160 
(C) The heading of such section is amended to read 
as follows: 
‘‘§ 7043. Provost and Academic Dean’’. 
(2) Section 5102(c)(10) of title 5, United States Code, 
is amended by striking ‘‘Academic Dean’’ and inserting 
‘‘Provost and Academic Dean’’. 
(c) CLERICAL AMENDMENT.—The table of sections at 
the beginning of chapter 605 of such title is amended by 
striking the items related to sections 7042 and 7043 and 
inserting the following new items: 
‘‘7042. President; assistants. 
‘‘7043. Provost and Academic Dean.’’. 
SEC. 554. INCREASE FROM TWO YEARS TO THREE YEARS IN 
PERIOD FOR WHICH EDUCATIONAL LEAVE OF 
ABSENCE MAY BE AUTHORIZED. 
Section 708(a) of title 10, United States Code, is 
amended by striking ‘‘two years’’ and inserting ‘‘three 
years’’. 
SEC. 555. CORRECTION TO DISPARATE TREATMENT OF DIS-
ABILITIES SUSTAINED DURING ACCESSION 
TRAINING. 
(a) ELIGIBILITY
OF ACADEMY CADETS
AND MID-
SHIPMEN
FOR DISABILITY RETIRED PAY.—(1) Section 
1217 of title 10, United States Code, is amended to read 
as follows:
161 
‘‘§ 1217. Cadets, midshipmen, and aviation cadets: ap-
plicability of chapter 
‘‘(a) This chapter applies to cadets at the United 
States Military Academy, the United States Air Force 
Academy, and the United States Coast Guard Academy and 
midshipmen of the Navy, but only with respect to physical 
disabilities incurred after the date of the enactment of the 
National Defense Authorization Act for Fiscal Year 2005. 
‘‘(b) Monthly cadet pay and monthly midshipman pay 
under section 203(c) of title 37 shall be considered to be 
basic pay for purposes of this chapter and the computation 
of retired pay and severance and separation pay to which 
entitlement is established under this chapter.’’. 
(2) The item related to section 1217 in the table of 
sections at the beginning of chapter 61 of such title is 
amended to read as follows: 
‘‘1217. Cadets, midshipmen, and aviation cadets: applicability of chapter.’’. 
(b) MEDICAL AND DENTAL CARE FOR SENIOR ROTC 
MEMBERS AND APPLICANTS.—(1) Chapter 55 of title 10, 
United States Code, is amended by inserting after section 
1074a the following new section:
162 
‘‘§ 1074b. Medical and dental care: members of, and 
designated applicants for membership in, 
Senior ROTC 
‘‘(a) Under joint regulations prescribed by the admin-
istering Secretaries, the following persons are entitled to the 
benefits described in subsection (b): 
‘‘(1) A member of, and a designated applicant 
for membership in, Senior ROTC who incurs or ag-
gravates an injury, illness, or disease in the line of 
duty while performing duties pursuant to section 
2109 of this title. 
‘‘(2) A member of, and a designated applicant 
for membership in, Senior ROTC who incurs or ag-
gravates an injury, illness, or disease while traveling 
directly to or from the place at which that member 
or applicant is to perform or has performed duties 
pursuant to section 2109 of this title. 
‘‘(3) Each member of, and each designated appli-
cant for membership in, Senior ROTC who incurs or 
aggravates an injury, illness, or disease in the line of 
duty while remaining overnight immediately before 
the commencement of duties performed pursuant to 
section 2109 of this title or, while remaining over-
night, between successive periods of performing duties 
pursuant to section 2109 of this title, at or in the vi-
cinity of the site of the duties performed pursuant to
163 
section 2109 of this title, if the site is outside reason-
able commuting distance from the residence of the 
member or designated applicant. 
‘‘(b) A person described in subsection (a) is entitled 
to— 
‘‘(1) the medical and dental care appropriate for 
the treatment of the injury, illness, or disease of that 
person until the resulting disability cannot be materi-
ally improved by further hospitalization or treatment; 
and 
‘‘(2) subsistence during hospitalization. 
‘‘(c) A member of, and each designated applicant for 
membership in, Senior ROTC is not entitled to benefits 
under subsection (b) if the injury, illness, or disease or ag-
gravation of an injury, illness, or disease of that person 
described in subsection (a)(2) is the result of the gross neg-
ligence or the misconduct of the member or applicant for 
membership in Senior ROTC. 
‘‘(d) In this section, the term ‘Senior ROTC’ means 
a program under chapter 103 of this title.’’. 
(2) Section 1074b of title 10, United States Code, as 
added by paragraph (1), shall apply with respect to inju-
ries, illnesses, and diseases incurred or aggravated on or 
after the date of the enactment of this Act.
164 
(3) The table of sections at the beginning of chapter 
55 of such title is amended by inserting after the item relat-
ing to section 1074a the following new item: 
‘‘1074b. Medical and dental care: members of, and designated applicants for mem-
bership in, Senior ROTC.’’. 
SEC. 556. PRAYER AT MILITARY SERVICE ACADEMY ACTIVI-
TIES. 
(a) AUTHORITY OF SUPERINTENDENT.—The Super-
intendent of a service academy may have in effect such pol-
icy as the Superintendent considers appropriate with re-
spect to the offering of a voluntary, nondenominational 
prayer at an otherwise authorized activity of the academy, 
subject to such limitations as the President may prescribe. 
(b) SERVICE ACADEMIES.—For purposes of this sec-
tion, the term ‘‘service academy’’ means any of the fol-
lowing: 
(1) The United States Military Academy. 
(2) The United States Naval Academy. 
(3) The United States Air Force Academy. 
SEC. 557. REVISION TO CONDITIONS ON SERVICE OF OFFI-
CERS AS SERVICE ACADEMY SUPERINTEND-
ENTS. 
(a) REPEAL OF REQUIREMENT THAT OFFICERS RE-
TIRE AFTER SERVICE
AS SUPERINTENDENT.—Sections 
3921, 6371, and 8921 of title 10, United States Code, are 
repealed.
165 
(b) MINIMUM THREE-YEAR TOUR OF DUTY AS SUPER-
INTENDENT.— 
(1) MILITARY ACADEMY.—Section 4333a of such 
title is amended to read as follows: 
‘‘§ 4333a. Superintendent: length of assignment 
‘‘An officer who is detailed to the position of Super-
intendent of the Academy shall be so detailed for a period 
of not less than three years. In any case in which an officer 
serving as Superintendent is reassigned or retires before 
having completed three years service as Superintendent, or 
otherwise leaves that position (other than due to death) 
without having completed three years service in that posi-
tion, the Secretary of the Army shall submit to Congress 
notice that such officer left the position of Superintendent 
without having completed three years service in that posi-
tion, together with a statement of the reasons why that offi-
cer did not complete three years service in that position.’’. 
(2) NAVAL ACADEMY.—Section 6951a of such 
title is amended— 
(A) by striking the second sentence of sub-
section (b); and 
(B) by adding at the end the following new 
subsection: 
‘‘(c) An officer who is detailed to the position of Super-
intendent shall be so detailed for a period of not less than
166 
three years. In any case in which an officer serving as Su-
perintendent is reassigned or retires before having com-
pleted three years service as Superintendent, or otherwise 
leaves that position (other than due to death) without hav-
ing completed three years service in that position, the Sec-
retary of the Navy shall submit to Congress notice that such 
officer left the position of Superintendent without having 
completed three years service in that position, together with 
a statement of the reasons why that officer did not complete 
three years service in that position.’’. 
(3) AIR FORCE ACADEMY.—Section 9333a of 
such title is amended to read as follows: 
‘‘§ 9333a. Superintendent: length of assignment 
‘‘An officer who is detailed to the position of Super-
intendent of the Academy shall be so detailed for a period 
of not less than three years. In any case in which an officer 
serving as Superintendent is reassigned or retires before 
having completed three years service as Superintendent, or 
otherwise leaves that position (other than due to death) 
without having completed three years service in that posi-
tion, the Secretary of the Air Force shall submit to Congress 
notice that such officer left the position of Superintendent 
without having completed three years service in that posi-
tion, together with a statement of the reasons why that offi-
cer did not complete three years service in that position.’’.
167 
(b) CLERICAL AMENDMENTS.— 
(1) The table of sections at the beginning of 
chapter 367 of such title is amended by striking the 
item relating to section 3921. 
(2) The table of sections at the beginning of 
chapter 403 of such title is amended to read as fol-
lows: 
‘‘4333a. Superintendent: length of assignment.’’ 
(3) The table of sections at the beginning of 
chapter 573 of such title is amended by striking the 
item relating to section 6371. 
(4) The table of sections at the beginning of 
chapter 867 of such title is amended by striking the 
item relating to section 8921. 
(5) The table of sections at the beginning of 
chapter 903 of such title is amended to read as fol-
lows: 
‘‘9333a. Superintendent: length of assignment.’’ 
SEC. 558. CODIFICATION OF PROHIBITION ON IMPOSITION 
OF CERTAIN CHARGES AND FEES AT THE 
SERVICE ACADEMIES. 
(a) UNITED STATES MILITARY ACADEMY.—(1) Chap-
ter 403 of title 10, United States Code, is amended by add-
ing at the end the following new section:
168 
‘‘§ 4359. Cadets: charges and fees for attendance; limi-
tation 
‘‘(a) PROHIBITION.—Except as provided in subsection 
(b), no charge or fee for tuition, room, or board for attend-
ance at the Academy may be imposed unless the charge or 
fee is specifically authorized by a law enacted after October 
5, 1994. 
‘‘(b) EXCEPTION.—The prohibition specified in sub-
section (a) does not apply with respect to any item or serv-
ice provided to cadets for which a charge or fee is imposed 
as of October 5, 1994. The Secretary of Defense shall notify 
Congress of any change made by the Academy in the 
amount of a charge or fee authorized under this sub-
section.’’. 
(2) The table of sections at the beginning of such chap-
ter is amended by adding at the end the following new item: 
‘‘4359. Cadets: charges and fees for attendance; limitation.’’. 
(b) UNITED STATES NAVAL ACADEMY.—(1) Chapter 
603 of title 10, United States Code, is amended by adding 
at the end the following new section: 
‘‘§ 6978. Midshipmen: charges and fees for attendance; 
limitation 
‘‘(a) PROHIBITION.—Except as provided in subsection 
(b), no charge or fee for tuition, room, or board for attend-
ance at the Naval Academy may be imposed unless the
169 
charge or fee is specifically authorized by a law enacted 
after October 5, 1994. 
‘‘(b) EXCEPTION.—The prohibition specified in sub-
section (a) does not apply with respect to any item or serv-
ice provided to midshipmen for which a charge or fee is 
imposed as of October 5, 1994. The Secretary of Defense 
shall notify Congress of any change made by the Naval 
Academy in the amount of a charge or fee authorized under 
this subsection.’’. 
(2) The table of sections at the beginning of such chap-
ter is amended by adding at the end the following new item: 
‘‘4359. Midshipmen: charges and fees for attendance; limitation.’’. 
(c) UNITED STATES AIR FORCE ACADEMY.—(1) Chap-
ter 903 of title 10, United States Code, is amended by add-
ing at the end the following new section: 
‘‘§ 9359. Cadets: charges and fees for attendance; limi-
tation 
‘‘(a) PROHIBITION.—Except as provided in subsection 
(b), no charge or fee for tuition, room, or board for attend-
ance at the Academy may be imposed unless the charge or 
fee is specifically authorized by a law enacted after October 
5, 1994. 
‘‘(b) EXCEPTION.—The prohibition specified in sub-
section (a) does not apply with respect to any item or serv-
ice provided to cadets for which a charge or fee is imposed 
as of October 5, 1994. The Secretary of Defense shall notify
170 
Congress of any change made by the Academy in the 
amount of a charge or fee authorized under this sub-
section.’’. 
(2) The table of sections at the beginning of such chap-
ter is amended by adding at the end the following new item: 
‘‘9359. Cadets: charges and fees for attendance; limitation.’’. 
(d) UNITED STATES COAST GUARD ACADEMY.—(1) 
Chapter 9 of title 14, United States Code, is amended by 
adding at the end the following new section: 
‘‘§ 197. Cadets: charges and fees for attendance; limi-
tation 
‘‘(a) PROHIBITION.—Except as provided in subsection 
(b), no charge or fee for tuition, room, or board for attend-
ance at the Academy may be imposed unless the charge or 
fee is specifically authorized by a law enacted after October 
5, 1994. 
‘‘(b) EXCEPTION.—The prohibition specified in sub-
section (a) does not apply with respect to any item or serv-
ice provided to cadets for which a charge or fee is imposed 
as of October 5, 1994. The Secretary of Homeland Security 
shall notify Congress of any change made by the Academy 
in the amount of a charge or fee authorized under this sub-
section.’’. 
(2) The table of sections at the beginning of such chap-
ter is amended by adding at the end the following new item: 
‘‘197. Cadets: charges and fees for attendance; limitation.’’.
171 
(e) UNITED STATES MERCHANT MARINE ACADEMY.— 
Section 1303 of the Merchant Marine Act, 1936 (46 U.S.C. 
App. 1295b), is amended by adding at the end the following 
new subsection: 
‘‘(j) LIMITATION ON CHARGES AND FEES FOR ATTEND-
ANCE.— 
‘‘(1) Except as provided in paragraph (2), no 
charge or fee for tuition, room, or board for attend-
ance at the Academy may be imposed unless the 
charge or fee is specifically authorized by a law en-
acted after October 5, 1994. 
‘‘(2)The prohibition specified in paragraph (1) 
does not apply with respect to any item or service 
provided to cadets for which a charge or fee is im-
posed as of October 5, 1994. The Secretary of Trans-
portation shall notify Congress of any change made 
by the Academy in the amount of a charge or fee au-
thorized under this paragraph.’’. 
(f) REPEAL OF CODIFIED PROVISION.—Section 553 of 
the National Defense Authorization Act for Fiscal Year 
1995 (Public Law 103–337; 10 U.S.C. 4331 note) is re-
pealed.
172 
SEC. 559. QUALIFICATIONS OF THE DEAN OF THE FACULTY 
OF UNITED STATES AIR FORCE ACADEMY. 
Section 9335(a) of title 10, United States Code, is 
amended by inserting before the period at the end of the 
second sentence the following: ‘‘, except that, if the Dean 
is not an officer on active duty, the Dean shall be a retired 
officer or former officer, and a person may not be appointed 
or assigned as Dean unless that person holds the highest 
academic degree in that person’s academic field’’. 
Subtitle G—Medals and Decora-
tions and Special Promotions 
and Appointments 
SEC. 561. SEPARATE MILITARY CAMPAIGN MEDALS TO REC-
OGNIZE SERVICE IN OPERATION ENDURING 
FREEDOM AND SERVICE IN OPERATION IRAQI 
FREEDOM. 
(a) REQUIREMENT.—The President shall establish a 
campaign medal specifically to recognize service by mem-
bers of the uniformed services in Operation Enduring Free-
dom and a separate campaign medal specifically to recog-
nize service by members of the uniformed services in Oper-
ation Iraqi Freedom. 
(b) ELIGIBILITY.—Subject to such limitations as may 
be prescribed by the President, eligibility for a campaign 
medal established pursuant to subsection (a) shall be set 
forth in regulations to be prescribed by the Secretary con-
173 
cerned (as defined in section 101 of title 10, United States 
Code). In the case of regulations prescribed by the Secre-
taries of the military departments, the regulations shall be 
subject to approval by the Secretary of Defense and shall 
be uniform throughout the Department of Defense. 
SEC. 562. ELIGIBILITY OF ALL UNIFORMED SERVICES PER-
SONNEL FOR NATIONAL DEFENSE SERVICE 
MEDAL. 
The President shall revise the criteria for eligibility for 
the decoration known as the National Defense Service Medal 
so as to extend such eligibility, with respect to service on 
or after September 11, 2001, to members of all of the uni-
formed services. 
SEC. 563. AUTHORITY TO APPOINT BRIGADIER GENERAL 
CHARLES E. YEAGER, UNITED STATES AIR 
FORCE (RETIRED), TO THE GRADE OF MAJOR 
GENERAL ON THE RETIRED LIST. 
The President is authorized to appoint, by and with 
the advice and consent of the Senate, Brigadier General 
Charles E. Yeager, United States Air Force (retired), to the 
grade of major general on the retired list of the Air Force. 
Any such appointment shall not affect the retired pay or 
other benefits of Charles E. Yeager or any benefits to which 
any other person is or may become entitled based upon his 
service.
174 
SEC. 564. POSTHUMOUS COMMISSION OF WILLIAM MITCH-
ELL IN THE GRADE OF MAJOR GENERAL IN 
THE ARMY. 
(a) AUTHORITY.—The President, by and with the ad-
vice and consent of the Senate, may issue posthumously a 
commission as major general, United States Army, in the 
name of the late William Mitchell, formerly a colonel, 
United States Army, who resigned his commission on Feb-
ruary 1, 1926. 
(b) DATE
OF COMMISSION.—A commission issued 
under subsection (a) shall issue as of the date of the death 
of William Mitchell on February 19, 1936. 
(c) PROHIBITION OF BENEFITS.—No person is entitled 
to receive any bonus, gratuity, pay, allowance, or other fi-
nancial benefit by reason of the enactment of this section. 
Subtitle H—Military Justice 
Matters 
SEC. 571. REVIEW ON HOW SEXUAL OFFENSES ARE COV-
ERED BY UNIFORM CODE OF MILITARY JUS-
TICE. 
(a) REVIEW REQUIRED.—The Secretary of Defense 
shall review the Uniform Code of Military Justice and the 
Manual for Courts-Martial with the objective of deter-
mining what changes are required to improve the ability 
of the military justice system to address issues relating to 
sexual assault and to conform the Uniform Code of Military
175 
Justice and the Manual for Courts-Martial more closely to 
other Federal laws and regulations that address such issues. 
(b) REPORT.—Not later than March 1, 2005, the Sec-
retary shall submit to the Committee on Armed Services 
of the Senate and the Committee on Armed Services of the 
House of Representatives a report on the review carried out 
under subsection (a). The report shall include the rec-
ommendations of the Secretary for revisions to the Uniform 
Code of Military Justice and, for each such revision, the 
rationale behind that revision. 
SEC. 572. SERVICE TIME NOT LOST WHEN CONFINED IN 
CONNECTION WITH TRIAL IF CONFINEMENT 
EXCUSED AS UNAVOIDABLE. 
Section 972 of title 10, United States Code, is amended 
in each of subsections (a)(3) and (b)(3) by inserting after 
‘‘the trial’’ the following: ‘‘, unless such confinement is ex-
cused as unavoidable’’. 
SEC. 573. CLARIFICATION OF AUTHORITY OF MILITARY 
LEGAL ASSISTANCE COUNSEL TO PROVIDE 
MILITARY LEGAL ASSISTANCE WITHOUT RE-
GARD TO LICENSING REQUIREMENTS. 
Section 1044 of title 10, United States Code, is amend-
ed by adding at the end the following new subsection: 
‘‘(e)(1) Notwithstanding any law regarding the licen-
sure of attorneys, a judge advocate or civilian attorney who
176 
is authorized to provide military legal assistance is author-
ized to provide that assistance in any jurisdiction, subject 
to such regulations as may be prescribed by the Secretary 
concerned. 
‘‘(2) In this subsection, the term ‘military legal assist-
ance’ includes— 
‘‘(A) legal assistance provided under this section; 
and 
‘‘(B) legal assistance contemplated by sections 
1044a, 1044b, 1044c, and 1044d of this title.’’. 
Subtitle I—Management and 
Administrative Matters 
SEC. 581. THREE-YEAR EXTENSION OF LIMITATION ON RE-
DUCTIONS OF PERSONNEL OF AGENCIES RE-
SPONSIBLE FOR REVIEW AND CORRECTION 
OF MILITARY RECORDS. 
Section 1559(a) of title 10, United States Code, is 
amended by striking ‘‘During fiscal years 2003, 2004, and 
2005,’’ and inserting ‘‘Before October 1, 2008,’’. 
SEC. 582. STAFFING AND FUNDING FOR DEFENSE PRIS-
ONER OF WAR/MISSING PERSONNEL OFFICE 
(DPMO). 
(a) MINIMUM LEVEL OF STAFFING.—Subparagraph 
(B) of section 1501(a)(5) of title 10, United States Code, 
is amended to read as follows:
177 
‘‘(B)(i) For any fiscal year— 
‘‘(I) the number of full-time Department of De-
fense personnel permanently assigned or detailed to 
the office shall be not less than 46 members of the 
armed forces and not less than 69 civilian employees 
of the Department of Defense; and 
‘‘(II) the number of permanent positions author-
ized for the office shall be not less than 46 positions 
for members of the armed forces and not less than 69 
positions for civilian employees. 
‘‘(ii) No reductions below the numbers assigned or au-
thorized under clause (i) may be made unless expressly au-
thorized by law. 
‘‘(iii) If for any reason the number of military or civil-
ian personnel assigned to the office should fall below the 
required level under clause (i)(I), the Secretary of Defense 
shall promptly notify the Committees on Armed Services 
of the Senate and House of Representatives of the number 
of personnel so assigned and of the Secretary’s plan to re-
store the staffing levels of the office to at least the required 
minimums under clause (i). The Secretary shall publish 
such notice and plan in the Federal Register.’’. 
(b) MINIMUM LEVEL
OF FUNDING.—Subparagraph 
(C) of such section is amended to read as follows:
178 
‘‘(C) For any fiscal year, the level of funding allocated 
to the office shall be not less than $16,000,000 unless a lower 
level of funding is expressly required by law.’’. 
SEC. 583. PERMANENT ID CARDS FOR RETIREE DEPEND-
ENTS AGE 70 AND OLDER. 
(a) IN GENERAL.—(1) Chapter 53 of title 10, United 
States Code, is amended by adding at the end the following 
new section: 
‘‘§ 1060b. Military ID cards: dependents and survivors 
of retirees; issuance of permanent ID card 
after attaining 70 years of age 
‘‘(a) PERMANENT ID CARD AFTER AGE 70.—In 
issuing military ID cards to retiree dependents, the Sec-
retary concerned shall issue a permanent ID card (not sub-
ject to renewal) to any such retiree dependent who has at-
tained 70 years of age. Such a permanent ID card shall 
be issued upon the expiration, after the retiree dependent 
attains 70 years of age, of any earlier, renewable military 
ID card or, if earlier, upon the request of such a retiree 
dependent after attaining age 70. 
‘‘(b) DEFINITIONS.—In this section: 
‘‘(1) The term ‘military ID card’ means a card 
or other form of identification used for purposes of 
demonstrating eligibility for any benefit from the De-
partment of Defense.
179 
‘‘(2) The term ‘‘retiree dependent’’ means a per-
son who is a dependent of a retired member of the 
uniformed services, or a survivor of a deceased retired 
member of the uniformed services, who is eligible for 
any benefit from the Department of Defense.’’. 
(2) The table of sections at the beginning of such chap-
ter is amended by adding at the end the following new item: 
‘‘1060b. Military ID cards: dependents and survivors of retirees; issuance of per-
manent ID card after attaining 70 years of age.’’. 
(b) EFFECTIVE DATE.—Section 1060b of title 10, 
United States Code, as added by subsection (a), shall take 
effect on October 1, 2004. 
SEC. 584. AUTHORITY TO PROVIDE CIVILIAN CLOTHING TO 
MEMBERS TRAVELING IN CONNECTION WITH 
MEDICAL EVACUATION. 
(a) AUTHORITY.—Section 1047 of title 10, United 
States Code, is amended— 
(1) by inserting ‘‘(b) CERTAIN ENLISTED MEM-
BERS.—’’ before ‘‘The Secretary’’; and 
(2) by inserting after the section heading the fol-
lowing: 
‘‘(a) MEMBERS TRAVELING IN CONNECTION WITH 
MEDICAL EVACUATION.—The Secretary of the military de-
partment concerned may furnish civilian clothing to a 
member at a cost not to exceed $250, or reimburse a member
180 
for the purchase of civilian clothing in an amount not to 
exceed $250, in the case of a member who— 
‘‘(1) is medically evacuated for treatment in a 
medical facility by reason of an illness or injury in-
curred or aggravated while on active duty; or 
‘‘(2) after being medically evacuated as described 
in paragraph (1), is in an authorized travel status 
from a medical facility to another location approved 
by the Secretary.’’. 
(b) EFFECTIVE DATE.—Subsection (a) of section 1047 
of title 10, United States Code, as added by subsection (a) 
shall take effect on October 1, 2004. 
SEC. 585. AUTHORITY TO ACCEPT DONATION OF FREQUENT 
TRAVELER MILES, CREDITS, AND TICKETS TO 
FACILITATE REST AND RECUPERATION TRAV-
EL OF DEPLOYED MEMBERS OF THE ARMED 
FORCES AND THEIR FAMILIES. 
(a) OPERATION HERO MILES.—Chapter 155 of title 
10, United States Code, is amended by adding at the end 
the following new section:
181 
‘‘§ 2613. Acceptance of frequent traveler miles, credits, 
and tickets; use to facilitate rest and recu-
peration travel of deployed members and 
their families 
‘‘(a) AUTHORITY TO ACCEPT DONATION OF TRAVEL 
BENEFITS.—Subject to subsection (c), the Secretary of De-
fense may accept from any person or government agency 
the donation of travel benefits for the purposes of use under 
subsection (d). 
‘‘(b) TRAVEL BENEFIT DEFINED.—In the section, the 
term ‘‘travel benefit’’ means frequent traveler miles, credits 
for tickets, or tickets for air or surface transportation issued 
by an air carrier or a surface carrier, respectively, that 
serves the public. 
‘‘(c) CONDITION ON AUTHORITY TO ACCEPT DONA-
TION.—The Secretary may accept a donation of a travel 
benefit under this section only if the air or surface carrier 
that is the source of the benefit consents to such donation. 
Any such donation shall be under such terms and condi-
tions as the surface carrier may specify, and the travel ben-
efit so donated may be used only in accordance with the 
rules established by the carrier. 
‘‘(d) USE OF DONATED TRAVEL BENEFITS.—A travel 
benefit accepted under this section may be used only for 
the purpose of—
182 
‘‘(1) facilitating the travel of a member of the 
armed forces who— 
‘‘(A) is deployed on active duty away from 
the permanent duty station of the member; and 
‘‘(B) is granted, during such deployment, 
rest and recuperative leave, emergency leave, 
convalescent leave, or another form of leave au-
thorized for the member; or 
‘‘(2) facilitating the travel of family members of 
a member described in paragraph (1) in order to be 
reunited with the member. 
‘‘(e) ADMINISTRATION.—The Secretary shall designate 
a single office in the Department of Defense to carry out 
this section. That office shall be responsible for developing 
rules and procedures to facilitate the acceptance and dis-
tribution of travel benefit under this section. 
‘‘(f) STATUS OF BENEFITS RECEIVED.—A member of 
the armed forces, or a family member of a member of the 
armed forces, who receives a travel benefit under this section 
is deemed to recognize no income from the receipt or use 
of such benefit. A donors of a travel benefit under this sec-
tion is deemed to obtain no tax benefit from such donation. 
‘‘(g) FAMILY MEMBER DEFINED.—In this section, the 
term ‘family member’ has the meaning given that term in 
section 411h(b)(1) of title 37.’’.
183 
(b) CLERICAL AMENDMENT.—The table of sections at 
the beginning of such chapter is amended by adding at the 
end the following new item: 
‘‘2613. Acceptance of frequent traveler miles, credits, and tickets; use to facilitate 
rest and recuperation travel of deployed members and their fam-
ilies.’’. 
SEC. 586. LIMITATION ON AMENDMENT OR CANCELLATION 
OF DEPARTMENT OF DEFENSE DIRECTIVE RE-
LATING TO REASONABLE ACCESS TO MILI-
TARY INSTALLATIONS FOR CERTAIN PER-
SONAL COMMERCIAL SOLICITATION. 
An amendment to Department of Defense Directive 
1344.7, ‘‘Personal Commercial Solicitation on DoD Instal-
lations’’, or cancellation of that directive, shall not take ef-
fect until after the end of the one-year period beginning on 
the date on which a report containing the results of the in-
vestigation regarding insurance premium allotment proc-
essing, which is underway as of the date of the enactment 
of this Act, is submitted to the Committee on Armed Serv-
ices and the Committee on Government Reform of the House 
of Representatives and the Committee on Armed Services 
and the Committee on Governmental Affairs of the Senate. 
SEC. 587. ANNUAL IDENTIFICATION OF REASONS FOR DIS-
CHARGES FROM THE ARMED FORCES DURING 
PRECEDING FISCAL YEAR. 
Not later than January 1 each year, the Secretary of 
Defense shall submit to the Committees on Armed Services
184 
of the Senate and House of Representatives a report on dis-
charges from the Army, Navy, Air Force, and Marine Corps 
during the preceding fiscal year. Each such report shall 
show, in the aggregate and for each of those Armed Forces, 
the following: 
(1) The total number of persons discharged dur-
ing the preceding fiscal year. 
(2) For each separation code, and for each reen-
listment eligibility code, used by the Armed Forces, 
the number of those discharged persons assigned that 
code. 
(3) For the persons assigned each such separa-
tion code, classification of discharges by age, by sex, 
by race, by military rank or grade, by time in serv-
ice, by unit (shown at the small unit level), by mili-
tary occupational specialty (or the equivalent), and 
by reenlistment eligibility code. 
SEC. 588. AUTHORITY FOR FEDERAL RECOGNITION OF NA-
TIONAL GUARD COMMISSIONED OFFICERS 
APPOINTED FROM FORMER COAST GUARD 
PERSONNEL. 
Section 305(a) of title 32, United States Code, is 
amended—
185 
(1) by striking ‘‘Army, Navy, Air Force, or Ma-
rine Corps’’ in paragraphs (2), (3), and (4) and in-
serting ‘‘armed forces’’; and 
(2) by striking ‘‘or the United States Air Force 
Academy’’ in paragraph (5) and inserting ‘‘the 
United States Air Force Academy, or the United 
States Coast Guard Academy’’. 
SEC. 589. STUDY OF BLENDED WING CONCEPT FOR THE AIR 
FORCE. 
(a) STUDY REQUIRED.—Not later than March 1, 2005, 
the Secretary of the Air Force shall submit to Congress a 
report on the blended wing concept for the Air Force. The 
report shall include the Secretary’s findings as to the char-
acteristics and locations that are considered favorable for 
a blended wing, a description of the manner in which cur-
rent blended wings are functioning, and a statement of the 
current and future plans of the Air Force to implement the 
blended wing concept. 
(b) SELECTION CRITERIA.—The report shall include a 
description of the criteria and attributes that the Secretary 
requires when choosing units to become blended wings.
186 
SEC. 590. CONTINUATION OF IMPACT AID ASSISTANCE ON 
BEHALF OF DEPENDENTS OF CERTAIN MEM-
BERS DESPITE CHANGE IN STATUS OF MEM-
BER. 
(a) SPECIAL RULE.—For purposes of computing the 
amount of a payment for an eligible local educational agen-
cy under subsection (a) of section 8003 of the Elementary 
and Secondary Education Act (20 U.S.C. 7703) for school 
year 2004–2005, the Secretary of Education shall continue 
to count as a child enrolled in a school of such agency under 
such subsection any child who— 
(1) would be counted under paragraph (1)(B) of 
such subsection to determine the number of children 
who were in average daily attendance in the school; 
but 
(2) due to the deployment of both parents or 
legal guardians of the child, the deployment of a par-
ent or legal guardian having sole custody of the child, 
or the death of a military parent or legal guardian 
while on active duty (so long as the child resides on 
Federal property (as defined in section 8013(5) of 
such Act (7 U.S.C. 7713(5))), is not eligible to be so 
counted. 
(b) TERMINATION.—The special rule provided under 
subsection (a) applies only so long as the children covered 
by such subsection remain in average daily attendance at
187 
a school in the same local educational agency they attended 
before their change in eligibility status. 
Subtitle J—Other Matters 
SEC. 591. EMPLOYMENT PREFERENCES FOR SPOUSES OF 
CERTAIN DEPARTMENT OF DEFENSE CIVIL-
IAN EMPLOYEES SUBJECT TO RELOCATION 
AGREEMENTS. 
(a) SPOUSES OF CERTAIN CIVILIAN EMPLOYEES.—(1) 
Section 1784 of title 10, United States Code, is amended 
by adding at the end the following new subsection: 
‘‘(h) INCLUSION OF SPOUSES OF CERTAIN DOD CIVIL-
IAN
EMPLOYEES
SUBJECT
TO
RELOCATION
AGREE-
MENTS.—(1) For the purposes of this section, the spouse of 
a civilian employee described in paragraph (2) shall be con-
sidered to be the spouse of a member of the armed forces. 
‘‘(2) An employee described in this paragraph is a De-
partment of Defense employee who, pursuant to a manda-
tory mobility agreement executed as a condition of employ-
ment or pursuant to another civilian mobility program of 
the Department of Defense, has had a change of permanent 
duty assignment (A) that was based on the needs of the Gov-
ernment, and (B) that required a relocation of the employ-
ee’s residence.’’. 
(b) CLERICAL AMENDMENTS.—(1) The heading of such 
section is amended to read as follows:
188 
‘‘§ 1784. Employment opportunities: military spouses; 
certain Department of Defense civilian 
spouses subject to relocation agreements’’. 
(2) The item relating to such section in the table of 
sections at the beginning of subchapter I of chapter 88 of 
such title is amended to read as follows: 
‘‘1784. Employment opportunities: military spouses; certain Department of De-
fense civilian spouses subject to relocation agreements.’’. 
(c) EFFECTIVE DATE.—Subsection (h) of section 1784 
of title 10, United States Code, as added by subsection (a), 
shall apply only with respect to spouses of employees de-
scribed in paragraph (2) of that subsection who relocate 
their residence as a result of a permanent duty assignment 
specified in that paragraph that is effective on or after the 
date of the enactment of this Act. 
SEC. 592. REPEAL OF REQUIREMENT TO CONDUCT ELEC-
TRONIC VOTING DEMONSTRATION PROJECT 
FOR THE FEDERAL ELECTION TO BE HELD IN 
NOVEMBER 2004. 
Section 1604 of the National Defense Authorization 
Act for Fiscal Year 2002 (Public Law 107-107; 115 Stat. 
1277; 42 U.S.C. 1977ff note) is repealed.
189 
SEC. 593. EXAMINATION OF SEXUAL ASSAULT IN THE 
ARMED FORCES BY THE DEFENSE TASK 
FORCE ESTABLISHED TO EXAMINE SEXUAL 
HARASSMENT AND VIOLENCE AT THE MILI-
TARY SERVICE ACADEMIES. 
(a) EXTENSION OF TASK FORCE.—(1) The task force 
in the Department of Defense established by the Secretary 
of Defense pursuant to section 526 of the National Defense 
Authorization Act for Fiscal Year 2004 (Public Law 108– 
136; 117 Stat. 1466) to examine matters relating to sexual 
harassment and violence at the United States Military 
Academy and United States Naval Academy shall continue 
in existence for a period of at least 18 months after the 
date as of which the task force would otherwise be termi-
nated pursuant to subsection (i) of that section. 
(2) Upon the completion of the functions of the task 
force referred to in paragraph (1) pursuant to section 526 
of the National Defense Authorization Act for Fiscal Year 
2004, the name of the task force shall be changed to the 
Defense Task Force on Sexual Assault in the Military Serv-
ices, and the task force shall then carry out the functions 
specified in this section. The task force shall not begin to 
carry out the functions specified in this section until it has 
completed its functions under such section 526. 
(b) EXAMINATION OF MATTERS RELATING TO SEXUAL 
ASSAULT IN THE ARMED FORCES.—The task force shall
190 
conduct an examination of matters relating to sexual as-
sault in cases in which members of the Armed Forces are 
either victims or commit acts of sexual assault. 
(c) RECOMMENDATIONS.—The Task Force shall in-
clude in its report under subsection (e) recommendations 
of ways by which civilian officials within the Department 
of Defense and leadership within the Armed Forces may 
more effectively address matters relating to sexual assault. 
That report shall include an assessment of, and rec-
ommendations (including any recommendations for changes 
in law) for measures to improve, with respect to sexual as-
sault, the following: 
(1) Victim care and advocacy programs. 
(2) Effective prevention. 
(3) Collaboration among military investigative 
organizations with responsibility or jurisdiction. 
(4) Coordination between military and civilian 
communities, including local support organizations. 
(5) Reporting procedures, data collection, and 
tracking. 
(6) Oversight of sexual assault programs. 
(7) Military justice issues. 
(8) Other issues identified by the task force relat-
ing to sexual assault.
191 
(d) METHODOLOGY.—In carrying out its examination 
under subsection (b) and in formulating its recommenda-
tions under subsection (c), the task force shall consider the 
findings and recommendations of previous reviews and in-
vestigations of sexual assault conducted by the Department 
of Defense and the Armed Forces. 
(e) REPORT.—(1) Not later than one year after the ini-
tiation of its examination under subsection (b), the task 
force shall submit to the Secretary of Defense and the Secre-
taries of the Army, Navy, and Air Force a report on the 
activities of the task force and on the activities of the De-
partment of Defense and the Armed Forces to respond to 
sexual assault. 
(2) The report shall include the following: 
(A) A description of any barrier to implementa-
tion of improvements as a result of previous efforts to 
address sexual assault. 
(B) Other areas of concern not previously ad-
dressed in prior reports 
(C) The findings and conclusions of the task 
force. 
(D) Any recommendations for changes to policy 
and law that the task force considers appropriate. 
(3) Within 90 days after receipt of the report under 
paragraph (1), the Secretary of Defense shall submit the
192 
report, together with the Secretary’s evaluation of the re-
port, to the Committees on Armed Services of the Senate 
and House of Representatives. 
(f) TERMINATION.—The task force shall terminate 90 
days after the date on which the report of the task force 
is submitted to the Committees on Armed Services of the 
Senate and House of Representatives pursuant to subsection 
(e)(3). 
SEC. 594. RENEWAL OF PILOT PROGRAM FOR TREATING 
GED AND HOME SCHOOL DIPLOMA RECIPI-
ENTS AS HIGH SCHOOL GRADUATES FOR DE-
TERMINATIONS OF ELIGIBILITY FOR ENLIST-
MENT. 
Section 571(e) of the Strom Thurmond National De-
fense Authorization Act for Fiscal Year 1999 (10 U.S.C. 
520 note) is amended to read as follows: 
‘‘(e) DURATION OF PILOT PROGRAM.—The pilot pro-
gram shall be in effect during the period beginning on Octo-
ber 1, 2004, and ending on September 30, 2005.’’. 
SEC. 595. ASSISTANCE TO LOCAL EDUCATIONAL AGENCIES 
THAT BENEFIT DEPENDENTS OF MEMBERS 
OF THE ARMED FORCES AND DEPARTMENT 
OF DEFENSE CIVILIAN EMPLOYEES. 
(a) CONTINUATION
OF DEPARTMENT
OF DEFENSE 
PROGRAM FOR FISCAL YEAR 2005.—Of the amount author-
193 
ized to be appropriated pursuant to section 301(5) for oper-
ation and maintenance for Defense-wide activities, 
$50,000,000 shall be available only for the purpose of pro-
viding educational agencies assistance to local educational 
agencies. 
(b) NOTIFICATION.—Not later than June 30, 2005, the 
Secretary of Defense shall notify each local educational 
agency that is eligible for educational agencies assistance 
for fiscal year 2005 of— 
(1) that agency’s eligibility for the assistance; 
and 
(2) the amount of the assistance for which that 
agency is eligible. 
(c) DISBURSEMENT OF FUNDS.—The Secretary of De-
fense shall disburse funds made available under subsection 
(a) not later than 30 days after the date on which notifica-
tion to the eligible local educational agencies is provided 
pursuant to subsection (b). 
(d) DEFINITIONS.—In this section: 
(1) The term ‘‘educational agencies assistance’’ 
means assistance authorized under section 386(b) of 
the National Defense Authorization Act for Fiscal 
Year 1993 (Public Law 102–484; 20 U.S.C. 7703 
note).
194 
(2) The term ‘‘local educational agency’’ has the 
meaning given that term in section 8013(9) of the El-
ementary and Secondary Education Act of 1965 (20 
U.S.C. 7713(9)). 
SEC. 596. SENIOR RESERVE OFFICER TRAINING CORPS AND 
RECRUITER ACCESS AT INSTITUTIONS OF 
HIGHER EDUCATION. 
(a) CERTIFICATION OF COMPLIANCE WITH ROTC AC-
CESS PROVISIONS.—Subsection (a) of section 983 of title 
10, United States Code, is amended— 
(1) by inserting ‘‘(1)’’ before ‘‘No funds’’; 
(2) by striking ‘‘prevents—’’ and inserting ‘‘pre-
vents, either (or both) of the following:’’; 
(3) by striking ‘‘(1) the’’ and inserting ‘‘(A) 
The’’; 
(4) by striking ‘‘; or’’ and inserting a period; 
(5) by striking ‘‘(2) a’’ and inserting ‘‘(B) A’’; 
and 
(6) by adding at the end the following: 
‘‘(2)(A) Not later than 180 days after the date of the 
enactment of the National Defense Authorization Act for 
Fiscal Year 2005 and annually thereafter, the Secretary of 
Defense shall request from each institution of higher edu-
cation that has students participating in a Senior Reserve 
Officer Training Corps program during the then-current
195 
academic year of that institution a certification that such 
institution, during the next academic year of the institu-
tion, will— 
‘‘(i) permit the Secretary of each military de-
partment to maintain a unit of the Senior Officer 
Training Corps (in accordance with subsection (a)) 
at that institution (or any subelement of that institu-
tion), should such Secretary elect to maintain such a 
unit; and 
‘‘(ii) if the Secretary of the military department 
concerned elects not to establish or maintain a unit 
of the Senior Reserve Officer Training Corps at that 
institution, permit a student of that institution (or 
any subelement of that institution) to enroll in a unit 
of the Senior Reserve Officer Training Corps at an-
other institution of higher education. 
‘‘(B) Any certification under subparagraph (A) shall 
be made by the president of the institution (or equivalent 
highest ranking administrative official) and shall be sub-
mitted to the Secretary of Defense no later than 90 days 
after receipt of the request from the Secretary. 
‘‘(C) In the case of any institution from which a cer-
tification is requested under subparagraph (A), if the Sec-
retary of Defense does not receive a certification in accord-
ance with subparagraph (B), or if the certification does not
196 
state that the university will comply with both clauses (i) 
and (ii) of subparagraph (A) during its next academic 
year, the Secretary shall make a determination under para-
graph (1) as to whether the institution has a policy or prac-
tice described in that paragraph.’’. 
(b) EQUAL TREATMENT OF MILITARY RECRUITERS 
WITH OTHER RECRUITERS.—Subsection (b)(1) of such sec-
tion is amended— 
(1) by striking ‘‘entry to campuses’’ and insert-
ing ‘‘access to campuses’’; and 
(2) by inserting before the semicolon at the end 
the following: ‘‘in a manner that is at least equal in 
quality and scope to the access to campuses and to 
students that is provided to any other employer’’. 
(c) PROHIBITION OF FUNDING FOR POST-SECONDARY 
SCHOOLS THAT PREVENT ROTC ACCESS OR MILITARY RE-
CRUITING.—(1) Subsection (d) of such section is amended— 
(A) in paragraph (1)— 
(i) by striking ‘‘limitation established in 
subsection (a) applies’’ and inserting ‘‘limita-
tions established in subsections (a) and (b) 
apply’’; 
(ii) in subparagraph (B), by inserting ‘‘for 
any department or agency for which regular ap-
197 
propriations are made’’ after ‘‘made available’’; 
and 
(iii) by adding at the end the following new 
subparagraphs: 
‘‘(C) Any funds made available for the Depart-
ment of Homeland Security. 
‘‘(D) Any funds made available for the National 
Nuclear Security Administration of the Department 
of Energy. 
‘‘(E) Any funds made available for the Depart-
ment of Transportation. 
‘‘(F) Any funds made available for the Central 
Intelligence Agency.’’; and 
(B) by striking paragraph (2). 
(2)(A) Subsection (b) of such section is amended by 
striking ‘‘subsection (d)(2)’’ and inserting ‘‘subsection 
(d)(1)’’. 
(B) Subsection (e) of such section is amended by in-
serting ‘‘, to the head of each other department and agency 
the funds of which are subject to the determination,’’ after 
‘‘Secretary of Education’’. 
(d) CODIFICATION AND EXTENSION OF EXCLUSION OF 
AMOUNTS TO COVER INDIVIDUAL PAYMENTS.—Subsection 
(d) of such section, as amended by subsection (c)(1), is fur-
ther amended—
198 
(1) by striking ‘‘The’’ after ‘‘(1)’’ and inserting 
‘‘Except as provided in paragraph (2), the’’; and 
(2) by adding at the end the following new para-
graph: 
‘‘(2) Any Federal funding specified in paragraph (1) 
that is provided to an institution of higher education, or 
to an individual, to be available solely for student financial 
assistance, related administrative costs, or costs associated 
with attendance, may be used for the purpose for which the 
funding is provided.’’. 
(e) CONFORMING AMENDMENTS.—Subsections (a) and 
(b) of such section are amended by striking ‘‘(including a 
grant of funds to be available for student aid)’’. 
(f) CONFORMING REPEAL OF CODIFIED PROVISION.— 
Section 8120 of the Department of Defense Appropriations 
Act, 2000 (Public Law 106–79; 10 U.S.C. 983 note), is re-
pealed 
(g) EFFECTIVE DATE.—The amendments made by this 
section shall apply with respect to funds appropriated for 
fiscal year 2005 and thereafter. 
SEC. 597. REPORTS ON TRANSFORMATION MILESTONES. 
(a) MILITARY TO CIVILIAN CONVERSIONS.—Not later 
than January 31, 2005, the Secretary of Defense shall sub-
mit to the Committees on Armed Services of the Senate and 
House of Representatives a report providing information
199 
as to the number of positions in the Department of Defense 
converted during the previous fiscal year from performance 
by military personnel to performance by civilian personnel. 
The report shall include— 
(1) a description of the skill set of the positions 
converted; 
(2) specification of the total cost of such conver-
sions and how that cost is being paid for; and 
(3) the number of positions in the Department of 
Defense projected for such conversion during the pe-
riod from March 1, 2005, to January 31, 2006. 
(b) CIVILIAN SKILLS CORPS FEASIBILITY STUDY.—(1) 
The Secretary of Defense shall conduct an Armed Forces- 
wide study of how a system to embed certain civilian exper-
tise skill sets within the military on a temporary basis 
could be implemented. The study shall include consideration 
of all skills sets in which, as determined by the Secretary 
of Defense, there is a significant shortfall within the Armed 
Forces or which are high value, but of uncertain need. The 
study shall examine the feasibility of implementing a per-
sonnel system that expands the capability of the Armed 
Forces to rapidly access civilian volunteers with needed ex-
pertise outside of the reserve components.
200 
(2) The Secretary shall submit to the congressional de-
fense committees a report on the results of the study under 
paragraph (1) not later than March 31, 2005. 
(c) MILITARY-TO-MILITARY CONVERSIONS.—Not later 
than March 31 of each of 2005, 2006, and 2007, the Sec-
retary of Defense shall submit to the congressional defense 
committees a report on the milestones within the multiyear 
transformation for internal military-to-military transi-
tions. Each such report shall include— 
(1) the number of units and personnel trans-
ferred and retrained within the previous fiscal year 
and what their new unit designations are; and 
(2) a description of the transformation goals for 
the upcoming fiscal year and whether the previous 
years goals were met and why or why not. 
(d) TRANSFORMATION TO BRIGADE STRUCTURE FOR 
THE ARMY.—No later than March 31 of each year, the Sec-
retary of Defense shall submit to the congressional defense 
committees a report on the status of the internal trans-
formation of the Army from a division-orientated system 
to a brigade-orientated one. Such a report shall be sub-
mitted for each year until the Secretary of the Army cer-
tifies to those committees that the transformation of the 
Army to brigade level units has been completed.
201 
TITLE VI—COMPENSATION AND 
OTHER PERSONNEL BENEFITS 
Subtitle A—Pay and Allowances 
SECTION 601. INCREASE IN BASIC PAY FOR FISCAL YEAR 
2005. 
(a) WAIVER OF SECTION 1009 ADJUSTMENT.—The ad-
justment to become effective during fiscal year 2005 re-
quired by section 1009 of title 37, United States Code, in 
the rates of monthly basic pay authorized members of the 
uniformed services shall not be made. 
(b) INCREASE IN BASIC PAY.—Effective on January 
1, 2005, the rates of monthly basic pay for members of the 
uniformed services are increased by 3.5 percent. 
SEC. 602. AUTHORITY TO PROVIDE FAMILY SEPARATION 
BASIC ALLOWANCE FOR HOUSING. 
Section 403(d) of title 37, United States Code, is 
amended— 
(1) in paragraph (1), by striking ‘‘is entitled to’’ 
and inserting ‘‘may be paid’’; and 
(2) in paragraph (4), by striking the first sen-
tence and inserting the following new sentence: ‘‘A 
family separation basic allowance for housing paid to 
a member under this subsection is in addition to any 
other allowance or per diem that the member receives 
under this title.’’
202 
SEC. 603. GEOGRAPHIC BASIS FOR BASIC ALLOWANCE FOR 
HOUSING DURING SHORT CHANGES OF STA-
TION FOR PROFESSIONAL MILITARY EDU-
CATION OR TRAINING. 
Section 403(d)(3) of title 37, United States Code, is 
amended by adding at the end the following new subpara-
graph: 
‘‘(C) If the member is reassigned for a perma-
nent change of station or permanent change of assign-
ment from a duty station in the continental United 
States to another duty station in the continental 
United States for a period of not more than one year 
for the purpose of participating in professional mili-
tary education or training classes, the Secretary con-
cerned may base the amount of the basic allowance 
for housing for the member on the duty station to 
which the member is reassigned or the area in which 
the dependents reside, whichever the Secretary con-
cerned determines to be most equitable.’’. 
SEC. 604. IMMEDIATE LUMP-SUM REIMBURSEMENT FOR UN-
USUAL 
NONRECURRING 
EXPENSES 
IN-
CURRED BY MEMBERS SERVING OUTSIDE 
CONTINENTAL UNITED STATES. 
(a) ELIGIBILITY FOR REIMBURSEMENT.—Section 405 
of title 37, United States Code, is amended by adding at 
the end the following new subsection:
203 
‘‘(d) 
LUMP-SUM
REIMBURSEMENT
FOR
NON-
RECURRING EXPENSES.—In addition to providing a per 
diem under this section, the Secretary concerned may reim-
burse a member for actual expenses of a nonrecurring na-
ture that the member incurs incident to serving on duty 
outside of the continental United States. The types of ex-
penses for which reimbursement may be provided under this 
paragraph shall be limited to those expenses directly related 
to the conditions or location of the duty outside of the conti-
nental United States and either of a nature or a magnitude 
not normally incurred by members assigned to duty inside 
the continental United States. In determining the per diem 
to be paid under this section, the Secretary concerned shall 
not consider expenses for which reimbursement is provided 
under this paragraph.’’. 
(b) USE OF DEFINED TERM CONTINENTAL UNITED 
STATES.—(1) Subsection (a) of such section is amended by 
striking ‘‘outside of the United States or in Hawaii or Alas-
ka’’ and inserting ‘‘outside of the continental United 
States’’. 
(2) The heading of such section is amended to read 
as follows:
204 
‘‘§ 405. Travel and transportation allowances: per 
diem while on duty outside the conti-
nental United States’’. 
(3) The table of sections at the beginning of chapter 
7 of such title is amended by striking the item relating to 
section 405 and inserting the following new item: 
‘‘405. Travel and transportation allowances: per diem while on duty outside the 
continental United States.’’. 
SEC. 605. INCOME REPLACEMENT PAYMENTS FOR RE-
SERVES EXPERIENCING EXTENDED AND FRE-
QUENT MOBILIZATION FOR ACTIVE DUTY 
SERVICE. 
(a) IN GENERAL.—(1) Chapter 19 of title 37, United 
States Code, is amended by adding at the end the following 
new section: 
‘‘§ 910. Replacement of lost income: involuntarily mo-
bilized reserve component members sub-
ject to extended and frequent active duty 
service 
‘‘(a) PAYMENT REQUIRED.—The Secretary concerned 
shall pay to an eligible member of a reserve component of 
the armed forces an amount equal to the monthly active- 
duty income differential of the member, as determined by 
the Secretary. The payments shall be made on a monthly 
basis.
205 
‘‘(b) ELIGIBILITY.—Subject to subsection (c), a reserve 
component member is entitled to a payment under this sec-
tion for any full month of active duty of the member, while 
on active duty under an involuntary mobilization order, 
following the date on which the member— 
‘‘(1) completes 12 continuous months of service 
on active duty under such an order; 
‘‘(2) completes 18 months on active duty during 
the previous 60 months under such an order; or 
‘‘(3) is involuntarily mobilized for service on ac-
tive duty six months or less following the member’s 
separation from the member’s previous period of ac-
tive duty. 
‘‘(c) MINIMUM AND MAXIMUM PAYMENT AMOUNTS.— 
(1) A payment under this section shall be made to a member 
for a month only if the amount of the monthly active-duty 
income differential for the month is greater than $50. 
‘‘(2) Notwithstanding the amount determined under 
subsection (d) for a member for a month, the monthly pay-
ment to a member under this section may not exceed $3,000. 
‘‘(d) MONTHLY
ACTIVE-DUTY
INCOME
DIFFEREN-
TIAL.—For purposes of this section, the monthly active-duty 
income differential of a member is the difference between— 
‘‘(1) the average monthly civilian income of the 
member; and
206 
‘‘(2) the member’s total monthly military com-
pensation. 
‘‘(e) DEFINITIONS.—In this section: 
‘‘(1) The term ‘average monthly civilian income’, 
with respect to a member of a reserve component, 
means the amount, determined by the Secretary con-
cerned, of the earned income of the member for either 
the 12 months preceding the member’s mobilization or 
the 12 months covered by the member’s most recent 
Federal income tax filing, divided by 12. 
‘‘(2) The term ‘total monthly military compensa-
tion’ means the amount, computed on a monthly 
basis, of the sum of— 
‘‘(A) the amount of the regular military 
compensation (RMC) of the member; and 
‘‘(B) any amount of special pay or incen-
tive pay and any allowance (other than an al-
lowance included in regular military compensa-
tion) that is paid to the member on a monthly 
basis.’’. 
(2) The table of sections at the beginning of such chap-
ter is amended by adding at the end the following new item: 
‘‘910. Replacement of lost income: involuntarily mobilized reserve component 
members subject to extended and frequent active duty service.’’.
207 
(b) EFFECTIVE DATE.—Section 910 of title 37, United 
States Code, as added by subsection (a), shall apply for 
months after December 2004. 
SEC. 606. AUTHORITY FOR CERTAIN MEMBERS DEPLOYED 
IN COMBAT ZONES TO RECEIVE LIMITED AD-
VANCES ON THEIR FUTURE BASIC PAY. 
(a) ADVANCEMENT OF BASIC PAY.—(1) Chapter 3 of 
title 37, United States Code, is amended by adding at the 
end the following new section: 
‘‘§ 212. Advancement of basic pay: members deployed 
in combat zones for more than one year 
‘‘(a) ELIGIBILITY; AMOUNT ADVANCED.—(1) If a 
member of the armed forces is assigned to duty in an area 
for which special pay under section 310 of this title is avail-
able and the assignment is pursuant to orders specifying 
an assignment of one year or more (or the assignment is 
otherwise extended beyond one year), the member may re-
quest, during the period of the assignment, the advanced 
payment of not more than three months of the basic pay 
of the member. 
‘‘(2) A request by a member described in paragraph 
(1) for the advanced payment of a single month of basic 
pay shall be granted. The Secretary concerned may grant 
a request for a second or third month of advanced basic
208 
pay during the assignment for the member upon a showing 
of financial hardship. 
‘‘(b) RECOUPMENT OF ADVANCED PAY.—The Secretary 
concerned shall recoup an advance made on the basic pay 
of a member under this section in equal installments over 
a one-year period beginning as provided in subsection (c). 
If the member is serving on active duty for any month dur-
ing the recoupment period, the amount of the installment 
for the month shall be deducted from the basic pay of the 
member for that month. The estate of a deceased member 
shall not be required to repay an advance made to the mem-
ber under this section. 
‘‘(c) COMMENCEMENT OF RECOUPMENT.—(1) Except 
as provided in paragraph (2), the recoupment of basic pay 
advanced to a member under this section shall commence 
beginning with the first month that begins after the end 
of the assignment of the member to duty in an area for 
which special pay under section 310 of this title is available 
‘‘(2) A member of a reserve component who receives 
an advancement of basic pay under this section shall com-
mence repayment of the advance beginning with the first 
month that begins after the the advanced pay is received.’’. 
(2) The table of sections at the beginning of such chap-
ter is amended by adding at the end the following new item: 
‘‘212. Advancement of basic pay: members deployed in combat zones for more 
than one year.’’.
209 
(b) EFFECTIVE DATE.—Section 212 of title 37, United 
States Code, as added by subsection (a), shall take effect 
October 1, 2004. 
Subtitle B—Bonuses and Special 
and Incentive Pays 
SEC. 611. ONE-YEAR EXTENSION OF BONUS AND SPECIAL 
PAY AUTHORITIES. 
(a) NURSE OFFICER CANDIDATE ACCESSION PRO-
GRAM.—Section 2130a(a)(1) of title 10, United States Code, 
is amended by striking ‘‘December 31, 2004’’ and inserting 
‘‘December 31, 2005’’. 
(b) REPAYMENT OF EDUCATION LOANS FOR CERTAIN 
HEALTH PROFESSIONALS WHO SERVE IN THE SELECTED 
RESERVE.—Section 16302(d) of such title is amended by 
striking ‘‘January 1, 2005’’ and inserting ‘‘January 1, 
2006’’. 
(c) AVIATION OFFICER RETENTION BONUS.—Section 
301b(a) of title 37, United States Code, is amended by strik-
ing ‘‘December 31, 2004’’ and inserting ‘‘December 31, 
2005’’. 
(d) ACCESSION BONUS FOR REGISTERED NURSES.— 
Section 302d(a)(1) of such title is amended by striking ‘‘De-
cember 31, 2004’’ and inserting ‘‘December 31, 2005’’. 
(e) INCENTIVE SPECIAL PAY
FOR NURSE ANES-
THETISTS.—Section 302e(a)(1) of such title is amended by
210 
striking ‘‘December 31, 2004’’ and inserting ‘‘December 31, 
2005’’. 
(f) ACCESSION BONUS FOR DENTAL OFFICERS.—Sec-
tion 302h(a)(1) of such title is amended by striking ‘‘De-
cember 31, 2004’’ and inserting ‘‘December 31, 2005’’. 
(g) ACCESSION BONUS FOR PHARMACY OFFICERS.— 
Section 302j(a) of such title is amended by striking ‘‘the 
date of the enactment of the Floyd D. Spence National De-
fense Authorization Act for Fiscal Year 2001 and ending 
on September 30, 2004’’ and inserting ‘‘October 30, 2000, 
and ending on December 31, 2005’’. 
(h) REENLISTMENT BONUS FOR ACTIVE AND RESERVE 
MEMBERS.—Section 308(g) of such title is amended by 
striking ‘‘December 31, 2004’’ and inserting ‘‘December 31, 
2005’’. 
(i) ENLISTMENT BONUS FOR ACTIVE AND RESERVE 
MEMBERS.—Section 309(e) of such title is amended by 
striking ‘‘December 31, 2004’’ and inserting ‘‘December 31, 
2005’’. 
(j) SPECIAL PAY FOR NUCLEAR-QUALIFIED OFFICERS 
EXTENDING PERIOD OF ACTIVE SERVICE.—Section 312(e) 
of such title is amended by striking ‘‘December 31, 2004’’ 
and inserting ‘‘December 31, 2005’’.
211 
(k) NUCLEAR CAREER ACCESSION BONUS.—Section 
312b(c) of such title is amended by striking ‘‘December 31, 
2004’’ and inserting ‘‘December 31, 2005’’. 
(l) NUCLEAR CAREER ANNUAL INCENTIVE BONUS.— 
Section 312c(d) of such title is amended by striking ‘‘De-
cember 31, 2004’’ and inserting ‘‘December 31, 2005’’. 
(m) RETENTION BONUS FOR MEMBERS WHO HAVE 
CRITICAL MILITARY SKILLS OR MEET OTHER CRITERIA.— 
Section 323(i) of such title is amended by striking ‘‘Decem-
ber 31, 2004’’ and inserting ‘‘December 31, 2005’’. 
(n) ACCESSION OR AFFILIATION BONUS FOR NEW OF-
FICERS IN CRITICAL SKILLS.—Section 324(g) of such title 
is amended by striking ‘‘December 31, 2004’’ and inserting 
‘‘December 31, 2005’’. 
SEC. 612. REDUCTION IN REQUIRED SERVICE COMMITMENT 
TO RECEIVE ACCESSION BONUS FOR REG-
ISTERED NURSES. 
(a) REDUCTION.—Section 302d(a)(1) of title 37, 
United States Code, is amended by striking ‘‘four years’’ 
and inserting ‘‘three years’’. 
(b) EFFECTIVE DATE.—The amendment made by sub-
section (a) shall take effect October 1, 2004, and apply with 
respect to written agreements referred to in section 
302d(a)(1) of title 37, United States Code, entered into on 
or after that date.
212 
SEC. 613. INCREASE IN MAXIMUM MONTHLY RATE AUTHOR-
IZED FOR HARDSHIP DUTY PAY. 
(a) INCREASE.—Section 305(a) of title 37, United 
States Code, is amended by striking ‘‘$300’’ and inserting 
‘‘$750’’. 
(b) EFFECTIVE DATE.—The amendment made by sub-
section (a) shall take effect October 1, 2004. 
SEC. 614. TERMINATION OF ASSIGNMENT INCENTIVE PAY 
FOR MEMBERS PLACED ON TERMINAL LEAVE. 
(a) TERMINATION.—Subsection (e) of section 307a of 
title 37, United States Code, is amended to read as follows: 
‘‘(e) STATUS NOT AFFECTED BY TEMPORARY DUTY OR 
LEAVE.—The service of a member in an assignment referred 
to in subsection (a) shall not be considered discontinued 
during any period that the member is not performing serv-
ice in the assignment by reason of — 
‘‘(1) the performance by the member of tem-
porary duty pursuant to orders; or 
‘‘(2) the absence of the member for authorized 
leave, unless the member is placed on terminal leave 
and will not be returning to the assignment.’’. 
(b) EFFECTIVE DATE.—The amendment made by sub-
section (a) shall apply with respect to agreements under 
section 307a(b) of title 37, United States Code, entered into 
on or after the date of the enactment of this Act.
213 
SEC. 615. CONSOLIDATION OF REENLISTMENT AND ENLIST-
MENT BONUS AUTHORITIES FOR REGULAR 
AND RESERVE COMPONENTS. 
(a) CONSOLIDATED REENLISTMENT BONUS AUTHOR-
ITY; ELIGIBILITY CRITERIA.—(1) Paragraph (1) of sub-
section (a) of section 308 of title 37, United States Code, 
is amended— 
(A) by striking the matter preceding subpara-
graph (A) and inserting ‘‘The Secretary concerned 
may pay a bonus under paragraph (2) to a member 
of the armed forces serving in a regular component or 
reserve component of the armed force if the member— 
’’; 
(B) by striking subparagraph (A) and inserting 
the following new subparagraph: 
‘‘(A) has completed at least 17 months of service 
in a regular or reserve component of the armed forces, 
but not more than 18 years of total military service;’’; 
and 
(C) by striking subparagraph (D) and all that 
follows through the period at the end of such para-
graph and inserting the following: 
‘‘(D) reenlists or voluntarily extends the mem-
ber’s enlistment for a period of at least three years in 
a regular component or reserve component of the 
armed forces.’’.
214 
(2) Paragraph (3) of such subsection is amended by 
striking ‘‘16 years’’ and inserting ‘‘20 years’’. 
(3) Paragraph (5) of such subsection is amended to 
read as follows: 
‘‘(5) The Secretary of Defense, and the Secretary of 
Homeland Security with respect to the Coast Guard when 
it is not operating as a service in the Navy, may waive 
all or part of the eligibility requirements specified in para-
graph (1) in time of war or national emergency.’’. 
(4) Subsection (b) of such section is amended— 
(A) by inserting ‘‘(1)’’ after ‘‘(b)’’; and 
(B) by adding at the end the following new 
paragraph: 
‘‘(2) Notwithstanding the schedule established for mak-
ing partial bonus payments under paragraph (1), a mem-
ber of a reserve component entitled to a bonus under this 
section who is called or ordered to active duty shall be paid, 
during that period of active duty, any amount of the bonus 
that becomes payable to the member during that period of 
active duty.’’. 
(5) Subsection (g) of such section is amended by strik-
ing ‘‘an active-duty reenlistment’’ and inserting ‘‘a reenlist-
ment’’. 
(b) CONSOLIDATED ENLISTMENT BONUS AUTHOR-
ITY.—Section 309(a) of such title is amended—
215 
(1) by striking the first sentence and inserting 
the following: ‘‘(1) The Secretary concerned may pay 
a bonus this section to a person who enlists in a reg-
ular component or reserve component of the armed 
forces for a period of at least two years.’’; and 
(2) by inserting after the first sentence, as so 
amended, the following new paragraph: 
‘‘(2) The amount of a bonus under this section may 
not exceed $20,000.’’. 
(c) REPEAL OF SEPARATE REENLISTMENT AND EN-
LISTMENT
BONUS
AUTHORITY
FOR
RESERVE
COMPO-
NENTS.—(1) Sections 308b, 308c, 308g, 308h, and 308i of 
such title are repealed. 
(2) The table of sections at the beginning of chapter 
5 of such title is amended by striking the items relating 
to sections 308b, 308c, 308h, and 308i. 
(d) EFFECTIVE DATE.——(1) Except as provided by 
paragraphs (2) and (3), the amendments made by this sec-
tion shall take effect October 1, 2004, and the amendments 
made by subsections (a) and (b) shall apply to reenlist-
ments, the voluntary extension of enlistments, and enlist-
ments referred to in section 308(a)(1) or 309(a) of title 37, 
United States Code, entered into on or after that date. 
(2) The amendments made by subsection (c) shall take 
effect December 31, 2004, except that the repeal of section
216 
308g of title 37, United States Code, shall take effect on 
the date of the enactment of this Act. 
(3) In the case of a member of the Armed Forces who, 
on or before December 31, 2004, reenlisted, voluntarily ex-
tended the enlistment of the member, or enlisted in a reserve 
component of the Armed Forces, section 308b, 308c, 308h, 
or 308i of title 37, United States Code, whichever applies 
to the member, and as in effect on December 31, 2004, shall 
continue to apply with respect to the payment of a bonus 
under such section to the member. 
(e) LIMITATION
ON FISCAL YEAR 2005 OBLIGA-
TIONS.—During fiscal year 2005, obligations incurred 
under sections 308 and 309 of title 37, United States Code, 
to provide reenlistment and enlistment bonuses to members 
of the uniformed services using the expanded authority pro-
vided by the amendments made by subsections (a) and (b) 
may not exceed $20,000,000. The bonus authority available 
under such sections shall not be considered to be an ex-
panded authority to the extent that the authority was avail-
able under a provision of law specified in subsection (c), 
before the repeal of the provision by such subsection. 
SEC. 616. REVISION OF AUTHORITY TO PROVIDE FOREIGN 
LANGUAGE PROFICIENCY PAY. 
(a) IN GENERAL.—(1) Section 316 of title 37, United 
States Code, is amended to read as follows:
217 
‘‘§ 316. Special pay: bonus for members with foreign 
language proficiency 
‘‘(a) BONUS AUTHORIZED.—The Secretary concerned 
may pay an annual bonus under this section to a member 
of the uniformed services who— 
‘‘(1) is qualified in a uniformed services spe-
cialty requiring proficiency in a foreign language 
identified by the Secretary concerned as a foreign lan-
guage in which it is necessary to have personnel pro-
ficient because of national defense or public health 
considerations; 
‘‘(2) received training, under regulations pre-
scribed by the Secretary concerned, designed to de-
velop a proficiency in such a foreign language; 
‘‘(3) is assigned to duties requiring a proficiency 
in such a foreign language; or 
‘‘(4) is proficient in a foreign language for which 
the uniformed service may have a critical need, as de-
termined by the Secretary concerned. 
‘‘(b) CERTIFICATION
OF PROFICIENCY.—Except as 
provided in subsection (e), for a member described in sub-
section (a) to be eligible to receive or retain a bonus under 
this section, the Secretary concerned shall certify the mem-
ber as being proficient in the foreign language for which 
bonus is offered.
218 
‘‘(c) DURATION OF CERTIFICATION.—Except as pro-
vided in subsection (e), the certification of a member as 
being proficient in a foreign language for purposes of re-
ceipt of a bonus under this section shall expire at the end 
of the 12-month period beginning on the first day of the 
first month beginning on or after the certification date. 
‘‘(d) BONUS AMOUNT; PAYMENT METHOD.—The max-
imum amount of the bonus paid under this section to a 
member may not exceed $12,000 for the 12-month period 
covered by the certification of the member. The Secretary 
concerned may pay the bonus in a single lump sum at the 
beginning of the certification period or in installments. 
‘‘(e) CERTIFICATION INTERRUPTED BY CONTINGENCY 
OPERATION.—(1) The Secretary concerned may waive the 
certification requirement under subsection (b) and pay a 
bonus under this section to a member described in sub-
section (a) who was previously certified in a foreign lan-
guage, but whose certification expired under subsection (c), 
if— 
‘‘(A) the member is assigned to duty in connec-
tion with a contingency operation; and 
‘‘(B) the Secretary concerned determines that the 
member is unable to schedule or complete the certifi-
cation required by subsection (b) because of that as-
signment.
219 
‘‘(2) For purposes of determining the amount of a 
bonus to be paid to a member under the authority of this 
subsection, the Secretary concerned shall treat the date on 
which the member was assigned to duty in connection with 
the contingency operation as equivalent to a certification 
date. In the case of a member whose certification expires 
during such duty assignment, the Secretary shall commence 
the next 12-month period effective as of the date on which 
the prior certification period expired. 
‘‘(3) A member who receives a bonus under the author-
ity of this subsection shall complete the certification re-
quired by subsection (b) for the foreign language for which 
the bonus was paid not later than the end of the 180-day 
period beginning on the date on which the member is re-
leased from the assignment in connection with the contin-
gency operation. The Secretary concerned may extend that 
period for a member in accordance with regulations pre-
scribed under subsection (h). If the member fails to obtain 
the required certification before the end of the authorized 
period, the Secretary concerned may require the member to 
repay all or a portion of the bonus, in the manner provided 
in subsection (g). 
‘‘(f) RELATIONSHIP TO OTHER PAY OR ALLOWANCE.— 
A bonus under this section is in addition to any other pay
220 
or allowance payable to a member under any other provi-
sion of law. 
‘‘(g) REPAYMENT OF BONUS.—(1) The Secretary con-
cerned may require a member who receives a bonus under 
this section, but who does not satisfy an eligibility require-
ment specified in subsection (a) for the entire certification 
period, to repay to the United States an amount which 
bears the same ratio to the total amount of the bonus paid 
to the member as the unsatisfied portion of the certification 
period bears to the entire certification period. 
‘‘(2) An obligation to repay the United States imposed 
under paragraph (1) is for all purposes a debt owed to the 
United States. A discharge in bankruptcy under title 11 
that is entered for the member less than five years after the 
expiration of the certification period does not discharge the 
member from a debt arising under this paragraph. This 
paragraph applies to any case commenced under title 11 
after the date of the enactment of this section. 
‘‘(h) REGULATIONS.—This section shall be adminis-
tered under regulations prescribed by the Secretary of De-
fense for the armed forces under the jurisdiction of the Sec-
retary, by the Secretary of Homeland Security for the Coast 
Guard when the Coast Guard is not operating as a service 
in the Navy, by the Secretary of Health and Human Serv-
ices for the Commissioned Corps of the Public Health Serv-
221 
ice, and by the Secretary of Commerce for the National Oce-
anic and Atmospheric Administration.’’. 
(2) The table of sections at the beginning of chapter 
5 of such title is amended by striking the item relating to 
section 316 and inserting the following new item: 
‘‘316. Special pay: bonus for members with foreign language proficiency.’’. 
(b) CONFORMING AMENDMENTS.—(1) Section 316a of 
title 37, United States Code, is repealed. 
(2) The table of sections at the beginning of chapter 
5 of such title is amended by striking the item relating to 
section 316a. 
SEC. 617. ELIGIBILITY OF RESERVE COMPONENT MEMBERS 
FOR CRITICAL SKILLS RETENTION BONUS 
AND EXPANSION OF AUTHORITY TO PROVIDE 
BONUS. 
(a) INCLUSION OF RESERVE COMPONENT MEMBERS.— 
Section 323 of title 37, United States Code, is amended— 
(1) in subsection (a)— 
(A) in the matter preceding paragraph (1), 
by striking ‘‘who is serving on active duty and’’ 
by inserting ‘‘who is serving on active duty in 
a regular component or in an active status in a 
reserve component and who’’; and 
(B) in paragraph (1), by inserting ‘‘, or re-
main in an active status in a reserve compo-
nent,’’ after ‘‘remain on active duty’’;
222 
(2) in subsection (e)(2), by inserting ‘‘or service 
in a reserve component’’ after ‘‘period of active duty’’; 
and 
(3) in subsection (g), by striking ‘‘active duty’’ 
and inserting ‘‘service’’. 
(b) INCLUSION OF MEMBERS SERVING PURSUANT TO 
INDEFINITE REENLISTMENT.—Subsection (a) of such sec-
tion is further amended— 
(1) by striking ‘‘or’’ at the end of paragraph (1); 
(2) in paragraph (2)— 
(A) by inserting ‘‘other than an enlisted 
member referred to in paragraph (3),’’ after ‘‘en-
listed member,’’; and 
(B) by striking the period at the end and 
inserting ‘‘; or’’; and 
(3) by adding at the end the following new para-
graph: 
‘‘(3) in the case of an enlisted member serving 
pursuant to an indefinite reenlistment, the member 
executes a written agreement to remain on active 
duty, or remain in an active status in a reserve com-
ponent, for a period of at least one year.’’. 
(c) ADDITIONAL CRITERIA FOR BONUS.—Such section 
is further amended—
223 
(1) in subsection (a), by striking ‘‘designated 
critical military skill’’ and inserting ‘‘critical mili-
tary skill designated under subsection (b) or satisfies 
such other criteria for the bonus established under 
such subsection’’; 
(2) in subsection (b)— 
(A) by striking ‘‘DESIGNATION OF CRITICAL 
SKILLS.—’’ and inserting ‘‘BASIS FOR BONUS.— 
(1)’’; and 
(B) by adding at the end the following new 
paragraph: 
‘‘(2) The Secretary of Defense, and the Secretary of 
Homeland Security with respect to the Coast Guard when 
it is not operating as a service in the Navy, may establish 
such other criteria as the Secretary considers appropriate 
under which a retention bonus will be provided to an officer 
or enlisted member of the armed forces under subsection 
(a).’’; and 
(3) in subsection (h)(1), by striking ‘‘qualified in 
the critical military skills for which the bonuses were 
offered’’ and inserting ‘‘who were offered the bonuses’’. 
(d) REPEAL OF SEPARATE SPECIAL AND INCENTIVE 
PAY AUTHORITIES FOR RESERVE COMPONENTS.—(1) Sec-
tions 302g, 308d, and 308e of such title are repealed.
224 
(2) In the case of a member of the Armed Forces who, 
on or before December 31, 2004, entered into a written 
agreement under section 302g or 308e of title 37, United 
States Code, such section 302g or 308e, whichever applies 
to the member, and as in effect on December 31, 2004, shall 
continue to apply after that date with respect to the pay-
ment of special pay under such section to the member dur-
ing the term of the agreement. 
(e) CLERICAL AMENDMENTS.—(1) The heading of sec-
tion 323 of such title is amended to read as follows: 
‘‘§ 323 Special pay: retention incentives for members 
qualified in a critical military skill or 
who satisfy other eligibility criteria’’. 
(2) The table of sections at the beginning of chapter 
5 of such title is amended— 
(A) by striking the items relating to sections 
302g, 308d, and 308e; and 
(B) by striking the item relating to section 323 
and inserting the following new item: 
‘‘323. Special pay: retention incentives for members qualified in a critical mili-
tary skill or who satisfy other eligibility criteria.’’. 
(f) EFFECTIVE DATE.—(1) Except as provided by 
paragraph (2), the amendments made by this section shall 
take effect October 1, 2004, and the amendments made by 
subsections (a), (b), and (c) shall apply to agreements, re-
enlistments, and the voluntary extension of enlistments re-
225 
ferred to in section 323(a) of title 37, United States Code, 
entered into on or after that date. 
(2) The amendments made by subsections (d)(1) and 
(e)(2)(A) shall take effect December 31, 2004. 
(g) LIMITATION
ON FISCAL YEAR 2005 OBLIGA-
TIONS.—During fiscal year 2005, obligations incurred 
under section 323 of title 37, United States Code, to provide 
retention bonuses to members of the uniformed services 
using the expanded authority provided by the amendments 
made by subsections (a), (b), and (c) may not exceed 
$10,000,000. The bonus authority available under such sec-
tion shall not be considered to be an expanded authority 
to the extent that the authority was available under a provi-
sion of law specified in subsection (d), before the repeal of 
the provision by such subsection. 
SEC. 618. ELIGIBILITY OF NEW RESERVE COMPONENT OFFI-
CERS 
FOR 
ACCESSION 
OR 
AFFILIATION 
BONUS FOR OFFICERS IN CRITICAL SKILLS. 
(a) ELIGIBILITY.—Subsection (a) of section 324 of title 
37, United States Code, is amended to read as follows: 
‘‘(a) BONUS AUTHORIZED.—(1) The Secretary con-
cerned may pay a bonus under this section— 
‘‘(A) to a person who executes a written agree-
ment to accept a commission or an appointment as 
an officer of armed forces and serve on active duty in
226 
a designated critical officer skill or serve in a reserve 
component of an armed force in a designated critical 
officer skill; or 
‘‘(B) to an officer of an armed force, including 
a warrant officer, but excluding an officer who has 
previously served in the Selected Reserve or an officer 
who is entitled to retired pay, who executes a written 
agreement to serve in a reserve component of an 
armed force in a designated critical officer skill after 
being discharged or released from active duty under 
honorable conditions, once the officer affiliates with a 
unit or position in the reserve component. 
‘‘(2) The written agreement under paragraph (1) be-
tween the Secretary concerned and a person or officer shall 
specify the period during which the person or officer will 
be required to serve in a designated critical officer skill to 
maintain entitlement to the bonus payment.’’. 
(b) AMOUNT OF BONUS.—Subsection (c) of such section 
is amended to read as follows: 
‘‘(c) AMOUNT OF BONUS.—The Secretary concerned 
shall determine the amount of a bonus to be paid under 
subsection (a), except that a person may not receive a total 
of more than $60,000 in payments under this section’’. 
(c) CONFORMING AMENDMENTS.—Such section is fur-
ther amended—
227 
(1) in subsection (d), by striking ‘‘accession’’ 
both places it appears; 
(2) in subsection (e)— 
(A) in the subsection heading, by striking 
‘‘ACCESSION’’; and 
(B) by striking ‘‘an accession bonus’’ and 
inserting ‘‘a bonus’’; and 
(3) in subsection (f), by striking ‘‘active duty’’ 
and ‘‘accession’’ each place it appears. 
(d) CLERICAL AMENDMENTS.—(1) The heading of sec-
tion 324 of such title is amended to read as follows: 
‘‘§ 324. Special pay: accession or affiliation bonus for 
officers in designated critical skills’’. 
(2) The table of sections at the beginning of chapter 
5 of such title is amended by striking the item relating to 
section 324 and inserting the following new item: 
‘‘324. Special pay: accession or affiliation bonus for officers in designated critical 
skills.’’. 
(e) EFFECTIVE DATE.—The amendments made by this 
section shall take effect October 1, 2004, and apply to agree-
ments referred to in section 324(a) of title 37, United States 
Code entered into on or after that date. 
(f) LIMITATION
ON
FISCAL
YEAR
2005 OBLIGA-
TIONS.—During fiscal year 2005, obligations incurred 
under section 324 of title 37, United States Code, as amend-
ed by subsections (a) and (b), to provide accession and
228 
affilliation bonuses to members of the Armed Forces not pre-
viously eligible for such a bonus under such section may 
not exceed $5,000,000. 
SEC. 619. ELIGIBILITY OF RESERVE COMPONENT MEMBERS 
FOR INCENTIVE BONUS FOR CONVERSION TO 
MILITARY 
OCCUPATIONAL 
SPECIALTY 
TO 
EASE PERSONNEL SHORTAGE. 
(a) ELIGIBILITY.—Section 326 of title 37, United 
States Code, is amended— 
(1) in subsection (a), by inserting ‘‘of a regular 
or reserve component’’ after ‘‘an eligible member’’; 
(2) in subsection (b)— 
(A) by striking ‘‘if—’’ and all that follows 
through ‘‘at the time’’ and inserting ‘‘if, at the 
time’’; and 
(B) by redesignating subparagraphs (A) 
and (B) as paragraphs (1) and (2), respectively; 
and 
(3) in subsection (c)(2), by inserting ‘‘regular or 
reserve component of the’’ after ‘‘chief personnel offi-
cer of the’’. 
(b) EFFECTIVE DATE.—The amendments made by this 
section shall take effect October 1, 2004, and apply to agree-
ments referred to in section 326(a) of title 37, United States 
Code, entered into on or after that date.
229 
(c) LIMITATION
ON FISCAL YEAR 2005 OBLIGA-
TIONS.—During fiscal year 2005, obligations incurred 
under section 326 of title 37, United States Code, as amend-
ed by subsection (a), to provide incentive bonuses to mem-
bers of a reserve component of the Armed Forces may not 
exceed $3,000,000. 
SEC. 620. AVAILABILITY OF HAZARDOUS DUTY INCENTIVE 
PAY FOR MILITARY FIREFIGHTERS. 
(a) ADDITIONAL TYPE OF DUTY ENTITLED TO PAY.— 
Subsection (a) of section 301 of title 37, United States Code, 
is amended— 
(1) by striking ‘‘or’’ at the end of paragraph 
(12); 
(2) by redesignating paragraph (13) as para-
graph (14); and 
(3) by inserting after paragraph (12) the fol-
lowing new paragraph: 
‘‘(13) involving regular participating as a fire-
fighting crew member, as determined by the Secretary 
concerned; or’’.’’. 
(b) MONTHLY AMOUNT OF PAY.—Subsection (c) of 
such section is amended— 
(1) in paragraph (1), by striking ‘‘(12)’’ and in-
serting ‘‘(13)’’; and
230 
(2) in paragraph (2)(A), by striking ‘‘(13)’’ and 
inserting ‘‘(14)’’. 
(c) EFFECTIVE DATE.—The amendments made by sub-
section (a) and (b) shall take effect October 1, 2004. 
Subtitle C—Travel and 
Transportation Allowances 
SEC. 631. EXPANSION OF TRAVEL AND TRANSPORTATION 
ALLOWANCES TO ASSIST SURVIVORS OF A DE-
CEASED MEMBER TO ATTEND BURIAL CERE-
MONY OF THE MEMBER. 
(a) AUTHORIZED TRAVEL LOCATIONS.—Subsection (b) 
of section 411f of title 37, United States Code, is amended 
to read as follows: 
‘‘(b) AUTHORIZED LOCATIONS FOR TRAVEL; DURA-
TION AND RATES.—(1) The allowances under subsection (a) 
may be provided for travel and transportation by eligible 
relatives of the deceased member to the place selected pursu-
ant to section 1482(a)(8) of title 10 for disposition of the 
remains of the deceased member. 
‘‘(2) The allowances may not exceed the rates for two 
days and the time necessary for the travel.’’. 
(b) ELIGIBLE RELATIVES.—Subsection (c)(1)(C) of 
such section is amended by striking ‘‘If no person described 
in subparagraph (A) or (B) is provided travel and trans-
231 
portation allowances under subsection (a)(1), the’’ and in-
serting ‘‘The’’. 
(c) LIMITATION
ON FISCAL YEAR 2005 OBLIGA-
TIONS.—During fiscal year 2005, obligations incurred 
under section 411f of title 37, United States Code, as 
amended by subsections (a) and (b), to provide travel and 
transportation allowances, not previously available under 
such section, to survivors of deceased members of the uni-
formed services, and to provide such allowances to persons 
not previously eligible for such allowances, may not exceed 
$2,000,000. 
SEC. 632. TRANSPORTATION OF FAMILY MEMBERS INCI-
DENT TO THE SERIOUS ILLNESS OR INJURY 
OF MEMBERS OF THE UNIFORMED SERVICES. 
(a) REMOVAL OF LIMITATION ON NUMBER OF FAMILY 
MEMBERS.—Subsection (a)(1) of section 411h of title 37, 
United States Code, is amended by striking ‘‘not more than 
two family members’’ and inserting ‘‘a family member’’. 
(b) FAMILY MEMBERS DESCRIBED.—Subsection (b)(1) 
of such section is amended— 
(1) by striking ‘‘and’’ at the end of subpara-
graph (C); 
(2) by striking the period at the end of subpara-
graph (D) and inserting ‘‘; and’’; and
232 
(3) by adding at the end the following new sub-
paragraph: 
‘‘(E) other persons approved by the Secretary 
concerned.’’. 
(c) AVAILABILITY OF PER DIEM.—Such section is fur-
ther amended— 
(1) in subsection (a)(1), by inserting ‘‘travel 
and’’ before ‘‘transportation’’; and 
(2) in subsection (c)— 
(A) by inserting ‘‘(1)’’ after ‘‘(c)’’ ; and 
(B) by adding at the end the following new 
paragraph: 
‘‘(2) In addition to the transportation authorized by 
subsection (a), the Secretary concerned may provide a per 
diem allowance or reimbursement for the actual and nec-
essary expenses of the travel, or a combination thereof, but 
not to exceed the rates established under section 404(d) of 
this title.’’. 
(d) EFFECTIVE DATE.—The amendments made by this 
section shall take effect on October 1, 2004, and apply to 
transportation described in section 411h of title 37, United 
States Code, provided on or after that date. 
(e) LIMITATION
ON FISCAL YEAR 2005 OBLIGA-
TIONS.—During fiscal year 2005, obligations incurred 
under section 411h of title 37, United States Code, as
233 
amended by subsections (a) and (b), to provide travel and 
transportation allowances, not previously available under 
such section, to family members of seriously ill or injured 
members of the uniformed services, and to provide such al-
lowances to persons not previously eligible for such allow-
ances, may not exceed $3,000,000. 
SEC. 633. REIMBURSEMENT OF MEMBERS FOR CERTAIN 
LODGING COSTS INCURRED IN CONNECTION 
WITH STUDENT DEPENDENT TRAVEL. 
Section 430(b) of title 37, United States Code, is 
amended— 
(1) by redesignating paragraphs (2) and (3) as 
paragraphs (3) and (4), respectively; and 
(2) by inserting after paragraph (1) the fol-
lowing new paragraph (2): 
‘‘(2) The transportation allowance paid to a member 
under paragraph (1) may include reimbursement, at a rate 
prescribed by the Secretaries concerned, for lodging costs in-
curred during the annual trip for which the allowance is 
paid when, for reasons beyond the control of the dependent 
child of the member, the child is required to procure accom-
modations while en route between the child’s school and the 
member’s duty station.’’.
234 
Subtitle D—Retired Pay and 
Survivor Benefits 
SEC. 641. COMPUTATION OF BENEFITS UNDER SURVIVOR 
BENEFIT PLAN FOR SURVIVING SPOUSES 
OVER AGE 62. 
(a) PHASED INCREASE IN BASIC ANNUITY.— 
(1) STANDARD ANNUITY.— 
(A) INCREASE TO 55 PERCENT.—Clause (i) 
of subsection (a)(1)(B) of section 1451 of title 10, 
United States Code, is amended by striking ‘‘35 
percent of the base amount.’’ and inserting ‘‘the 
product of the base amount and the percent ap-
plicable to the month, as follows: 
‘‘(I) For a month before October 2005, 
the applicable percent is 35 percent. 
‘‘(II) For months after September 2005 
and before April 2006, the applicable per-
cent is 40 percent. 
‘‘(III) For months after March 2006 
and before April 2007, the applicable per-
cent is 45 percent. 
‘‘(IV) For months after March 2007 
and before April 2008, the applicable per-
cent is 50 percent.
235 
‘‘(V) For months after March 2008, the 
applicable percent is 55 percent.’’. 
(B) COORDINATION
WITH
SAVINGS
PROVI-
SION UNDER PRIOR LAW.—Clause (ii) of such 
subsection is amended by striking ‘‘, at the time 
the beneficiary becomes entitled to the annuity,’’. 
(2) RESERVE-COMPONENT ANNUITY.—Subsection 
(a)(2)(B)(i)(I) of such section is amended by striking 
‘‘35 percent’’ and inserting ‘‘the percent specified 
under subsection (a)(1)(B)(i) as being applicable for 
the month’’. 
(3) SURVIVORS OF ELIGIBLE PERSONS DYING ON 
ACTIVE DUTY, ETC.— 
(A) INCREASE TO 55 PERCENT.—Clause (i) 
of subsection (c)(1)(B) of such section is amend-
ed— 
(i) by striking ‘‘35 percent’’ and in-
serting ‘‘the applicable percent’’; and 
(ii) by adding at the end the following: 
‘‘The percent applicable for a month under 
the preceding sentence is the percent speci-
fied under subsection (a)(1)(B)(i) as being 
applicable for that month.’’. 
(B) COORDINATION
WITH
SAVINGS
PROVI-
SION UNDER PRIOR LAW.—Clause (ii) of such
236 
subsection is amended by striking ‘‘, at the time 
the beneficiary becomes entitled to the annuity,’’. 
(4) CLERICAL
AMENDMENT.—The heading for 
subsection (d)(2)(A) of such section is amended to 
read as follows: ‘‘COMPUTATION OF ANNUITY.—’’. 
(b) CORRESPONDING PHASED ELIMINATION OF SUP-
PLEMENTAL ANNUITY.— 
(1) PHASED REDUCTION OF SUPPLEMENTAL AN-
NUITY.—Section 1457(b) of title 10, United States 
Code, is amended— 
(A) by striking ‘‘5, 10, 15, or 20 percent’’ 
and inserting ‘‘the applicable percent’’; and 
(B) by inserting after the first sentence the 
following: ‘‘The percent used for the computation 
shall be an even multiple of 5 percent and, what-
ever the percent specified in the election, may not 
exceed 20 percent for months before October 
2005, 15 percent for months after September 
2005 and before April 2006, 10 percent for 
months after March 2006 and before April 2007, 
and 5 percent for months after March 2007 and 
before April 2008.’’. 
(2) REPEAL UPON IMPLEMENTATION OF 55 PER-
CENT
SBP
ANNUITY.—Effective on April 1, 2008, 
chapter 73 of such title is amended—
237 
(A) by striking subchapter III; and 
(B) by striking the item relating to sub-
chapter III in the table of subchapters at the be-
ginning of that chapter. 
(c) RECOMPUTATION OF ANNUITIES.— 
(1) PERIODIC RECOMPUTATION REQUIRED.—Ef-
fective on the first day of each month specified in 
paragraph (2)— 
(A) each annuity under section 1450 of title 
10, United States Code, that commenced before 
that month, is computed under a provision of 
section 1451 of that title amended by subsection 
(a), and is payable for that month shall be re-
computed so as to be equal to the amount that 
would be in effect if the percent applicable for 
that month under that provision, as so amended, 
had been used for the initial computation of the 
annuity; and 
(B) each supplemental survivor annuity 
under section 1457 of such title that commenced 
before that month and is payable for that month 
shall be recomputed so as to be equal to the 
amount that would be in effect if the percent ap-
plicable for that month under that section, as 
amended by this section, had been used for the
238 
initial computation of the supplemental survivor 
annuity. 
(2) TIME
FOR
RECOMPUTATION.—The require-
ment under paragraph (1) for recomputation of cer-
tain annuities applies with respect to the following 
months: 
(A) October 2005. 
(B) April 2006. 
(C) April 2007. 
(D) April 2008. 
(d) RECOMPUTATION OF RETIRED PAY REDUCTIONS 
FOR
SUPPLEMENTAL
SURVIVOR
ANNUITIES.—The Sec-
retary of Defense shall take such actions as are necessitated 
by the amendments made by subsection (b) and the require-
ments of subsection (c)(1)(B) to ensure that the reductions 
in retired pay under section 1460 of title 10, United States 
Code, are adjusted to achieve the objectives set forth in sub-
section (b) of that section. 
SEC. 642. OPEN ENROLLMENT PERIOD FOR SURVIVOR BEN-
EFIT PLAN COMMENCING OCTOBER 1, 2005. 
(a) PERSONS NOT CURRENTLY PARTICIPATING IN SUR-
VIVOR BENEFIT PLAN.— 
(1) ELECTION OF SBP COVERAGE.—An eligible 
retired or former member may elect to participate in 
the Survivor Benefit Plan under subchapter II of
239 
chapter 73 of title 10, United States Code, during the 
open enrollment period specified in subsection (f). 
(2) ELECTION OF SUPPLEMENTAL ANNUITY COV-
ERAGE.—An eligible retired or former member who 
elects under paragraph (1) to participate in the Sur-
vivor Benefit Plan at the maximum level may also 
elect during the open enrollment period to participate 
in the Supplemental Survivor Benefit Plan estab-
lished under subchapter III of chapter 73 of title 10, 
United States Code. 
(3) ELIGIBLE RETIRED OR FORMER MEMBER.— 
For purposes of paragraphs (1) and (2), an eligible 
retired or former member is a member or former 
member of the uniformed services who on the day be-
fore the first day of the open enrollment period is not 
a participant in the Survivor Benefit Plan and— 
(A) is entitled to retired pay; or 
(B) would be entitled to retired pay under 
chapter 1223 of title 10, United States Code, but 
for the fact that such member or former member 
is under 60 years of age. 
(4) STATUS UNDER SBP OF PERSONS MAKING 
ELECTIONS.— 
(A) STANDARD ANNUITY.—A person making 
an election under paragraph (1) by reason of eli-
240 
gibility under paragraph (3)(A) shall be treated 
for all purposes as providing a standard annuity 
under the Survivor Benefit Plan. 
(B) 
RESERVE-COMPONENT
ANNUITY.—A 
person making an election under paragraph (1) 
by reason of eligibility under paragraph (3)(B) 
shall be treated for all purposes as providing a 
reserve-component annuity under the Survivor 
Benefit Plan. 
(b) ELECTION
TO
INCREASE
COVERAGE
UNDER 
SBP.—A person who on the day before the first day of the 
open enrollment period is a participant in the Survivor 
Benefit Plan but is not participating at the maximum base 
amount or is providing coverage under the Plan for a de-
pendent child and not for the person’s spouse or former 
spouse may, during the open enrollment period, elect to— 
(1) participate in the Plan at a higher base 
amount (not in excess of the participant’s retired 
pay); or 
(2) provide annuity coverage under the Plan for 
the person’s spouse or former spouse at a base amount 
not less than the base amount provided for the de-
pendent child. 
(c) ELECTION FOR CURRENT SBP PARTICIPANTS TO 
PARTICIPATE IN SUPPLEMENTAL SBP.—
241 
(1) ELECTION.—A person who is eligible to make 
an election under this paragraph may elect during 
the open enrollment period to participate in the Sup-
plemental Survivor Benefit Plan established under 
subchapter III of chapter 73 of title 10, United States 
Code. 
(2) PERSONS ELIGIBLE.—Except as provided in 
paragraph (3), a person is eligible to make an elec-
tion under paragraph (1) if on the day before the first 
day of the open enrollment period the person is a par-
ticipant in the Survivor Benefit Plan at the max-
imum level, or during the open enrollment period the 
person increases the level of such participation to the 
maximum level under subsection (b) of this section, 
and under that Plan is providing annuity coverage 
for the person’s spouse or a former spouse. 
(3) LIMITATION
ON
ELIGIBILITY
FOR
CERTAIN 
SBP PARTICIPANTS NOT AFFECTED BY TWO-TIER AN-
NUITY
COMPUTATION.—A person is not eligible to 
make an election under paragraph (1) if (as deter-
mined by the Secretary concerned) the annuity of a 
spouse or former spouse beneficiary of that person 
under the Survivor Benefit Plan will be computed 
under section 1451(e) of title 10, United States Code. 
However, such a person may during the open enroll-
242 
ment period waive the right to have that annuity 
computed under such section. Any such election is ir-
revocable. A person making such a waiver may make 
an election under paragraph (1) as in the case of any 
other participant in the Survivor Benefit Plan. 
(d) MANNER OF MAKING ELECTIONS.—An election 
under this section must be made in writing, signed by the 
person making the election, and received by the Secretary 
concerned before the end of the open enrollment period. Any 
such election shall be made subject to the same conditions, 
and with the same opportunities for designation of bene-
ficiaries and specification of base amount, that apply under 
the Survivor Benefit Plan or the Supplemental Survivor 
Benefit Plan, as the case may be. A person making an elec-
tion under subsection (a) to provide a reserve-component 
annuity shall make a designation described in section 
1448(e) of title 10, United States Code. 
(e) EFFECTIVE DATE FOR ELECTIONS.—Any such elec-
tion shall be effective as of the first day of the first calendar 
month following the month in which the election is received 
by the Secretary concerned. 
(f) OPEN ENROLLMENT PERIOD DEFINED.—The open 
enrollment period is the two-year period beginning on Octo-
ber 1, 2005.
243 
(g) EFFECT OF DEATH OF PERSON MAKING ELECTION 
WITHIN TWO YEARS OF MAKING ELECTION.—If a person 
making an election under this section dies before the end 
of the two-year period beginning on the effective date of the 
election, the election is void and the amount of any reduc-
tion in retired pay of the person that is attributable to the 
election shall be paid in a lump sum to the person who 
would have been the deceased person’s beneficiary under the 
voided election if the deceased person had died after the end 
of such two-year period. 
(h) APPLICABILITY
OF
CERTAIN
PROVISIONS
OF 
LAW.—The provisions of sections 1449, 1453, and 1454 of 
title 10, United States Code, are applicable to a person 
making an election, and to an election, under this section 
in the same manner as if the election were made under the 
Survivor Benefit Plan or the Supplemental Survivor Ben-
efit Plan, as the case may be. 
(i) ADDITIONAL PREMIUM.—The Secretary of Defense 
may require that the premium for a person making an elec-
tion under subsection (a)(1) or (b) include, in addition to 
the amount required under section 1452(a) of title 10, 
United States Code, an amount determined under regula-
tions prescribed by the Secretary of Defense for the purposes 
of this subsection. Any such amount shall be stated as a 
percentage of the base amount of the person making the elec-
244 
tion and shall reflect the number of years that have elapsed 
since the person retired, but may not exceed 4.5 percent of 
that person’s base amount. 
(j) REPORT CONCERNING OPEN SEASON.—Not later 
than July 1, 2005, the Secretary of Defense shall submit 
to the Committee on Armed Services of the Senate and the 
Committee on Armed Services of the House of Representa-
tives a report on the open season authorized by this section 
for the Survivor Benefit Plan. The report shall include the 
following: 
(1) A description of the Secretary’s plans for im-
plementation of the open season. 
(2) The Secretary’s estimates of the costs associ-
ated with the open season, including any anticipated 
effect of the open season on the actuarial status of the 
Department of Defense Military Retirement Fund. 
(3) Any recommendation by the Secretary for 
further legislative action. 
SEC. 643. SOURCE OF FUNDS FOR SURVIVOR BENEFIT PLAN 
ANNUITIES FOR DEPARTMENT OF DEFENSE 
BENEFICIARIES OVER AGE 62. 
(a) IN GENERAL.—Chapter 74 of title 10, United 
States Code, is amended as follows: 
(1) Section 1465(b) of such title is amended by 
adding at the end the following new paragraph:
245 
‘‘(4) At the same time that the Secretary of Defense 
makes the determination required by paragraph (1) for any 
fiscal year, the Secretary shall determine the amount of the 
Treasury contribution to be made to the Fund for the next 
fiscal year under section 1466(b)(2)(E) of this title. That 
amount shall be determined in the same manner as the de-
termination under paragraph (1) of the total amount of De-
partment of Defense contributions to be made to the Fund 
during that fiscal year under section 1466(a) of this title, 
except that for purposes of this paragraph the Secretary, 
in making the calculations required by subparagraphs (A) 
and (B) of that paragraph, shall use the single level percent-
ages determined under subsection (c)(5), rather than those 
determined under subsection (c)(1).’’. 
(4) Section 1465(c) of such title is amended— 
(A) in paragraph (1)— 
(i) in subparagraph (A), by inserting 
before the semicolon at the end the fol-
lowing: ‘‘and as if benefits under subchpater 
II of chapter 73 of this title for beneficiaries 
62 years of age and older were computed for 
any fiscal year on the basis of the percent-
age of 35 percent, rather than any percent-
age otherwise applicable for that computa-
tion for that fiscal year’’; and
246 
(ii) in subparagraph (B), by inserting 
before the period at the end the following: 
‘‘and as if benefits under subchapter II of 
chapter 73 of this title for beneficiaries 62 
years of age and older were computed for 
any fiscal year on the basis of the percent-
age of 35 percent, rather than any percent-
age otherwise applicable for that computa-
tion for that fiscal year’’; 
(B) by redesignating paragraph (5) as 
paragraph (6); and 
(C) by inserting after paragraph (4) the fol-
lowing new paragraph (5): 
‘‘(5) Whenever the Secretary carries out an actuarial 
valuation under paragraph (1), the Secretary shall include 
as part of such valuation the following: 
‘‘(A) A determination of a single level percentage 
determined in the same manner as applies under sub-
paragraph (A) of paragraph (1), but determined as if 
benefits under subchapter II of chapter 73 of this title 
for beneficiaries 62 years of age and older were com-
puted for any fiscal year on the basis of the percent-
age of 35 percent, rather than any percentage other-
wise applicable for that computation for that fiscal 
year.
247 
‘‘(B) A determination of a single level percentage 
determined in the same manner as applies under sub-
paragraph (B) of paragraph (1), but determined as 
if benefits under subchapter II of chapter 73 of this 
title for beneficiaries 62 years of age and older were 
computed for any fiscal year on the basis of the per-
centage of 35 percent, rather than any percentage oth-
erwise applicable for that computation for that fiscal 
year. 
Such single level percentages shall be used for the purposes 
of subsection (b)(4).’’. 
(5) Section 1466(b) of such title is amended— 
(A) 
in 
paragraph 
(1), 
by 
inserting 
‘‘1465(b)(4),’’ after ‘‘1465(b)(3),’’; and 
(B) by adding at the end of paragraph (2) 
the following new subparagraph: 
‘‘(E) The amount for that year determined by 
the Secretary of Defense under section 1465(b)(4) of 
this title for the cost to the Fund arising from in-
creased amounts payable from the Fund by reason of 
benefits under subchapter II of chapter 73 of this title 
for beneficiaries 62 years of age and older being com-
puted for any fiscal year on the basis of the percent-
age greater than 35 percent.’’.
248 
(b) EFFECTIVE DATE.—The amendments made by sub-
section (a) shall take effect as of October 1, 2004. If this 
Act is enacted after that date, the Secretary of Defense shall 
provide for such administrative adjustments as necessary 
to provide for payments made for any period during fiscal 
year 2005 before the date of the enactment of this Act to 
be treated as having been made in accordance with such 
amendments and for the provisions of those amendments to 
be implemented as if enacted as of September 30, 2004. 
Subtitle E—Commissary and Non-
appropriated Fund Instrumen-
tality Benefits 
SEC. 651. CONSOLIDATION AND REORGANIZATION OF LEG-
ISLATIVE PROVISIONS REGARDING DEFENSE 
COMMISSARY SYSTEM AND EXCHANGES AND 
OTHER MORALE, WELFARE, AND RECREATION 
ACTIVITIES. 
(a) PROVISIONS RELATED TO COMMISSARY STORES.— 
Chapter 147 of title 10, United States Code, is amended— 
(1) by striking the table of sections at the begin-
ning of the chapter and sections 2481, 2483, 2485, 
and 2487; 
(2) by redesignating sections 2482, 2484, and 
2486 as sections 2485, 2483 and 2484, respectively;
249 
(3) by inserting after the chapter heading the fol-
lowing: 
‘‘Subchapter 
Sec. 
‘‘I. Defense Commissary System .....................................................................
2481 
‘‘II. Relationship, Continuation, and Common Policies of Defense Com-
missary and Exchange Systems ........................................
2487 
‘‘III. Morale, Welfare, and Recreation Programs and Nonappropriated 
Fund Instrumentalities .....................................................
2491 
‘‘SUBCHAPTER I—DEFENSE COMMISSARY 
SYSTEM 
‘‘Sec. 
‘‘2481. Existence and purpose of defense commissary system. 
‘‘2482. Commissary stores: criteria for establishment or closure; store size. 
‘‘2483. Commissary stores: use of appropriated funds to cover operating expenses. 
‘‘2484. Commissary stores: merchandise that may be sold; uniform surcharges and 
pricing. 
‘‘2485. Commissary stores: operation. 
‘‘§ 2481. Existence and purpose of defense commissary 
system 
‘‘(a) EXISTENCE OF SYSTEM.—The Secretary of the 
Defense shall operate, using funds appropriated to the De-
partment of Defense, a world-wide system of commissary 
stores that sell, at reduced prices, food and other merchan-
dise consistent with societal norms for product selection in 
commercial large-scale grocery stores in the United States 
to members of the uniformed services on active duty, mem-
bers of the uniformed services entitled to retired pay, de-
pendents of such members, and patrons authorized to use 
the system under chapter 54 of this title. 
‘‘(b) PURPOSE OF SYSTEM.—The purpose of the de-
fense commissary system is to enhance the quality of life 
of members of the uniformed services, retired members, de-
250 
pendents of such members, and other authorized patrons 
and to provide such members with an additional nonmone-
tary compensation in recognition of their service to the 
United States. 
‘‘(c) REDUCES PRICES DEFINED.—In this section, the 
term ‘reduced prices’ means prices for food and other mer-
chandise determined using the price setting process specified 
in section 2484 of this title. 
‘‘§ 2482. Commissary stores: criteria for establishment 
or closure; store size 
‘‘(a) PRIMARY
CONSIDERATION
FOR
ESTABLISH-
MENT.—The needs of members of the uniformed services on 
active duty and their dependents shall be the primary con-
sideration whenever the Secretary of Defense— 
‘‘(1) assesses the need to establish a commissary 
store; and 
‘‘(2) selects the actual location for the store. 
‘‘(b) STORE SIZE.—In determining the size of a com-
missary store, the Secretary of Defense shall take into con-
sideration the number of all authorized patrons of the de-
fense commissary system who are likely to use the store. 
‘‘(c) CLOSURE CONSIDERATIONS.—(1) Whenever as-
sessing whether to close a commissary store, the effect of the 
closure on the quality of life of members of the uniformed 
services and their dependents using the store and on the
251 
welfare and security of the military community in which 
the commissary is located shall be the primary consider-
ation. In all cases, the quality of life for military patrons 
shall take priority over any consideration of economic cri-
teria relative to store financial performance. 
‘‘(2) The Secretary of Defense shall give the quality 
of life for members of a reserve component the same priority 
as the quality of life for active duty members whenever as-
sessing whether to close a commissary store, including when 
the assessment is undertaken as a result of the closure or 
realignment of a military installation under a base closure 
law. 
‘‘(d) CONGRESSIONAL NOTIFICATION.—The closure of 
a commissary store shall not take effect until the end of 
the 90-day period beginning on the date on which the Sec-
retary of Defense submits to Congress written notice of the 
reasons supporting the closure. The written notice shall in-
clude an assessment of the impact closure will have on the 
quality of life for military patrons and the welfare and se-
curity of the military community in which the commissary 
is located.’’; 
(4) by inserting sections 2483 and 2484, as re-
designated by paragraph (2), after section 2482, as 
added by paragraph (3);
252 
(5) in section 2484, as redesignated by para-
graph (2)— 
(A) by striking subsections (a), (b), (c), and 
(g); 
(B) by redesignating subsections (d), (e), 
and (f) as subsections (f), (g), and (h), respec-
tively; 
(C) by inserting before subsection (f), as so 
redesignated, the following new subsections: 
‘‘(a) IN GENERAL.—As provided in section 2481(a) of 
this title, commissary stores are intended to be similar to 
commercial grocery stores and may sell merchandise simi-
lar to that sold in commercial grocery stores. The Secretary 
of Defense shall ensure that the design and format of com-
missary stores are consistent with modern grocery store 
stockage and format. 
‘‘(b) REQUIRED COMMISSARY MERCHANDISE CAT-
EGORIES.—Merchandise sold in, at, or by commissary 
stores shall include items in the following categories: 
‘‘(1) Meat, poultry, and seafood. 
‘‘(2) Nonalcoholic beverages. 
‘‘(3) Produce. 
‘‘(4) Grocery food, whether stored chilled, frozen, 
or at room temperature. 
‘‘(5) Dairy products.
253 
‘‘(6) Bakery and delicatessen items. 
‘‘(7) Nonfood grocery items. 
‘‘(8) Health and beauty aids. 
‘‘(9) Magazines and periodicals. 
‘‘(10) Telephone cards, greeting cards, and film 
and one-time use cameras. 
‘‘(c) INCLUSION OF GENERAL MERCHANDISE ITEMS.— 
(1) Among the various defense retail systems— 
‘‘(A) commissary stores shall be the primary De-
partment of Defense-operated store for the sale of 
items described in paragraphs (1) through (7) of sub-
section (b); and 
‘‘(B) exchange stores shall continue to maintain 
the exclusive right to operate convenience stores, 
shopettes, and troop stores, including such stores es-
tablished to support contingency operations. 
‘‘(2) Merchandise sold in commissary stores may in-
clude such general merchandise items as the Secretary of 
Defense may prescribe, except that the Secretary may not 
exclude seasonal items, tobacco products, pet supplies, bat-
teries, potted plants and floral bouquets, women’s hosiery, 
and school supplies, to the extent such products have been 
available in commissary stores before June 1, 2004, unless 
the Secretary determines that space or other considerations 
preclude the sale of all or some of the specified items. The
254 
Secretary shall provide notice to Congress of any reduction 
in the availability of such items at least 30 days before the 
reduction takes effect. 
‘‘(3) A military exchange may be considered as the 
vendor for the purchase of tobacco products, greeting cards, 
and film and one-time use cameras and shall serve as the 
vendor for telephone cards. Subsections (e) and (f) shall not 
apply to the pricing of such an item when a military ex-
change serves as the vendor of the item. Commissary store 
and exchange prices shall be comparable for such an item. 
‘‘(4) During the two-year period ending March 31, 
2007, the Secretary shall maintain sales data for com-
missary stores and exchange stores regarding the items 
identified in subsection (b)(10). Not later than August 1, 
2007, the Secretary shall submit to Congress a report con-
taining such sales data. 
‘‘(d) EXCLUDED GOODS OR SERVICES.—Commissary 
stores shall not offer film development services. 
‘‘(e) UNIFORM SALES PRICE SURCHARGE.—The Sec-
retary of Defense shall apply a uniform surcharge equal to 
not more than five percent on the sales prices established 
under subsection (f) for each item of merchandise sold in, 
at, or by commissary stores.’’;
255 
(D) in subsection (f), as so redesignated, by 
striking ‘‘(consistent with this section and sec-
tion 2685 of this title)’’ in paragraph (1); 
(E) in subsection (h), as so redesignated, by 
striking ‘‘Subsections (c) and (d)’’ and inserting 
‘‘Subsections (e) and (f)’’; and 
(F) by adding at the end the following new 
subsection: 
‘‘(i) USE OF SURCHARGE FOR CONSTRUCTION, RE-
PAIR, IMPROVEMENT, AND MAINTENANCE.—(1)(A) The Sec-
retary of Defense may use the proceeds from the surcharges 
imposed under subsection (e) only— 
‘‘(i) to acquire (including acquisition by lease), 
construct, convert, expand, improve, repair, main-
tain, and equip the physical infrastructure of com-
missary stores and central product processing facili-
ties of the defense commissary system; and 
‘‘(ii) to cover environmental evaluation and con-
struction costs related to activities described in clause 
(i), including costs for surveys, administration, over-
head, planning, and design. 
‘‘(B) In subparagraph (A), the term ‘physical infra-
structure’ includes real property, utilities, and equipment 
(installed and free standing and including computer equip-
256 
ment), necessary to provide a complete and usable com-
missary store or central product processing facility. 
‘‘(2)(A) The Secretary of Defense may authorize a non-
appropriated fund instrumentality of the United States to 
enter into a contract for construction of a shopping mall 
or similar facility for a commissary store and one or more 
nonappropriated fund instrumentality activities. The Sec-
retary may use the proceeds of surcharges under subsection 
(e) to reimburse the nonappropriated fund instrumentality 
for the portion of the cost of the contract that is attributable 
to construction of the commissary store or to pay the con-
tractor directly for that portion of such cost. 
‘‘(B) In subparagraph (A), the term ‘construction’, 
with respect to a facility, includes acquisition, conversion, 
expansion, installation, or other improvement of the facil-
ity. 
‘‘(3) The Secretary of Defense, with the approval of 
the Director of the Office of Management and Budget, may 
obligate anticipated proceeds from the surcharges under 
subsection (e) for any use specified in paragraph (1) or (2), 
without regard to fiscal year limitations, if the Secretary 
determines that such obligation is necessary to carry out 
any use of such adjustments or surcharges specified in such 
paragraph.
257 
‘‘(4) Revenues received by the Secretary of Defense 
from the following sources or activities of commissary store 
facilities shall be available for the purposes set forth in 
paragraphs (1), (2), and (3): 
‘‘(A) Sale of recyclable materials. 
‘‘(B) Sale of excess and surplus property. 
‘‘(C) License fees. 
‘‘(D) Royalties. 
‘‘(E) Fees paid by sources of products in order 
to obtain favorable display of the products for resale, 
known as business related management fees.’’; 
(6) by inserting section 2485, as redesignated by 
paragraph (2), after section 2484, as amended by 
paragraph (5); and 
(7) in section 2485, as redesignated by para-
graph (2)— 
(A) in subsection (a)(2), by adding at the 
end the following new sentence: ‘‘Until December 
31, 2009, the Defense Commissary Agency is not 
required to conduct any cost-comparison study 
under the policies and procedures of Office of 
Management and Budget Circular A–76 relating 
to the possible contracting out of commissary 
store functions.’’;
258 
(B) in subsection (b)(2), by striking ‘‘sec-
tion 2484’’ and inserting ‘‘section 2483’’; 
(C) in subsection (c)(2), by adding at the 
end the following new sentences: ‘‘The chairman 
of the governing board shall be a commissioned 
officer or member of the senior executive service 
who has demonstrated experience or knowledge 
relevant to the management of the defense com-
missary system. In selecting other members of the 
governing board, the Secretary shall give pri-
ority to persons with experience related to logis-
tics, military personnel, military entitlements or 
other experiences of value of management of com-
missaries.’’; and 
(D) by adding at the end the following new 
subsections: 
‘‘(d) ASSIGNMENT OF ACTIVE DUTY MEMBERS.—(1) 
Except as provided in paragraph (2), members of the armed 
forces on active duty may not be assigned to the operation 
of a commissary store. 
‘‘(2)(A) The Secretary of Defense may assign an officer 
on the active-duty list to serve as the Director of the Defense 
Commissary Agency. 
‘‘(B) Not more than 18 members (in addition to the 
officer referred to in subparagraph (A)) of the armed forces
259 
on active duty may be assigned to the Defense Commissary 
Agency. Members who may be assigned under this subpara-
graph to regional headquarters of the agency shall be lim-
ited to enlisted members assigned to duty as advisers in 
the regional headquarters responsible for overseas com-
missaries and to veterinary specialists. 
‘‘(e) REIMBURSEMENT FOR USE OF COMMISSARY FA-
CILITIES BY MILITARY DEPARTMENTS.—(1) The Secretary 
of a military department shall pay the Defense Commissary 
Agency the amount determined under paragraph (2) for 
any use of a commissary facility by the military depart-
ment for a purpose other than commissary sales or oper-
ations in support of commissary sales. 
‘‘(2) The amount payable under paragraph (1) for use 
of a commissary facility by a military department shall 
be equal to the share of depreciation of the facility that is 
attributable to that use, as determined under regulations 
prescribed by the Secretary of Defense. 
‘‘(3) The Director of the Defense Commissary Agency 
shall credit amounts paid under paragraph (1) for use of 
a facility to an appropriate account to which proceeds of 
a surcharge applied under section 2484(e) of this title are 
credited. 
‘‘(4) This subsection applies with respect to a com-
missary facility that is acquired, constructed, converted, ex-
260 
panded, installed, or otherwise improved (in whole or in 
part) with the proceeds of a surcharge applied under section 
2484(e) of this title. 
‘‘(f) DONATION OF UNUSABLE FOOD.—(1) The Sec-
retary of Defense may donate food described in paragraph 
(2) to any of the following entities: 
‘‘(A) A charitable nonprofit food bank that is 
designated by the Secretary of Defense or the Sec-
retary of Health and Human Services as authorized 
to receive such donations. 
‘‘(B) A State or local agency that is designated 
by the Secretary of Defense or the Secretary of Health 
and Human Services as authorized to receive such do-
nations. 
‘‘(C) A chapter or other local unit of a recog-
nized national veterans organization that provides 
services to persons without adequate shelter and is 
designated by the Secretary of Veterans Affairs as au-
thorized to receive such donations. 
‘‘(D) A not-for-profit organization that provides 
care for homeless veterans and is designated by the 
Secretary of Veterans Affairs as authorized to receive 
such donations. 
‘‘(2) Food that may be donated under this subsection 
is commissary store food, mess food, meals ready-to-eat
261 
(MREs), rations known as humanitarian daily rations 
(HDRs), and other food available to the Secretary of De-
fense that— 
‘‘(A) is certified as edible by appropriate food in-
spection technicians; 
‘‘(B) would otherwise be destroyed as unusable; 
and 
‘‘(C) in the case of commissary store food, is un-
marketable and unsaleable. 
‘‘(3) In the case of commissary store food, a donation 
under this subsection shall take place at the site of the com-
missary store that is donating the food. 
‘‘(4) This subsection does not authorize any service (in-
cluding transportation) to be provided in connection with 
a donation under this subsection. 
‘‘(g) COLLECTION OF DISHONORED CHECKS.—(1) The 
Secretary of Defense may impose a charge for the collection 
of a check accepted at a commissary store that is not hon-
ored by the financial institution on which the check is 
drawn. The imposition and amounts of charges shall be con-
sistent with practices of commercial grocery stores regard-
ing dishonored checks. 
‘‘(2)(A) The following persons are liable to the United 
States for the amount of a check referred to in paragraph
262 
(1) that is returned unpaid to the United States, together 
with any charge imposed under that paragraph: 
‘‘(i) The person who presented the check. 
‘‘(ii) Any person whose status and relationship 
to the person who presented the check provide the 
basis for that person’s eligibility to make purchases at 
a commissary store. 
‘‘(B) Any amount for which a person is liable under 
subparagraph (A) may be collected by deducting and with-
holding such amount from any amounts payable to that 
person by the United States. 
‘‘(3) Amounts collected as charges imposed under para-
graph (1) shall be credited to the commissary trust revolv-
ing fund. 
‘‘(4) Appropriated funds may be used to pay any costs 
incurred in the collection of checks and charges referred to 
in paragraph (1). An appropriation account charged a cost 
under the preceding sentence shall be reimbursed the 
amount of that cost out of funds in the commissary trust 
revolving fund. 
‘‘(5) In this subsection, the term ‘commissary trust re-
volving fund’ means the trust revolving fund maintained 
by the Department of Defense for surcharge collections and 
proceeds of sales of commissary stores.
263 
‘‘(h) RELEASE OF CERTAIN COMMERCIALLY VALUABLE 
INFORMATION TO PUBLIC.—(1) The Secretary of Defense 
may limit the release to the public of any information de-
scribed in paragraph (2) if the Secretary determines that 
it is in the best interest of the Department of Defense to 
limit the release of such information. If the Secretary deter-
mines to limit the release of any such information, the Sec-
retary may provide for limited release of such information 
in accordance with paragraph (3). 
‘‘(2) Paragraph (1) applies to the following: 
‘‘(A) Information contained in the computerized 
business systems of commissary stores or the Defense 
Commissary Agency that is collected through or in 
connection with the use of electronic scanners in com-
missary stores, including the following information: 
‘‘(i) Data relating to sales of goods or serv-
ices. 
‘‘(ii) Demographic information on cus-
tomers. 
‘‘(iii) Any other information pertaining to 
commissary transactions and operations. 
‘‘(B) Business programs, systems, and applica-
tions (including software) relating to commissary op-
erations that were developed with funding derived 
from commissary surcharges.
264 
‘‘(3)(A) The Secretary of Defense may, using competi-
tive procedures, enter into a contract to sell information 
described in paragraph (2). 
‘‘(B) The Secretary of Defense may release, without 
charge, information on an item sold in commissary stores 
to the manufacturer or producer of that item or an agent 
of the manufacturer or producer. 
‘‘(C) The Secretary of Defense may, by contract entered 
into with a business, grant to the business a license to use 
business programs referred to in paragraph (2)(B), includ-
ing software used in or comprising any such program. The 
fee charged for the license shall be based on the costs of simi-
lar programs developed and marketed by businesses in the 
private sector, determined by means of surveys. 
‘‘(D) Each contract entered into under this paragraph 
shall specify the amount to be paid for information released 
or a license granted under the contract, as the case may 
be. 
‘‘(4) Information described in paragraph (2) may not 
be released, under paragraph (3) or otherwise, in a form 
that identifies any customer or that provides information 
making it possible to identify any customer. 
‘‘(5) Amounts received by the Secretary under this sec-
tion shall be credited to funds derived from commissary sur-
charges applied under section 2484(e) of this title, shall be
265 
merged with those funds, and shall be available for the same 
purposes as the funds with which merged.’’. 
(b) RELATION BETWEEN DEFENSE COMMISSARY AND 
EXCHANGE SYSTEMS.—Chapter 147 of title 10, United 
States Code, is further amended— 
(1) by inserting after section 2485, as amended 
by subsection (a)(7), the following: 
‘‘SUBCHAPTER 
II—RELATIONSHIP, 
CONTINU-
ATION, AND COMMON POLICIES OF DEFENSE 
COMMISSARY AND EXCHANGE SYSTEMS 
‘‘Sec. 
‘‘2487. Existence and purpose of defense commissary system. 
‘‘2488. Combined exchange and commissary stores. 
‘‘2489. Overseas commissary and exchange stores: access and purchase restrictions. 
‘‘§ 2487. Relationship between defense commissary sys-
tem and exchange stores system 
‘‘(a) SEPARATE SYSTEMS.—(1) Except as provided in 
paragraph (2), the defense commissary system and the ex-
change stores system shall be operated as separate systems 
of the Department of Defense. 
‘‘(2) Paragraph (1) does not apply to the following: 
‘‘(A) Combined exchange and commissary stores 
operated under the authority provided by section 
2489 of this title. 
‘‘(B) NEXMART stores of the Navy Exchange 
Service Command established before October 1, 2003.
266 
‘‘(b) CONSOLIDATION
OR OTHER ORGANIZATIONAL 
CHANGES OF DEFENSE RETAIL SYSTEMS.—(1) The oper-
ation and administration of the defense retail systems may 
not be consolidated or otherwise merged unless the consoli-
dation or merger is specifically authorized by an Act of 
Congress. 
‘‘(2) In this subsection, the term ‘defense retail systems’ 
means the defense commissary system and exchange stores 
system and other revenue-generating facilities operated by 
nonappropriated fund instrumentalities of the Department 
of Defense for the morale, welfare, and recreation of mem-
bers of the armed forces’’; 
(2) by redesignating sections 2488, 2489, 2489a 
as sections 2495, 2495a, and 2495b, respectively; and 
(3) by redesignating sections 2490a and 2492 as 
sections 2488 and 2489, respectively, and inserting 
such sections after section 2487, as added by para-
graph (1). 
(c) MWR PROGRAMS AND NONAPPROPRIATED FUND 
INSTRUMENTALITIES.—Chapter 147 of title 10, United 
States Code, is further amended— 
(1) by inserting after section 2489, as redesig-
nated and moved by subsection (b)(3), the following:
267 
‘‘SUBCHAPTER 
III—MORALE, 
WELFARE, 
AND 
RECREATION 
PROGRAMS 
AND 
NON-
APPROPRIATED FUND INSTRUMENTALITIES 
‘‘Sec. 
‘‘2491. Uniform funding and management of morale, welfare, and recreation pro-
grams. 
‘‘2491a. Department of Defense golf courses: limitation on use of appropriated 
funds. 
‘‘2491b. Use of appropriated funds for operation of Armed Forces Recreation Cen-
ter, Europe: limitation. 
‘‘2491c. Retention of morale, welfare, and recreation funds by military installa-
tions: limitation. 
‘‘2492. Nonappropriated fund instrumentalities: contracts with other agencies and 
instrumentalities to provide and obtain goods and services. 
‘‘2493. Fisher Houses: administration as nonappropriated fund instrumentality. 
‘‘2494. Nonappropriated fund instrumentalities: furnishing utility services for mo-
rale, welfare, and recreation purposes. 
‘‘2495. Nonappropriated fund instrumentalities: purchase of alcoholic beverages. 
‘‘2495a. Overseas package stores: treatment of United States wines. 
‘‘2495b. Sale or rental of sexually explicit material prohibited.’’; 
(2) by redesignating section 2494 as section 2491 
and inserting such section after the table of sections 
at the beginning of subchapter III, as added by para-
graph (1); 
(3) by redesignating section 2482a as section 
2492 and inserting such section before section 2493; 
(4) by inserting after section 2493 the following 
new section: 
‘‘§ 2494. Nonappropriated fund instrumentalities: fur-
nishing utility services for morale, wel-
fare, and recreation purposes 
‘‘Appropriations for the Department of Defense may 
be used to provide utility services for—
268 
‘‘(1) buildings on military installations author-
ized by regulation to be used for morale, welfare, and 
recreation purposes; and 
‘‘(2) other morale, welfare, and recreation activi-
ties for members of the armed forces.’’; and 
(5) by inserting sections 2495, 2495a, and 
2495b, as redesignated by subsection (b)(2), after sec-
tion 2494, as added by paragraph (4). 
(d) INCLUSION OF OTHER TITLE 10 PROVISIONS.— 
Sections 2246, 2247, and 2219 of title 10, United States 
Code, are— 
(1) transferred to chapter 147 of such title; 
(2) inserted after section 2491, as redesignated 
and moved by subsection (c)(2); and 
(3) redesignated as sections 2491a, 2491b, and 
2491c, respectively. 
(e) CONFORMING AMENDMENTS.—(1) Section 977 of 
title 10, United States Code, is repealed. 
(2) Section 2868 of such title is amended by striking 
‘‘for—’’ and all that follows through the period at the end 
and inserting ‘‘for buildings constructed at private cost, as 
authorized by law.’’. 
(3) Section 367 of the Strom Thurmond National De-
fense Authorization Act for Fiscal Year 1999 (Public Law 
105–261; 112 Stat. 1987; 10 U.S.C. 2482 note) is repealed.
269 
(f) CLERICAL AMENDMENTS.—(1) The table of sections 
at the beginning of chapter 49 of title 10, United States 
Code, is amended by striking the item relating to section 
977. 
(2) The table of sections at the beginning of chapter 
132 of such title is amended by striking the item relating 
to section 2219. 
(3) The table of sections at the beginning of subchapter 
I of chapter 134 of such title is amended by striking the 
items relating to sections 2246 and 2247. 
SEC. 652. CONSISTENT STATE TREATMENT OF DEPART-
MENT 
OF 
DEFENSE 
NONAPPROPRIATED 
FUND HEALTH BENEFITS PROGRAM. 
Section 349 of the National Defense Authorization Act 
for Fiscal Year 1995 (Public Law 103–337; 108 Stat. 2727) 
is amended by adding at the end the following new sub-
section: 
‘‘(c) TREATMENT OF PROGRAM AS FEDERAL HEALTH 
BENEFIT PROGRAM.—(1) No State tax, fee, other monetary 
payment, or State health plan requirement, may be im-
posed, directly or indirectly, on the Nonappropriated Fund 
Uniform Health Benefits Program of the Department of De-
fense, or on a carrier or an underwriting or plan adminis-
tration contractor of the Program, to the same extent as 
such prohibition applies to the health insurance program
270 
authorized by chapter 89 of title 5, United States Code, 
under section 8909(f) of such title. 
‘‘(2) Paragraph (1) shall not be construed to exempt 
the Nonappropriated Fund Uniform Health Benefits Pro-
gram of the Department of Defense, or any carrier or under-
writing or plan administration contractor of the Program 
from the imposition, payment, or collection of a tax, fee, 
or other monetary payment on the net income or profit ac-
cruing to, or realized by, the Program or by such carrier 
or contractor from business conducted under the Program, 
so long as the tax, fee, or payment is applicable to a broad 
range of business activity. 
‘‘(3) In this section, the term ‘State’ means each of the 
several States, the District of Columbia, the Commonwealth 
of Puerto Rico, the United States Virgin Islands, Guam, 
American Samoa, and the Commonwealth of the Northern 
Mariana Islands, and any political subdivision or other 
non-Federal authority thereof.’’.
271 
SEC. 653. COOPERATION AND ASSISTANCE FOR QUALIFIED 
SCOUTING 
ORGANIZATIONS 
SERVING 
DE-
PENDENTS OF MEMBERS OF THE ARMED 
FORCES AND CIVILIAN EMPLOYEES OVER-
SEAS. 
(a) AUTHORITY TO COOPERATE AND PROVIDE ASSIST-
ANCE.—Subsection (a) of section 2606 of title 10, United 
States Code, is amended— 
(1) in subsection (a), by striking ‘‘Subject to sub-
section (b)’’ and inserting ‘‘In the interest of pro-
moting the recognized morale, welfare, and recreation 
of members of the armed forces’’; and 
(2) in subsection (b), by striking ‘‘and may’’ and 
all that follows through ‘‘armed forces’’. 
(b) TREATMENT
OF ORGANIZATIONS
AND EMPLOY-
EES.—Such section is further amended— 
(1) by striking subsections (e) and (f); 
(2) by redesignating subsections (c) and (d) as 
subsections (e) and (f), respectively; and 
(3) by inserting after subsection (b) the following 
new subsections: 
‘‘(c) TREATMENT
AS NONAPPROPRIATED FUND IN-
STRUMENTALITIES.—(1) Subject to paragraphs (2) and (3), 
to the extent a qualified scouting organization is providing 
services for members of the armed forces and their depend-
ents, or civilian employees of the Department of Defense
272 
and their dependents, at a location outside the United 
States consistent with the regulations prescribed under sub-
section (b), the qualified scouting organization shall be a 
nonappropriated fund instrumentality of the Department 
of Defense. 
‘‘(2) Notwithstanding treatment as a nonappropriated 
fund instrumentality of the Department of Defense, per-
sonnel of the qualified scouting organization who are per-
forming duties in connection with cooperation and assist-
ance provided under subsection (a) may continue such poli-
cies and procedures related to personnel management and 
such other policies or procedures established by the qualified 
scouting organization as the personnel consider appro-
priate, subject to the approval of the qualified scouting or-
ganization. 
‘‘(3) A qualified scouting organization operating out-
side the United States may operate as a private association 
overseas for the purpose of raising funds. Any funds so 
raised may not be commingled with amounts retained in 
a nonappropriated morale, welfare, and recreation account 
of the Department of Defense. 
‘‘(d) TREATMENT AS NONAPPROPRIATED FUND IN-
STRUMENTALITY EMPLOYEES.—(1) Personnel of a qualified 
scouting organization who are performing duties in connec-
tion with cooperation and assistance provided under sub-
273 
section (a) for members of the armed forces and their de-
pendents, or civilian employees of the Department of De-
fense and their dependents, shall be nonappropriated fund 
instrumentality employees of the United States for any pe-
riod during which the personnel perform such duties. 
‘‘(2) Such personnel of a qualified scouting organiza-
tion shall receive the same benefits, entitlements, and 
logistical support as other nonappropriated fund instru-
mentality employees, except that such personnel— 
‘‘(A) shall be allowed to decline to participate in 
retirement programs or other personnel management 
policies or procedures available to other non-
appropriated fund instrumentality employees and 
elect to continue the programs, policies or procedures 
made available by the qualified scouting organization; 
and 
‘‘(B) shall not receive nonappropriated fund in-
strumentality employment credit nor rehire priority. 
‘‘(3) In the regulations prescribed under subsection (b), 
the Secretary of Defense may authorize the use of funds ap-
propriated to the Department of Defense to pay costs of such 
personnel of a qualified scouting organization, including re-
imbursement of the personnel or the qualified scouting orga-
nization, in the case of those retirement, personnel manage-
ment, and other compensation programs regarding which
274 
the personnel have elected to continue the programs made 
available to them by the qualified scouting organization.’’. 
(c) CONFORMING AND CLERICAL AMENDMENTS.—Such 
section is further amended— 
(1) in subsection (a), by inserting ‘‘AUTHORITY 
TO COOPERATE AND PROVIDE ASSISTANCE.—’’ after 
‘‘(a)’’; 
(2) in subsection (c), by inserting ‘‘BASIS FOR 
COOPERATION AND ASSISTANCE.—’’; 
(3) in subsection (e), as redesignated by sub-
section (b)(2)— 
(A) by inserting ‘‘PROVISION OF TRANSPOR-
TATION, SPACE, AND SERVICES.—’’ after ‘‘(e)’’; 
and 
(B) in the matter preceding paragraph (1), 
by inserting ‘‘, using the authority of subsection 
(d)(3)’’ after ‘‘furnished’’; 
(4) in subsection (f), as redesignated by sub-
section (b)(2), by inserting ‘‘TRANSPORTATION
OF 
SUPPLIES.—’’ after ‘‘(f)’’; and 
(5) in subsection (g), by inserting ‘‘DEFINI-
TION.—’’ after ‘‘(g)’’.
275 
Subtitle F—Other Matters 
SEC. 661. REPEAL OF REQUIREMENT THAT MEMBERS ENTI-
TLED TO BASIC ALLOWANCE FOR SUBSIST-
ENCE PAY SUBSISTENCE CHARGES WHILE 
HOSPITALIZED. 
(a) REPEAL.—(1) Section 1075 of title 10, United 
States Code, is repealed. 
(2) The table of sections at the beginning of chapter 
55 of such title is amended by striking the item relating 
to section 1075. 
(b) CONFORMING AMENDMENT REGARDING MILITARY- 
CIVILIAN HEALTH SERVICES PARTNERSHIP PROGRAM.— 
Section 1096(c) of such title is amended— 
(1) by inserting ‘‘who is a dependent’’ after ‘‘cov-
ered beneficiary’’; and 
(2) by striking ‘‘shall pay’’ and all that follows 
through the period at the end of paragraph (2) and 
inserting ‘‘shall pay the charges prescribed by section 
1078 of this title.’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall take effect on the date of the enactment of this 
Act.
276 
SEC. 662. CLARIFICATION OF EDUCATION LOANS QUALI-
FYING FOR EDUCATION LOAN REPAYMENT 
PROGRAM 
FOR 
RESERVE 
COMPONENT 
HEALTH PROFESSIONS OFFICERS. 
Section 16302(a)(5) of title 10, United States Code, 
is amended by inserting ‘‘a basic professional qualifying 
degree (as determined under regulations prescribed by the 
Secretary of Defense) or graduate education in’’ after ‘‘re-
garding’’. 
SEC. 663. SURVEY AND ANALYSIS OF EFFECT OF EXTENDED 
AND FREQUENT MOBILIZATION OF RESERV-
ISTS FOR ACTIVE DUTY SERVICE ON RESERV-
IST INCOME. 
(a) SURVEY OF MOBILIZED RESERVISTS TO DETER-
MINE DIFFERENTIAL BETWEEN PRIVATE SECTOR INCOME 
AND MILITARY COMPENSATION.—(1) The Secretary of De-
fense shall conduct a survey involving members of the re-
serve components who serve, or have served, on active duty 
in support of a contingency operation at any time during 
the period beginning on September 11, 2001, and ending 
on September 30, 2005, to determine the extent to which 
such members sustained a reduction in monthly income 
during the period of the active duty service compared to 
the average monthly civilian income of the members during 
the 12 months preceding their mobilization.
277 
(2) At least 50 percent of the total number of members 
of the reserve components who have served on active duty 
in support of a contingency operation at any time during 
the period specified in paragraph (1) shall be included in 
the survey. 
(b) CALCULATION OF INCOME DIFFERENTIAL.—For 
each member surveyed under subsection (a) who reports that 
total monthly military compensation during the active duty 
service of the member was less, or appeared to be less, than 
the average monthly civilian income of the member, the Sec-
retary of Defense, in cooperation with the member, shall cal-
culate the monthly active-duty income differential for the 
member. 
(c) DEFINITIONS USED IN CONDUCTING SURVEY AND 
CALCULATIONS.—In this section: 
(1) The term ‘‘monthly active-duty income dif-
ferential’’, with respect to a member of a reserve com-
ponent surveyed under subsection (a), means the dif-
ference between— 
(A) the average monthly civilian income of 
the member; and 
(B) the total monthly military compensa-
tion of the member. 
(2) The term ‘‘average monthly civilian income’’, 
with respect to a member of a reserve component sur-
278 
veyed under subsection (a), means the amount, deter-
mined by the Secretary of Defense, of the earned in-
come of the member for the 12 months preceding the 
first mobilization of the member during the period 
specified in subsection (a)(1), divided by 12. 
(3) The term ‘‘total monthly military compensa-
tion’’, with respect to a member of a reserve compo-
nent surveyed under subsection (a), means the 
amount, computed on a monthly basis, of the sum 
of— 
(A) the amount of the regular military com-
pensation (RMC), as defined in section 101(25) 
of title 37, United States Code, of the member 
during the period specified in subsection (a)(1); 
and 
(B) any amount of special pay or incentive 
pay and any allowance (other than an allowance 
included in regular military compensation) that 
is paid to the member on a monthly basis during 
the period specified in subsection (a)(1). 
(d) COLLECTION OF DEMOGRAPHIC DATA.—The Sec-
retary of Defense shall collect demographic data regarding 
each member of a reserve component surveyed under sub-
section (a), including, at a minimum, data on the fol-
lowing:
279 
(1) Reserve component. 
(2) Unit of assignment. 
(3) Grade. 
(4) Age. 
(5) Years of service. 
(6) Sex. 
(7) Marital status. 
(8) Number of dependents. 
(9) General category of private-sector employ-
ment, as determined by the Secretary, but to include 
an employment category to cover members who are 
self-employed. 
(10) Military occupational specialty, including 
specifying all surveyed members who are serving in a 
critical wartime specialty. 
(11) Length of service on active duty during the 
most recent mobilization. 
(12) Number of times mobilized since September 
11, 2001. 
(e) EFFECT OF INCOME LOSS ON RETENTION.—The 
Secretary of Defense shall include in the survey a question 
to solicit information from each member of a reserve compo-
nent surveyed under subsection (a) regarding the likely ef-
fect of a reoccurring monthly active-duty income differen-
280 
tial for the member while serving on active duty on the deci-
sion of the member to remain in the reserve component. 
(f) ANALYSIS OF SURVEY DATA.—(1) At a minimum, 
the Secretary of Defense shall determine, for each variable 
listed in paragraphs (2) through (12) of subsection (d), the 
number of members of the reserve components surveyed 
under subsection (a) who sustained a monthly active-duty 
income differential for any month during their active duty 
service and compare and contrast that number with the 
number of members who did not experience a monthly ac-
tive-duty income differential. 
(2) The Secretary shall also determine the average 
amount of the active-duty income differential by reserve 
component for each variable within the characteristics listed 
in paragraphs (2) through (12) of subsection (d). 
(g) SUBMISSION
OF SURVEY RESULTS
AND REC-
OMMENDATIONS.—Not later than January 31, 2006, the 
Secretary of Defense shall submit to Congress and the 
Comptroller General a report containing the results of the 
surveys conducted under subsection (a), including the re-
sults of the analysis of survey data required by subsection 
(e). The Secretary shall include such recommendations as 
the Secretary considers appropriate regarding alternatives 
for restoring income lost by members of the reserve compo-
281 
nents who sustained a monthly active-duty income differen-
tial during their active duty service. 
(h) COMPTROLLER GENERAL EVALUATION.—Not later 
than March 31, 2006, the Comptroller General shall submit 
to Congress an assessment of the findings and recommenda-
tions contained in the report of the Secretary of Defense 
submitted under subsection (g). 
TITLE VII—HEALTH CARE 
PROVISIONS 
Subtitle A—Enhanced Benefits for 
Reserves 
SEC. 701. DEMONSTRATION PROJECT FOR TRICARE COV-
ERAGE FOR READY RESERVE MEMBERS. 
(a) DEMONSTRATION PROGRAM.—Section 1076b of 
title 10, United States Code, is amended to read as follows: 
‘‘§ 1076b. TRICARE demonstration project: coverage 
for members of the Ready Reserve 
‘‘(a) IN GENERAL.—(1) The Secretary of Defense shall 
conduct a demonstration project beginning in fiscal year 
2005 to test whether TRICARE coverage for certain Ready 
Reserve members and their families enhances medical readi-
ness and retention of such members. 
‘‘(2) Under the demonstration project required by 
paragraph (1), within the scope of the project, as established 
by the Secretary, members of the Ready Reserve may be
282 
allowed to enroll for coverage under the TRICARE Stand-
ard option of the TRICARE program and receive benefits 
under such enrollment for any period that the member— 
‘‘(A) is not eligible for health care benefits under 
an employer-sponsored health benefits plan; and 
‘‘(B) either— 
‘‘(i) is not on active duty; or 
‘‘(ii) is on active duty but under a call or 
order to active duty for a period of 30 days or 
less. 
‘‘(3) A member allowed to enroll in TRICARE Stand-
ard under the demonstration project may enroll for self-only 
coverage or self and family coverage. 
‘‘(b) SCOPE OF COVERAGE .—A member and the de-
pendents of a member enrolled in TRICARE Standard 
under this section shall be entitled to the same benefits and 
shall pay the same charges as are provided under section 
1079 of this title. 
‘‘(c) PREMIUMS.—(1) The Secretary of Defense shall 
charge premiums for coverage pursuant to enrollments 
under this section. The Secretary shall prescribe a premium 
for self only coverage and a premium for self and family 
coverage. 
‘‘(2) The monthly amount of the premium in effect for 
a month for a type of coverage under this section shall be
283 
the amount equal to 28 percent of the total amount deter-
mined by the Secretary on an appropriate actuarial basis 
as being reasonable for the coverage. 
‘‘(3) The premiums payable by a member under this 
subsection may be deducted and withheld from basic pay 
payable to the member under section 204 of title 37 or from 
compensation payable to the member under section 206 of 
such title. The Secretary shall prescribe the requirements 
and procedures applicable to the payment of premiums by 
members not entitled to such basic pay or compensation. 
‘‘(4) Amounts collected as premiums under this sub-
section shall be credited to the appropriation available for 
the Defense Health Program Account under section 1100 
of this title, shall be merged with sums in such Account 
that are available for the fiscal year in which collected, and 
shall be available under subparagraph (B) of such section 
for such fiscal year. 
‘‘(d) CONDITIONS OF ELIGIBILITY.—(1) The Secretary 
of Defense may establish other conditions of eligibility, in-
cluding requiring a member to submit any certification 
that the Secretary considers appropriate to substantiate the 
member’s assertion that the member is not eligible for health 
care benefits under any other health benefits plan. 
‘‘(2) In the case of any member who is self-employed 
and not eligible for coverage under any other employer-
284 
sponsored health benefits plan, the member shall not be con-
sidered eligible to enroll under this section if the member’s 
income in the prior calendar year exceeded $40,000. 
‘‘(e) 
SCOPE
AND
TERMS
OF
DEMONSTRATION 
PROJECT.—The geographic scope and priorities for enroll-
ment under the demonstration program, if any, shall be es-
tablished by the Secretary of Defense. The Secretary may 
establish such other terms and conditions for the demonstra-
tion project required by subsection (a) as the Secretary de-
termines appropriate to accomplish its purposes. 
‘‘(f) TERMINATION OF AUTHORITY.—An enrollment in 
TRICARE under this section may not continue after De-
cember 31, 2007. 
‘‘(g) EVALUATION OF DEMONSTRATION AND REPORT 
TO CONGRESS.—Not later than March 1, 2007, the Sec-
retary shall provide to Congress a report on the results of 
the demonstration project required by this section. Such re-
port shall include an analysis of the impact of the dem-
onstration on medical readiness and retention of the mem-
bers who enrolled, an assessment of the costs and benefits 
of any improvements in medical readiness or retention, and 
recommendations concerning TRICARE Standard coverage 
for Ready Reserve members. 
‘‘(h) 
DEFINITION.—In 
this 
section, 
the 
term 
‘TRICARE Standard’ means the option of the TRICARE
285 
program that is also known as the Civilian Health and 
Medical Program of the Uniformed Services, as defined in 
section 1072(4) of this title.’’. 
(b) TERMINATION OF COVERAGE UNDER SUPERSEDED 
PROVISION OF LAW.—An enrollment in TRICARE under 
section 1076b of title 10, United States Code, as in effect 
before the date of the enactment of this Act may not con-
tinue after such date. 
(c) SITE IDENTIFICATION.—(1) Not later than 60 days 
after the date of enactment of this Act, the Secretary of De-
fense, in consultation with the Committees on Armed Serv-
ices of the Senate and the House of Representatives, shall 
identify not less than 10 sites that meet the criteria speci-
fied in paragraph (2) for the conduct of the demonstration 
project required under section 1076b of title 10, United 
States Code, as amended by this section. 
(2) For purposes of paragraph (1), the sites selected 
for the conduct of the demonstration project shall be areas 
of the United States that include a substantial number of 
personnel expected to be ordered to active duty for a period 
of more than 30 days. 
(d) INDEPENDENT EVALUATION AND REPORTS.—(1) 
The Comptroller General shall conduct an evaluation of the 
demonstration project required under section 1076b of title
286 
10, United States Code (as amended by this section) The 
evaluation shall include an assessment of the following: 
(A) Compliance by the Department of Defense 
with the requirements under section 1076b of title 10, 
United States Code (as amended by this section). 
(B) A description of the effects of the demonstra-
tion project on medical readiness and retention of the 
participants compared to nonparticipants. 
(C) The number of Ready Reserve members and 
their dependents opting to participate in the dem-
onstration project. 
(D) An analysis of how the demonstration 
project affects the overall accessibility of care in the 
direct and purchased care systems and a description 
of the unintended effects (if any) upon the normal 
treatment priority system. 
(E) A description of the difficulties (if any) ex-
perienced by the Department of Defense in managing 
the demonstration project. 
(F) Any impact of the demonstration project on 
employers, including causing them to discontinue 
health care insurance benefits for employees who are 
members of the reserves. 
(G) A recommendation whether to extend the 
demonstration project or make the project permanent.
287 
(H) A determination of whether the terms and 
conditions of the demonstration project should be con-
tinued or modified if the project is extended or ex-
panded. 
(I) Implications on cost, medical readiness, re-
cruitment, and retention if the demonstration project 
was made available to all reservists meeting the en-
rollment criteria throughout the United States and its 
territories. 
(J) Any additional elements that the Comptroller 
General determines are appropriate to assess the dem-
onstration project. 
(2) The Comptroller General shall submit to the Com-
mittees on Armed Services of the Senate and the House of 
Representatives— 
(A) an interim report on the evaluation under 
this section not later than 12 months after the date 
on which the demonstration project begins operation; 
and 
(B) a final report on the evaluation under this 
section not later than March 1, 2007.
288 
SEC. 702. COMPTROLLER GENERAL REPORT ON THE COST 
AND FEASIBILITY OF PROVIDING PRIVATE 
HEALTH INSURANCE STIPENDS FOR MEM-
BERS OF THE READY RESERVES. 
(a) STUDY
REQUIRED.—The Comptroller General 
shall conduct a study on the cost and feasibility of pro-
viding a stipend to members of the Ready Reserves to offset 
the cost of continuing private health insurance coverage for 
the member’s dependents when the member is on active duty 
for a period of more than 30 days, with the dependents 
being ineligible to enroll in the TRICARE program and 
payment of the stipend ending when the member is no 
longer on active duty. 
(b) MATTERS COVERED.—The study shall include the 
following matters: 
(1) Recommendation for a benefit amount and 
cost to the Department of Defense. 
(2) Potential effects on medical readiness, re-
cruitment, and retention. 
(3) The extent to which the Reserves and mem-
bers of their families might participate under the sti-
pend program. 
(4) Administrative and management consider-
ations for the Department of Defense. 
(5) Impact of pre-existing conditions on con-
tinuity of care for dependents.
289 
(6) Possible implications for employers. 
(c) REPORT.—Not later than March 31, 2005, the 
Comptroller General shall submit to the Committee on 
Armed Services of the Senate and the Committee on Armed 
Services of the House of Representatives a report containing 
the results of the study under this section. 
SEC. 703. IMPROVEMENT OF MEDICAL SERVICES FOR ACTI-
VATED MEMBERS OF THE READY RESERVE 
AND THEIR FAMILIES. 
(a) REQUIREMENT FOR TRICARE COVERAGE FOR 
DEPENDENTS
OF MEMBERS
OF RESERVE COMPONENTS 
CALLED
TO ACTIVE DUTY.—Paragraph (1) of section 
1074(d) of title 10, United States Code, is amended— 
(1) by inserting ‘‘a dependent of’’ after ‘‘chap-
ter,’’; 
(2) by inserting ‘‘a dependent of a member’’ after 
‘‘treated as being’’; and 
(3) by striking ‘‘the later of’’ and all that follows 
through the period at the end of subparagraph (B) 
and inserting ‘‘the date described in paragraph (3).’’. 
(b) AUTHORITY FOR TRICARE COVERAGE FOR MEM-
BERS
OF RESERVE COMPONENTS CALLED TO ACTIVE 
DUTY.—Section 1074(d) of such title is further amended— 
(1) by striking paragraph (3);
290 
(2) by redesignating paragraph (2) as para-
graph (4); and 
(3) by inserting after paragraph (1) the fol-
lowing new paragraphs: 
‘‘(2) The Secretary of Defense may, beginning on the 
date described in paragraph (3), provide a member of a 
reserve component of the armed forces who is issued a de-
layed-effective-date active-duty order, or is covered by such 
an order, such medical and dental care (in addition to care 
for which the member is eligible under section 1074a(f) of 
this title or other provisions of law) the Secretary deter-
mines appropriate. 
‘‘(3) The date referred to in paragraphs (1) and (2) 
with respect to a member is the later of the date that is— 
‘‘(A) the date of the issuance of the delayed-effec-
tive-date active-duty order; or 
‘‘(B) 90 days before the date on which the period 
of active duty is to commence under such order for 
that member.’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall take effect on January 1, 2005. 
SEC. 
704. 
MODIFICATION 
OF 
WAIVER 
OF 
CERTAIN 
DEDUCTIBLES UNDER TRICARE PROGRAM. 
Section 1095d(a) of title 10, United States Code, is 
amended in paragraphs (1) and (2) by striking ‘‘less than
291 
one year’’ each place it appears and inserting ‘‘more than 
30 days’’. 
SEC. 705. AUTHORITY FOR PAYMENT BY UNITED STATES OF 
ADDITIONAL AMOUNTS BILLED BY HEALTH 
CARE PROVIDERS TO ACTIVATED RESERVE 
MEMBERS. 
Section 1079(h) of title 10, United States Code, is 
amended by adding at the end of paragraph (4) the fol-
lowing new subparagraph: 
‘‘(C) In the case of services billed to a dependent re-
ferred to in subsection (a) of a member of a reserve compo-
nent who is ordered to active duty for a period of more 
than 30 days in support of a contingency operation under 
a provision of law referred to in section 101(a)(13)(B) of 
this title, the regulations shall provide that, in addition to 
amounts otherwise payable by the United States, the Sec-
retary may pay the amount referred to in subparagraph 
(B)(i) for the services.’’. 
SEC. 706. EXTENSION OF TRANSITIONAL HEALTH CARE 
BENEFITS AFTER SEPARATION FROM ACTIVE 
DUTY. 
(a) EXTENSION
OF TRANSITIONAL HEALTH CARE 
BENEFITS.—Paragraph (3) of section 1145(a) of title 10, 
United States Code, is amended to read as follows:
292 
‘‘(3) Transitional health care shall be available under 
this subsection for a period beginning on the date on which 
the member is separated from active duty and ending on 
the earlier of— 
‘‘(A) 180 days after the date on which the mem-
ber is separated from active duty; or 
‘‘(B) the date on which the member and depend-
ents of the member are covered by a health plan spon-
sored by an employer.’’. 
(b) LIMITATION.—During the period beginning on 
January 1, 2005, and ending on September 30, 2005, not 
more than $170,000,000 of the amount appropriated pursu-
ant to the authorization for operations and maintenance 
for the Defense Health Program in section 303(a) may be 
used for transitional health care under section 1145(a) of 
title 10, United States Code, as amended by this section. 
(c) EFFECTIVE DATE.—The amendment made by sub-
section (a) shall apply with respect to separations from ac-
tive duty that take effect on or after January 1, 2005. 
Subtitle B—Other Benefits 
Improvements 
SEC. 711. COVERAGE OF CERTAIN YOUNG CHILDREN 
UNDER TRICARE DENTAL PROGRAM. 
(a) COVERAGE OF CERTAIN YOUNG CHILDREN.—Sec-
tion 1076a(k)(2) of title 10, United States Code, is amended
293 
by inserting after ‘‘by reason of’’ the following: ‘‘the depend-
ent’s young age on the date of death of the member of’’. 
(b) EFFECTIVE DATE.—The amendment made by sub-
section (a) shall take effect on the date of the enactment 
of this Act. 
SEC. 712. COMPTROLLER GENERAL REPORT ON PROVISION 
OF HEALTH AND SUPPORT SERVICES FOR EX-
CEPTIONAL FAMILY MEMBER PROGRAM EN-
ROLLEES. 
(a) EVALUATION REQUIREMENT.—The Comptroller 
General shall evaluate the effect of the Exceptional Family 
Member Program (in this section referred to as ‘‘EFMP’’) 
on health and support services in selected civilian commu-
nities near military installations with a high concentration 
of EFMP enrollees. 
(b) MATTERS COVERED.—The evaluation under sub-
section (a) shall include a discussion of the following: 
(1) Communities that have high concentrations 
of EFMP enrollees that use State and local health and 
support services. 
(2) Needs of EFMP enrollees, if any, that are not 
met by State and local health and support services. 
(3) The burdens, financial and otherwise, placed 
on State and local health and support services by 
EFMP enrollees and their families.
294 
(4) The ability of the TRICARE program to 
meet the needs of EFMP enrollees and their families. 
(5) Reasons for any limitations of the TRICARE 
program, the EFMP, and State and local health and 
support services in providing assistance to EFMP en-
rollees and their families. 
(6) Recommendations for more effectively meet-
ing the needs of EFMP enrollees and their families. 
(c) COMMUNITIES COVERED.—The evaluation under 
subsection (a) shall examine no fewer than four civilian 
communities, as determined by the Comptroller General, 
that have high concentrations of EFMP enrollees and that 
are near several military installations, including at least 
two military installations with tenants from more than one 
of the Armed Forces. 
(d) DEFINITIONS.—In this section: 
(1) The term ‘‘health and support services’’ 
means services provided to children and other depend-
ents with special needs, including specialized day 
care, mental health day treatment services, respite 
services, counseling, and other such services provided 
for children and other dependents with special needs. 
(2) The term ‘‘TRICARE program’’ has the 
meaning given that term in section 1072(7) of title 
10, United States Code.
295 
(e) REPORT.—Not later than March 31, 2005, the 
Comptroller General shall submit to the Armed Services 
Committees of the Senate and the House of Representatives 
a report on the results of the evaluation required under sub-
section (a), with findings and recommendations. 
SEC. 713. EXCEPTIONAL ELIGIBILITY FOR TRICARE PRIME 
REMOTE. 
Section 1079(p) of title 10, United States Code, is 
amended— 
(1) by redesignating paragraph (4) as para-
graph (5); and 
(2) by inserting after paragraph (3) the fol-
lowing new paragraph: 
‘‘(4) The Secretary of Defense may provide for coverage 
of a dependent referred to in subsection (a) who is not de-
scribed in paragraph (3) if the Secretary determines that 
exceptional circumstances warrant such coverage.’’. 
SEC. 714. TRANSITION TO HOME HEALTH CARE BENEFIT 
UNDER SUB-ACUTE CARE PROGRAM. 
Section 1074j of title 10, United States Code, is 
amended in subsection (b)(3)— 
(1) by inserting ‘‘(A)’’ after ‘‘(3)’’; and 
(2) by adding at the end the following: 
‘‘(B) The Secretary of Defense shall establish proce-
dures for the transition to and implementation of the home
296 
health care benefit required by subparagraph (A). The Sec-
retary may provide in such procedures that covered bene-
ficiaries who, before the implementation of such benefit, re-
ceived home health care under this chapter in excess of such 
benefit, may continue to receive such care for such time as 
the Secretary considers appropriate.’’. 
SEC. 715. REQUIREMENT RELATING TO PRESCRIPTION 
DRUG BENEFITS FOR MEDICARE-ELIGIBLE 
ENROLLEES UNDER DEFENSE HEALTH CARE 
PLANS. 
Section 1074g(a)(6) of title 10, United States Code, is 
amended— 
(1) by inserting ‘‘(A)’’ after ‘‘(6)’’; and 
(2) by adding at the end the following: 
‘‘(B) For a medicare-eligible beneficiary, the 
cost-sharing requirements may not be in excess of the 
cost-sharing requirements applicable to all other bene-
ficiaries covered by section 1086 of this title. For pur-
poses of the preceding sentence, a medicare-eligible 
beneficiary is a beneficiary eligible for health benefits 
under section 1086 of this title pursuant to subsection 
(d)(2) of such section.’’.
297 
SEC. 716. PROFESSIONAL ACCREDITATION OF MILITARY 
DENTISTS. 
Section 1077(c) of title 10, United States Code, is 
amended— 
(1) by striking ‘‘A’’ and inserting ‘‘(1) Except as 
provided in paragraph (2), a’’; and 
(2) by adding at the end the following new para-
graph: 
‘‘(2)(A) Dependents who have not attained age 13 and 
who are participating under a dental plan established 
under section 1076a of this title may be treated by post- 
graduate dental students in eligible dental treatment facili-
ties if— 
‘‘(i)(I) treatment of pediatric dental patients is 
required to comply with American Dental Association 
accreditation standards; or 
‘‘(II) pediatric dental training is required to en-
able post-graduate dental students to provide dental 
care for such dependents outside the United States; 
and 
‘‘(ii) there are insufficient numbers of children 
eligible to be provided dental care under section 
1076(a) of this title to meet such standards or train-
ing requirements.
298 
‘‘(B) The total number of dependents who may be 
treated under this paragraph may not exceed 2,000 in any 
fiscal year. 
‘‘(C) In this paragraph, an eligible dental treatment 
facility is a dental treatment facility with a post-graduate 
dental education program accredited by the American Den-
tal Association.’’. 
SEC. 717. ADDITION OF CERTAIN UNREMARRIED FORMER 
SPOUSES TO PERSONS ELIGIBLE FOR DEN-
TAL INSURANCE PLAN OF RETIREES OF THE 
UNIFORMED SERVICES. 
(a) ELIGIBILITY OF CERTAIN FORMER SPOUSES FOR 
DENTAL COVERAGE.—(1) Section 1076c(b) of title 10, 
United States Code, is amended by adding at the end the 
following new paragraph: 
‘‘(6) A person who— 
‘‘(i) is an unremarried former spouse of a 
member described in paragraph (1) or (2); 
‘‘(i) is described in section 1072(2)(F)(i) of 
this title; and 
‘‘(ii) does not have dental coverage under an 
employer-sponsored health plan.’’. 
(b) EFFECTIVE DATE.—Section 1076c(b)(6) of title 10, 
United States Code, as added by subsection (a), shall take 
effect on the date of the enactment of this Act.
299 
SEC. 718. WAIVER OF COLLECTION OF PAYMENTS DUE 
FROM CERTAIN PERSONS UNAWARE OF LOSS 
OF CHAMPUS ELIGIBILITY. 
(a) AUTHORITY TO WAIVE COLLECTION.—The Sec-
retary of Defense may waive (in whole or in part) the collec-
tion of payments otherwise due from a person described in 
subsection (b) as a result of the receipt by the person of 
health benefits under section 1086 of title 10, United States 
Code, after the termination of the person’s eligibility for 
such benefits and may also authorize continued coverage of 
benefits under section 1086 of such title for such person for 
the period described in subsection (c). 
(b) PERSONS ELIGIBLE.—A person shall be eligible for 
relief under subsection (a) if the person— 
(1) is a person described in paragraph (1) of 
subsection (d) of section 1086, of title 10, United 
States Code; 
(2) in the absence of such paragraph, would have 
been eligible for health benefits under such section; 
(3) at the time of the receipt of such benefits, sat-
isfies the criteria specified in subparagraph (B) of 
paragraph (2) of such subsection; and 
(4) was unaware of the loss of eligibility to re-
ceive health benefits at the time they were received. 
(c) EXTENT OF AUTHORITY.—The authority to waive 
the collection of payments and to continue coverage of bene-
300 
fits under this section shall apply during the period begin-
ning on July 1, 1999, and ending on December 31, 2004, 
under terms established by the Secretary of Defense. 
(d) QUARTERLY REPORTS.—(1) The Secretary of De-
fense shall provide quarterly reports to the Committees on 
Armed Services of the Senate and House of Representatives 
regarding— 
(A) efforts by the Department of Defense to iden-
tify persons who satisfy the criteria specified in sub-
paragraph (B) of subsection (d)(2) of section 1086 of 
title 10, United States Code, and would be eligible for 
health benefits under such section if the criteria speci-
fied in subparagrpah (A) were also satisfied; and 
(B) actions taken by the Department with re-
spect to persons identified under subparagraph (B) of 
this paragraph. 
(2) The first report under paragraph (1) shall be sub-
mitted not later than 30 days after the end of the first quar-
ter of fiscal year 2005. 
Subtitle C—Planning, 
Programming, and Management 
SEC. 721. PILOT PROGRAM FOR TRANSFORMATION OF 
HEALTH CARE DELIVERY. 
(a) FINDINGS.—(1) Congress finds the following:
301 
(A) Historically, providing military health care 
to military beneficiaries has centered on building a 
military medical treatment facility and providing a 
full range of services on a military installation. 
(B) Traditionally, in many locations the major-
ity of military personnel and their dependents who 
are eligible beneficiaries of the military health care 
system do not live on military installations. 
(C) As the cost of repairing, replacing, recapital-
izing, or expanding aging military treatment facili-
ties and maintaining adequate health care services on 
military installations increases, the Department of 
Defense will be challenged to find new, more cost-effec-
tive ways of providing enhanced health care for mili-
tary and civilian beneficiaries of the Department of 
Defense health care system. 
(2) In view of these findings, the Secretary of Defense 
is directed to examine feasible and cost-effective methods for 
leveraging and expanding non-military health care re-
sources to provide health care to military beneficiaries. Fur-
thermore, the Secretary of Defense shall conduct a pilot pro-
gram in accordance with this section. 
(b) PILOT PROGRAM PURPOSES.—The Secretary of 
Defense shall conduct a pilot program at one or more mili-
tary installations for purposes of testing—
302 
(1) the feasibility and cost effectiveness of ex-
panding use of non-military health care resources, 
particularly in cases in which such use would reduce 
or eliminate the need for military medical construc-
tion projects; 
(2) initiatives that build cooperative health care 
arrangements and agreements between military in-
stallations and local and regional non-military health 
care systems; and 
(3) development of an integrated, long range 
business plan for the delivery of health care services 
for military beneficiaries, incorporating present and 
potential future capabilities in the non-military 
health care sector. 
(c) REQUIREMENTS
OF PILOT PROGRAM.—In con-
ducting the pilot program, the Secretary of Defense shall— 
(1) identify and analyze health care delivery op-
tions that range from outsourcing all health care de-
livery services to the private sector to providing some 
health care services in military facilities located on 
the installation; 
(2) determine the cost avoidance or savings re-
sulting from innovative partnerships between the De-
partment of Defense and the private sector and lim-
iting recapitalization costs in military facilities;
303 
(3) study the potential, viability, cost efficiency, 
and health care effectiveness of Department of Defense 
health care providers delivering health care in civil-
ian community hospitals; 
(4) determine the opportunities for and barriers 
to coordinating and leveraging the use of existing 
health care resources, including Federal, State, local, 
and contractor assets; and 
(5) develop recommendations for a model health 
care delivery system that may be used at other mili-
tary installations. 
(d) CONSULTATION REQUIREMENTS.—The Secretary 
of Defense shall develop the pilot program in consultation 
with the Secretaries of the military departments, represent-
atives from the military installation selected for the pilot 
program, Federal, State, and local entities, and the 
TRICARE managed care support contractor with responsi-
bility for that installation. 
(e) SELECTION
OF MILITARY INSTALLATION.—The 
pilot program shall be implemented at one or more military 
installations selected by the Secretary of Defense. At least 
one of the selected military installations shall meet the fol-
lowing criteria: 
(1) The military installation is an Army instal-
lation located in a rural area.
304 
(2) The military installation has members of the 
Armed Forces on active duty and members of reserve 
components of the Armed Forces that use the installa-
tion as a training and operational base, with mem-
bers routinely deploying in support of the global war 
on terrorism. 
(3) The number of members of the Armed Forces 
on active duty permanently assigned to the military 
installation is expected to increase over the next five 
years. 
(4) One or more partnerships exist at the mili-
tary installation with civilian health care entities in 
the form of limited specialty care services in the mili-
tary medical treatment facility on the installation. 
(5) There is a military treatment facility on the 
installation that does not have inpatient or trauma 
center care capabilities. 
(6) There is a civilian community hospital with-
in 15 miles of the military installation with limited 
capability to expand inpatient care beds, intensive 
care, and specialty services. 
(7) There is no civilian hospital with a trauma 
center within 50 miles from the military installation. 
(f) DURATION OF PILOT PROGRAM.—Implementation 
of the pilot program developed under this subsection shall
305 
begin not later than May 1, 2005, and shall be conducted 
during fiscal years 2005, 2006, and 2007. 
(g) FUNDS.—For fiscal year 2005, not more than 
$5,000,000 of the amount appropriated pursuant to the au-
thorization for operations and maintenance for the Defense 
Health Program in section 303(a) may be used to conduct 
the pilot program under this section. 
(h) REPORTS.—Not later than July 1, 2005, the Sec-
retary of Defense shall submit an interim report to the 
Committees on Armed Services of the Senate and of the 
House of Representatives describing the details of the pilot 
program. Not later than July 1, 2007, the Secretary of De-
fense shall submit to such committees a final report describ-
ing the results of the pilot program with recommendations 
for a model health care delivery system for other military 
installations. 
SEC. 722. STUDY OF PROVISION OF TRAVEL REIMBURSE-
MENT TO HOSPITALS FOR CERTAIN MILITARY 
DISABILITY RETIREES. 
(a) STUDY.—The Secretary of Defense shall conduct a 
study of the feasibility, and of the desirability, of providing 
that a member of the uniformed services retired under chap-
ter 61 of title 10, United States Code, for a combat-related 
disability (as defined in section 1413a(e) of that title) shall 
be provided reimbursement for the travel expenses of such
306 
member for travel, during the two-year period beginning 
on the date of the retirement of the member, to a military 
treatment facility for medical care. The Secretary shall in-
clude in that study consideration of whether reimbursement 
under such a plan should, as nearly as practicable, be under 
the same terms and conditions, and at the same rate, as 
apply to beneficiary travel reimbursement provided by the 
Secretary of Veterans Affairs under section 111 of title 38, 
United States Code. 
(b) REPORT.—The Secretary of Defense shall submit 
to the congressional defense committees a report providing 
the results of the study under subsection (a). Such report 
shall be submitted not later than March 1, 2005. 
TITLE VIII—ACQUISITION POL-
ICY, ACQUISITION MANAGE-
MENT, AND RELATED MAT-
TERS 
Subtitle A—Amendments to General 
Contracting Authorities, Proce-
dures, and Limitations 
SEC. 801. RAPID ACQUISITION AUTHORITY TO RESPOND TO 
COMBAT EMERGENCIES. 
(a) IN GENERAL.—Chapter 141 of title 10, United 
States Code, is amended by adding at the end the following 
new section:
307 
‘‘§ 2410p. Rapid acquisition authority to respond to 
combat emergencies 
‘‘(a) RAPID ACQUISITION AUTHORITY.—The Secretary 
of Defense may rapidly acquire, in accordance with this 
section, equipment needed by a combatant commander to 
eliminate a combat capability deficiency that has resulted 
in combat fatalities. 
‘‘(b) PROCESS FOR RAPID ACQUISITION.—Not later 
than 30 days after the date of the enactment of this section, 
the Secretary of Defense shall develop a process for the rapid 
acquisition authority provided by subsection (a) and sub-
mit to Congress a detailed explanation of the process, in-
cluding procedures to be followed in carrying out the proc-
ess. The process shall provide for the following: 
‘‘(1) A requirement that the process may be used 
only to acquire the minimum amount of equipment 
needed until the needs of the combatant commander 
can be fulfilled under existing acquisition statutes, 
policies, directives, and regulations. 
‘‘(2) A goal of awarding a contract for the equip-
ment within 15 days after receipt of a request from 
a commander. 
‘‘(3) In a case in which the equipment cannot be 
acquired without an extensive delay, a requirement 
for an interim solution to minimize the combat capa-
308 
bility deficiency and combat fatalities until the equip-
ment can be acquired. 
‘‘(4) Waiver of the applicability of all policies, 
directives, and regulations related to— 
‘‘(A) the establishment of the requirement 
for the equipment; 
‘‘(B) the research, development, test, and 
evaluation of the equipment; and 
‘‘(C) the solicitation and selection of 
sources, and the award of the contract, for pro-
curement of the equipment. 
‘‘(5) Such other procedures or requirements as 
the Secretary considers appropriate. 
‘‘(c) WAIVER OF CERTAIN STATUTES.—For purposes 
of exercising the authority provided by subsection (a) with 
respect to equipment, laws relating to the following shall 
not apply: 
‘‘(A) The establishment of the requirement for the 
equipment. 
‘‘(B) The research, development, test, and evalua-
tion of the equipment. 
‘‘(C) The solicitation and selection of sources, 
and the award of the contract, for procurement of the 
equipment.
309 
‘‘(d) LIMITATIONS.—The rapid acquisition authority 
provided by subsection (a) may be used only— 
‘‘(1) after the Secretary of Defense, without dele-
gation, determines in writing that there exists a com-
bat capability deficiency that has resulted in combat 
fatalities; and 
‘‘(2) to acquire equipment in an amount aggre-
gating not more than $100,000,000 during a fiscal 
year. 
‘‘(e) SOURCE OF FUNDS.—For acquisitions under this 
section to be made during any fiscal year, the Secretary 
may use any funds made available to the Department of 
Defense for that fiscal year. 
‘‘(f) NOTIFICATION TO CONGRESS AFTER EACH USE 
OF AUTHORITY.—The Secretary of Defense shall notify the 
congressional defense committees within 15 days after each 
use of the authority provided by subsection (a). Each such 
notice shall identify the equipment to be acquired, the 
amount to be expended for such acquisition, and the source 
of funds for such acquisition. 
‘‘(g) COMBATANT COMMANDER.—In this section, the 
term ‘combatant commander’ means the commander of a 
unified combatant command with authority for the conduct 
of operations in a specific area of responsibility or who oth-
310 
erwise has authority to conduct operations at the direction 
of the President or Secretary of Defense.’’. 
(b) CLERICAL AMENDMENT.—The table of sections at 
the beginning of such chapter is amended by adding at the 
end the following new item: 
‘‘2410p. Rapid acquisition authority to respond to combat emergencies.’’. 
SEC. 802. DEFENSE ACQUISITION WORKFORCE CHANGES. 
(a) SELECTION CRITERIA AND PROCEDURES.—Section 
1732(b)(1)(A) of title 10, United States Code, is amended 
by striking ‘‘within grade GS–13 or above of the General 
Schedule’’ and inserting ‘‘in any position designated by the 
Secretary of Defense’’. 
(b) CRITICAL ACQUISITION POSITIONS.—Section 1733 
of such title is amended by striking subsection (b) and in-
serting the following: 
‘‘(b) DESIGNATION OF CRITICAL ACQUISITION.—(1) 
The Secretary of Defense shall designate the acquisition po-
sitions in the Department of Defense that are critical acqui-
sition positions. Such positions shall include the following: 
‘‘(A) Program executive officer. 
‘‘(B) Program manager of a major defense acqui-
sition program (as defined in section 2430 of this 
title) or of a significant nonmajor defense acquisition 
program (as defined in section 1737(a)(3) of this 
title).
311 
‘‘(C) Deputy program manager of a major de-
fense acquisition program. 
‘‘(D) Any other acquisition position of signifi-
cant responsibility determined by the Secretary to be 
critical. 
‘‘(2) The Secretary shall annually publish a list of the 
positions designated under this subsection.’’. 
(c) SCHOLARSHIP PROGRAMS.—Section 1742 of such 
title is amended— 
(1) by inserting ‘‘(a) PROGRAMS.—’’ at the be-
ginning of the text; and 
(2) by adding at the end the following new sub-
section: 
‘‘(b) SCHOLARSHIP PROGRAM REQUIREMENTS.—With 
respect to any scholarship program conducted under this 
section, the Secretary of Defense and the participant shall 
agree in writing to the terms of the scholarship. The agree-
ment shall include the obligations of the Secretary and the 
participant, as well as actions available for either party 
to take if there is a failure to meet the obligations under 
the agreement.’’. 
SEC. 803. LIMITATION ON TASK AND DELIVERY ORDER CON-
TRACTS. 
Subsection 2304a(f) of title 10, United States Code, is 
amended to read as follows:
312 
‘‘(f) CONTRACT PERIOD.—The head of an agency en-
tering into a task or delivery order contract under this sec-
tion may provide for the contract to cover any base period 
up to five years and may extend the contract period for 
one or more successive periods pursuant to an option pro-
vided in the contract or a modification to the contract.’’. 
SEC. 804. FUNDING FOR CONTRACT CEILINGS FOR CERTAIN 
MULTIYEAR PROCUREMENT CONTRACTS. 
(a) MULTIYEAR CONTRACTS RELATING
TO PROP-
ERTY.—Section 2306b(g) of title 10, United States Code, 
is amended— 
(1) by inserting ‘‘(1)’’ before ‘‘Before any’’; 
(2) by striking ‘‘Committee’’ through ‘‘House of 
Representatives’’ and inserting ‘‘congressional defense 
committees’’; and 
(3) by adding at the end the following new para-
graph: 
‘‘(2) In the case of a contract described in subsection 
(a) with a cancellation ceiling described in paragraph (1), 
if the budget for the contract does not include proposed 
funding for the costs of contract cancellation up to the can-
cellation ceiling established in the contract, the head of the 
agency concerned shall, as part of the certification required 
by subsection (i)(1)(A), give written notification to the con-
gressional defense committees of—
313 
‘‘(A) the cancellation ceiling amounts planned 
for each program year in the proposed multiyear pro-
curement contract, together with the reasons for the 
amounts planned; 
‘‘(B) the extent to which costs of contract can-
cellation are not included in the budget for the con-
tract; and 
‘‘(C) a financial risk assessment of not including 
budgeting for costs of contract cancellation, including 
proposed funding sources to meet such cancellation 
costs if the contract is canceled.’’. 
(b) MULTIYEAR CONTRACTS RELATING
TO SERV-
ICES.—Section 2306c(d) of title 10, United States Code, is 
amended— 
(1) in paragraphs (1), (3), and (4), by striking 
‘‘committees of Congress named in paragraph (5)’’ 
and inserting ‘‘congressional defense committees’’ each 
place it appears; and 
(2) by amending paragraph (5) to read as fol-
lows: 
‘‘(5) In the case of a contract described in subsection 
(a) with a cancellation ceiling described in paragraph (4), 
if the budget for the contract does not include proposed 
funding for the costs of contract cancellation up to the can-
cellation ceiling established in the contract, the head of the
314 
agency concerned shall give written notification to the con-
gressional defense committees of— 
‘‘(A) the cancellation ceiling amounts planned 
for each program year in the proposed multiyear pro-
curement contract, together with the reasons for the 
amounts planned; 
‘‘(B) the extent to which costs of contract can-
cellation are not included in the budget for the con-
tract; and 
‘‘(C) a financial risk assessment of not including 
budgeting for costs of contract cancellation, including 
proposed funding sources to meet such cancellation 
costs if the contract is canceled.’’ 
SEC. 805. INCREASED THRESHOLD FOR REQUIRING CON-
TRACTORS 
TO 
PROVIDE 
SPECIFIED 
EM-
PLOYEE 
INFORMATION 
TO 
COOPERATIVE 
AGREEMENT HOLDERS. 
Section 2416(d) of title 10, United States Code, is 
amended 
by 
striking 
‘‘$500,000’’ 
and 
inserting 
‘‘$1,000,000’’. 
SEC. 806. EXTENSION OF AUTHORITY FOR USE OF SIM-
PLIFIED ACQUISITION PROCEDURES. 
Section 4202(e) of the Clinger-Cohen Act (division D 
of Public Law 104–106; 110 Stat. 652; 10 U.S.C. 2304
315 
note) is amended by striking ‘‘January 1, 2006’’ and insert-
ing ‘‘October 1, 2009’’. 
SEC. 807. AUTHORITY TO ADJUST ACQUISITION-RELATED 
DOLLAR THRESHOLDS FOR INFLATION. 
(a) INFLATION ADJUSTMENT AUTHORITY.—The FAR 
Council and the heads of executive agencies may adjust the 
dollar thresholds in procurement laws in order to maintain 
the constant dollar value of the threshold, taking into ac-
count the effect of inflation on the threshold. 
(b) LIMITATION ON EXERCISE OF AUTHORITY.—Ad-
justments of dollar thresholds under subsection (a) may be 
carried out— 
(1) by the FAR Council only with respect to pro-
curement laws that apply to executive agencies gen-
erally; and 
(2) by the head of an executive agency only with 
respect to procurement laws that apply to that agency 
exclusively. 
(c) ADDITIONAL REQUIREMENTS.—In adjusting a 
threshold under subsection (a), the FAR Council and the 
head of an agency shall— 
(2) consult with the Director of the Office of 
Management and Budget; 
(3) round the threshold, to facilitate implementa-
tion; and
316 
(4) publish the adjusted threshold in the Federal 
Register. 
(d) EXCLUSIONS.—This section does not apply to— 
(1) dollar thresholds in sections 3141 through 
3144, 3146, and 3147 of title 40, United States Code; 
(2) dollar thresholds in the Service Contract Act 
of 1965 (41 U.S.C. 351, et seq.); or 
(3) dollar thresholds established by the United 
States Trade Representative pursuant to title III of 
the Trade Agreements Act of 1979 (19 U.S.C. 2511 et 
seq.). 
(e) DEFINITIONS.—In this section: 
(1) The term ‘‘procurement law’’ means any pro-
vision of law that sets forth policies, procedures, re-
quirements, or restrictions for the procurement of 
property or services by the Federal Government. 
(2) The terms ‘‘executive agency’’ and ‘‘procure-
ment’’ have the meanings provided by section 4(1) of 
the Office of Federal Procurement Policy Act (41 
U.S.C. 403(1)) 
(3) The term ‘‘FAR Council’’ means the Federal 
Acquisition Regulatory Council established under sec-
tion 25 of the Office of Federal Procurement Policy 
Act (41 U.S.C. 421)).
317 
Subtitle B—United States Defense 
Industrial Base Provisions 
SEC. 811. DEFENSE TRADE RECIPROCITY. 
(a) IN GENERAL.—Chapter 148 of title 10, United 
States Code, is amended by inserting after section 2532 the 
following new section: 
‘‘§ 2532a. Defense trade reciprocity 
‘‘(a) POLICY.—(1) It is the policy of Congress that pro-
curement regulations used in the conduct of trade in defense 
articles and defense services shall be based on the principle 
of fair trade and reciprocity consistent with United States 
national security, including the need to ensure comprehen-
sive manufacturing capability in the United States defense 
industrial base for military system essential items. 
‘‘(2) The Secretary of Defense shall make every effort 
to ensure that the policies and practices of the Department 
of Defense reflect the goal of establishing an equitable trad-
ing relationship between the United States and its foreign 
defense trade partners, including ensuring that United 
States firms and United States employment in the defense 
sector are not disadvantaged by unilateral procurement 
practices by foreign governments, such as the imposition of 
offset agreements or similar requirements in defense pro-
curements by those governments. In pursuing this goal, the 
Secretary shall—
318 
‘‘(A) develop a comprehensive defense acquisition 
trade policy that provides the necessary guidance and 
incentives for the elimination of offset agreements as 
an accepted practice in defense trade; and 
‘‘(B) review and make necessary modifications to 
existing acquisition policies and strategies, and re-
view and seek to make necessary modifications to ex-
isting memoranda of understanding, cooperative 
project agreements, or related agreements with foreign 
defense trade partners, to reflect this goal. 
‘‘(b) REQUIREMENT.—The Secretary of Defense may 
not enter into a contract, or approve or permit any sub-
contract under a contract entered into by the Department 
of Defense, for the procurement of any defense article or 
defense service from a foreign firm unless the country in 
which the foreign firm performs substantially all of its 
manufacturing, production, and research and development 
activities in the performance of the contract (or sub-
contract) agrees to apply offset agreements to the procure-
ment of defense articles and defense services from the United 
States firms in the same manner and to the same degree 
as such agreements are applied by the Department of De-
fense to the procurement of defense articles and defense serv-
ices from that country.
319 
‘‘(c) EXCEPTION.—Subsection (b) does not apply to a 
contract or subcontract for the procurement of a defense ar-
ticle or defense service from a foreign firm if the Secretary 
of Defense determines in writing, with respect to the specific 
contract or subcontract, that an exception to subsection (b) 
is necessary for the Department to be able to meet national 
security objectives. 
‘‘(d) NOTIFICATION REQUIRED WHEN EXCEPTION AP-
PLIED.—The Secretary of Defense may not apply an excep-
tion under subsection (c) until— 
‘‘(1) a notification of the intent to apply such ex-
ception is submitted to the congressional defense com-
mittees and published in the Federal Register; and 
‘‘(2) a period of 30 days has expired after the 
date on which such notification is so submitted and 
published. 
‘‘(e) AUTHORITY TO APPLY EXCEPTION NOT DELE-
GABLE.—The authority of the Secretary to apply the excep-
tion under subsection (c) may not be delegated to any officer 
or employee in a position at a level lower than the position 
of the Under Secretary of Defense for Acquisition, Tech-
nology, and Logistics. 
‘‘(f) REGULATIONS.—The Secretary shall prescribe reg-
ulations to implement this section in the Department of De-
fense supplement to the Federal Acquisition Regulation.
320 
‘‘(g) EFFECTIVE DATE.—This section and the regula-
tions prescribed under this section shall apply to contracts 
and subcontracts entered into on and after the date occur-
ring one year after the date of the enactment of this Act. 
‘‘(h) DEFINITIONS.—In this section: 
‘‘(1) The term ‘foreign firm’ means a business 
entity that performs substantially all of its manufac-
turing, production, and research and development ac-
tivities outside of the United States. 
‘‘(2) The term ‘United States firm’ means a 
business entity that performs substantially all of its 
manufacturing, production, and research and develop-
ment activities in the United States. 
‘‘(3) The term ‘foreign defense trade partner’ 
means a foreign country with respect to which there 
is— 
‘‘(A) a memorandum of understanding or 
related agreement described in section 2531(a) of 
title 10, United States Code; or 
‘‘(B) a cooperative project agreement de-
scribed in section 27 of the Arms Export Control 
Act (22 U.S.C. 2767). 
‘‘(4) The term ‘offset agreement’ has the meaning 
provided that term by section 36(e) of the Arms Ex-
port Control Act (22 U.S.C. 2776(e)).
321 
‘‘(5) The terms ‘defense article’ and ‘defense serv-
ice’ have the meanings provided those terms by section 
47(7) of the Arms Export Control Act (22 U.S.C. 
2794(7)). 
‘‘(6) The term ‘military system essential item’ 
means an item on the military system essential item 
breakout list produced pursuant to section 813(b) of 
the National Defense Authorization Act for Fiscal 
Year 2004 (P.L. 108–136; 117 Stat. 1544).’’. 
(b) CLERICAL AMENDMENT.—The table of sections at 
the beginning of such chapter is amended by adding at the 
end the following new item: 
‘‘2532a. Defense trade reciprocity.’’. 
SEC. 812. AMENDMENTS TO DOMESTIC SOURCE REQUIRE-
MENTS. 
(a) NOTICE.—Section 2533a of title 10, United States 
Code, is amended by adding at the end the following new 
subsection: 
‘‘(k) NOTIFICATION REQUIRED WHEN CERTAIN EX-
CEPTIONS APPLIED.—(1) Funds appropriated or otherwise 
available to the Department of Defense may not be used 
to enter into a contract to procure an item described in 
subsection (b) pursuant to an exception set forth in sub-
section (c) or (e) until— 
‘‘(A) a notification of the intent to apply such 
exception is submitted to Congress and posted on the
322 
website maintained by the General Services Adminis-
tration known as FedBizOpps.gov (or any successor 
site); and 
‘‘(B) a period of 15 days has expired after the 
date on which such notification is so submitted and 
published. 
‘‘(2) In any case in which the Secretary of Defense 
or the Secretary of the military department concerned in-
tends to apply or applies the exception set forth in sub-
section (d)(1), the Secretary concerned shall submit to Con-
gress a notification of such intent or such application dur-
ing the period beginning six months before the date of appli-
cation of such exception and ending six months after the 
date of application of such exception.’’. 
(b) CLOTHING MATERIALS AND COMPONENTS COV-
ERED.—Subsection (b) of section 2533a of title 10, United 
States Code, is amended in paragraph (1)(B) by inserting 
before the semicolon the following: ‘‘and the materials and 
components thereof, other than sensors, electronics, or other 
items added to, and not normally associated with, clothing 
(and the materials and components thereof)’’.
323 
SEC. 813. THREE-YEAR EXTENSION OF RESTRICTION ON AC-
QUISITION OF POLYACRYLONITRILE (PAN) 
CARBON FIBER FROM FOREIGN SOURCES. 
The Secretary of Defense shall delay by three years the 
phase-out 
of 
the 
restriction 
on 
acquisition 
of 
polyacrylonitrile (PAN) carbon fiber from foreign sources 
(described in subpart 225.7103 of the Department of De-
fense supplement to the Federal Acquisition Regulation). In 
implementing such delay, the Secretary shall revise the 
appplicable regulations to ensure that such restriction ap-
plies to— 
(1) solicitations and contracts issued on or before 
May 31, 2006, for major systems that are not yet in 
production; and 
(2) solicitations and contracts issued during the 
period beginning June 1, 2006, and ending May 31, 
2008, for major systems that are not yet in engineer-
ing and manufacturing development. 
SEC. 814. GRANT PROGRAM FOR DEFENSE CONTRACTORS 
TO 
IMPLEMENT 
STRATEGIES 
TO 
AVOID 
OUTSOURCING OF JOBS. 
(a) GRANT PROGRAM AUTHORIZED.—The Secretary of 
Defense may make grants under this section for fiscal year 
2005 to qualified defense contractor groups for the purposes 
described in subsection (b).
324 
(b) GRANT PURPOSES.—A grant may be made under 
this section for the purpose of implementing a strategy to 
avoid the outsourcing of jobs by a defense contractor, includ-
ing the following strategies: 
(1) Cost-cutting measures. 
(2) Retraining programs. 
(3) Technology development. 
(4) Plant upgrades. 
(c) APPLICATION.—A grant may not be awarded under 
this section unless an application is submitted to, and ap-
proved by, the Secretary. Such an application— 
(1) shall be submitted by a qualified defense con-
tractor group in such form and manner as the Sec-
retary may require; and 
(2) shall contain— 
(A) a description of the strategy proposed 
for avoiding the outsourcing of at least 10 jobs 
in the performance of a defense contract by the 
defense contractor concerned; and 
(B) such other information as the Secretary 
may require. 
(d) DEFINITIONS.—In this section: 
(1) The term ‘‘qualified defense contractor 
group’’, with respect to a defense contractor, is a 
group or person representing—
325 
(A) management of the contractor; 
(B) a labor organization that represents em-
ployees of the contractor; or 
(C) employees of the contractor. 
(2) The term ‘‘outsourcing’’, with respect to a de-
fense contract, includes the performance outside the 
United States of work under the contract. 
(e) FEDERAL SHARE.—The Federal share of the costs 
of the strategy carried out with a grant under this section 
may not exceed 50 percent. 
(f) USE
OF DEFENSE INDUSTRIAL CAPABILITIES 
FUND FOR GRANTS.—(1) Notwithstanding section 814(c) of 
the National Defense Authorization Act for Fiscal Year 
2004 (P.L. 108–136; 117 Stat. 1545), amounts in the De-
fense Industrial Base Capabilities Fund may be used for 
grants under this section. 
(2) For fiscal year 2005, up to $50,000,000 of amounts 
available in such Fund may be used to carry out this sec-
tion. 
(g) AUTHORIZATION OF FUNDS.—There are authorized 
to be appropriated to the Defense Industrial Base Capabili-
ties Fund $50,000,000 for purposes of providing grants 
under this section.
326 
SEC. 815. PREFERENCE FOR DOMESTIC FREIGHT FOR-
WARDING SERVICES. 
(a) PREFERENCE.—In the procurement of transpor-
tation services described in subsection (b), the Secretary of 
Defense shall give preference to any freight forwarder 
that— 
(1) certifies to the Department of Defense that it 
is owned and controlled by citizens of the United 
States; and 
(2) offers services at fair and reasonable rates. 
(b) SERVICES COVERED.—Subsection (a) applies to 
transportation services to, from, or within Iraq or Afghani-
stan, and warehousing, logistics, or other similar services 
performed within Iraq or Afghanistan. 
Subtitle C—Other Acquisition 
Matters 
SEC. 821. SUSTAINMENT AND MODERNIZATION PLANS FOR 
EXISTING SYSTEMS WHILE REPLACEMENT 
SYSTEMS ARE UNDER DEVELOPMENT. 
(a) EXISTING SYSTEMS TO BE MAINTAINED WHILE 
REPLACEMENT SYSTEMS ARE UNDER DEVELOPMENT.—(1) 
Chapter 144 of title 10, United States Code, is amended 
by inserting after section 2436 the following new section:
327 
‘‘§ 2437. Development of major defense acquisition 
programs: sustainment and moderniza-
tion of system to be replaced 
‘‘(a) REQUIREMENT FOR SUSTAINING AND MODERN-
IZING EXISTING FORCES.—(1) The Secretary of Defense 
shall require that, whenever a new major defense acquisi-
tion program begins development, the defense acquisition 
authority responsible for that program shall develop a plan 
(to be known as a sustainment and modernization plan) 
for the existing system that the system under development 
is intended to replace. Any such sustainment and mod-
ernization plan shall provide for budgeting, sustaining, and 
modernizing the existing system until the replacement sys-
tem to be developed under the major defense acquisition pro-
gram is fielded and assumes the majority responsibility for 
the mission of the existing system. This section does not 
apply to a major defense acquisition that reaches initial 
operational capability before October 1, 2008. 
‘‘(2) In this section, the term ‘‘defense acquisition au-
thority’’ means the Secretary of a military department or 
the commander of the United States Special Operations 
Command. 
‘‘(b) SUSTAINMENT AND MODERNIZATION PLAN.—The 
Secretary of Defense shall require that each sustainment 
and modernization plan under this section include, at a 
minimum, the following:
328 
‘‘(1) The milestone schedule for the development 
of the major defense acquisition program, including 
low-rate initial production, initial operational capa-
bility, full-rate production, full operational capa-
bility, and the date when the replacement system as-
sumes the majority responsibility for the mission of 
the existing system. 
‘‘(2) An analysis of the existing system to deter-
mine the following: 
‘‘(A) A sustainment plan and budget re-
quirements necessary to provide service life ex-
tension to the existing system at acceptable reli-
ability and availability rates. 
‘‘(B) A modernization plan and budget re-
quirements necessary to maintain mission capa-
bility against the relevant threats. 
‘‘(C) A modernization plan and budget re-
quirements necessary— 
‘‘(i) to transfer mature technologies 
from the new system or other systems so 
that the mission capability of the existing 
system is enhanced against relevant threats; 
and 
‘‘(ii) to provide interoperability with 
the new system during the period from ini-
329 
tial fielding until the new system assumes 
the majority of responsibility for the mis-
sion of the existing system. 
‘‘(c) ANNUAL REVIEW.—Each fiscal year, before the 
submission to Congress of the President’s budget for the next 
fiscal year, the Secretary of Defense shall review the sched-
ule performance of each replacement major defense acquisi-
tion program for which a sustainment and modernization 
plan has been developed under this section to compare that 
performance with the schedule set forth under subsection 
(b)(1). If the schedule for the program has changed, then 
the Secretary shall notify the congressional defense commit-
tees of such change. 
‘‘(d) EXCEPTIONS.—Subsection (a) shall not apply to 
a major defense acquisition program if the Secretary of De-
fense determines that— 
‘‘(1) the existing system is no longer relevant to 
the mission; 
‘‘(2) the mission has been eliminated; 
‘‘(3) the mission has been consolidated with an-
other mission in such a manner that another existing 
system can adequately meet the mission requirements; 
or 
‘‘(4) the duration of time until the new system 
assumes the majority of responsibility for the existing