I 

108TH CONGRESS 

2D SESSION H. R. 3962

To amend title 10, United States Code, to establish a program of interestfree loans to members of the Selected Reserve who experience financial 

hardship due to service on active duty in the Armed Forces. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 11, 2004

Mr. SHAW introduced the following bill; which was referred to the Committee 

on Armed Services 

A BILL

To amend title 10, United States Code, to establish a program of interest-free loans to members of the Selected 

Reserve who experience financial hardship due to service 

on active duty in the Armed Forces.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Support for Military 

5 Reserve Families Act of 2004’’. 
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1 SEC. 2. LOAN PROGRAM FOR MEMBERS OF THE SELECTED 

2 RESERVE. 

3 (a) IN GENERAL.—Part II of subtitle E of title 10, 

4 United States Code, is amended by inserting after chapter 

5 1215 the following new chapter: 

6 ‘‘CHAPTER 1216—READY RESERVE 

7 MOBILIZATION LOAN PROGRAM

‘‘12591. Definitions. 

‘‘12592. Establishment of loan program. 

‘‘12593. Members eligible for loans. 

‘‘12594. Loan amounts. 

‘‘12595. Interest. 

‘‘12596. Payment.

8 ‘‘§ 12591. Definitions 

9 ‘‘In this chapter: 

10 ‘‘(1) The term ‘eligible member’ means a mem11 ber of the Ready Reserve who has one or more de12 pendents enrolled in the Department of Defense pro13 gram Defense Enrollment Eligibility Reporting Sys14 tem (DEERS). 

15 ‘‘(2) The term ‘covered service’ means active 

16 duty performed by a member of a reserve component 

17 under an involuntary call or order to active duty in 

18 support of a contingency operation. 

19 ‘‘§ 12592. Establishment of loan program 

20 ‘‘(a) ESTABLISHMENT.—The Secretary of Defense 

21 shall establish for members of the Ready Reserve (includ-
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1 ing the Coast Guard Reserve) a loan program to be known 

2 as the ‘Ready Reserve Mobilization Loan Program’. 

3 ‘‘(b) ADMINISTRATION.—The loan program shall be 

4 administered by the Secretary under such regulations as 

5 the Secretary considers appropriate for carrying out the 

6 program. 

7 ‘‘(c) AGREEMENT WITH SECRETARY OF HOMELAND

8 SECURITY.—The Secretary and the Secretary of Home9 land Security shall enter into an agreement with respect 

10 to the administration of the program for the Coast Guard 

11 Reserve. 

12 ‘‘§ 12593. Members eligible for loans 

13 ‘‘(a) IN GENERAL.—The Secretary of Defense shall 

14 make a loan under the program under this chapter to an 

15 eligible member, upon receipt of an application for such 

16 loan from such member, for any period during which the 

17 member performs covered service if, as determined by the 

18 Secretary—

19 ‘‘(1) the income of the member during such 

20 service is less than the member’s income before 

21 being called or ordered to such service; and 

22 ‘‘(2) the member incurs a financial hardship by 

23 reason of such service. 
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1 ‘‘(b) DETERMINATION OF INCOME.—The Secretary 

2 shall make a determination under paragraph (1) of sub3 section (a) by comparing—

4 ‘‘(1) the member’s regular military compensa5 tion (as defined in section 101 of title 37), stated as 

6 an annualized amount; with 

7 ‘‘(2) the amount of income of the member over 

8 the 52 weeks preceding the beginning of such service 

9 derived from sources that will not be available to the 

10 member while performing such service. 

11 ‘‘(c) USE OF LOAN AMOUNTS.—The Secretary shall 

12 take such steps as the Secretary considers necessary to 

13 ensure that a loan under the program is not used for in14 vestment purposes (other than deposit in a demand ac15 count). 

16 ‘‘§ 12594. Loan amounts 

17 ‘‘(a) AMOUNT OF LOAN.—The amount of a loan to 

18 an eligible member under this chapter may be in any 

19 amount specified by the eligible member up to $500 for 

20 each full month of covered service performed by the mem21 ber. 

22 ‘‘(b) DISBURSEMENT OF LOAN AMOUNT.—The Sec23 retary of Defense shall disburse a loan under the program 

24 under this chapter in such manner as may be directed by 

25 the member taking out the loan. The Secretary shall pro-
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1 vide means to assist the member in facilitating the making 

2 of the amount of such loan available for the use or benefit 

3 of dependents of the member. A member may designate 

4 in writing another person to receive the amount of a loan 

5 under the program, and the member may direct that such 

6 an amount for a person so designated be deposited with 

7 a bank or other financial institution to the credit of the 

8 designated person. 

9 ‘‘§ 12595. Interest 

10 ‘‘(a) INTEREST FREE PERIOD.—Except as provided 

11 in subsection (b)(2), a loan under this chapter for any 

12 month of covered service shall bear no interest for the pe13 riod beginning on the date of the loan and ending at the 

14 end of—

15 ‘‘(1) five years from the end of the period of 

16 covered service including that month, if that period 

17 of covered service is a period of less than 12 con18 secutive months; and 

19 ‘‘(2) ten years from the end of the period of 

20 covered service including that month, if that period 

21 of covered service is a period of 12 consecutive 

22 months or more. 

23 ‘‘(b) 5 PERCENT INTEREST.—A loan under this 

24 chapter shall bear interest at the rate of 5 percent per 

25 year commencing to accrue—
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1 ‘‘(1) as of the date that is the end of the inter2 est-free period specified in subsection (a); or 

3 ‘‘(2) if the service of the member in the Se4 lected Reserve ends before the date referred to in 

5 paragraph (1), as of the date such service in the Se6 lected Reserve ends. 

7 ‘‘§ 12596. Payment 

8 ‘‘(a) PERIOD OF PAYMENT.—(1) Repayment of a 

9 loan under this chapter shall commence when the member 

10 to whom the loan is made is released from the period of 

11 active duty that includes the covered service for which the 

12 loan is made. Unless the member enters into an alternative 

13 repayment agreement with the Secretary, the loan shall 

14 be repaid over the period beginning on the date of the loan 

15 and ending at the end of—

16 ‘‘(1) five years, if the period of covered service 

17 is a period of less than 12 consecutive months; and 

18 ‘‘(2) ten years, if that period of covered service 

19 is a period of 12 consecutive months or more. 

20 ‘‘(b) METHOD OF PAYMENT.—Unless the member 

21 enters into an alternative repayment agreement with the 

22 Secretary, payment on a loan under this chapter shall be 

23 by deduction from the amount of basic pay or inactive24 duty pay earned by the member while in an active status 

25 but not on active duty (other than for training).’’. 
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1 (b) CLERICAL AMENDMENT.—The tables of chapters 

2 at the beginning of subtitle E, and at the beginning of 

3 part II of subtitle E, of title 10, United States Code, are 

4 amended by inserting after the item relating to chapter 

5 1215 the following new item:

‘‘1216. Ready Reserve Mobilization Loan Program ................................. 12591’’.

Æ