To amend title 10, United States Code, to revise the rules relating to the court-ordered apportionment of the retired pay of members of the uniformed services to former spouses, and for other purposes.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Uniformed Services Divorce Equity 
Act of 2003''.

SEC. 2. PROPORTIONATE DIVISION OF RETIRED PAY FOR FORMER SPOUSES.

    Section 1408(c) of title 10, United States Code, is amended by 
adding at the end the following new paragraph:
    ``(5)(A) In the case of a court order issued on or after the date 
of the enactment of the Uniformed Services Divorce Equity Act of 2003 
in which the court, pursuant to paragraph (1), provides for treatment 
of the disposable retired pay of a member as property of the member and 
the member's spouse, the court (unless otherwise expressly provided for 
by a spousal agreement) shall award the spouse or former spouse a share 
of such retired pay as follows:
            ``(i) If the spouse or former spouse was married to the 
        member throughout the service of the member that is creditable 
        for computation of retired pay, a share equal to 50 percent of 
        the disposable retired pay of the member.
            ``(ii) If the spouse or former spouse was not married to 
        the member throughout the service of the member that is 
        creditable for computation of retired pay, a share equal to 
        that proportion of 50 percent of the disposable retired pay of 
        the member that is the proportion that--
                    ``(I) the number of days of the marriage of the 
                former spouse to the participant during periods of such 
                creditable service bears to the total number of days of 
                such creditable service; or
                    ``(II) in the case of a member for whom retired pay 
                is payable under chapter 1223 of this title, the number 
                of points credited under section 12733 of this title 
                for computation of the member's retired pay that 
                accrued during the period of marriage bears to the 
                total number of points credited under that section for 
                computation of the member's retired pay.
    ``(B) In subparagraph (A), the term `spousal agreement' means an 
agreement between a member and the member's spouse or former spouse 
that--
                    ``(i) is in writing, is signed by the parties, and 
                is notarized; and
                    ``(ii) has not been modified by court order.''.

SEC. 3. DURATION OF PAYMENT OF RETIRED PAY TO FORMER SPOUSES.

    (a) Limitation.--Section 1408(c) of title 10, United States Code, 
is amended by adding after paragraph (5), as added by section 2, the 
following new paragraph:
    ``(6)(A) If the period of the marriage during which time the member 
was qualifying for retired pay through military service is less than 
240 months, payments under paragraph (1) shall be made by the member to 
the former spouse for a period equal to the number of months of the 
marriage during which time the member was qualifying for retired pay 
through military service, except that, in the case of payments made 
pursuant a court order of divorce, dissolution, annulment, or legal 
separation issued after the date of the enactment of Uniformed Services 
Divorce Equity Act of 2003, such payments shall terminate upon the 
remarriage of the former spouse, if such remarriage occurs before the 
end of such period.
    ``(B) If the period of the marriage during which time the member 
was qualifying for retired pay through military service is 240 months 
or more, payments under paragraph (1) shall terminate in accordance 
with the terms of the applicable court order, but not later than the 
date of the death of the member or the date of the death of the spouse 
or former spouse to whom payments are being made, whichever occurs 
first.''.
    (b) Termination of Department of Defense Payments.--Section 
1408(d)(4) of such title is amended--
            (1) by inserting ``(A)'' after ``(4)''; and
            (2) by adding at the end the following:
    ``(B) In the case of payments from the disposable retired pay of a 
member pursuant to this section that are subject to termination by 
reason of subsection (c)(6)(A), the Secretary concerned shall terminate 
such payments--
            ``(i) upon written request of the member, if information in 
        possession of the Secretary or provided by the member is 
        sufficient for the Secretary to conclude that the provisions 
        for termination under subsection (c)(6)(A) are satisfied; or
            ``(ii) upon effective service of a court order modifying 
        the court order under which the payments to the member's spouse 
        or former spouse have been made.''.
    (c) Transition Provision.--
            (1) Marriages terminated before enactment.--With respect to 
        a court order issued before the date of the enactment of this 
        Act, if the length of the marriage before the court order 
        during which time the member was qualifying for retired pay 
        through military service was less than 240 months--
                    (A) if payments by the member to the spouse or 
                former spouse as of the date of the enactment of this 
                Act have been made for less than the number of months 
                of the marriage during which time the member was 
                qualifying for retired pay through military service, 
                payments shall continue in the amount specified in the 
                court order until such payments have been made for the 
                number of months of the marriage during which time the 
                members was qualifying for retired pay through military 
                service, but in no event shall such payments terminate 
                by reason of this paragraph sooner than the end of the 
                24-month period beginning on the date of the enactment 
                of this Act; and
                    (B) if payments by the member to the former spouse 
                as of the date of the enactment of this Act have been 
                made for a period equal to or greater than the number 
                of months of the marriage during which time the member 
                was qualifying for retired pay through military 
                service, payments shall terminate 24 months after the 
                date of the enactment of this Act, unless sooner 
                terminated under some other provision of law.
            (2) Applicability of dod termination provisions.--
        Subparagraph (B) of subsection (d)(4) of section 1408 of title 
        10, United States Code, as added by subsection (b), shall apply 
        to the provisions of paragraph (1) of this subsection in the 
        same manner as to subsection (c)(6)(A) of such section 1408, as 
        added by subsection (a).
            (3) Court order defined.--In this subsection, the term 
        ``court order'' has the meaning given that term in section 
        1408(a)(2) of title 10, United States Code.

SEC. 4. AWARD OF RETIRED PAY TO BE BASED ON RETIREE'S LENGTH OF SERVICE 
              AND PAY GRADE AT TIME OF DIVORCE.

    Section 1408(c) of title 10, United States Code, is amended by 
adding after paragraph (6), as added by section 3(a), the following new 
paragraph:
    ``(7) In the case of a member as to whom a final decree of divorce, 
dissolution, annulment, or legal separation is issued on or after the 
date of the enactment of the Uniformed Services Divorce Equity Act of 
2003 and before the date when the member begins to receive retired pay, 
the disposable retired pay of the member that a court may treat in the 
manner described in paragraph (1) shall be computed based on the pay 
grade and the length of service of the member while married to the 
spouse or former spouse that are creditable toward entitlement to basic 
pay and to retired pay as of the date of the final decree. Amounts so 
calculated shall be increased by the cumulative percentage of increases 
in retired pay between the date of the final decree and the effective 
date of the member's retirement.''.

SEC. 5. PROHIBITION ON COURT ORDERING PAYMENTS BEFORE RETIREMENT BASED 
              ON IMPUTATION OF RETIRED PAY.

    Section 1408(c)(3) of title 10, United States Code, is amended--
            (1) by inserting ``(A)'' after ``(3)''; and
            (2) by adding at the end the following:
    ``(B) After the date of the enactment of the Uniformed Services 
Divorce Equity Act of 2003, a court may not order a member to make 
payments to a spouse or former spouse before the date of the member's 
retirement based upon an imputation of a property interest in future 
retired pay.''.

SEC. 6. LIMITATION ON TIME FOR SEEKING DIVISION OF RETIRED PAY.

    (a) In General.--Section 1408(c)(4) of title 10, United States 
Code, is amended--
            (1) by inserting ``(A)'' after ``(4)''; and
            (2) by adding at the end the following new subparagraph:
    ``(B) In order to be eligible to receive payments from the 
disposable retired pay of a member in the manner described in paragraph 
(1), the member's spouse or former spouse must obtain a court order for 
the treatment of the disposable retired pay of the member as property 
of the member and the member's spouse not later than two years after 
the date of a final decree of divorce, dissolution, annulment, or legal 
separation, including a court ordered, ratified, or approved property 
settlement incident to such a decree.''.
    (b) Prospective Application.--The amendment made by subsection (a) 
shall apply with respect to final decrees of divorce, dissolution, 
annulment, or legal separation issued on or after the date of the 
enactment of this Act.
    (c) Implementation.--With respect to payments to a spouse or former 
spouse from a member's disposable retired pay pursuant to a final 
decree of divorce, dissolution, annulment, or legal separation issued 
before the date of the enactment of this Act, if more than two years 
have elapsed between the date of the final decree of divorce, 
dissolution, annulment, or legal separation and the issuance of a court 
order for the apportionment of the disposable retired pay of a member, 
a court may not order that payments of retired pay to a former spouse 
be made retroactive to the date of the final decree of divorce, 
dissolution, annulment, or legal separation.

SEC. 7. TERMINATION OF LIABILITY FOR PAYMENTS TO FORMER SPOUSES.

    Subsection 1408(d)(4)(A) of title 10, United States Code, as 
redesignated by section 3(b)(1), is amended by inserting ``and 
liability therefor'' after ``section''.

SEC. 8. PROHIBITION ON APPORTIONMENT OF DISABILITY PAY.

    (a) In General.--Subsection 1408(e)(4) of title 10, United States 
Code, is amended by adding at the end the following new subparagraph:
    ``(C) Notwithstanding any other provision of law, a court may not 
treat as part of the disposable retired pay of a member under this 
section or as part of amounts to be paid by a member pursuant to legal 
processes under section 459 of the Social Security Act (42 U.S.C. 659) 
for the purpose of alimony payments to a former spouse, amounts that--
            ``(i) are deducted from the retired pay of such member as a 
        result of a waiver of retired pay required by law in order to 
        receive disability compensation under title 38; or
            ``(ii) in the case of a member entitled to retired pay 
        under chapter 61 of this title, are equal to the amount of 
        retired pay of the member under that chapter computed using the 
        percentage of the member's disability on the date when the 
        member was retired (or the date on which the member's name was 
        placed on the temporary disability list).''.
    (b) Amendments to Social Security Act.--Section 459(h) of the 
Social Security Act (42 U.S.C. 659(h)) is amended--
            (1) in paragraph (1)(A)(ii)(V), by striking all that 
        follows ``Armed Forces'' and inserting a semicolon; and
            (2) by adding at the end the following new paragraph:
            ``(3) Limitations with respect to compensation paid to 
        veterans for service-connected disabilities.--Notwithstanding 
        any other provision of this subsection--
                    ``(A) compensation described in paragraph 
                (1)(A)(ii)(V) shall not be subject to withholding 
                pursuant to this section--
                            ``(i) for payment of alimony; or
                            ``(ii) for payment of child support if the 
                        individual is fewer than 60 days in arrears in 
                        payment of the support; and
                    ``(B) not more than 50 percent of any payment of 
                compensation described in paragraph (1)(A)(ii)(V) may 
                be withheld pursuant to this section.''.
    (c) Effective Date.--The amendments made by subsections (a) and (b) 
shall apply to court orders and legal processes issued on or after June 
25, 1981. In the case of a court order or legal process issued before 
the date of the enactment of this Act, such amendments shall apply only 
with respect to retired pay payable for months beginning on or after 
the date of the enactment of this Act.

SEC. 9. TECHNICAL CORRECTIONS.

    (a) Gender-Neutral References.--Section 1408 of title 10, United 
States Code, is amended as follows:
            (1) Subsection (c)(1) is amended by striking ``the member 
        and his spouse'' and inserting ``the member and the member's 
        spouse''.
            (2) Subsection (c)(4)(A) is amended by striking ``his'' 
        each place it appears and inserting ``the member's''.
            (3) Subsection (d)(5) is amended by striking ``the member 
        and his spouse'' and inserting ``the member and the member's 
        spouse''.
            (4) Subsection (g) is amended by striking ``his'' and 
        inserting ``the member's''.
    (b) Date of Enactment Reference.--Subsection (d)(6) of such section 
is amended by striking ``on or after the date of the enactment of this 
paragraph'' and inserting ``after August 21, 1996,''.
    (c) Subsection Caption.--The heading for subsection (e) of such 
section is amended to read as follows: ``Multiple Court Orders.--''.

Summary: Uniformed Services Divorce Equity Act of 2003 - Requires a court, in the case of the disposition of monthly retired pay upon a divorce, to award the former spouse 50 percent of such pay of a member of the uniformed services if the former spouse was married to the member throughout the member's creditable service. Reduces such amount proportionately for the reduced period of the marriage in relation to the total service period.Requires that, if the marriage period is: (1) less than 240 months, such payments shall continue for a period equal to the marriage period; and (2) 240 months or more, such payments shall continue at least until the death of the member or former spouse.Provides that for purposes of such monthly payments, the disposable retired pay of a member to whom a final divorce, disillusionment, annulment, or legal separation decree is issued before the member begins to receive such pay shall be computed based on the pay grade and length of service of the member while married. Increases such amount concurrently with retired pay increases. Prohibits a court from ordering such payments before a member's retirement based upon an imputation of a property interest in future retired pay. Requires a former spouse to obtain a court order for reapportionment of disposable military retired pay within two years of the date of the final decree.Prohibits the court from treating as part of a member's disposable retired pay amounts which: (1) have been waived from such pay in order to receive veterans' disability compensation; or (2) represent payment for service-connected disabilities.