TASK DEFINITION: In this task, you are given text for US Congressional and California state bills, your task is to generate a summary for this bill.
PROBLEM: SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Retirement Security for Life Act of 
2004''.

SEC. 2. EXCLUSION FOR LIFETIME ANNUITY PAYMENTS.

    (a) Lifetime Annuity Payments Under Annuity Contracts.--Section 
72(b) of the Internal Revenue Code of 1986 (relating to exclusion 
ratio) is amended by adding at the end the following new paragraph:
            ``(5) Exclusion for lifetime annuity payments.--
                    ``(A) In general.--In the case of lifetime annuity 
                payments received under one or more annuity contracts 
                in any taxable year, gross income shall not include 50 
                percent of the portion of lifetime annuity payments 
                otherwise includible (without regard to this paragraph) 
                in gross income under this section. For purposes of the 
                preceding sentence, the amount excludible from gross 
                income in any taxable year shall not exceed $20,000.
                    ``(B) Cost-of-living adjustment.--In the case of 
                taxable years beginning after December 31, 2005, the 
                $20,000 amount in subparagraph (A) shall be increased 
                by an amount equal to--
                            ``(i) such dollar amount, multiplied by
                            ``(ii) the cost-of-living adjustment 
                        determined under section 1(f)(3) for the 
                        calendar year in which the taxable year begins, 
                        determined by substituting `calendar year 2004' 
                        for `calendar year 1992' in subparagraph (B) 
                        thereof.
                If any amount as increased under the preceding sentence 
                is not a multiple of $500, such amount shall be rounded 
                to the next lower multiple of $500.
                    ``(C) Application of paragraph.--Subparagraph (A) 
                shall not apply to--
                            ``(i) any amount received under an eligible 
                        deferred compensation plan (as defined in 
                        section 457(b)) or under a qualified retirement 
                        plan (as defined in section 4974(c)),
                            ``(ii) any amount paid under an annuity 
                        contract that is received by the beneficiary 
                        under the contract--
                                    ``(I) after the death of the 
                                annuitant in the case of payments 
                                described in subsection 
                                (c)(5)(A)(ii)(III), unless the 
                                beneficiary is the surviving spouse of 
                                the annuitant, or
                                    ``(II) after the death of the 
                                annuitant and joint annuitant in the 
                                case of payments described in 
                                subsection (c)(5)(A)(ii)(IV), unless 
                                the beneficiary is the surviving spouse 
                                of the last to die of the annuitant and 
                                the joint annuitant, or
                            ``(iii) any annuity contract that is a 
                        qualified funding asset (as defined in section 
                        130(d)), but without regard to whether there is 
                        a qualified assignment.
                    ``(D) Investment in the contract.--For purposes of 
                this section, the investment in the contract shall be 
                determined without regard to this paragraph.''.
    (b) Definitions.--Subsection (c) of section 72 of the Internal 
Revenue Code of 1986 is amended by adding at the end the following new 
paragraph:
            ``(5) Lifetime annuity payment.--
                    ``(A) In general.--For purposes of subsection 
                (b)(5), the term `lifetime annuity payment' means any 
                amount received as an annuity under any portion of an 
                annuity contract, but only if--
                            ``(i) the only person (or persons in the 
                        case of payments described in subclause (II) or 
                        (IV) of clause (ii)) legally entitled (by 
                        operation of the contract, a trust, or other 
                        legally enforceable means) to receive such 
                        amount during the life of the annuitant or 
                        joint annuitant is such annuitant or joint 
                        annuitant, and
                            ``(ii) such amount is part of a series of 
                        substantially equal periodic payments made not 
                        less frequently than annually over--
                                    ``(I) the life of the annuitant,
                                    ``(II) the lives of the annuitant 
                                and a joint annuitant, but only if the 
                                annuitant is the spouse of the joint 
                                annuitant as of the annuity starting 
                                date or the difference in age between 
                                the annuitant and joint annuitant is 15 
                                years or less,
                                    ``(III) the life of the annuitant 
                                with a minimum period of payments or 
                                with a minimum amount that must be paid 
                                in any event, or
                                    ``(IV) the lives of the annuitant 
                                and a joint annuitant with a minimum 
                                period of payments or with a minimum 
                                amount that must be paid in any event, 
                                but only if the annuitant is the spouse 
                                of the joint annuitant as of the 
                                annuity starting date or the difference 
                                in age between the annuitant and joint 
                                annuitant is 15 years or less.
                            ``(iii) Exceptions.--For purposes of clause 
                        (ii), annuity payments shall not fail to be 
                        treated as part of a series of substantially 
                        equal periodic payments--
                                    ``(I) because the amount of the 
                                periodic payments may vary in 
                                accordance with investment experience, 
                                reallocations among investment options, 
                                actuarial gains or losses, cost of 
                                living indices, a constant percentage 
                                applied not less frequently than 
                                annually, or similar fluctuating 
                                criteria,
                                    ``(II) due to the existence of, or 
                                modification of the duration of, a 
                                provision in the contract permitting a 
                                lump sum withdrawal after the annuity 
                                starting date, or
                                    ``(III) because the period between 
                                each such payment is lengthened or 
                                shortened, but only if at all times 
                                such period is no longer than one 
                                calendar year.
                    ``(B) Annuity contract.--For purposes of 
                subparagraph (A) and subsections (b)(5) and (w), the 
                term `annuity contract' means a commercial annuity (as 
                defined by section 3405(e)(6)), other than an endowment 
                or life insurance contract.
                    ``(C) Minimum period of payments.--For purposes of 
                subparagraph (A), the term `minimum period of payments' 
                means a guaranteed term of payments that does not 
                exceed the greater of 10 years or--
                            ``(i) the life expectancy of the annuitant 
                        as of the annuity starting date, in the case of 
                        lifetime annuity payments described in 
                        subparagraph (A)(ii)(III), or
                            ``(ii) the life expectancy of the annuitant 
                        and joint annuitant as of the annuity starting 
                        date, in the case of lifetime annuity payments 
                        described in subparagraph (A)(ii)(IV).
                For purposes of this subparagraph, life expectancy 
                shall be computed with reference to the tables 
                prescribed by the Secretary under paragraph (3). For 
                purposes of subsection (w)(1)(C)(ii), the permissible 
                minimum period of payments shall be determined as of 
                the annuity starting date and reduced by one for each 
                subsequent year.
                    ``(D) Minimum amount that must be paid in any 
                event.--For purposes of subparagraph (A), the term 
                `minimum amount that must be paid in any event' means 
                an amount payable to the designated beneficiary under 
                an annuity contract that is in the nature of a refund 
                and does not exceed the greater of the amount applied 
                to produce the lifetime annuity payments under the 
                contract or the amount, if any, available for 
                withdrawal under the contract on the date of death.''.
    (c) Recapture Tax for Lifetime Annuity Payments.--Section 72 of the 
Internal Revenue Code of 1986 is amended by redesignating subsection 
(w) as subsection (x) and by inserting after subsection (v) the 
following new subsection:
    ``(w) Recapture Tax for Modifications to or Reductions in Lifetime 
Annuity Payments.--
            ``(1) In general.--If any amount received under an annuity 
        contract is excluded from income by reason of subsection (b)(5) 
        (relating to lifetime annuity payments), and--
                    ``(A) the series of payments under such contract is 
                subsequently modified so any future payments are not 
                lifetime annuity payments,
                    ``(B) after the date of receipt of the first 
                lifetime annuity payment under the contract an 
                annuitant receives a lump sum and thereafter is to 
                receive annuity payments in a reduced amount under the 
                contract, or
                    ``(C) after the date of receipt of the first 
                lifetime annuity payment under the contract the dollar 
                amount of any subsequent annuity payment is reduced and 
                a lump sum is not paid in connection with the 
                reduction, unless such reduction is--
                            ``(i) due to an event described in 
                        subsection (c)(5)(A)(iii), or
                            ``(ii) due to the addition of, or increase 
                        in, a minimum period of payments within the 
                        meaning of subsection (c)(5)(C) or a minimum 
                        amount that must be paid in any event (within 
                        the meaning of subsection (c)(5)(D)),
        then gross income for the first taxable year in which such 
        modification or reduction occurs shall be increased by the 
        recapture amount.
            ``(2) Recapture amount.--
                    ``(A) In general.--For purposes of this subsection, 
                the recapture amount shall be the amount, determined 
                under rules prescribed by the Secretary, equal to the 
                amount that (but for subsection (b)(5)) would have been 
                includible in the taxpayer's gross income if the 
                modification or reduction described in paragraph (1) 
                had been in effect at all times, plus interest for the 
                deferral period at the underpayment rate established by 
                section 6621.
                    ``(B) Deferral period.--For purposes of this 
                subsection, the term `deferral period' means the period 
                beginning with the taxable year in which (without 
                regard to subsection (b)(5)) the payment would have 
                been includible in gross income and ending with the 
                taxable year in which the modification described in 
                paragraph (1) occurs.
            ``(3) Exceptions to recapture tax.--Paragraph (1) shall not 
        apply in the case of any modification or reduction that occurs 
        because an annuitant--
                    ``(A) dies or becomes disabled (within the meaning 
                of subsection (m)(7)),
                    ``(B) becomes a chronically ill individual within 
                the meaning of section 7702B(c)(2), or
                    ``(C) encounters hardship.''.
    (d) Lifetime Distributions of Life Insurance Death Benefits.--
            (1) In general.--Section 101(d) of the Internal Revenue 
        Code of 1986 (relating to payment of life insurance proceeds at 
        a date later than death) is amended by adding at the end the 
        following new paragraph:
            ``(4) Exclusion for lifetime annuity payments.--
                    ``(A) In general.--In the case of amounts to which 
                this subsection applies, gross income shall not include 
                the lesser of--
                            ``(i) 50 percent of the portion of lifetime 
                        annuity payments otherwise includible in gross 
                        income under this section (determined without 
                        regard to this paragraph), or
                            ``(ii) the amount in effect under section 
                        72(b)(5).
                    ``(B) Rules of section 72(b)(5) to apply.--For 
                purposes of this paragraph, rules similar to the rules 
                of section 72(b)(5) and section 72(w) shall apply, 
                substituting the term `beneficiary of the life 
                insurance contract' for the term `annuitant' wherever 
                it appears, and substituting the term `life insurance 
                contract' for the term `annuity contract' wherever it 
                appears.''.
            (2) Conforming amendment.--Section 101(d)(1) of such Code 
        is amended by inserting ``or paragraph (4)'' after ``to the 
        extent not excluded by the preceding sentence''.
    (e) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        apply to amounts received in calendar years beginning after the 
        date of the enactment of this Act.
            (2) Special rule for existing contracts.--In the case of a 
        contract in force on the date of the enactment of this Act that 
        does not satisfy the requirements of section 72(c)(5)(A) of the 
        Internal Revenue Code of 1986 (as added by this section), or 
        requirements similar to such section 72(c)(5)(A) in the case of 
        a life insurance contract), any modification to such contract 
        (including a change in ownership) or to the payments thereunder 
        that is made to satisfy the requirements of such section (or 
        similar requirements) shall not result in the recognition of 
        any gain or loss, any amount being included in gross income, or 
        any addition to tax that otherwise might result from such 
        modification, but only if the modification is completed prior 
        to the date that is 2 years after the date of the enactment of 
        this Act.

SOLUTION: Retirement Security for Life Act of 2004 - Amends the Internal Revenue Code to allow an exclusion from gross income for 50 percent of the amount otherwise includible in gross income as guaranteed payments from certain annuity or life insurance contracts. Limits the amount of such exclusion to $20,000 in any taxable year. Provides for an inflation adjustment of the $20,000 limitation beginning in 2006.

PROBLEM: SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Highway Funding Equity Act of 
2005''.

SEC. 2. MINIMUM GUARANTEE.

    Section 105 of title 23, United States Code, is amended--
            (1) by striking subsection (a) and subsections (c) through 
        (f);
            (2) by redesignating subsection (b) as subsection (e);
            (3) by inserting after the section heading the following:
    ``(a) Guarantee.--
            ``(1) In general.--For each of fiscal years 2005 through 
        2009, the Secretary shall allocate among the States amounts 
        sufficient to ensure that the percentage for each State of the 
        total apportionments for the fiscal year for the National 
        Highway System under section 103(b), the high priority projects 
        program under section 117, the Interstate maintenance program 
        under section 119, the surface transportation program under 
        section 133, metropolitan planning under section 134, the 
        highway bridge replacement and rehabilitation program under 
        section 144, the congestion mitigation and air quality 
        improvement program under section 149, the recreational trails 
        program under section 206, the Appalachian development highway 
        system under subtitle IV of title 40, and the minimum guarantee 
        under this paragraph, equals or exceeds the percentage 
        determined for the State under paragraph (2).
            ``(2) State percentages.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the percentage for each State 
                referred to in paragraph (1) is the percentage that is 
                equal to 95 percent of the ratio that--
                            ``(i) the estimated tax payments 
                        attributable to highway users in the State paid 
                        into the Highway Trust Fund (other than the 
                        Mass Transit Account) in the most recent fiscal 
                        year for which data are available; bears to
                            ``(ii) the estimated tax payments 
                        attributable to highway users in all States 
                        paid into the Highway Trust Fund (other than 
                        the Mass Transit Account) in the most recent 
                        fiscal year for which data are available.
                    ``(B) Exception.--In the case of a State having a 
                population density of less than 50 individuals per 
                square mile according to the 2000 decennial census, the 
                percentage referred to in paragraph (1) shall be the 
                greater of--
                            ``(i) the percentage determined under 
                        subparagraph (A); or
                            ``(ii) the percentage specified in 
                        subsection (e).
    ``(b) Treatment of Funds.--
            ``(1) Programmatic distribution.--The Secretary shall 
        apportion the amounts made available under this section that 
        exceed $2,800,000,000 so that the amount apportioned to each 
        State under this paragraph for each program referred to in 
        subsection (a)(1) (other than the high priority projects 
        program, metropolitan planning, the recreational trails 
        program, the Appalachian development highway system, and the 
        minimum guarantee under subsection (a)) is equal to the product 
        obtained by multiplying--
                    ``(A) the amount to be apportioned under this 
                paragraph; and
                    ``(B) the ratio that--
                            ``(i) the amount of funds apportioned to 
                        the State for each program referred to in 
                        subsection (a)(1) (other than the high priority 
                        projects program, metropolitan planning, the 
                        recreational trails program, the Appalachian 
                        development highway system, and the minimum 
                        guarantee under subsection (a)) for a fiscal 
                        year; bears to
                            ``(ii) the total amount of funds 
                        apportioned to the State for that program for 
                        the fiscal year.
            ``(2) Remaining distribution.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                Secretary shall apportion the remainder of funds made 
                available under this section to the States, and 
                administer those funds, in accordance with section 
                104(b)(3).
                    ``(B) Inapplicable requirements.--Paragraphs (1), 
                (2), and (3) of section 133(d) shall not apply to 
                amounts apportioned in accordance with this paragraph.
    ``(c) Authorization of Appropriations.--There are authorized to be 
appropriated out of the Highway Trust Fund (other than the Mass Transit 
Account) such sums as are necessary to carry out this section for each 
of fiscal years 2005 through 2009.
    ``(d) Guarantee of 95 Percent Return.--
            ``(1) In general.--For each of fiscal years 2005 through 
        2009, before making any apportionment under this title, the 
        Secretary shall--
                    ``(A) determine whether the sum of the percentages 
                determined under subsection (a)(2) for the fiscal year 
                exceeds 100 percent; and
                    ``(B) if the sum of the percentages exceeds 100 
                percent, proportionately adjust the percentages 
                specified in the table contained in subsection (e) to 
                ensure that the sum of the percentages determined under 
                subsection (a)(1)(B) for the fiscal year equals 100 
                percent.
            ``(2) Eligibility threshold for adjustment.--The Secretary 
        may make an adjustment under paragraph (1) for a State for a 
        fiscal year only if the percentage for the State in the table 
        contained in subsection (e) is equal to or exceeds 95 percent 
        of the ratio determined for the State under subsection 
        (a)(1)(B)(i) for the fiscal year.
            ``(3) Limitation on adjustments.--Adjustments of the 
        percentages in the table contained in subsection (e) in 
        accordance with this subsection shall not result in a total of 
        the percentages determined under subsection (a)(2) that exceeds 
        100 percent.''; and
            (4) in subsection (e) (as redesignated by paragraph (2)), 
        by striking ``subsection (a)'' and inserting ``subsections 
        (a)(2)(B)(ii) and (d)''.

SOLUTION: Highway Funding Equity Act of 2005 - Amends Federal highway law to revise Federal highway minimum guarantee requirements.

Requires the Secretary of Transportation, for each of FY 2005 through 2009, to allocate among the States amounts sufficient to ensure that the percentage for each State of the total apportionments for the fiscal year for certain Federal-aid highway programs (including the basic minimum guarantee under this Act) equals or exceeds 95 percent of the ratio that the estimated gas tax payments attributable to highway users in the State paid into the Highway Trust Fund (HTF) bears to such payments attributable to highway users in all States (with a specified exception for any State having a population density of less than 50 individuals per square mile).

Provides for: (1) the programmatic distribution of funds above $2.8 billion for certain Federal-aid highway programs; (2) the apportionment of the remainder of funds to the States; and (3) required adjustments where the sum of State percentages exceeds 100 percent.

PROBLEM: SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Enhancement of Military Benefits 
Act''.

SEC. 2. 2001 PAY RAISE FOR MEMBERS OF THE UNIFORMED SERVICES.

    (a) Waiver of Section 1009 Adjustment.--The adjustment to become 
effective during fiscal year 2001 required 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, 2001, the rates 
of monthly basic pay for members of the uniformed services are 
increased by 4.8 percent.

SEC. 3. EXPANSION OF MEDICARE SUBVENTION PROJECT FOR MILITARY RETIREES 
              AND DEPENDENTS.

    (a) Expansion of Sites.--
            (1) Expansion to 16 sites.--Effective January 1, 2001, 
        subsection (b)(2) of section 1896 of the Social Security Act 
        (42 U.S.C. 1395ggg) is amended by striking ``6'' and inserting 
        ``16''.
            (2) Future repeal of limitation on number of sites.--
        Effective October 1, 2003, paragraph (2) of section 1896(b) of 
        such Act is amended to read as follows:
            ``(2) Location of sites.--The program shall be conducted in 
        any site designated jointly by the administering 
        Secretaries.''.
    (b) Making Project Permanent; Changes in Project References.--
            (1) Elimination of time limitation.--Paragraph (4) of 
        section 1896(b) of such Act is repealed.
            (2) Treatment of caps.--Subsection (i)(4) of section 1896 
        of such Act is amended by adding at the end the following:
        ``This paragraph shall not apply after calendar year 2001.''.
            (3) Conforming changes of references to demonstration 
        project.--Section 1896 of such Act is further amended--
                    (A) in the heading, by striking ``demonstration 
                project'' and inserting ``program'';
                    (B) by amending subsection (a)(2) to read as 
                follows:
            ``(2) Program.--The term `program' means the program 
        carried out under this section.'';
                    (C) in the heading to subsection (b), by striking 
                ``Demonstration Project'' and inserting ``Program'';
                    (D) by striking ``demonstration project'' or 
                ``project'' each place either appears and inserting 
                ``program'';
                    (E) in subsection (k)(2)--
                            (i) by striking ``extension and expansion 
                        of demonstration project'' and inserting 
                        ``program''; and
                            (ii) by striking subparagraphs (A) through 
                        (C) and inserting the following:
                    ``(A) whether there is a cost to the health care 
                program under this title in conducting the program 
                under this section; and
                    ``(B) whether the terms and conditions of the 
                program should be modified.''.
            (4) Additional conforming amendment.--Paragraph (5) of 
        section 1896(b) of such Act is repealed.
    (c) Permitting Payment on a Fee-for-Service Basis.--
            (1) In general.--Section 1896 of the Social Security Act is 
        further amended by adding at the end the following new 
        subsection:
    ``(l) Payment on a Fee-for-Service Basis.--Instead of the payment 
method described in subsection (i)(1) and in the case of individuals 
who are not enrolled in the program in the manner described in 
subsection (d)(1), the Secretary may reimburse the Secretary of Defense 
for services provided under the program at a rate that does not exceed 
the rate of payment that would otherwise be made under this title for 
such services if sections 1814(c) and 1835(d), and paragraphs (2) and 
(3) of section 1862(a), did not apply.''.
            (2) Conforming amendments.--Such section is further 
        amended--
                    (A) in subsections (b)(1)(B)(v) and 
                (b)(1)(B)(viii)(I), by inserting ``or subsection (l)'' 
                after ``subsection (i)';
                    (B) in subsection (b)(2), by adding at the end the 
                following: ``If feasible, at least one of the sites 
                shall be conducted using the fee-for-service 
                reimbursement method described in subsection (l).'';
                    (C) in subsection (d)(1)(A), by inserting 
                ``(insofar as it provides for the enrollment of 
                individuals and payment on the basis described in 
                subsection (i))'' before ``shall meet'';
                    (D) in subsection (d)(1)(A), by inserting ``and the 
                program (insofar as it provides for payment for 
                facility services on the basis described in subsection 
                (l)) shall meet all requirements for such facilities 
                under this title'' after ``medicare payments'';
                    (E) in subsection (d)(2), by inserting ``, insofar 
                as it provides for the enrollment of individuals and 
                payment on the basis described in subsection (i),'' 
                before ``shall comply'';
                    (F) in subsection (g)(1), by inserting ``, insofar 
                as it provides for the enrollment of individuals and 
                payment on the basis described in subsection (i),'' 
                before ``the Secretary of Defense'';
                    (G) in subsection (i)(1), by inserting ``and 
                subsection (l)'' after ``of this subsection'';
                    (H) in subsection (i)(4), by inserting ``and 
                subsection (l)'' after ``under this subsection''; and
                    (I) in subsection (j)(2)(B)(ii), by inserting ``or 
                subsection (l)'' after ``subsection (i)(1)''.
            (3) Effective date.--The amendments made by this subsection 
        take effect on January 1, 2001, and apply to services furnished 
        on or after such date.
    (d) Elimination of Restriction on Eligibility.--Section 1896(b)(1) 
of such Act is amended by adding at the end the following new 
subparagraph:
                    ``(C) Elimination of restrictive policy.--If the 
                enrollment capacity in the program has been reached at 
                a particular site designated under paragraph (2) and 
                the Secretary therefore limits enrollment at the site 
                to medicare-eligible military retirees and dependents 
                who are enrolled in TRICARE Prime (as defined for 
                purposes of chapter 55 of title 10, United States Code) 
                at the site immediately before attaining 65 years of 
                age, participation in the program by a retiree or 
                dependent at such site shall not be restricted based on 
                whether the retiree or dependent has a civilian primary 
                care manager instead of a military primary care 
                manager.''.
    (e) Medigap Protection for Enrollees.--Section 1896 of such Act is 
further amended by adding at the end the following new subsection:
    ``(m) Medigap Protection for Enrollees.--(1) Subject to paragraph 
(2), the provisions of section 1882(s)(3) (other than clauses (i) 
through (iv) of subparagraph (B)) and 1882(s)(4) of the Social Security 
Act shall apply to any enrollment (and termination of enrollment) in 
the program (for which payment is made on the basis described in 
subsection (i)) in the same manner as they apply to enrollment (and 
termination of enrollment) with a Medicare+Choice organization in a 
Medicare+Choice plan.
    ``(2) In applying paragraph (1)--
            ``(A) in the case of enrollments occurring before January 
        1, 2001, any reference in clause (v) or (vi) of section 
        1882(s)(3)(B) of such Act to 12 months is deemed a reference to 
        the period ending on December 31, 2001; and
            ``(B) the notification required under section 1882(s)(3)(D) 
        of such Act shall be provided in a manner specified by the 
        Secretary of Defense in consultation with the Director of the 
        Office of Personnel Management.''.

SEC. 4. INCREASE IN MILITARY SURVIVOR BENEFIT PLAN ANNUITIES FOR 
              BENEFICIARIES 62 YEARS OF AGE AND OLDER.

    (a) Repeal of Annuity Reduction at Age 62.--(1) Subsection (a) of 
section 1451 of title 10, United States Code, is amended to read as 
follows:
    ``(a) Computation of Annuity for a Spouse, Former Spouse, or 
Child.--
            ``(1) Standard annuity.--In the case of a standard annuity 
        provided to a beneficiary under section 1450(a) of this title 
        (other than under section 1450(a)(4)), the monthly annuity 
        shall be the amount equal to 55 percent of the base amount.
            ``(2) Reserve-component annuity.--In the case of a reserve-
        component annuity provided to a beneficiary under section 
        1450(a) of this title (other than under section 1450(a)(4)), 
        the monthly annuity payable to the beneficiary shall be the 
        amount equal to a percentage of the base amount that--
                    ``(A) is less than 55 percent; and
                    ``(B) is determined under subsection (f).''.
    (2) Subsection (c)(1) of such section is amended to read as 
follows:
            ``(1) In general.--In the case of an annuity provided under 
        section 1448(d) or 1448(f) of this title, the amount of the 
        monthly annuity shall be the amount equal to 55 percent of the 
        retired pay to which the member or former member would have 
        been entitled if the member or former member had been entitled 
        to that pay based upon his years of active service when he 
        died.''.
    (3) Subsections (d) and (e) of such section are repealed.
    (b) Termination of Supplemental SBP Program.--The Secretary of 
Defense shall terminate the Supplemental Survivor Benefit Plan program 
under subchapter III of chapter 73 of title 10, United States Code, 
effective on the date specified in subsection (d). No annuity may be 
paid under that subchapter, and no reduction in retired pay may be made 
under that subchapter, for any period on or after that date.
    (c) Recomputation of Annuities.--Effective as of the date specified 
in subsection (d), the Secretary concerned shall recompute annuities 
payable under subchapter II of chapter 73 of title 10, United States 
Code, as necessary so that each such annuity is in the amount that 
would be in effect if initially computed under section 1450 of title 
10, United States Code, as amended by subsection (a).
    (d) Effective Date.--The amendments made by subsection (a) shall 
take effect on October 1, 2000, and shall apply to payments under 
chapter 73 of title 10, United States Code, for months beginning on or 
after that date.

SEC. 5. INCLUSION OF UNIFORMED SERVICES RETIREES AND DEPENDENTS IN 
              FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM.

    (a) In General.--Chapter 55 of title 10, United States Code, is 
amended by inserting after section 1108 the following new section:
``Sec. 1108a. Health care coverage through Federal Employees Health 
              Benefits program: retirees and dependents
    ``(a) FEHBP Option.--The Secretary of Defense, after consulting 
with the other administering Secretaries, shall enter into an agreement 
with the Office of Personnel Management under which eligible 
beneficiaries described in subsection (b) may enroll in health benefits 
plans offered through the Federal Employees Health Benefits program 
under chapter 89 of title 5.
    ``(b) Eligible Beneficiaries; Coverage.--(1) An eligible 
beneficiary under this subsection is--
            ``(A) a member or former member of the uniformed services 
        described in section 1074(b) of this title; or
            ``(B) an individual who is a dependent of such a member or 
        former member.
    ``(2) Eligible beneficiaries may enroll in a Federal Employees 
Health Benefit plan under chapter 89 of title 5 under this section for 
self-only coverage or for self and family coverage.
    ``(3) A person eligible for coverage under this subsection shall 
not be required to satisfy any eligibility criteria specified in 
chapter 89 of title 5 as a condition for enrollment in health benefits 
plans offered through the Federal Employees Health Benefits program 
under this section.
    ``(c) Separate Risk Pools; Charges.--(1) The Director of the Office 
of Personnel Management shall require health benefits plans under 
chapter 89 of title 5 that participate under this section to maintain a 
separate risk pool for purposes of establishing premium rates for 
eligible beneficiaries who enroll in such a plan in accordance with 
this section.
    ``(2) The Director shall determine total subscription charges for 
self only or for family coverage for eligible beneficiaries who enroll 
in a health benefits plan under chapter 89 of title 5 in accordance 
with this section. The subscription charges shall include premium 
charges paid to the plan and amounts described in section 8906(c) of 
title 5 for administrative expenses and contingency reserves.
    ``(d) Government Contributions.--The Secretary of Defense shall be 
responsible for the Government contribution for an eligible beneficiary 
who enrolls in a health benefits plan under chapter 89 of title 5 in 
accordance with this section, except that the amount of the 
contribution may not exceed the amount of the Government contribution 
which would be payable if the electing beneficiary were an employee (as 
defined for purposes of such chapter) enrolled in the same health 
benefits plan and level of benefits.''.
    (b) Conforming Amendments.--(1) The table of sections at the 
beginning of chapter 55 of title 10, United States Code, is amended by 
inserting after the item relating to section 1108 the following new 
item:

``1108a. Health care coverage through Federal Employees Health Benefits 
                            program: retirees and dependents.''.
    (2) Chapter 89 of title 5, United States Code, is amended in 
section 8905(d) by inserting ``or 1108a'' after ``section 1108''.

SOLUTION:
Amends title XVIII (Medicare) of the Social Security Act to extend to up to 16 (currently six) the number of authorized sites for the Medicare subvention demonstration project (a project under which the Secretary of Health and Human Services reimburses the Secretary of Defense (Secretary) for certain services provided through the Department of Defense for Medicare-eligible military retirees and dependents). Makes such demonstration project permanent (currently terminates on January 1, 2001), designating it as a program. Authorizes such reimbursement on a fee-for-service basis in lieu of a current percentage rate. Eliminates a program eligibility restriction based on whether the retiree or dependent has a civilian primary care manager instead of a military primary care manager. Provides Medigap protection for program enrollees in the same manner as applied to enrollment with a Medicare+Choice plan.
Increases from 35 to 55 percent of the base amount of military retired pay the military Survivor Benefit Plan annuity for beneficiaries age 62 or older. Directs the Secretary to terminate the Supplemental Survivor Benefit Plan program.
Directs the Secretary to enter into an agreement with the Office of Personnel Management under which members and former members entitled to retired or retainer pay, and their dependents, may enroll in health benefits plans offered through the Federal Employees Health Benefits program (FEHBP). Prohibits such individuals from being required to satisfy any FEHBP eligibility criteria. Makes the Secretary responsible for required Government contributions for such enrollees.