233 
Subtitle D—Retired Pay and 
Survivor Benefits 
SEC. 651. MONTHLY DISBURSEMENT TO STATES OF STATE 
INCOME TAX WITHHELD FROM RETIRED OR 
RETAINER PAY. 
Section 1045(a) of title 10, United States Code, is 
amended in the third sentence— 
(1) by striking ‘‘quarter’’ the first place it ap-
pears and inserting ‘‘month’’; and 
(2) by striking ‘‘during the month following that 
calendar quarter’’ and inserting ‘‘during the following 
calendar month’’. 
SEC. 652. REVISION TO ELIGIBILITY FOR NONREGULAR 
SERVICE RETIREMENT AFTER ESTABLISHING 
ELIGIBILITY FOR REGULAR RETIREMENT. 
(a) REVISION TO ALLOW CONTINUATION IN ACTIVE 
STATUS.—Subsection (a) of section 12741 of title 10, 
United States Code, is amended— 
(1) in the matter preceding paragraph (1), by 
striking ‘‘becoming entitled to’’ and inserting ‘‘having 
met the requirements for’’; and 
(2) in paragraph (3), by striking ‘‘become enti-
tled to’’ and inserting ‘‘met the requirements for’’.
234 
(b) CONFORMING AMENDMENT.—Subsection (b)(1) of 
such section is amended by striking ‘‘entitlement to’’ and 
inserting ‘‘eligibility for’’. 
(c) CLERICAL AMENDMENTS.— 
(1) SECTION HEADING.—The heading of such sec-
tion is amended to read as follows: 
‘‘§ 12741. Retirement from active reserve service per-
formed after becoming eligible for regular 
retirement’’. 
(2) TABLE OF SECTIONS.—The item relating to 
section 12741 in the table of sections at the beginning 
of chapter 1223 of such title is amended to read as 
follows: 
‘‘12741. Retirement from active reserve service performed after becoming eligible 
for regular retirement.’’. 
SEC. 653. DENIAL OF MILITARY FUNERAL HONORS IN CER-
TAIN CASES. 
(a) ADDITIONAL CIRCUMSTANCES FOR DENIAL OF FU-
NERAL HONORS.—Subsection (a) of section 985 of title 10, 
United States Code, is amended— 
(1) by inserting ‘‘(under section 1491 of this title 
or any other authority)’’ after ‘‘military honors’’. 
(2) by striking ‘‘a person’’ and all that follows 
and inserting ‘‘any of the following persons: 
‘‘(1) A person who has been convicted of a cap-
ital offense under Federal or State law for which the
235 
person was sentenced to death or life imprisonment 
without parole. 
‘‘(2) A person not covered by paragraph (1) who 
is ineligible for interment in Arlington National 
Cemetery or a national cemetery under the control of 
the National Cemetery Administration by reason of 
section 2411(b) of title 38. 
‘‘(3) A person who is a veteran (as defined in 
section 1491(h) of this title) or who died while on ac-
tive duty or a member of a reserve component, when 
the circumstances surrounding the person’s death or 
other circumstances as specified by the Secretary of 
Defense are such that to provide military honors at 
the funeral or burial of the person would bring dis-
credit upon the person’s service (or former service).’’. 
(b) CLERICAL AMENDMENTS.— 
(1) SECTION HEADING.—The heading of such sec-
tion is amended to read as follows: 
‘‘§ 985. Persons convicted of capital crimes; certain 
other persons: denial of specified burial- 
related benefits’’. 
(2) TABLE OF SECTIONS.—The item relating to 
section 985 in the table of sections at the beginning 
of chapter 49 of such title is amended to read as fol-
lows:
236 
‘‘985. Persons convicted of capital crimes; certain other persons: denial of speci-
fied burial-related benefits.’’. 
(c) 
CROSS-REFERENCE
AMENDMENT.—Section 
1491(a) of such title is amended by inserting before the pe-
riod at the end the following: ‘‘, except when military hon-
ors are prohibited under section 985(a) of this title’’. 
(d) EFFECTIVE DATE.—The amendments made by this 
section shall apply with respect to funerals and burials that 
occur on or after the date of the enactment of this Act. 
SEC. 654. CHILD SUPPORT FOR CERTAIN MINOR CHILDREN 
OF RETIREMENT-ELIGIBLE MEMBERS CON-
VICTED OF DOMESTIC VIOLENCE RESULTING 
IN DEATH OF CHILD’S OTHER PARENT. 
(a) AUTHORITY FOR COURT-ORDERED PAYMENTS.— 
Section 1408(h) of title 10, United States Code, is amend-
ed— 
(1) in paragraph (1)— 
(A) by inserting ‘‘(A)’’ after ‘‘(1)’’; and 
(B) by adding at the end of such paragraph 
the following: 
‘‘(B) If, in the case of a member or former member 
of the armed forces referred to in paragraph (2)(A), a court 
order provides for the payment as child support of an 
amount from the disposable retired pay of that member or 
former member (as certified under paragraph (4)) to an 
eligible dependent child of the member or former member,
237 
the Secretary concerned, beginning upon effective service of 
such court order, shall pay that amount in accordance with 
this subsection to such dependent child.’’; 
(2) in paragraph (2)— 
(A) in the matter preceding subparagraph 
(A), by inserting ‘‘, or a dependent child,’’ after 
‘‘former spouse’’; 
(B) in subparagraph (B)— 
(i) by inserting ‘‘in the case of eligi-
bility of a spouse or former spouse under 
paragraph (1)(A),’’ after ‘‘(B)’’; and 
(ii) by striking the period at the end 
and inserting ‘‘; and’’; and 
(C) by adding at the end the following new 
subparagraph: 
‘‘(C) in the case of eligibility of a dependent 
child under paragraph (1)(B), the other parent of the 
child died as a result of the misconduct that resulted 
in the termination of retired pay.’’; 
(3) in paragraph (4), by inserting ‘‘, or an eligi-
ble dependent child,’’ after ‘‘former spouse’’; 
(4) in paragraph (5), by inserting ‘‘, or the de-
pendent child,’’ after ‘‘former spouse’’; and 
(5) in paragraph (6), by inserting ‘‘, or to a de-
pendent child,’’ after ‘‘former spouse’’.
238 
(b) EFFECTIVE DATE.—A court order authorized by 
the amendments made by this section may not provide for 
a payment attributable to any period before October 1, 
2005, or the date of the court order, whichever is later. 
SEC. 655. CONCURRENT RECEIPT OF VETERANS DISABILITY 
COMPENSATION AND MILITARY RETIRED PAY. 
Section 1414(a) of title 10, United States Code, is 
amended by inserting before the period at the end the fol-
lowing: ‘‘, and in the case of a qualified retiree receiving 
veterans’ disability compensation at the rate payable for 
a 100 percent disability by reason of a determination of 
individual unemployability, payment of retired pay to such 
veteran is subject to subsection (c) only during the period 
beginning on January 1, 2004, and ending on September 
30, 2009’’. 
SEC. 656. MILITARY SURVIVOR BENEFIT PLAN BENE-
FICIARIES 
UNDER 
INSURABLE 
INTEREST 
COVERAGE. 
(a) AUTHORITY TO ELECT NEW BENEFICIARY.—Sec-
tion 1448(b)(1) of title 10, United States Code, is amend-
ed— 
(1) by inserting ‘‘or under subparagraph (G) of 
this paragraph’’ in the second sentence of subpara-
graph (E) before the period at the end; and
239 
(2) by adding at the end the following new sub-
paragraph: 
‘‘(G) ELECTION OF NEW BENEFICIARY UPON 
DEATH OF PREVIOUS BENEFICIARY.— 
‘‘(i) AUTHORITY
FOR
ELECTION.—If 
the reason for discontinuation in the Plan 
is the death of the beneficiary, the partici-
pant in the Plan may elect a new bene-
ficiary. Any such beneficiary must be a nat-
ural person with an insurable interest in 
the participant. Such an election may be 
made only during the 180-day period begin-
ning on the date of the death of the previous 
beneficiary. 
‘‘(ii) PROCEDURES.—Such an election 
shall be in writing, signed by the partici-
pant, and made in such form and manner 
as the Secretary concerned may prescribe. 
Such an election shall be effective the first 
day of the first month following the month 
in which the election is received by the Sec-
retary. 
‘‘(iii) VITIATION OF ELECTION BY PAR-
TICIPANT WHO DIES WITHIN TWO YEARS OF 
ELECTION.—If a person providing an annu-
240 
ity under a election under clause (i) dies be-
fore the end of the two-year period begin-
ning on the effective date of the election— 
‘‘(I) the election is vitiated; and 
‘‘(II) the amount by which the 
person’s retired pay was reduced under 
section 1452 of this title that is attrib-
utable to the election shall be paid in 
a lump sum to the person who would 
have been the deceased person’s bene-
ficiary under the vitiated election if 
the deceased person had died after the 
end of such two-year period.’’. 
(b) CHANGE IN PREMIUM FOR COVERAGE OF NEW 
BENEFICIARY.—Section 1452(c) of such title is amended by 
adding at the end the following new paragraph: 
‘‘(5) RULE FOR DESIGNATION OF NEW INSUR-
ABLE INTEREST BENEFICIARY FOLLOWING DEATH OF 
ORIGINAL
BENEFICIARY.—The Secretary of Defense 
shall prescribe in regulations premiums which a par-
ticipant 
making 
an 
election 
under 
section 
1448(b)(1)(G) of this title shall be required to pay for 
participating in the Plan pursuant to that election. 
The total amount of the premiums to be paid by a
241 
participant under the regulations shall be equal to the 
sum of the following: 
‘‘(A) The total additional amount by which 
the retired pay of the participant would have 
been reduced before the effective date of the elec-
tion if the original beneficiary (i) had not died 
and had been covered under the Plan through the 
date of the election, and (ii) had been the same 
number of years younger than the participant (if 
any) as the new beneficiary designated under the 
election. 
‘‘(B) Interest on the amounts by which the 
retired pay of the participant would have been 
so reduced, computed from the dates on which 
the retired pay would have been so reduced at 
such rate or rates and according to such method-
ology as the Secretary of Defense determines rea-
sonable. 
‘‘(C) Any additional amount that the Sec-
retary determines necessary to protect the actu-
arial soundness of the Department of Defense 
Military Retirement Fund against any increased 
risk for the fund that is associated with the elec-
tion.’’. 
(c) TRANSITION.—
242 
(1) TRANSITION PERIOD.—In the case of a par-
ticipant in the Survivor Benefit Plan who made a 
covered insurable-interest election (as defined in para-
graph (2)) and whose designated beneficiary under 
that election dies before the date of the enactment of 
this Act or during the 18-month period beginning on 
such date, the time period applicable for purposes of 
the limitation in the third sentence of subparagraph 
(G)(i) of section 1448(b)(1) of title 10, United States 
Code, as added by subsection (a), shall be the two- 
year period beginning on the date of the enactment of 
this Act (rather than the 180-day period specified in 
that sentence). 
(2) 
COVERED
INSURABLE-INTEREST
ELEC-
TIONS.—For purposes of paragraph (1), a covered in-
surable-interest election is an election under section 
1448(b)(1) of title 10, United States Code, made be-
fore the date of the enactment of this Act, or during 
the 18-month period beginning on such date, by a 
participant in the Survivor Benefit Plan to provide 
an annuity under that plan to a natural person with 
an insurable interest in that person. 
(3) SURVIVOR BENEFIT PLAN.—For purposes of 
this subsection, the term ‘‘Survivor Benefit Plan’’
243 
means the program under subchapter II of chapter 73 
of title 10, United States Code. 
Subtitle E—Commissary and Non-
appropriated Fund Instrumen-
tality Benefits 
SEC. 661. INCREASE IN AUTHORIZED LEVEL OF SUPPLIES 
AND SERVICES PROCUREMENT FROM OVER-
SEAS EXCHANGE STORES. 
Subsection 2424(b) of title 10, United States Code, is 
amended by striking ‘‘$50,000’’ and inserting ‘‘$100,000’’. 
SEC. 662. REQUIREMENTS FOR PRIVATE OPERATION OF 
COMMISSARY STORE FUNCTIONS. 
Section 2485(a)(2) of title 10, United States Code, is 
amended by adding at the end the following new sentence: 
‘‘Until December 31, 2010, the Defense Commissary Agency 
is not required to conduct any cost-comparison study under 
the policies and procedures of Office of Management and 
Budget Circular A–76 relating to the possible contracting 
out of commissary store functions.’’.
244 
SEC. 663. PROVISION OF INFORMATION TECHNOLOGY 
SERVICES FOR ACCOMMODATIONS PROVIDED 
BY NONAPPROPRIATED FUND INSTRUMEN-
TALITIES FOR WOUNDED MEMBERS OF THE 
ARMED FORCES AND THEIR FAMILIES. 
(a) AUTHORITY TO PROVIDE SERVICES.—Section 2494 
of title 10, United States Code, is amended— 
(1) by inserting ‘‘(a) UTILITY SERVICES.—’’ be-
fore ‘‘Appropriations’’; and 
(2) by adding at the end the following new sub-
section: 
‘‘(b) INFORMATION TECHNOLOGY SERVICES.—Appro-
priations for the Department of Defense may be used to pro-
vide information technology services, including equipment 
and access to the internet, for— 
‘‘(1) Fisher Houses and Fisher Suites associated 
with health care facilities of a military department; 
and 
‘‘(2) other accommodations made available by a 
nonappropriated fund instrumentality of the Depart-
ment of Defense to members of the Armed Forces re-
covering from a wound or injury or to dependents of 
such members.’’. 
(b) CLERICAL AMENDMENTS.— 
(1) SECTION HEADING.—The heading of such sec-
tion is amended to read as follows:
245 
‘‘§ 2494. Nonappropriated fund instrumentalities: fur-
nishing certain services for morale, wel-
fare, and recreation purposes’’. 
(2) TABLE OF SECTIONS.—The table of sections 
at the beginning of subchapter III of chapter 147 of 
such title is amended by striking the item relating to 
section 2494 and inserting the following new item: 
‘‘2494. Nonappropriated fund instrumentalities: furnishing certain services for 
morale, welfare, and recreation purposes.’’. 
SEC. 664. PROVISION OF AND PAYMENT FOR OVERSEAS 
TRANSPORTATION 
SERVICES 
FOR 
COM-
MISSARY AND EXCHANGE SUPPLIES. 
Section 2643 of title 10, United States Code, is amend-
ed— 
(1) by inserting ‘‘(a) TRANSPORTATION
OP-
TIONS.—’’ before ‘‘The Secretary’’; 
(2) in the first sentence, by striking ‘‘by sea 
without relying on the Military Sealift Command’’ 
and inserting ‘‘to destinations outside the continental 
United States without relying on the Air Mobility 
Command, the Military Sealift Command’’; 
(3) in the second sentence, by striking ‘‘transpor-
tation contracts’’ and inserting ‘‘contracts for sea- 
borne transportation’’; and 
(4) by adding at the end the following new sub-
section:
246 
‘‘(b) PAYMENT OF TRANSPORTATION COSTS.—Section 
2483(b)(5) of this title, regarding the use of appropriated 
funds to cover the expenses of operating commissary stores, 
shall apply to the transportation of commissary supplies. 
Appropriated funds for the Department of Defense shall also 
be used to cover the expenses of transporting exchange sup-
plies to destinations outside the continental United States.’’. 
SEC. 665. COMPENSATORY TIME OFF FOR CERTAIN NON-
APPROPRIATED FUND EMPLOYEES. 
Section 5543 of title 5, United States Code, is amended 
by adding at the end the following new subsection: 
‘‘(d)(1) The appropriate Secretary may, on request of 
an employee of a nonappropriated fund instrumentality of 
the Department of Defense or the Coast Guard described in 
section 2105(c), grant such employee compensatory time off 
from duty instead of overtime pay for overtime work. 
‘‘(2) For purposes of this subsection, the term ‘appro-
priate Secretary’ means— 
‘‘(A) with respect to an employee of a non-
appropriated fund instrumentality of the Department 
of Defense, the Secretary of Defense; and 
‘‘(B) with respect to an employee of a non-
appropriated fund instrumentality of the Coast 
Guard, the Secretary of the Executive department in 
which it is operating.’’.
247 
Subtitle F—Other Matters 
SEC. 671. INCLUSION OF SENIOR ENLISTED ADVISOR FOR 
THE CHAIRMAN OF THE JOINT CHIEFS OF 
STAFF AMONG SENIOR ENLISTED MEMBERS 
OF THE ARMED FORCES. 
(a) BASIC PAY RATE.— 
(1) EQUAL TREATMENT.—The rate of basic pay 
for an enlisted member in the grade E–9 while serv-
ing as Senior Enlisted Advisor for the Chairman of 
the Joint Chiefs of Staff shall be the same as the rate 
of basic pay for an enlisted member in that grade 
while serving as Sergeant Major of the Army, Master 
Chief Petty Officer of the Navy, Chief Master Ser-
geant of the Air Force, Sergeant Major of the Marine 
Corps, or Master Chief Petty Officer of the Coast 
Guard, regardless of cumulative years of service com-
puted under section 205 of title 37, United States 
Code. 
(2) EFFECTIVE
DATE.—Paragraph (1) shall 
apply beginning on the date on which an enlisted 
member of the Armed Forces is first appointed to 
serve as Senior Enlisted Advisor for the Chairman of 
the Joint Chiefs of Staff. 
(b) PAY DURING TERMINAL LEAVE OR WHILE HOS-
PITALIZED.—Section 210(c) of title 37, United States Code,
248 
is amended by adding at the end the following new para-
graph: 
‘‘(6) The Senior Enlisted Advisor for the Chair-
man of the Joint Chiefs of Staff.’’. 
(c) PERSONAL MONEY ALLOWANCE.—Section 414(c) of 
such title is amended— 
(1) by striking ‘‘or’’ after ‘‘Sergeant Major of the 
Marine Corps,’’; and 
(2) by inserting before the period at the end the 
following: ‘‘, or the Senior Enlisted Advisor for the 
Chairman of the Joint Chiefs of Staff’’. 
(d) RETIRED PAY BASE.—Section 1406(i)(3)(B) of 
title 10, United States Code, is amended by adding at the 
end the following new clause: 
‘‘(vi) Senior Enlisted Advisor for the 
Chairman of the Joint Chiefs of Staff.’’. 
SEC. 672. SPECIAL AND INCENTIVE PAYS CONSIDERED FOR 
SAVED PAY UPON APPOINTMENT OF MEM-
BERS AS OFFICERS. 
(a) INCLUSION
AND EXCLUSION
OF CERTAIN PAY 
TYPES.—Subsection (d) of section 907 of title 37, United 
States Code, is amended to read as follows: 
‘‘(d)(1) In determining the amount of the pay and al-
lowances of a grade formerly held by an officer, the fol-
lowing special and incentive pays may be considered only
249 
so long as the officer continues to perform the duty that 
creates the entitlement to, or eligibility for, that pay and 
would otherwise be eligible to receive that pay in the former 
grade: 
‘‘(A) Incentive pay for hazardous duty under 
section 301 of this title. 
‘‘(B) Submarine duty incentive pay under sec-
tion 301c of this title. 
‘‘(C) Special pay for diving duty under section 
304 of this title. 
‘‘(D) Hardship duty pay under section 305 of 
this title. 
‘‘(E) Career sea pay under section 305a of this 
title. 
‘‘(F) Special pay for service as a member of a 
Weapons of Mass Destruction Civil Support Team 
under section 305b of this title. 
‘‘(G) Assignment incentive pay under section 
307a of this title. 
‘‘(H) Special pay for duty subject to hostile fire 
or imminent danger under section 310 of this title. 
‘‘(I) Special pay or bonus for an extension of 
duty at a designated overseas location under section 
314 of this title.