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[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5509 Introduced in House (IH)]

110th CONGRESS
  2d Session
                                H. R. 5509

 To amend titles 10 and 38, United States Code, to improve and enhance 
   procedures for the retirement of members of the Armed Forces for 
 disability and to improve and enhance authorities for the rating and 
  compensation of service-connected disabilities in veterans, and for 
                            other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                           February 28, 2008

  Mr. Buyer introduced the following bill; which was referred to the 
 Committee on Veterans' Affairs, and in addition to the Committees on 
Armed Services and Rules, 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 amend titles 10 and 38, United States Code, to improve and enhance 
   procedures for the retirement of members of the Armed Forces for 
 disability and to improve and enhance authorities for the rating and 
  compensation of service-connected disabilities in veterans, and for 
                            other purposes.

    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 ``Noble Warrior 
Act''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
   TITLE I--RETIREMENT OF MEMBERS OF THE ARMED FORCES FOR DISABILITY

Sec. 101. Retirement for disability of members of the Armed Forces 
                            after implementation of enhanced Department 
                            of Veterans Affairs disability compensation 
                            system.
Sec. 102. Continuation of respite care and aid and other extended care 
                            benefits for members of the uniformed 
                            services who incur a serious injury or 
                            illness on active duty.
  TITLE II--COMPENSATION OF VETERANS FOR SERVICE-CONNECTED DISABILITY

Sec. 201. Study on veterans disability compensation.
Sec. 202. Study on veterans transition benefits.
Sec. 203. Study on measures to assist and encourage veterans in the 
                            completion of their vocational 
                            rehabilitation plans.
Sec. 204. Proposal on veterans disability compensation and veterans 
                            transition benefits.
Sec. 205. Congressional consideration of proposal.
Sec. 206. Effective date of implementation of enhanced Department of 
                            Veterans Affairs disability compensation 
                            system.
Sec. 207. Enhanced Department of Veterans Affairs disability 
                            compensation system.
Sec. 208. Supplemental survivor benefit for survivors of veterans 
                            retired for disability after implementation 
                            of enhanced Department of Veterans Affairs 
                            disability compensation system.

   TITLE I--RETIREMENT OF MEMBERS OF THE ARMED FORCES FOR DISABILITY

SEC. 101. RETIREMENT FOR DISABILITY OF MEMBERS OF THE ARMED FORCES 
              AFTER IMPLEMENTATION OF ENHANCED DEPARTMENT OF VETERANS 
              AFFAIRS DISABILITY COMPENSATION SYSTEM.

    (a) In General.--Chapter 61 of title 10, United States Code, is 
amended--
            (1) by inserting before section 1201 the following:

   ``SUBCHAPTER I--RETIREMENT OR SEPARATION BEFORE IMPLEMENTATION OF 
 ENHANCED DEPARTMENT OF VETERANS AFFAIRS DISABILITY COMPENSATION SYSTEM

``Sec. 1200. Applicability of subchapter: members retired or separated 
              before implementation of enhanced Department of Veterans 
              Affairs disability compensation system; certain members 
              on temporary disability retired list as of implementation 
              of enhanced Department of Veterans Affairs disability 
              compensation system
    ``(a) In General.--Except as provided in subsection (b), this 
subchapter applies to the retirement or separation for disability of 
members as follows:
            ``(1) Members who are eligible for retirement for 
        disability or separation for disability before the effective 
        date of the implementation of the enhanced Department of 
        Veterans Affairs disability compensation system under chapter 
        12 of title 38 (as determined in accordance with section 206 of 
        the Noble Warrior Act).
            ``(2) Members on the temporary disability retired list as 
        of the effective date of the implementation of the enhanced 
        Department of Veterans Affairs disability compensation system 
        who--
                    ``(A) are eligible for retirement under the 
                provisions of subchapter II in accordance with section 
                1206c of this title; but
                    ``(B) do not elect to retire under the provisions 
                of subchapter II as otherwise provided in section 1206c 
                of this title.
    ``(b) Inapplicability to Certain Members.--For provisions relating 
to the applicability of subchapter II to the retirement for disability 
of certain members otherwise covered by this subchapter under 
subsection (a)(1), see section 1206b of this title.'';
            (2) by transferring section 1206a to appear after section 
        1207a and redesignating such section, as so transferred, as 
        section 1207b; and
            (3) by inserting after section 1206 the following:

``SUBCHAPTER II--RETIREMENT AFTER IMPLEMENTATION OF ENHANCED DEPARTMENT 
           OF VETERANS AFFAIRS DISABILITY COMPENSATION SYSTEM

``Sec. 1206a. Applicability of subchapter: members retired on or after 
              implementation of enhanced Department of Veterans Affairs 
              disability compensation system
    ``(a) In General.--This subchapter applies to the retirement of 
members for disability (including the placement of members on the 
temporary disability retired list in accordance with section 1206e of 
this title) on or after the effective date of the implementation of the 
enhanced Department of Veterans Affairs disability compensation system 
(as determined in accordance with section 206 of the Noble Warrior 
Act).
    ``(b) Exclusive Application.--Members eligible for retirement under 
this subchapter by reason of this section are not eligible for 
retirement or separation under subchapter I.
``Sec. 1206b. Applicability of subchapter: certain members retired on 
              or after October 7, 2001, but before implementation of 
              enhanced Department of Veterans Affairs disability 
              compensation system
    ``(a) Election of Applicability.--(1) During such period as the 
Secretary of Defense shall prescribe for purposes of this section, a 
former member described in subsection (b) may elect to retire under 
this subchapter in lieu of retirement under the provisions of this 
chapter as in effect on the day before the effective date of the 
implementation of the enhanced Department of Veterans Affairs 
disability compensation system (as determined in accordance with 
section 206 of the Noble Warrior Act).
    ``(2) Each election under this subsection shall be executed in such 
form and manner as the Secretary of Defense shall prescribe for 
purposes of this section.
    ``(3) Any election made under this subsection is irrevocable.
    ``(b) Covered Former Members.--A former member described in this 
subsection is any former member who, during the period beginning on 
October 7, 2001, and ending on the day before the effective date of the 
implementation of the enhanced Department of Veterans Affairs 
disability compensation system, is retired under the provisions of this 
chapter as in effect before the effective date of the implementation of 
the enhanced Department of Veterans Affairs disability compensation 
system.
    ``(c) Treatment of Former Members Making Elections.--(1) Effective 
as of the date of the correction of the military records of such former 
member under subsection (d), each former member who makes an election 
under subsection (a) shall be deemed to have been retired under this 
subchapter, with retired pay computed under section 1401 of this title 
(as in effect after the effective date of the implementation of the 
enhanced Department of Veterans Affairs disability compensation 
system), rather than to have been retired under the provisions of this 
chapter as in effect before the effective date of the implementation of 
the enhanced Department of Veterans Affairs disability compensation 
system.
    ``(2) No benefits are available to a former member under this 
subchapter for any period before the correction of the military records 
of the former member under subsection (d).
    ``(3) The Secretary of Defense may not recoup or collect from any 
former member who is retired under this subchapter pursuant to an 
election under subsection (a) any amount of retired pay paid to the 
former member under this chapter before the date of the effective date 
of the correction of the military records of the former member under 
subsection (d).
    ``(d) Correction of Military Records.--The Secretary concerned 
shall correct the military records of each former member making an 
election under subsection (a) to reflect that the former member is 
retired under the provisions of this subchapter rather than retired 
under the provisions of this chapter as in effect before the effective 
date of the implementation of the enhanced Department of Veterans 
Affairs disability compensation system.
``Sec. 1206c. Applicability of subchapter: members on temporary 
              disability retired list as of implementation of enhanced 
              Department of Veterans Affairs disability compensation 
              system
    ``(a) Election of Applicability.--(1) A member described in 
subsection (b) may elect to retire under this subchapter in lieu of 
retirement under the provisions of subchapter I.
    ``(2) Each election under this subsection shall be executed in such 
form and manner as the Secretary of Defense shall prescribe for 
purposes of this section.
    ``(3) Any election made under this subsection is irrevocable.
    ``(b) Covered Members.--A member described in this subsection is 
any member--
            ``(1) whose name is on the temporary disability retired 
        list as of the effective date of the implementation of the 
        enhanced Department of Veterans Affairs disability compensation 
        system (as determined in accordance with section 206 of the 
        Noble Warrior Act); and
            ``(2)(A) whose disability qualifying the member for 
        placement on the temporary disability retired list is 
        determined after such effective date by the Secretary 
        concerned, based on accepted medical principles, to be of a 
        permanent nature and stable; or
            ``(B) whose disability is considered after such effective 
        date by the Secretary concerned to be of a permanent nature and 
        stable after five years of the placement of the member's name 
        on the temporary disability retired list in accordance with 
        section 1210(b) of this title.
    ``(c) Timing of Election.--A member eligible to make an election 
under subsection (a) by reason of a determination under subparagraph 
(A) or (B) of subsection (b)(2) shall make such election, if at all, 
during such period after the date of the determination as the Secretary 
of Defense shall prescribe for purposes of this section.
    ``(d) Treatment of Members Making Elections.--(1) Effective as of 
the date of such election, each member who makes an election under 
subsection (a) shall be retired under this subchapter, with retired pay 
computed under section 1401 of this title (as in effect after the 
effective date of the implementation of the enhanced Department of 
Veterans Affairs disability compensation system).
    ``(2) No benefits are available to a member under this subchapter 
for any period before the election of the member under subsection (a).
    ``(3) The Secretary of Defense may not recoup or collect from any 
member who is retired under this subchapter pursuant to an election 
under subsection (a) any amount of retired pay paid to the member under 
this chapter before the date of the election of the member under 
subsection (a).
``Sec. 1206d. Retirement
    ``(a) In General.--Upon a determination by the Secretary concerned 
that a member covered by this subchapter under section 1206a of this 
title is unfit to perform the duties of the member's office, grade, 
rank, or rating because of physical disability, the Secretary may, 
consistent with regulations prescribed by the Secretary of Defense for 
purposes of this subchapter, retire the member, with retired pay 
computed under section 1401 of this title (as in effect after the 
effective date of the implementation of the enhanced Department of 
Veterans Affairs disability compensation system), if the Secretary 
concerned also makes the determinations specified in subsection (b) 
with respect to the member.
    ``(b) Determinations.--The determinations specified in this 
subsection with respect to a member are determinations by the Secretary 
concerned as follows:
            ``(1) That the disability of the member, based upon 
        accepted medical principles--
                    ``(A) is of a permanent nature; or
                    ``(B) is of uncertain permanency, such that a 
                temporary disability retirement under section 1206e of 
                this title is appropriate.
            ``(2) That the injury, illness, or disease rendering the 
        member unfit was incurred or aggravated in the line of duty--
                    ``(A) while the member was entitled to basic pay 
                under section 204 of title 37 or compensation under 
                section 206 of that title;
                    ``(B) while performing active duty but not entitled 
                to basic pay under section 204 of title 37 or inactive-
                duty training; or
                    ``(C) while engaged in an activity covered by 
                section 1201(c)(3), 1204(2)(B), or 1204(2)(C) of this 
                title.
            ``(3) That the injury, illness, or disease was not--
                    ``(A) the result of the member's intentional 
                misconduct or willful neglect; or
                    ``(B) incurred during a period of unauthorized 
                absence.
``Sec. 1206e. Temporary disability retired list
    ``(a) In General.--Subject to the provisions of this section, a 
member covered by section 1206d(b) of this title who is described by 
paragraph (1)(B) of such section shall have such member's name placed 
on the temporary disability retired list, with retired pay computed 
under section 1401 of this title (as in effect after the effective date 
of the implementation of the enhanced Department of Veterans Affairs 
disability compensation system (as determined in accordance with 
section 206 of the Noble Warrior Act)).
    ``(b) Administration.--(1) Subsection (a) shall be administered in 
accordance with such regulations as the Secretary of Defense shall 
prescribe for purposes of this section.
    ``(2)(A) Except as provided in subparagraph (B), the regulations 
prescribed under this subsection shall provide for the applicability of 
the provisions of sections 1210 and 1211 of this title to a member 
whose name is placed on the temporary disability retired list under 
this section.
    ``(B) The provisions of subsections (c), (d), and (e) of section 
1210 of this title shall not apply to a member whose name is placed on 
the temporary disability retired list under this section.
    ``(3)(A) The regulations shall provide for appropriate mechanisms, 
applicable uniformly across the military departments, for an annual 
review by the military departments of determinations to place members' 
names on the temporary disability retired list under this section in 
order to ensure the accuracy and consistency of such determinations by 
the military departments.
    ``(B) The Secretary of Defense shall submit to the Committees on 
Armed Services of the Senate and the House of Representatives each year 
a report on the results of the reviews conducted by the military 
departments under subparagraph (A) during the preceding year.
    ``(c) Retirement.--If, as a result of a periodic examination under 
section 1210(a) of this title or upon a final determination under 
section 1210(b) of this title, it is determined that a member's 
physical disability is of a permanent nature, the member's name shall 
be removed from the temporary disability retired list, and the member 
shall be retired under section 1206d of this title.
``Sec. 1206f. Treatment of retired pay
    ``(a) In General.--Retired pay authorized by this subchapter shall 
be treated as retired pay for all purposes under this title, including 
for purposes of eligibility for medical and dental care under chapter 
55 of this title.
    ``(b) No Offset Under Duplication of Benefits.--Retired pay 
authorized by this subchapter is not subject to the prohibitions 
against duplication of benefits under sections 5304 and 5305 of title 
38.
    ``(c) Ineligibility for Combat-Related Special Compensation.--A 
member retired under this subchapter is not eligible for combat-related 
special compensation under section 1413a of this title.
    ``(d) Ineligibility for Certain Space-Available Travel.--A member 
retired under this subchapter residing in a Commonwealth or possession 
of the United States is not eligible for space-available travel on 
Department of Defense aircraft under section 2461b of this title.
``Sec. 1206g. Determinations of unfitness
    ``(a) In General.--In this subchapter, a finding of unfitness for 
duty with respect to a member shall be based on determinations by the 
Secretary concerned that--
            ``(1) the member is unfit to perform the duties of the 
        member's office, grade, rank, or rating because of a physical 
        disability; and
            ``(2) it is unlikely that through retraining in another 
        occupational specialty or other preparations the member can be 
        reassigned to other duties the member would be fit to perform 
        and which are consistent with the needs of the armed force 
        concerned.
    ``(b) Interservice Transfer.--With the consent of a member 
determined unfit for duty under subsection (a), the member may, instead 
of being retired under this subchapter, be transferred under section 
716 of this title to another uniformed service if the Secretary 
responsible for that uniformed service determines that the member, 
currently or through retraining in another occupational specialty or 
other preparations, can be reassigned to other duties the member would 
be fit to perform and which are consistent with the needs of that 
uniformed service.
    ``(c) Continuation of Service of Member Determined Unfit.--Upon the 
agreement of a member determined unfit for duty under subsection (a) 
and the Secretary concerned, the member's service may be continued 
under terms and conditions specified by the Secretary concerned, 
including through transfer to another uniformed service under section 
716 of this title.
``Sec. 1206h. Definitions
    ``In this subchapter, the terms `disability' and `physical 
disability' include any disability based on a mental disorder.

              ``SUBCHAPTER III--ADMINISTRATIVE MATTERS''.

    (b) Clerical Amendments.--Chapter 61 of such title is further 
amended--
            (1) by inserting after the chapter heading the following:

``Subchapter                                                      Sec. 
``I. Retirement or Separation Before Implementation of            1200 
                            Enhanced Department of Veterans 
                            Affairs Disability Compensation 
                            System.
``II. Retirement After Implementation of Enhanced Department     1206a 
                            of Veterans Affairs Disability 
                            Compensation System.
``III. Administrative Matters...............................    1207'';
            (2) by inserting after the subchapter heading for 
        subchapter I, as added by subsection (a)(1) of this section, 
        the following:

``Sec.
``1200. Applicability of subchapter: members retired or separated 
                            before implementation of enhanced 
                            Department of Veterans Affairs disability 
                            compensation system; certain members on 
                            temporary disability retired list as of 
                            implementation of enhanced Department of 
                            Veterans Affairs disability compensation 
                            system.
``1201. Regulars and members on active duty for more than 30 days: 
                            retirement.
``1202. Regulars and members on active duty for more than 30 days: 
                            temporary disability retired list.
``1203. Regulars and members on active duty for more than 30 days: 
                            separation.
``1204. Members on active duty for 30 days or less or on inactive-duty 
                            training: retirement.
``1205. Members on active duty for 30 days or less or on inactive-duty 
                            training: temporary disability retired 
                            list.
``1206. Members on active duty for 30 days or less or on inactive-duty 
                            training: separation.'';
            (3) by inserting after the subchapter heading for 
        subchapter II, as added by subsection (a)(3) of this section, 
        the following:

``Sec.
``1206a. Applicability of subchapter: members retired on or after 
                            implementation of enhanced Department of 
                            Veterans Affairs disability compensation 
                            system.
``1206b. Applicability of subchapter: certain members retired on or 
                            after October 7, 2001, but before 
                            implementation of enhanced Department of 
                            Veterans Affairs disability compensation 
                            system.
``1206c. Applicability of subchapter: members on temporary disability 
                            retired list as of implementation of 
                            enhanced Department of Veterans Affairs 
                            disability compensation system.
``1206d. Retirement.
``1206e. Temporary disability retired list.
``1206f. Treatment of retired pay.
``1206g. Determinations of unfitness.
``1206h. Definitions.'';
        and
            (4) by inserting after the subchapter heading for 
        subchapter III, as so added, the following:

``Sec.
``1207. Disability from intentional misconduct or willful neglect: 
                            separation.
``1207a. Members with over eight years of active service: eligibility 
                            for disability retirement for pre-existing 
                            conditions.
``1207b. Reserve component members unable to perform duties when 
                            ordered to active duty: disability system 
                            processing.
``1208. Computation of service.
``1209. Transfer to inactive status list instead of separation.
``1210. Members on temporary disability retired list: periodic physical 
                            examination; final determination of status.
``1211. Members on temporary disability retired list: return to active 
                            duty; promotion.
``1212. Disability severance pay.
``1213. Effect of separation on benefits and claims.
``1214. Right to full and fair hearing.
``1215. Members other than Regulars: applicability of laws.
``1216. Secretaries: powers, functions, and duties.
``1217. Academy cadets and midshipmen: applicability of chapter.
``1218. Discharge or release from active duty: claims for compensation, 
                            pension, or hospitalization.
``1219. Statement of origin of disease or injury: limitations.
``1221. Effective date of retirement or placement of name on temporary 
                            disability retired list.''.
    (c) Eligibility for Disability Retirement for Pre-Existing 
Condition After Eight Years of Service.--Section 1207a(a) of title 10, 
United States Code, is amended by striking ``or 1203'' and inserting 
``1203, 1206b, 1206c, 1206d, or 1206e''.
    (d) Computation of Retired Pay.--The table in section 1401(a) of 
title 10, United States Code, is amended by inserting after the matter 
relating to Formula 2 the following matter:

 
 
------------------------------------------------------------------------
`  1  Retired pay base       2\1/2\% of years of service
   2
 ` 0
   6
   b
   1    as computed            credited to the person
   2
   0
   6
   c
   1    under section          under section 1208.1''.
   2
   0
   6
   d
   1    1406(b) or           ............................
   2
   0
   6
   e
        1407.                ............................
------------------------------------------------------------------------

    (e) Conforming Amendments Relating to Retired Pay.--
            (1) Recomputation of retired pay to reflect later active 
        duty.--Sections 1402(b) and 1402a(b) of title 10, United States 
        Code, are each amended by inserting ``(as in effect before the 
        effective date of the implementation of the enhanced Department 
        of Veterans Affairs disability compensation system (as 
        determined in accordance with section 206 of the Noble Warrior 
        Act) or subchapter I of chapter 61 of this title (as in effect 
        after such effective date), as applicable'' after ``chapter 61 
        of this title''.
            (2) Retired pay base for members retired before september 
        8, 1980.--The items in the column in the table in section 
        1406(b)(1) of such title designated ``For a member entitled to 
        retired pay under section:'' are amended to read as follows:

``1201
1202
1204
1205
1206b
1206c
1206d
1206e''.
 

            (3) Retired pay base for members retired after september 7, 
        1980.--Section 1407 of such title is amended--
                    (A) in subsection (c)--
                            (i) in paragraph (1), by striking ``other 
                        than section 1204 or 1205 or section 12731 of 
                        this title'' and inserting ``(other than 
                        section 1204, 1205, or 12731 of this title, or 
                        section 1206b, 1206c, 1206d, or 1206e of this 
                        title for nonregular service)'';
                            (ii) in paragraph (2), by inserting ``, or 
                        under section 1206b, 1206c, 1206d, or 1206e of 
                        this title for regular service,'' after 
                        ``section 1201 or 1202 of this title''; and
                            (iii) in paragraph (3)--
                                    (I) by striking ``section 1201 or 
                                1202'' and inserting ``section 1201, 
                                1202, 1206b, 1206c, 1206d, or 1206e''; 
                                and
                                    (II) by inserting ``or under 
                                section 1206b, 1206c, 1206d, or 1206e 
                                of this title for nonregular service'' 
                                before the period; and
                    (B) in subsection (d)--
                            (i) in paragraph (2), by inserting ``, or 
                        under section 1206b, 1206c, 1206d, or 1206e of 
                        this title for nonregular service,'' after 
                        ``section 1204 or 1205 of this title''; and
                            (ii) in paragraph (3), inserting ``, or 
                        under section 1206, 1206c, 1206d, or 1206e of 
                        this title for nonregular service,'' after 
                        ``section 1204 or 1205 of this title''.
            (4) Grade on retirement for physical disability.--Section 
        1372 of such title is amended--
                    (A) by striking ``section 1201 or 1204'' and 
                inserting ``section 1201, 1204, 1206b, 1206c, or 
                1206d''; and
                    (B) by striking ``section 1202 or 1205'' and 
                inserting ``section 1202, 1205, or 1206e''.
    (f) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), this 
        section and the amendments made by this section shall take 
        effect, if at all, on the effective date of the implementation 
        of the enhanced Department of Veterans Affairs disability 
        compensation system as determined in accordance with section 
        206.
            (2) Anticipation of implementation.--The Secretary of 
        Defense shall take appropriate actions to ensure that the 
        amendments made by this section are implementable on the 
        effective date described in paragraph (1) in the event of the 
        implementation of the enhanced Department of Veterans Affairs 
        disability compensation system on that date.

SEC. 102. CONTINUATION OF RESPITE CARE AND AID AND OTHER EXTENDED CARE 
              BENEFITS FOR MEMBERS OF THE UNIFORMED SERVICES WHO INCUR 
              A SERIOUS INJURY OR ILLNESS ON ACTIVE DUTY.

    Paragraph (4) of section 1074(c) of title 10, United States Code, 
as added by section 1633(a) of the Wounded Warrior Act (title XVI of 
the National Defense Authorization Act for Fiscal Year 2008), is 
amended--
            (1) by redesignating subparagraph (B) as subparagraph (C); 
        and
            (2) by inserting after subparagraph (A) the following new 
        subparagraph (B):
    ``(B) Coverage for a member under this paragraph may continue for 
such period after the discharge or separation of the member from active 
duty as the Secretary considers appropriate.''.

  TITLE II--COMPENSATION OF VETERANS FOR SERVICE-CONNECTED DISABILITY

SEC. 201. STUDY ON VETERANS DISABILITY COMPENSATION.

    (a) In General.--The Secretary of Veterans Affairs shall conduct a 
study to determine the amount of compensation for service-connected 
disability to be payable to veterans under chapter 12 of title 38, 
United States Code (as added by section 207(b) of this Act), for each 
rating of disability assignable to veterans for service-connected 
disability.
    (b) Matters To Be Examined.--In conducting the study required by 
subsection (a), the Secretary shall examine the following:
            (1) The nature of injuries and combination of injuries for 
        which disability compensation is payable under various 
        disability compensation programs of the Federal Government, 
        State governments, and other countries.
            (2) To the extent applicable, the nature of injuries and 
        combination of injuries for which disability compensation is 
        payable under commercial disability insurance.
            (3) The extent to which quality of life and loss of 
        earnings are independently taken into account in various 
        disability compensation programs of the Federal Government, 
        State governments, and other countries.
            (4) The effect of an injury or combination of injuries on--
                    (A) average loss of earning capacity, such as 
                inability to work in certain occupations; and
                    (B) a veteran's quality of life, such as activities 
                of independent living, recreational and community 
                activities, and personal relationships, including the 
                inability to participate in favorite activities, social 
                problems related to disfigurement or cognitive 
                difficulties, and the need to spend increased amounts 
                of time performing activities of daily living.
            (5) The measurement of the effect of an injury or 
        combination of injuries on a veteran's psychological state, 
        loss of physical integrity, and social inability to adapt.
            (6) The extent to which disability compensation for 
        veterans may be used as an incentive to encourage veterans to 
        seek and undergo appropriate medical treatment and vocational 
        rehabilitation.
    (c) Considerations in Determinations of Amounts of Compensation.--
            (1) General considerations.--In determining amounts of 
        compensation under the study required by subsection (a), the 
        Secretary shall ensure that the determinations--
                    (A) reflect current concepts of medicine and 
                disability; and
                    (B) take into account loss of quality of life and 
                average loss of earning capacity resulting from 
                specific injuries or combinations of injuries.
            (2) Specific considerations.--In determining amounts of 
        compensation, the Secretary shall consider the following:
                    (A) The appropriate injuries or combination of 
                injuries to be covered by the new schedule for rating 
                service-connected disabilities.
                    (B) The appropriate level of compensation under 
                that schedule for loss of quality of life.
                    (C) The appropriate standards for determining for 
                purposes of that schedule whether an injury or 
                combination of injuries has caused a loss in a 
                veteran's quality of life.
                    (D) The appropriate level of compensation, 
                including an age-appropriate level of compensation at 
                time of initial filing of claims, under that schedule 
                for loss of earnings.
                    (E) The appropriate standards for purposes of that 
                schedule for determining whether an injury or 
                combination of injuries causes loss of earnings.
                    (F) The appropriate relationship between the 
                receipt of compensation under that schedule, and, where 
                appropriate, assurances by the veterans concerned of 
                participation in a regimen of medical treatment or 
                vocational rehabilitation.
    (d) Consultation.--In conducting the study required by subsection 
(a), the Secretary--
            (1) shall consult with such veterans and military service 
        organizations and with such public and private organizations 
        and individuals as the Secretary considers appropriate; and
            (2) may employ consultants.
    (e) Consideration of Completed and On-Going Studies.--In conducting 
the study required by subsection (a), the Secretary may take into 
account the findings, determinations, and results of any completed or 
on-going study or report applicable to the matters addressed by the 
study required by subsection (a) that the Secretary considers 
appropriate.
    (f) Report.--Not later than 270 days after the commencement of the 
study required by subsection (a), the Secretary shall submit to the 
Committee on Veterans' Affairs of the Senate and the Committee on 
Veterans' Affairs of the House of Representatives a report on the 
study. The report shall include the following:
            (1) The findings of the Secretary under the study.
            (2) The findings of the Secretary with respect to matters 
        covered by the study arising from--
                    (A) the report of the Veterans' Disability Benefits 
                Commission established pursuant to section 1501 of the 
                National Defense Authorization Act of 2004 (38 U.S.C. 
                1101 note); and
                    (B) the reports of any other independent advisory 
                commission that has studied the matters covered by the 
                study as the Secretary considers appropriate.
            (3) The recommendations of the Secretary on the matters 
        considered under subparagraphs (A), (C), (E), and (F) of 
        subsection (c)(2), including a proposal for such legislative or 
        administrative action as the Secretary considers appropriate to 
        implement the recommendations.

SEC. 202. STUDY ON VETERANS TRANSITION BENEFITS.

    (a) In General.--The Secretary of Veterans Affairs shall conduct a 
study to determine the appropriate amounts and duration of transition 
payments to be payable under chapter 12 of title 38, United States Code 
(as added by section 207(b) of this Act), including the amount of 
monthly transition payments to be payable under section 1204(b) of 
title 38, United States Code (as so added), and the amount and duration 
of rehabilitation transition allowances to be payable under section 
1204(c) of title 38, United States Code (as so added), to veterans who 
are participating in a rehabilitation program under chapter 17 or 31 of 
title 38, United States Code.
    (b) Considerations.--In determining under subsection (a) the amount 
and duration of rehabilitation transition allowances to be payable 
under section 1204(c) of title 38, United States Code (as so added), to 
veterans who are participating in a rehabilitation program under 
chapter 17 or 31 of title 38, United States Code, the Secretary shall 
take into account the prohibition in paragraph (7) of such section 
1204(c) on the payment of subsistence allowances otherwise authorized 
by section 3108 of title 38, United States Code, to veterans paid 
rehabilitation transition allowances under such section 1204(c).
    (c) Consultation.--In conducting the study required by subsection 
(a), the Secretary--
            (1) shall consult with such veterans and military service 
        organizations and with such public and private organizations 
        and individuals as the Secretary considers appropriate; and
            (2) may employ consultants.
    (d) Consideration of Completed and On-Going Studies.--In conducting 
the study required by subsection (a), the Secretary may take into 
account the findings, determinations, and results of any completed or 
on-going study or report applicable to the matters addressed by the 
study required by subsection (a) that the Secretary considers 
appropriate.
    (e) Report.--Not later than 270 days after the commencement of the 
study required by subsection (a), the Secretary shall submit to the 
Committee on Veterans' Affairs of the Senate and the Committee on 
Veterans' Affairs of the House of Representatives a report on the 
study. The report shall include the following:
            (1) The findings of the Secretary under the study.
            (2) The findings of the Secretary with respect to matters 
        covered by the study arising from--
                    (A) the report of the Veterans' Disability Benefits 
                Commission established pursuant to section 1501 of the 
                National Defense Authorization Act of 2004 (38 U.S.C. 
                1101 note); and
                    (B) the reports of such other independent advisory 
                commissions that have studied the matters covered by 
                the study as the Secretary considers appropriate.

SEC. 203. STUDY ON MEASURES TO ASSIST AND ENCOURAGE VETERANS IN THE 
              COMPLETION OF THEIR VOCATIONAL REHABILITATION PLANS.

    (a) In General.--The Secretary of Veterans Affairs shall conduct a 
study to identify the following:
            (1) The various factors that may prevent or preclude 
        veterans from completing their vocational rehabilitation plans 
        through the Department of Veterans Affairs or otherwise 
        achieving the vocational rehabilitation objectives of such 
        plans.
            (2) Actions to be taken by the Secretary to assist and 
        encourage veterans in overcoming such factors and in otherwise 
        completing their vocational rehabilitation plans or achieving 
        the vocational rehabilitation objectives of such plans.
    (b) Matters To Be Examined.--In conducting the study required by 
subsection (a), the Secretary shall examine the following:
            (1) Measures utilized in other disability systems in the 
        United States, and in other countries, to encourage completion 
        of vocational rehabilitation.
            (2) Any survey data available to the Secretary that relates 
        to the matters covered by the study.
            (3) The results of the studies conducted pursuant to 
        sections 201 and 202, including any analysis for purposes of 
        such studies of the extent to which disability compensation may 
        be used as an incentive to encourage veterans to undergo and 
        complete vocational rehabilitation.
            (4) The report of the Veterans' Disability Benefits 
        Commission established pursuant to section 1501 of the National 
        Defense Authorization Act of 2004 (38 U.S.C. 1101 note).
            (5) The report of the President's Commission on Care for 
        America's Returning Wounded Warriors.
    (c) Considerations.--In conducting the study required by subsection 
(a), the Secretary shall consider--
            (1) the extent to which bonus payments or other incentives 
        may be used to encourage veterans to complete their vocational 
        rehabilitation plans or otherwise achieve the vocational 
        rehabilitation objectives of such plans; and
            (2) such other matters as the Secretary considers 
        appropriate.
    (d) Consultation.--In conducting the study required by subsection 
(a), the Secretary--
            (1) shall consult with such veterans and military service 
        organizations and with such public and private organizations 
        and individuals as the Secretary considers appropriate; and
            (2) may employ consultants.
    (e) Report.--Not later than 270 days after the commencement of the 
study required by subsection (a), the Secretary shall submit to the 
Committee on Veterans' Affairs of the Senate and the Committee on 
Veterans' Affairs of the House of Representatives a report on the 
study. The report shall include the following:
            (1) The findings of the Secretary under the study.
            (2) Any recommendations that the Secretary considers 
        appropriate for actions to be taken by the Secretary in light 
        of the study, including a proposal for such legislative or 
        administrative action as the Secretary considers appropriate to 
        implement the recommendations.

SEC. 204. PROPOSAL ON VETERANS DISABILITY COMPENSATION AND VETERANS 
              TRANSITION BENEFITS.

    Not later than one year after the later of the dates of the reports 
required by sections 201(f) and 202(d), the Secretary of Veterans 
Affairs shall submit to Congress a proposal setting forth the 
following:
            (1) A statement of the purpose or purposes of the 
        disability compensation and transition payments to be payable 
        to veterans under chapter 12 of title 38, United States Code 
        (as added by section 207(b) of this Act).
            (2) A statement of the amounts of compensation for service-
        connected disability to be payable to veterans under chapter 12 
        of title 38, United States Code (as so added), for each rating 
        of disability assignable to veterans for service-connected 
        disability.
            (3) A statement of the amounts and duration of transition 
        benefits to be payable to veterans under chapter 12 of title 
        38, United States Code (as so added), including the amount of 
        monthly transition payments to be payable under section 1204(b) 
        of title 38, United States Code (as so added), and the amount 
        and duration of rehabilitation transition allowances to be 
        payable under section 1204(c) of title 38, United States Code 
        (as so added), to veterans who are participating in a 
        rehabilitation program under chapter 17 or 31 of title 38, 
        United States Code.

SEC. 205. CONGRESSIONAL CONSIDERATION OF PROPOSAL.

    (a) Terms of Joint Resolution.--For purposes of this section, the 
term ``joint resolution'' means only a joint resolution which is 
introduced within the 10-day period beginning on the date on which the 
Secretary of Veterans Affairs submits to Congress the proposal of the 
Secretary of Veterans Affairs on veterans disability compensation and 
veterans transition benefits under section 204, and--
            (1) which does not have a preamble;
            (2) the matter after the resolving clause of which is as 
        follows: ``That Congress disapproves the proposal on veterans 
        disability compensation and veterans transition benefits under 
        section 204 of the Noble Warrior Act as submitted to Congress 
        on _____'', the blank space being filled in with the 
        appropriate date; and
            (3) the title of which is as follows: ``Joint resolution 
        disapproving the proposal of the Secretary of Veterans Affairs 
        on veterans disability compensation and veterans transition 
        benefits under the Noble Warrior Act.''.
    (b) Referral.--A resolution described in subsection (a) that is 
introduced in the House of Representatives shall be referred to the 
Committee on Veterans' Affairs of the House of Representatives. A 
resolution described in subsection (a) introduced in the Senate shall 
be referred to the Committee on Veterans' Affairs of the Senate.
    (c) Discharge.--If the committee to which a resolution described in 
subsection (a) is referred has not reported such resolution (or an 
identical resolution) by the end of the 60-day period beginning on the 
date on which the Secretary of Veterans Affairs submits to Congress the 
proposal under section 204, such committee shall be, at the end of such 
period, discharged from further consideration of such resolution, and 
such resolution shall be placed on the appropriate calendar of the 
House involved.
    (d) Consideration.--
            (1) On or after the third day after the date on which the 
        committee to which such a resolution is referred has reported, 
        or has been discharged (under subsection (c)) from further 
        consideration of, such a resolution, it is in order (even 
        though a previous motion to the same effect has been disagreed 
        to) for any Member of the respective House to move to proceed 
        to the consideration of the resolution. A Member may make the 
        motion only on the day after the calendar day on which the 
        Member announces to the House concerned the Member's intention 
        to make the motion, except that, in the case of the House of 
        Representatives, the motion may be made without such prior 
        announcement if the motion is made by direction of the 
        committee to which the resolution was referred. All points of 
        order against the resolution (and against consideration of the 
        resolution) are waived. The motion is highly privileged in the 
        House of Representatives and is privileged in the Senate and is 
        not debatable. The motion is not subject to amendment, or to a 
        motion to postpone, or to a motion to proceed to the 
        consideration of other business. A motion to reconsider the 
        vote by which the motion is agreed to or disagreed to shall not 
        be in order. If a motion to proceed to the consideration of the 
        resolution is agreed to, the respective House shall immediately 
        proceed to consideration of the joint resolution without 
        intervening motion, order, or other business, and the 
        resolution shall remain the unfinished business of the 
        respective House until disposed of.
            (2) Debate on the resolution, and on all debatable motions 
        and appeals in connection therewith, shall be limited to not 
        more than 2 hours, which shall be divided equally between those 
        favoring and those opposing the resolution. An amendment to the 
        resolution is not in order. A motion further to limit debate is 
        in order and not debatable. A motion to postpone, or a motion 
        to proceed to the consideration of other business, or a motion 
        to recommit the resolution is not in order. A motion to 
        reconsider the vote by which the resolution is agreed to or 
        disagreed to is not in order.
            (3) Immediately following the conclusion of the debate on a 
        resolution described in subsection (a) and a single quorum call 
        at the conclusion of the debate if requested in accordance with 
        the rules of the appropriate House, the vote on final passage 
        of the resolution shall occur.
            (4) Appeals from the decisions of the Chair relating to the 
        application of the rules of the Senate or the House of 
        Representatives, as the case may be, to the procedure relating 
        to a resolution described in subsection (a) shall be decided 
        without debate.
    (e) Consideration by Other House.--
            (1) If, before the passage by one House of a resolution of 
        that House described in subsection (a), that House receives 
        from the other House a resolution described in subsection (a), 
        then the following procedures shall apply:
                    (A) The resolution of the other House shall not be 
                referred to a committee and may not be considered in 
                the House receiving it except in the case of final 
                passage as provided in subparagraph (B)(ii).
                    (B) With respect to a resolution described in 
                subsection (a) of the House receiving the resolution--
                            (i) the procedure in that House shall be 
                        the same as if no resolution had been received 
                        from the other House; but
                            (ii) the vote on final passage shall be on 
                        the resolution of the other House.
            (2) Upon disposition of the resolution received from the 
        other House, it shall no longer be in order to consider the 
        resolution that originated in the receiving House.
    (f) Rules of the Senate and House.--This section is enacted by 
Congress--
            (1) as an exercise of the rulemaking power of the Senate 
        and House of Representatives, respectively, and as such it is 
        deemed a part of the rules of each House, respectively, but 
        applicable only with respect to the procedure to be followed in 
        that House in the case of a resolution described in subsection 
        (a), and it supersedes other rules only to the extent that it 
        is inconsistent with such rules; and
            (2) with full recognition of the constitutional right of 
        either House to change the rules (so far as relating to the 
        procedure of that House) at any time, in the same manner, and 
        to the same extent as in the case of any other rule of that 
        House.

SEC. 206. EFFECTIVE DATE OF IMPLEMENTATION OF ENHANCED DEPARTMENT OF 
              VETERANS AFFAIRS DISABILITY COMPENSATION SYSTEM.

    (a) In General.--For purposes of this Act and the amendments made 
by this Act, the effective date of the implementation of the enhanced 
Department of Veterans Affair disability compensation system is the 
date, as provided in subsection (b), on which the authority of Congress 
under section 205 to disapprove the proposal of the Secretary of 
Veterans Affairs on veterans disability compensation and veterans 
transition benefits under section 204 expires, but only if Congress 
does not so disapprove the proposal of the Secretary before such date.
    (b) Disapproval by Congress.--
            (1) In general.--The Secretary of Veterans Affairs shall 
        not implement the enhanced Department of Veterans Affairs 
        disability compensation system if a joint resolution is 
        enacted, in accordance with section 205, disapproving the 
        proposal of the Secretary of Veterans Affairs on veterans 
        disability compensation and veterans transition benefits under 
        section 204 before the earlier of--
                    (A) the end of the 85-day period beginning on the 
                date on which the Secretary submits the proposal to 
                Congress; or
                    (B) the adjournment of Congress sine die for the 
                session during which the proposal is submitted.
            (2) Computation of periods.--For purposes of paragraph (1) 
        and section 205, the days on which either House of Congress is 
        not in session because of an adjournment of more than three 
        days to a day certain shall be excluded in the computation of a 
        period.
    (c) Enhanced Department of Veterans Affairs Disability Compensation 
System Defined.--For purposes of this Act and the amendments made by 
this Act, the term ``enhanced Department of Veterans Affairs disability 
compensation system'' means--
            (1) the elements of the proposal of the Secretary of 
        Veterans Affairs on veterans disability compensation and 
        veterans transition benefits under section 204; and
            (2) the amendments to section 1155 of title 38, United 
        States Code, made by section 207(a) of this Act; and
            (3) chapter 12 of title 38, United States Code, as added by 
        section 207(b) of this Act.

SEC. 207. ENHANCED DEPARTMENT OF VETERANS AFFAIRS DISABILITY 
              COMPENSATION SYSTEM.

    (a) Modification of Schedule of Ratings To Account for Loss of 
Earning Capacity and Quality of Life.--
            (1) In general.--Section 1155 of title 38, United States 
        Code, is amended to read as follows:
``Sec. 1155. Schedule for rating disabilities
    ``(a) In General.--The Secretary shall adopt and apply a schedule 
of ratings of disability of veterans associated with specific injuries 
or combinations of injuries.
    ``(b) Scope of Ratings.--(1) For veterans for whom disability 
compensation is payable under this chapter, the ratings under 
subsection (a) shall be based, as far as practicable, upon the average 
impairments of earning capacity in civil occupations resulting from the 
injuries concerned.
    ``(2) For veterans for whom disability compensation is payable 
under chapter 12 of this title, the ratings shall reflect, as far as 
practicable, each of the following:
            ``(A) Average loss of earning capacity, such as inability 
        to work in certain occupations.
            ``(B) Quality of life, such as activities of independent 
        living, recreational and community activities, and personal 
        relationships, including the inability to participate in 
        favorite activities, social problems related to disfigurement 
        or cognitive difficulties, and the need to spend increased 
        amounts of time performing activities of daily living.
    ``(c) Grades of Disability.--(1) For veterans for whom disability 
compensation is payable under this chapter, the schedule of ratings 
shall be constructed so as to provide ten grades of disability and no 
more, upon which payments of compensation shall be based, namely 10 
percent, 20 percent, 30 percent, 40 percent, 50 percent, 60 percent, 70 
percent, 80 percent, 90 percent, and total, 100 percent.
    ``(2) For veterans for whom disability compensation is payable 
under chapter 12 of this title, the schedule of ratings shall be 
constructed--
            ``(A) at the discretion of the Secretary in light of the 
        study required by section 201 of the Noble Warrior Act, so as 
        to provide such number of grades of disability as the Secretary 
        considers appropriate;
            ``(B) at the discretion of the Secretary in light of the 
        study referred to in subparagraph (A), so as to provide 
        either--
                    ``(i) the assignment to veterans of separate grades 
                of disability reflecting each matter specified in 
                subparagraphs (A) and (B) of subsection (b)(2); or
                    ``(ii) the assignment to veterans of a single grade 
                of disability reflecting both such matters; and
            ``(C) if provided in the schedule at the discretion of the 
        Secretary in light of the study referred to in subparagraph 
        (A), so as to reflect in the grade of disability assignable to 
        a veteran for average loss of earning capacity the effect of 
        the age of the veteran on the potential future earnings of the 
        veteran at the time of assignment.
    ``(d) Adjustment.--The Secretary shall from time to time adjust the 
schedule of ratings in accordance with experience.
    ``(e) Preservation of Rating.--(1) Except as provided in paragraph 
(2), an adjustment in the schedule of ratings under subsection (d) 
shall not cause a veteran's disability rating in effect on the 
effective date of the adjustment to be reduced unless an improvement in 
the veteran's disability is shown to have occurred.
    ``(2) An adjustment in the schedule of ratings may result in a 
reduction in a veteran's disability rating as provided in section 1205 
of this title.''.
            (2) Clerical amendment.--The table of sections at the 
        beginning of chapter 11 of such title is amended by striking 
        the item relating to section 1155 and inserting the following 
        new item:

``1155. Schedule for rating disabilities.''.
            (3) Effective date.--Except as provided in paragraph (4), 
        this subsection and the amendments made by this subsection 
        shall take effect, if at all, on the effective date of the 
        implementation of the enhanced Department of Veterans Affairs 
        disability compensation system as determined in accordance with 
        section 206.
            (4) Anticipation of implementation.--The Secretary of 
        Veterans Affairs shall take appropriate actions to ensure that 
        the amendments made by this subsection are implementable on the 
        effective date described in paragraph (3) in the event of the 
        implementation of the enhanced Department of Veterans Affairs 
        disability compensation system on that date.
    (b) Disability Compensation for Loss of Earning Capacity and 
Quality of Life and Transition Payments for Participation in Medical or 
Rehabilitational Regimen.--
            (1) In general.--Part II of title 38, United States Code, 
        is amended by inserting after chapter 11 the following new 
        chapter:

    ``CHAPTER 12--COMPENSATION AND TRANSITION PAYMENTS FOR SERVICE-
                          CONNECTED DISABILITY

``Sec.
``1201. Compensation for service-connected disability: veterans not 
                            rated as service-connected disabled who 
                            file claims for compensation on or after 
                            implementation of enhanced Department of 
                            Veterans Affairs disability compensation 
                            system.
``1202. Compensation for service-connected disability: veterans rated 
                            as service-connected disabled as of 
                            implementation of enhanced Department of 
                            Veterans Affairs disability compensation 
                            system who file claims on or after 
                            implementation.
``1203. Rates of compensation.
``1204. Transition benefits: payments; allowances.
``1205. Periodic review of extent of disability.
``1206. Prohibition on duplication of benefits.
``Sec. 1201. Compensation for service-connected disability: veterans 
              not rated as service-connected disabled who file claims 
              for compensation on or after implementation of enhanced 
              Department of Veterans Affairs disability compensation 
              system
    ``(a) In General.--In the case of a veteran who has not been rated 
as having a service-connected disability under chapter 11 of this title 
as of the effective date of the implementation of the enhanced 
Department of Veterans Affairs disability compensation system (as 
determined in accordance with section 206 of the Noble Warrior Act) and 
who files with the Secretary a claim with respect to disability on or 
after that effective date, for disability resulting from personal 
injury suffered or disease contracted in line of duty, or from 
aggravation of a preexisting injury suffered or disease contracted in 
line of duty, in the active military, naval, or air service, the United 
States will pay such veteran thus disabled and who was discharged or 
released under conditions other than dishonorable from the period of 
service in which such injury or disease was incurred, or preexisting 
injury or disease was aggravated, compensation as provided in section 
1203 of this title, but no compensation shall be paid if the disability 
is a result of such veteran's own willful misconduct or abuse of 
alcohol or drugs.
    ``(b) Rating of Disability.--The rating of disability for which 
compensation is payable under this section shall be assigned utilizing 
the schedule of ratings under section 1155 of this title that is 
applicable to veterans for whom disability compensation is payable 
under this chapter.
    ``(c) Limitations.--(1) The payment of compensation pursuant to 
this section shall be subject to the provisions of sections 5110 and 
5112 of this title.
    ``(2) Compensation shall not be paid under this section to a 
veteran who is retired for disability under subchapter II of chapter 61 
of title 10 pursuant to section 1206a of that title for any period 
before the first day following termination of the veteran's receipt of 
benefits under section 1204 of this title.
``Sec. 1202. Compensation for service-connected disability: veterans 
              rated as service-connected disabled as of implementation 
              of enhanced Department of Veterans Affairs disability 
              compensation system who file claims on or after 
              implementation
    ``(a) In General.--In the case of a veteran who is rated as having 
a service-connected disability under chapter 11 of this title as of the 
effective date of the implementation of the enhanced Department of 
Veterans Affairs disability compensation system (as determined in 
accordance with section 206 of the Noble Warrior Act) who files with 
the Secretary a claim with respect to such disability or disabilities, 
or another disability, on or after that date, for disability resulting 
from personal injury suffered or disease contracted in line of duty, or 
from aggravation of a preexisting injury suffered or disease contracted 
in line of duty, in the active military, naval, or air service, the 
United States will pay such veteran thus disabled and who was 
discharged or released under conditions other than dishonorable from 
the period of service in which such injury or disease was incurred, or 
preexisting injury or disease was aggravated, compensation as provided 
in section 1203 of this title, but no compensation shall be paid if 
such disability is a result of such veteran's own willful misconduct or 
abuse of alcohol or drugs.
    ``(b) Rating of Disability.--The rating of disability for which 
compensation is payable under this section shall--
            ``(1) take into account all service-connected disabilities 
        of the veteran concerned, including any disability for which 
        such veteran was rated as having a service-connected as 
        described in subsection (a) and the disability with respect to 
        which such veteran files a claim as described in that 
        subsection; and
            ``(2) be assigned utilizing the schedule of ratings under 
        section 1155 of this title that is applicable to veterans for 
        whom disability compensation is payable under this chapter.
    ``(c) Limitation.--The payment of compensation pursuant to this 
section shall be subject to the provisions of sections 5110 and 5112 of 
this title.
``Sec. 1203. Rates of compensation
    ``(a) In General.--For purposes of sections 1201 and 1202 of this 
title, the rates of compensation payable for disabilities shall be the 
applicable rates specified for grade of disability in the proposal of 
the Secretary of Veterans Affairs under section 204(2) of the Noble 
Warrior Act.
    ``(b) Reduction for Persons Incarcerated for Conviction of a 
Felony.--The payment of compensation for disabilities under sections 
1201 and 1202 shall be subject to the provisions of section 5313 of 
this title.
    ``(c) Source of Funds.--Amounts for the payment of compensation 
under this section shall be derived from amounts available in the 
Compensation and Pension account of the Department of Veterans Affairs.
``Sec. 1204. Transition benefits: payments; allowances
    ``(a) Eligible Veterans.--For purposes of this section, an eligible 
veteran is any veteran who is retired under subchapter II of chapter 61 
of title 10 pursuant to section 1206a of that title.
    ``(b) Monthly Transition Payments.--(1) Subject to the provisions 
of this subsection, the Secretary shall pay to each eligible veteran a 
monthly transition payment.
    ``(2) A veteran entitled to monthly transition payments under this 
subsection shall be paid--
            ``(A) a monthly transition payment in an amount equal to 
        the amount specified with respect to the veteran in the 
        proposal of the Secretary of Veterans Affairs under section 
        204(3) of the Noble Warrior Act for each of the first three 
        months beginning on the date of the veteran's retirement as 
        described in paragraph (1); and
            ``(B) a one-time prorated payment of such amount for the 
        remaining portion of the month in which the retirement of the 
        veteran occurred.
    ``(3) No payment shall be made to a veteran under this subsection 
for any period for which a rehabilitation transition allowance is paid 
the veteran under subsection (c).
    ``(c) Rehabilitation Transition Allowance.--(1) Subject to the 
provisions of this subsection, the Secretary shall pay to each eligible 
veteran who is participating in a rehabilitation program under chapter 
17 or 31 of this title a monthly rehabilitation transition allowance 
described in paragraph (3) during the period described in paragraph 
(4).
    ``(2)(A) For purposes of this subsection, a veteran shall be 
treated as participating in a rehabilitation program under chapter 17 
of this title if, as determined by the Secretary, the veteran is 
participating in an intensive treatment program under that chapter for 
a service-connected disability which program is intended to assist the 
veteran in restoring the veteran's ability to obtain and maintain 
substantially gainful employment.
    ``(B) For purposes of this subsection, a veteran shall be treated 
as participating in a rehabilitation program under chapter 31 of this 
title during any period, as determined by the Secretary, during which 
the veteran is eligible, notwithstanding paragraph (7), for the 
subsistence allowance authorized by section 3108(a)(1) of this title.
    ``(3)(A) The amount of the monthly rehabilitation transition 
allowance payable to a veteran under this subsection is the amount 
equal to the amount specified with respect to the veteran in the 
proposal of the Secretary of Veterans Affairs under section 204(3) of 
the Noble Warrior Act.
    ``(B) For any month in which an eligible veteran participates in a 
rehabilitation program described in paragraph (1) for less than the 
full month, the amount payable to the veteran under this paragraph 
shall be prorated for the portion of the month in which the veteran so 
participates.
    ``(C) In the case of a veteran entitled to assistance under this 
subsection who is participating in a rehabilitation program that 
includes paid training on the job, the Secretary may reduce the 
veteran's rehabilitation transition allowance under this subsection by 
one dollar for each dollar of wages, compensation, or other income paid 
(directly or indirectly) by the employer to the veteran for such 
training.
    ``(4) The period for which a monthly rehabilitation transition 
allowance is payable to a veteran under this subsection is the period 
specified with respect to the veteran in the proposal of the Secretary 
of Veterans Affairs under section 204(3) of the Noble Warrior Act.
    ``(5) A veteran may be paid a rehabilitation transition allowance 
under this subsection only if the veteran is complying substantially 
with the individual rehabilitation or recovery plan developed by the 
Secretary for purposes of the rehabilitation program described in 
paragraph (1).
    ``(6)(A) Except as provided in subparagraph (B), no rehabilitation 
transition allowance may be paid under this subsection to a veteran who 
is participating in a vocational rehabilitation program under chapter 
31 of this title while such veteran is incarcerated in a Federal, 
State, local, or other penal institution or correctional facility for 
conviction of a felony.
    ``(B) Subparagraph (A) shall not apply to a veteran who is 
participating in a vocational rehabilitation program while residing in 
a halfway house or participating in a work-release program in 
connection with the veteran's conviction of a felony.
    ``(7) A veteran paid a rehabilitation transition allowance for a 
month under this subsection may not be paid the subsistence allowance 
otherwise authorized for the veteran under section 3108 of this title 
for that month.
    ``(d) Source of Funds.--Amounts for payments under this section 
shall be derived from amounts available in the Readjustment Benefits 
account of the Department of Veterans Affairs.
``Sec. 1205. Periodic review of extent of disability
    ``(a) In General.--Except as provided under this section, the 
Secretary shall--
            ``(1) reevaluate and adjust, if appropriate, the disability 
        rating of each veteran entitled to compensation under section 
        1201 or 1202 of this title, as the Secretary considers 
        appropriate; and
            ``(2) adjust the rate of compensation payable to such 
        veteran under section 1203 of this title according to the new 
        disability rating as adjusted under paragraph (1) and to any 
        adjustment of the schedule of ratings under section 1155 of 
        this title applicable to veterans for whom compensation is 
        payable under this chapter that has occurred since the 
        preceding assignment of a disability rating to such veteran.
    ``(b) Frequency of Reevaluations and Adjustments.--The Secretary 
shall carry out the reevaluations and adjustments required by 
subsection (a) with respect to a veteran described in that subsection 
with such frequency as the Secretary considers appropriate. In making a 
determination regarding the appropriate frequency of reevaluations for 
a veteran, the Secretary shall be guided by recommendations made by an 
examining physician or other appropriate medical professional who has 
evaluated the veteran and by such other factors as the Secretary 
considers appropriate.
    ``(c) Reevaluation at Request of Veteran.--At the request of a 
veteran receiving compensation under section 1201 or 1202 of this 
title, the Secretary may--
            ``(1) reevaluate and adjust, if appropriate, the disability 
        rating of the veteran as the Secretary considers appropriate; 
        and
            ``(2) adjust the rate of compensation payable to such 
        veteran under section 1203 of this title according to the new 
        disability rating as adjusted under paragraph (1) and to any 
        adjustment of the schedule of ratings under section 1155 of 
        this title applicable to veterans for whom compensation is 
        payable under this chapter that has occurred since the 
        preceding assignment of a disability rating to such veteran.
``Sec. 1206. Prohibition on duplication of benefits
    ``(a) In General.--A veteran entitled to compensation under section 
1201 or 1202 of this title is not entitled to compensation under 
chapter 11 of this title.
    ``(b) Preservation of Entitlement Under Other System.--(1)(A) 
Except as provided in paragraph (2), any veteran in receipt of 
compensation under chapter 11 of this title (other than compensation 
paid as a result of a temporary rating of disability) as of the 
effective date of the implementation of the enhanced Department of 
Veterans Affairs disability compensation system (as determined in 
accordance with section 206 of the Noble Warrior Act) shall remain 
entitled to compensation in accordance with the provisions of chapter 
11 of this title after that date.
    ``(B) For provisions relating to the protection of ratings of 
disability of veterans covered by subparagraph (A), see section 110(c) 
of this title.
    ``(2)(A) The entitlement to compensation of, and amount of 
compensation payable to, a veteran described in paragraph (1) who files 
a claim for compensation under this title on or after the effective 
date of the implementation of the enhanced Department of Veterans 
Affairs disability compensation system shall be determined in 
accordance with the facts found under the provisions of section 1155 of 
this title and this chapter as such provisions are in effect on the 
date of the filing of the claim.
    ``(B) The objection of a veteran to a proposed reduction in rating 
of service-connected disability or other response of a veteran to a 
proposed adverse action by the Secretary concerning compensation for a 
service-connected disability under chapter 11 of this title shall not 
be treated as a claim for purposes of subparagraph (A).''.
            (2) Clerical amendments.--The table of chapters at the 
        beginning of title 38, United States Code, and the beginning of 
        part II of such title, are each amended by inserting after the 
        item related to chapter 11 the following new item:

``12. Compensation and Transition Payments for Service-         1201''.
                            Connected Disability.
            (3) Disability evaluations subject to reevaluation.--
        Section 110 of title 38, United States Code, is amended--
                    (A) in the first sentence, by striking ``A rating'' 
                and inserting ``(a) Except as otherwise provided in 
                this title, a rating'';
                    (B) by designating the second sentence as 
                subsection (b) and indenting such subsection, as so 
                designated, two ems from the left margin;
                    (C) in subsection (b), as so designated, by 
                striking ``A disability'' and inserting ``Except as 
                otherwise provided in this title, a disability''; and
                    (D) by adding at the end the following new 
                subsection:
    ``(c) The rating of disability assigned to a veteran who continues 
to remain entitled to compensation under chapter 11 of this title after 
the effective date of the implementation of the enhanced Department of 
Veterans Affairs disability compensation system (as determined in 
accordance with section 206 of the Noble Warrior Act) by reason of 
section 1206(b) of this title may not be reduced while the veteran 
continues to remain so entitled, except upon a showing that such rating 
was based on fraud.''.
            (4) Matters not subject to review.--Notwithstanding any 
        other provision of law, the following matters shall not be 
        subject to review by any other official or by any court, 
        whether by an action in the nature of mandamus or otherwise:
                    (A) Any rate of disability compensation payable 
                under chapter 12 of title 38, United States Code (as 
                amended by this subsection), that is prescribed by the 
                Secretary of Veterans Affairs for purposes of the 
                proposal under section 204(2) .
                    (B) Any amount of monthly transition payments 
                payable under section 1204(b) of title 38, United 
                States Code (as so amended), that is specified by the 
                Secretary for purposes of the proposal under section 
                204(3).
                    (C) Any amount or duration of rehabilitation 
                transition allowances payable under section 1204(c) of 
                title 38, United States Code (as so amended), that is 
                specified by the Secretary for purposes of the proposal 
                under section 204(3).
            (5) Treatment of veterans with pending claims.--In the case 
        of a veteran whose claim for disability compensation under 
        title 38, United States Code, is pending an initial decision 
        from the Secretary of Veterans Affairs, or is on appeal 
        (whether before the Board of Veterans' Appeals, the United 
        States Court of Appeals for Veterans Claims, or otherwise), as 
        of the effective date of the implementation of the enhanced 
        Department of Veterans Affairs disability compensation system 
        (as determined in accordance with section 206), the Secretary 
        shall treat such claim as a claim for compensation payable 
        under chapter 11 of title 38, United States Code.
            (6) Effective date.--Except as provided in paragraph (7), 
        this subsection and the amendments made by this subsection 
        shall take effect, if at all, on the effective date of the 
        implementation of the enhanced Department of Veterans Affairs 
        disability compensation system as determined in accordance with 
        section 206.
            (7) Anticipation of implementation.--The Secretary of 
        Veterans Affairs shall take appropriate actions to ensure that 
        this subsection and the amendments made by this subsection are 
        implementable on the effective date described in paragraph (6) 
        in the event of the implementation of the enhanced Department 
        of Veterans Affairs disability compensation system on that 
        date.
    (c) Expanded Retroactivity of Award of Compensation.--
            (1) In general.--Section 5110(g) of title 38, United States 
        Code, is amended--
                    (A) by inserting ``(1)'' after ``(g)''; and
                    (B) by striking the second sentence and inserting 
                the following new paragraph:
    ``(2) Subject to the limitation in paragraph (1) and except as 
provided in paragraph (3), an award or increase described in paragraph 
(1) may not be retroactive for more than one year from the date of 
application therefore or the date of administrative determination of 
entitlement, whichever is earlier.
    ``(3) Subject to the limitation in paragraph (1), an award or 
increase described in that paragraph pursuant to the amendment to 
section 1155 of this title or chapter 12 of this title made by section 
207 of the Noble Warrior Act under an application therefor filed during 
the three-year period beginning on the effective date of the 
implementation of the enhanced Department of Veterans Affairs 
disability compensation system (as determined in accordance with 
section 206 of that Act) may be retroactive for three years from the 
date of application or date of administrative determination of 
entitlement, whichever is earlier.''.
            (2) Effective date.--The amendments made by this subsection 
        shall take effect, if at all, on the effective date of the 
        implementation of the enhanced Department of Veterans Affairs 
        disability compensation system as determined in accordance with 
        section 206.
    (d) Expedited Claims Processing During Implementation of Enhanced 
Disability Compensation System.--
            (1) In general.--Effective as of the effective date of the 
        implementation of the enhanced Department of Veterans Affairs 
        disability compensation system as determined in accordance with 
        section 206, the Secretary of Veterans Affairs shall implement 
        appropriate mechanisms to expedite the processing of claims 
        anticipated to be submitted to the Secretary under that system 
        during the three-year period beginning on the effective date of 
        the implementation of that system.
            (2) Elements.--The mechanisms implemented under this 
        subsection shall include the following:
                    (A) Mechanisms for affording appropriate priority 
                for processing among the claims submitted as described 
                in paragraph (1).
                    (B) Mechanisms for ensuring the appropriate 
                allocation of personnel and resources of the Department 
                of Veterans Affairs in order to facilitate an expedited 
                processing of such claims.
                    (C) Any other mechanisms that the Secretary 
                considers appropriate to facilitate an expedited 
                processing of such claims.
            (3) Consultation in development of mechanisms.--The 
        Secretary shall consult with appropriate representatives of 
        veterans services organizations in developing the mechanisms to 
        be implemented under this subsection.
            (4) Enhanced authority for processing claims.--
                    (A) In general.--Subject to subparagraph (B), 
                during the five-year period beginning on the effective 
                date of the implementation of the enhanced Department 
                of Veterans Affairs disability compensation system, the 
                Secretary may waive any provision or limitation of law 
                applicable to determinations on claims for compensation 
                for veterans under title 38, United States Code, if the 
                Secretary determines that the waiver of such provision 
                or limitation will further the expedited processing of 
                claims submitted as described in paragraph (1).
                    (B) Notice and wait.--The Secretary may not waive a 
                provision or limitation of law under subparagraph (A) 
                until 30 days after the date on which the Secretary 
                submits to the Committee Veterans' Affairs of the 
                Senate and the Committee on Veterans' Affairs of the 
                House of Representatives a report setting forth--
                            (i) the provision or limitation of law to 
                        be waived and the duration of the waiver;
                            (ii) a statement of the reasons why the 
                        waiver of the provision or limitation of law 
                        will further the expedited processing of claims 
                        submitted as described in paragraph (1); and
                            (iii) an estimate of the time anticipated 
                        to be required to complete the processing of 
                        claims under the waiver.

SEC. 208. SUPPLEMENTAL SURVIVOR BENEFIT FOR SURVIVORS OF VETERANS 
              RETIRED FOR DISABILITY AFTER IMPLEMENTATION OF ENHANCED 
              DEPARTMENT OF VETERANS AFFAIRS DISABILITY COMPENSATION 
              SYSTEM.

    (a) Supplemental Survivor Benefit.--
            (1) In general.--Part II of title 38, United States Code, 
        as amended by section 207(b) of this Act, is further amended by 
        inserting after chapter 13 the following new chapter:

 ``CHAPTER 14--SUPPLEMENTAL SURVIVOR BENEFIT FOR SURVIVORS OF VETERANS 
 RETIRED FOR DISABILITY AFTER IMPLEMENTATION OF ENHANCED DEPARTMENT OF 
            VETERANS AFFAIRS DISABILITY COMPENSATION SYSTEM

``Sec.
``1401. Definition.
``1402. Election of benefit.
``1403. Receipt of benefit.
``1404. Reduction of compensation; termination of reduction.
``1405. Offset for dependency and indemnity compensation.
``Sec. 1401. Definition
    ``In this chapter, the term `covered veteran' means a veteran 
retired under subchapter II of chapter 61 of title 10 pursuant to 
section 1206a of that title who is entitled to compensation for 
service-connected disability under chapter 12 of this title.
``Sec. 1402. Election of benefit
    ``(a) In General.--A covered veteran may elect in accordance with 
this section to provide a monthly supplemental survivor benefit under 
this chapter to the veteran's survivors as follows:
            ``(1) The surviving spouse of the veteran.
            ``(2) The surviving children of the veteran.
    ``(b) Election by Veterans at Award of Compensation.--(1) If, at 
the time of the award of compensation for service-connected disability 
under chapter 12 of this title that qualifies such veteran as a covered 
veteran, a veteran has a spouse, one or more children, or both, the 
veteran shall elect to whom to provide a supplemental survivor benefit 
under this chapter.
    ``(2) A veteran may provide the supplemental survivor benefit 
referred to in paragraph (1) pursuant to an election under this 
paragraph--
            ``(A) if the veteran has only a spouse at the time of the 
        election, to the surviving spouse of the veteran;
            ``(B) if the veteran has both a spouse and one or more 
        children at the time of the election--
                    ``(i) to the surviving spouse of the veteran; or
                    ``(ii) to the surviving children of the veteran; or
            ``(C) if the veteran is unmarried but has one or more 
        children at the time of the election, to the surviving children 
        of the veteran.
    ``(3)(A) If a veteran described by paragraph (2)(B) elects pursuant 
to paragraph (1) to provide a supplemental survivor benefit under this 
chapter to the surviving children of the veteran, the Secretary shall 
notify the veteran's spouse of the election.
    ``(B) A veteran who makes an election described by subparagraph (A) 
may later elect instead to provide a supplemental survivor benefit 
under this chapter to the surviving spouse of the veteran, but only if 
the veteran submits the election under this subparagraph to the 
Secretary not later than 30 days after the date of the submittal of the 
election described by subparagraph (A) to the Secretary.
    ``(4)(A) Except as provided in subparagraph (B), an election 
pursuant to this subsection shall be effective as of the first day of 
the first month after the election is received by the Secretary.
    ``(B) An election pursuant to this subsection that is described by 
paragraph (3) shall be effective as of the first day of the first month 
that begins more than 30 days after the election described by paragraph 
(3)(A) is received by the Secretary.
    ``(5) Except as provided in subsection (c), a veteran who does not 
make the election provided in this subsection at the time described in 
paragraph (1) may not provide a supplemental survivor benefit under 
this chapter.
    ``(6) Except as provided in subsections (c), (d), and (e), an 
election pursuant to this subsection is irrevocable.
    ``(c) Election by Veterans Not Married at Award of Compensation Who 
Later Marry.--(1) A veteran who is unmarried at the time of the award 
of compensation for service-connected disability under chapter 12 of 
this title that qualifies the veteran as a covered veteran and who 
later marries may elect to provide a supplemental survivor benefit 
under this chapter to the spouse of the veteran by such marriage.
    ``(2) An election pursuant to this subsection shall be effective 
only if received by the Secretary not later than 60 days after the date 
of the marriage concerned.
    ``(3) An election pursuant to this subsection shall be effective as 
of the first day of the first month after the date the election is 
received by the Secretary.
    ``(4) An election of a veteran pursuant to this subsection 
supersedes the election, if any, of the veteran described in subsection 
(b)(2)(C).
    ``(5) Except as provided in subsection (e), an election pursuant to 
this subsection is irrevocable.
    ``(d) Election by Veterans Married at Award of Compensation Who 
Later Remarry.--(1) A veteran who is married at the time of the award 
of compensation for service-connected disability under chapter 12 of 
this title that qualifies the veteran as a covered veteran, who made an 
election provided in subsection (b) at that time, and who later 
remarries may elect to provide a supplemental survivor benefit under 
this chapter to the spouse of the veteran by such remarriage.
    ``(2) An election pursuant to this subsection shall be effective 
only if received by the Secretary not later than 60 days after the date 
of the marriage concerned.
    ``(3) An election pursuant to this subsection shall be effective as 
of the first day of the first month after the date the election is 
received by the Secretary.
    ``(4) An election of a veteran pursuant to this subsection 
supersedes the election of the veteran under subsection (b).
    ``(5) Except as provided in subsection (e), an election pursuant to 
this subsection is irrevocable.
    ``(e) Revocation of Election of Spouse Eligibility.--(1) A covered 
veteran who has made an election under this section to provide a 
supplemental survivor benefit to the surviving spouse of the veteran 
may revoke the election.
    ``(2)(A) Except as provided in subparagraph (B), a veteran may 
revoke an election under this subsection only with the concurrence of 
the veteran's spouse.
    ``(B) A veteran may revoke an election under this subsection 
without the concurrence of the veteran's spouse if the veteran 
demonstrates to the satisfaction of the Secretary that--
            ``(i) the whereabouts of the spouse cannot be determined; 
        or
            ``(ii) because of exceptional circumstances, a requirement 
        that the veteran seek the concurrence of the spouse would be 
        unreasonable.
    ``(3) A revocation of an election under this subsection is 
irrevocable.
    ``(f) Form of Elections.--Any election under this section 
(including a revocation of election under subsection (e)) shall be made 
in writing.
    ``(g) Notice Regarding Elections.--The Secretary shall take 
appropriate actions to inform covered veterans of the elections 
available to covered veterans under this subsection, including the 
procedures and deadlines applicable to the making of such elections.
``Sec. 1403. Receipt of benefit
    ``(a) In General.--(1) Effective as of the first day of the first 
month after the month in which a covered veteran who has made an 
election under section 1402 of this title dies, a monthly supplemental 
survivor benefit under this chapter in an amount equal to 55 percent of 
the monthly compensation payable to the veteran under section 1203(a) 
of this title at the time of the veteran's death shall be payable to 
the individual or individuals provided for in such election in force at 
the time of the veteran's death.
    ``(2) Any payment of a supplemental survivor benefit under this 
section to the surviving children of a veteran shall be paid to the 
surviving children in equal shares.
    ``(b) Eligibility of Surviving Spouse.--(1) In the event of the 
death of a surviving spouse being paid a supplemental survivor benefit 
under subsection (a), the surviving spouse shall be ineligible for the 
benefit effective as of the first day of the first month after the date 
of the surviving spouse's death.
    ``(2)(A) In the event a surviving spouse being paid a supplemental 
survivor benefit under subsection (a) remarries before reaching the age 
of 55, the surviving spouse shall be ineligible for the benefit 
effective as of the first day of the first month after the date of the 
surviving spouse's remarriage.
    ``(B) If the remarriage of a surviving spouse covered by 
subparagraph (A) is terminated by the death of the surviving spouses's 
spouse, annulment, or divorce, the eligibility of the surviving spouse 
for the benefit shall recommence effective as of the first day of the 
first month after the date on which the remarriage is so terminated.
    ``(3) A surviving spouse who is otherwise eligible for payment of 
more than one supplemental survivor benefit under subsection (a) based 
on marriages to more than one covered veteran shall elect which 
marriage shall entitle the surviving spouse to payment of the benefit 
for purposes of this chapter. Any election under this paragraph is 
irrevocable.
    ``(c) Eligibility of Surviving Children.--(1) In the event the 
surviving spouse of a veteran becomes ineligible for payment of a 
supplemental survivor benefit under subsection (b), the surviving 
children of the veteran shall become eligible for the benefit effective 
as of the first day of the first month after the date in which the 
surviving spouse becomes so ineligible.
    ``(2) In the event the surviving spouse of a veteran becomes re-
eligible for payment of a supplemental survivor benefit under 
subsection (b)(2)(B), the surviving children of the veteran shall be 
ineligible for the benefit effective as of the first day of the first 
month after the date in which the surviving spouse becomes so re-
eligible.
    ``(3) In the event of the death of a surviving child being paid a 
supplemental survivor benefit, the surviving child shall be ineligible 
for the benefit effective as of the first day of the first month after 
the surviving child's death, and the payment of the benefit to the 
remaining surviving children (if any) of the veteran concerned shall be 
adjusted accordingly effective as of that day.
``Sec. 1404. Reduction of compensation; termination of reduction
    ``(a) Reduction of Compensation.--Effective as of the effective 
date of an election of a covered veteran under section 1402 of this 
title to provide a monthly supplemental survivor benefit under this 
chapter (as determined in accordance with applicable provisions of 
section 1402 of this title), the amount of monthly compensation for 
service-connected disability otherwise payable to the veteran under 
section 1203(a) of this title shall be reduced by an amount equal to 
6.5 percent of the amount of such monthly compensation.
    ``(b) Termination of Reduction in Connection With Benefit for 
Surviving Spouse.--(1) In the case of a covered veteran who has elected 
to provide a supplemental survivor benefit under this chapter to the 
surviving spouse of the veteran, the reduction required by subsection 
(a) shall terminate effective as of the first day of the first month 
after--
            ``(A) the death of the spouse;
            ``(B) the revocation of the eligibility of the spouse for 
        the benefit under section 1402(e) of this title; or
            ``(C) the dissolution of the veteran's marriage to the 
        spouse through annulment or divorce.
    ``(2) If after the reduction required by subsection (a) is 
terminated under paragraph (1)(C) a veteran elects under section 
1402(d) of this title to provide the benefit to the surviving spouse of 
the remarriage covered by such section 1402(d), the reduction required 
by subsection (a) shall recommence effective as of the first day of the 
first month after the date of the remarriage, and shall be subject to 
subsequent termination in accordance with paragraph (1).
    ``(c) Termination of Reduction in Connection With Benefit for 
Surviving Children.--In the case of a covered veteran who has elected 
to provide a supplemental survivor benefit under this chapter to the 
surviving children of the veteran, the reduction required by subsection 
(a) shall terminate effective as of the first day of the first month 
after--
            ``(1) the date of death of the last child of the veteran; 
        or
            ``(2) the date on which the last of the children of the 
        veteran is no longer treatable as a child under section 101 of 
        this title.
    ``(d) Limitation on Number of Months Subject to Reduction.--The 
total number of months for which the monthly compensation of a covered 
veteran is reduced under subsection (a) may not exceed 360 months.
``Sec. 1405. Offset for dependency and indemnity compensation
    ``(a) In General.--If an individual eligible for payment of a 
monthly supplemental survivor benefit under this chapter based on the 
death of a covered veteran is or becomes entitled to dependency and 
indemnity compensation under chapter 13 of this title based on the 
death of the veteran, the amount of the supplemental survivor benefit 
paid the individual under this chapter for a month is the amount of the 
benefit otherwise payable to the individual under section 1403 of this 
title for that month minus the amount of the dependency and indemnity 
compensation so payable to the individual for that month.
    ``(b) Effective Date.--The reduction of benefit of an individual 
required by subsection (a) shall be effective as of the date of the 
commencement of the payment of dependency and indemnity compensation to 
the individual under chapter 13 of this title.
    ``(c) Reimbursement of Reduction in Compensation.--(1) If as a 
result of subsection (a) no benefit otherwise payable to an individual 
under section 1403 of this title with respect to a covered veteran is 
payable to the individual under this chapter, an amount shall be paid 
to the individual equal to the aggregate amount of the reduction under 
section 1404(a) of this title of the monthly compensation otherwise 
payable to the veteran.
    ``(2) If as a result of subsection (a) the amount of monthly 
benefit otherwise payable to an individual under section 1403 of this 
title with respect to a covered veteran is reduced (other than to 
zero), an amount shall be paid to the individual equal to--
            ``(A) the aggregate amount of the reduction under section 
        1404(a) of this title of the monthly compensation otherwise 
        payable to the veteran; multiplied by
            ``(B) a number equal to 1 minus an amount equal to the 
        fraction--
                    ``(i) whose numerator is the amount of the monthly 
                benefit payable to the individual under section 1403 of 
                this title as a result of the reduction under 
                subsection (a); and
                    ``(ii) whose denominator is the amount of the 
                monthly benefit otherwise payable to the individual 
                under section 1403 of this title without regard to the 
                reduction under subsection (a).
    ``(3) Any amount payable under this subsection shall be paid, at 
the election of the Secretary, in a lump sum or in such installments as 
the Secretary shall specify for purposes of this subsection.''.
            (2) Clerical amendments.--The tables of chapters at the 
        beginning of title 38, United States Code, and the beginning of 
        part II of such title, as amended by section 207(b) of this 
        Act, are each further amended by inserting after the item 
        relating to chapter 13 the following new item:

``14. Supplemental survivor benefit for survivors of            1401''.
                            veterans retired for disability 
                            after implementation of enhanced 
                            Department of Veterans Affairs 
                            disability compensation system.
    (b) Effective Date.--Except as provided in subsection (c), this 
section and the amendments made by this section shall take effect, if 
at all, on the effective date of the implementation of the enhanced 
Department of Veterans Affairs disability compensation system as 
determined in accordance with section 206.
    (c) Anticipation of Implementation.--The Secretary of Veterans 
Affairs shall take appropriate actions to ensure that the amendments 
made by this section are implementable on the effective date described 
in subsection (b) in the event of the implementation of the enhanced 
Department of Veterans Affairs disability compensation system on that 
date.
                                 <all>
```