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[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 2274 Introduced in Senate (IS)]

108th CONGRESS
  2d Session
                                S. 2274

    To expand and improve retired pay, burial, education, and other 
 mobilization benefits for members of the National Guard and Reserves 
   who are called or ordered to active duty, and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                             April 1, 2004

 Ms. Landrieu introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL

 
    To expand and improve retired pay, burial, education, and other 
 mobilization benefits for members of the National Guard and Reserves 
   who are called or ordered to active duty, 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.

    This Act may be cited as the ``21st Century Citizen Soldier 
Benefits Act''.

SEC. 2. ELIGIBILITY FOR RETIRED PAY FOR NON-REGULAR SERVICE.

    (a) Age and Service Requirements.--Subsection (a) of section 12731 
of title 10, United States Code, is amended to read as follows:
    ``(a)(1) Except as provided in subsection (c), a person is 
entitled, upon application, to retired pay computed under section 12739 
of this title, if the person--
            ``(A) satisfies one of the combinations of requirements for 
        minimum age and minimum number of years of service (computed 
        under section 12732 of this title) that are specified in the 
        table in paragraph (2);
            ``(B) performed the last six years of qualifying service 
        while a member of any category named in section 12732(a)(1) of 
        this title, but not while a member of a regular component, the 
        Fleet Reserve, or the Fleet Marine Corps Reserve, except that 
        in the case of a person who completed 20 years of service 
        computed under section 12732 of this title before October 5, 
        1994, the number of years of qualifying service under this 
        subparagraph shall be eight; and
            ``(C) is not entitled, under any other provision of law, to 
        retired pay from an armed force or retainer pay as a member of 
        the Fleet Reserve or the Fleet Marine Corps Reserve.
    ``(2) The combinations of minimum age and minimum years of service 
required of a person under subparagraph (A) of paragraph (1) for 
entitlement to retired pay as provided in such paragraph are as 
follows:

``Age, in years, is                  The minimum years of service
  at least:                                   required for that age is:
    55......................................................        30 
    56......................................................        28 
    57......................................................        26 
    58......................................................        24 
    59......................................................        22 
    60......................................................     20.''.
    (b) 20-Year Letter.--Subsection (d) of such section is amended by 
striking ``the years of service required for eligibility for retired 
pay under this chapter'' in the first sentence and inserting ``20 years 
of service computed under section 12732 of this title.''.
    (c) Effective Date.--This section and the amendments made by this 
subsection (a) shall take effect on the first day of the first month 
beginning on or after the date of the enactment of this Act and shall 
apply with respect to retired pay payable for that month and subsequent 
months.

SEC. 3. CERTAIN BURIAL BENEFITS FOR RESERVES WHO SERVED IN CAMPAIGN OR 
              EXPEDITION FOR WHICH A CAMPAIGN MEDAL WAS AUTHORIZED.

    (a) Eligibility for Headstone or Grave Marker.--Section 2306(a) of 
title 38, United States Code, is amended by adding at the end the 
following new paragraph:
            ``(6) Any individual who, while a member of a reserve 
        component, served on active duty in a campaign or expedition 
        for which a campaign medal was authorized and who was 
        discharged or released from service in the Armed Forces under 
        other than dishonorable conditions.''.
    (b) Eligibility for Interment in National Cemeteries.--Section 2402 
of such title is amended by adding at the end the following new 
paragraph:
            ``(9) Any individual who, while a member of a reserve 
        component, served on active duty in a campaign or expedition 
        for which a campaign medal was authorized and who was 
        discharged or released from service in the Armed Forces under 
        other than dishonorable conditions.''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to deaths occurring on or after the date of the 
enactment of this Act.

SEC. 4. EDUCATIONAL ASSISTANCE UNDER MONTGOMERY GI BILL FOR MEMBERS OF 
              THE SELECTED RESERVE WHO AGGREGATE MORE THAN 2 YEARS OF 
              ACTIVE DUTY SERVICE DURING ANY 5-YEAR PERIOD.

    (a) Entitlement.--Section 3012(a)(1) of title 38, United States 
Code, is amended--
            (1) in subparagraph (B), by striking ``or'' at the end;
            (2) in subparagraph (C), by adding ``or'' at the end; and
            (3) by inserting after subparagraph (C) the following new 
        subparagraph (D):
                    ``(D) during any five-year period beginning on or 
                after September 11, 2001, while in the Selected 
                Reserve, serves on active duty in the Armed Forces for 
                one or more periods aggregating not less than two years 
                of service on active duty during such period;''.
    (b) Contributions for Basic Assistance.--Section 3012(c) of such 
title is amended--
            (1) by inserting ``(1)'' after ``(c)'';
            (2) by designating the second sentence as paragraph (3) and 
        indenting such paragraph, as so designated, two ems from the 
        left margin; and
            (3) by inserting after paragraph (1), as so designated, the 
        following new paragraph:
    ``(2)(A) Except as provided in subparagraph (B), in the case of an 
individual described in subsection (a)(1)(D) who does not make an 
election under subsection (d)(4), the basic pay of such individual 
shall be reduced by $100 for each of any of the first 12 months that 
such individual is entitled to such pay commencing with the first month 
after the date on which such individual becomes entitled to educational 
assistance under this chapter by reason of subsection (a)(1)(D).
    ``(B) An individual described in subparagraph (A) may pay the 
Secretary $1,200 in a lump sum payment in lieu of the reduction in 
basic pay otherwise required by subparagraph (A). Such payment shall be 
made before the commencement of the receipt by the individual of 
amounts of basic educational assistance under this chapter.
    ``(C) If the total amount of basic pay of an individual reduced 
under subparagraph (A) is less than $1,200 as of the completion of all 
service of such individual on active duty, the individual shall pay the 
Secretary in a lump sum payment an amount equal to the difference 
between $1,200 and the amount so reduced. The payment shall be made 
before the commencement of the receipt by such individual of amounts of 
basic educational assistance under this chapter.
    ``(D) The Secretary shall deposit any amounts received as payments 
under subparagraph (B) or (C) into the Treasury as miscellaneous 
receipts.''.
    (c) Election Not To Receive Assistance.--Section 3012(d) of such 
title is amended by adding at the end the following new paragraph:
    ``(4) An individual described in subsection (a)(1)(D) may make an 
election not to receive educational assistance under this chapter. Any 
such election shall be made not later than 30 days after the date on 
which the individual otherwise becomes entitled to such assistance 
under subsection (a)(1)(D). Any individual who makes such an election 
is not entitled to educational assistance under this chapter.''.
    (d) Contributions for Additional Assistance.--Section 3012(f) of 
such title is amended--
            (1) in paragraph (1), by inserting ``or (d)(4)'' after 
        ``subsection (d)(1)''; and
            (2) in the second sentence, by inserting ``, or any 
        payments by such individual,'' after ``pay of such 
        individual''.
    (e) Duration of Assistance.--Section 3013(b) of such title is 
amended by striking ``is entitled to'' and all that follows and 
inserting the following: ``is entitled to--
            ``(1) one month of educational assistance benefits under 
        this chapter--
                    ``(A) in the case of an individual described in 
                section 3012(a)(1)(A) of this title, for each month of 
                continuous active duty served by such individual after 
                June 30, 1985, as part of the obligated period of 
                active duty on which such entitlement is based;
                    ``(B) in the case of an individual described in 
                section 3012(a)(1)(B) of this title, for each month of 
                continuous active duty served by such individual after 
                June 30, 1985; or
                    ``(C) in the case of an individual described in 
                section 3012(a)(1)(D) of this title, for each month of 
                active duty served by such individual after September 
                11, 2001, as part of the aggregate period of active 
                duty on which such entitlement is based; and
            ``(2) one month of educational assistance benefits under 
        this chapter for each four months served by such individual in 
        the Selected Reserve after the applicable date specified in 
        paragraph (1) (other than any month in which the individual 
        served on active duty).''.
    (f) Amount of Assistance.--Section 3015 of such title is amended--
            (1) in subsections (a)(1)(D) and (b)(1)(D), by striking 
        ``subsection (h)'' and inserting ``subsection (i)'';
            (2) by redesignating subsection (h) as subsection (i); and
            (3) by inserting after subsection (g) the following new 
        subsection (h):
    ``(h) In the case of an individual entitled to an educational 
assistance allowance under section 3012(a)(1)(D) of this title, the 
amount of the basic educational assistance allowance payable under this 
chapter is the amount determined under subsection (b).''.
    (g) Death Benefit.--Section 3017(b)(1) of such title is amended--
            (1) in subparagraph (C), by striking ``and'' at the end;
            (2) in subparagraph (D), by striking ``, less'' and 
        inserting ``; and''; and
            (3) by adding at the end the following new subparagraph:
                    ``(E) the amount of any payments made by the 
                individual under section 3012(c)(2) of this title, 
                less''.
    (h) Entitlement Date for Certain Members.--In the case of any 
member or former member of the Selected Reserve who, under section 
3012(a)(1)(D) of title 38, United States Code (as amended by subsection 
(a)), is entitled to educational assistance under chapter 30 of title 
38, United States Code, as of the date of the enactment of this Act by 
reason of active duty served by such member during the period beginning 
on September 11, 2001, and ending on the date of the enactment of this 
Act, the date on which such individual becomes entitled to such 
educational assistance by reason of that section shall be deemed to be 
the date of the enactment of this Act.
    (i) Outreach.--(1) The Secretaries concerned shall take actions to 
inform members of the Selected Reserve who are or may become entitled 
to basic educational assistance benefits under chapter 30 of title 38, 
United States Code, as a result of section 3012(a)(1)(D) of such title 
(as amended by subsection (a) of this section) of the minimum service 
requirements for entitlement to such benefits under that chapter and of 
the scope and nature of such benefits.
    (2) In this subsection:
            (A) The term ``Secretary concerned'' has the meaning given 
        such term in section 101(25) of title 38, United States Code.
            (B) The term ``Selected Reserve'' has the meaning given 
        such term in section 3002(4) of title 38, United States Code.

SEC. 5. MODIFICATION OF MAXIMUM RATE OF INTEREST PAYABLE BY 
              SERVICEMEMBERS ON OBLIGATIONS INCURRED BEFORE MILITARY 
              SERVICE.

    (a) Modification.--Section 207 of the Servicemembers Civil Relief 
Act (50 U.S.C. App. 527) is amended--
            (1) in subsection (a), by striking ``6 percent'' each place 
        it appears in the text of paragraphs (1) and (2) and inserting 
        ``the interest rate limitation percentage'';
            (2) in subsection (c), by striking ``6 percent'' and 
        inserting ``the interest rate limitation percentage''; and
            (3) by striking subsection (d) and inserting the following 
        new subsection (d):
    ``(d) Definitions.--In this section:
            ``(1) Interest.--The term `interest' includes service 
        charges, renewal charges, fees, or any other charges (except 
        bona fide insurance) with respect to an obligation or 
        liability.
            ``(2) Interest rate limitation percentage.--The term 
        `interest rate limitation percentage' means the lesser of--
                    ``(A) 6 percent; or
                    ``(B) the prime lending rate, as identified by the 
                Administration and published in the Federal Register on 
                a quarterly basis, plus 1 percent.''.
    (b) Effect of Adjustment of Interest Rate Limitation Percentage 
During Military Service.--Subsection (a) of such section is further 
amended by adding at the end the following new paragraph:
            ``(4) Effect of adjustment of interest rate limitation 
        percentage during service.--If during the military service of a 
        servicemember the interest rate limitation percentage is 
        adjusted as a result of a quarterly identification of the prime 
        lending rate by the Administration, the interest rate 
        limitation under this subsection on obligations and liabilities 
        incurred before such service shall be so adjusted.''.
    (c) Conforming Amendments.--Subsection (a) of such section is 
further amended--
            (1) in the paragraph caption of paragraph (1), by striking 
        ``Limitation to 6 percent'' and inserting ``Limitation''; and
            (2) in the paragraph caption of paragraph (2), by striking 
        ``Forgiveness of interest in excess of 6 percent'' and 
        inserting ``Forgiveness of interest in excess of interest rate 
        limitation percentage''.

SEC. 6. NONREDUCTION IN PAY WHILE FEDERAL EMPLOYEE IS PERFORMING ACTIVE 
              SERVICE IN THE UNIFORMED SERVICES.

    (a) In General.--Subchapter IV of chapter 55 of title 5, United 
States Code, is amended by adding at the end the following:
``Sec. 5538. Nonreduction in pay while serving in the uniformed 
              services
    ``(a) An employee who is absent from a position of employment with 
the Federal Government in order to perform service in the uniformed 
services shall be entitled to receive, for each pay period described in 
subsection (b), an amount equal to the amount by which--
            ``(1) the amount of basic pay which would otherwise have 
        been payable to such employee for such pay period if such 
        employee's civilian employment with the Government had not been 
        interrupted by that service, exceeds (if at all)
            ``(2) the amount of pay and allowances which (as determined 
        under subsection (d))--
                    ``(A) is payable to such employee for that service; 
                and
                    ``(B) is allocable to such pay period.
    ``(b)(1) Amounts under this section shall be payable with respect 
to each pay period (which would otherwise apply if the employee's 
civilian employment had not been interrupted)--
            ``(A) during which such employee is entitled to 
        reemployment rights under chapter 43 of title 38 with respect 
        to the position from which such employee is absent (as referred 
        to in subsection (a)); and
            ``(B) for which such employee does not otherwise receive 
        basic pay (including by taking any annual, military, or other 
        paid leave) to which such employee is entitled by virtue of 
        such employee's civilian employment with the Government.
    ``(2) For purposes of this section, the period during which an 
employee is entitled to reemployment rights under chapter 43 of title 
38--
            ``(A) shall be determined disregarding the provisions of 
        section 4312(d) of title 38; and
            ``(B) shall include any period of time specified in section 
        4312(e) of title 38 within which an employee may report or 
        apply for employment or reemployment following completion of 
        service in the uniformed services.
    ``(c) Any amount payable under this section to an employee shall be 
paid--
            ``(1) by such employee's employing agency;
            ``(2) from the appropriation or fund which would be used to 
        pay the employee if such employee were in a pay status; and
            ``(3) to the extent practicable, at the same time and in 
        the same manner as would basic pay if such employee's civilian 
        employment had not been interrupted.
    ``(d) The Office of Personnel Management shall, in consultation 
with Secretary of Defense, prescribe any regulations necessary to carry 
out the preceding provisions of this section.
    ``(e)(1) The head of each agency referred to in section 
2302(a)(2)(C)(ii) shall, in consultation with the Office, prescribe 
procedures to ensure that the rights under this section apply to the 
employees of such agency.
    ``(2) The Administrator of the Federal Aviation Administration 
shall, in consultation with the Office, prescribe procedures to ensure 
that the rights under this section apply to the employees of that 
agency.
    ``(f) For purposes of this section--
            ``(1) the terms `employee', `Federal Government', and 
        `uniformed services' have the same respective meanings as given 
        in section 4303 of title 38;
            ``(2) the term `service in the uniformed services' has the 
        meaning given that term in section 4303 of title 38 and 
        includes duty performed by a member of the National Guard under 
        section 502(f) of title 32 at the direction of the Secretary of 
        the Army or Secretary of the Air Force;
            ``(3) the term `employing agency', as used with respect to 
        an employee entitled to any payments under this section, means 
        the agency or other entity of the Government (including an 
        agency referred to in section 2302(a)(2)(C)(ii)) with respect 
        to which such employee has reemployment rights under chapter 43 
        of title 38; and
            ``(4) the term `basic pay' includes any amount payable 
        under section 5304.''.
    (b) Clerical Amendment.--The table of sections for chapter 55 of 
title 5, United States Code, is amended by inserting after the item 
relating to section 5537 the following:

``5538. Nonreduction in pay while serving in the uniformed services or 
                            National Guard.''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to pay periods (as described in section 5538(b) of 
title 5, United States Code, as added by this section) beginning on or 
after September 11, 2001.

SEC. 7. READY RESERVE-NATIONAL GUARD EMPLOYEE CREDIT ADDED TO GENERAL 
              BUSINESS CREDIT.

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

``SEC. 45G. READY RESERVE-NATIONAL GUARD EMPLOYEE CREDIT.

    ``(a) General Rule.--For purposes of section 38, the Ready Reserve-
National Guard employee credit determined under this section for any 
taxable year is an amount equal to 50 percent of the actual 
compensation amount for such taxable year.
    ``(b) Definition of Actual Compensation Amount.--For purposes of 
this section, the term `actual compensation amount' means the amount of 
compensation paid or incurred by an employer with respect to a Ready 
Reserve-National Guard employee on any day during a taxable year when 
the employee was absent from employment for the purpose of performing 
qualified active duty.
    ``(c) Limitations.--
            ``(1) Maximum period for credit per employee.--The maximum 
        period with respect to which the credit may be allowed with 
        respect to any Ready Reserve-National Guard employee shall not 
        exceed the 12-month period beginning on the first day such 
        credit is so allowed with respect to such employee.
            ``(2) Days other than work days.--No credit shall be 
        allowed with respect to a Ready Reserve-National Guard employee 
        who performs qualified active duty on any day on which the 
        employee was not scheduled to work (for reason other than to 
        participate in qualified active duty).
    ``(d) Definitions.--For purposes of this section--
            ``(1) Qualified active duty.--The term `qualified active 
        duty' means--
                    ``(A) active duty, other than the training duty 
                specified in section 10147 of title 10, United States 
                Code (relating to training requirements for the Ready 
                Reserve), or section 502(a) of title 32, United States 
                Code (relating to required drills and field exercises 
                for the National Guard), in connection with which an 
                employee is entitled to reemployment rights and other 
                benefits or to a leave of absence from employment under 
                chapter 43 of title 38, United States Code, and
                    ``(B) hospitalization incident to such duty.
            ``(2) Compensation.--The term `compensation' means any 
        remuneration for employment, whether in cash or in kind, which 
        is paid or incurred by a taxpayer and which is deductible from 
        the taxpayer's gross income under section 162(a)(1).
            ``(3) Ready reserve-national guard employee.--The term 
        `Ready Reserve-National Guard employee' means an employee who 
        is a member of the Ready Reserve or of the National Guard.
            ``(4) National guard.--The term `National Guard' has the 
        meaning given such term by section 101(c)(1) of title 10, 
        United States Code.
            ``(5) Ready reserve.--The term `Ready Reserve' has the 
        meaning given such term by section 10142 of title 10, United 
        States Code.''.
    (b) Credit To Be Part of General Business Credit.--Subsection (b) 
of section 38 of such Code (relating to general business credit) is 
amended by striking ``plus'' at the end of paragraph (14), by striking 
the period at the end of paragraph (15) and inserting ``, plus'', and 
by adding at the end the following:
            ``(16) the Ready Reserve-National Guard employee credit 
        determined under section 45G(a).''.
    (c) Conforming Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by inserting after the item relating to section 45F the 
following:

                              ``Sec. 45G. Ready Reserve-National Guard 
                                        employee credit.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SEC. 8. LEAVE OF ABSENCE FROM EDUCATIONAL INSTITUTIONS FOR MILITARY 
              SERVICE.

    (a) Obligation as Part of Program Participation Requirements.--
Section 487(a)(22) of the Higher Education Act of 1965 (20 U.S.C. 
1094(a)(22)) is amended by inserting ``and with the policy on leave of 
absence for active duty military service established pursuant to 
section 484C'' after ``section 484B''.
    (b) Leave of Absence for Military Service.--Part G of title IV of 
the Higher Education Act of 1965 is amended by inserting after section 
484B (20 U.S.C. 1091b) the following new section:

``SEC. 484C. LEAVE OF ABSENCE FOR MILITARY SERVICE.

    ``(a) Leave of Absence Required.--Whenever a student who is a 
member of the National Guard or other reserve component of the Armed 
Forces of the United States, or a member of such Armed Forces in a 
retired status, is called or ordered to active duty, the institution of 
higher education in which the student is enrolled shall grant the 
student a military leave of absence from the institution while such 
student is serving on active duty, and for one year after the 
conclusion of such service.
    ``(b) Consequences of Military Leave of Absence.--
            ``(1) Preservation of status and accounts.--A student on a 
        military leave of absence from an institution of higher 
        education shall be entitled, upon release from serving on 
        active duty, to be restored to the educational status such 
        student had attained prior to being ordered to such duty 
        without loss of academic credits earned, scholarships or grants 
        awarded, or, subject to paragraph (2), tuition and other fees 
        paid prior to the commencement of the active duty.
            ``(2) Refunds.--
                    ``(A) Option of refund or credit.--An institution 
                of higher education shall refund tuition or fees paid 
                or credit the tuition and fees to the next period of 
                enrollment after the student returns from a military 
                leave of absence, at the option of the student. 
                Notwithstanding the 180-day limitation referred to in 
                section 484B(a)(2)(B), a student on a military leave of 
                absence under this section shall not be treated as 
                having withdrawn for purposes of section 484B unless 
                the student fails to return at the end of the military 
                leave of absence (as determined under subsection (a) of 
                this section).
                    ``(B) Proportionate reduction of refund for time 
                completed.--If a student requests a refund during a 
                period of enrollment, the percentage of the tuition and 
                fees that shall be refunded shall be equal to 100 
                percent minus--
                            ``(i) the percentage of the period of 
                        enrollment (for which the tuition and fees were 
                        paid) that was completed (as determined in 
                        accordance with section 484B(d)) as of the day 
                        the student withdrew, provided that such date 
                        occurs on or before the completion of 60 
                        percent of the period of enrollment; or
                            ``(ii) 100 percent, if the day the student 
                        withdrew occurs after the student has completed 
                        60 percent of the period of enrollment.
    ``(c) Active Duty.--In this section, the term `active duty' has the 
meaning given such term in section 101(d)(1) of title 10, United States 
Code, except that such term--
            ``(1) does not include active duty for training or 
        attendance at a service school; but
            ``(2) includes, in the case of members of the National 
        Guard, active State duty.''.
                                 <all>
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