162
providing an analysis of the cost implications, and the pol-
icy implications, of permitting up to 5 percent of each
graduating class of each of the service academies to be
placed, upon graduation and commissioning, in an active
status in the appropriate reserve component (without a
minimum period of obligated active duty service), with a
corresponding increase in the number of ROTC graduates
each year who are permitted to serve on active duty upon
commissioning.
(b) INFORMATION
ON CURRENT ACADEMY GRAD-
UATES
IN RESERVE COMPONENTS.—The Comptroller
General shall include in the report information (shown in
the aggregate and separately for each of the Armed Forces
and for graduates of each service academy) on—
(1) the number of academy graduates who at
the time of the report are serving in an active status
in a reserve component; and
(2) within the number under paragraph (1), the
number for each reserve component and, of those,
the number within each reserve component who are
on active duty under section 12301(d) of title 10,
United States Code, for the purpose of organizing,
administering, recruiting, instructing, or training the
reserve components.
163
(c) SUBMISSION OF REPORT.—The report shall be
submitted not later than six months after the date of the
enactment of this Act.
(d) SERVICE ACADEMIES.—For purposes of this sec-
tion, the term ‘‘service academies’’ means—
(1) the United States Military Academy;
(2) the United States Naval Academy; and
(3) the United States Air Force Academy.
Subtitle E—Other Matters
SEC. 561. HATE CRIMES IN THE MILITARY.
(a) HUMAN RELATIONS TRAINING.—(1) The Sec-
retary of Defense shall ensure that the Secretary of each
military department conducts ongoing programs for
human relations training for all members of the Armed
Forces under the jurisdiction of the Secretary. Matters to
be covered by such training include race relations, equal
opportunity, opposition to gender discrimination, and sen-
sitivity to ‘‘hate group’’ activity. Such training shall be
provided during basic training (or other initial military
training) and on a regular basis thereafter.
(2) The Secretary of Defense shall also ensure that
unit commanders are aware of their responsibilities in en-
suring that impermissible activity based upon discrimina-
tory motives does not occur in units under their command.
164
(b) INFORMATION TO BE PROVIDED TO PROSPEC-
TIVE RECRUITS.—The Secretary of Defense shall ensure
that each individual preparing to enter an officer accession
program or to execute an original enlistment agreement
is provided information concerning the meaning of the
oath of office or oath of enlistment for service in the
Armed Forces in terms of the equal protection and civil
liberties guarantees of the Constitution, and each such in-
dividual shall be informed that if supporting those guaran-
tees is not possible personally for that individual, then that
individual should decline to enter the Armed Forces.
(c) ANNUAL SURVEY.—(1) Section 451 of title 10,
United States Code, is amended to read as follows:
‘‘§ 451. Race relations, gender discrimination, and
hate group activity: annual survey and
report
‘‘(a) ANNUAL SURVEY.—The Secretary of Defense
shall carry out an annual survey to measure the state of
racial, ethnic, and gender issues and discrimination among
members of the armed forces serving on active duty and
the extent (if any) of activity among such members that
may be seen as so-called ‘hate group’ activity. The survey
shall solicit information on the race relations and gender
relations climate in the armed forces, including—
165
‘‘(1) indicators of positive and negative trends
of relations among all racial and ethnic groups and
between the sexes;
‘‘(2) the effectiveness of Department of Defense
policies designed to improve race, ethnic, and gender
relations; and
‘‘(3) the effectiveness of current processes for
complaints on and investigations into racial, ethnic,
and gender discrimination.
‘‘(b) IMPLEMENTING ENTITY.—The Secretary shall
carry out each annual survey through the entity in the
Department of Defense known as the Armed Forces Sur-
vey on Race/Ethnic Issues.
‘‘(c) REPORTS TO CONGRESS.—Upon completion of
biennial survey under subsection (a), the Secretary shall
submit to Congress a report containing the results of the
survey.’’.
(2) The item relating to such section in the table of
sections at the beginning of chapter 22 of such title is
amended to read as follows:
‘‘451. Race relations, gender discrimination, and hate group activity: annual sur-
vey and report.’’.
166
SEC. 562. AUTHORITY OF A RESERVE JUDGE ADVOCATE TO
ACT AS A NOTARY PUBLIC.
(a) NOTARY PUBLIC AUTHORITY TO INCLUDE RE-
SERVE LAWYERS
OF
THE ARMED FORCES.—Section
1044a(b) of title 10, United States Code, is amended—
(1) in paragraph (1), by striking out ‘‘on active
duty or performing inactive-duty training’’ and in-
serting in lieu thereof ‘‘, including reserve judge ad-
vocates not on active duty’’;
(2) in paragraph (3), by striking out ‘‘adjutants
on active duty or performing inactive-duty training’’
and inserting in lieu thereof ‘‘adjutants, including
reserve members not on active duty’’; and
(3) in paragraph (4), by striking out ‘‘persons
on active duty or performing inactive-duty training’’
and inserting in lieu thereof ‘‘members of the armed
forces, including reserve members not on active
duty,’’.
(b) RATIFICATION OF PRIOR NOTARIAL ACTS.—Any
notarial act performed before the enactment of this Act,
the validity of which has not been challenged or negated
in a case pending before or decided by a court or adminis-
trative agency of competent jurisdiction, on or before the
date of the enactment of this Act, is hereby confirmed,
ratified, and approved with full effect as if such act was
performed after the enactment of this Act.
167
SEC. 563. AUTHORITY TO PROVIDE LEGAL ASSISTANCE TO
PUBLIC HEALTH SERVICE OFFICERS.
(a) LEGAL ASSISTANCE AVAILABLE.—Subsection (a)
of section 1044 of title 10, United States Code, is amend-
ed by striking out paragraph (3) and inserting in lieu
thereof the following:
‘‘(3) Officers of the commissioned corps of the
Public Health Service who are on active duty or en-
titled to retired or equivalent pay.
‘‘(4) Dependents of members and former mem-
bers described in paragraphs (1), (2), and (3).’’.
(b) LIMITATION ON ASSISTANCE.—Subsection (c) of
such section is amended—
(1) by striking out ‘‘armed forces’’ and insert-
ing in lieu thereof ‘‘uniformed services described in
subsection (a)’’; and
(2) by inserting ‘‘such’’ after ‘‘dependent of’’.
(c) CLARIFYING AMENDMENTS.—Subsection (a) of
such section is further amended by striking out ‘‘under
his jurisdiction’’ in paragraphs (1) and (2).
(d) STYLISTIC AMENDMENTS.—Subsection (a) of
such section is further amended—
(1) in the matter preceding paragraph (1), by
striking out ‘‘to—’’ and inserting in lieu thereof ‘‘to
the following persons:’’;
168
(2) by capitalizing the first letter of the first
word of paragraphs (1) and (2);
(3) by striking out the semicolon at the end of
paragraph (1) and inserting in lieu thereof a period;
and
(4) by striking out ‘‘; and’’ at the end of para-
graph (2) and inserting in lieu thereof a period.
SEC. 564. EXCEPTED APPOINTMENT OF CERTAIN JUDICIAL
NON-ATTORNEY 
STAFF 
IN 
THE 
UNITED
STATES COURT OF APPEALS FOR THE ARMED
FORCES.
Section 943(c) of title 10, United States Code, is
amended—
(1) in the heading for the subsection, by insert-
ing ‘‘AND CERTAIN OTHER’’ after ‘‘ATTORNEY’’; and
(2) in paragraph (1), by inserting ‘‘and non-at-
torney positions on the personal staff of a judge’’
after ‘‘Court of Appeals for the Armed Forces’’.
SEC. 565. REPLACEMENT OF CERTAIN AMERICAN THEATER
CAMPAIGN RIBBONS.
(a) REPLACEMENT RIBBONS.—The Secretary of the
Army, pursuant to section 3751 of title 10, United States
Code, may replace any World War II decoration known
as the American Theater Campaign Ribbon that was
169
awarded to a person listed in the order described in sub-
section (b).
(b) RIBBONS PROPERLY AWARDED.—Any person
listed in the document titled ‘‘General Order Number 1’’,
issued by the Third Auxiliary Surgical Group, APO 647,
United States Army, dated February 1, 1943, shall be
considered to have been properly awarded the American
Theater Campaign Ribbon for service during World War
II.
SEC. 566. RESTORATION OF REGULATIONS PROHIBITING
SERVICE OF HOMOSEXUALS IN THE ARMED
FORCES.
(a) TERMINATION
OF EXISTING ADMINISTRATIVE
POLICY.—Effective on the date of the enactment of this
Act, the following measures of the executive branch are
rescinded and shall cease to be effective:
(1) The memorandum of the Secretary of De-
fense to the Secretaries of the military departments
and the Chairman of the Joint Chiefs of Staff dated
July 19, 1993, that stated its subject to be: ‘‘Policy
on Homsexual Conduct in the Armed Forces’’.
(2) The four-page document entitled ‘‘Policy
Guidelines on Homsexual Conduct in the Armed
Forces’’ that was issued by the Secretary of Defense
170
as an attachment to the memorandum referred to
in paragraph (1).
(3) The revisions to Department of Defense di-
rectives 1332.30, 1332.14, and 1304.26 that were
directed to be made by the General Counsel of the
Department of Defense by memorandum dated Feb-
ruary 28, 1994, to the Director of Administration
and Management of the Department of Defense.
(b) REINSTATEMENT OF FORMER REGULATIONS.—
Immediately upon the enactment of this Act and effective
as of the date of the enactment of this Act—
(1) the Secretary of Defense shall reinstate the
regulations (including Department of Defense direc-
tives) of the Department of Defense regarding serv-
ice of homosexuals in the Armed Forces that were
in effect on January 19, 1993; and
(2) the Secretary of each military department
shall reinstate the regulations of that military de-
partment regarding service of homosexuals in the
Armed Forces that were in effect on January 19,
1993.
(c) REVISION PROHIBITED.—The regulations (in-
cluding Department of Defense directives) reinstated pur-
suant to subsection (b), insofar as they relate to the serv-
ice of homosexuals in the Armed Forces, may not be re-
171
vised except as specifically provided by a law enacted after
the enactment of this Act.
(d) RULE OF CONSTRUCTION.—In the case of a con-
flict between the regulations required to be prescribed by
subsection (b) and the provisions of section 654 of title
10, United States Code, or any other provision of law, the
requirements of such provision of law shall be given effect.
(e) RESTORATION OF QUESTIONING OF NEW EN-
TRANTS INTO MILITARY SERVICE.—(1) Not later than 90
days after the date of the enactment of this Act, the Sec-
retary of Defense shall issue instructions for the resump-
tion of questioning of potential new entrants into the
Armed Forces as to homosexuality in accordance with the
policy and practices of the Department of Defense as of
January 19, 1993 (as reinstated pursuant to subsection
(b)).
(2) Section 571(d) of the National Defense Author-
ization Act for Fiscal Year 1994 (Public Law 103–160;
107 Stat. 1673; 10 U.S.C. 654 note) is repealed.
SEC. 567. REENACTMENT AND MODIFICATION OF MANDA-
TORY SEPARATION FROM SERVICE FOR MEM-
BERS DIAGNOSED WITH HIV–1 VIRUS.
(a) REENACTMENT AND MODIFICATION.—(1) Chap-
ter 59 of title 10, United States Code, is amended by in-
serting after section 1176 the following:
172
‘‘§ 1177. Members infected with HIV–1 virus: manda-
tory discharge or retirement
‘‘(a) MANDATORY SEPARATION.—(1) A member of
the Army, Navy, Air Force, or Marine Corps who is HIV-
positive and who on the date on which the medical deter-
mination is made that the member is HIV-positive has less
than 15 years of creditable service shall be separated.
Such separation shall be made on a date determined by
the Secretary concerned, which shall be as soon as prac-
ticable after the date on which the medical determination
is made that the member is HIV-positive and not later
than the last day of the second month beginning after such
date.
‘‘(2) In determining the years of creditable service of
a member for purposes of paragraph (1)—
‘‘(A) in the case of a member on active duty or
full-time National Guard duty, the member’s years
of creditable service are the number of years of serv-
ice of the member as computed for the purpose of
determining the member’s eligibility for retirement
under any provision of law (other than chapter 61
or 1223 of this title); and
‘‘(B) in the case of a member in an active sta-
tus, the member’s years of creditable service are the
number of years of service creditable to the member
under section 12732 of this title.
173
‘‘(b) FORM OF SEPARATION.—The characterization
of the service of the member shall be determined without
regard to the determination that the member is HIV-posi-
tive.
‘‘(c) SEPARATION TO BE CONSIDERED INVOLUN-
TARY.—A separation under this section shall be consid-
ered to be an involuntary separation for purposes of any
other provision of law.
‘‘(d) COUNSELING
ABOUT
AVAILABLE
MEDICAL
CARE.—A member to be separated under this section shall
be provided information, in writing, before such separation
of the available medical care (through the Department of
Veterans Affairs and otherwise) to treat the member’s
condition. Such information shall include identification of
specific medical locations near the member’s home of
record or point of discharge at which the member may
seek necessary medical care.
‘‘(e) HIV-POSITIVE MEMBERS.—A member shall be
considered to be HIV-positive for purposes of this section
if there is serologic evidence that the member is infected
with the virus known as Human Immunodeficiency Virus–
1 (HIV–1), the virus most commonly associated with the
acquired immune deficiency syndrome (AIDS) in the Unit-
ed States. Such serologic evidence shall be considered to
exist if there is a reactive result given by an enzyme-linked
174
immunosorbent assay (ELISA) serologic test that is con-
firmed by a reactive and diagnostic immunoelectrophoresis
test (Western blot) on two separate samples. Any such se-
rologic test must be one that is approved by the Food and
Drug Administration.’’.
(2) The table of sections at the beginning of chapter
59 of such title is amended by inserting after the item
relating to section 1176 the following new item:
‘‘1177. Members infected with HIV–1 virus: mandatory discharge or retire-
ment.’’.
(b) EFFECTIVE DATE.—Section 1177 of title 10,
United States Code, as added by subsection (a), applies
with respect to members of the Army, Navy, Air Force,
and Marine Corps determined to be HIV-positive before,
on, or after the date of the enactment of this Act. In the
case of a member of the Army, Navy, Air Force, or Marine
Corps determined to be HIV-positive before such date, the
deadline for separation of the member under subsection
(a) of such section shall be determined from the date of
the enactment of this Act (rather than from the date of
such determination), except that no such member shall be
separated by reason of such section (without the consent
of the member) before October 1, 1996.
175
TITLE VI—COMPENSATION AND
OTHER PERSONNEL BENEFITS
Subtitle A—Pay and Allowances
SEC. 601. MILITARY PAY RAISE FOR FISCAL YEAR 1997.
(a) WAIVER OF SECTION 1009 ADJUSTMENT.—Any
adjustment required by section 1009 of title 37, United
States Code, in elements of compensation of members of
the uniformed services to become effective during fiscal
year 1997 shall not be made.
(b) INCREASE IN BASIC PAY AND BAS.—Effective on
January 1, 1997, the rates of basic pay and basic allow-
ance for subsistence of members of the uniformed services
are increased by 3 percent.
(c) INCREASE IN BAQ.—Effective on January 1,
1997, the rates of basic allowance for quarters of members
of the uniformed services are increased by 4.6 percent.
SEC. 602. AVAILABILITY OF BASIC ALLOWANCE FOR QUAR-
TERS FOR CERTAIN MEMBERS WITHOUT DE-
PENDENTS WHO SERVE ON SEA DUTY.
(a) 
AVAILABILITY
OF
ALLOWANCE.—Section
403(c)(2) of title 37, United States Code, is amended—
(1) by striking out ‘‘A member’’ in the first
sentence and inserting in lieu thereof ‘‘(A) Except as
provided in subparagraph (B) or (C), a member’’;
(2) by striking out the second sentence; and
176
(3) by adding at the end the following new sub-
paragraphs:
‘‘(B) Under regulations prescribed by the Secretary
concerned, the Secretary may authorize the payment of
a basic allowance for quarters to a member of a uniformed
service under the jurisdiction of the Secretary when the
member is without dependents, is serving in pay grade E–
5, and is assigned to sea duty. In prescribing regulations
under this subparagraph, the Secretary concerned shall
consider the availability of quarters for members serving
in pay grade E–5.
‘‘(C) Notwithstanding section 421 of this title, two
members of the uniformed services in a pay grade below
pay grade E–5 who are married to each other, have no
other dependents, and are simultaneously assigned to sea
duty are entitled to a single basic allowance for quarters
during the period of such simultaneous sea duty. The
amount of the allowance shall be based on the without de-
pendents rate for the pay grade of the senior member.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall take effect on July 1, 1997.
177
SEC. 
603. 
ESTABLISHMENT 
OF 
MINIMUM 
MONTHLY
AMOUNT OF VARIABLE HOUSING ALLOW-
ANCE FOR HIGH HOUSING COST AREAS.
(a) MINIMUM MONTHLY AMOUNT OF ALLOWANCE.—
Subsection (c) of section 403a of title 37, United States
Code, is amended by striking out paragraph (1) and in-
serting in lieu thereof the following new paragraph:
‘‘(1) The monthly amount of a variable housing allow-
ance under this section for a member of a uniformed serv-
ice with respect to an area is equal to the greater of the
following amounts:
‘‘(A) An amount equal to the difference be-
tween—
‘‘(i) the median monthly cost of housing in
that area for members of the uniformed services
serving in the same pay grade and with the
same dependency status as that member; and
‘‘(ii) 80 percent of the median monthly
cost of housing in the United States for mem-
bers of the uniformed services serving in the
same pay grade and with the same dependency
status as that member.
‘‘(B) An amount equal to the difference be-
tween—
‘‘(i) the adequate housing allowance floor
determined by the Secretary of Defense for all
178
members of the uniformed services in that area
entitled to a variable housing allowance under
this section; and
‘‘(ii) the monthly basic allowance for quar-
ters for members of the uniformed services
serving in the same pay grade and with the
same dependency status as that member.’’.
(b) ADEQUATE HOUSING ALLOWANCE FLOOR.—
Such subsection is further amended by adding at the end
the following new paragraph:
‘‘(7)(A) For purposes of paragraph (1)(B)(i), the
Secretary of Defense shall establish an adequate housing
allowance floor for members of the uniformed services in
an area as a selected percentage, not to exceed 85 percent,
of the cost of adequate housing in that area based on an
index of housing costs selected by the Secretary of Defense
from among the following:
‘‘(i) The fair market rentals established annu-
ally by the Secretary of Housing and Urban Devel-
opment under section 8(c)(1) of the United States
Housing Act of 1937 (42 U.S.C. 1437f(c)(1)).
‘‘(ii) An index developed in the private sector
that the Secretary of Defense determines is com-
parable to the fair market rentals referred to in
180
of the requirements imposed by the amendments to such
later date as the Secretary considers appropriate upon
publication of notice to that effect in the Federal Register.
Subtitle B—Bonuses and Special
and Incentive Pays
SEC. 611. EXTENSION OF CERTAIN BONUSES FOR RESERVE
FORCES.
(a) SELECTED RESERVE REENLISTMENT BONUS.—
Section 308b(f) of title 37, United States Code, is amend-
ed by striking out ‘‘September 30, 1997’’ and inserting
in lieu thereof ‘‘September 30, 1998’’.
(b) SELECTED RESERVE ENLISTMENT BONUS.—Sec-
tion 308c(e) of title 37, United States Code, is amended
by striking out ‘‘September 30, 1997’’ and inserting in
lieu thereof ‘‘September 30, 1998’’.
(c) SELECTED RESERVE AFFILIATION BONUS.—Sec-
tion 308e(e) of title 37, United States Code, is amended
by striking out ‘‘September 30, 1997’’ and inserting in
lieu thereof ‘‘September 30, 1998’’.
(d) READY RESERVE ENLISTMENT AND REENLIST-
MENT BONUS.—Section 308h(g) of title 37, United States
Code, is amended by striking out ‘‘September 30, 1997’’
and inserting in lieu thereof ‘‘September 30, 1998’’.
(e) PRIOR SERVICE ENLISTMENT BONUS.—Section
308i(i) of title 37, United States Code, is amended by
181
striking out ‘‘September 30, 1997’’ and inserting in lieu
thereof ‘‘September 30, 1998’’.
SEC. 612. EXTENSION OF CERTAIN BONUSES AND SPECIAL
PAY FOR NURSE OFFICER CANDIDATES, REG-
ISTERED 
NURSES, 
AND 
NURSE 
ANES-
THETISTS.
(a) NURSE OFFICER CANDIDATE ACCESSION PRO-
GRAM.—Section 2130a(a)(1) of title 10, United States
Code, is amended by striking out ‘‘September 30, 1997’’
and inserting in lieu thereof ‘‘September 30, 1998’’.
(b) ACCESSION BONUS FOR REGISTERED NURSES.—
Section 302d(a)(1) of title 37, United States Code, is
amended by striking out ‘‘September 30, 1997’’ and in-
serting in lieu thereof ‘‘September 30, 1998’’.
(c) INCENTIVE SPECIAL PAY
FOR NURSE ANES-
THETISTS.—Section 302e(a)(1) of title 37, United States
Code, is amended by striking out ‘‘September 30, 1997’’
and inserting in lieu thereof ‘‘September 30, 1998’’.
SEC. 613. EXTENSION OF AUTHORITY RELATING TO PAY-
MENT OF OTHER BONUSES AND SPECIAL
PAYS.
(a) AVIATION OFFICER RETENTION BONUS.—Sec-
tion 301b(a) of title 37, United States Code, is amended
by striking out ‘‘September 30, 1997’’ and inserting in
lieu thereof ‘‘September 30, 1998,’’.
182
(b) SPECIAL PAY
FOR HEALTH CARE PROFES-
SIONALS WHO SERVE IN THE SELECTED RESERVE IN
CRITICALLY
SHORT
WARTIME
SPECIALTIES.—Section
302g(f) of title 37, United States Code, is amended by
striking out ‘‘September 30, 1997’’ and inserting in lieu
thereof ‘‘September 30, 1998’’.
(c) REENLISTMENT
BONUS
FOR
ACTIVE
MEM-
BERS.—Section 308(g) of title 37, United States Code, is
amended by striking out ‘‘September 30, 1997’’ and in-
serting in lieu thereof ‘‘September 30, 1998’’.
(d) ENLISTMENT BONUSES FOR CRITICAL SKILLS.—
Sections 308a(c) and 308f(c) of title 37, United States
Code, are each amended by striking out ‘‘September 30,
1997’’ and inserting in lieu thereof ‘‘September 30,
1998’’.
(e) SPECIAL PAY FOR ENLISTED MEMBERS OF THE
SELECTED RESERVE ASSIGNED TO CERTAIN HIGH PRI-
ORITY UNITS.—Section 308d(c) of title 37, United States
Code, is amended by striking out ‘‘September 30, 1997’’
and inserting in lieu thereof ‘‘September 30, 1998’’.
(f) SPECIAL PAY FOR NUCLEAR QUALIFIED OFFI-
CERS EXTENDING PERIOD OF ACTIVE SERVICE.—Section
312(e) of title 37, United States Code, is amended by
striking out ‘‘September 30, 1997’’ and inserting in lieu
thereof ‘‘September 30, 1998’’.
183
(g) NUCLEAR CAREER ACCESSION BONUS.—Section
312b(c) of title 37, United States Code, is amended by
striking out ‘‘September 30, 1997’’ and inserting in lieu
thereof ‘‘September 30, 1998’’.
(h) 
NUCLEAR
CAREER
ANNUAL
INCENTIVE
BONUS.—Section 312c(d) of title 37, United States Code,
is amended by striking out ‘‘October 1, 1997’’ and insert-
ing in lieu thereof ‘‘October 1, 1998’’.
(i) REPAYMENT OF EDUCATION LOANS FOR CERTAIN
HEALTH PROFESSIONALS WHO SERVE IN THE SELECTED
RESERVE.—Section 16302(d) of title 10, United States
Code, is amended by striking out ‘‘October 1, 1997’’ and
inserting in lieu thereof ‘‘October 1, 1998’’.
SEC. 614. SPECIAL INCENTIVES TO RECRUIT AND RETAIN
DENTAL OFFICERS.
(a) VARIABLE, ADDITIONAL, AND BOARD CERTIFIED
SPECIAL PAYS FOR ACTIVE DUTY DENTAL OFFICERS.—
Section 302b(a) of title 37, United States Code is amend-
ed—
(1) in paragraph (2)—
(A) in subparagraph (A), by striking out
‘‘$1,200’’ 
and 
inserting 
in 
lieu 
thereof
‘‘$3,000’’;
184
(B) in subparagraph (B), by striking out
‘‘$2,000’’ 
and 
inserting 
in 
lieu 
thereof
‘‘$7,000’’; and
(C) in subparagraph (C), by striking out
‘‘$4,000’’ 
and 
inserting 
in 
lieu 
thereof
‘‘$7,000’’;
(2) in paragraph (4), by striking out subpara-
graphs (A), (B), and (C) and inserting in lieu there-
of the following:
‘‘(A) $4,000 per year, if the officer has less
than three years of creditable service.
‘‘(B) $6,000 per year, if the officer has at least
three but less than 14 years of creditable service.
‘‘(C) $8,000 per year, if the officer has at least
14 but less than 18 years of creditable service.
‘‘(D) $10,000 per year, if the officer has at
least 18 or more years of creditable service.’’; and
(3) in paragraph (5), by striking out subpara-
graphs (A), (B), and (C) and inserting in lieu there-
of the following:
‘‘(A) $2,500 per year, if the officer has less
than 10 years of creditable service.
‘‘(B) $3,500 per year, if the officer has at least
10 but less than 12 years of creditable service.
186
5 of title 37, United States Code, is amended by inserting
after section 302g the following new section:
‘‘§ 302h. Special pay: accession bonus for dental offi-
cers
‘‘(a) ACCESSION BONUS AUTHORIZED.—(1) A person
who is a graduate of an accredited dental school and who,
during the period beginning on the date of the enactment
of this section, and ending on September 30, 2002, exe-
cutes a written agreement described in subsection (c) to
accept a commission as an officer of the armed forces and
remain on active duty for a period of not less than four
years may, upon the acceptance of the agreement by the
Secretary concerned, be paid an accession bonus in an
amount determined by the Secretary concerned.
‘‘(2) The amount of an accession bonus under para-
graph (1) may not exceed $30,000.
‘‘(b) LIMITATION ON ELIGIBILITY FOR BONUS.—A
person may not be paid a bonus under subsection (a) if—
‘‘(1) the person, in exchange for an agreement
to accept an appointment as an officer, received fi-
nancial assistance from the Department of Defense
to pursue a course of study in dentistry; or
‘‘(2) the Secretary concerned determines that
the person is not qualified to become and remain
certified and licensed as a dentist.
187
‘‘(c) AGREEMENT.—The agreement referred to in
subsection (a) shall provide that, consistent with the needs
of the armed service concerned, the person executing the
agreement will be assigned to duty, for the period of obli-
gated service covered by the agreement, as an officer of
the Dental Corps of the Army or the Navy or an officer
of the Air Force designated as a dental officer.
‘‘(d) REPAYMENT.—(1) An officer who receives a
payment under subsection (a) and who fails to become and
remain certified or licensed as a dentist during the period
for which the payment is made shall refund to the United
States an amount equal to the full amount of such pay-
ment.
‘‘(2) An officer who voluntarily terminates service on
active duty before the end of the period agreed to be
served under subsection (a) shall refund to the United
States an amount that bears the same ratio to the amount
paid to the officer as the unserved part of such period
bears to the total period agreed to be served.
‘‘(3) An obligation to reimburse the United States
imposed under paragraph (1) or (2) is for all purposes
a debt owed to the United States.
‘‘(4) A discharge in bankruptcy under title 11 that
is entered less than five years after the termination of an
agreement under this section does not discharge the per-
188
son signing such agreement from a debt arising under
such agreement or this subsection. This paragraph applies
to any case commenced under title 11 after the date of
the enactment of this section.’’.
(2) The table of sections at the beginning of such
chapter is amended by inserting after the item relating
to section 302g the following new item:
‘‘302h. Special pay: accession bonus for dental officers.’’.
(3) Section 303a of title 37, United States Code, is
amended by striking out ‘‘302g’’ each place it appears and
inserting in lieu thereof ‘‘302h’’.
(d) REPORT
ON ADDITIONAL ACTIVITIES
TO IN-
CREASE RECRUITMENT OF DENTISTS.—Not later than
April 1, 1997, the Secretary of Defense shall submit to
Congress a report describing the feasibility of increasing
the number of persons enrolled in the Armed Forces
Health Professions Scholarship and Financial Assistance
program who are pursuing a course of study in dentistry
in anticipation of service as an officer of the Dental Corps
of the Army or the Navy or an officer of the Air Force
designated as a dental officer.
(e) STYLISTIC AMENDMENTS.—Section 302b of title
37, United States Code, is amended—
(1) in subsection (a), by inserting ‘‘VARIABLE,
ADDITIONAL, AND BOARD CERTIFICATION SPECIAL
PAY.—’’ after ‘‘(a)’’;
189
(2) in subsection (b), by inserting ‘‘ACTIVE-
DUTY AGREEMENT.—’’ after ‘‘(b)’’;
(3) in subsection (c), by inserting ‘‘REGULA-
TIONS.—’’ after ‘‘(c)’’;
(4) in subsection (d), by inserting ‘‘FREQUENCY
OF PAYMENTS.—’’ after ‘‘(d)’’;
(5) in subsection (e), by inserting ‘‘REFUND
FOR PERIOD OF UNSERVED OBLIGATED SERVICE.—
’’ after ‘‘(e)’’;
(6) in subsection (f), by inserting ‘‘EFFECT OF
DISCHARGE IN BANKRUPTCY.—’’ after ‘‘(f)’’; and
(7) in subsection (g), by inserting ‘‘DETER-
MINATION
OF
CREDITABLE
SERVICE.—’’ after
‘‘(g)’’.
Subtitle C—Travel and
Transportation Allowances
SEC. 621. TEMPORARY LODGING EXPENSES OF MEMBER IN
CONNECTION 
WITH 
FIRST 
PERMANENT
CHANGE OF STATION.
(a) PAYMENT OR REIMBURSEMENT AUTHORIZED.—
Section 404a(a) of title 37, United States Code, is amend-
ed—
(1) by striking out ‘‘or’’ at the end of para-
graph (1);
190
(2) in paragraph (2), by inserting ‘‘or’’ after
‘‘Alaska;’’; and
(3) by inserting after paragraph (2) the follow-
ing new paragraph:
‘‘(3) from home of record or initial technical
school to first duty station;’’.
(b) EFFECTIVE DATE.—The amendments made by
subsection (a) shall take effect on January 1, 1997.
SEC. 622. ALLOWANCE IN CONNECTION WITH SHIPPING
MOTOR VEHICLE AT GOVERNMENT EXPENSE.
(a) 
ALLOWANCE
AUTHORIZED.—Section
406(b)(1)(B) of title 37, United States Code, is amended
by adding at the end the following: ‘‘If clause (i)(I) applies
to the transportation by the member of a motor vehicle
from the old duty station, the monetary allowance under
this subparagraph shall also cover return travel to the old
duty station by the member or other person transporting
the vehicle. In the case of transportation described in
clause (ii), the monetary allowance shall also cover travel
from the new duty station to the port of debarkation to
pick up the vehicle.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall take effect on January 1, 1997.
191
SEC. 623. DISLOCATION ALLOWANCE AT A RATE EQUAL TO
TWO AND ONE-HALF MONTHS BASIC ALLOW-
ANCE FOR QUARTERS.
(a) Section 407(a) of title 37, United States Code,
is amended in the matter preceding the paragraphs by
striking out ‘‘two months’’ and inserting in lieu thereof
‘‘two and one-half months’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall take effect on January 1, 1997.
SEC. 624. ALLOWANCE FOR TRAVEL PERFORMED IN CON-
NECTION WITH LEAVE BETWEEN CONSECU-
TIVE OVERSEAS TOURS.
(a) ADDITIONAL DEFERRAL.—Section 411b(a)(2) of
title 37, United States Code, is amended by adding at the
end the following: ‘‘If the member is unable to undertake
the travel before the end of such one-year period as a re-
sult of the participation of the member in a critical oper-
ational mission, as determined by the Secretary concerned,
the member may defer the travel, under the regulations
referred to in paragraph (1), for a period not to exceed
one year after the date on which the member’s participa-
tion in the critical operational mission ends.’’.
(b) APPLICATION OF AMENDMENT.—The amendment
made by subsection (a) shall apply to members of the uni-
formed services participating, on or after November 1,
192
1995, in critical operational missions designated by the
Secretary of Defense.
Subtitle D—Retired Pay, Survivior
Benefits, and Related Matters
SEC. 631. INCREASE IN ANNUAL LIMIT ON DAYS OF INAC-
TIVE DUTY TRAINING CREDITABLE TOWARDS
RESERVE RETIREMENT.
(a) INCREASE
IN
LIMIT.—Section 12733(3) is
amended by inserting before the period at the end the fol-
lowing: ‘‘before the year in which the date of the enact-
ment of the National Defense Authorization Act for Fiscal
Year 1997 occurs and not more than 75 days in any sub-
sequent year’’.
(b) TRACKING SYSTEM FOR AWARD OF RETIREMENT
POINTS.—To better enable the Secretary of Defense and
Congress to assess the cost and the effect on readiness
of the amendment made by subsection (a) and of other
potential changes to the Reserve retirement system under
chapter 1223 of title 10, United States Code, the Sec-
retary of Defense shall require the Secretary of each mili-
tary department to implement a system to monitor the
award of retirement points for purposes of that chapter
by categories in accordance with the recommendation set
forth in the August 1988 report of the Sixth Quadrennial
Review of Military Compensation.
193
(c) RECOMMENDATIONS TO CONGRESS.—The Sec-
retary shall submit to Congress, not later than one year
after the date of the enactment of this Act, the rec-
ommendations of the Secretary with regard to the adop-
tion of the following Reserve retirement initiatives rec-
ommended in the August 1988 report of the Sixth Quad-
rennial Review of Military Compensation:
(1) Elimination of membership points under
subparagraph (C) of section 12732(a)(2) of title 10,
United States Code, in conjunction with a decrease
from 50 to 35 in the number of points required for
a satisfactory year under that section.
(2) Limitation to 60 in any year on the number
of points that may be credited under subparagraph
(B) of section 12732(a)(2) of such title at two
points per day.
(3) Limitation to 360 in any year on the total
number of retirement points countable for purposes
of section 12733 of such title.
SEC. 632. AUTHORITY FOR RETIREMENT IN GRADE IN
WHICH A MEMBER HAS BEEN SELECTED FOR
PROMOTION WHEN A PHYSICAL DISABILITY
INTERVENES.
Section 1372 of title 10, United States Code, is
amended by striking out ‘‘his physical examination for
194
promotion’’ in paragraphs (3) and (4) and inserting in lieu
thereof ‘‘a physical examination’’.
SEC. 633. ELIGIBILITY FOR RESERVE DISABILITY RETIRE-
MENT FOR RESERVES INJURED WHILE AWAY
FROM HOME OVERNIGHT FOR INACTIVE-
DUTY TRAINING.
Section 1204(2) of title 10, United States Code, is
amended by inserting before the semicolon at the end the
following: ‘‘or is incurred in line of duty while remaining
overnight, between successive periods of inactive-duty
training, at or in the vicinity of the site of the inactive-
duty training, if the site is outside reasonable commuting
distance from the member’s residence’’.
SEC. 634. RETIREMENT OF RESERVE ENLISTED MEMBERS
WHO QUALIFY FOR ACTIVE DUTY RETIRE-
MENT AFTER ADMINISTRATIVE REDUCTION
IN ENLISTED GRADE.
(a) ARMY.—(1) Chapter 369 of title 10, United
States Code, is amended by inserting after section 3962
the following new section:
‘‘§ 3963. Highest grade held satisfactorily: Reserve en-
listed members reduced in grade not as a
result of the member’s misconduct
‘‘(a) A Reserve enlisted member of the Army de-
scribed in subsection (b) who is retired under section 3914
195
of this title shall be retired in the highest enlisted grade
in which the member served on active duty satisfactorily
(or, in the case of a member of the National Guard, in
which the member served on full-time duty satisfactorily),
as determined by the Secretary of the Army.
‘‘(b) This section applies to a Reserve enlisted mem-
ber who—
‘‘(1) at the time of retirement is serving on ac-
tive duty (or, in the case of a member of the Na-
tional Guard, on full-time National Guard duty) in
a grade lower than the highest enlisted grade held
by the member while on active duty (or full-time Na-
tional Guard duty); and
‘‘(2) was previously administratively reduced in
grade not as a result of the member’s own mis-
conduct, as determined by the Secretary of the
Army.
‘‘(c) This section applies with respect to Reserve en-
listed members who are retired under section 3914 of this
title after September 30, 1996.’’.
(2) The table of sections at the beginning of such
chapter is amended by inserting after the item relating
to section 3962 the following new item:
‘‘3963. Highest grade held satisfactorily: Reserve enlisted members reduced in
grade not as a result of the member’s misconduct.’’.
196
(b) NAVY AND MARINE CORPS.—(1) Chapter 571 of
title 10, United States Code, is amended by adding at the
end the following new section:
‘‘§ 6336. Highest grade held satisfactorily: Reserve en-
listed members reduced in grade not as a
result of the member’s misconduct
‘‘(a) A member of the Naval Reserve or Marine Corps
Reserve described in subsection (b) who is transferred to
the Fleet Reserve or the Fleet Marine Corps Reserve
under section 6330 of this title shall be transferred in the
highest enlisted grade in which the member served on ac-
tive duty satisfactorily, as determined by the Secretary of
the Navy.
‘‘(b) This section applies to a Reserve enlisted mem-
ber who—
‘‘(1) at the time of transfer to the Fleet Re-
serve or Fleet Marine Corps Reserve is serving on
active duty in a grade lower than the highest en-
listed grade held by the member while on active
duty; and
‘‘(2) was previously administratively reduced in
grade not as a result of the member’s own mis-
conduct, as determined by the Secretary of the
Navy.
197
‘‘(c) This section applies with respect to enlisted
members of the Naval Reserve and Marine Corps Reserve
who are transferred to the Fleet Reserve or the Fleet Ma-
rine Corps Reserve after September 30, 1996.’’.
(2) The table of sections at the beginning of such
chapter is amended by adding at the end the following
new item:
‘‘6336. Highest grade held satisfactorily: Reserve enlisted members reduced in
grade not as a result of the member’s misconduct.’’.
(c) AIR FORCE.—(1) Chapter 869 of title 10, United
States Code, is amended by inserting after section 8962
the following new section:
‘‘§ 8963. Highest grade held satisfactorily: Reserve en-
listed members reduced in grade not as a
result of the member’s misconduct
‘‘(a) A Reserve enlisted member of the Air Force de-
scribed in subsection (b) who is retired under section 8914
of this title shall be retired in the highest enlisted grade
in which the member served on active duty satisfactorily
(or, in the case of a member of the National Guard, in
which the member served on full-time duty satisfactorily),
as determined by the Secretary of the Air Force.
‘‘(b) This section applies to a Reserve enlisted mem-
ber who—
‘‘(1) at the time of retirement is serving on ac-
tive duty (or, in the case of a member of the Na-
198
tional Guard, on full-time National Guard duty) in
a grade lower than the highest enlisted grade held
by the member while on active duty (or full-time Na-
tional Guard duty); and
‘‘(2) was previously administratively reduced in
grade not as a result of the member’s own mis-
conduct, as determined by the Secretary of the Air
Force.
‘‘(c) This section applies with respect to Reserve en-
listed members who are retired under section 8914 of this
title after September 30, 1996.’’.
(2) The table of sections at the beginning of such
chapter is amended by inserting after the item relating
to section 8962 the following new item:
‘‘8963. Highest grade held satisfactorily: Reserve enlisted members reduced in
grade not as a result of the member’s misconduct.’’.
(d) COMPUTATION OF RETIRED AND RETAINER PAY
BASED UPON RETIRED GRADE.—(1) Section 3991 of
such title is amended by adding at the end the following
new subsection:
‘‘(c) SPECIAL RULE FOR RETIRED RESERVE EN-
LISTED MEMBERS COVERED BY SECTION 3963.—In the
case of a Reserve enlisted member retired under section
3914 of this title whose retired grade is determined under
section 3963 of this title and who first became a member
of a uniformed service before October 1, 1980, the retired
199
pay base of the member (notwithstanding section
1406(a)(1) of this title) is the amount of the monthly basic
pay of the member’s retired grade (determined based upon
the rates of basic pay applicable on the date of the mem-
ber’s retirement), and that amount shall be used for the
purposes of subsection (a)(1)(A) rather than the amount
computed under section 1406(c) of this title.’’.
(2) Section 6333 of such title is amended by adding
at the end the following new subsection:
‘‘(c) In the case of a Reserve enlisted member whose
grade upon transfer to the Fleet Reserve or Fleet Marine
Corps Reserve is determined under section 6336 of this
title and who first became a member of a uniformed serv-
ice before October 1, 1980, the retainer pay base of the
member (notwithstanding section 1406(a)(1) of this title)
is the amount of the monthly basic pay of the grade in
which the member is so transferred (determined based
upon the rates of basic pay applicable on the date of the
member’s transfer), and that amount shall be used for the
purposes of the table in subsection (a) rather than the
amount computed under section 1406(d) of this title.’’.
(3) Section 8991 of such title is amended by adding
at the end the following new subsection:
‘‘(c) SPECIAL RULE FOR RETIRED RESERVE EN-
LISTED MEMBERS COVERED BY SECTION 8963.—In the
200
case of a Reserve enlisted member retired under section
8914 of this title whose retired grade is determined under
section 8963 of this title and who first became a member
of a uniformed service before October 1, 1980, the retired
pay base of the member (notwithstanding section
1406(a)(1) of this title) is the amount of the monthly basic
pay of the member’s retired grade (determined based upon
the rates of basic pay applicable on the date of the mem-
ber’s retirement), and that amount shall be used for the
purposes of subsection (a)(1)(A) rather than the amount
computed under section 1406(e) of this title.’’.
SEC. 635. CLARIFICATION OF INITIAL COMPUTATION OF
RETIREE COLAS AFTER RETIREMENT.
(a) IN GENERAL.—Section 1401a of title 10, United
States Code, is amended by striking out subsections (c)
and (d) and inserting in lieu thereof the following new sub-
sections:
‘‘(c) FIRST COLA ADJUSTMENT
FOR MEMBERS
WITH RETIRED PAY COMPUTED USING FINAL BASIC
PAY.—
‘‘(1) FIRST ADJUSTMENT WITH INTERVENING
INCREASE
IN
BASIC
PAY.—Notwithstanding sub-
section (b), if a person described in paragraph (3)
becomes entitled to retired pay based on rates of
monthly basic pay that became effective after the
201
last day of the calendar quarter of the base index,
the retired pay of the member or former member
shall be increased on the effective date of the next
adjustment of retired pay under subsection (b) only
by the percent (adjusted to the nearest one-tenth of
1 percent) by which—
‘‘(A) the price index for the base quarter
of that year, exceeds
‘‘(B) the price index for the calendar quar-
ter immediately before the calendar quarter in
which the rates of monthly basic pay on which
the retired pay is based became effective.
‘‘(2) FIRST ADJUSTMENT WITH NO INTERVEN-
ING INCREASE IN BASIC PAY.—If a person described
in paragraph (3) becomes entitled to retired pay on
or after the effective date of an adjustment in re-
tired pay under subsection (b) but before the effec-
tive date of the next increase in the rates of monthly
basic pay, the retired pay of the member or former
member shall be increased, effective on the date the
member becomes entitled to that pay, by the percent
(adjusted to the nearest one-tenth of 1 percent) by
which—
‘‘(A) the base index, exceeds
203
‘‘(2) the price index for the calendar quarter
immediately before the calendar quarter during
which the member became entitled to retired pay.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply only to adjustments of retired
and retainer pay effective after the date of the enactment
of this Act.
SEC. 636. TECHNICAL CORRECTION TO PRIOR AUTHORITY
FOR PAYMENT OF BACK PAY TO CERTAIN
PERSONS.
Section 634 of the National Defense Authorization
Act for Fiscal Year 1996 (Public Law 104–106; 110 Stat.
366) is amended—
(1) in subsection (b)(1), by striking out ‘‘Island
of Bataan’’ and inserting in lieu thereof ‘‘peninsula
of Bataan or island of Corregidor’’; and
(2) in subsection (c), by inserting after the first
sentence the following: ‘‘For the purposes of this
subsection, the Secretary of War shall be deemed to
have determined that conditions in the Philippines
during the specified period justified payment under
applicable regulations of quarters and subsistence al-
lowances at the maximum special rate for duty
where emergency conditions existed.’’.
204
SEC. 637. AMENDMENTS TO THE UNIFORMED SERVICES
FORMER SPOUSES’ PROTECTION ACT.
(a) MANNER OF SERVICE OF PROCESS.—Subsection
(b)(1)(A) of section 1408 of title 10, United States Code,
is amended by striking out ‘‘certified or registered mail,
return receipt requested’’ and inserting in lieu thereof
‘‘facsimile or electronic transmission or by mail’’.
(b) SUBSEQUENT COURT ORDER FROM ANOTHER
STATE.—Subsection (d) of such section is amended by
adding at the end the following new paragraph:
‘‘(6)(A) The Secretary concerned may not accept
service of a court order that is an out-of State modifica-
tion, or comply with the provisions of such a court order,
unless the court issuing that order has jurisdiction in the
manner specified in subsection (c)(4) over both the mem-
ber and the spouse or former spouse involved.
‘‘(B) A court order shall be considered to be an out-
of-State modification for purposes of this paragraph if the
order—
‘‘(i) modifies a previous court order under this
section upon which payments under this subsection
are based; and
‘‘(ii) is issued by a court of a State other than
the State of the court that issued the previous court
order.’’.
205
SEC. 638. ADMINISTRATION OF BENEFITS FOR SO-CALLED
MINIMUM INCOME WIDOWS.
(a) PAYMENTS TO BE MADE BY SECRETARY OF VET-
ERANS AFFAIRS.—Section 4 of Public Law 92–425 (10
U.S.C. 1448 note) is amended by adding at the end the
following new subsection:
‘‘(e)(1) Payment of annuities under this section shall
be made by the Secretary of Veterans Affairs. If appro-
priate for administrative convenience (or otherwise deter-
mined appropriate by the Secretary of Veterans Affairs),
that Secretary may combine a payment to any person for
any month under this section with any other payment for
that month under laws administered by the Secretary so
as to provide that person with a single payment for that
month.
‘‘(2) The Secretary concerned shall annually transfer
to the Secretary of Veterans Affairs such amounts as may
be necessary for payments by the Secretary of Veterans
Affairs under this section and for costs of the Secretary
of Veterans Affairs in administering this section. Such
transfers shall be made from amounts that would other-
wise be used for payment of annuities by the Secretary
concerned under this section. The authority to make such
a transfer is in addition to any other authority of the Sec-
retary concerned to transfer funds for a purpose other
than the purpose for which the funds were originally made
206
available. In the case of a transfer by the Secretary of
a military department, the provisions of section 2215 of
this title do not apply.
‘‘(3) The Secretary concerned shall promptly notify
the Secretary of Veterans Affairs of any change in bene-
ficiaries under this section.’’.
(b) EFFECTIVE DATE.—Subsection (e) of section 4
of Public Law 92–425, as added by subsection (a), shall
apply with respect to payments of benefits for any month
after June 1997.
SEC. 639. NONSUBSTANTIVE RESTATEMENT OF SURVIVOR
BENEFIT PLAN STATUTE.
Subchapter II of chapter 73 of title 10, United States
Code, is amended to read as follows:
‘‘SUBCHAPTER II—SURVIVOR BENEFIT PLAN
‘‘Sec.
‘‘1447. Definitions.
‘‘1448. Application of Plan.
‘‘1449. Mental incompetency of member.
‘‘1450. Payment of annuity: beneficiaries.
‘‘1451. Amount of annuity.
‘‘1452. Reduction in retired pay.
‘‘1453. Recovery of amounts erroneously paid.
‘‘1454. Correction of administrative errors.
‘‘1455. Regulations.
‘‘§ 1447. Definitions
‘‘In this subchapter:
‘‘(1) PLAN.—The term ‘Plan’ means the Survi-
vor Benefit Plan established by this subchapter.
207
‘‘(2) STANDARD ANNUITY.—The term ‘standard
annuity’ means an annuity provided by virtue of eli-
gibility under section 1448(a)(1)(A) of this title.
‘‘(3) 
RESERVE-COMPONENT
ANNUITY.—The
term ‘reserve-component annuity’ means an annuity
provided by virtue of eligibility under section
1448(a)(1)(B) of this title.
‘‘(4) RETIRED PAY.—The term ‘retired pay’ in-
cludes retainer pay paid under section 6330 of this
title.
‘‘(5) RESERVE-COMPONENT
RETIRED
PAY.—
The term ‘reserve-component retired pay’ means re-
tired pay under chapter 1223 of this title (or under
chapter 67 of this title as in effect before the effec-
tive date of the Reserve Officer Personnel Manage-
ment Act).
‘‘(6) BASE AMOUNT.—The term ‘base amount’
means the following:
‘‘(A) FULL
AMOUNT
UNDER
STANDARD
ANNUITY.—In the case of a person who dies
after becoming entitled to retired pay, such
term means the amount of monthly retired pay
(determined without regard to any reduction
under section 1409(b)(2) of this title) to which
the person—
208
‘‘(i) was entitled when he became eli-
gible for that pay; or
‘‘(ii) later became entitled by being
advanced on the retired list, performing ac-
tive duty, or being transferred from the
temporary disability retired list to the per-
manent disability retired list.
‘‘(B) FULL
AMOUNT
UNDER
RESERVE-
COMPONENT ANNUITY.—In the case of a person
who would have become eligible for reserve-com-
ponent retired pay but for the fact that he died
before becoming 60 years of age, such term
means the amount of monthly retired pay for
which the person would have been eligible—
‘‘(i) if he had been 60 years of age on
the date of his death, for purposes of an
annuity to become effective on the day
after his death in accordance with a des-
ignation made under section 1448(e) of
this title.
‘‘(ii) upon becoming 60 years of age
(if he had lived to that age), for purposes
of an annuity to become effective on the
60th anniversary of his birth in accordance
209
with a designation made under section
1448(e) of this title.
‘‘(C) 
REDUCED
AMOUNT.—Such 
term
means any amount less than the amount other-
wise applicable under subparagraph (A) or (B)
with respect to an annuity provided under the
Plan but which is not less than $300 and which
is designated by the person (with the concur-
rence of the person’s spouse, if required under
section 1448(a)(3) of this title) providing the
annuity on or before—
‘‘(i) the first day for which he be-
comes eligible for retired pay, in the case
of a person providing a standard annuity,
or
‘‘(ii) the end of the 90-day period be-
ginning on the date on which he receives
the 
notification 
required 
by 
section
12731(d) of this title that he has com-
pleted the years of service required for eli-
gibility for reserve-component retired pay,
in the case of a person providing a reserve-
component annuity.
‘‘(7) WIDOW.—The term ‘widow’ means the
surviving wife of a person who, if not married to the
210
person at the time he became eligible for retired
pay—
‘‘(A) was married to the person for at least
one year immediately before the person’s death;
or
‘‘(B) is the mother of issue by that mar-
riage.
‘‘(8) WIDOWER.—The term ‘widower’ means
the surviving husband of a person who, if not mar-
ried to the person at the time she became eligible for
retired pay—
‘‘(A) was married to her for at least one
year immediately before her death; or
‘‘(B) is the father of issue by that mar-
riage.
‘‘(9) SURVIVING SPOUSE.—The term ‘surviving
spouse’ means a widow or widower.
‘‘(10) FORMER
SPOUSE.—The term ‘former
spouse’ means the surviving former husband or wife
of a person who is eligible to participate in the Plan.
‘‘(11) DEPENDENT CHILD.—
‘‘(A) IN GENERAL.—The term ‘dependent
child’ means a person who—
‘‘(i) is unmarried;
211
‘‘(ii) is (I) under 18 years of age, (II)
at least 18, but under 22, years of age and
pursuing a full-time course of study or
training in a high school, trade school,
technical or vocational institute, junior col-
lege, college, university, or comparable rec-
ognized educational institution, or (III) in-
capable of self support because of a mental
or physical incapacity existing before the
person’s eighteenth birthday or incurred on
or after that birthday, but before the per-
son’s twenty-second birthday, while pursu-
ing such a full-time course of study or
training; and
‘‘(iii) is the child of a person to whom
the Plan applies, including (I) an adopted
child, and (II) a stepchild, foster child, or
recognized natural child who lived with
that person in a regular parent-child rela-
tionship.
‘‘(B) SPECIAL RULES FOR COLLEGE STU-
DENTS.—For the purpose of subparagraph (A),
a child whose twenty-second birthday occurs be-
fore July 1 or after August 31 of a calendar
year, and while regularly pursuing such a
212
course of study or training, is considered to
have become 22 years of age on the first day
of July after that birthday. A child who is a
student is considered not to have ceased to be
a student during an interim between school
years if the interim is not more than 150 days
and if the child shows to the satisfaction of the
Secretary of Defense that the child has a bona
fide intention of continuing to pursue a course
of study or training in the same or a different
school during the school semester (or other pe-
riod into which the school year is divided) im-
mediately after the interim.
‘‘(C) FOSTER CHILDREN.—A foster child,
to qualify under this paragraph as the depend-
ent child of a person to whom the Plan applies,
must, at the time of the death of that person,
also reside with, and receive over one-half of his
support from, that person, and not be cared for
under a social agency contract. The temporary
absence of a foster child from the residence of
that person, while a student as described in this
paragraph, shall not be considered to affect the
residence of such a foster child.
213
‘‘(12) COURT.—The term ‘court’ has the mean-
ing given that term by section 1408(a)(1) of this
title.
‘‘(13) COURT ORDER.—
‘‘(A) IN GENERAL.—The term ‘court order’
means a court’s final decree of divorce, dissolu-
tion, or annulment or a court ordered, ratified,
or approved property settlement incident to
such a decree (including a final decree modify-
ing the terms of a previously issued decree of
divorce, dissolution, annulment, or legal separa-
tion, or of a court ordered, ratified, or approved
property settlement agreement incident to such
previously issued decree).
‘‘(B) FINAL DECREE.—The term ‘final de-
cree’ means a decree from which no appeal may
be taken or from which no appeal has been
taken within the time allowed for the taking of
such appeals under the laws applicable to such
appeals, or a decree from which timely appeal
has been taken and such appeal has been finally
decided under the laws applicable to such ap-
peals.
‘‘(C) REGULAR ON ITS FACE.—The term
‘regular on its face’, when used in connection
214
with a court order, means a court order that
meets the conditions prescribed in section
1408(b)(2) of this title.
‘‘§ 1448. Application of plan
‘‘(a) GENERAL RULES FOR PARTICIPATION IN THE
PLAN.—
‘‘(1) NAME
OF
PLAN; 
ELIGIBLE
PARTICI-
PANTS.—The program established by this sub-
chapter shall be known as the Survivor Benefit Plan.
The following persons are eligible to participate in
the Plan:
‘‘(A) Persons entitled to retired pay.
‘‘(B) Persons who would be eligible for re-
serve-component retired pay but for the fact
that they are under 60 years of age.
‘‘(2) PARTICIPANTS IN THE PLAN.—The Plan
applies to the following persons, who shall be partici-
pants in the Plan:
‘‘(A) 
STANDARD
ANNUITY
PARTICI-
PANTS.—A person who is eligible to participate
in the Plan under paragraph (1)(A) and who is
married or has a dependent child when he be-
comes entitled to retired pay, unless he elects
(with his spouse’s concurrence, if required
under paragraph (3)) not to participate in the
215
Plan before the first day for which he is eligible
for that pay.
‘‘(B) RESERVE-COMPONENT ANNUITY PAR-
TICIPANTS.—A person who (i) is eligible to par-
ticipate in the Plan under paragraph (1)(B),
(ii) is married or has a dependent child when
he is notified under section 12731(d) of this
title that he has completed the years of service
required for eligibility for reserve-component re-
tired pay, and (iii) elects to participate in the
Plan (and makes a designation under sub-
section (e)) before the end of the 90-day period
beginning on the date he receives such notifica-
tion.
A person described in clauses (i) and (ii) of subpara-
graph (B) who does not elect to participate in the
Plan before the end of the 90-day period referred to
in that clause remains eligible, upon reaching 60
years of age and otherwise becoming entitled to re-
tired pay, to participate in the Plan in accordance
with eligibility under paragraph (1)(A).
‘‘(3) ELECTIONS.—
‘‘(A) SPOUSAL
CONSENT
FOR
CERTAIN
ELECTIONS
RESPECTING
STANDARD
ANNU-
ITY.—A married person who is eligible to pro-
216
vide a standard annuity may not without the
concurrence of the person’s spouse elect—
‘‘(i) not to participate in the Plan;
‘‘(ii) to provide an annuity for the
person’s spouse at less than the maximum
level; or
‘‘(iii) to provide an annuity for a de-
pendent child but not for the person’s
spouse.
‘‘(B) SPOUSAL
CONSENT
FOR
CERTAIN
ELECTIONS RESPECTING RESERVE-COMPONENT
ANNUITY.—A married person who elects to pro-
vide a reserve-component annuity may not with-
out the concurrence of the person’s spouse
elect—
‘‘(i) to provide an annuity for the per-
son’s spouse at less than the maximum
level; or
‘‘(ii) to provide an annuity for a de-
pendent child but not for the person’s
spouse.
‘‘(C) EXCEPTION WHEN SPOUSE UNAVAIL-
ABLE.—A person may make an election de-
scribed in subparagraph (A) or (B) without the
concurrence of the person’s spouse if the person
217
establishes to the satisfaction of the Secretary
concerned—
‘‘(i) that the spouse’s whereabouts
cannot be determined; or
‘‘(ii) that, due to exceptional cir-
cumstances, requiring the person to seek
the spouse’s consent would otherwise be in-
appropriate.
‘‘(D) 
CONSTRUCTION
WITH
FORMER
SPOUSE
ELECTION
PROVISIONS.—This para-
graph does not affect any right or obligation to
elect to provide an annuity for a former spouse
(or for a former spouse and dependent child)
under subsection (b)(2).
‘‘(E) NOTICE TO SPOUSE OF ELECTION TO
PROVIDE FORMER SPOUSE ANNUITY.—If a mar-
ried person who is eligible to provide a standard
annuity elects to provide an annuity for a
former spouse (or for a former spouse and de-
pendent child) under subsection (b)(2), that
person’s spouse shall be notified of that elec-
tion.
‘‘(4) IRREVOCABILITY OF ELECTIONS.—
‘‘(A) STANDARD
ANNUITY.—An election
under paragraph (2)(A) not to participate in
218
the Plan is irrevocable if not revoked before the
date on which the person first becomes entitled
to retired pay.
‘‘(B) RESERVE-COMPONENT
ANNUITY.—
An election under paragraph (2)(B) to partici-
pate in the Plan is irrevocable if not revoked
before the end of the 90-day period referred to
in that paragraph.
‘‘(5) PARTICIPATION
BY
PERSON
MARRYING
AFTER RETIREMENT, ETC.—
‘‘(A) 
ELECTION
TO
PARTICIPATE
IN
PLAN.—A person who is not married and has
no dependent child upon becoming eligible to
participate in the Plan but who later marries or
acquires a dependent child may elect to partici-
pate in the Plan.
‘‘(B) MANNER AND TIME OF ELECTION.—
Such an election must be written, signed by the
person making the election, and received by the
Secretary concerned within one year after the
date on which that person marries or acquires
that dependent child.
‘‘(C) LIMITATION
ON
REVOCATION
OF
ELECTION.—Such an election may not be re-
219
voked except in accordance with subsection
(b)(3).
‘‘(D) EFFECTIVE
DATE
OF
ELECTION.—
The election is effective as of the first day of
the first calendar month following the month in
which the election is received by the Secretary
concerned.
‘‘(E) DESIGNATION IF RCSBP ELECTION.—
In the case of a person providing a reserve-com-
ponent annuity, such an election shall include a
designation under subsection (e).
‘‘(6) ELECTION OUT OF PLAN BY PERSON WITH
SPOUSE COVERAGE WHO REMARRIES.—
‘‘(A) GENERAL RULE.—A person—
‘‘(i) who is a participant in the Plan
and is providing coverage under the Plan
for a spouse (or a spouse and child);
‘‘(ii) who does not have an eligible
spouse beneficiary under the Plan; and
‘‘(iii) who remarries,
may elect not to provide coverage under the
Plan for the person’s spouse.
‘‘(B) EFFECT OF ELECTION ON RETIRED
PAY.—If such an election is made, reductions in
220
the retired pay of that person under section
1452 of this title shall not be made.
‘‘(C) TERMS AND CONDITIONS OF ELEC-
TION.—An election under this paragraph—
‘‘(i) is irrevocable;
‘‘(ii) shall be made within one year
after the person’s remarriage; and
‘‘(iii) shall be made in such form and
manner as may be prescribed in regula-
tions under section 1455 of this title.
‘‘(D) NOTICE
TO
SPOUSE.—If a person
makes an election under this paragraph—
‘‘(i) not to participate in the Plan;
‘‘(ii) to provide an annuity for the
person’s spouse at less than the maximum
level; or
‘‘(iii) to provide an annuity for a de-
pendent child but not for the person’s
spouse,
the person’s spouse shall be notified of that
election.
‘‘(E) 
CONSTRUCTION
WITH
FORMER
SPOUSE
ELECTION
PROVISIONS.—This para-
graph does not affect any right or obligation to
221
elect to provide an annuity to a former spouse
under subsection (b).
‘‘(b) INSURABLE INTEREST AND FORMER SPOUSE
COVERAGE.—
‘‘(1) COVERAGE FOR PERSON WITH INSURABLE
INTEREST.—
‘‘(A) GENERAL RULE.—A person who is
not married and does not have a dependent
child upon becoming eligible to participate in
the Plan may elect to provide an annuity under
the Plan to a natural person with an insurable
interest in that person. In the case of a person
providing a reserve-component annuity, such an
election shall include a designation under sub-
section (e).
‘‘(B) TERMINATION
OF
COVERAGE.—An
election under subparagraph (A) for a bene-
ficiary who is not the former spouse of the per-
son providing the annuity may be terminated.
Any such termination shall be made by a par-
ticipant by the submission to the Secretary con-
cerned of a request to discontinue participation
in the Plan, and such participation in the Plan
shall be discontinued effective on the first day
of the first month following the month in which
222
the request is received by the Secretary con-
cerned. Effective on such date, the Secretary
concerned shall discontinue the reduction being
made in such person’s retired pay on account
of participation in the Plan or, in the case of
a person who has been required to make depos-
its in the Treasury on account of participation
in the Plan, such person may discontinue mak-
ing such deposits effective on such date.
‘‘(C) FORM FOR DISCONTINUATION.—A re-
quest under subparagraph (B) to discontinue
participation in the Plan shall be in such form
and shall contain such information as may be
required under regulations prescribed by the
Secretary of Defense.
‘‘(D) WITHDRAWAL OF REQUEST FOR DIS-
CONTINUATION.—The Secretary concerned shall
furnish promptly to each person who submits a
request under subparagraph (B) to discontinue
participation in the Plan a written statement of
the advantages and disadvantages of participat-
ing in the Plan and the possible disadvantages
of discontinuing participation. A person may
withdraw the request to discontinue participa-
223
tion if withdrawn within 30 days after having
been submitted to the Secretary concerned.
‘‘(E) CONSEQUENCES
OF
DISCONTINU-
ATION.—Once participation is discontinued,
benefits may not be paid in conjunction with
the earlier participation in the Plan and pre-
miums paid may not be refunded. Participation
in the Plan may not later be resumed except
through a qualified election under paragraph
(5) of subsection (a).
‘‘(2) FORMER SPOUSE COVERAGE UPON BECOM-
ING A PARTICIPANT IN THE PLAN.—
‘‘(A) GENERAL RULE.—A person who has
a former spouse upon becoming eligible to par-
ticipate in the Plan may elect to provide an an-
nuity to that former spouse.
‘‘(B) EFFECT OF FORMER SPOUSE ELEC-
TION ON SPOUSE OR DEPENDENT CHILD.—In
the case of a person with a spouse or a depend-
ent child, such an election prevents payment of
an annuity to that spouse or child (other than
a child who is a beneficiary under an election
under paragraph (4)), including payment under
subsection (d).
224
‘‘(C) DESIGNATION
IF
MORE
THAN
ONE
FORMER SPOUSE.—If there is more than one
former spouse, the person shall designate which
former spouse is to be provided the annuity.
‘‘(D) DESIGNATION IF RCSBP ELECTION.—
In the case of a person providing a reserve-com-
ponent annuity, such an election shall include a
designation under subsection (e).
‘‘(3) FORMER SPOUSE COVERAGE BY PERSONS
ALREADY PARTICIPATING IN PLAN.—
‘‘(A) ELECTION OF COVERAGE.—
‘‘(i) AUTHORITY
FOR
ELECTION.—A
person—
‘‘(I) who is a participant in the
Plan and is providing coverage for a
spouse or a spouse and child (even
though there is no beneficiary cur-
rently eligible for such coverage), and
‘‘(II) who has a former spouse
who was not that person’s former
spouse when that person became eligi-
ble to participate in the Plan,
may (subject to subparagraph (B)) elect to
provide an annuity to that former spouse.
225
‘‘(ii) TERMINATION OF PREVIOUS COV-
ERAGE.—Any such election terminates any
previous coverage under the Plan.
‘‘(iii) MANNER AND TIME OF ELEC-
TION.—Any such election must be written,
signed by the person making the election,
and received by the Secretary concerned
within one year after the date of the decree
of divorce, dissolution, or annulment.
‘‘(B) LIMITATION ON ELECTION.—A per-
son may not make an election under subpara-
graph (A) to provide an annuity to a former
spouse who that person married after becoming
eligible for retired pay unless—
‘‘(i) the person was married to that
former spouse for at least one year, or
‘‘(ii) that former spouse is the parent
of issue by that marriage.
‘‘(C) IRREVOCABILITY, EFFECTIVE
DATE,
ETC.—An election under this paragraph may
not be revoked except in accordance with sec-
tion 1450(f) of this title. Such an election is ef-
fective as of the first day of the first calendar
month following the month in which it is re-
ceived by the Secretary concerned. This para-
226
graph does not provide the authority to change
a designation previously made under subsection
(e).
‘‘(D) NOTICE
TO
SPOUSE.—If a person
who is married makes an election to provide an
annuity to a former spouse under this para-
graph, that person’s spouse shall be notified of
the election.
‘‘(4) FORMER SPOUSE AND CHILD COVERAGE.—
A person who elects to provide an annuity for a
former spouse under paragraph (2) or (3) may, at
the time of the election, elect to provide coverage
under that annuity for both the former spouse and
a dependent child, if the child resulted from the per-
son’s marriage to that former spouse.
‘‘(5) DISCLOSURE OF WHETHER ELECTION OF
FORMER SPOUSE COVERAGE IS REQUIRED.—A per-
son who elects to provide an annuity to a former
spouse under paragraph (2) or (3) shall, at the time
of making the election, provide the Secretary con-
cerned with a written statement (in a form to be
prescribed by that Secretary and signed by such per-
son and the former spouse) setting forth—
227
‘‘(A) whether the election is being made
pursuant to the requirements of a court order;
or
‘‘(B) whether the election is being made
pursuant to a written agreement previously en-
tered into voluntarily by such person as a part
of, or incident to, a proceeding of divorce, dis-
solution, or annulment and (if so) whether such
voluntary written agreement has been incor-
porated in, or ratified or approved by, a court
order.
‘‘(c) PERSONS ON TEMPORARY DISABILITY RETIRED
LIST.—The application of the Plan to a person whose
name is on the temporary disability retired list terminates
when his name is removed from that list and he is no
longer entitled to disability retired pay.
‘‘(d) COVERAGE FOR SURVIVORS OF RETIREMENT-
ELIGIBLE MEMBERS WHO DIE ON ACTIVE DUTY.—
‘‘(1) SURVIVING SPOUSE ANNUITY.—The Sec-
retary concerned shall pay an annuity under this
subchapter to the surviving spouse of a member who
dies on active duty after—
‘‘(A) becoming eligible to receive retired
pay;
228
‘‘(B) qualifying for retired pay except that
he has not applied for or been granted that pay;
or
‘‘(C) completing 20 years of active service
but before he is eligible to retire as a commis-
sioned officer because he has not completed 10
years of active commissioned service.
‘‘(2) DEPENDENT CHILD ANNUITY.—The Sec-
retary concerned shall pay an annuity under this
subchapter to the dependent child of a member de-
scribed in paragraph (1) if there is no surviving
spouse or if the member’s surviving spouse subse-
quently dies.
‘‘(3) MANDATORY FORMER SPOUSE ANNUITY.—
If a member described in paragraph (1) is required
under a court order or spousal agreement to provide
an annuity to a former spouse upon becoming eligi-
ble to be a participant in the Plan or has made an
election under subsection (b) to provide an annuity
to a former spouse, the Secretary—
‘‘(A) may not pay an annuity under para-
graph (1) or (2); but
‘‘(B) shall pay an annuity to that former
spouse as if the member had been a participant
in the Plan and had made an election under
229
subsection (b) to provide an annuity to the
former spouse, or in accordance with that elec-
tion, as the case may be, if the Secretary re-
ceives a written request from the former spouse
concerned that the election be deemed to have
been made in the same manner as provided in
section 1450(f)(3) of this title.
‘‘(4) PRIORITY.—An annuity that may be pro-
vided under this subsection shall be provided in pref-
erence to an annuity that may be provided under
any other provision of this subchapter on account of
service of the same member.
‘‘(5) COMPUTATION.—The amount of an annu-
ity under this subsection is computed under section
1451(c) of this title.
‘‘(e) DESIGNATION
FOR COMMENCEMENT
OF RE-
SERVE-COMPONENT ANNUITY.—In any case in which a
person electing to participate in the Plan is required to
make a designation under this subsection, the person mak-
ing such election shall designate whether, in the event he
dies before becoming 60 years of age, the annuity provided
shall become effective on—
‘‘(1) the day after the date of his death; or
‘‘(2) the 60th anniversary of his birth.
230
‘‘(f) COVERAGE OF SURVIVORS OF PERSONS DYING
WHEN ELIGIBLE TO ELECT RESERVE-COMPONENT AN-
NUITY.—
‘‘(1) SURVIVING SPOUSE ANNUITY.—The Sec-
retary concerned shall pay an annuity under this
subchapter to the surviving spouse of a person who
is eligible to provide a reserve-component annuity
and who dies—
‘‘(A) before being notified under section
12731(d) of this title that he has completed the
years of service required for eligibility for re-
serve-component retired pay; or
‘‘(B) during the 90-day period beginning
on the date he receives notification under sec-
tion 12731(d) of this title that he has com-
pleted the years of service required for eligi-
bility for reserve-component retired pay if he
had not made an election under subsection
(a)(2)(B) to participate in the Plan.
‘‘(2) DEPENDENT CHILD ANNUITY.—The Sec-
retary concerned shall pay an annuity under this
subchapter to the dependent child of a person de-
scribed in paragraph (1) if there is no surviving
spouse or if the person’s surviving spouse subse-
quently dies.
231
‘‘(3) MANDATORY FORMER SPOUSE ANNUITY.—
If a person described in paragraph (1) is required
under a court order or spousal agreement to provide
an annuity to a former spouse upon becoming eligi-
ble to be a participant in the Plan or has made an
election under subsection (b) to provide an annuity
to a former spouse, the Secretary—
‘‘(A) may not pay an annuity under para-
graph (1) or (2); but
‘‘(B) shall pay an annuity to that former
spouse as if the person had been a participant
in the Plan and had made an election under
subsection (b) to provide an annuity to the
former spouse, or in accordance with that elec-
tion, as the case may be, if the Secretary re-
ceives a written request from the former spouse
concerned that the election be deemed to have
been made in the same manner as provided in
section 1450(f)(3) of this title.
‘‘(4) COMPUTATION.—The amount of an annu-
ity under this subsection is computed under section
1451(c) of this title.
‘‘(g) ELECTION TO INCREASE COVERAGE UPON RE-
MARRIAGE.—
‘‘(1) ELECTION.—A person—
232
‘‘(A) who is a participant in the Plan and
is providing coverage under subsection (a) for a
spouse or a spouse and child, but at less than
the maximum level; and
‘‘(B) who remarries,
may elect, within one year of such remarriage, to in-
crease the level of coverage provided under the Plan
to a level not in excess of the current retired pay of
that person.
‘‘(2) PAYMENT
REQUIRED.—Such an election
shall be contingent on the person paying to the
United States the amount determined under para-
graph (3) plus interest on such amount at a rate de-
termined under regulations prescribed by the Sec-
retary of Defense.
‘‘(3) AMOUNT TO BE PAID.—The amount re-
ferred to in paragraph (2) is the amount equal to
the difference between—
‘‘(A) the amount that would have been
withheld from such person’s retired pay under
section 1452 of this title if the higher level of
coverage had been in effect from the time the
person became a participant in the Plan; and
‘‘(B) the amount of such person’s retired
pay actually withheld.
233
‘‘(4) MANNER OF MAKING ELECTION.—An elec-
tion under paragraph (1) shall be made in such
manner as the Secretary shall prescribe and shall
become effective upon receipt of the payment re-
quired by paragraph (2).
‘‘(5) DISPOSITION OF PAYMENTS.—A payment
received under this subsection by the Secretary of
Defense shall be deposited into the Department of
Defense Military Retirement Fund. Any other pay-
ment received under this subsection shall be depos-
ited in the Treasury as miscellaneous receipts.
‘‘§ 1449. Mental incompetency of member
‘‘(a) ELECTION BY SECRETARY CONCERNED ON BE-
HALF OF MENTALLY INCOMPETENT MEMBER.—If a per-
son to whom section 1448 of this title applies is deter-
mined to be mentally incompetent by medical officers of
the armed force concerned or of the Department of Veter-
ans Affairs, or by a court of competent jurisdiction, an
election described in subsection (a)(2) or (b) of section
1448 of this title may be made on behalf of that person
by the Secretary concerned.
‘‘(b) REVOCATION OF ELECTION BY MEMBER.—
‘‘(1) AUTHORITY
UPON
SUBSEQUENT
DETER-
MINATION OF MENTAL COMPETENCE.—If a person
for whom the Secretary has made an election under
234
subsection (a) is later determined to be mentally
competent by an authority named in that subsection,
that person may, within 180 days after that deter-
mination, revoke that election.
‘‘(2) DEDUCTIONS FROM RETIRED PAY NOT TO
BE REFUNDED.—Any deduction made from retired
pay by reason of such an election may not be re-
funded.
‘‘§ 1450. Payment of annuity: beneficiaries
‘‘(a) IN GENERAL.—Effective as of the first day after
the death of a person to whom section 1448 of this title
applies (or on such other day as that person may provide
under subsection (j)), a monthly annuity under section
1451 of this title shall be paid to the person’s beneficiaries
under the Plan, as follows:
‘‘(1) 
SURVIVING
SPOUSE
OR
FORMER
SPOUSE.—The eligible surviving spouse or the eligi-
ble former spouse.
‘‘(2) SURVIVING CHILDREN.—The surviving de-
pendent children in equal shares, if the eligible sur-
viving spouse or the eligible former spouse is dead,
dies, or otherwise becomes ineligible under this sec-
tion.
‘‘(3) DEPENDENT CHILDREN.—The dependent
children in equal shares if the person to whom sec-
235
tion 1448 of this title applies (with the concurrence
of the person’s spouse, if required under section
1448(a)(3) of this title) elected to provide an annu-
ity for dependent children but not for the spouse or
former spouse.
‘‘(4) NATURAL
PERSON
DESIGNATED
UNDER
‘INSURABLE
INTEREST’ COVERAGE.—The natural
person designated under section 1448(b)(1) of this
title, unless the election to provide an annuity to the
natural person has been changed as provided in sub-
section (f).
‘‘(b) TERMINATION OF ANNUITY FOR DEATH, RE-
MARRIAGE BEFORE AGE 55, ETC.—
‘‘(1) GENERAL RULE.—An annuity payable to
the beneficiary terminates effective as of the first
day of the month in which eligibility is lost.
‘‘(2) TERMINATION OF SPOUSE ANNUITY UPON
DEATH OR REMARRIAGE BEFORE AGE 55.—An annu-
ity for a surviving spouse or former spouse shall be
paid to the surviving spouse or former spouse while
the surviving spouse or former spouse is living or, if
the surviving spouse or former spouse remarries be-
fore reaching age 55, until the surviving spouse or
former spouse remarries.
236
‘‘(3) EFFECT
OF
TERMINATION
OF
SUBSE-
QUENT MARRIAGE BEFORE AGE 55.—If the surviving
spouse or former spouse remarries before reaching
age 55 and that marriage is terminated by death,
annulment, or divorce, payment of the annuity shall
be resumed effective as of the first day of the month
in which the marriage is so terminated. However, if
the surviving spouse or former spouse is also entitled
to an annuity under the Plan based upon the mar-
riage so terminated, the surviving spouse or former
spouse may not receive both annuities but must elect
which to receive.
‘‘(c) OFFSET FOR AMOUNT OF DEPENDENCY AND
INDEMNITY COMPENSATION.—
‘‘(1) REQUIRED OFFSET.—If, upon the death of
a person to whom section 1448 of this title applies,
the surviving spouse or former spouse of that person
is also entitled to dependency and indemnity com-
pensation under section 1311(a) of title 38, the sur-
viving spouse or former spouse may be paid an an-
nuity under this section, but only in the amount that
the annuity otherwise payable under this section
would exceed that compensation.
‘‘(2) EFFECTIVE DATE OF OFFSET.—A reduc-
tion in an annuity under this section required by
237
paragraph (1) shall be effective on the date of the
commencement of the period of payment of such de-
pendency and indemnity compensation under title
38.
‘‘(d) LIMITATION ON PAYMENT OF ANNUITIES WHEN
COVERAGE UNDER CIVIL SERVICE RETIREMENT ELECT-
ED.—If, upon the death of a person to whom section 1448
of this title applies, that person had in effect a waiver of
that person’s retired pay for the purposes of subchapter
III of chapter 83 of title 5, an annuity under this section
shall not be payable unless, in accordance with section
8339(j) of title 5, that person notified the Office of Per-
sonnel Management that he did not desire any spouse sur-
viving him to receive an annuity under section 8341(b)
of that title.
‘‘(e) REFUND OF AMOUNTS DEDUCTED FROM RE-
TIRED PAY WHEN DIC OFFSET IS APPLICABLE.—
‘‘(1) FULL REFUND WHEN DIC GREATER THAN
SBP ANNUITY.—If an annuity under this section is
not payable because of subsection (c), any amount
deducted from the retired pay of the deceased under
section 1452 of this title shall be refunded to the
surviving spouse or former spouse.
‘‘(2) PARTIAL REFUND WHEN SBP ANNUITY RE-
DUCED BY DIC.—If, because of subsection (c), the
238
annuity payable is less than the amount established
under section 1451 of this title, the annuity payable
shall be recalculated under that section. The amount
of the reduction in the retired pay required to pro-
vide that recalculated annuity shall be computed
under section 1452 of this title, and the difference
between the amount deducted before the computa-
tion of that recalculated annuity and the amount
that would have been deducted on the basis of that
recalculated annuity shall be refunded to the surviv-
ing spouse or former spouse.
‘‘(f) CHANGE IN ELECTION OF INSURABLE INTEREST
OR FORMER SPOUSE BENEFICIARY.—
‘‘(1) AUTHORIZED CHANGES.—
‘‘(A) ELECTION IN FAVOR OF SPOUSE OR
CHILD.—A person who elects to provide an an-
nuity to a person designated by him under sec-
tion 1448(b) of this title may, subject to para-
graph (2), change that election and provide an
annuity to his spouse or dependent child.
‘‘(B) NOTICE.—The Secretary concerned
shall notify the former spouse or other natural
person previously designated under section
1448(b) of this title of any change of election
under subparagraph (A).
239
‘‘(C) 
PROCEDURES, 
EFFECTIVE
DATE,
ETC.—Any such change of election is subject to
the same rules with respect to execution, rev-
ocation, and effectiveness as are set forth in
section 1448(a)(5) of this title (without regard
to the eligibility of the person making the
change of election to make such an election
under that section).
‘‘(2) LIMITATION ON CHANGE IN BENEFICIARY
WHEN FORMER SPOUSE COVERAGE IN EFFECT.—A
person who, incident to a proceeding of divorce, dis-
solution, or annulment, is required by a court order
to elect under section 1448(b) of this title to provide
an annuity to a former spouse (or to both a former
spouse and child), or who enters into a written
agreement (whether voluntary or required by a court
order) to make such an election, and who makes an
election pursuant to such order or agreement, may
not change that election under paragraph (1) unless,
of the following requirements, whichever are applica-
ble in a particular case are satisfied:
‘‘(A) In a case in which the election is re-
quired by a court order, or in which an agree-
ment to make the election has been incor-
240
porated in or ratified or approved by a court
order, the person—
‘‘(i) furnishes to the Secretary con-
cerned a certified copy of a court order
which is regular on its face and which
modifies the provisions of all previous
court orders relating to such election, or
the agreement to make such election, so as
to permit the person to change the elec-
tion; and
‘‘(ii) certifies to the Secretary con-
cerned that the court order is valid and in
effect.
‘‘(B) In a case of a written agreement that
has not been incorporated in or ratified or ap-
proved by a court order, the person—
‘‘(i) furnishes to the Secretary con-
cerned a statement, in such form as the
Secretary concerned may prescribe, signed
by the former spouse and evidencing the
former spouse’s agreement to a change in
the election under paragraph (1); and
‘‘(ii) certifies to the Secretary con-
cerned that the statement is current and in
effect.
241
‘‘(3) REQUIRED FORMER SPOUSE ELECTION TO
BE DEEMED TO HAVE BEEN MADE.—
‘‘(A) DEEMED ELECTION UPON REQUEST
BY FORMER SPOUSE.—If a person described in
paragraph (2) or (3) of section 1448(b) of this
title is required (as described in subparagraph
(B)) to elect under section 1448(b) of this title
to provide an annuity to a former spouse and
such person then fails or refuses to make such
an election, such person shall be deemed to
have made such an election if the Secretary
concerned receives the following:
‘‘(i) 
REQUEST
FROM
FORMER
SPOUSE.—A written request, in such man-
ner as the Secretary shall prescribe, from
the former spouse concerned requesting
that such an election be deemed to have
been made.
‘‘(ii) COPY
OF
COURT
ORDER
OR
OTHER OFFICIAL STATEMENT.—Either—
‘‘(I) a copy of the court order,
regular on its face, which requires
such election or incorporates, ratifies,
or approves the written agreement of
such person; or
242
‘‘(II) a statement from the clerk
of the court (or other appropriate offi-
cial) that such agreement has been
filed with the court in accordance with
applicable State law.
‘‘(B) PERSONS REQUIRED TO MAKE ELEC-
TION.—A person shall be considered for pur-
poses of subparagraph (A) to be required to
elect under section 1448(b) of this title to pro-
vide an annuity to a former spouse if—
‘‘(i) the person enters, incident to a
proceeding of divorce, dissolution, or an-
nulment, into a written agreement to make
such an election and the agreement (I) has
been incorporated in or ratified or ap-
proved by a court order, or (II) has been
filed with the court of appropriate jurisdic-
tion in accordance with applicable State
law; or
‘‘(ii) the person is required by a court
order to make such an election.
‘‘(C) TIME
LIMIT
FOR
REQUEST
BY
FORMER
SPOUSE.—An election may not be
deemed to have been made under subparagraph
(A) in the case of any person unless the Sec-
243
retary concerned receives a request from the
former spouse of the person within one year of
the date of the court order or filing involved.
‘‘(D) EFFECTIVE DATE OF DEEMED ELEC-
TION.—An election deemed to have been made
under subparagraph (A) shall become effective
on the first day of the first month which begins
after the date of the court order or filing in-
volved.
‘‘(4) FORMER SPOUSE COVERAGE MAY BE RE-
QUIRED BY COURT ORDER.—A court order may re-
quire a person to elect (or to enter into an agree-
ment to elect) under section 1448(b) of this title to
provide an annuity to a former spouse (or to both
a former spouse and child).
‘‘(g) LIMITATION ON CHANGING OR REVOKING ELEC-
TIONS.—
‘‘(1) IN GENERAL.—An election under this sec-
tion may not be changed or revoked.
‘‘(2) EXCEPTIONS.—Paragraph (1) does not
apply to—
‘‘(A) a revocation of an election under sec-
tion 1449(b) of this title; or
‘‘(B) a change in an election under sub-
section (f).
244
‘‘(h) TREATMENT
OF ANNUITIES UNDER OTHER
LAWS.—Except as provided in section 1451 of this title,
an annuity under this section is in addition to any other
payment to which a person is entitled under any other pro-
vision of law. Such annuity shall be considered as income
under laws administered by the Secretary of Veterans Af-
fairs.
‘‘(i) ANNUITIES EXEMPT FROM CERTAIN LEGAL
PROCESS.—Except as provided in subsection (l)(3)(B), an
annuity under this section is not assignable or subject to
execution, levy, attachment, garnishment, or other legal
process.
‘‘(j) EFFECTIVE DATE
OF RESERVE-COMPONENT
ANNUITIES.—
‘‘(1) PERSONS MAKING SECTION 1448(e) DES-
IGNATION.—An annuity elected by a person provid-
ing a reserve-component annuity shall be effective in
accordance with the designation made by such per-
son under section 1448(e) of this title.
‘‘(2) PERSONS DYING BEFORE MAKING SECTION
1448(e) DESIGNATION.—An annuity payable under
section 1448(f) of this title shall be effective on the
day after the date of the death of the person upon
whose service the right to the annuity is based.
245
‘‘(k) ADJUSTMENT OF SPOUSE OR FORMER SPOUSE
ANNUITY UPON LOSS OF DEPENDENCY AND INDEMNITY
COMPENSATION.—
‘‘(1) READJUSTMENT IF BENEFICIARY 55 YEARS
OF AGE OR MORE.—If a surviving spouse or former
spouse whose annuity has been adjusted under sub-
section (c) subsequently loses entitlement to depend-
ency and indemnity compensation under section
1311(a) of title 38 because of the remarriage of the
surviving spouse, or former spouse, and if at the
time of such remarriage the surviving spouse or
former spouse is 55 years of age or more, the
amount of the annuity of the surviving spouse or
former spouse shall be readjusted, effective on the
effective date of such loss of dependency and indem-
nity compensation, to the amount of the annuity
which would be in effect with respect to the surviv-
ing spouse or former spouse if the adjustment under
subsection (c) had never been made.
‘‘(2) REPAYMENT
OF
AMOUNTS
PREVIOUSLY
REFUNDED.—
‘‘(A) GENERAL RULE.—A surviving spouse
or former spouse whose annuity is readjusted
under paragraph (1) shall repay any amount re-
246
funded under subsection (e) by reason of the
adjustment under subsection (c).
‘‘(B) INTEREST REQUIRED IF REPAYMENT
NOT A LUMP SUM.—If the repayment is not
made in a lump sum, the surviving spouse or
former spouse shall pay interest on the amount
to be repaid. Such interest shall commence on
the date on which the first such payment is due
and shall be applied over the period during
which any part of the repayment remains to be
paid.
‘‘(C) MANNER OF REPAYMENT; RATE OF
INTEREST.—The manner in which such repay-
ment shall be made, and the rate of any such
interest, shall be prescribed in regulations
under section 1455 of this title.
‘‘(D) DEPOSIT OF AMOUNTS REPAID.—An
amount repaid under this paragraph (including
any such interest) received by the Secretary of
Defense shall be deposited into the Department
of Defense Military Retirement Fund. Any
other amount repaid under this paragraph shall
be deposited into the Treasury as miscellaneous
receipts.
247
‘‘(l) PARTICIPANTS IN THE PLAN WHO ARE MISS-
ING.—
‘‘(1) AUTHORITY TO PRESUME DEATH OF MISS-
ING PARTICIPANT.—
‘‘(A) IN
GENERAL.—Upon application of
the beneficiary of a participant in the Plan who
is missing, the Secretary concerned may deter-
mine for purposes of this subchapter that the
participant is presumed dead.
‘‘(B) PARTICIPANT
WHO
IS
MISSING.—A
participant in the Plan is considered to be miss-
ing for purposes of this subsection if—
‘‘(i) the retired pay of the participant
has been suspended on the basis that the
participant is missing; or
‘‘(ii) in the case of a participant in
the Plan who would be eligible for reserve-
component retired pay but for the fact that
he is under 60 years of age, his retired
pay, if he were entitled to retired pay,
would be suspended on the basis that he is
missing.
‘‘(C) REQUIREMENTS APPLICABLE TO PRE-
SUMPTION OF DEATH.—Any such determination
shall be made in accordance with regulations
248
prescribed under section 1455 of this title. The
Secretary concerned may not make a deter-
mination for purposes of this subchapter that a
participant who is missing is presumed dead
unless the Secretary finds that—
‘‘(i) the participant has been missing
for at least 30 days; and
‘‘(ii) the circumstances under which
the participant is missing would lead a rea-
sonably prudent person to conclude that
the participant is dead.
‘‘(2) COMMENCEMENT OF ANNUITY.—Upon a
determination under paragraph (1) with respect to a
participant in the Plan, an annuity otherwise pay-
able under this subchapter shall be paid as if the
participant died on the date as of which the retired
pay of the participant was suspended.
‘‘(3) EFFECT OF PERSON NOT BEING DEAD.—
‘‘(A) 
TERMINATION
OF
ANNUITY.—If,
after a determination under paragraph (1), the
Secretary concerned determines that the partic-
ipant is alive—
‘‘(i) any annuity being paid under this
subchapter by reason of this subsection
shall be terminated; and
249
‘‘(ii) the total amount of any annuity
payments made by reason of this sub-
section shall constitute a debt to the Unit-
ed States.
‘‘(B) COLLECTION FROM PARTICIPANT OF
ANNUITY
AMOUNTS
ERRONEOUSLY
PAID.—A
debt under subparagraph (A)(ii) may be col-
lected or offset—
‘‘(i) from any retired pay otherwise
payable to the participant;
‘‘(ii) if the participant is entitled to
compensation under chapter 11 of title 38,
from that compensation; or
‘‘(iii) if the participant is entitled to
any other payment from the United States,
from that payment.
‘‘(C) COLLECTION FROM BENEFICIARY.—If
the participant dies before the full recovery of
the amount of annuity payments described in
subparagraph (A)(ii) has been made by the
United States, the remaining amount of such
annuity payments may be collected from the
participant’s beneficiary under the Plan if that
beneficiary was the recipient of the annuity
payments made by reason of this subsection.
250
‘‘§ 1451. Amount of annuity
‘‘(a) COMPUTATION OF ANNUITY FOR A SPOUSE,
FORMER SPOUSE, OR CHILD.—
‘‘(1) STANDARD ANNUITY.—In the case of a
standard annuity provided to a beneficiary under
section 1450(a) of this title (other than under sec-
tion 1450(a)(4)), the monthly annuity payable to the
beneficiary shall be determined as follows:
‘‘(A) BENEFICIARY UNDER 62 YEARS OF
AGE.—If the beneficiary is under 62 years of
age or is a dependent child when becoming enti-
tled to the annuity, the monthly annuity shall
be the amount equal to 55 percent of the base
amount.
‘‘(B) BENEFICIARY 62 YEARS OF AGE OR
OLDER.—
‘‘(i) GENERAL
RULE.—If the bene-
ficiary (other than a dependent child) is 62
years of age or older when becoming enti-
tled to the annuity, the monthly annuity
shall be the amount equal to 35 percent of
the base amount.
‘‘(ii) RULE IF BENEFICIARY ELIGIBLE
FOR SOCIAL SECURITY OFFSET COMPUTA-
TION.—If the beneficiary is eligible to have
the annuity computed under subsection (e)
251
and if, at the time the beneficiary becomes
entitled to the annuity, computation of the
annuity under that subsection is more fa-
vorable to the beneficiary than computa-
tion under clause (i), the annuity shall be
computed under that subsection rather
than under clause (i).
‘‘(2) RESERVE-COMPONENT
ANNUITY—In the
case of a reserve-component annuity provided to a
beneficiary under section 1450(a) of this title (other
than under section 1450(a)(4)), the monthly annuity
payable to the beneficiary shall be determined as fol-
lows:
‘‘(A) BENEFICIARY UNDER 62 YEARS OF
AGE.—If the beneficiary is under 62 years of
age or is a dependent child when becoming enti-
tled to the annuity, the monthly annuity shall
be the amount equal to a percentage of the base
amount that—
‘‘(i) is less than 55 percent; and
‘‘(ii) is determined under subsection
(f).
‘‘(B) BENEFICIARY 62 YEARS OF AGE OR
OLDER.—
252
‘‘(i) GENERAL
RULE.—If the bene-
ficiary (other than a dependent child) is 62
years of age or older when becoming enti-
tled to the annuity, the monthly annuity
shall be the amount equal to a percentage
of the base amount that—
‘‘(I) is less than 35 percent; and
‘‘(II) is determined under sub-
section (f).
‘‘(ii) RULE IF BENEFICIARY ELIGIBLE
FOR SOCIAL SECURITY OFFSET COMPUTA-
TION.—If the beneficiary is eligible to have
the annuity computed under subsection (e)
and if, at the time the beneficiary becomes
entitled to the annuity, computation of the
annuity under that subsection is more fa-
vorable to the beneficiary than computa-
tion under clause (i), the annuity shall be
computed under that subsection rather
than under clause (i).
‘‘(b) INSURABLE INTEREST BENEFICIARY.—
‘‘(1) STANDARD ANNUITY.—In the case of a
standard annuity provided to a beneficiary under
section 1450(a)(4) of this title, the monthly annuity
payable to the beneficiary shall be the amount equal
253
to 55 percent of the retired pay of the person who
elected to provide the annuity after the reduction in
that pay in accordance with section 1452(c) of this
title.
‘‘(2) RESERVE-COMPONENT ANNUITY.—In the
case of a reserve-component annuity provided to a
beneficiary under section 1450(a)(4) of this title, the
monthly annuity payable to the beneficiary shall be
the amount equal to a percentage of the retired pay
of the person who elected to provide the annuity
after the reduction in such pay in accordance with
section 1452(c) of this title that—
‘‘(A) is less than 55 percent; and
‘‘(B) is determined under subsection (f).
‘‘(3) COMPUTATION
OF
RESERVE-COMPONENT
ANNUITY
WHEN
PARTICIPANT
DIES
BEFORE
AGE
60.—For the purposes of paragraph (2), a person—
‘‘(A) who provides an annuity that is de-
termined in accordance with that paragraph;
‘‘(B) who dies before becoming 60 years of
age; and
‘‘(C) who at the time of death is otherwise
entitled to retired pay,
shall be considered to have been entitled to retired
pay at the time of death. The retired pay of such
254
person for the purposes of such paragraph shall be
computed on the basis of the rates of basic pay in
effect on the date on which the annuity provided by
such person is to become effective in accordance
with the designation of such person under section
1448(e) of this title.
‘‘(c) ANNUITIES FOR SURVIVORS OF CERTAIN PER-
SONS DYING DURING A PERIOD OF SPECIAL ELIGIBILITY
FOR SBP.—
‘‘(1) IN GENERAL.—In the case of an annuity
provided under section 1448(d) or 1448(f) of this
title, the amount of the annuity shall be determined
as follows:
‘‘(A) BENEFICIARY UNDER 62 YEARS OF
AGE.—If the person receiving the annuity is
under 62 years of age or is a dependent child
when the member or former member dies, the
monthly annuity shall be the amount equal to
55 percent of the retired pay to which the mem-
ber or former member would have been entitled
if the member or former member had been enti-
tled to that pay based upon his years of active
service when he died.
‘‘(B) BENEFICIARY 62 YEARS OF AGE OR
OLDER.—
255
‘‘(i) GENERAL RULE.—If the person
receiving the annuity (other than a de-
pendent child) is 62 years of age or older
when the member or former member dies,
the monthly annuity shall be the amount
equal to 35 percent of the retired pay to
which the member or former member
would have been entitled if the member or
former member had been entitled to that
pay based upon his years of active service
when he died.
‘‘(ii) RULE IF BENEFICIARY ELIGIBLE
FOR SOCIAL SECURITY OFFSET COMPUTA-
TION.—If the beneficiary is eligible to have
the annuity computed under subsection (e)
and if, at the time the beneficiary becomes
entitled to the annuity, computation of the
annuity under that subsection is more fa-
vorable to the beneficiary than computa-
tion under clause (i), the annuity shall be
computed under that subsection rather
than under clause (i).
‘‘(2) DIC 
OFFSET.—An annuity computed
under paragraph (1) that is paid to a surviving
spouse shall be reduced by the amount of depend-
256
ency and indemnity compensation to which the sur-
viving spouse is entitled under section 1311(a) of
title 38. Any such reduction shall be effective on the
date of the commencement of the period of payment
of such compensation under title 38.
‘‘(3) OFFICER WITH ENLISTED SERVICE WHO IS
NOT YET ELIGIBLE TO RETIRE AS AN OFFICER.—In
the case of an annuity provided by reason of the
service 
of 
a 
member 
described 
in 
section
1448(d)(1)(B) or 1448(d)(1)(C) of this title who
first became a member of a uniformed service before
September 8, 1980, the retired pay to which the
member would have been entitled when he died shall
be determined for purposes of paragraph (1) based
upon the rate of basic pay in effect at the time of
death for the grade in which the member was serv-
ing at the time of death, unless (as determined by
the Secretary concerned) the member would have
been entitled to be retired in a higher grade.
‘‘(4) RATE OF PAY TO BE USED IN COMPUTING
ANNUITY.—In the case of an annuity paid under
section 1448(f) of this title by reason of the service
of a person who first became a member of a uni-
formed service before September 8, 1980, the retired
pay of the person providing the annuity shall for the
257
purposes of paragraph (1) be computed on the basis
of the rates of basic pay in effect on the effective
date of the annuity.
‘‘(d) REDUCTION OF ANNUITIES AT AGE 62.—
‘‘(1) REDUCTION REQUIRED.—The annuity of a
person whose annuity is computed under subpara-
graph (A) of subsection (a)(1), (a)(2), or (c)(1) shall
be reduced on the first day of the month after the
month in which the person becomes 62 years of age.
‘‘(2) AMOUNT OF ANNUITY AS REDUCED.—
‘‘(A) 35 PERCENT
ANNUITY.—Except as
provided in subparagraph (B), the reduced
amount of the annuity shall be the amount of
the annuity that the person would be receiving
on that date if the annuity had initially been
computed under subparagraph (B) of that sub-
section.
‘‘(B) SAVINGS
PROVISION
FOR
BENE-
FICIARIES
ELIGIBLE
FOR
SOCIAL
SECURITY
OFFSET COMPUTATION.—In the case of a per-
son eligible to have an annuity computed under
subsection (e) and for whom, at the time the
person becomes 62 years of age, the annuity
computed with a reduction under subsection
(e)(3) is more favorable than the annuity with
258
a reduction described in subparagraph (A), the
reduction in the annuity shall be computed in
the same manner as a reduction under sub-
section (e)(3).
‘‘(e) SAVINGS
PROVISION
FOR
CERTAIN
BENE-
FICIARIES.—
‘‘(1) PERSONS COVERED.—The following bene-
ficiaries under the Plan are eligible to have an annu-
ity under the Plan computed under this subsection:
‘‘(A) A beneficiary receiving an annuity
under the Plan on October 1, 1985, as the sur-
viving spouse or former spouse of the person
providing the annuity.
‘‘(B) A spouse or former spouse bene-
ficiary of a person who on October 1, 1985—
‘‘(i) was a participant in the Plan;
‘‘(ii) was entitled to retired pay or
was qualified for that pay except that he
had not applied for and been granted that
pay; or
‘‘(iii) would have been eligible for re-
serve-component retired pay but for the
fact that he was under 60 years of age.
259
‘‘(2) AMOUNT OF ANNUITY.—Subject to para-
graph (3), an annuity computed under this sub-
section is determined as follows:
‘‘(A) STANDARD ANNUITY.—In the case of
the beneficiary of a standard annuity, the annu-
ity shall be the amount equal to 55 percent of
the base amount.
‘‘(B) RESERVE COMPONENT ANNUITY.—In
the case of the beneficiary of a reserve-compo-
nent annuity, the annuity shall be the percent-
age of the base amount that—
‘‘(i) is less than 55 percent; and
‘‘(ii) is determined under subsection
(f).
‘‘(C) BENEFICIARIES OF PERSONS DYING
DURING A PERIOD OF SPECIAL ELIGIBILITY FOR
SBP.—In the case of the beneficiary of an annu-
ity under section 1448(d) or 1448(f) of this
title, the annuity shall be the amount equal to
55 percent of the retired pay of the person pro-
viding the annuity (as that pay is determined
under subsection (c)).
‘‘(3) SOCIAL SECURITY OFFSET.—An annuity
computed under this subsection shall be reduced by
the lesser of the following:
261
seq.) to the extent that such benefit has been
offset by deductions under section 203 of such
Act (42 U.S.C. 403) on account of work.
‘‘(B) TREATMENT
OF
CERTAIN
PERIODS
FOR WHICH SOCIAL SECURITY REFUNDS ARE
MADE.—In the computation of any reduction
made under paragraph (3), there shall be ex-
cluded any period of service described in section
210(l)(1) of the Social Security Act (42 U.S.C.
410(l)(1))—
‘‘(i) which was performed after De-
cember 1, 1980; and
‘‘(ii) which involved periods of service
of less than 30 continuous days for which
the person concerned is entitled to receive
a refund under section 6413(c) of the In-
ternal Revenue Code of 1986 of the social
security tax which the person had paid.
‘‘(f) DETERMINATION OF PERCENTAGES APPLICA-
BLE TO COMPUTATION OF RESERVE-COMPONENT ANNU-
ITIES.—The percentage to be applied in determining the
amount of an annuity computed under subsection (a)(2),
(b)(2), or (e)(2)(B) shall be determined under regulations
prescribed by the Secretary of Defense. Such regulations
shall be prescribed taking into consideration the following:
262
‘‘(1) The age of the person electing to provide
the annuity at the time of such election.
‘‘(2) The difference in age between such person
and the beneficiary of the annuity.
‘‘(3) Whether such person provided for the an-
nuity to become effective (in the event he died before
becoming 60 years of age) on the day after his death
or on the 60th anniversary of his birth.
‘‘(4) Appropriate group annuity tables.
‘‘(5) Such other factors as the Secretary consid-
ers relevant.
‘‘(g) ADJUSTMENTS TO ANNUITIES.—
‘‘(1) PERIODIC
ADJUSTMENTS
FOR
COST-OF-
LIVING.—
‘‘(A) INCREASES IN ANNUITIES WHEN RE-
TIRED PAY INCREASED.—Whenever retired pay
is increased under section 1401a of this title (or
any other provision of law), each annuity that
is payable under the Plan shall be increased at
the same time.
‘‘(B) PERCENTAGE OF INCREASE.—The in-
crease shall, in the case of any annuity, be by
the same percent as the percent by which the
retired pay of the person providing the annuity
would have been increased at such time if the
263
person were alive (and otherwise entitled to
such pay).
‘‘(C) CERTAIN
REDUCTIONS
TO
BE
DIS-
REGARDED.—The amount of the increase shall
be based on the monthly annuity payable before
any reduction under section 1450(c) of this title
or under subsection (c)(2).
‘‘(2) ROUNDING DOWN.—The monthly amount
of an annuity payable under this subchapter, if not
a multiple of $1, shall be rounded to the next lower
multiple of $1.
‘‘(h) ADJUSTMENTS TO BASE AMOUNT.—
‘‘(1) PERIODIC
ADJUSTMENTS
FOR
COST-OF-
LIVING.—
‘‘(A) INCREASES IN BASE AMOUNT WHEN
RETIRED
PAY
INCREASED.—Whenever retired
pay is increased under section 1401a of this
title (or any other provision of law), the base
amount applicable to each participant in the
Plan shall be increased at the same time.
‘‘(B) PERCENTAGE OF INCREASE.—The in-
crease shall be by the same percent as the per-
cent by which the retired pay of the participant
is so increased.
264
‘‘(2) RECOMPUTATION AT AGE 62.—When the
retired pay of a person who first became a member
of a uniformed service on or after August 1, 1986,
and who is a participant in the Plan is recomputed
under section 1410 of this title upon the person’s
becoming 62 years of age, the base amount applica-
ble to that person shall be recomputed (effective on
the effective date of the recomputation of such re-
tired pay under section 1410 of this title) so as to
be the amount equal to the amount of the base
amount that would be in effect on that date if in-
creases in such base amount under paragraph (1)
had been computed as provided in paragraph (2) of
section 1401a(b) of this title (rather than under
paragraph (3) of that section).
‘‘(3) DISREGARDING OF RETIRED PAY REDUC-
TIONS
FOR
RETIREMENT
BEFORE
YEARS
OF
SERVICE.—Computation of a member’s retired pay
for purposes of this section shall be made without
regard to any reduction under section 1409(b)(2) of
this title.
‘‘(i) RECOMPUTATION
OF ANNUITY
FOR CERTAIN
BENEFICIARIES.—In the case of an annuity under the
Plan which is computed on the basis of the retired pay
of a person who would have been entitled to have that re-
265
tired pay recomputed under section 1410 of this title upon
attaining 62 years of age, but who dies before attaining
that age, the annuity shall be recomputed, effective on the
first day of the first month beginning after the date on
which the member or former member would have attained
62 years of age, so as to be the amount equal to the
amount of the annuity that would be in effect on that date
if increases under subsection (h)(1) in the base amount
applicable to that annuity to the time of the death of the
member or former member, and increases in such annuity
under subsection (g)(1), had been computed as provided
in paragraph (2) of section 1401a(b) of this title (rather
than under paragraph (3) of that section).
‘‘§ 1452. Reduction in retired pay
‘‘(a) SPOUSE AND FORMER SPOUSE ANNUITIES.—
‘‘(1) REQUIRED REDUCTION IN RETIRED PAY.—
Except as provided in subsection (b), the retired pay
of a participant in the Plan who is providing spouse
coverage (as described in paragraph (5)) shall be re-
duced as follows:
‘‘(A) STANDARD ANNUITY.—If the annuity
coverage being providing is a standard annuity,
the reduction shall be as follows:
‘‘(i) DISABILITY
AND
NONREGULAR
SERVICE RETIREES.—In the case of a per-
266
son who is entitled to retired pay under
chapter 61 or chapter 1223 of this title,
the reduction shall be in whichever of the
alternative reduction amounts is more fa-
vorable to that person.
‘‘(ii) MEMBERS AS OF ENACTMENT OF
FLAT-RATE REDUCTION.—In the case of a
person who first became a member of a
uniformed service before March 1, 1990,
the reduction shall be in whichever of the
alternative reduction amounts is more fa-
vorable to that person.
‘‘(iii) NEW ENTRANTS AFTER ENACT-
MENT OF FLAT-RATE REDUCTION.—In the
case of a person who first becomes a mem-
ber of a uniformed service on or after
March 1, 1990, and who is entitled to re-
tired pay under a provision of law other
than chapter 61 or chapter 1223 of this
title, the reduction shall be in an amount
equal to 61⁄2 percent of the base amount.
‘‘(iv) 
ALTERNATIVE
REDUCTION
AMOUNTS.—For purposes of clauses (i)
and (ii), the alternative reduction amounts
are the following:
267
‘‘(I) FLAT-RATE
REDUCTION.—
An amount equal to 61⁄2 percent of
the base amount.
‘‘(II) AMOUNT UNDER PRE-FLAT-
RATE REDUCTION.—An amount equal
to 21⁄2 percent of the first $421 (as
adjusted under paragraph (4)) of the
base amount plus 10 percent of the
remainder of the base amount.
‘‘(B) RESERVE-COMPONENT ANNUITY.—If
the annuity coverage being provided is a re-
serve-component annuity, the reduction shall be
in whichever of the following amounts is more
favorable to that person:
‘‘(i) 
FLAT-RATE
REDUCTION.—An
amount equal to 61⁄2 percent of the base
amount plus an amount determined in ac-
cordance with regulations prescribed by the
Secretary of Defense as a premium for the
additional coverage provided through re-
serve-component annuity coverage under
the Plan.
‘‘(ii) AMOUNT UNDER PRE-FLAT-RATE
REDUCTION.—An amount equal to 21⁄2
percent of the first $421 (as adjusted
268
under paragraph (4)) of the base amount
plus 10 percent of the remainder of the
base amount plus an amount determined
in accordance with regulations prescribed
by the Secretary of Defense as a premium
for 
the 
additional 
coverage 
provided
through reserve-component annuity cov-
erage under the Plan.
‘‘(2) ADDITIONAL REDUCTION FOR CHILD COV-
ERAGE.—If there is a dependent child as well as a
spouse or former spouse, the amount prescribed
under paragraph (1) shall be increased by an
amount prescribed under regulations of the Sec-
retary of Defense.
‘‘(3) NO REDUCTION WHEN NO BENEFICIARY.—
The reduction in retired pay prescribed by para-
graph (1) shall not be applicable during any month
in which there is no eligible spouse or former spouse
beneficiary.
‘‘(4) PERIODIC ADJUSTMENTS.—
‘‘(A) ADJUSTMENTS
FOR
INCREASES
IN
RATES OF BASIC PAY.—Whenever there is an
increase in the rates of basic pay of members
of the uniformed services effective after Janu-
ary 1, 1996, the amounts under paragraph (1)
269
with respect to which the percentage factor of
21⁄2 is applied shall be increased by the overall
percentage of such increase in the rates of basic
pay. The increase under the preceding sentence
shall apply only with respect to persons whose
retired pay is computed based on the rates of
basic pay in effect on or after the date of such
increase in rates of basic pay.
‘‘(B) ADJUSTMENTS
FOR
RETIRED
PAY
COLAS.—In addition to the increase under sub-
paragraph (A), the amounts under paragraph
(1) with respect to which the percentage factor
of 21⁄2 is applied shall be further increased at
the same time and by the same percentage as
an increase in retired pay under section 1401a
of this title effective after January 1, 1996.
Such increase under the preceding sentence
shall apply only with respect to a person who
initially participates in the Plan on a date
which is after both the effective date of such in-
crease under section 1401a and the effective
date of the rates of basic pay upon which that
person’s retired pay is computed.
‘‘(5) SPOUSE COVERAGE DESCRIBED.—For the
purposes of paragraph (1), a participant in the Plan
270
who is providing spouse coverage is a participant
who—
‘‘(A) has (i) a spouse or former spouse, or
(ii) a spouse or former spouse and a dependent
child; and
‘‘(B) has not elected to provide an annuity
to a person designated by him under section
1448(b)(1) of this title or, having made such an
election, has changed his election in favor of his
spouse under section 1450(f) of this title.
‘‘(b) CHILD-ONLY ANNUITIES.—
‘‘(1) REQUIRED REDUCTION IN RETIRED PAY.—
The retired pay of a participant in the Plan who is
providing child-only coverage (as described in para-
graph (4)) shall be reduced by an amount prescribed
under regulations by the Secretary of Defense.
‘‘(2) NO REDUCTION WHEN NO CHILD.—There
shall be no reduction in retired pay under paragraph
(1) for any month during which the participant has
no eligible dependent child.
‘‘(3) SPECIAL RULE FOR CERTAIN RCSBP PAR-
TICIPANTS.—In the case of a participant in the Plan
who is participating in the Plan under an election
under section 1448(a)(2)(B) of this title and who
provided child-only coverage during a period before
271
the participant becomes entitled to receive retired
pay, the retired pay of the participant shall be re-
duced by an amount prescribed under regulations by
the Secretary of Defense to reflect the coverage pro-
vided under the Plan during the period before the
participant became entitled to receive retired pay. A
reduction under this paragraph is in addition to any
reduction under paragraph (1) and is made without
regard to whether there is an eligible dependent
child during a month for which the reduction is
made.
‘‘(4) CHILD-ONLY
COVERAGE
DEFINED.—For
the purposes of this subsection, a participant in the
Plan who is providing child-only coverage is a partic-
ipant who has a dependent child and who—
‘‘(A) does not have an eligible spouse or
former spouse; or
‘‘(B) has a spouse or former spouse but
has elected to provide an annuity for dependent
children only.
‘‘(c) REDUCTION FOR INSURABLE INTEREST COV-
ERAGE.—
‘‘(1) REQUIRED REDUCTION IN RETIRED PAY.—
The retired pay of a person who has elected to pro-
vide an annuity to a person designated by him under
273
‘‘(d) DEPOSITS TO COVER PERIODS WHEN RETIRED
PAY NOT PAID.—
‘‘(1) REQUIRED DEPOSITS.—If a person who
has elected to participate in the Plan has been
awarded retired pay and is not entitled to that pay
for any period, that person must deposit in the
Treasury the amount that would otherwise have
been deducted from his pay for that period.
‘‘(2) DEPOSITS NOT REQUIRED WHEN PARTICI-
PANT ON ACTIVE DUTY.—Paragraph (1) does not
apply to a person with respect to any period when
that person is on active duty under a call or order
to active duty for a period of more than 30 days.
‘‘(e) DEPOSITS NOT REQUIRED FOR CERTAIN PAR-
TICIPANTS IN CSRS.—When a person who has elected to
participate in the Plan waives that person’s retired pay
for the purposes of subchapter III of chapter 83 of title
5, that person shall not be required to make the deposit
otherwise required by subsection (d) as long as that waiver
is in effect unless, in accordance with section 8339(i) of
title 5, that person has notified the Office of Personnel
Management that he does not desire a spouse surviving
him to receive an annuity under section 8331(b) of title
5.
‘‘(f) REFUNDS OF DEDUCTIONS NOT ALLOWED.—
274
‘‘(1) GENERAL RULE.—A person is not entitled
to refund of any amount deducted from retired pay
under this section.
‘‘(2) EXCEPTIONS.—Paragraph (1) does not
apply—
‘‘(A) in the case of a refund authorized by
section 1450(e) of this title; or
‘‘(B) in case of a deduction made through
administrative error.
‘‘(g) DISCONTINUATION OF PARTICIPATION BY PAR-
TICIPANTS WHOSE SURVIVING SPOUSES WILL BE ENTI-
TLED TO DIC.—
‘‘(1) DISCONTINUATION.—
‘‘(A) CONDITIONS.—Notwithstanding any
other provision of this subchapter but subject to
paragraphs (2) and (3), a person who has elect-
ed to participate in the Plan and who is suffer-
ing from a service-connected disability rated by
the Secretary of Veterans Affairs as totally dis-
abling and has suffered from such disability
while so rated for a continuous period of 10 or
more years (or, if so rated for a lesser period,
has suffered from such disability while so rated
for a continuous period of not less than 5 years
from the date of such person’s last discharge or
275
release from active duty) may discontinue par-
ticipation in the Plan by submitting to the Sec-
retary concerned a request to discontinue par-
ticipation in the Plan.
‘‘(B) EFFECTIVE DATE.—Participation in
the Plan of a person who submits a request
under subparagraph (A) shall be discontinued
effective on the first day of the first month fol-
lowing the month in which the request under
subparagraph (A) is received by the Secretary
concerned. Effective on such date, the Secretary
concerned shall discontinue the reduction being
made in such person’s retired pay on account of
participation in the Plan or, in the case of a
person who has been required to make deposits
in the Treasury on account of participation in
the Plan, such person may discontinue making
such deposits effective on such date.
‘‘(C) FORM
FOR
REQUEST
FOR
DIS-
CONTINUATION.—Any request under this para-
graph to discontinue participation in the Plan
shall be in such form and shall contain such in-
formation as the Secretary concerned may re-
quire by regulation.
276
‘‘(2) CONSENT OF BENEFICIARIES REQUIRED.—
A person described in paragraph (1) may not dis-
continue participation in the Plan under such para-
graph without the written consent of the beneficiary
or beneficiaries of such person under the Plan.
‘‘(3) INFORMATION ON PLAN TO BE PROVIDED
BY SECRETARY CONCERNED.—
‘‘(A) INFORMATION
TO
BE
PROVIDED
PROMPTLY
TO
PARTICIPANT.—The Secretary
concerned shall furnish promptly to each person
who files a request under paragraph (1) to dis-
continue participation in the Plan a written
statement of the advantages of participating in
the Plan and the possible disadvantages of dis-
continuing participation.
‘‘(B) RIGHT TO WITHDRAW DISCONTINU-
ATION REQUEST.—A person may withdraw a re-
quest made under paragraph (1) if it is with-
drawn within 30 days after having been submit-
ted to the Secretary concerned.
‘‘(4) REFUND OF DEDUCTIONS FROM RETIRED
PAY.—Upon the death of a person described in para-
graph (1) who discontinued participation in the Plan
in accordance with this subsection, any amount de-
ducted from the retired pay of that person under
277
this section shall be refunded to the person’s surviv-
ing spouse.
‘‘(5) 
RESUMPTION
OF
PARTICIPATION
IN
PLAN.—
‘‘(A) CONDITIONS
FOR
RESUMPTION.—A
person described in paragraph (1) who discon-
tinued participation in the Plan may elect to
participate again in the Plan if—
‘‘(i) after having discontinued partici-
pation in the Plan the Secretary of Veter-
ans Affairs reduces that person’s service-
connected disability rating to a rating of
less than total; and
‘‘(ii) that person applies to the Sec-
retary concerned, within such period of
time after the reduction in such person’s
service-connected disability rating has been
made as the Secretary concerned may pre-
scribe, to again participate in the Plan and
includes in such application such informa-
tion as the Secretary concerned may re-
quire.
‘‘(B) EFFECTIVE DATE OF RESUMED COV-
ERAGE.—Such person’s participation in the
Plan under this paragraph is effective begin-
278
ning on the first day of the month after the
month in which the Secretary concerned re-
ceives the application for resumption of partici-
pation in the Plan.
‘‘(C) RESUMPTION OF CONTRIBUTIONS.—
When a person elects to participate in the Plan
under this paragraph, the Secretary concerned
shall begin making reductions in that person’s
retired pay, or require such person to make de-
posits in the Treasury under subsection (d), as
appropriate, effective on the effective date of
such participation under subparagraph (B).
‘‘(h) INCREASES IN REDUCTION WITH INCREASES IN
RETIRED PAY.—Whenever retired pay is increased under
section 1401a of this title (or any other provision of law),
the amount of the reduction to be made under subsection
(a) or (b) in the retired pay of any person shall be in-
creased at the same time and by the same percentage as
such retired pay is so increased.
‘‘(i) RECOMPUTATION OF REDUCTION UPON RECOM-
PUTATION OF RETIRED PAY.—When the retired pay of
a person who first became a member of a uniformed serv-
ice on or after August 1, 1986, and who is a participant
in the Plan is recomputed under section 1410 of this title
upon the person’s becoming 62 years of age, the amount
279
of the reduction in such retired pay under this section
shall be recomputed (effective on the effective date of the
recomputation of such retired pay under section 1410 of
this title) so as to be the amount equal to the amount
of such reduction that would be in effect on that date if
increases in such retired pay under section 1401a(b) of
this title, and increases in reductions in such retired pay
under subsection (h), had been computed as provided in
paragraph (2) of section 1401a(b) of this title (rather than
under paragraph (3) of that section).
‘‘§ 1453. Recovery of amounts erroneously paid
‘‘(a) RECOVERY.—In addition to any other method
of recovery provided by law, the Secretary concerned may
authorize the recovery of any amount erroneously paid to
a person under this subchapter by deduction from later
payments to that person.
‘‘(b) AUTHORITY TO WAIVE RECOVERY.—Recovery
of an amount erroneously paid to a person under this sub-
chapter is not required if, in the judgment of the Secretary
concerned and the Comptroller General—
‘‘(1) there has been no fault by the person to
whom the amount was erroneously paid; and
‘‘(2) recovery of such amount would be contrary
to the purposes of this subchapter or against equity
and good conscience.
280
‘‘§ 1454. Correction of administrative errors
‘‘(a) AUTHORITY.—The Secretary concerned may,
under regulations prescribed under section 1455 of this
title, correct or revoke any election under this subchapter
when the Secretary considers it necessary to correct an
administrative error.
‘‘(b) FINALITY.—Except when procured by fraud, a
correction or revocation under this section is final and con-
clusive on all officers of the United States.
‘‘§ 1455. Regulations
‘‘(a) IN GENERAL.—The President shall prescribe
regulations to carry out this subchapter. Those regulations
shall, so far as practicable, be uniform for the uniformed
services.
‘‘(b) NOTICE
OF
ELECTIONS.—Regulations pre-
scribed under this section shall provide that before the
date on which a member becomes entitled to retired pay—
‘‘(1) if the member is married, the member and
the member’s spouse shall be informed of the elec-
tions available under section 1448(a) of this title
and the effects of such elections; and
‘‘(2) if the notification referred to in section
1448(a)(3)(E) of this title is required, any former
spouse of the member shall be informed of the elec-
tions available and the effects of such elections.
281
‘‘(c) PROCEDURE
FOR DEPOSITING CERTAIN RE-
CEIPTS.—Regulations prescribed under this section shall
establish procedures for depositing the amounts referred
to in sections 1448(g), 1450(k)(2), and 1452(d) of this
title.
‘‘(d) PAYMENTS TO GUARDIANS AND FIDUCIARIES.—
‘‘(1) IN
GENERAL.—Regulations prescribed
under this section shall provide procedures for the
payment of an annuity under this subchapter in the
case of—
‘‘(A) a person for whom a guardian or
other fiduciary has been appointed; and
‘‘(B) a minor, mentally incompetent, or
otherwise legally disabled person for whom a
guardian or other fiduciary has not been ap-
pointed.
‘‘(2) AUTHORIZED PROCEDURES.—The regula-
tions under paragraph (1) may include provisions for
the following:
‘‘(A) In the case of an annuitant referred
to in paragraph (1)(A), payment of the annuity
to the appointed guardian or other fiduciary.
‘‘(B) In the case of an annuitant referred
to in paragraph (1)(B), payment of the annuity
to any person who, in the judgment of the Sec-
282
retary concerned, is responsible for the care of
the annuitant.
‘‘(C) Subject to subparagraphs (D) and
(E), a requirement for the payee of an annuity
to spend or invest the amounts paid on behalf
of the annuitant solely for benefit of the annu-
itant.
‘‘(D) Authority for the Secretary concerned
to permit the payee to withhold from the annu-
ity payment such amount, not in excess of 4
percent of the annuity, as the Secretary con-
cerned considers a reasonable fee for the fidu-
ciary services of the payee when a court ap-
pointment order provides for payment of such a
fee to the payee for such services or the Sec-
retary concerned determines that payment of a
fee to such payee is necessary in order to obtain
the fiduciary services of the payee.
‘‘(E) Authority for the Secretary concerned
to require the payee to provide a surety bond in
an amount sufficient to protect the interests of
the annuitant and to pay for such bond out of
the annuity.
‘‘(F) A requirement for the payee of an
annuity to maintain and, upon request, to pro-
283
vide to the Secretary concerned an accounting
of expenditures and investments of amounts
paid to the payee.
‘‘(G) In the case of an annuitant referred
to in paragraph (1)(B)—
‘‘(i) procedures for determining in-
competency and for selecting a payee to
represent the annuitant for the purposes of
this section, including provisions for notify-
ing the annuitant of the actions being
taken to make such a determination and to
select a representative payee, an oppor-
tunity for the annuitant to review the evi-
dence being considered, and an opportunity
for the annuitant to submit additional evi-
dence before the determination is made;
and
‘‘(ii) standards for determining incom-
petency, including standards for determin-
ing the sufficiency of medical evidence and
other evidence.
‘‘(H) Provisions for any other matter that
the President considers appropriate in connec-
tion with the payment of an annuity in the case
of a person referred to in paragraph (1).
284
‘‘(3) LEGAL EFFECT OF PAYMENT TO GUARD-
IAN OR FIDUCIARY.—An annuity paid to a person on
behalf of an annuitant in accordance with the regu-
lations prescribed pursuant to paragraph (1) dis-
charges the obligation of the United States for pay-
ment to the annuitant of the amount of the annuity
so paid.’’.
Subtitle E—Other Matters
SEC. 651. TECHNICAL CORRECTION CLARIFYING ABILITY
OF CERTAIN MEMBERS TO ELECT NOT TO OC-
CUPY GOVERNMENT QUARTERS.
Effective July 1, 1996, section 403(b)(3) of title 37,
United States Code, is amended by striking out ‘‘A mem-
ber’’ and inserting in lieu thereof ‘‘Subject to the provi-
sions of subsection (j), a member’’.
SEC. 652. TECHNICAL CORRECTION CLARIFYING LIMITA-
TION ON FURNISHING CLOTHING OR ALLOW-
ANCES FOR ENLISTED NATIONAL GUARD
TECHNICIANS.
Section 418(c) of title 37, United States Code, is
amended by striking out ‘‘for which a uniform allowance
is paid under section 415 or 416 of this title’’, and insert-
ing in lieu thereof ‘‘for which clothing is furnished or a
uniform allowance is paid under this section’’.
285
TITLE VII—HEALTH CARE
PROVISIONS
Subtitle A—Health Care Services
SEC. 701. MEDICAL AND DENTAL CARE FOR RESERVE COM-
PONENT MEMBERS IN A DUTY STATUS.
(a) AVAILABILITY
OF
MEDICAL
AND
DENTAL
CARE.—(1) Section 1074a of title 10, United States Code,
is amended to read as follows:
‘‘§ 1074a. Medical and dental care: reserve component
members in a duty status
‘‘(a) HEALTH CARE DESCRIBED.—A person de-
scribed in subsection (b) is entitled to the medical and
dental care appropriate for the treatment of the injury,
illness, or disease of the person until the person completes
treatment and is physically able to resume the military
duties of the person or has completed processing in ac-
cordance with chapter 61 of this title.
‘‘(b) MEMBERS ENTITLED TO CARE.—Under joint
regulations prescribed by the administering Secretaries,
the following persons are entitled to the benefits described
in this section:
‘‘(1) Each member of a reserve component who
incurs or aggravates an injury, illness, or disease in
the line of duty while performing—
286
‘‘(A) active duty, including active duty for
training and annual training duty, or full-time
National Guard duty; or
‘‘(B) inactive-duty training, regardless of
whether the member is in a pay or nonpay sta-
tus.
‘‘(2) Each member of a reserve component who
incurs or aggravates an injury, illness, or disease
while traveling directly to or from the place at which
that member is to perform or has performed—
‘‘(A) active duty, including active duty for
training and annual training duty, or full-time
National Guard duty, or
‘‘(B) inactive-duty training, regardless of
whether the member is in a pay or nonpay sta-
tus.
‘‘(3) Each member of a reserve component who
incurs or aggravates an injury, illness, or disease in
the line of duty while remaining overnight, between
successive periods of inactive-duty training, at or in
the vicinity of the site of the inactive-duty training,
if the site of inactive-duty training is outside reason-
able commuting distance from the member’s resi-
dence.
287
‘‘(c) ADDITIONAL BENEFITS.—(1) At the request of
a person described in paragraph (1)(A) or (2)(A) of sub-
section (b), the person may continue on active duty or full-
time National Guard duty during any period of hos-
pitalization resulting from the injury, illness, or disease.
‘‘(2) A person described in subsection (b) is entitled
to the pay and allowances authorized in accordance with
subsections (g) and (h) of section 204 of title 37.
‘‘(d) LIMITATION.—A person described in subsection
(b) is not entitled to benefits under this section if the in-
jury, illness, or disease, or aggravation of the injury, ill-
ness, or disease, is the result of the gross negligence or
misconduct of the person.’’.
(2) The item relating to such section in the table of
sections at the beginning of chapter 55 of title 10, United
States Code, is amended to read as follows:
‘‘1074a. Medical and dental care: reserve component members in a duty sta-
tus.’’.
(b) ANNUAL MEDICAL AND DENTAL SCREENINGS
AND CARE
FOR CERTAIN SELECTED RESERVE MEM-
BERS.—Section 10206 of title 10, United States Code, is
amended by adding at the end the following new sub-
section:
‘‘(c)(1) The Secretary of the Army shall provide to
members of the Selected Reserve of the Army who are as-
signed to units scheduled for deployment within 75 days
288
after mobilization the following medical and dental serv-
ices:
‘‘(A) An annual medical screening.
‘‘(B) For members who are over 40 years of
age, a full physical examination not less often than
once every two years.
‘‘(C) An annual dental screening.
‘‘(D) The dental care identified in an annual
dental screening as required to ensure that a mem-
ber meets the dental standards required for deploy-
ment in the event of mobilization.
‘‘(2) The services provided under this subsection shall
be provided at no cost to the member.’’.
SEC. 702. PREVENTIVE HEALTH CARE SCREENING FOR
COLON AND PROSTATE CANCER.
(a) MEMBERS AND FORMER MEMBERS.—(1) Sub-
section (a) of section 1074d of title 10, United States
Code, is amended—
(A) by inserting ‘‘(1)’’ before ‘‘Female’’; and
(B) by adding at the end the following new
paragraph:
‘‘(2) Male members and former members of the uni-
formed services entitled to medical care under section
1074 or 1074a of this title shall also be entitled to preven-
tive health care screening for colon or prostate cancer at
289
such intervals and using such screening methods as the
administering Secretaries consider appropriate.’’.
(2)(A) The heading of such section is amended to
read as follows:
‘‘§ 1074d. Primary and preventive health care serv-
ices
(B) The item relating to such section in the table of
sections at the beginning of chapter 55 of such title is
amended to read as follows:
‘‘1074d. Primary and preventive health care services.’’.
(b) DEPENDENTS.—(1) Section 1077(a) of such title
is amended by adding at the end the following new para-
graph:
‘‘(14) Preventive health care screening for colon
or prostate cancer at the intervals and using the
screening 
methods 
prescribed 
under 
section
1074d(a)(2) of this title.’’.
(2) Section 1079(a)(2) of such title is amended—
(A) in the matter preceding subparagraph (A),
by inserting ‘‘the schedule and method of colon and
prostate cancer screenings,’’ after ‘‘pap smears and
mammograms,’’; and
(B) in subparagraph (B), by inserting ‘‘or colon
and prostate cancer screenings’’ after ‘‘pap smears
and mammograms’’.
290
Subtitle B—TRICARE Program
SEC. 711. DEFINITION OF TRICARE PROGRAM.
For purposes of this subtitle, the term ‘‘TRICARE
program’’ means the managed health care program that
is established by the Secretary of Defense under the au-
thority of chapter 55 of title 10, United States Code, prin-
cipally section 1097 of such title, and includes the com-
petitive selection of contractors to financially underwrite
the delivery of health care services under the Civilian
Health and Medical Program of the Uniformed Services.
SEC. 712. CHAMPUS PAYMENT LIMITS FOR TRICARE PRIME
ENROLLEES.
Section 1079(h)(4) of title 10, United States Code,
is amended in the second sentence by striking ‘‘emer-
gency’’.
SEC. 713. IMPROVED INFORMATION EXCHANGE BETWEEN
MILITARY 
TREATMENT 
FACILITIES 
AND
TRICARE PROGRAM CONTRACTORS.
(a) UNIFORM INTERFACES.—With respect to the
automated medical information system being developed by
the Department of Defense and known as the Composite
Health Care System, the Secretary of Defense shall ensure
that the Composite Health Care System provides for uni-
form interfaces between information systems of military
treatment facilities and private contractors under man-
291
aged care programs of the TRICARE program. The uni-
form interface shall provide for a full electronic two-way
exchange of health care information between the military
treatment facilities and contractor information systems,
including enrollment information, information regarding
eligibility determinations, provider network information,
appointment information, and information regarding the
existence of third-party payers.
(b) AMENDMENT OF EXISTING CONTRACTS.—To as-
sure a single consistent source of information throughout
the health care delivery system of the uniformed services,
the Secretary of Defense shall amend each TRICARE pro-
gram contract, with the consent of the TRICARE pro-
gram contractor and notwithstanding any requirement for
competition, to require the contractor—
(1) to use software furnished under the Com-
posite Health Care System to record military treat-
ment facility provider appointments; and
(2) to record TRICARE program enrollment
through direct use of the Composite Health Care
System software or through the uniform two-way
interface between the contractor and military treat-
ment facilities systems, where applicable.
(c) PHASED IMPLEMENTATION.—The Secretary of
Defense shall test the uniform version of the Composite
292
Health Care System required under subsection (a) in one
region of the TRICARE program for six months before
deploying the information system throughout the health
care delivery system of the uniformed services.
Subtitle C—Uniformed Services
Treatment Facilities
SEC. 721. DEFINITIONS.
In this subtitle:
(1) The term ‘‘administering Secretaries’’
means the Secretary of Defense, the Secretary of
Transportation, and the Secretary of Health and
Human Services.
(2) The term ‘‘agreement’’ means the agree-
ment required under section 722(b) between the Sec-
retary of Defense and a designated provider.
(3) The term ‘‘capitation payment’’ means an
actuarially sound payment for a defined set of health
care services that is established on a per enrollee per
month basis.
(4) The term ‘‘covered beneficiary’’ means a
beneficiary under chapter 55 of title 10, United
States Code, other than a beneficiary under section
1074(a) of such title.
(5) The term ‘‘designated provider’’ means a
public or nonprofit private entity that was a trans-
293
feree of a Public Health Service hospital or other
station under section 987 of the Omnibus Budget
Reconciliation Act of 1981 (Public Law 97–35; 95
Stat. 603) and that, before the date of the enact-
ment of this Act, was deemed to be a facility of the
uniformed services for the purposes of chapter 55 of
title 10, United States Code. The term includes any
legal successor in interest of the transferee.
(6) The term ‘‘enrollee’’ means a covered bene-
ficiary who enrolls with a designated provider.
(7) The term ‘‘health care services’’ means the
health care services provided under the health plan
known as the TRICARE PRIME option under the
TRICARE program.
(8) The term ‘‘Secretary’’ means the Secretary
of Defense.
(9) The term ‘‘TRICARE program’’ means the
managed health care program that is established by
the Secretary of Defense under the authority of
chapter 55 of title 10, United States Code, prin-
cipally section 1097 of such title, and includes the
competitive selection of contractors to financially un-
derwrite the delivery of health care services under
the Civilian Health and Medical Program of the
Uniformed Services.
294
SEC. 722. INCLUSION OF DESIGNATED PROVIDERS IN UNI-
FORMED SERVICES HEALTH CARE DELIVERY
SYSTEM.
(a) INCLUSION IN SYSTEM.—The health care delivery
system of the uniformed services shall include the des-
ignated providers.
(b) AGREEMENTS TO PROVIDE MANAGED HEALTH
CARE SERVICES.—(1) After consultation with the other
administering Secretaries, the Secretary of Defense shall
negotiate and enter into an agreement with each des-
ignated provider, under which the designated provider will
provide managed health care services to covered bene-
ficiaries who enroll with the designated provider.
(2) The agreement shall be entered into on a sole
source basis. The Federal Acquisition Regulation, except
for those requirements regarding competition, issued pur-
suant to section 25(c) of the Office of Federal Procure-
ment Policy Act (41 U.S.C. 421(c)) shall apply to the
agreements as acquisitions of commercial items.
(3) The implementation of an agreement is subject
to availability of funds for such purpose.
(c) EFFECTIVE DATE OF AGREEMENTS.—(1) Unless
an earlier effective date is agreed upon by the Secretary
and the designated provider, the agreement shall take ef-
fect upon the later of the following:
295
(A) The date on which a managed care support
contract under the TRICARE program is imple-
mented in the service area of the designated pro-
vider.
(B) October 1, 1997.
(2) Notwithstanding paragraph (1), the designated
provider whose service area includes Seattle, Washington,
shall implement its agreement as soon as the agreement
permits.
(d) TEMPORARY CONTINUATION OF EXISTING PAR-
TICIPATION AGREEMENTS.—The Secretary shall extend
the participation agreement of a designated provider in ef-
fect immediately before the date of the enactment of this
Act under section 718(c) of the National Defense Author-
ization Act for Fiscal Year 1991 (Public Law 101–510;
104 Stat. 1587) until the agreement required by this sec-
tion takes effect under subsection (c).
(e) SERVICE AREA.—The Secretary may not reduce
the size of the service area of a designated provider below
the size of the service area in effect as of September 30,
1996.
(f) COMPLIANCE WITH ADMINISTRATIVE REQUIRE-
MENTS.—(1) Unless otherwise agreed upon by the Sec-
retary and a designated provider, the designated provider
shall comply with necessary and appropriate administra-
296
tive requirements established by the Secretary for other
providers of health care services and requirements estab-
lished by the Secretary of Health and Human Services for
risk-sharing contractors under section 1876 of the Social
Security Act (42 U.S.C. 1395mm). The Secretary and the
designated provider shall determine and apply only such
administrative requirements as are minimally necessary
and appropriate. A designated provider shall not be re-
quired to comply with a law or regulation of a State gov-
ernment requiring licensure as a health insurer or health
maintenance organization.
(2) A designated provider may not contract out more
than five percent of its primary care enrollment without
the approval of the Secretary, except in the case of pri-
mary care contracts between a designated provider and a
primary care contractor in force on the date of the enact-
ment of this Act.
SEC. 723. PROVISION OF UNIFORM BENEFIT BY DES-
IGNATED PROVIDERS.
(a) UNIFORM BENEFIT REQUIRED.—A designated
provider shall offer to enrollees the health benefit option
prescribed and implemented by the Secretary under sec-
tion 731 of the National Defense Authorization Act for
Fiscal Year 1994 (Public Law 103–160; 10 U.S.C. 1073
note), including accompanying cost-sharing requirements.
297
(b) TIME FOR IMPLEMENTATION OF BENEFIT.—A
designated provider shall offer the health benefit option
described in subsection (a) to enrollees upon the later of
the following:
(1) The date on which health care services with-
in the health care delivery system of the uniformed
services are rendered through the TRICARE pro-
gram in the region in which the designated provider
operates.
(2) October 1, 1997.
(c) ADJUSTMENTS.—The Secretary may establish a
later date under subsection (b)(2) or prescribe reduced
cost-sharing requirements for enrollees.
SEC. 724. ENROLLMENT OF COVERED BENEFICIARIES.
(a) FISCAL YEAR 1997 LIMITATION.—(1) During fis-
cal year 1997, the number of covered beneficiaries who
are enrolled in managed care plans offered by designated
providers may not exceed the number of such enrollees as
of October 1, 1995.
(2) The Secretary may waive the limitation under
paragraph (1) if the Secretary determines that additional
enrollment authority for a designated provider is required
to accommodate covered beneficiaries who are dependents
of members of the uniformed services entitled to health
care under section 1074(a) of title 10, United States Code.
298
(b) PERMANENT LIMITATION.—For each fiscal year
after fiscal year 1997, the number of enrollees in managed
care plans offered by designated providers may not exceed
110 percent of the number of such enrollees as of the first
day of the immediately preceding fiscal year. The Sec-
retary may waive this limitation as provided in subsection
(a)(2).
(c) RETENTION OF CURRENT ENROLLEES.—An en-
rollee in the managed care program of a designated pro-
vider as of September 30, 1997, or such earlier date as
the designated provider and the Secretary may agree
upon, shall continue receiving services from the designated
provider pursuant to the agreement entered into under
section 722 unless the enrollee disenrolls from the des-
ignated provider. Except as provided in subsection (e), the
administering Secretaries may not disenroll such an en-
rollee unless the disenrollment is agreed to by the Sec-
retary and the designated provider.
(d) ADDITIONAL ENROLLMENT AUTHORITY.—Other
covered beneficiaries may also receive health care services
from a designated provider, except that the designated
provider may market such services to, and enroll, only
those covered beneficiaries who—
(1) do not have other primary health insurance
coverage (other than medicare coverage) covering
299
basic primary care and inpatient and outpatient
services; or
(2) are enrolled in the direct care system under
the TRICARE program, regardless of whether the
covered beneficiaries were users of the health care
delivery system of the uniformed services in prior
years.
(e) SPECIAL RULE FOR MEDICARE-ELIGIBLE BENE-
FICIARIES.—If a covered beneficiary who desires to enroll
in the managed care program of a designated provider is
also entitled to hospital insurance benefits under part A
of title XVIII of the Social Security Act (42 U.S.C. 1395c
et seq.), the covered beneficiary shall elect whether to re-
ceive health care services as an enrollee or under part A
of title XVIII of the Social Security Act. The Secretary
may disenroll an enrollee who subsequently violates the
election made under this subsection and receives benefits
under part A of title XVIII of the Social Security Act.
(f) INFORMATION REGARDING ELIGIBLE COVERED
BENEFICIARIES.—The Secretary shall provide, in a timely
manner, a designated provider with an accurate list of cov-
ered beneficiaries within the marketing area of the des-
ignated provider to whom the designated provider may
offer enrollment.
300
SEC. 725. APPLICATION OF CHAMPUS PAYMENT RULES.
(a) APPLICATION OF PAYMENT RULES.—Subject to
subsection (b), the Secretary shall require a private facility
or health care provider that is a health care provider under
the Civilian Health and Medical Program of the Uni-
formed Services to apply the payment rules described in
section 1074(c) of title 10, United States Code, in impos-
ing charges for health care that the private facility or pro-
vider provides to enrollees of a designated provider.
(b) AUTHORIZED
ADJUSTMENTS.—The payment
rules imposed under subsection (a) shall be subject to such
modifications as the Secretary considers appropriate. The
Secretary may authorize a lower rate than the maximum
rate that would otherwise apply under subsection (a) if
the lower rate is agreed to by the designated provider and
the private facility or health care provider.
(c) REGULATIONS.—The Secretary shall prescribe
regulations to implement this section after consultation
with the other administering Secretaries.
(d) CONFORMING AMENDMENT.—Section 1074 of
title 10, United States Code, is amended by striking out
subsection (d).
SEC. 726. PAYMENTS FOR SERVICES.
(a) FORM OF PAYMENT.—Unless otherwise agreed to
by the Secretary and a designated provider, the form of
payment for services provided by a designated provider
301
shall be full risk capitation. The capitation payments shall
be negotiated and agreed upon by the Secretary and the
designated provider. In addition to such other factors as
the parties may agree to apply, the capitation payments
shall be based on the utilization experience of enrollees
and competitive market rates for equivalent health care
services for a comparable population to such enrollees in
the area in which the designated provider is located.
(b) LIMITATION ON TOTAL PAYMENTS.—Total capi-
tation payments to a designated provider shall not exceed
an amount equal to the cost that would have been incurred
by the Government if the enrollees had received their care
through a military treatment facility, the TRICARE pro-
gram, or the medicare program, as the case may be.
(c) ESTABLISHMENT OF PAYMENT RATES ON AN-
NUAL BASIS.—The Secretary and a designated provider
shall establish capitation payments on an annual basis,
subject to periodic review for actuarial soundness and to
adjustment for any adverse or favorable selection reason-
ably anticipated to result from the design of the program.
(d) ALTERNATIVE BASIS FOR CALCULATING PAY-
MENTS.—After September 30, 1999, the Secretary and a
designated provider may mutually agree upon a new basis
for calculating capitation payments.
302
SEC. 727. REPEAL OF SUPERSEDED AUTHORITIES.
(a) REPEALS.—The following provisions of law are
repealed:
(1) Section 911 of the Military Construction
Authorization Act, 1982 (42 U.S.C. 248c).
(2) Section 1252 of the Department of Defense
Authorization Act, 1984 (42 U.S.C. 248d).
(3) Section 718(c) of the National Defense Au-
thorization Act for Fiscal year 1991 (Public Law
101–510; 42 U.S.C. 248c note).
(4) Section 726 of the National Defense Au-
thorization Act for Fiscal Year 1996 (Public Law
104–106; 42 U.S.C. 248c note).
(b) EFFECTIVE DATE.—The amendments made by
this section shall take effect on October 1, 1997.
Subtitle D—Other Changes to Ex-
isting Laws Regarding Health
Care Management
SEC. 731. AUTHORITY TO WAIVE CHAMPUS EXCLUSION RE-
GARDING 
NONMEDICALLY 
NECESSARY
TREATMENT IN CONNECTION WITH CERTAIN
CLINICAL TRIALS.
(a) WAIVER AUTHORITY.—Paragraph (13) of section
1079(a) of title 10, United States Code, is amended—
(1) by striking out ‘‘any service’’ and inserting
in lieu thereof ‘‘Any service’’;
303
(2) by striking out the semicolon at the end and
inserting in lieu thereof a period; and
(3) by adding at the end the following: ‘‘Pursu-
ant to an agreement with the Secretary of Health
and Human Services and under such regulations as
the Secretary of Defense may prescribe, the Sec-
retary of Defense may waive the operation of this
paragraph in connection with clinical trials spon-
sored or approved by the National Institutes of
Health if the Secretary of Defense determines that
such a waiver will promote access by covered bene-
ficiaries to promising new treatments and contribute
to the development of such treatments.’’.
(b) CLERICAL AMENDMENTS.—Such section is fur-
ther amended—
(1) in the matter preceding paragraph (1), by
striking out ‘‘except that—’’ and inserting in lieu
thereof ‘‘except as follows:’’;
(2) by capitalizing the first letter of the first
word of each of paragraphs (1) through (17);
(3) by striking out the semicolon at the end of
each of paragraphs (1) through (15) and inserting
in lieu thereof a period; and
(4) in paragraph (16), by striking out ‘‘; and’’
and inserting in lieu thereof a period.
304
SEC. 732. AUTHORITY TO WAIVE OR REDUCE CHAMPUS DE-
DUCTIBLE 
AMOUNTS 
FOR 
RESERVISTS
CALLED TO ACTIVE DUTY IN SUPPORT OF
CONTINGENCY OPERATIONS.
Section 1079(b) of title 10, United States Code, is
amended—
(1) by redesignating paragraphs (1) through
(5) as subparagraphs (A) through (E), respectively;
(2) by inserting ‘‘(1)’’ after ‘‘(b)’’;
(3) in subparagraph (B), as so redesignated, by
striking out ‘‘clause (3)’’ and inserting in lieu there-
of ‘‘subparagraph (C)’’;
(4) in subparagraph (D), as so redesignated—
(A) by striking out ‘‘this clause’’ and in-
serting in lieu thereof ‘‘this subparagraph’’; and
(B) by striking out ‘‘clauses (2) and (3)’’
and inserting in lieu thereof ‘‘subparagraphs
(B) and (C)’’; and
(5) by adding at the end the following new
paragraph:
‘‘(2) The Secretary of Defense may waive or reduce
the deductible amounts required by subparagraphs (B)
and (C) of paragraph (1) in the case of the dependents
of a member of a reserve component of the uniformed
services who serves on active duty in support of a contin-
305
gency operation under a call or order to active duty of
less than one year.’’.
SEC. 733. EXCEPTION TO MAXIMUM ALLOWABLE PAYMENTS
TO INDIVIDUAL HEALTH-CARE PROVIDERS
UNDER CHAMPUS.
Section 1079(h) of title 10, United States Code, is
amended—
(1) by redesignating paragraph (5) as para-
graph (6); and
(2) by inserting after paragraph (4) the follow-
ing new paragraph:
‘‘(5) Except in an area in which the Secretary of De-
fense has entered into an at-risk contract for the provision
of health care services, the Secretary may authorize the
commander of a facility of the uniformed services, the lead
agent (if other than the commander), and the health care
contractor to modify the payment limitations under para-
graph (1) for certain health care providers when necessary
to ensure both the availability of certain services for cov-
ered beneficiaries and costs lower than standard
CHAMPUS for the required services.’’.
306
SEC. 734. CODIFICATION OF ANNUAL AUTHORITY TO CRED-
IT CHAMPUS REFUNDS TO CURRENT YEAR
APPROPRIATION.
(a) CODIFICATION.—(1) Chapter 55 of title 10, Unit-
ed States Code, is amended by inserting after section 1079
the following new section:
‘‘§ 1079a. CHAMPUS: treatment of refunds and other
amounts collected
‘‘All refunds and other amounts collected in the ad-
ministration of the Civilian Health and Medical Program
of the Uniformed Services shall be credited to the appro-
priation supporting the program in the year in which the
amount is collected.’’.
(2) The table of sections at the beginning of such
chapter is amended by inserting after the item relating
to section 1079 the following new item:
‘‘1079a. CHAMPUS: treatment of refunds and other amounts collected.’’.
(b) CONFORMING REPEAL.—Section 8094 of the De-
partment of Defense Appropriations Act, 1996 (Public
Law 104–61; 109 Stat. 671), is repealed.
SEC. 735. EXCEPTIONS TO REQUIREMENTS REGARDING OB-
TAINING 
NONAVAILABILITY-OF-HEALTH-
CARE STATEMENTS.
(a) REFERENCE TO INPATIENT MEDICAL CARE.—(1)
Section 1080(a) of title 10, United States Code, is amend-
307
ed by inserting ‘‘inpatient’’ before ‘‘medical care’’ in the
first sentence.
(2) Section 1086(e) of such title is amended in the
first sentence by striking out ‘‘benefits’’ and inserting in
lieu thereof ‘‘inpatient medical care’’.
(b) WAIVERS
AND
EXCEPTIONS
TO
REQUIRE-
MENTS.—(1) Section 1080 of such title is amended by
adding at the end the following new subsection:
‘‘(c) WAIVERS
AND
EXCEPTIONS
TO
REQUIRE-
MENTS.—(1) A covered beneficiary enrolled in a managed
care plan offered pursuant to any contract or agreement
under this chapter for the provision of health care services
shall not be required to obtain a nonavailability-of-health-
care statement as a condition for the receipt of health
care.
‘‘(2) The Secretary of Defense may waive the require-
ment to obtain nonavailability-of-health-care statements
following an evaluation of the effectiveness of such state-
ments in optimizing the use of facilities of the uniformed
services.’’.
(2) Section 1086(e) of such title is amended in the
last sentence by striking out ‘‘section 1080(b)’’ and insert-
ing in lieu thereof ‘‘subsections (b) and (c) of section
1080’’.
308
(c) CONFORMING AMENDMENT.—Section 1080(b) of
such title is amended—
(1) by striking out ‘‘NONAVAILABILITY
OF
HEALTH CARE STATEMENTS’’ and inserting in lieu
thereof 
‘‘NONAVAILABILITY-OF-HEALTH-CARE
STATEMENTS; and
(2) by striking out ‘‘nonavailability of health
care statement’’ and inserting in lieu thereof ‘‘non-
availability of health care statement’’.
SEC. 736. EXPANSION OF COLLECTION AUTHORITIES FROM
THIRD-PARTY PAYERS.
(a) EXPANSION
OF COLLECTION AUTHORITIES.—
Section 1095 of title 10, United States Code, is amend-
ed—
(1) in subsection (g)(1), by inserting ‘‘or
through’’ after ‘‘provided at’’;
(2) in subsection (h)(1), by inserting before the
period at the end of the first sentence the following:
‘‘and a workers’ compensation program or plan’’;
and
(3) in subsection (h)(2)—
(A) by striking ‘‘organization and’’ and in-
serting in lieu thereof ‘‘organization,’’; and
(B) by inserting before the period at the
end the following: ‘‘, and personal injury protec-
309
tion or medical payments benefits in cases in-
volving personal injuries resulting from oper-
ation of a motor vehicle’’.
(b) INCLUSION OF THIRD PARTY PAYER IN COLLEC-
TION EFFORTS.—Section 1079(j)(1) of such title is
amended by inserting after ‘‘or health plan’’ the following:
‘‘(including any plan offered by a third-party payer (as
defined in section 1095(h)(1) of this title))’’.
Subtitle E—Other Matters
SEC. 741. ALTERNATIVES TO ACTIVE DUTY SERVICE OBLI-
GATION UNDER ARMED FORCES HEALTH
PROFESSIONS SCHOLARSHIP AND FINANCIAL
ASSISTANCE 
PROGRAM 
AND 
UNIFORMED
SERVICES 
UNIVERSITY 
OF 
THE 
HEALTH
SCIENCES.
(a) ARMED FORCES HEALTH PROFESSIONS SCHOL-
ARSHIP AND FINANCIAL ASSISTANCE PROGRAM.—Sub-
section (e) of section 2123 of title 10, United States Code,
is amended to read as follows:
‘‘(e)(1) A member of the program who is relieved of
the member’s active duty obligation under this subchapter
before the completion of that active duty obligation may
be given, with or without the consent of the member, any
of the following alternative obligations, as determined by
the Secretary of the military department concerned:
310
‘‘(A) A service obligation in a component of the
Selected Reserve for a period not less than twice as
long as the member’s remaining active duty service
obligation.
‘‘(B) A service obligation as a civilian employee
employed as a health care professional in a facility
of the uniformed services for a period of time equal
to the member’s remaining active duty service obli-
gation.
‘‘(C) With the concurrence of the Secretary of
Health and Human Services, transfer of the active
duty service obligation to an obligation equal in time
in the National Health Service Corps under section
338C of the Public Health Service Act (42 U.S.C.
254m) and subject to all requirements and proce-
dures applicable to obligated members of the Na-
tional Health Service Corps.
‘‘(D) Repayment to the Secretary of Defense of
a percentage of the total cost incurred by the Sec-
retary under this subchapter on behalf of the mem-
ber equal to the percentage of the member’s total ac-
tive duty service obligation being relieved, plus inter-
est.
311
‘‘(2) The Secretary of Defense shall prescribe regula-
tions describing the manner in which an alternative obliga-
tion may be given under paragraph (1).’’.
(b) UNIFORMED SERVICES UNIVERSITY
OF
THE
HEALTH SCIENCES.—Section 2114 of title 10, United
States Code is amended by adding at the end the following
new subsection:
‘‘(h) A graduate of the University who is relieved of
the graduate’s active-duty service obligation under sub-
section (b) before the completion of that active-duty serv-
ice obligation may be given, with or without the consent
of the graduate, an alternative obligation comparable to
the alternative obligations authorized in subparagraphs
(A) and (B) of section 2123(e)(1) of this title for members
of the Armed Forces Health Professions Scholarship and
Financial Assistance program.’’.
(c) APPLICATION OF AMENDMENTS.—The amend-
ments made by this section shall apply with respect to in-
dividuals who first become members of the Armed Forces
Health Professions Scholarship and Financial Assistance
program or students of the Uniformed Services University
of the Health Sciences on or after October 1, 1996.
(d) TRANSITION PROVISION.—(1) In the case of any
member of the Armed Forces Health Professions Scholar-
ship and Financial Assistance program who, as of October
312
1, 1996, is serving an active duty obligation under the pro-
gram or is incurring an active duty obligation as a partici-
pant in the program, and who is subsequently relieved of
the active duty obligation before the completion of the obli-
gation, the alternative obligations authorized by the
amendment made by subsection (a) may be used by the
Secretary of the military department concerned with the
agreement of the member.
(2) In the case of any person who, as of October 1,
1996, is serving an active-duty service obligation as a
graduate of the Uniformed Services University of the
Health Sciences or is incurring an active-duty service obli-
gation as a student of the University, and who is subse-
quently relieved of the active-duty service obligation before
the completion of the obligation, the alternative obligations
authorized by the amendment made by subsection (b) may
be implemented by the Secretary of Defense with the
agreement of the person.
SEC. 742. EXCEPTION TO STRENGTH LIMITATIONS FOR
PUBLIC 
HEALTH 
SERVICE 
OFFICERS 
AS-
SIGNED TO DEPARTMENT OF DEFENSE.
Section 206 of the Public Health Service Act (42
U.S.C. 207) is amended by adding at the end the following
new subsection:
313
‘‘(f) In computing the maximum number of commis-
sioned officers of the Public Health Service authorized by
law or administrative determination to serve on active
duty, there may be excluded from such computation offi-
cers who are assigned to duty in the Department of De-
fense.’’.
SEC. 743. CONTINUED OPERATION OF UNIFORMED SERV-
ICES UNIVERSITY OF THE HEALTH SCIENCES.
(a) CLOSURE PROHIBITED.—In light of the impor-
tant role of the Uniformed Services University of the
Health Sciences in providing trained health care providers
for the uniformed services, Congress reaffirms the require-
ment contained in section 922 of the National Defense Au-
thorization Act for Fiscal Year 1995 (Public Law 103–
337; 108 Stat 2829) that the Uniformed Services Univer-
sity of the Health Sciences may not be closed.
(b) BUDGETARY COMMITMENT TO CONTINUATION.—
It is the sense of Congress that the Secretary of Defense
should budget for the operation of the Uniformed Services
University of the Health Sciences during fiscal year 1998
at a level at least equal to the level of operations conducted
at the University during fiscal year 1995.
314
SEC. 744. SENSE OF CONGRESS REGARDING TAX TREAT-
MENT OF ARMED FORCES HEALTH PROFES-
SIONS SCHOLARSHIP AND FINANCIAL ASSIST-
ANCE PROGRAM.
It is the sense of Congress that the Secretary of De-
fense should work with the Secretary of the Treasury to
interpret section 117 of the Internal Revenue Code of
1986 so that the limitation on the amount of a qualified
scholarship or qualified tuition reduction excluded from
gross income does not apply to any portion of a scholar-
ship or financial assistance provided by the Secretary of
Defense to a person enrolled in the Armed Forces Health
Professions Scholarship and Financial Assistance program
under subchapter I of chapter 105 of title 10, United
States Code.
SEC. 745. REPORT REGARDING SPECIALIZED TREATMENT
FACILITY PROGRAM.
Not later than April 1, 1997, the Secretary of De-
fense shall submit to Congress a report evaluating the im-
pact on the military health care system of limiting the
service area of a facility designated as part of the special-
ized treatment facility program under section 1105 of title
10, United States Code, to not more than 100 miles from
the facility.
315
TITLE VIII—ACQUISITION POL-
ICY, ACQUISITION MANAGE-
MENT, AND RELATED MAT-
TERS
Subtitle A—Acquisition
Management
SEC. 801. AUTHORITY TO WAIVE CERTAIN REQUIREMENTS
FOR 
DEFENSE 
ACQUISITION 
PILOT 
PRO-
GRAMS.
(a) AUTHORITY.—The Secretary of Defense may
waive sections 2399, 2403, 2432, and 2433 of title 10,
United States Code, in accordance with this section for
any defense acquisition program designated by the Sec-
retary of Defense for participation in the defense acquisi-
tion pilot program authorized by section 809 of the Na-
tional Defense Authorization Act for Fiscal Year 1991
(Public Law 101–510; 10 U.S.C. 2340 note).
(b) OPERATIONAL TEST
AND EVALUATION.—The
Secretary of Defense may waive the requirements for oper-
ational test and evaluation for such a defense acquisition
program as set forth in section 2399 of title 10, United
States Code, if the Secretary—
(1) determines (without delegation) that such
test would be unreasonably expensive or impractical;
316
(2) develops a suitable alternate operational test
program for the system concerned;
(3) describes in the test and evaluation master
plan, as approved by the Director of Operational
Test and Evaluation, the method of evaluation that
will be used to evaluate whether the system will be
effective and suitable for combat; and
(4) submits to the congressional defense com-
mittees a report containing the determination that
was made under paragraph (1), a justification for
that determination, and a copy of the plan required
by paragraph (3).
(c) CONTRACTOR GUARANTEES FOR MAJOR WEAP-
ONS SYSTEMS.—The Secretary of Defense may waive the
requirements of section 2403 of title 10, United States
Code, for such a defense acquisition program if an alter-
native guarantee is used that ensures high quality weap-
ons systems.
(d) SELECTED ACQUISITION REPORTS.—The Sec-
retary of Defense may waive the requirements of sections
2432 and 2433 of title 10, United States Code, for such
a defense acquisition program if the Secretary provides a
single annual report to Congress at the end of each fiscal
year that describes the status of the program in relation
317
to the baseline description for the program established
under section 2435 of such title.
SEC. 802. EXCLUSION FROM CERTAIN POST-EDUCATION
DUTY ASSIGNMENTS FOR MEMBERS OF AC-
QUISITION CORPS.
Section 663(d) of title 10, United States Code, is
amended by adding at the end the following new para-
graph:
‘‘(3) The Secretary of Defense may exclude from the
requirements of paragraph (1) or (2) an officer who is
a member of an Acquisition Corps established pursuant
to 1731 of this title if the officer—
‘‘(A) has graduated from a senior level course
of instruction designed for personnel serving in criti-
cal acquisition positions; and
‘‘(B) is assigned, upon graduation, to a critical
acquisition position designated pursuant to section
1733 of this title.’’.
SEC. 803. EXTENSION OF AUTHORITY TO CARRY OUT CER-
TAIN PROTOTYPE PROJECTS.
(a) AUTHORITY.—Section 845(a) of the National De-
fense Authorization Act for Fiscal Year 1994 (Public Law
103–160; 107 Stat. 1721) is amended by inserting after
‘‘Agency’’ the following: ‘‘, the Secretary of a military de-
318
partment, or any other official designated by the Secretary
of Defense’’.
(b) PERIOD OF AUTHORITY.—Section 845(c) of such
Act is amended by striking out ‘‘3 years after the date
of the enactment of this Act’’ and inserting in lieu thereof
‘‘on September 30, 1999’’.
(c) CONFORMING AND TECHNICAL AMENDMENTS.—
Section 845 of such Act is further amended—
(1) in subsection (b)—
(A) in paragraph (1), by striking out
‘‘(c)(2) and (c)(3) of such section 2371, as re-
designated by section 827(b)(1)(B),’’ and in-
serting in lieu thereof ‘‘(e)(2) and (e)(3) of such
section 2371’’; and
(B) in paragraph (2), by inserting after
‘‘Director’’ the following: ‘‘, Secretary, or other
official’’; and
(2) in subsection (c), by striking out ‘‘of the Di-
rector’’.
SEC. 804. INCREASE IN THRESHOLD AMOUNTS FOR MAJOR
SYSTEMS.
Section 2302(5) of title 10, United States Code, is
amended—
(1) by striking out ‘‘$75,000,000 (based on fis-
cal year 1980 constant dollars)’’ and inserting in
319
lieu thereof ‘‘$115,000,000 (based on fiscal year
1990 dollars)’’;
(2) by striking out ‘‘$300,000,000 (based on
fiscal year 1980 constant dollars)’’ and inserting in
lieu thereof ‘‘$540,000,000 (based on fiscal year
1990 constant dollars)’’; and
(3) by adding at the end the following: ‘‘The
Secretary of Defense may adjust the amounts and
the base fiscal year provided in clause (A) on the
basis of Department of Defense escalation rates. An
adjustment under this paragraph shall be effective
after the Secretary transmits to the Committee on
Armed Services of the Senate and the Committee on
National Security of the House of Representatives a
written notification of the adjustment.’’.
SEC. 805. REVISIONS IN INFORMATION REQUIRED TO BE
INCLUDED IN SELECTED ACQUISITION RE-
PORTS.
Section 2432 of title 10, United States Code, is
amended—
(1) in subsection (c)—
(A) by striking out ‘‘and’’ at the end of
subparagraph (B);
(B) by redesignating subparagraph (C) as
subparagraph (D); and
320
(C) by inserting after subparagraph (B)
the following new subparagraph (C):
‘‘(C) the current procurement unit cost for each
major defense acquisition program included in the
report and the history of that cost from the date the
program was first included in a Selected Acquisition
Report to the end of the quarter for which the cur-
rent report is submitted; and’’; and
(2) in subsection (e), by striking out paragraph
(8) and redesignating paragraph (9) as paragraph
(8).
SEC. 806. INCREASE IN SIMPLIFIED ACQUISITION THRESH-
OLD FOR HUMANITARIAN OR PEACEKEEPING
OPERATIONS.
Section 2302(7) of title 10, United States Code, is
amended—
(1) by inserting ‘‘(A)’’ after ‘‘(7)’’;
(2) by inserting after ‘‘contingency operation’’
the following: ‘‘or a humanitarian or peacekeeping
operation’’; and
(3) by adding at the end the following:
‘‘(B) In subparagraph (A), the term ‘humani-
tarian or peacekeeping operation’ means a military
operation in support of the provision of humani-
tarian or foreign disaster assistance or in support of
321
a peacekeeping operation under chapter VI or VII of
the Charter of the United Nations. The term does
not include routine training, force rotation, or sta-
tioning.’’.
SEC. 807. EXPANSION OF AUDIT RECIPROCITY AMONG FED-
ERAL AGENCIES TO INCLUDE POST-AWARD
AUDITS.
(a) ARMED SERVICES ACQUISITIONS.—Subsection
(d) of section 2313 of title 10, United States Code, is
amended to read as follows:
‘‘(d) LIMITATION ON AUDITS RELATING TO INDI-
RECT COSTS.—The head of an agency may not perform
an audit of indirect costs under a contract, subcontract,
or modification before or after entering into the contract,
subcontract, or modification in any case in which the con-
tracting officer determines that the objectives of the audit
can reasonably be met by accepting the results of an audit
that was conducted by any other department or agency
of the Federal Government within one year preceding the
date of the contracting officer’s determination.’’.
(b) CIVILIAN AGENCY ACQUISITIONS.—Subsection
(d) of section 304C of the Federal Property and Adminis-
trative Services Act of 1949 (41 U.S.C. 254d) is amended
to read as follows:
322
‘‘(d) LIMITATION ON AUDITS RELATING TO INDI-
RECT COSTS.—An executive agency may not perform an
audit of indirect costs under a contract, subcontract, or
modification before or after entering into the contract,
subcontract, or modification in any case in which the con-
tracting officer determines that the objectives of the audit
can reasonably be met by accepting the results of an audit
that was conducted by any other department or agency
of the Federal Government within one year preceding the
date of the contracting officer’s determination.’’.
(c) GUIDELINES FOR ACCEPTANCE OF AUDITS BY
STATE AND LOCAL GOVERNMENTS RECEIVING FEDERAL
ASSISTANCE.—The Director of the Office and Manage-
ment and Budget shall issue guidelines to ensure that an
audit of indirect costs performed by the Federal Govern-
ment is accepted by State and local governments that re-
ceive Federal funds under contracts, grants, or other Fed-
eral assistance programs.
SEC. 808. EXTENSION OF PILOT MENTOR-PROTEGE PRO-
GRAM.
Paragraphs (1) and (2) of section 831(j) of the Na-
tional Defense Authorization Act for Fiscal Year 1991 (10
U.S.C. 2302 note) are each amended by striking out
‘‘1996’’ and inserting in lieu thereof ‘‘1997’’.
323
Subtitle B—Other Matters
SEC. 821. AMENDMENT TO DEFINITION OF NATIONAL SECU-
RITY SYSTEM UNDER INFORMATION TECH-
NOLOGY MANAGEMENT REFORM ACT OF 1995.
Section 5142(a) of the Information Technology Man-
agement Reform Act of 1996 (division E of Public Law
104–106; 110 Stat. 689; 40 U.S.C. 1452) is amended—
(1) by striking out ‘‘or’’ at the end of para-
graph (4);
(2) by striking out the period at the end of
paragraph (5) and inserting in lieu thereof ‘‘; or’’;
and
(3) by adding at the end the following new
paragraph:
‘‘(6) involves the storage, processing, or for-
warding of classified information and is protected at
all times by procedures established for the handling
of classified information.’’.
SEC. 822. PROHIBITION ON RELEASE OF CONTRACTOR
PROPOSALS UNDER FREEDOM OF INFORMA-
TION ACT.
(a) ARMED SERVICES ACQUISITIONS.—Section 2305
of title 10, United States Code, is amended by adding at
the end the following new subsection:
324
‘‘(g) PROHIBITION ON RELEASE OF CONTRACTOR
PROPOSALS.—(1) A proposal in the possession or control
of the Department of Defense may not be made available
to any person under section 552 of title 5.
‘‘(2) In this subsection, the term ‘proposal’ means
any proposal, including a technical, management, or cost
proposal, submitted by a contractor in response to the re-
quirements of a solicitation for a competitive proposal.’’.
(b) CIVILIAN AGENCY ACQUISITIONS.—Section 303B
of the Federal Property and Administrative Services Act
of 1949 (41 U.S.C. 253b) is amended by adding at the
end the following new subsection:
‘‘(m) PROHIBITION ON RELEASE OF CONTRACTOR
PROPOSALS.—(1) A proposal in the possession or control
of an executive agency may not be made available to any
person under section 552 of title 5.
‘‘(2) In this subsection, the term ‘proposal’ means
any proposal, including a technical, management, or cost
proposal, submitted by a contractor in response to the re-
quirements of a solicitation for a competitive proposal.’’.
SEC. 823. REPEAL OF ANNUAL REPORT BY ADVOCATE FOR
COMPETITION.
Section 20(b) of the Office of Federal Procurement
Policy Act (41 U.S.C. 418(b)) is amended—
325
(1) by striking out ‘‘and’’ at the end of para-
graph (3)(B);
(2) by striking out paragraph (4); and
(3) by redesignating paragraphs (5), (6), and
(7) as paragraphs (4), (5), and (6), respectively.
SEC. 824. REPEAL OF BIANNUAL REPORT ON PROCURE-
MENT REGULATORY ACTIVITY.
Subsection (g) of section 25 of the Office of Federal
Procurement Policy Act (41 U.S.C. 421) is repealed.
SEC. 825. REPEAL OF MULTIYEAR LIMITATION ON CON-
TRACTS FOR INSPECTION, MAINTENANCE,
AND REPAIR.
Paragraph (14) of section 210(a) of the Federal
Property and Administrative Services Act of 1949 (40
U.S.C. 490(a)) is amended by striking out ‘‘for periods
not exceeding three years’’.
SEC. 826. STREAMLINED NOTICE REQUIREMENTS TO CON-
TRACTORS 
AND 
EMPLOYEES 
REGARDING
TERMINATION OR SUBSTANTIAL REDUCTION
IN 
CONTRACTS 
UNDER 
MAJOR 
DEFENSE
PROGRAMS.
(a) ELIMINATION
OF
UNNECESSARY
REQUIRE-
MENTS.—Section 4471 of the Defense Conversion, Rein-
vestment, and Transition Assistance Act of 1992 (division
326
D of Public Law 102–484; 10 U.S.C. 2501 note) is
amended—
(1) by striking out subsection (a);
(2) by striking out subsection (f), except para-
graph (4);
(3) by redesignating subsections (b), (c), (d),
(e), and (g) as subsections (a), (b), (c), (d), and (f),
respectively; and
(4) by redesignating such paragraph (4) as sub-
section (e).
(b) NOTICE TO CONTRACTORS.—Subsection (a) of
such section, as redesignated by subsection (a)(3), is
amended by striking out paragraphs (1) and (2) and in-
serting in lieu thereof the following:
‘‘(1) shall identify each contract (if any) under
major defense programs of the Department of De-
fense that will be terminated or substantially re-
duced as a result of the funding levels provided in
that Act; and
‘‘(2) shall ensure that notice of the termination
of, or substantial reduction in, the funding of the
contract is provided—
‘‘(A) directly to the prime contractor under
the contract; and
‘‘(B) directly to the Secretary of Labor.’’.
327
(c) NOTICE TO SUBCONTRACTORS.—Subsection (b)
of such section, as redesignated by subsection (a)(3), is
amended—
(1) by striking out ‘‘As soon as’’ and all that
follows through ‘‘that program,’’ in the matter pre-
ceding paragraph (1) and inserting in lieu thereof
‘‘Not later than 60 days after the date on which the
prime contractor for a contract under a major de-
fense program receives notice under subsection (a),’’;
(2) in paragraph (1)—
(A) by striking out ‘‘for that program
under a contract’’ and inserting in lieu thereof
‘‘for that prime contract for subcontracts’’; and
(B) by striking out ‘‘for the program’’; and
(3) in paragraph (2)(A), by striking out ‘‘for
the program under a contract’’ and inserting in lieu
thereof ‘‘for subcontracts’’.
(d) NOTICE TO EMPLOYEES AND STATE DISLOCATED
WORKER UNIT.—Subsection (c) of such section, as redes-
ignated by subsection (a)(3), is amended by striking out
‘‘under subsection (a)(1)’’ and all that follows through ‘‘a
defense program,’’ in the matter preceding paragraph (1)
and inserting in lieu thereof ‘‘under subsection (a),’’.
328
(e) CROSS REFERENCES AND CONFORMING AMEND-
MENTS.—(1) Subsection (d) of such section, as redesig-
nated by subsection (a)(3), is amended—
(A) by striking out ‘‘a major defense program
provided under subsection (d)(1)’’ and inserting in
lieu thereof ‘‘a defense contract provided under sub-
section (c)(1)’’; and
(B) by striking out ‘‘the program’’ and insert-
ing in lieu thereof ‘‘the contract’’.
(2) Subsection (e) of such section, as redesignated by
subsection (a)(4), is amended—
(A) by striking out ‘‘ELIGIBILITY’’ and inserting
in lieu thereof ‘‘ELIGIBILITY’’; and
(B) by striking out ‘‘under paragraph (3)’’ and
inserting in lieu thereof ‘‘or cancellation of the ter-
mination of, or substantial reduction in, contract
funding’’.
(3) Subsection (f) of such section, as redesignated by
subsection (a)(3), is amended in paragraph (2)—
(A) by inserting ‘‘a defense contract under’’ be-
fore ‘‘a major defense program’’; and
(B) by striking out ‘‘contracts under the pro-
gram’’ and inserting in lieu thereof ‘‘the funds obli-
gated by the contract’’.
329
SEC. 827. REPEAL OF NOTICE REQUIREMENTS FOR SUB-
STANTIALLY OR SERIOUSLY AFFECTED PAR-
TIES IN DOWNSIZING EFFORTS.
Sections 4101 and 4201 of the National Defense Au-
thorization Act for Fiscal Year 1991 (Public Law 101–
510; 104 Stat. 1850, 1851; 10 U.S.C. 2391 note) are re-
pealed.
SEC. 828. TESTING OF DEFENSE ACQUISITION PROGRAMS.
(a) IN GENERAL.—Section 2366 of title 10, United
States Code, is amended—
(1) by striking out ‘‘survivability’’ each place it
appears (including in the section heading) and in-
serting in lieu thereof ‘‘vulnerability’’; and
(2) in subsection (b)—
(A) by striking out ‘‘Survivability’’ and in-
serting in lieu thereof ‘‘Vulnerability’’; and
(B) by inserting after paragraph (2) the
following new paragraph:
‘‘(3) Testing should begin at the component, sub-
system, and subassembly level, culminating with tests of
the complete system configured for combat.’’.
(b) CLERICAL AMENDMENT.—The item relating to
such section in the table of sections at the beginning of
chapter 139 of such title is amended to read as follows:
‘‘2366. Major systems and munitions programs: vulnerability testing and
lethality testing required before full-scale production.’’.
330
SEC. 829. DEPENDENCY OF NATIONAL TECHNOLOGY AND
INDUSTRIAL BASE ON SUPPLIES AVAILABLE
ONLY FROM FOREIGN COUNTRIES.
(a) NATIONAL SECURITY OBJECTIVES
FOR NA-
TIONAL TECHNOLOGY AND INDUSTRIAL BASE.—Section
2501(a) of title 10, United States Code, is amended by
adding at the end the following:
‘‘(5) Providing for the development, manufac-
ture, and supply of items and technologies critical to
the production and sustainment of advanced military
weapon systems with minimal reliance on items for
which the source of supply, manufacture, or tech-
nology is outside of the United States and Canada
and for which there is no immediately available
source in the United States or Canada.’’.
(b) ASSESSMENT OF EXTENT OF UNITED STATES
DEPENDENCY ON FOREIGN SOURCE ITEMS.—Subsection
(c) of section 2505 of such title is amended to read as
follows:
‘‘(c) ASSESSMENT OF EXTENT OF DEPENDENCY ON
FOREIGN SOURCE ITEMS.—Each assessment under sub-
section (a) shall include a separate discussion and presen-
tation regarding the extent to which the national tech-
nology and industrial base is dependent on items for which
the source of supply, manufacture, or technology is outside
of the United States and Canada and for which there is
331
no immediately available source in the United States or
Canada. The discussion and presentation shall include the
following:
‘‘(1) An assessment of the overall degree of de-
pendence by the national technology and industrial
base on such foreign items, including a comparison
with the degree of dependence identified in the pre-
ceding assessment.
‘‘(2) Identification of major systems (as defined
in section 2302 of this title) under development or
production containing such foreign items, including
an identification of all such foreign items for each
system.
‘‘(3) An analysis of the production or develop-
ment risks resulting from the possible disruption of
access to such foreign items, including consideration
of both peacetime and wartime scenarios.
‘‘(4) An analysis of the importance of retaining
domestic production sources for the items specified
in section 2534 of this title.
‘‘(5) A discussion of programs and initiatives in
place to reduce dependence by the national tech-
nology and industrial base on such foreign items.
‘‘(6) A discussion of proposed policy or legisla-
tive initiatives recommended to reduce the depend-
332
ence of the national technology and industrial base
on such foreign items.’’.
(c) TIME FOR COMPLETION OF NEXT DEFENSE CA-
PABILITY ASSESSMENT.—Notwithstanding the schedule
prescribed by the Secretary of Defense under subsection
(d) of section 2505 of title 10, United States Code, the
National Defense Technology and Industrial Base Council
shall complete the next defense capability assessment re-
quired under such section not later than March 1, 1997.
SEC. 830. SENSE OF CONGRESS REGARDING TREATMENT
OF DEPARTMENT OF DEFENSE CABLE TELE-
VISION FRANCHISE AGREEMENTS.
It is the sense of Congress that the United States
Court of Federal Claims should transmit to Congress the
report required by section 823 of Public Law 104–106
(110 Stat. 399) on or before the date specified in that
section.
SEC. 831. EXTENSION OF DOMESTIC SOURCE LIMITATION
FOR VALVES AND MACHINE TOOLS.
Subparagraph (C) of section 2534(c)(2) is amended
by striking out ‘‘1996’’ and inserting in lieu thereof
‘‘2001’’.
333
SEC. 832. DEMONSTRATION PROJECT FOR PURCHASE OF
FIRE, SECURITY, POLICE, PUBLIC WORKS,
AND UTILITY SERVICES FROM LOCAL GOV-
ERNMENT AGENCIES.
(a) EXTENSION
OF DEMONSTRATION PROJECT.—
Section 816 of the National Defense Authorization Act for
Fiscal Year 1995 (Public Law 103–337; 108 Stat. 2820)
is amended by adding at the end the following new sub-
section:
‘‘(c) DURATION OF PROJECT.—The authority to pur-
chase services under the demonstration project shall expire
on September 30, 1998.’’.
(b) REPORTING REQUIREMENTS.—Subsection (b) of
such section is amended by striking out ‘‘, 1996’’ and in-
serting in lieu thereof ‘‘of each of the years 1997 and
1998’’.
SEC. 833. STUDY OF EFFECTIVENESS OF DEFENSE MERG-
ERS.
(a) STUDY.—The Secretary of Defense shall conduct
a study on mergers and acquisitions in the defense sector.
The study shall address the following:
(1) The effectiveness of defense mergers and
acquisitions in eliminating excess capacity within the
defense industry.
334
(2) The degree of change in the dependence by
defense contractors on defense-related Federal con-
tracts within their overall business after mergers.
(3) The effect on defense industry employment
resulting from defense mergers and acquisitions oc-
curring during the three years preceding the date of
the enactment of this Act.
(b) REPORT.—Not later than six months after the
date of the enactment of this Act, the Secretary of Defense
shall submit to Congress a report on the results of the
study conducted under subsection (a).
TITLE IX—DEPARTMENT OF DE-
FENSE ORGANIZATION AND
MANAGEMENT
SEC. 901. ADDITIONAL REQUIRED REDUCTION IN DEFENSE
ACQUISITION WORKFORCE.
Section 906(d) of the National Defense Authorization
Act for Fiscal Year 1996 (Public Law 104–106; 110 Stat.
405) is amended—
(1) in paragraph (1), by striking out ‘‘during
fiscal year 1996’’ and all that follows and inserting
in lieu thereof ‘‘so that—
‘‘(A) the total number of such positions as of
October 1, 1996, is less than the baseline number by
at least 15,000; and
335
‘‘(B) the total number of such positions as of
October 1, 1997, is less than the baseline number by
at least 40,000.’’; and
(2) by adding at the end the following new
paragraph:
‘‘(3) For purposes of this subsection, the term ‘base-
line number’ means the total number of defense acquisi-
tion personnel positions as of October 1, 1995.’’.
SEC. 902. REDUCTION OF PERSONNEL ASSIGNED TO OF-
FICE OF THE SECRETARY OF DEFENSE.
(a) PERMANENT LIMITATION
ON OSD PERSON-
NEL.—Effective October 1, 1999, the number of OSD per-
sonnel may not exceed 75 percent of the baseline number.
(b) PHASED REDUCTION.—The number of OSD per-
sonnel—
(1) as of October 1, 1997, may not exceed 85
percent of the baseline number; and
(2) as of October 1, 1998, may not exceed 80
percent of the baseline number.
(c) BASELINE NUMBER.—For purposes of this sec-
tion, the term ‘‘baseline number’’ means the number of
OSD personnel as of October 1, 1994.
(d) OSD PERSONNEL DEFINED.—For purposes of
this section, the term ‘‘OSD personnel’’ means military
and civilian personnel of the Department of Defense who
336
are assigned to, or employed in, functions in the Office
of the Secretary of Defense (including Direct Support Ac-
tivities of that Office and the Washington Headquarters
Services of the Department of Defense).
(e) LIMITATION
ON
REASSIGNMENT
OF
FUNC-
TIONS.—In carrying out reductions in the number of per-
sonnel assigned to, or employed in, the Office of the De-
partment of Defense in order to comply with this section,
the Secretary of Defense may not reassign functions solely
in order to evade the requirements contained in this sec-
tion.
(f) FLEXIBILITY.—If the Secretary of Defense deter-
mines, and certifies to Congress, that the limitation in
subsection (b) with respect to any fiscal year would ad-
versely affect United States national security, the limita-
tion under that subsection with respect to that fiscal year
may be waived. If the Secretary of Defense determines,
and certifies to Congress, that the limitation in subsection
(a) during fiscal year 1999 would adversely affect United
States national security, the limitation under that sub-
section with respect to that fiscal year may be waived. The
authority under this subsection may be used only once,
with respect to a single fiscal year.
(g) REPEAL
OF
PRIOR
REQUIREMENT.—Section
901(d) of the National Defense Authorization Act for Fis-
337
cal Year 1996 (Public Law 104–106; 110 Stat. 410) is
repealed.
SEC. 903. REPORT ON MILITARY DEPARTMENT HEAD-
QUARTERS STAFFS.
(a) REVIEW BY SECRETARY OF DEFENSE.—The Sec-
retary of Defense shall conduct a review of the size, mis-
sion, organization, and functions of the military depart-
ment headquarters staffs. This review shall include the fol-
lowing:
(1) An assessment on the adequacy of the
present organization structure to efficiently and ef-
fectively support the mission of the military depart-
ments.
(2) An assessment of options to reduce the
number of personnel assigned to the military depart-
ment headquarters staffs.
(3) An assessment of the extent of unnecessary
duplication of functions between the Office of the
Secretary of Defense and the military department
headquarters staffs.
(4) An assessment of the possible benefits that
could be derived from further functional consolida-
tion between the civilian secretariat of the military
departments and the staffs of the military service
chiefs.
338
(5) An assessment of the possible benefits that
could be derived from reducing the number of civil-
ian officers in the military departments who are ap-
pointed by and with the advice and consent of the
Senate.
(b) REPORT.—Not later than March 1, 1997, the
Secretary of Defense shall submit to the congressional de-
fense committees a report containing—
(1) the findings and conclusions of the Sec-
retary resulting from the review under subsection
(a); and
(2) a plan for implementing resulting rec-
ommendations, including proposals for legislation
(with supporting rationale) that would be required
as result of the review.
(c) REDUCTION IN TOTAL NUMBER OF PERSONNEL
ASSIGNED.—In developing the plan under subsection
(b)(2), the Secretary shall make every effort to provide
for significant reductions in the overall number of military
and civilian personnel assigned to or serving in the mili-
tary department headquarters staffs.
(d) 
MILITARY
DEPARTMENT
HEADQUARTERS
STAFFS DEFINED.—For the purposes of this section, the
term ‘‘military department headquarters staffs’’ means
339
the offices, organizations, and other elements of the De-
partment of Defense comprising the following:
(1) The Office of the Secretary of the Army.
(2) The Army Staff.
(3) The Office of the Secretary of the Air
Force.
(4) The Air Staff.
(5) The Office of the Secretary of the Navy.
(6) The Office of the Chief of Naval Oper-
ations.
(7) Headquarters, Marine Corps.
SEC. 904. EXTENSION OF EFFECTIVE DATE FOR CHARTER
FOR 
JOINT 
REQUIREMENTS 
OVERSIGHT
COUNCIL.
Section 905(b) of the National Defense Authorization
Act for Fiscal Year 1996 (Public Law 104–106; 110 Stat.
404) is amended by striking out ‘‘January 31, 1997’’ and
inserting in lieu thereof ‘‘January 31, 1998’’.
SEC. 905. REMOVAL OF SECRETARY OF THE ARMY FROM
MEMBERSHIP ON THE FOREIGN TRADE ZONE
BOARD.
The first section of the Act of June 18, 1934 (Public
Law Numbered 397, Seventy-third Congress; 48 Stat.
998) (19 U.S.C. 81a), popularly known as the ‘‘Foreign
Trade Zones Act’’, is amended—
340
(1) in subsection (b), by striking out ‘‘the Sec-
retary of the Treasury, and the Secretary of War’’
and inserting in lieu thereof ‘‘and the Secretary of
the Treasury’’; and
(2) in subsection (c), by striking out ‘‘Alaska,
Hawaii,’’.
SEC. 906. MEMBERSHIP OF THE AMMUNITION STORAGE
BOARD.
Section 172(a) of title 10, United States Code, is
amended by striking out ‘‘a joint board of officers selected
by them’’ and inserting in lieu thereof ‘‘a joint board se-
lected by them composed of officers, civilian officers and
employees of the Department of Defense, or both’’.
SEC. 907. DEPARTMENT OF DEFENSE DISBURSING OFFI-
CIAL 
CHECK 
CASHING 
AND 
EXCHANGE
TRANSACTIONS.
Section 3342(b) of title 31, United States Code, is
amended—
(1) by striking out the period at the end of
paragraph (3) and inserting in lieu thereof a semi-
colon;
(2) by striking out ‘‘and’’ at the end of para-
graph (5);
341
(3) by striking out the period at the end of
paragraph (6) and inserting in lieu thereof ‘‘; or’’;
and
(4) by adding at the end the following new
paragraph:
‘‘(7) a Federal credit union that at the request
of the Secretary of Defense is operating on a United
States military installation in a foreign country, but
only if that country does not permit contractor-oper-
ated military banking facilities to operate on such
installations.’’.
TITLE X—GENERAL PROVISIONS
Subtitle A—Financial Matters
SEC. 1001. TRANSFER AUTHORITY.
(a) AUTHORITY TO TRANSFER AUTHORIZATIONS.—
(1) Upon determination by the Secretary of Defense that
such action is necessary in the national interest, the Sec-
retary may transfer amounts of authorizations made avail-
able to the Department of Defense in this division for fis-
cal year 1997 between any such authorizations for that
fiscal year (or any subdivisions thereof). Amounts of au-
thorizations so transferred shall be merged with and be
available for the same purposes as the authorization to
which transferred.
342
(2) The total amount of authorizations that the Sec-
retary of Defense may transfer under the authority of this
section may not exceed $2,000,000,000.
(b) LIMITATIONS.—The authority provided by this
section to transfer authorizations—
(1) may only be used to provide authority for
items that have a higher priority than the items
from which authority is transferred; and
(2) may not be used to provide authority for an
item that has been denied authorization by Con-
gress.
(c) EFFECT
ON
AUTHORIZATION
AMOUNTS.—A
transfer made from one account to another under the au-
thority of this section shall be deemed to increase the
amount authorized for the account to which the amount
is transferred by an amount equal to the amount trans-
ferred.
(d) NOTICE
TO CONGRESS.—The Secretary shall
promptly notify Congress of each transfer made under
subsection (a).
SEC. 1002. INCORPORATION OF CLASSIFIED ANNEX.
(a) STATUS OF CLASSIFIED ANNEX.—The Classified
Annex prepared by the Committee on National Security
of the House of Representatives to accompany the bill
H.R. 3230 of the One Hundred Fourth Congress and
343
transmitted to the President is hereby incorporated into
this Act.
(b) CONSTRUCTION WITH OTHER PROVISIONS OF
ACT.—The amounts specified in the Classified Annex are
not in addition to amounts authorized to be appropriated
by other provisions of this Act.
(c) LIMITATION ON USE OF FUNDS.—Funds appro-
priated pursuant to an authorization contained in this Act
that are made available for a program, project, or activity
referred to in the Classified Annex may only be expended
for such program, project, or activity in accordance with
such terms, conditions, limitations, restrictions, and re-
quirements as are set out for that program, project, or
activity in the Classified Annex.
(d) DISTRIBUTION
OF CLASSIFIED ANNEX.—The
President shall provide for appropriate distribution of the
Classified Annex, or of appropriate portions of the annex,
within the executive branch of the Government.
SEC. 1003. AUTHORITY FOR OBLIGATION OF CERTAIN UN-
AUTHORIZED FISCAL YEAR 1996 DEFENSE AP-
PROPRIATIONS.
(a) AUTHORITY.—The amounts described in sub-
section (b) may be obligated and expended for programs,
projects, and activities of the Department of Defense in
accordance with fiscal year 1996 defense appropriations.
344
(b) COVERED AMOUNTS.—The amounts referred to
in subsection (a) are the amounts provided for programs,
projects, and activities of the Department of Defense in
fiscal year 1996 defense appropriations that are in excess
of the amounts provided for such programs, projects, and
activities in fiscal year 1996 defense authorizations.
(c) DEFINITIONS.—For the purposes of this section:
(1) FISCAL
YEAR
1996
DEFENSE
APPROPRIA-
TIONS.—The term ‘‘fiscal year 1996 defense appro-
priations’’ means amounts appropriated or otherwise
made available to the Department of Defense for fis-
cal year 1996 in the Department of Defense Appro-
priations Act, 1996 (Public Law 104–61).
(2) FISCAL YEAR 1996 DEFENSE AUTHORIZA-
TIONS.—The term ‘‘fiscal year 1996 defense author-
izations’’ means amounts authorized to be appro-
priated for the Department of Defense for fiscal
year 1996 in the National Defense Authorization
Act for Fiscal Year 1996 (Public Law 104–106).
SEC. 1004. AUTHORIZATION OF PRIOR EMERGENCY SUP-
PLEMENTAL APPROPRIATIONS FOR FISCAL
YEAR 1996.
Amounts authorized to be appropriated to the De-
partment of Defense for fiscal year 1996 in the National
Defense Authorization Act for Fiscal Year 1996 (Public
345
Law 104–106) are hereby adjusted, with respect to any
such authorized amount, by the amount by which appro-
priations pursuant to such authorization were increased
(by a supplemental appropriation) or decreased (by a re-
scission), or both, in the Omnibus Consolidated Rescis-
sions and Appropriations Act of 1996 (Public Law 104–
134).
SEC. 1005. FORMAT FOR BUDGET REQUESTS FOR NAVY/
MARINE CORPS AND AIR FORCE AMMUNI-
TION ACCOUNTS.
Section 114 of title 10, United States Code, is
amended by adding at the end the following new sub-
section:
‘‘(f) In each budget submitted by the President to
Congress under section 1105 of title 31, amounts re-
quested for procurement of ammunition for the Navy and
Marine Corps, and for procurement of ammunition for the
Air Force, shall be set forth separately from other
amounts requested for procurement.’’.
SEC. 1006. FORMAT FOR BUDGET REQUESTS FOR DEFENSE
AIRBORNE RECONNAISSANCE PROGRAM.
(a) REQUIREMENT.—The Secretary of Defense shall
ensure that in the budget justification documents for any
fiscal year there is set forth separately amounts requested
for each program, project, or activity within the Defense
346
Airborne Reconnaissance Program, with a unique program
element provided for funds requested for research, devel-
opment, test, and evaluation for each such program,
project, or activity and a unique procurement line item
provided for funds requested for procurement for each
such program, project, or activity.
(b) DEFENSE BUDGET.—For purposes of subsection
(a), the term ‘‘budget justification documents’’ means the
supporting budget documentation submitted to the con-
gressional defense committees in support of the budget of
the Department of Defense for a fiscal year as included
in the budget of the President submitted under section
1105 of title 31, United States Code, for that fiscal year.
Subtitle B—Reports and Studies
SEC. 1021. ANNUAL REPORT ON OPERATION PROVIDE COM-
FORT AND OPERATION ENHANCED SOUTH-
ERN WATCH.
(a) ANNUAL REPORT.—Not later than March 1 of
each year, the Secretary of Defense shall submit to Con-
gress a report on Operation Provide Comfort and Oper-
ation Enhanced Southern Watch.
(b) MATTERS RELATING TO OPERATION PROVIDE
COMFORT.—Each report under subsection (a) shall in-
clude, with respect to Operation Provide Comfort, the fol-
lowing:
347
(1) A detailed presentation of the projected
costs to be incurred by the Department of Defense
for that operation during the fiscal year in which the
report is submitted and projected for the following
fiscal year, together with a discussion of missions
and functions expected to be performed by the De-
partment as part of that operation during each of
those fiscal years.
(2) A detailed presentation of the projected
costs to be incurred by other departments and agen-
cies of the Federal Government participating in or
providing support to that operation during each of
those fiscal years.
(3) A discussion of options being pursued to re-
duce the involvement of the Department of Defense
in those aspects of that operation that are not di-
rectly related to the military mission of the Depart-
ment of Defense.
(4) A discussion of the exit strategy for United
States involvement in, and support for, that oper-
ation.
(5) A description of alternative approaches to
accomplishing the mission of that operation that are
designed to limit the scope and cost to the Depart-
348
ment of Defense of accomplishing that mission while
maintaining mission success.
(6) The contributions (both in-kind and actual)
by other nations to the costs of conducting that op-
eration.
(7) A detailed presentation of significant Iraqi
military activity (including specific violations of the
no-fly zone) determined to jeopardize the security of
the Kurdish population in northern Iraq.
(c) MATTERS RELATING TO OPERATION ENHANCED
SOUTHERN WATCH.—Each report under subsection (a)
shall include, with respect to Operation Enhanced South-
ern Watch, the following:
(1) The expected duration and annual costs of
the various elements of that operation.
(2) The political and military objectives associ-
ated with that operation.
(3) The contributions (both in-kind and actual)
by other nations to the costs of conducting that op-
eration.
(4) A description of alternative approaches to
accomplishing the mission of that operation that are
designed to limit the scope and cost of accomplishing
that mission while maintaining mission success.
349
(5) A comprehensive discussion of the political
and military objectives and initiatives that the De-
partment of Defense has pursued, and intends to
pursue, in order to reduce United States involvement
in that operation.
(6) A detailed presentation of significant Iraqi
military activity (including specific violations of the
no-fly zone) determined to jeopardize the security of
the Shiite population in southern Iraq.
(d) TERMINATION OF REPORT REQUIREMENT.—The
requirement under subsection (a) shall cease to apply with
respect to an operation named in that subsection upon the
termination of United States involvement in that oper-
ation.
(e) DEFINITIONS.—For purposes of this section:
(1) 
OPERATION
ENHANCED
SOUTHERN
WATCH.—The term ‘‘Operation Enhanced Southern
Watch’’ means the operation of the Department of
Defense that as of October 30, 1995, is designated
as Operation Enhanced Southern Watch.
(2) OPERATION PROVIDE COMFORT.—The term
‘‘Operation Provide Comfort’’ means the operation
of the Department of Defense that as of October 30,
1995, is designated as Operation Provide Comfort.