referred to, or otherwise received by, the Office 
of Special Counsel under the demonstration 
project, the Office of Special Counsel shall re-
tain administrative jurisdiction over the claim. 
(5) PERIOD OF PROJECT.—The demonstration 
project shall be carried out during the period begin-
ning on the date that is 60 days after the date of 
the enactment of this Act, and ending on September 
30, 2007. 
(6) PERIODIC EVALUATIONS.—The Comptroller 
General of the United States shall conduct periodic 
evaluations of the demonstration project under this 
subsection. 
(7) REPORT ON EVALUATIONS.—Not later than 
April 1, 2007, the Comptroller General shall submit 
to Congress a report on the evaluations conducted 
under paragraph (6). The report shall include the 
following information and recommendations: 
(A) A description of the operation and re-
sults of the demonstration program, includ-
ing— 
(i) the number of claims described in 
paragraph (3) referred to, or otherwise re-
ceived by, the Office of Special Counsel
and the number of such claims referred to 
the Secretary of Labor; and 
(ii) for each Federal executive agency, 
the number of claims resolved, the type of 
corrective action obtained, the period of 
time for final resolution of the claim, and 
the results obtained. 
(B) An assessment of whether referral to 
the Office of Special Counsel of claims under 
the demonstration project— 
(i) 
improved 
services 
to 
servicemembers and veterans; or 
(ii) significantly reduced or eliminated 
duplication of effort and unintended delays 
in resolving meritorious claims of those 
servicemembers and veterans. 
(C) An assessment of the feasibility and 
advisability of referring all claims under chapter 
43 of title 38, United States Code, against Fed-
eral executive agencies to the Office of Special 
Counsel for investigation and resolution. 
(D) Such other recommendations for ad-
ministrative action or legislation as the Comp-
troller General determines appropriate. 
(8) DEFINITIONS.—In this subsection:
(A) OFFICE OF SPECIAL COUNSEL.—The 
term ‘‘Office of Special Counsel’’ means the Of-
fice of Special Counsel established by section 
1211 of title 5, United States Code. 
(B) SECRETARY.—The term ‘‘Secretary’’ 
means the Secretary of Labor. 
(C) FEDERAL EXECUTIVE AGENCY.—The 
term ‘‘Federal executive agency’’ has the mean-
ing given that term in section 4303(5) of title 
38, United States Code. 
(c) USERRA IMPLEMENTING REGULATIONS.— 
(1) REQUIREMENT
FOR
REGULATIONS.—Sub-
sections (a) and (b)(1) of section 4331 of title 38, 
United States Code, are amended by striking ‘‘may 
prescribe’’ and inserting ‘‘shall prescribe’’. 
(2) CLARIFICATION OF RIGHT TO MERIT PAY 
INCREASES.—The regulations prescribed for the im-
plementation of chapter 43 of title 38, United States 
Code, under section 4331 of such title shall include 
regulations that clarify that the entitlement of per-
sons returning to employment under such chapter to 
receive pay increases under merit pay systems of 
employers may not be denied on the basis of lack of 
work performance evaluations for periods of absence 
for active duty in the uniformed services.
SEC. 7. IMPROVED EDUCATIONAL ASSISTANCE BENEFITS 
FOR MEMBERS OF THE SELECTED RESERVE. 
(a) INCREASE IN AMOUNT OF BASIC EDUCATIONAL 
ASSISTANCE.— 
(1) IN GENERAL.—Section 16131(b) of title 10, 
United States Code, is amended to read as follows: 
‘‘(b) Except as provided in subsections (d) through 
(f), each educational assistance program established under 
subsection (a) shall provide for payment by the Secretary 
concerned, through the Secretary of Veterans Affairs, to 
each person entitled to educational assistance under this 
chapter who is pursuing a program of education of an edu-
cational assistance allowance at the following monthly 
rates: 
‘‘(1) For such a program of education pursued 
on a full-time basis, at the monthly rate equal to the 
applicable percentage (as defined in paragraph (3)) 
of the rate that applies for the month under section 
3015(a)(1) of title 38. 
‘‘(2)(A) Subject to subparagraph (B), for such 
a program of education pursued on less than a full- 
time basis, at an appropriately reduced rate, as de-
termined under regulations which the Secretaries 
concerned shall prescribe. 
‘‘(B) No payment may be made to a person for 
less than half-time pursuit of such a program of
education if tuition assistance is otherwise available 
to the person for such pursuit from the military de-
partment concerned. 
‘‘(3) In this subsection, the term ‘applicable 
percentage’ means, with respect to months occurring 
during— 
‘‘(A) fiscal year 2005, 33 percent; 
‘‘(B) fiscal year 2006, 37 percent; 
‘‘(C) fiscal year 2007, 41 percent; 
‘‘(D) fiscal year 2008, 45 percent; and 
‘‘(E) fiscal year 2009, and each subsequent 
fiscal year, 50 percent.’’. 
(2) EFFECTIVE DATE.—The amendments made 
by paragraph (1) shall take effect on October 1, 
2004, and shall apply with respect to educational as-
sistance allowances under section 16131(b) of such 
title paid for months after September 2004. 
(b) EXPANSION OF ELIGIBILITY REQUIREMENTS FOR 
MEMBERS OF THE SELECTED RESERVE HAVING SERVED 
ON ACTIVE DUTY FOR A PERIOD OF 24 NON-CONSECU-
TIVE MONTHS UNDER CHAPTER 30 OF TITLE 38, 
UNITED STATES CODE.— 
(1) CREDIT FOR 24 MONTHS OF ACTIVE DUTY 
SERVICE OVER A PERIOD OF 5 YEARS.—Subsection 
3012(a) of title 38, United States Code, is amended