I 
108TH CONGRESS 
2D SESSION 
H. R. 3962
To amend title 10, United States Code, to establish a program of interest-
free loans to members of the Selected Reserve who experience financial 
hardship due to service on active duty in the Armed Forces. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 11, 2004
Mr. SHAW introduced the following bill; which was referred to the Committee 
on Armed Services 
A BILL 
To amend title 10, United States Code, to establish a pro-
gram of interest-free loans to members of the Selected 
Reserve who experience financial hardship due to service 
on active duty in the Armed Forces.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Support for Military 
Reserve Families Act of 2004’’.
SEC. 2. LOAN PROGRAM FOR MEMBERS OF THE SELECTED 
RESERVE. 
(a) IN GENERAL.—Part II of subtitle E of title 10, 
United States Code, is amended by inserting after chapter 
1215 the following new chapter: 
‘‘CHAPTER 1216—READY RESERVE 
MOBILIZATION LOAN PROGRAM
‘‘12591. Definitions. 
‘‘12592. Establishment of loan program. 
‘‘12593. Members eligible for loans. 
‘‘12594. Loan amounts. 
‘‘12595. Interest. 
‘‘12596. Payment.
‘‘§ 12591. Definitions 
‘‘In this chapter: 
‘‘(1) The term ‘eligible member’ means a mem-
ber of the Ready Reserve who has one or more de-
pendents enrolled in the Department of Defense pro-
gram Defense Enrollment Eligibility Reporting Sys-
tem (DEERS). 
‘‘(2) The term ‘covered service’ means active 
duty performed by a member of a reserve component 
under an involuntary call or order to active duty in 
support of a contingency operation. 
‘‘§ 12592. Establishment of loan program 
‘‘(a) ESTABLISHMENT.—The Secretary of Defense 
shall establish for members of the Ready Reserve (includ-
ing the Coast Guard Reserve) a loan program to be known 
as the ‘Ready Reserve Mobilization Loan Program’. 
‘‘(b) ADMINISTRATION.—The loan program shall be 
administered by the Secretary under such regulations as 
the Secretary considers appropriate for carrying out the 
program. 
‘‘(c) AGREEMENT WITH SECRETARY OF HOMELAND 
SECURITY.—The Secretary and the Secretary of Home-
land Security shall enter into an agreement with respect 
to the administration of the program for the Coast Guard 
Reserve. 
‘‘§ 12593. Members eligible for loans 
‘‘(a) IN GENERAL.—The Secretary of Defense shall 
make a loan under the program under this chapter to an 
eligible member, upon receipt of an application for such 
loan from such member, for any period during which the 
member performs covered service if, as determined by the 
Secretary—
‘‘(1) the income of the member during such 
service is less than the member’s income before 
being called or ordered to such service; and 
‘‘(2) the member incurs a financial hardship by 
reason of such service.
‘‘(b) DETERMINATION OF INCOME.—The Secretary 
shall make a determination under paragraph (1) of sub-
section (a) by comparing—
‘‘(1) the member’s regular military compensa-
tion (as defined in section 101 of title 37), stated as 
an annualized amount; with 
‘‘(2) the amount of income of the member over 
the 52 weeks preceding the beginning of such service 
derived from sources that will not be available to the 
member while performing such service. 
‘‘(c) USE OF LOAN AMOUNTS.—The Secretary shall 
take such steps as the Secretary considers necessary to 
ensure that a loan under the program is not used for in-
vestment purposes (other than deposit in a demand ac-
count). 
‘‘§ 12594. Loan amounts 
‘‘(a) AMOUNT OF LOAN.—The amount of a loan to 
an eligible member under this chapter may be in any 
amount specified by the eligible member up to $500 for 
each full month of covered service performed by the mem-
ber. 
‘‘(b) DISBURSEMENT OF LOAN AMOUNT.—The Sec-
retary of Defense shall disburse a loan under the program 
under this chapter in such manner as may be directed by 
the member taking out the loan. The Secretary shall pro-
vide means to assist the member in facilitating the making 
of the amount of such loan available for the use or benefit 
of dependents of the member. A member may designate 
in writing another person to receive the amount of a loan 
under the program, and the member may direct that such 
an amount for a person so designated be deposited with 
a bank or other financial institution to the credit of the 
designated person. 
‘‘§ 12595. Interest 
‘‘(a) INTEREST FREE PERIOD.—Except as provided 
in subsection (b)(2), a loan under this chapter for any 
month of covered service shall bear no interest for the pe-
riod beginning on the date of the loan and ending at the 
end of—
‘‘(1) five years from the end of the period of 
covered service including that month, if that period 
of covered service is a period of less than 12 con-
secutive months; and 
‘‘(2) ten years from the end of the period of 
covered service including that month, if that period 
of covered service is a period of 12 consecutive 
months or more. 
‘‘(b) 5 PERCENT INTEREST.—A loan under this 
chapter shall bear interest at the rate of 5 percent per 
year commencing to accrue—
‘‘(1) as of the date that is the end of the inter-
est-free period specified in subsection (a); or 
‘‘(2) if the service of the member in the Se-
lected Reserve ends before the date referred to in 
paragraph (1), as of the date such service in the Se-
lected Reserve ends. 
‘‘§ 12596. Payment 
‘‘(a) PERIOD OF PAYMENT.—(1) Repayment of a 
loan under this chapter shall commence when the member 
to whom the loan is made is released from the period of 
active duty that includes the covered service for which the 
loan is made. Unless the member enters into an alternative 
repayment agreement with the Secretary, the loan shall 
be repaid over the period beginning on the date of the loan 
and ending at the end of—
‘‘(1) five years, if the period of covered service 
is a period of less than 12 consecutive months; and 
‘‘(2) ten years, if that period of covered service 
is a period of 12 consecutive months or more. 
‘‘(b) METHOD OF PAYMENT.—Unless the member 
enters into an alternative repayment agreement with the 
Secretary, payment on a loan under this chapter shall be 
by deduction from the amount of basic pay or inactive-
duty pay earned by the member while in an active status 
but not on active duty (other than for training).’’.