A bill to amend title 38, United States Code, to permit the transfer to spouses and children of a portion of the entitlement of certain members of the Armed Forces to educational assistance under the Montgomery GI Bill, and for other purposes.

SECTION 1. TRANSFER BY CERTAIN MEMBERS OF THE ARMED FORCES OF PORTION 
              OF ENTITLEMENT TO EDUCATIONAL ASSISTANCE UNDER THE 
              MONTGOMERY GI BILL.

    (a) In General.--Chapter 30 of title 38, United States Code, is 
amended--
            (1) by redesignating section 3020 as section 3020A; and
            (2) by inserting after section 3019 the following new 
        section 3020:
``Sec. 3020. Transfer of entitlement to basic educational assistance: 
              certain members of the Armed Forces agreeing to 
              additional service
    ``(a) In General.--Subject to the provisions of this section, an 
individual described in subsection (b) who is entitled to basic 
educational assistance under this subchapter may transfer to one or 
more of the dependents specified in subsection (c) a portion of such 
individual's entitlement to such assistance, subject to the limitation 
under subsection (d).
    ``(b) Eligible Individuals.--An individual referred to in 
subsection (a) is any member of the Armed Forces who--
            ``(1) has completed at least six years of service in the 
        Armed Forces; and
            ``(2) enters into an agreement to serve at least four more 
        years as a member of the Armed Forces.
    ``(c) Eligible Dependents.--An individual referred to in subsection 
(a) may transfer entitlement to basic educational assistance under this 
section as follows:
            ``(1) To the individual's spouse.
            ``(2) To one or more of the individual's children.
            ``(3) To a combination of the individuals referred to in 
        paragraphs (1) and (2).
    ``(d) Limitation on Months Transferable.--The total number of 
months of entitlement to basic educational assistance transferable by 
an individual under this section may not exceed the lesser of--
            ``(1) the number of months equal to one quarter of the 
        aggregate number of months of basic educational assistance to 
        which the individual is entitled under this subchapter (as 
        determined under section 3013 of this title); or
            ``(2) the number of months of entitlement to basic 
        educational assistance which remain unused by the individual at 
        the time of transfer under this section.
    ``(e) Designation of Transferee.--An individual transferring an 
entitlement to basic educational assistance under this section shall--
            ``(1) designate the dependent or dependents to whom such 
        entitlement is being transferred;
            ``(2) designate the number of months of such entitlement to 
        be transferred to each such dependent; and
            ``(3) specify the period for which the transfer shall be 
        effective for each dependent designated under paragraph (1).
    ``(f) Time for Transfer; Revocation and Modification.--(1) Subject 
to the time limitation for use of entitlement under section 3031 of 
this title, an individual entitled to transfer basic educational 
assistance under this subchapter may transfer such entitlement at any 
time, without regard to whether the individual is a member of the Armed 
Forces when the transfer is executed.
    ``(2)(A) An individual transferring entitlement under this section 
may modify or revoke at any time the transfer of any unused portion of 
the entitlement so transferred.
    ``(B) The modification or revocation of the transfer of entitlement 
under this paragraph shall be made by the submittal of written notice 
of the action to both the Secretary concerned and the Secretary of 
Veterans Affairs.
    ``(g) Additional Administrative Matters.--(1) The use of any 
entitlement to basic educational assistance transferred under this 
section shall be charged against the entitlement of the individual 
making the transfer at the rate of one month for each month of 
transferred entitlement that is used.
    ``(2) Except as provided under subsection (f)(2) and subject to 
paragraphs (5) and (6), a dependent to whom entitlement is transferred 
under this section is entitled to basic educational assistance under 
this subchapter in the same manner and at the same rate as the 
individual from whom the entitlement was transferred.
    ``(3) The monthly rate of educational assistance payable to a 
dependent to whom entitlement is transferred under this section shall 
be the monthly rate payable under sections 3105 and 3022 of this title 
at the time of the use of such entitlement by the dependent.
    ``(4) The death of an individual transferring an entitlement under 
this section shall not affect the use of the entitlement by the 
dependent to whom the entitlement is transferred.
    ``(5) Notwithstanding section 3031 of this title, a child to whom 
entitlement is transferred under this section may not use any 
entitlement so transferred after attaining the age of 26 years.
    ``(6) The administrative provisions of this chapter (including the 
provisions set forth in section 3034(a)(1) of this title) shall apply 
to the use of entitlement transferred under this section, except that 
the dependent to whom the entitlement is transferred shall be treated 
as the eligible veteran for purposes of such provisions.
    ``(7) The purposes for which a dependent to whom entitlement is 
transferred under this section may use such entitlement shall include 
the pursuit and completion of the requirements of a secondary school 
diploma (or equivalency certificate).
    ``(h) Overpayment.--(1) In the event of an overpayment of basic 
educational assistance with respect to a dependent to whom entitlement 
is transferred under this section, the dependent and the individual 
making the transfer shall be jointly and severally liable to the United 
States for the amount of the overpayment for purposes of section 3685 
of this title.
    ``(2) Except as provided in paragraph (3), if an individual 
transferring entitlement under this section fails to complete the 
service agreed to by the individual under subsection (b)(2) in 
accordance with the terms of the agreement of the individual under that 
subsection, the amount of any transferred entitlement under this 
section that is used by a dependent of the individual as of the date of 
such failure shall be treated as an overpayment of basic educational 
assistance under paragraph (1).
    ``(3) Paragraph (2) shall not apply in the case of an individual 
who fails to complete service agreed to by the individual--
            ``(A) by reason of the death of the individual; or
            ``(B) for a reason referred to in section 
        3011(a)(1)(A)(ii)(I) of this title.
    ``(i) Construction With Other Transfer Authority.--The authority of 
an individual to transfer entitlement to basic educational assistance 
under this section is in addition to the authority, if any, of the 
individual to transfer entitlement to basic educational assistance 
under section 3020A of this title.
    ``(j) Regulations.--The Secretary of Defense shall prescribe 
regulations for purposes of this section. Such regulations shall 
specify the manner and effect of an election to modify or revoke a 
transfer of entitlement under subsection (f)(2) and shall specify the 
manner of the applicability of the administrative provisions referred 
to in subsection (g)(6) to a dependent to whom entitlement is 
transferred under this section.
    ``(k) Secretary Concerned Defined.--Notwithstanding section 101(25) 
of this title, in this section, the term `Secretary concerned' means--
            ``(1) the Secretary of the Army with respect to matters 
        concerning the Army;
            ``(2) the Secretary of the Navy with respect to matters 
        concerning the Navy or the Marine Corps;
            ``(3) the Secretary of the Air Force with respect to 
        matters concerning the Air Force; and
            ``(4) the Secretary of Defense with respect to matters 
        concerning the Coast Guard, or the Secretary of Transportation 
        when it is not operating as a service in the Navy.''.
    (b) Source of Funds for Increased Usage.--(1) Section 3035(b)(4) of 
title 38, United States Code, is amended by inserting ``or 3020A'' 
after ``section 3020''.
    (2) Section 2006(b)(2)(D) of title 10, United States Code, is 
amended by inserting ``or 3020A'' after ``section 3020''.
    (c) Clerical Amendment.--The table of sections at the beginning of 
chapter 30 of title 38, United States Code, is amended by striking the 
item relating to section 3020 and inserting the following new items:

``3020. Transfer of entitlement to basic educational assistance: 
                            certain members of the Armed Forces 
                            agreeing to additional service.
``3020A. Transfer of entitlement to basic educational assistance: 
                            members of the Armed Forces with critical 
                            military skills.''.

Summary: Authorizes military personnel who have completed at least six years of service and who agree to serve for at least four more years to transfer a portion of their entitlement to veterans' basic educational assistance to a spouse, child, or combination of such individuals. Limits the transferable number of months of such assistance. Requires the member to designate the dependent(s) to whom such assistance is being transferred as well as the number of months being transferred. Allows such members to make, revoke, or modify such transfers at any time. Requires a pro rata repayment of transferred assistance for any of the four-year service period not successfully served by the member (with exceptions in the case of member death or release or discharge for a service-connected disability, for hardship, or for a physical or mental condition).