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‘‘(E) The person who directs the disposition of
the remains of the deceased member under section
1482(c) of title 10, or, in the case of a deceased mem-
ber whose remains are commingled and buried in a
common grave in a national cemetery, the person who
have been designated under such section to direct the
disposition of the remains if individual identification
had been made.’’; and
(2) in paragraph (2), by striking ‘‘may be pro-
vided to—’’ and all that follows through the end and
inserting ‘‘may be provided to up to two additional
persons closely related to the deceased member who
are selected by the person referred to in paragraph
(1)(E).’’.
SEC. 657. TRANSPORTATION OF REMAINS OF DECEASED
MEMBERS OF THE ARMED FORCES AND CER-
TAIN OTHER PERSONS.
Section 1482(a)(8) of title 10, United States Code, is
amended by adding at the end the following new sentence:
‘‘When transportation of the remains includes transpor-
tation by aircraft, the Secretary concerned shall provide,
to the maximum extent possible, for delivery of the remains
by air to the commercial, general aviation, or military air-
port nearest to the place selected by the designee or, if such
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a selection is not made, nearest to the cemetery selected by
the Secretary.’’.
SEC. 658. REPEAL OF REQUIREMENT OF REDUCTION OF
SURVIVOR BENEFIT PLAN SURVIVOR ANNU-
ITIES BY DEPENDENCY AND INDEMNITY COM-
PENSATION.
(a) REPEAL.—
(1) IN GENERAL.—Subchapter II of chapter 73 of
title 10, United States Code, is amended as follows:
(A) In section 1450, by striking subsection
(c).
(B) In section 1451(c)—
(i) by striking paragraph (2); and
(ii) by redesignating paragraphs (3)
and (4) as paragraphs (2) and (3), respec-
tively.
(2) 
CONFORMING
AMENDMENTS.—Such 
sub-
chapter is further amended as follows:
(A) In section 1450—
(i) by striking subsection (e); and
(ii) by striking subsection (k).
(B) In section 1451(g)(1), by striking sub-
paragraph (C).
(C) In section 1452—
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(i) in subsection (f)(2), by striking
‘‘does not apply—’’ and all that follows and
inserting ‘‘does not apply in the case of a
deduction made through administrative
error.’’; and
(ii) by striking subsection (g).
(D) In section 1455(c), by striking ‘‘,
1450(k)(2),’’.
(b) PROHIBITION ON RETROACTIVE BENEFITS.—No
benefits may be paid to any person for any period before
the effective date provided under subsection (f) by reason
of the amendments made by subsection (a).
(c) PROHIBITION
ON
RECOUPMENT
OF
CERTAIN
AMOUNTS PREVIOUSLY REFUNDED TO SBP RECIPIENTS.—
A surviving spouse who is or has been in receipt of an an-
nuity under the Survivor Benefit Plan under subchapter
II of chapter 73 of title 10, United States Code, that is in
effect before the effective date provided under subsection (f)
and that is adjusted by reason of the amendments made
by subsection (a) and who has received a refund of retired
pay under section 1450(e) of title 10, United States Code,
shall not be required to repay such refund to the United
States.
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(d) REPEAL OF AUTHORITY FOR OPTIONAL ANNUITY
FOR DEPENDENT CHILDREN.—Section 1448(d)(2) of such
title is amended—
(1) by striking ‘‘DEPENDENT CHILDREN.—’’ and
all that follows through ‘‘In the case of a member de-
scribed in paragraph (1),’’ and inserting ‘‘DEPEND-
ENT CHILDREN.—In the case of a member described
in paragraph (1),’’; and
(2) by striking subparagraph (B).
(e) RESTORATION OF ELIGIBILITY FOR PREVIOUSLY
ELIGIBLE SPOUSES.—The Secretary of the military depart-
ment concerned shall restore annuity eligibility to any eli-
gible surviving spouse who, in consultation with the Sec-
retary, previously elected to transfer payment of such annu-
ity to a surviving child or children under the provisions
of section 1448(d)(2)(B) of title 10, United States Code, as
in effect on the day before the effective date provided under
subsection (f). Such eligibility shall be restored whether or
not payment to such child or children subsequently was ter-
minated due to loss of dependent status or death. For the
purposes of this subsection, an eligible spouse includes a
spouse who was previously eligible for payment of such an-
nuity and is not remarried, or remarried after having at-
tained age 55, or whose second or subsequent marriage has
been terminated by death, divorce or annulment.
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(f) EFFECTIVE DATE.—The sections and the amend-
ments made by this section shall take effect on the later of—
(1) the first day of the first month that begins
after the date of the enactment of this Act; or
(2) the first day of the fiscal year that begins in
the calendar year in which this Act is enacted.
SEC. 659. EFFECTIVE DATE OF PAID-UP COVERAGE UNDER
SURVIVOR BENEFIT PLAN.
(a) SURVIVOR BENEFIT PLAN.—Section 1452(j) of title
10, United States Code, is amended by striking ‘‘October
1, 2008’’ and inserting ‘‘October 1, 2007’’.
(b) RETIRED SERVICEMAN’S FAMILY PROTECTION
PLAN.—Section 1436a of such title is amended by striking
‘‘October 1, 2008’’ and inserting ‘‘October 1, 2007’’.
SEC. 660. INCLUSION OF VETERANS WITH SERVICE-CON-
NECTED DISABILITIES RATED AS TOTAL BY
REASON OF UNEMPLOYABILITY UNDER TER-
MINATION OF PHASE-IN OF CONCURRENT RE-
CEIPT OF RETIRED PAY AND VETERANS’ DIS-
ABILITY COMPENSATION.
(a) INCLUSION OF VETERANS.—Section 1414(a)(1) of
title 10, United States Code, is amended by striking ‘‘except
that’’ and all that follows and inserting ‘‘except that pay-
ment of retired pay is subject to subsection (c) only during
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the period beginning on January 1, 2004, and ending on
December 31, 2004, in the case of the following:
‘‘(A) A qualified retiree receiving veterans’
disability compensation for a disability rated as
100 percent.
‘‘(B) A qualified retiree receiving veterans’
disability compensation at the rate payable for
a 100 percent disability by reason of a deter-
mination of individual unemployability.’’.
(b) EFFECTIVE DATE.—The amendment made by sub-
section (a) shall take effect on December 31, 2004.
SEC. 661. COMPUTATION OF YEARS OF SERVICE FOR PUR-
POSES OF RETIRED PAY FOR NON-REGULAR
SERVICE.
Section 12733(3) of title 10, United States Code, is
amended—
(1) in subparagraph (B), by striking ‘‘and’’ at
the end;
(2) in subparagraph (C), by striking the period
and inserting ‘‘before the year of service that includes
October 30, 2007; and’’; and
(3) by adding at the end the following new sub-
paragraph:
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‘‘(D) 130 days in the year of service that
includes October 30, 2007, and any subsequent
year of service.’’.
Subtitle E—Education Benefits
SEC. 671. TUITION ASSISTANCE FOR OFF-DUTY TRAINING
OR EDUCATION.
(a) CLARIFICATION OF APPLICABILITY OF CURRENT
AUTHORITY
TO
COMMISSIONED
OFFICERS
ON
ACTIVE
DUTY.—Subsection (b) of section 2007 of title 10, United
States Code, is amended—
(1) in paragraph (1)—
(A) by inserting ‘‘(other than a member of
the Ready Reserve)’’ after ‘‘active duty’’ the first
place it appears; and
(B) by striking ‘‘or full-time National
Guard duty’’ both places it appears; and
(2) in paragraph (2)(B), by inserting ‘‘for which
ordered to active duty’’ after ‘‘active duty service’’.
(b) AUTHORITY TO PAY TUITION ASSISTANCE
TO
MEMBERS OF THE READY RESERVE.—
(1) IN GENERAL.—Subsection (c) of such section
is amended to read as follows:
‘‘(c)(1) Subject to paragraphs (3)(A) and (4), the Sec-
retary of a military department may pay the charges of
an educational institution for the tuition or expenses de-
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scribed in subsection (a) of a member of the Selected Re-
serve.
‘‘(2) Subject to paragraphs (3)(B) and (4), the Sec-
retary of a military department may pay the charges of
an educational institution for the tuition or expenses de-
scribed in subsection (a) of a member of the Individual
Ready Reserve who has a military occupational specialty
designated by the Secretary for purposes of this subsection.
‘‘(3)(A) The Secretary of a military department may
not pay charges under paragraph (1) for tuition or expenses
of an officer of the Selected Reserve unless the officer agrees
to remain a member of the Selected Reserve for at least four
years after completion of the education or training for
which the charges are paid.
‘‘(B) The Secretary of a military department may not
pay charges under paragraph (2) for tuition or expenses
of an officer of the Individual Ready Reserve unless the offi-
cer agrees to remain in the Selected Reserve or Individual
Ready Reserve for at least four years after completion of
the education or training for which the charges are paid.
‘‘(4) The Secretary of a military department may re-
quire enlisted members of the Selected Reserve or Individual
Ready Reserve to agree to serve for up to four years in the
Selected Reserve or Individual Ready Reserve, as the case
may be, after completion of education or training for which
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tuition or expenses are paid under paragraph (1) or (2),
as applicable.’’.
(2) REPEAL OF SUPERSEDED PROVISION.—Such
section is further amended—
(A) by striking subsection (d); and
(B) by redesignating subsections (e) and (f)
as subsections (d) and (e), respectively.
(3) REPAYMENT OF UNEARNED BENEFIT.—Sub-
section (e) of such section, as redesignated by para-
graph (2) of this subsection, is amended—
(A) by inserting ‘‘(1)’’ after ‘‘(e)’’; and
(B) by adding at the end the following new
paragraph:
‘‘(2) If a member of the Ready Reserve who enters into
an agreement under subsection (c) does not complete the pe-
riod of service specified in the agreement, the member shall
be subject to the repayment provisions of section 303a(e)
of title 37.’’.
(c) REGULATIONS.—Such section is further amended
by adding at the end the following new subsection:
‘‘(f) This section shall be administered under regula-
tions prescribed by the Secretary of Defense and the Sec-
retary of Homeland Security for the Coast Guard when it
is not operating as a service in the Navy.’’.
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SEC. 672. EXPANSION OF SELECTED RESERVE EDUCATION
LOAN REPAYMENT PROGRAM.
(a) ADDITIONAL LOANS ELIGIBLE FOR REPAYMENT.—
Paragraph (1) of subsection (a) of section 16301 of title 10,
United States Code, is amended—
(1) in subparagraph (B), by striking ‘‘or’’ at the
end;
(2) in subparagraph (C), by striking the period
at the end and inserting ‘‘; or’’; and
(3) by adding at the end the following new sub-
paragraph:
‘‘(D) any loan incurred for educational purposes
made by a lender that is—
‘‘(i) an agency or instrumentality of a
State;
‘‘(ii) a financial or credit institution (in-
cluding an insurance company) that is subject to
examination and supervision by an agency of
the United States or any State;
‘‘(iii) a pension fund approved by the Sec-
retary for purposes of this section; or
‘‘(iv) a nonprofit private entity designated
by a State, regulated by such State, and ap-
proved by the Secretary for purposes of this sec-
tion.’’.
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(b) ELIGIBILITY OF OFFICERS.—Such subsection is
further amended—
(1) in paragraph (2)—
(A) by striking ‘‘Except as provided in
paragraph (3), the Secretary’’ and inserting
‘‘The Secretary’’; and
(B) by striking ‘‘an enlisted member of the
Selected Reserve of the Ready Reserve of an
armed force in a reserve component and military
specialty’’ and inserting ‘‘a member of the Se-
lected Reserve of the Ready Reserve of an armed
force in a reserve component and officer program
or military specialty’’; and
(2) by striking paragraph (3).
(c) CONFORMING AMENDMENT.—The heading of such
section is amended to read as follows:
‘‘§ 16301. Education loan repayment program: mem-
bers of the Selected Reserve’’.
(d) CLERICAL AMENDMENT.—The table of sections at
the beginning of chapter 1609 of such title is amended by
striking the item relating to section 16301 and inserting
the following new item:
‘‘16301. Education loan repayment program: members of the Selected Reserve.’’.