who is pursuing 
an approved program of education--
            ``(1) a stipend as provided in section 3044 of this title; 
        and
            ``(2) in accordance with regulations prescribed by the 
        Secretary, an amount equal to the average cost, for the year 
        involved, of books and supplies payable by individuals pursuing 
        courses of education at educational institutions.
``Sec. 3044. Amount of stipend
    ``(a) In General.--Except as provided in section 3042 of this 
title, the stipend under this subchapter shall be paid at a monthly 
rate (as that rate may be increased pursuant to subsection (b)) as 
follows:
            ``(1) At the monthly rate of $900 for an approved program 
        of education pursued on a full-time basis.
            ``(2) At the monthly rate of $700 for an approved program 
        of education pursued on a three-quarter-time basis.
            ``(3) At the monthly rate of $500 for an approved program 
        of education pursued on a half-time basis.
            ``(4) At the monthly rate of $300 for an approved program 
        of education pursued on less than a half-time basis.
    ``(b) Adjustment for Inflation.--With respect to any fiscal year 
beginning after fiscal year 2006, the Secretary shall provide a 
percentage increase (rounded to the nearest dollar) in the rates 
payable under subsection (a) equal to the percentage by which--
            ``(1) the Consumer Price Index (all items, United States 
        city average) for the 12-month period ending on the June 30 
        preceding the beginning of the fiscal year for which the 
        increase is made, exceeds
            ``(2) such Consumer Price Index for the 12-month period 
        preceding the 12-month period described in paragraph (1).''.
    (b) Conforming Amendments.--(1) Section 3002 of such title is 
amended by inserting at the end the following new paragraph:
    ``(9) The term `enhanced educational assistance' means educational 
assistance provided under subchapter V.''.
    (2) Section 3011 of such title is amended in subsection (f)(1) and 
(g) by striking ``chapter'' each place it appears and inserting 
``subchapter''.
    (3) Section 3018A(a) of such title is amended by striking 
``education assistance under this chapter'' and inserting ``educational 
assistance under this subchapter''.
    (4) Section 3018B of such title is amended by striking ``education 
assistance under this chapter'' each place it appears and inserting 
``educational assistance under this subchapter''.
    (5) Section 3018C of such title is amended by striking 
``educational assistance under this chapter'' each place it appears and 
inserting ``educational assistance under this subchapter''.
    (6) Section 3019 of such title is amended by striking ``chapter'' 
each place it appears and inserting ``subchapter''.
    (7) Section 3032(e)(3) of such title is amended by inserting ``, or 
section 3044(a)(1)'' after ``section 3015''.
    (c) Clerical Amendment.--The table of sections at the beginning of 
chapter 30 of title 38, United States Code, is amended by adding at the 
end the following new items:

            ``subchapter v--enhanced educational assistance
``3041. Enhanced educational assistance entitlement.
``3042. Duration of enhanced educational assistance.
``3043. Payment of educational expenses.
``3044. Amount of stipend.''.

SEC. 502. INCREASE IN RATES OF BASIC EDUCATIONAL ASSISTANCE UNDER THE 
              MONTGOMERY GI BILL.

    (a) Rates for Basic Educational Assistance.--Section 3015 of title 
38, United States Code, is amended--
            (1) in subsection (a)(1)--
                    (A) in subparagraph (C), by striking ``and'' at the 
                end;
                    (B) by redesignating subparagraph (D) as 
                subparagraph (F); and
                    (C) by inserting after subparagraph (C) the 
                following new subparagraphs:
            ``(D) for months occurring during fiscal year 2005, $1,004;
            ``(E) for months occurring during fiscal year 2006, $1,300; 
        and''; and
            (2) in subsection (b)(1)--
                    (A) in subparagraph (C), by striking ``and'' at the 
                end;
                    (B) by redesignating subparagraph (D) as 
                subparagraph (F); and
                    (C) by inserting after subparagraph (C) the 
                following new subparagraphs:
            ``(D) for months occurring during fiscal year 2005, $816;
            ``(E) for months occurring during fiscal year 2006, $1,000; 
        and''.
    (b) Application of Index Based on Costs of Higher Learning.--
Section 3015(h) of such title is amended to read as follows:
    ``(h)(1) With respect to any fiscal year, the Secretary shall 
provide a percentage increase (rounded to the nearest dollar) in the 
rates payable under subsections (a)(1) and (b)(1) equal to the 
percentage (as determined by the Secretary) by which--
            ``(A) the average monthly costs of tuition and expenses for 
        commuter students at public institutions of higher learning 
        that award baccalaureate degrees for purposes of subsections 
        (a)(1) and (b)(1) for the fiscal year involved, exceeds
            ``(B) such average monthly costs for the preceding fiscal 
        year.
    ``(2) The Secretary shall make the determination under paragraph 
(1) after consultation with the Secretary of Education.
    ``(3) A determination made under paragraph (1) in a year shall take 
effect on October 1 of that year and apply with respect to basic 
educational assistance allowances payable under this section for the 
fiscal year beginning in that year.
    ``(4) Not later than September 30 each year, the Secretary shall 
publish in the Federal Register the average monthly costs of tuition 
and expenses as determined under paragraph (1) in that year.''.
    (c) Effective Dates.--(1) The amendments made by subsection (a) 
shall apply with respect to payments for months beginning after 
September 30, 2005.
    (2) The amendment made by subsection (b) shall apply with respect 
to payments for months beginning after September 30, 2006. No 
adjustment in rates of educational assistance shall be made under 
section 3015(h) of title 38, United States Code, for months occurring 
during fiscal year 2006.

SEC. 503. REPEAL OF PAY REDUCTION AND HIGH SCHOOL GRADUATION 
              REQUIREMENT FOR PARTICIPATION IN BASIC EDUCATIONAL 
              ASSISTANCE UNDER THE MONTGOMERY GI BILL.

    (a) Repeal of Pay Reduction and Election of Benefits.--(1) Section 
3011 of title 38, United States Code, is amended--
            (A) by striking subsection (b); and
            (B) in subsection (c), by striking paragraph (1) and 
        redesignating paragraphs (2) and (3) as paragraphs (1) and (2), 
        respectively.
    (2) Section 3012 of such title is amended--
            (A) by striking subsection (c); and
            (B) in subsection (d), by striking paragraph (1) and 
        redesignating paragraphs (2) and (3) as paragraphs (1) and (2), 
        respectively.
    (3) Section 3016(a)(1) of such title is amended by striking ``, and 
does not make an election under section 3011(c)(1) or section 
3012(d)(1)''.
    (4) The amendments made by this subsection shall take effect on 
October 1, 2005, and apply to individuals whose initial obligated 
period of active duty under section 3011 or 3012 of title 38, United 
States Code, as the case may be, begins on or after such date.
    (5) Any reduction in the basic pay of an individual referred to in 
subsection (b) of section 3011 of title 38, United States Code, by 
reason of such subsection, or of any individual referred to in 
subsection (c) of section 3012 of such title by reason of such 
subsection, shall cease commencing with months beginning after 
September 30, 2005, and any obligation of such individual under such 
subsections, as the case may be, as of September 30, 2005, shall be 
deemed to be fully satisfied as of such date.
    (b) Repeal of High School Graduation Requirement.--(1) Section 
3011(a) of title 38, United States Code, is amended--
            (A) by striking paragraph (2); and
            (B) by redesignating paragraph (3) as paragraph (2).
    (2) Section 3012(a) of such title is amended--
            (A) by striking paragraph (2); and
            (B) by redesignating paragraph (3) as paragraph (2).
    (3) Section 3018(b) of such title is amended--
            (A) by striking paragraph (4);
            (B) by inserting ``and'' at the end of paragraph (3)(C); 
        and
            (C) by redesignating paragraph (5) as paragraph (4).
    (4) The amendments made by this subsection shall take effect on the 
date of the enactment of this Act and apply with respect to individuals 
applying for basic educational assistance under chapter 30 of title 38, 
United States Code, on or after such date.
    (c) Exclusion From Income for Eligibility Determinations for 
Federal Educational Loans.--Section 3015 of such title is amended--
            (1) by redesignating subsection (h), as amended in section 
        3(b), as subsection (i); and
            (2) by inserting after subsection (g) the following new 
        subsection:
    ``(h) Exclusion From Income for Eligibility Determinations for 
Federal Educational Loans.--Notwithstanding any other provision of law, 
amounts payable by the Secretary under this subchapter with respect to 
an eligible individual shall not be considered as income for purposes 
of determining eligibility of such individual for education grants or 
loans under any other provision of Federal law.''.

SEC. 504. REPEAL OF DELIMITING DATE FOR USE OF ENTITLEMENT TO BASIC 
              EDUCATIONAL ASSISTANCE UNDER THE MONTGOMERY GI BILL.

    (a) Repeal.--Section 3031 of title 38, United States Code, and 
section 16133 of title 10, United States Code, are repealed.
    (b) Conforming Amendments.--(1) Section 3018C(e)(3)(B) of such 
title is amended--
            (A) by striking clause (ii); and
            (B) by striking ``(B)(i)'' and inserting ``(B)''.
    (2) Section 3020 of such title is amended--
            (A) in subsection (f)(1), by striking ``Subject to the time 
        limitation for use of entitlement under section 3031 of this 
        title, an'' and inserting ``An''; and
            (B) in subsection (h)(5), by striking ``Notwithstanding 
        section 3031 of this title, a'' and inserting ``A''.
    (3) Section 16164 of title 10, United States Code, is repealed.
    (c) Effective Date.--The amendments made by this section shall 
apply to individuals entitled to educational assistance under chapter 
30 of title 38, United States Code, on or after the date of the 
enactment of this Act.

SEC. 505. ELIMINATION OF LIMITATION TO CRITICAL MILITARY SKILLS FOR 
              AUTHORITY TO TRANSFER ENTITLEMENT.

    Subsection (b) of section 3020 of title 38, United States Code, is 
amended--
            (1) by striking paragraph (2);
            (2) be redesignating paragraph (3) as paragraph (2); and
            (3) by inserting ``and'' at the end of paragraph (1).

SEC. 506. INCREASE IN REPAYMENT AMOUNTS UNDER THE STUDENT LOAN 
              REPAYMENT PROGRAMS FOR SERVICEMEMBERS.

    (a) Active Duty.--Subsection (b) of section 2171 of title 10, 
United States Code, is amended--
            (1) by striking ``is 33 1/3 percent or $1,500, whichever is 
        greater,'' and inserting ``is $6,000'';
            (2) by inserting ``(1)'' after ``(b)''; and
            (3) by adding at the end the following new paragraph:
    ``(2) The total amount that may be repaid on behalf of any person 
under this section may not exceed $40,000.''.
    (b) Selected Reserve.--Subsection (b) of section 16301 of title 10, 
United States Code, is amended--
            (1) by striking ``is 15 percent or $500, whichever is 
        greater,'' and inserting ``is $3,000'';
            (2) by inserting ``(1)'' after ``(b)''; and
            (3) by adding at the end the following new paragraph:
    ``(2) The total amount that may be repaid on behalf of any person 
under this section may not exceed $20,000.''.

SEC. 507. EXPANSION OF PROGRAMS OF EDUCATION ELIGIBLE FOR ACCELERATED 
              PAYMENTS OF EDUCATIONAL ASSISTANCE UNDER THE MONTGOMERY 
              GI BILL.

    (a) In General.--Subsection (b)(1) of section 3014A of title 38, 
United States Code, is amended by striking ``that leads to employment 
in a high technology occupation in a high technology industry (as 
determined pursuant to regulations prescribed by the Secretary)''.
    (b) Conforming Amendments.--(1) The heading of section 3014A of 
such title is amended to read as follows:

``SEC. 3014A. ACCELERATED PAYMENT OF BASIC EDUCATIONAL ASSISTANCE FOR 
              CERTAIN APPROVED PROGRAMS OF EDUCATION.''.

    (2) The table of sections at the beginning of chapter 30 of such 
title is amended by striking the item relating to section 3014A and 
inserting after the item relating to section 3014 the following new 
item:

``3014A. Accelerated payment of basic educational assistance for 
                            certain approved programs of education.''.

                 Subtitle B--Reserve Montgomery GI Bill

SEC. 511. EDUCATIONAL ASSISTANCE UNDER MONTGOMERY GI BILL FOR MEMBERS 
              OF THE SELECTED RESERVE WHO AGGREGATE MORE THAN 2 YEARS 
              OF ACTIVE DUTY SERVICE DURING ANY 5-YEAR PERIOD.

    (a) Entitlement.--Section 3012(a)(1) of title 38, United States 
Code, is amended--
            (1) in subparagraph (B), by striking ``or'' at the end;
            (2) in subparagraph (C), by adding ``or'' at the end; and
            (3) by inserting after subparagraph (C) the following new 
        subparagraph (D):
                    ``(D) while in the Selected Reserve--
                            ``(i) is first ordered to serve on active 
                        duty in the Armed Forces under section 
                        12301(a), 12301(d), 12301(g), 12302, or 12304 
                        of title 10, during the period beginning on 
                        September 11, 2001, and ending December 31, 
                        2006; and
                            ``(ii) serves on active duty in the Armed 
                        Forces for one or more periods (whether 
                        continuous or otherwise) aggregating not less 
                        than two years of service on active duty during 
                        a five-year period beginning on the date the 
                        individual is first ordered to serve on active 
                        duty during the period referred to in clause 
                        (i);''.
    (b) Duration of Assistance.--Section 3013(b) of such title is 
amended by striking ``is entitled to'' and all that follows and 
inserting the following:
 ``is entitled to--
            ``(1) one month of educational assistance benefits under 
        this chapter--
                    ``(A) in the case of an individual described in 
                section 3012(a)(1)(A) of this title, for each month of 
                continuous active duty served by such individual after 
                June 30, 1985, as part of the obligated period of 
                active duty on which such entitlement is based;
                    ``(B) in the case of an individual described in 
                section 3012(a)(1)(B) or section 3012(a)(1)(C) of this 
                title, for each month of continuous active duty served 
                by such individual after June 30, 1985; or
                    ``(C) in the case of an individual described in 
                section 3012(a)(1)(D) of this title, for each month of 
                active duty served by such individual after September 
                11, 2001, as part of the aggregate period of active 
                duty on which such entitlement is based; and
            ``(2) one month of educational assistance benefits under 
        this chapter for each four months served by such individual in 
        the Selected Reserve after the applicable date specified in 
        paragraph (1) (other than any month in which the individual 
        served on active duty).''.
    (c) Amount of Assistance.--Section 3015 of such title is amended--
            (1) in subsections (a)(1)(D) and (b)(1)(D), by striking 
        ``subsection (h)'' and inserting ``subsection (i)'';
            (2) by redesignating subsection (h) as subsection (i); and
            (3) by inserting after subsection (g) the following new 
        subsection (h):
    ``(h) In the case of an individual entitled to an educational 
assistance allowance under section 3012(a)(1)(D) of this title, the 
amount of the basic educational assistance allowance payable under this 
chapter is the amount determined under subsection (b) of this 
section.''.
    (d) Contribution.--Paragraph (1) of section 3012(c) of such title 
is amended by inserting ``or subsection (a)(1)(D)'' after ``subsection 
(a)(1)(A)''.
    (e) Election to Opt Out.--Subsection (d)(1) of section 3012 of such 
title is amended--
            (1) by inserting ``(A)'' after ``(d)(1)'';
            (2) by designating the last sentence as subparagraph (C);
            (3) in subparagraph (C), as so designated, by striking 
        ``such an election'' and inserting ``an election under this 
        paragraph''; and
            (4) by inserting before subparagraph (C), as so designated, 
        the following new subparagraph (B):
    ``(B) An individual described in subsection (a)(1)(D) may make an 
election not to receive educational assistance under this chapter. Any 
such election shall be made at the time the individual completes the 
aggregate period of active duty service required under such 
subsection.''.
    (f) Outreach.--(1) The Secretaries concerned shall take actions to 
inform members of the Selected Reserve who are or may become entitled 
to basic educational assistance benefits under chapter 30 of title 38, 
United States Code, as a result of section 3012(a)(1)(D) of such title 
(as amended by subsection (a) of this section) of the minimum service 
requirements for entitlement to such benefits under that chapter and of 
the scope and nature of such benefits.
    (2) In this subsection:
            (A) The term ``Secretary concerned'' has the meaning given 
        such term in section 101(25) of title 38, United States Code.
            (B) The term ``Selected Reserve'' has the meaning given 
        such term in section 3002(4) of title 38, United States Code.

        Subtitle C--Employment Assistance for Homeless Veterans

SEC. 521. REAUTHORIZATION OF APPROPRIATIONS FOR HOMELESS VETERANS 
              REINTEGRATION PROGRAM.

    Subsection (e)(1) of section 2021 of title 38, United States Code, 
is amended by adding at the end the following new subparagraph:
            ``(F) $50,000,000 for each of fiscal years 2007 through 
        2011.''.

SEC. 522. EXPANSION OF HOMELESS VETERANS REINTEGRATION PROGRAM TO 
              INCLUDE VETERANS AT IMMINENT RISK FOR HOMELESSNESS.

    Subsection (a) of section 2021 of title 38, United States Code, is 
amended by inserting ``and veterans who are at imminent risk of 
homelessness'' after ``to expedite the reintegration of homeless 
veterans''.

                      Subtitle D--Payment Matters

SEC. 531. NO REDUCTION IN MONTHLY MILITARY PAY AND ALLOWANCES FOR 
              MEMBERS OF THE UNIFORMED SERVICES WOUNDED OR INJURED IN 
              COMBAT ZONES.

    (a) In General.--Subsection (b) of section 310 of title 37, United 
States Code, is amended to read as follows:
    ``(b) No Reduction in Monthly Military Pay for Wounded or Injured 
Members.--
            ``(1) Effect of wound or injury in combat zone.--For each 
        month during the period specified in paragraph (2), the total 
        amount of monthly military pay paid to a member who was wounded 
        or otherwise injured while assigned to duty in an area for 
        which special pay was available under this section at the time 
        the member was wounded or otherwise injured shall not be less 
        than the total amount of military pay paid to the member for 
        the month during which the member was wounded or otherwise 
        injured.
            ``(2) Duration.--Paragraph (1) shall apply with respect to 
        a wounded or injured member until the end of the first month 
        during which any of the following occurs:
                    ``(A) The member is found to be physically able to 
                perform the duties of the member's office, grade, rank, 
                or rating.
                    ``(B) The member is discharged or separated from 
                the uniformed services.
                    ``(C) The member dies.
            ``(3) Military pay defined.--In this subsection, the term 
        `military pay' has the meaning given the term `pay' in section 
        101(21) of this title, except that the term includes allowances 
        under chapter 7 of this title.''.
    (b) Retroactive Effective Date.--Subsection (b) of section 310 of 
title 37, United States Code, as amended by this section, shall apply 
with respect to any pay period ending on or after September 11, 2001, 
for members of the uniformed services described in paragraph (1) of 
such section who were wounded or otherwise injured on or after that 
date.

SEC. 532. REPEAL OF TIME LIMITATION ON EXCLUSION OF COMBAT ZONE 
              COMPENSATION BY REASON OF HOSPITALIZATION.

    (a) In General.--Subsections (a)(2) and (b)(2) of section 112 of 
the Internal Revenue Code of 1986 are each amended by striking ``; but 
this paragraph shall not apply for any month beginning more than 2 
years after the date of the termination of combatant activities in such 
zone''.
    (b) Effective Date.--Subsections (a)(2) and (b)(2) of section 112 
of the Internal Revenue Code of 1986, as amended by this section, shall 
apply to compensation received for months ending on or after September 
11, 2001, for members of the uniformed services described in such 
subsections who were wounded or otherwise injured on or after that 
date.

 TITLE VI--RESERVE COMPONENTS AND RECRUITMENT AND RETENTION INITIATIVES

                        Subtitle A--Health Care

SEC. 601. EXPANDED ELIGIBILITY OF SELECTED RESERVE MEMBERS UNDER 
              TRICARE PROGRAM.

    (a) General Eligibility.--Subsection (a) of section 1076d of title 
10, United States Code, is amended--
            (1) by striking ``(a) Eligibility.--A member'' and 
        inserting ``(a) Eligibility.--(1) Except as provided in 
        paragraph (2), a member'';
            (2) by striking ``after the member completes'' and all that 
        follows through ``one or more whole years following such 
        date''; and
            (3) by adding at the end the following new paragraph:
    ``(2) Paragraph (1) does not apply to a member who is enrolled, or 
is eligible to enroll, in a health benefits plan under chapter 89 of 
title 5.''.
    (b) Condition for Termination of Eligibility.--Subsection (b) of 
such section is amended by striking ``(b) Period of Coverage.--(1) 
TRICARE Standard'' and all that follows through ``(3) Eligibility'' and 
inserting ``(b) Termination of Eligibility Upon Termination of 
Service.--Eligibility''.
    (c) Conforming Amendments.--
            (1) Such section is further amended--
                    (A) by striking subsection (e); and
                    (B) by redesignating subsection (g) as subsection 
                (e) and transferring such subsection within such 
                section so as to appear following subsection (d).
            (2) The heading for such section is amended to read as 
        follows:
``Sec. 1076d. TRICARE program: TRICARE standard coverage for members of 
              the selected reserve''.
    (d) Repeal of Obsolete Provision.--Section 1076b of title 10, 
United States Code, is repealed.
    (e) Clerical Amendments.--The table of sections at the beginning of 
chapter 55 of title 10, United States Code, is amended--
            (1) by striking the item relating to section 1076b; and
            (2) by striking the item relating to section 1076d and 
        inserting the following:

``1076d. TRICARE program: TRICARE Standard coverage for members of the 
                            Selected Reserve.''.
    (f) Savings Provision.--Enrollments in TRICARE Standard that are in 
effect on the day before the date of the enactment of this Act under 
section 1076d of title 10, United States Code, as in effect on such 
day, shall be continued until terminated after such day under such 
section 1076d as amended by this section.

            Subtitle B--Recruitment and Retention Incentives

SEC. 611. INCREASE IN AUTHORIZED MAXIMUM ANNUAL AMOUNT OF SPECIAL PAY 
              FOR SELECTED RESERVE HEALTH CARE PROFESSIONALS IN 
              CRITICALLY SHORT WARTIME SPECIALTIES AND AUTHORIZED 
              DURATION OF PAY.

    Section 302g of title 37, United States Code, is amended--
            (1) in subsection (a)--
                    (A) by striking ``nor more than three years''; and
                    (B) by striking ``$10,000'' and inserting 
                ``$25,000''; and
            (2) in subsection (f), by striking ``2005'' and inserting 
        ``2006''.

SEC. 612. REENLISTMENT BONUS FOR MEMBERS OF SELECTED RESERVE.

    (a) Eligibility of Senior Enlisted Members.--Subsection (a)(1) of 
section 308b of title 37, United States Code, is amended by striking 
``16 years of total military service'' and inserting ``18 years of 
total military service''.
    (b) Reenlistment Options.--Subsection (a)(2) of such section is 
amended by striking ``three years or for a period of six years'' and 
inserting ``one to six years, in increments of whole years,''.
    (c) Bonus Amounts.--Paragraph (1) of subsection (b) of such section 
is amended to read as follows
    ``(1) The amount of a bonus under this section may not exceed--
            ``(A) $15,000, in the case of a member who reenlists or 
        extends an enlistment for a period of six years;
            ``(B) $12,500, in the case of a member who reenlists or 
        extends an enlistment for a period of five years;
            ``(C) $10,000, in the case of a member who reenlists or 
        extends an enlistment for a period of four years;
            ``(D) $7,500, in the case of a member who, having never 
        received a bonus under this section, reenlists or extends an 
        enlistment for a period of three years;
            ``(E) $5,000, in the case of a member who, having never 
        received a bonus under this section, reenlists or extends an 
        enlistment for a period of two years;
            ``(F) $2,500, in the case of a member who, having never 
        received a bonus under this section, reenlists or extends an 
        enlistment for a period of one year; and
            ``(G) $6,000, in the case of a member who, having received 
        a bonus under this section for a previous one-, two-, or three-
        year reenlistment or extension of an enlistment, reenlists or 
        extends the enlistment for an additional period of one, two, or 
        three years.''.
    (d) Authority to Waive Eligibility Requirements.--Subsection (c)(2) 
of such section is amended by striking ``In the case'' and all that 
follows through ``the Secretary'' and inserting ``In time of war or 
national emergency, the Secretary''.
    (e) Duration of Authority.--Subsection (g) of such section is 
amended by striking ``2005'' and inserting ``2006''.
    (f) Conforming Amendments.--Subsection (c)(1) of such section is 
amended--
            (1) in the matter preceding subparagraph (A), by striking 
        ``subsection (b)(1)(C)'' and inserting ``subsection 
        (b)(1)(G)''; and
            (2) in subparagraph (A), by striking ``three years'' and 
        inserting ``one, two, or three years''.

SEC. 613. INCREASE IN AUTHORIZED MAXIMUM AMOUNT OF SELECTED RESERVE 
              ENLISTMENT BONUS.

    Section 308c of title 37, United States Code, is amended--
            (1) in subsection (b), by striking ``$10,000'' and 
        inserting ``$32,000''; and
            (2) in subsection (e), by striking ``2005'' and inserting 
        ``2006''.

SEC. 614. INCREASE IN AUTHORIZED MAXIMUM AMOUNT FOR RESERVE AFFILIATION 
              BONUS UNDER RESERVE AFFILIATION AGREEMENTS ENTERED INTO 
              DURING FISCAL YEAR 2006.

    (a) Increase.--Section 308e of title 37, United States Code, is 
amended by adding at the end the following new subsection:
    ``(h) Notwithstanding subsection (c), the maximum amount of the 
bonus that may be paid under this section pursuant to a reserve 
affiliation agreement entered into during fiscal year 2006 shall not 
exceed $15,000. The Secretary of Defense, and the Secretary of Homeland 
Security with respect to the Coast Guard, may amend the regulations 
prescribed under subsection (f) to modify the method by which bonus 
payments will be made under such reserve affiliation agreements.''.
    (b) Conforming Amendment.--Subsection (e) of such section is 
amended by striking ``2005'' and inserting ``2006''.

SEC. 615. INCREASE IN AUTHORIZED MAXIMUM AMOUNT OF GENERAL ENLISTMENT 
              BONUS.

    Section 309 of title 37, United States Code, is amended--
            (1) in subsection (a), by striking ``$20,000'' and 
        inserting ``$50,000''; and
            (2) in subsection (e), by striking ``2005'' and inserting 
        ``2006''.

SEC. 616. USE OF REFERRAL BONUS TO PROMOTE ENLISTMENTS IN SELECTED 
              RESERVE.

    (a) Bonus Authorized.--Chapter 5 of title 37, United States Code, 
is amended by inserting after section 308 the following new section:
``Sec. 308a. Selected Reserve referral bonus
    ``(a) Bonus Authorized.--The Secretary concerned may pay a referral 
bonus to a member of the Selected Reserve who refers, to a member of 
the uniformed services assigned to recruiting duties, a person who, 
after such referral, enlists or is appointed, for a period of not less 
than two years, in the Selected Reserve of the same reserve component 
as the member making the referral.
    ``(b) Amount of Bonus.--The referral bonus may not exceed $2,500 
per referral.
    ``(c) Relation to Prohibition on Bounties.--The referral bonus 
authorized by this section is not a bounty for purposes of section 
514(a) of title 10.
    ``(d) Duration of Authority.--A referral bonus may not be paid 
under this section with respect to any referral made after December 31, 
2006.''.
    (b) Clerical Amendment.--The table of sections at the beginning of 
such chapter is amended by inserting after the item relating to section 
308 the following new item:

``308a. Selected Reserve referral bonus.''.

SEC. 617. EXTENSION OF ACTIVE-DUTY RETENTION BONUSES AND SPECIAL PAYS 
              FOR HEALTH CARE PROFESSIONALS TO RESERVE COMPONENT 
              OFFICERS.

    Section 303a of title 37, United States Code, is amended by adding 
at the end the following new subsection:
    ``(e) Availability for Reserve Component Health Care 
Professionals.--The Secretary of Defense shall modify the eligibility 
requirements for each special pay authorized under sections 301d, 301e, 
302 through 302j, and 303 of this title as necessary to ensure that 
commissioned officers of the reserve components who are not serving 
under a call or order to active duty, but who otherwise satisfy the 
eligibility requirements for the special pay, are eligible to receive 
the special pay in amounts, and under terms and conditions, comparable 
to those applicable to commissioned officers of the regular components. 
The requirements of this subsection are in addition to the policy 
expressed in section 302f of this title to expand the availability of 
certain special pays to reserve officers who are health care 
professionals. ''.

SEC. 618. CRITICAL-SKILLS ACCESSION BONUS FOR PERSONS ENROLLED IN 
              SENIOR RESERVE OFFICERS' TRAINING CORPS WHO ARE OBTAINING 
              NURSING DEGREES.

    (a) Provision of Bonus in Reduced Amount.--Section 324 of title 37, 
United States Code, as amended by section 614(f) of this Act, is 
further amended--
            (1) by redesignating subsections (f) and (g) as subsections 
        (g) and (h), respectively; and
            (2) by inserting after subsection (e) the following new 
        subsection:
    ``(f) Nurse Candidates in Senior Reserve Officers' Training 
Corps.--(1) A person enrolled in the Senior Reserve Officers' Training 
Corps program of the Army for advanced training under chapter 103 of 
title 10, including a person receiving financial assistance under 
section 2107 of such title, may receive an accession bonus under this 
section if the person--
            ``(A) has completed the second year of an accredited 
        baccalaureate degree program in nursing; and
            ``(B) executes an agreement under this section to serve on 
        active duty as a commissioned officer in the Army Nurse Corps.
    ``(2) Notwithstanding subsection (c), the amount of the accession 
bonus paid to a person described in paragraph (1) may not exceed 
$5,000. ''.
    (b) Retroactive Application to Existing Agreements.--Subsection (f) 
of section 324 of title 37, United States Code, as added by subsection 
(a), shall apply with respect to agreements referred to in paragraph 
(1)(B) of such subsection executed on or after October 5, 2004.

                      Subtitle C--Payment Matters

SEC. 621. NONREDUCTION IN PAY WHILE FEDERAL EMPLOYEE IS SERVING ON 
              ACTIVE DUTY IN A RESERVE COMPONENT OF THE UNIFORMED 
              SERVICES.

    (a) In General.--Subchapter IV of chapter 55 of title 5, United 
States Code, is amended by adding at the end the following new section:
``Sec. 5538. Nonreduction in pay while serving on active duty in a 
              reserve component
    ``(a) An employee who is also a member of a reserve component and 
is absent from a position of employment with the Federal Government 
under a call or order to serve on active duty for a period of more than 
30 days shall be entitled to receive, for each pay period described in 
subsection (b), an amount equal to the difference (if any) between--
            ``(1) the amount of civilian basic pay that would otherwise 
        have been payable to the employee for such pay period if the 
        employee's civilian employment with the Government had not been 
        interrupted by the service on active duty; and
            ``(2) the amount of military compensation that is payable 
        to the employee for the service on active duty and is allocable 
        to such pay period.
    ``(b)(1) Amounts under this section shall be payable with respect 
to each pay period (which would otherwise apply if the employee's 
civilian employment had not been interrupted) that occurs--
            ``(A) while the employee serves on active duty for a period 
        of more than 30 days;
            ``(B) while the employee is hospitalized for, or 
        convalescing from, an illness or injury incurred in, or 
        aggravated during, the performance of such active duty; or
            ``(C) during the 14-day period beginning at the end of such 
        active duty or the end of the period referred to in 
        subparagraph (B).
    ``(2) Paragraph (1) shall not apply with respect to a pay period 
for which the employee receives civilian basic pay (including by taking 
any annual, military, or other paid leave) to which the employee is 
entitled by virtue of the employee's civilian employment with the 
Government.
    ``(c) Any amount payable under this section to an employee shall be 
paid--
            ``(1) by the employing agency of the employee;
            ``(2) from the appropriations or fund that would be used to 
        pay the employee if the employee were in a pay status; and
            ``(3) to the extent practicable, at the same time and in 
        the same manner as would civilian basic pay if the employee's 
        civilian employment had not been interrupted.
    ``(d) In consultation with Secretary of Defense, the Office of 
Personnel Management shall prescribe such regulations as may be 
necessary to carry out this section.
    ``(e) In consultation with the Office of Personnel Management, the 
head of each employing agency shall prescribe procedures to ensure that 
the rights under this section apply to the employees of such agency.
    ``(f) In this section:
            ``(1) The terms `active duty for a period of more than 30 
        days', `member', and `reserve component' have the meanings 
        given such terms in section 101 of title 37.
            ``(2) The term `civilian basic pay', with respect to an 
        employee, includes any amount payable under section 5304 of 
        this title or under such other law providing for the 
        compensation of the employee by the employing agency for work 
        performed.
            ``(3) The term `employing agency', as used with respect to 
        an employee entitled to any payments under this section, means 
        the agency with respect to which the employee has reemployment 
        rights under chapter 43 of title 38. The term `agency' has the 
        meaning given such term in subparagraph (C) of section 
        2302(a)(2) of this title, except that the term includes 
        Government corporations and agencies excluded by clause (i) or 
        (ii) of such subparagraph.
            ``(4) The term `military compensation' has the meaning 
        given the term `pay' in section 101(21) of title 37, except 
        that the term includes allowances under chapter 7 of such 
        title.''.
    (b) Clerical Amendment.--The table of sections at the beginning of 
chapter 55 of title 5, is amended by inserting after the item relating 
to section 5537 the following new item:

``5538. Nonreduction in pay while serving on active duty in a reserve 
                            component.''.
    (c) Application of Amendment.--Section 5538 of title 5, United 
States Code, as added by subsection (a), shall apply with respect to 
pay periods (as described in subsection (b) of such section) beginning 
on or after the date of the enactment of this Act.

SEC. 622. ACTIVE-DUTY RESERVE COMPONENT EMPLOYEE CREDIT ADDED TO 
              GENERAL BUSINESS CREDIT.

    (a) Addition of Credit.--Subpart D of part IV of subchapter A of 
chapter 1 of the Internal Revenue Code of 1986 (relating to business-
related credits) is amended by adding at the end the following new 
section:

``SEC. 45J. ACTIVE-DUTY RESERVE COMPONENT EMPLOYEE CREDIT.

    ``(a) General Rule.--For purposes of section 38, the Ready Reserve-
National Guard employee credit determined under this section for any 
taxable year with respect to each Ready Reserve-National Guard employee 
of an employer is an amount equal to the lesser of--
            ``(1) 50 percent of the actual compensation amount paid 
        with respect to such Ready Reserve-National Guard employee for 
        such taxable year while the employee is absent from employment 
        for a reason described in subsection (b); or
            ``(2) $30,000.
    ``(b) Covered Pay Periods.--Subsection (a) shall apply with respect 
to a Ready Reserve-National Guard employee--
            ``(1) while the employee serves on active duty for a period 
        of more than 30 days;
            ``(2) while the employee is hospitalized for, or 
        convalescing from, an illness or injury incurred in, or 
        aggravated during, the performance of such active duty; or
            ``(3) during the 14-day period beginning at the end of such 
        active duty or the end of the period referred to in 
        subparagraph (B).
    ``(c) Limitation.--No credit shall be allowed under subsection (a) 
with respect to a Ready Reserve-National Guard employee on any day on 
which the employee was not scheduled to work (for a reason other than 
such service on active duty) and ordinarily would not have worked.
    ``(d) Portion of Credit Refundable.--
            ``(1) In general.--In the case of an employer described in 
        paragraph (2), the aggregate credits allowed to a taxpayer 
        under subpart C shall be increased by the lesser of--
                    ``(A) the credit which would be allowed under this 
                section without regard to this subsection and the 
                limitation under section 38(c), or
                    ``(B) the amount by which the aggregate amount of 
                credits allowed by this subpart (determined without 
                regard to this subsection) would increase if the 
                limitation imposed by section 38(c) for any taxable 
                year were increased by the amount of employer payroll 
                taxes imposed on the taxpayer during the calendar year 
                in which the taxable year begins.
        The amount of the credit allowed under this subsection shall 
        not be treated as a credit allowed under this subpart and shall 
        reduce the amount of the credit otherwise allowable under 
        subsection (a) without regard to section 38(c).
            ``(2) Employer described.--An employer is described in this 
        paragraph if the employer is--
                    ``(A) an organization exempt from tax under this 
                chapter,
                    ``(B) any State or political subdivision thereof, 
                the District of Columbia, any possession of the United 
                States, or any agency or instrumentality of any of the 
                foregoing, or
                    ``(C) any Indian tribal government (within the 
                meaning of section 7871) or any agency or 
                instrumentality thereof.
            ``(3) Employer payroll taxes.--For purposes of this 
        subsection--
                    ``(A) In general.--The term `employer payroll 
                taxes' means the taxes imposed by--
                            ``(i) section 3111(b), and
                            ``(ii) sections 3211(a) and 3221(a) 
                        (determined at a rate equal to the rate under 
                        section 3111(b)).
                    ``(B) Special rule.--A rule similar to the rule of 
                section 24(d)(2)(C) shall apply for purposes of 
                subparagraph (A).
    ``(e) Definitions.--In this section--
            ``(1) The terms `active duty for a period of more than 30 
        days', `member', and `reserve component' have the meanings 
        given such terms in section 101 of title 37, United States 
        Code.
            ``(2) The term `compensation' means any remuneration for 
        employment, whether in cash or in kind, which is paid or 
        incurred by a taxpayer and which is deductible from the 
        taxpayer's gross income under section 162(a)(1).
            ``(3) The term `Ready Reserve-National Guard employee' with 
        respect to an employer, means an employee of the employer who 
        is also a member of a reserve component during a taxable 
        year.''.
    (b) Credit to Be Part of General Business Credit.--Subsection (b) 
of section 38 of such Code (relating to general business credit) is 
amended by striking ``plus'' at the end of paragraph (18), by striking 
the period at the end of paragraph (19) and inserting ``, plus'', and 
by adding at the end the following new paragraph:
            ``(20) the active-duty reserve component employee credit 
        determined under section 45J(a).''.
    (c) Conforming Amendment.--
            (1) Paragraph (2) of section 1324(b) of title 31, United 
        States Code, is amended by inserting ``or 45J'' after ``section 
        35''.
            (2) The table of sections for subpart D of part IV of 
        subchapter A of chapter 1 of the Internal Revenue Code of 1986 
        is amended by inserting after the item relating to section 45I 
        the following new item:

``Sec. 45J. Active-duty reserve component employee credit.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2004.

SEC. 623. DIFFERENTIAL WAGE PAYMENTS.

    (a) Income Tax Withholding.--Section 3401 of the Internal Revenue 
Code of 1986 (relating to definitions) is amended by adding at the end 
the following new subsection:
    ``(i) Differential Wage Payments to Active Duty Members of the 
Uniformed Services.--
            ``(1) In general.--For purposes of subsection (a), any 
        differential wage payment shall be treated as a payment of 
        wages by the employer to the employee.
            ``(2) Differential wage payment.--For purposes of paragraph 
        (1), the term `differential wage payment' means any payment 
        which--
                    ``(A) is made by an employer to an individual with 
                respect to any period during which the individual is 
                performing service in the uniformed services while on 
                active duty for a period of more than 30 days, and
                    ``(B) represents all or a portion of the wages the 
                individual would have received from the employer if the 
                individual were performing service for the employer.''.
    (b) Treatment of Differential Wage Payments for Retirement Plan 
Purposes.--
            (1) Pension plans.--
                    (A) In general.--Section 414(u) of such Code 
                (relating to special rules relating to veterans' 
                reemployment rights under USERRA) is amended by adding 
                at the end the following new paragraph:
            ``(11) Treatment of differential wage payments.--
                    ``(A) In general.--Except as provided in this 
                paragraph, for purposes of applying this title to a 
                retirement plan to which this subsection applies--
                            ``(i) an individual receiving a 
                        differential wage payment shall be treated as 
                        an employee of the employer making the payment,
                            ``(ii) the differential wage payment shall 
                        be treated as compensation, and
                            ``(iii) the plan shall not be treated as 
                        failing to meet the requirements of any 
                        provision described in paragraph (1)(C) by 
                        reason of any contribution which is based on 
                        the differential wage payment.
                    ``(B) Special rule for distributions.--
                            ``(i) In general.--Notwithstanding 
                        subparagraph (A)(i), for purposes of section 
                        401(k)(2)(B)(i)(I), 403(b)(7)(A)(ii), 
                        403(b)(11)(A), or 457(d)(1)(A)(ii), an 
                        individual shall be treated as having been 
                        severed from employment during any period the 
                        individual is performing service in the 
                        uniformed services described in section 
                        3401(i)(2)(A).
                            ``(ii) Limitation.--If an individual elects 
                        to receive a distribution by reason of clause 
                        (i), the plan shall provide that the individual 
                        may not make an elective deferral or employee 
                        contribution during the 6-month period 
                        beginning on the date of the distribution.
                    ``(C) Nondiscrimination requirement.--Subparagraph 
                (A)(iii) shall apply only if all employees of an 
                employer performing service in the uniformed services 
                described in section 3401(i)(2)(A) are entitled to 
                receive differential wage payments on reasonably 
                equivalent terms and, if eligible to participate in a 
                retirement plan maintained by the employer, to make 
                contributions based on the payments . For purposes of 
                applying this subparagraph, the provisions of 
                paragraphs (3), (4), and (5), of section 410(b) shall 
                apply.
                    ``(D) Differential wage payment.--For purposes of 
                this paragraph, the term `differential wage payment' 
                has the meaning given such term by section 
                3401(i)(2).''.
                    (B) Conforming amendment.--The heading for section 
                414(u) of such Code is amended by inserting ``and to 
                Differential Wage Payments to Members on Active Duty'' 
                after ``USERRA''.
            (2) Differential wage payments treated as compensation for 
        individual retirement plans.--Section 219(f)(1) of such Code 
        (defining compensation) is amended by adding at the end the 
        following new sentence: ``The term `compensation' includes any 
        differential wage payment (as defined in section 3401(i)(2))''.
    (c) Effective Dates.--
            (1) Subsection (a).--The amendments made by subsection (a) 
        shall apply to remuneration paid after December 31, 2004.
            (2) Subsection (b).--The amendments made by subsection (b) 
        shall apply to plan years beginning after December 31, 2004.
    (d) Provisions Relating to Plan Amendments.--
            (1) In general.--If this subsection applies to any plan or 
        annuity contract amendment--
                    (A) such plan or contract shall be treated as being 
                operated in accordance with the terms of the plan or 
                contract during the period described in paragraph 
                (2)(B)(i), and
                    (B) except as provided by the Secretary of the 
                Treasury, such plan shall not fail to meet the 
                requirements of the Internal Revenue Code of 1986 or 
                the Employee Retirement Income Security Act of 1974 by 
                reason of such amendment.
            (2) Amendments to which section applies.--
                    (A) In general.--This subsection shall apply to any 
                amendment to any plan or annuity contract which is 
                made--
                            (i) pursuant to any amendment made by this 
                        section, and
                            (ii) on or before the last day of the first 
                        plan year beginning on or after January 1, 
                        2007.
                    (B) Conditions.--This subsection shall not apply to 
                any plan or annuity contract amendment unless--
                            (i) during the period beginning on the date 
                        the amendment described in subparagraph (A)(i) 
                        takes effect and ending on the date described 
                        in subparagraph (A)(ii) (or, if earlier, the 
                        date the plan or contract amendment is 
                        adopted), the plan or contract is operated as 
                        if such plan or contract amendment were in 
                        effect; and
                            (ii) such plan or contract amendment 
                        applies retroactively for such period.

SEC. 624. CREDIT FOR INCOME DIFFERENTIAL FOR EMPLOYMENT OF ACTIVATED 
              MILITARY RESERVIST AND REPLACEMENT PERSONNEL.

    (a) In General.--Subpart B of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to other credits) is 
amended by adding at the end the following new section:

``SEC. 30B. EMPLOYER WAGE CREDIT FOR ACTIVATED MILITARY RESERVISTS.

    ``(a) General Rule.--There shall be allowed as a credit against the 
tax imposed by this chapter for the taxable year an amount equal to the 
sum of--
            ``(1) in the case of a small business employer, the 
        employment credit with respect to all qualified employees and 
        qualified replacement employees of the taxpayer, plus
            ``(2) the self-employment credit of a qualified self-
        employed taxpayer.
    ``(b) Employment Credit.--For purposes of this section--
            ``(1) Qualified employees.--
                    ``(A) In general.--The employment credit with 
                respect to a qualified employee of the taxpayer for any 
                taxable year is equal to 50 percent of the lesser of--
                            ``(i) the excess, if any, of--
                                    ``(I) the qualified employee's 
                                average daily qualified compensation 
                                for the taxable year, over
                                    ``(II) the average daily military 
                                pay and allowances received by the 
                                qualified employee during the taxable 
                                year, while participating in qualified 
                                reserve component duty to the exclusion 
                                of the qualified employee's normal 
                                employment duties for the number of 
                                days the qualified employee 
                                participates in qualified reserve 
                                component duty during the taxable year, 
                                including time spent in a travel 
                                status, or
                            ``(ii) $30,000.
                The employment credit, with respect to all qualified 
                employees, is equal to the sum of the employment 
                credits for each qualified employee under this 
                subsection.
                    ``(B) Average daily qualified compensation and 
                average daily military pay and allowances.--As used 
                with respect to a qualified employee--
                            ``(i) the term `average daily qualified 
                        compensation' means the qualified compensation 
                        of the qualified employee for the taxable year 
                        divided by the difference between--
                                    ``(I) 365, and
                                    ``(II) the number of days the 
                                qualified employee participates in 
                                qualified reserve component duty during 
                                the taxable year, including time spent 
                                in a travel status, and
                            ``(ii) the term `average daily military pay 
                        and allowances' means--
                                    ``(I) the amount paid to the 
                                qualified employee during the taxable 
                                year as military pay and allowances on 
                                account of the qualified employee's 
                                participation in qualified reserve 
                                component duty, divided by
                                    ``(II) the total number of days the 
                                qualified employee participates in 
                                qualified reserve component duty, 
                                including time spent in travel status.
                    ``(C) Qualified compensation.--When used with 
                respect to the compensation paid or that would have 
                been paid to a qualified employee for any period during 
                which the qualified employee participates in qualified 
                reserve component duty, the term `qualified 
                compensation' means--
                            ``(i) compensation which is normally 
                        contingent on the qualified employee's presence 
                        for work and which would be deductible from the 
                        taxpayer's gross income under section 162(a)(1) 
                        if the qualified employee were present and 
                        receiving such compensation,
                            ``(ii) compensation which is not 
                        characterized by the taxpayer as vacation or 
                        holiday pay, or as sick leave or pay, or as any 
                        other form of pay for a nonspecific leave of 
                        absence, and with respect to which the number 
                        of days the qualified employee participates in 
                        qualified reserve component duty does not 
                        result in any reduction in the amount of 
                        vacation time, sick leave, or other nonspecific 
                        leave previously credited to or earned by the 
                        qualified employee, and
                            ``(iii) group health plan costs (if any) 
                        with respect to the qualified employee.
                    ``(D) Qualified employee.--The term `qualified 
                employee' means a person who--
                            ``(i) has been an employee of the taxpayer 
                        for the 31-day period immediately preceding the 
                        period during which the employee participates 
                        in qualified reserve component duty, and
                            ``(ii) is a member of the Ready Reserve of 
                        a reserve component of an Armed Force of the 
                        United States as defined in sections 10142 and 
                        10101 of title 10, United States Code.
            ``(2) Qualified replacement employees.--
                    ``(A) In general.--The employment credit with 
                respect to a qualified replacement employee of the 
                taxpayer for any taxable year is equal to 50 percent of 
                the lesser of--
                            ``(i) the individual's qualified 
                        compensation attributable to service rendered 
                        as a qualified replacement employee, or
                            ``(ii) $12,000.
                The employment credit, with respect to all qualified 
                replacement employees, is equal to the sum of the 
                employment credits for each qualified replacement 
                employee under this subsection.
                    ``(B) Qualified compensation.--When used with 
                respect to the compensation paid to a qualified 
                replacement employee, the term `qualified compensation' 
                means--
                            ``(i) compensation which is normally 
                        contingent on the qualified replacement 
                        employee's presence for work and which is 
                        deductible from the taxpayer's gross income 
                        under section 162(a)(1),
                            ``(ii) compensation which is not 
                        characterized by the taxpayer as vacation or 
                        holiday pay, or as sick leave or pay, or as any 
                        other form of pay for a nonspecific leave of 
                        absence, and
                            ``(iii) group health plan costs (if any) 
                        with respect to the qualified replacement 
                        employee.
                    ``(C) Qualified replacement employee.--The term 
                `qualified replacement employee' means an individual 
                who is hired to replace a qualified employee or a 
                qualified self-employed taxpayer, but only with respect 
                to the period during which such employee or taxpayer 
                participates in qualified reserve component duty, 
                including time spent in travel status.
                    ``(D) Failure to make differential wage payments.--
                The employment credit with respect to a qualified 
                replacement employee of the taxpayer for any taxable 
                year shall be zero if the taxpayer does not make all 
                differential wage payments (as defined by section 
                3401(i)(2)) for the taxable year to the qualified 
                employee or the qualified self-employed taxpayer (as 
                the case may be) who is replaced by the qualified 
                replacement employee.
    ``(c) Self-Employment Credit.--For purposes of this section--
            ``(1) In general.--The self-employment credit of a 
        qualified self-employed taxpayer for any taxable year is equal 
        to 50 percent of the lesser of--
                    ``(A) the excess, if any, of--
                            ``(i) the self-employed taxpayer's average 
                        daily self-employment income for the taxable 
                        year over
                            ``(ii) the average daily military pay and 
                        allowances received by the taxpayer during the 
                        taxable year, while participating in qualified 
                        reserve component duty to the exclusion of the 
                        taxpayer's normal self-employment duties for 
                        the number of days the taxpayer participates in 
                        qualified reserve component duty during the 
                        taxable year, including time spent in a travel 
                        status, or
                    ``(B) $30,000.
            ``(2) Average daily self-employment income and average 
        daily military pay and allowances.--As used with respect to a 
        self-employed taxpayer--
                    ``(A) the term `average daily self-employment 
                income' means the self-employment income (as defined in 
                section 1402(b)) of the taxpayer for the taxable year 
                plus the amount paid for insurance which constitutes 
                medical care for the taxpayer for such year (within the 
                meaning of section 162(l)) divided by the difference 
                between--
                            ``(i) 365, and
                            ``(ii) the number of days the taxpayer 
                        participates in qualified reserve component 
                        duty during the taxable year, including time 
                        spent in a travel status, and
                    ``(B) the term `average daily military pay and 
                allowances' means--
                            ``(i) the amount paid to the taxpayer 
                        during the taxable year as military pay and 
                        allowances on account of the taxpayer's 
                        participation in qualified reserve component 
                        duty, divided by
                            ``(ii) the total number of days the 
                        taxpayer participates in qualified reserve 
                        component duty, including time spent in travel 
                        status.
            ``(3) Qualified self-employed taxpayer.--The term 
        `qualified self-employed taxpayer' means a taxpayer who--
                    ``(A) has net earnings from self-employment (as 
                defined in section 1402(a)) for the taxable year, and
                    ``(B) is a member of the Ready Reserve of a reserve 
                component of an Armed Force of the United States.
    ``(d) Credit in Addition to Deduction.--The employment credit or 
the self-employment credit provided in this section is in addition to 
any deduction otherwise allowable with respect to compensation actually 
paid to a qualified employee, qualified replacement employee, or 
qualified self-employed taxpayer during any period the qualified 
employee or qualified self-employed taxpayer participates in qualified 
reserve component duty to the exclusion of normal employment duties.
    ``(e) Coordination With Other Credits.--The amount of credit 
otherwise allowable under sections 51(a) and 1396(a) with respect to 
any employee shall be reduced by the credit allowed by this section 
with respect to such employee.
    ``(f) Limitations.--
            ``(1) Application with other credits.--The credit allowed 
        under subsection (a) for any taxable year shall not exceed the 
        excess (if any) of--
                    ``(A) the regular tax for the taxable year reduced 
                by the sum of the credits allowable under subpart A and 
                sections 27, 29, and 30, over
                    ``(B) the tentative minimum tax for the taxable 
                year.
            ``(2) Disallowance for failure to comply with employment or 
        reemployment rights of members of the reserve components of the 
        armed forces of the united states.--No credit shall be allowed 
        under subsection (a) to a taxpayer for--
                    ``(A) any taxable year, beginning after the date of 
                the enactment of this section, in which the taxpayer is 
                under a final order, judgment, or other process issued 
                or required by a district court of the United States 
                under section 4323 of title 38 of the United States 
                Code with respect to a violation of chapter 43 of such 
                title, and
                    ``(B) the 2 succeeding taxable years.
            ``(3) Disallowance with respect to persons ordered to 
        active duty for training.--No credit shall be allowed under 
        subsection (a) to a taxpayer with respect to any period by 
        taking into account any person who is called or ordered to 
        active duty for any of the following types of duty:
                    ``(A) Active duty for training under any provision 
                of title 10, United States Code.
                    ``(B) Training at encampments, maneuvers, outdoor 
                target practice, or other exercises under chapter 5 of 
                title 32, United States Code.
                    ``(C) Full-time National Guard duty, as defined in 
                section 101(d)(5) of title 10, United States Code.
    ``(g) General Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Small business employer.--
                    ``(A) In general.--The term `small business 
                employer' means, with respect to any taxable year, any 
                employer who employed an average of 50 or fewer 
                employees on business days during such taxable year.
                    ``(B) Controlled groups.--For purposes of 
                subparagraph (A), all persons treated as a single 
                employer under subsection (b), (c), (m), or (o) of 
                section 414 shall be treated as a single employer.
            ``(2) Military pay and allowances.--The term `military pay' 
        means pay as that term is defined in section 101(21) of title 
        37, United States Code, and the term `allowances' means the 
        allowances payable to a member of the Armed Forces of the 
        United States under chapter 7 of that title.
            ``(3) Qualified reserve component duty.--The term 
        `qualified reserve component duty' includes only active duty 
        performed, as designated in the reservist's military orders, in 
        support of a contingency operation as defined in section 
        101(a)(13) of title 10, United States Code.
            ``(4) Special rule for certain manufacturers.--
                    ``(A) In general.--In the case of any qualified 
                manufacturer, paragraph (1)(A) of this subsection shall 
                be applied by substituting `100' for `50'.
                    ``(B) Qualified manufacturer.--For purposes of this 
                paragraph, the term `qualified manufacturer' means any 
                person if--
                            ``(i) the primary business of such person 
                        is classified in sector 31, 32, or 33 of the 
                        North American Industrial Classification 
                        System, and
                            ``(ii) all of such person's facilities 
                        which are used for production in such business 
                        are located in the United States.
            ``(5) Carryback and carryforward allowed.--
                    ``(A) In general.--If the credit allowable under 
                subsection (a) for a taxable year exceeds the amount of 
                the limitation under subsection (f)(1) for such taxable 
                year (in this paragraph referred to as the `unused 
                credit year'), such excess shall be a credit carryback 
                to each of the 3 taxable years preceding the unused 
                credit year and a credit carryforward to each of the 20 
                taxable years following the unused credit year.
                    ``(B) Rules.--Rules similar to the rules of section 
                39 shall apply with respect to the credit carryback and 
                credit carryforward under subparagraph (A).
            ``(6) Certain rules to apply.--Rules similar to the rules 
        of subsections (c), (d), and (e) of section 52 shall apply.''.
    (b) Conforming Amendment.--Section 55(c)(2) of the Internal Revenue 
Code of 1986 is amended by inserting ``30B(f)(1),'' after 
``30(b)(3),''.
    (c) Clerical Amendment.--The table of sections for subpart B of 
part IV of subchapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by adding at the end of 30A the following new item:

``Sec. 30B. Employer wage credit for activated military reservists.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2004.

SEC. 625. EMPLOYER CONTRIBUTIONS TO IRAS OF CERTAIN MEMBERS OF THE 
              UNIFORMED SERVICES.

    (a) In General.--Section 3121 of the Internal Revenue Code of 1986 
is amended by adding at the end the following:
    ``(z) Employer Contributions to IRAs of Certain Members of the 
Uniformed Services.--Nothing in any paragraph of subsection (a) (other 
than paragraphs (1) and (5)) shall exclude from the term `wages' any 
employer payment on behalf of an individual to an individual retirement 
plan if such payment is made by the employer to such plan with respect 
to any period during which the individual is performing service in the 
uniformed services while on active duty for a period of more than 30 
days.''.
    (b) Railroad Retirement.--Subsection (e) of Section 3231 of such 
Code is amended by adding at the end the following new paragraph:
            ``(13) Employer contributions to iras of certain members of 
        the uniformed services.--Nothing in any paragraph of this 
        subsection (other than paragraph (2)) shall exclude from the 
        term `compensation' any amount described in section 3121(z).''.
    (c) Federal Unemployment Tax.--Section 3306 of such Code is amended 
by adding at the end the following:
    ``(v) Employer Contributions to IRAs of Certain Members of the 
Uniformed Services.--Nothing in any paragraph of subsection (b) (other 
than paragraphs (1) and (5)) shall exclude from the term `wages' any 
employer payment on behalf of an individual to an individual retirement 
plan if such payment is made by the employer to such plan with respect 
to any period during which the individual is performing service in the 
uniformed services while on active duty for a period of more than 30 
days.''.
    (d) Withholding.--Section 3401 of such Code, as amended by this 
Act, is amended by adding at the end the following new subsection:
    ``(j) Employer Contributions to IRAs of Certain Members of the 
Uniformed Services.--Nothing in any paragraph of subsection (a) (other 
than paragraph (12)) shall exclude from the term `wages' any amount 
described in section 3121(z).''.
    (e) Effective Date.--The amendments made by this section shall 
apply to amounts paid after December 31, 2004.

                           TITLE VII--FUNDING

SEC. 701. REPEAL OF 2001 TAX CUT FOR HIGH INCOME TAXPAYERS.

    (a) In General.--Section 1 of the Internal Revenue Code of 1986 is 
amended by adding at the end the following new subsection:
    ``(j) Repeal of 2001 Tax Cut for High Income Taxpayers.--The amount 
determined under subsection (a), (b), (c), or (d), as the case may be, 
shall be increased by 4.6 percent of so much of taxable income as 
exceeds $1,000,000 in the case of individuals to whom subsection (a) 
applies ($500,000 in any other case).''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2005.

SEC. 702. REPEAL OF SCHEDULED TERMINATION OF PHASEOUT OF PERSONAL 
              EXEMPTIONS.

    (a) In General.--Paragraph (3) of section 151(d) of the Internal 
Revenue Code of 1986 is amended by striking subparagraphs (E) and (F).
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2005.

SEC. 703. REPEAL OF SCHEDULED PHASEOUT OF OVERALL LIMITATION ON 
              ITEMIZED DEDUCTIONS.

    (a) In General.--Section 68 of the Internal Revenue Code of 1986 is 
amended by striking subsections (f) and (g).
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2005.
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