To improve benefits for members of the Armed Forces and veterans and for their dependents and survivors.

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Salute to Veterans 
and the Armed Forces Act of 2003''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Full payment of both retired pay and compensation to disabled 
                            military retirees.
Sec. 3. Repeal of dependency and indemnity compensation offset from 
                            survivor benefit plan surviving spouse 
                            annuities.
Sec. 4. Increase in amount of basic educational assistance for members 
                            of the Selected Reserve.
Sec. 5. Application of index based on costs of higher learning.
Sec. 6. One-time bonus for certain service in connection with Operation 
                            Iraqi Freedom or Operation Enduring 
                            Freedom.
Sec. 7. Authorization of additional funding for veterans medical care.
Sec. 8. Interim payments under certain veterans claims when decision is 
                            delayed following remand for expedited 
                            consideration.
Sec. 9. Prohibition on increases in medication copayment for veterans 
                            and imposition of healthcare enrollment fee 
                            for veterans.
Sec. 10. Information for separating servicemembers on veterans benefits 
                            information.
Sec. 11. Veterans outreach programs.
Sec. 12. Retention of 38.6 percent top individual income tax rate.

SEC. 2. FULL PAYMENT OF BOTH RETIRED PAY AND COMPENSATION TO DISABLED 
              MILITARY RETIREES.

    (a) Restoration of Full Retired Pay Benefits.--Section 1414 of 
title 10, United States Code, is amended to read as follows:
``Sec. 1414. Members eligible for retired pay who have service-
              connected disabilities: payment of retired pay and 
              veterans' disability compensation
    ``(a) Payment of Both Retired Pay and Compensation.--Except as 
provided in subsection (b), a member or former member of the uniformed 
services who is entitled to retired pay (other than as specified in 
subsection (c)) and who is also entitled to veterans' disability 
compensation is entitled to be paid both without regard to sections 
5304 and 5305 of title 38.
    ``(b) Special Rule for Chapter 61 Career Retirees.--The retired pay 
of a member retired under chapter 61 of this title with 20 years or 
more of service otherwise creditable under section 1405 of this title 
at the time of the member's retirement is subject to reduction under 
sections 5304 and 5305 of title 38, but only to the extent that the 
amount of the member's retired pay under chapter 61 of this title 
exceeds the amount of retired pay to which the member would have been 
entitled under any other provision of law based upon the member's 
service in the uniformed services if the member had not been retired 
under chapter 61 of this title.
    ``(c) Exception.--Subsection (a) does not apply to a member retired 
under chapter 61 of this title with less than 20 years of service 
otherwise creditable under section 1405 of this title at the time of 
the member's retirement.
    ``(d) Definitions.--In this section:
            ``(1) The term `retired pay' includes retainer pay, 
        emergency officers retirement pay, and naval pension.
            ``(2) The term `veterans' disability compensation' has the 
        meaning given the term `compensation' in section 101(13) of 
        title 38.''.
    (b) Repeal of Special Compensation Programs.--Sections 1413 and 
1413a of such title are repealed.
    (c) Clerical Amendment.--The table of sections at the beginning of 
such chapter is amended by striking the items relating to sections 
1413, 1413a, and 1414 and inserting the following:

``1414. Members eligible for retired pay who have service-connected 
                            disabilities: payment of retired pay and 
                            veterans' disability compensation.''.
    (d) Effective Date.--The amendments made by this section shall take 
effect on--
            (1) the first day of the first month that begins after the 
        date of the enactment of this Act; or
            (2) the first day of the fiscal year that begins in the 
        calendar year in which this Act is enacted, if later than the 
        date specified in paragraph (1).
    (e) Retroactive Benefits.--No benefits may be paid to any person by 
reason of section 1414 of title 10, United States Code, as amended by 
subsection (a), for any period before the effective date specified in 
subsection (a).

SEC. 3. REPEAL OF DEPENDENCY AND INDEMNITY COMPENSATION OFFSET FROM 
              SURVIVOR BENEFIT PLAN SURVIVING SPOUSE ANNUITIES.

    (a) Repeal.--Subsections (c), (e), and (k) of section 1450 of title 
10, United States Code, and subsection (c)(2) of section 1451 of such 
title are repealed.
    (b) Effective Date.--The amendments made by subsection (a)--
            (1) shall take effect on the later of October 1, 2003, or 
        the date of the enactment of this Act; and
            (2) shall apply with respect to payment of annuities under 
        subchapter II of chapter 73 of title 10, United States Code, 
        for months beginning on or after that date.
    (c) Recoupment of Certain Amounts Previously Refunded to SBP 
Recipients.--(1) A surviving spouse who is in receipt of an SBP annuity 
that is in effect before the date specified in subsection (b) and that 
is adjusted by reason of the amendments made by subsection (a) and who 
had previously received an SBP retired pay refund shall repay an amount 
determined under paragraph (2). Any such repayment shall be made in the 
same manner as a repayment under subsection (k)(2) of section 1450 of 
title 10, United States Code, as in effect on the day before the date 
of the enactment of this Act.
    (2) The amount of a repayment under paragraph (1) shall be the 
amount that bears the same ratio to the amount of that refund as the 
surviving spouse's life expectancy (determined in accordance with 
standard actuarial practices) bears to the anticipated total duration 
of the annuity (determined as the sum of such life expectancy and the 
duration of the annuity already received).
    (3) In this subsection:
            (A) The term ``SBP annuity'' means an annuity under the 
        program established under subchapter II of chapter 73 of title 
        10, United States Code.
            (B) The term ``SBP retired pay refund'' means a refund 
        under subsection (e) of section 1450 of title 10, United States 
        Code, as in effect before the date specified in subsection (b).

SEC. 4. INCREASE IN AMOUNT OF BASIC EDUCATIONAL ASSISTANCE FOR MEMBERS 
              OF THE SELECTED RESERVE.

    (a) In General.--(1) Paragraph (1) of section 16131(b) of title 10, 
United States Code, is amended--
            (A) in subparagraph (A), by striking ``$251'' and inserting 
        ``$600'';
            (B) in subparagraph (B), by striking ``$188'' and inserting 
        ``$450''; and
            (C) in subparagraph (C), by striking ``$125'' and inserting 
        ``$300''.
    (2) The amendments made by paragraph (1) shall take effect on 
October 1, 2004, and shall apply with respect to educational assistance 
allowances under section 16131(b)(1) of such title paid for months 
after September 2004.
    (3) In the case of an educational assistance allowance under such 
section paid for months occurring during fiscal year 2004--
            (A) subparagraph (A) of such section shall be applied by 
        substituting ``$475'' for ``$251'';
            (B) subparagraph (B) of such section shall be applied by 
        substituting ``$325'' for ``$188''; and
            (C) subparagraph (C) of such section shall be applied by 
        substituting ``$215'' for ``$125''.
    (b) No Adjustment for Fiscal Years 2004 and 2005.--Section 
16131(b)(2) of such title shall not apply to rates of basic educational 
assistance paid under such section during fiscal years 2004 and 2005.

SEC. 5. APPLICATION OF INDEX BASED ON COSTS OF HIGHER LEARNING.

    (a) In General.--Section 16131(b)(2) of title 10, United States 
Code, is amended to read as follows:
    ``(2)(A) With respect to any fiscal year beginning on or after 
October 1, 2005, the Secretary shall provide a percentage increase 
(rounded to the nearest dollar) in the rates payable under paragraph 
(1) equal to the percentage (as determined by the Secretary) by which--
            ``(i) the average monthly costs of tuition and expenses for 
        commuter students at public institutions of higher learning 
        that award baccalaureate degrees for purposes of paragraph (1) 
        for the fiscal year involved, exceeds
            ``(ii) such average monthly costs for the preceding fiscal 
        year.
    ``(B) The Secretary shall make the determination under subparagraph 
(A) after consultation with the Secretary of Education.
    ``(C) A determination made under subparagraph (A) in a year shall 
take effect on October 1 of that year and apply with respect to basic 
educational assistance allowances payable under this section for the 
fiscal year beginning in that year.
    ``(D) Not later than September 30 each year, the Secretary shall 
publish in the Federal Register the average monthly costs of tuition 
and expenses as determined under subparagraph (A) in that year.''.
    (b) Conforming Amendment.--(1) Section 3015(h) of title 38, United 
States Code, is amended by striking ``by which--'' and all that follows 
and inserting ``determined by the Secretary under section 16131(b)(2) 
of title 10 for the fiscal year involved.''.
    (2) The amendment made by paragraph (1) shall apply to fiscal years 
beginning on or after October 1, 2005.

SEC. 6. ONE-TIME BONUS FOR CERTAIN SERVICE IN CONNECTION WITH OPERATION 
              IRAQI FREEDOM OR OPERATION ENDURING FREEDOM.

    (a) Army, Navy, Air Force, and Marine Corps.--The Secretary of 
Defense shall provide for the payment of a bonus under this section to 
each member of the Army, Navy, Air Force, or Marine Corps who, at any 
time during the service of the member in connection with Operation 
Iraqi Freedom or Operation Enduring Freedom, satisfied or satisfies the 
eligibility criteria for receipt of special pay under section 310 of 
title 37, United States Code, for duty subject to hostile fire or 
imminent danger.
    (b) Coast Guard.--The Secretary of Homeland Security shall provide 
for the payment of a bonus under this section to each member of the 
Coast Guard who, at any time during the service of the member in 
connection with Operation Iraqi Freedom or Operation Enduring Freedom, 
satisfied or satisfies the eligibility criteria for receipt of special 
pay under such section.
    (c) Amount of Bonus.--The amount of the bonus paid under this 
section shall be equal to $1,000.
    (d) Entitlement Limited to Single Bonus Payment.--A member may not 
receive more than one bonus under the authority of this section.

SEC. 7. AUTHORIZATION OF ADDITIONAL FUNDING FOR VETERANS MEDICAL CARE.

    (a) Authorization.--There are authorized to be appropriated to the 
Department of Veterans Affairs, in addition to amounts otherwise 
authorized to be appropriated, the amount of $1,000,000,000 for each of 
fiscal years 2004 through 2013.
    (b) Improved Access to Care.--Amounts appropriated pursuant to the 
authorization of appropriations in subsection (a) shall be used to 
ensure that veterans seeking healthcare from the Department of Veterans 
Affairs receive their initial appointment for healthcare for a date 
that is not later than 30 days after the date on which the request is 
made.

SEC. 8. INTERIM PAYMENTS UNDER CERTAIN VETERANS CLAIMS WHEN DECISION IS 
              DELAYED FOLLOWING REMAND FOR EXPEDITED CONSIDERATION.

    (a) In General.--(1) Chapter 53 of title 38, United States Code, is 
amended by adding at the end the following new section:
``Sec. 5320. Interim benefits under certain remanded cases
    ``(a) Interim Benefits.--When a claim for benefits under the 
jurisdiction of the Secretary is remanded by the United States Court of 
Appeals for Veterans Claims or by the Board for Veterans' Appeals in a 
case to which section 302 of Public Law 103-446 (38 U.S.C. 5101 note) 
applies, if the Secretary does not make a decision on the matter within 
180 days of the date of the remand decision, then until such matter is 
finally decided, the Secretary shall pay an interim benefit in the 
amount of $500 per month to each claimant under the claim. Such 
payments shall commence as of the first month beginning after the end 
of such 180-day period.
    ``(b) Effect on Interim Benefit Payments of Final Decision on 
Claim.--When a claim with respect to which interim benefits are being 
paid under subsection (b) is finally decided--
            ``(1) if the final decision is to award benefits, the 
        amounts paid as interim benefits shall be considered to be an 
        advance payment of benefits owed for any period before the date 
        of such final decision (except that if the total amount of 
        interim benefits paid is greater than the amount of retroactive 
        benefits, the amount of the difference shall not be considered 
        to be an overpayment for any purpose); and
            ``(2) if the final decision is not to award benefits, the 
        amounts paid as interim benefits shall not be considered to be 
        an overpayment for any purpose.''.
    (2) The table of sections at the beginning of such chapter is 
amended by adding at the end the following new item:

``5320. Interim benefits under certain remanded cases.''.
    (b) Effective Date.--Section 5320 of title 38, United States Code, 
as added by subsection (a), shall apply with respect to any decision 
remanded by the Court of Appeals for Veterans Claims or the Board of 
Veterans' Appeals on or after the date of the enactment of this Act.
    (c) Report.--Not later than six months after the date of the 
enactment of this Act, the Secretary of Veterans Affairs shall submit 
to Congress a report on measures the Secretary intends to take to 
expedite the processing of remanded claims for veterans benefits.

SEC. 9. PROHIBITION ON INCREASES IN MEDICATION COPAYMENT FOR VETERANS 
              AND IMPOSITION OF HEALTHCARE ENROLLMENT FEE FOR VETERANS.

    (a) Medication Copayments.--During the period beginning on the date 
of the enactment of this Act and ending on October 1, 2004, the 
Secretary of Veterans Affairs may not implement under subsection (b) of 
section 1722A of title 38, United States Code, an increase in the 
copayment for medications required under subsection (a) of that 
section.
    (b) Enrollment Fee.--During the period beginning on the date of the 
enactment of this Act and ending on October 1, 2004, the Secretary of 
Veterans Affairs may not implement an enrollment fee for veterans 
enrolling (or renewing enrollment) in the Department of Veterans 
Affairs healthcare system under section 1705 of such title.

SEC. 10. INFORMATION FOR SEPARATING SERVICEMEMBERS ON VETERANS BENEFITS 
              INFORMATION.

    (a) Information on Final Pay Stub.--Section 1142 of title 10, 
United States Code, is amended by adding at the end the following new 
subsection:
    ``(d) Information on Access to Veterans Benefits.--The Secretary 
concerned shall include on the final statement of pay and allowances 
provided to a member who is separating from active duty or an active 
status information on how to contact the Department of Veterans Affairs 
for information concerning veterans benefits and the Department of 
Labor for information concerning employment opportunities.''.
    (b) Effective Date.--Subsection (d) of section 1142 of title 10, 
United States Code, as added by subsection (a), shall apply with 
respect to persons separating from active duty or an active status in 
the Armed Forces after the end of the 60-day period beginning on the 
date of the enactment of this Act.

SEC. 11. VETERANS OUTREACH PROGRAMS.

    (a) Information on Veterans Benefits.--Section 7722(c) of title 38, 
United States Code, is amended by adding at the end the following new 
paragraphs:
    ``(3) Information provided under this subsection shall include 
information on how to apply for benefits for which the veteran or 
dependent may be eligible, including information about assistance 
available under subsection (d).
    ``(4) In the case of veterans or dependents who are members of 
distinct beneficiary populations (such as survivors of veterans), the 
Secretary shall ensure that information provided under this subsection 
includes specific information about benefits relating to that 
population.''.
    (b) Annual Outreach Plan.--(1) Chapter 77 of such title is amended 
by inserting at the end of subchapter II the following new section:
``Sec. 7728. Annual outreach plan
    ``(a) The Secretary shall prepare an annual plan for the conduct of 
outreach activities under this subchapter. The Secretary shall include 
in the annual plan--
            ``(1) efforts to identify veterans who are not otherwise 
        enrolled or registered with the Department for benefits or 
        services under programs administered by the Secretary; and
            ``(2) provisions for informing veterans and dependents of 
        any changes in benefit programs or health care eligibility.
    ``(b) In developing the annual plan, the Secretary shall consult 
with the following:
            ``(1) Directors or other responsible officials of veterans 
        service organizations.
            ``(2) Directors or other responsible officials of local 
        education and training programs.
            ``(3) Representatives of veterans outreach programs.
            ``(4) Local veterans employment representatives.
            ``(5) Business and professional organizations.
            ``(6) Other appropriate individuals or organizations that 
        could assist veterans in adjusting to a self-sufficient 
        civilian life.
    ``(c) The annual report required by section 7726 of this title 
shall include specific information concerning the effectiveness of the 
outreach plan developed pursuant to this section.''.
    (2) The table of sections at the beginning of such chapter is 
amended by inserting after the item relating to section 7727 the 
following new item:

``7728. Annual outreach plan.''.

SEC. 12. RETENTION OF 38.6 PERCENT TOP INDIVIDUAL INCOME TAX RATE.

    (a) In General.--The table contained in section 1(i)(2) of the 
Internal Revenue Code of 1986, as amended by the Jobs and Growth Tax 
Relief Reconciliation Act of 2003, is amended by striking ``35.0%'' and 
inserting ``38.6%''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2002.

Summary: Salute to Veterans and the Armed Forces Act of 2003 - Allows the full payment of military retired pay and veterans' disability compensation, without deduction from either (current law), without the enactment of qualifying offsetting legislation.

Repeals: (1) special compensation programs for certain severely disabled and combat-disabled military retirees; and (2) provisions requiring a dependency and indemnity compensation offset from surviving spouse annuities under the Survivor Benefit Plan.

Increases the amount of basic educational assistance for members of the Selected Reserve.

Directs the Secretary of Defense, for fiscal years after 2005, to provide a percentage increase in the higher learning cost index for determining basic educational assistance amounts.

Directs the Secretary to pay a bonus to members who, at any time during service under Operations Iraqi Freedom or Enduring Freedom, satisfied eligibility requirements for the receipt of special pay for duty subject to hostile fire or imminent danger. Directs the Secretary of Homeland to provide such bonus to qualifying Coast Guard members.

Authorizes additional appropriations for veterans' improved access to medical care.

Directs the Secretary of Veterans Affairs to make interim payments under claims for veterans' benefits when the final decision regarding the payment of such benefits is delayed following remand by the U.S. Court of Appeals for Veterans Claims or the Board for Veterans' Appeals to the Secretary for expedited consideration.

Prohibits with respect to veterans: (1) increases in medication copayments; and (2) the imposition of health care enrollment fees.

Requires the: (1) Secretaries of Veterans Affairs and Labor to provide appropriate information concerning veterans' benefits and employment opportunities; and (2) Secretary of Veterans Affairs to prepare an annual plan for the conduct of veterans' outreach activities.

Amends the Internal Revenue Code to place the maximum individual income tax rate at 38.6 percent.