SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Military Physician Equity Act of 
2002''.

SEC. 2. ADDITIONAL SPECIAL PAY RECEIVED BY MEDICAL, DENTAL, AND 
              VETERINARY OFFICERS OF THE UNIFORMED SERVICES TREATED AS 
              PART OF BASIC PAY FOR RETIREMENT PURPOSES.

    (a) Members Who Became Members Before September 8, 1980.--Section 
1406 of title 10, United States Code, is amended by adding at the end 
the following new subsection:
    ``(j) Special Rule for Medical, Dental, or Veterinary Officer 
Receiving Additional Special Pay.--(1) For purposes of determining the 
retired pay base or retainer pay base of a member of the uniformed 
services, the monthly basic pay of the member includes the monthly 
equivalent of any additional special pay received by the member under 
section 302, 302b, or 303 of title 37 (or, in the case of a 
commissioned officer in the Public Health Service, received under such 
section pursuant to section 303a(b) of title 37) during the year 
immediately preceding the date of the member's retirement.
    ``(2) Except as otherwise provided in this subsection, additional 
special pay referred to in paragraph (1) may not be treated as basic 
pay for purposes of any computation under this section unless, before 
the date of the member's retirement, the member has completed at least 
15 years of service as a medical, dental, or veterinary officer of the 
uniformed services (whether performed before, on, or after the date of 
the enactment of this subsection).
    ``(3) If the condition under paragraph (2) is met, then, the 
monthly equivalent of amounts received by the member in the form of 
additional special pay referred to in paragraph (1) shall (for the 
purposes referred to in paragraph (2)) be treated as basic pay, but 
only to the extent that such amounts are attributable to service 
performed on or after the date of the enactment of this subsection, and 
only to the extent of the percentage allowable, which shall be 
determined as follows:

``If the total amount of service                                       
  performed, on or after the date of               Then, the percentage
   the enactment of this subsection,                  allowable is:    
  as a medical, dental, or veterinary officer is:                      
    Less than 2 years.............................               0     
    At least 2 but less than 4 years..............              25     
    At least 4 but less than 6 years..............              50     
    At least 6 but less than 8 years..............              75     
    At least 8 years..............................             100.    

    ``(4) Notwithstanding any other provision of this subsection, 100 
percent of the monthly equivalent of all amounts received as additional 
special pay referred to in paragraph (1) shall, to the extent 
attributable to service performed on or after the date of the enactment 
of this subsection, be treated as basic pay (without regard to any of 
the preceding provisions of this subsection) for purposes of 
computing--
            (A) disability retired pay; and
            (B) a survivor annuity under chapter 73 of this title, if 
        based on the service of a member who dies before retirement.''.
    (b) Members Who Became Members After September 7, 1980.--Section 
1407 of title 10, United States Code, is amended by adding at the end 
the following new subsection:
    ``(g) Special Rule for Medical, Dental, or Veterinary Officer 
Receiving Additional Special Pay.--(1) For purposes of the computations 
required under subsections (c) and (d) to determine the high-three 
average of a member of the uniformed services, the monthly equivalent 
of any additional special pay received by the member under section 302, 
302b, or 303 of title 37 (or, in the case of a commissioned officer in 
the Public Health Service, received under such section pursuant to 
section 303a(b) of title 37) during the periods referred to in such 
subsections shall be treated as a part of the basic pay of the member.
    ``(2) Except as otherwise provided in this subsection, additional 
special pay referred to in paragraph (1) may not be treated as basic 
pay for purposes of any computation under this section unless, before 
the date of the member's retirement, the member has completed at least 
15 years of service as a medical, dental, or veterinary officer of the 
uniformed services (whether performed before, on, or after the date of 
the enactment of this subsection).
    ``(3) If the condition under paragraph (2) is met, then, the 
monthly equivalent of amounts received by the member in the form of 
additional special pay referred to in paragraph (1) shall (for the 
purposes referred to in paragraph (2)) be treated as basic pay, but 
only to the extent that such amounts are attributable to service 
performed on or after the date of the enactment of this subsection, and 
only to the extent of the percentage allowable, which shall be 
determined as follows:

``If the total amount of service                                       
  performed, on or after the date of               Then, the percentage
   the enactment of this subsection,                  allowable is:    
  as a medical, dental, or veterinary officer is:                      
    Less than 2 years.............................               0     
    At least 2 but less than 4 years..............              25     
    At least 4 but less than 6 years..............              50     
    At least 6 but less than 8 years..............              75     
    At least 8 years..............................             100.    

    ``(4) Notwithstanding any other provision of this subsection, 100 
percent of the monthly equivalent of all amounts received as additional 
special pay referred to in paragraph (1) shall, to the extent 
attributable to service performed on or after the date of the enactment 
of this subsection, be treated as basic pay (without regard to any of 
the preceding provisions of this subsection) for purposes of 
computing--
            (A) disability retired pay; and
            (B) a survivor annuity under chapter 73 of this title, if 
        based on the service of a member who dies before retirement.''.
Output: Military Physician Equity Act of 2002 - Provides that the military personnel retired or retainer pay base shall include specified percentages of any additional or special pay received as a medical, dental, and veterinary officer for an officer who has completed at least 15 years of military service before retirement. Makes the percentage of additional pay so realized 0 percent if the officer performed less than two years as a medical, dental, or veterinary officer before receiving such pay, with a gradual increase to 100 percent for officers who performed at least eight years in such a specialty before receiving such pay. Provides a special rule for officers receiving such additional pay after first becoming members after September 7, 1980.States that any such additional pay so recognized shall be retirement-creditable for purposes of the determination of disability retired pay as well as survivor annuities.