SECTION 1. MODIFICATION OF SCHEME FOR PAYMENT OF DEATH GRATUITY PAYABLE 
              WITH RESPECT TO MEMBERS OF THE ARMED FORCES.

    (a) Findings.--Congress makes the following findings:
            (1) The death gratuity authorized under sections 1475 to 
        1480 of title 10, United States Code, was intended, when 
        originally enacted to provide an immediate cash payment to 
        assist survivors of deceased members of the Armed Forces to 
        meet their financial needs during the period immediately 
        following a member's death and before other survivor benefits 
        become available.
            (2) The death gratuity, when first implemented in 1908, 
        amounted to six months of a service member's pay and, until 
        1991, could not exceed $3,000.
            (3) However, following the attacks of September 11, 2001, 
        and the initiation of Operation Enduring Freedom and Operation 
        Iraqi Freedom, Congress determined that the death benefits 
        available to survivors of members of the Armed Forces should be 
        substantially increased.
            (4) The National Defense Authorization Act for Fiscal Year 
        2006, which was enacted on January 6, 2006, as Public Law 109-
        163, increased the amount of the death gratuity to $100,000, 
        effective retroactively to October 7, 2001.
            (5) Under section 1477 of title 10, United States Code, the 
        law authorizing the death gratuity, those living relatives of 
        deceased members of the Armed Forces who shall receive the 
        death gratuity are specifically designated. Service members are 
        not provided with the opportunity to make an election choosing 
        a beneficiary other than those set forth in section 1477 of 
        title 10, United States Code.
            (6) The increased death gratuity, in combination with 
        benefits available under the Servicemembers' Group Life 
        Insurance program, the Survivor Benefit Plan, and Dependency 
        and Indemnity Compensation provide significant support and 
        compensation to the next of kin of deceased members of the 
        Armed Forces. Individual members are best qualified to 
        determine who the beneficiaries for death benefits should be 
        and should be afforded the opportunity to make these selections 
        at appropriate times throughout military service and 
        particularly prior to mobilization or deployment to a combat 
        zone.
            (7) Under the current system, many members of the Armed 
        Forces have designated individuals as beneficiaries for the 
        death gratuity in a manner not provided for by law. In these 
        cases, the wishes of these members regarding the disposition of 
        the death gratuity has in many cases not been implemented, to 
        the detriment of their children and other loved ones.
    (b) Sense of Congress.--It is the sense of Congress that all 
members of the Armed Forces should be given the opportunity to 
affirmatively select who shall receive the death gratuity and that the 
Secretary of Defense and the Secretaries of the military departments 
should take prompt action to afford members the opportunity to make an 
election in writing about the disposition of the death gratuity 
proceeds and to provide appropriate and timely counseling about the 
manner in which the proceeds of the death gratuity and other forms of 
insurance will be administered.
    (c) Modification.--
            (1) In general.--Subsection (a) of section 1477 of title 
        10, United States Code, is amended by striking all that follows 
        ``on the following list:'' and inserting the following:
            ``(1) To any individual designated by the person in 
        writing.
            ``(2) If there is no person so designated, to the surviving 
        spouse of the person.
            ``(3) If there is none of the above, to the children (as 
        prescribed by subsection (b)) of the person and the descendants 
        of any deceased children by representation.
            ``(4) If there is none of the above, to the parents (as 
        prescribed by subsection (c)) of the person or the survivor of 
        them.
            ``(5) If there is none of the above, to the duly appointed 
        executor or administrator of the estate of the person.
            ``(6) If there is none of the above, to other next of kin 
        of the person entitled under the laws of domicile of the person 
        at the time of the person's death.''.
            (2) Conforming amendments.--Such section is further 
        amended--
                    (A) in subsection (b), by striking ``Subsection 
                (a)(2)'' in the matter preceding paragraph (1) and 
                inserting ``Subsection (a)(3)'';
                    (B) by striking (c) and inserting the following new 
                subsection (c):
    ``(c) For purposes of subsection (a)(4), parents include fathers 
and mothers through adoption. However, only one father and one mother 
may be recognized in any case, and preference shall be given to those 
who exercised a parental relationship on the date, or most nearly 
before the date, on which the decedent entered a status described in 
section 1475 or 1476 of this title.''; and
                    (C) by striking subsection (d).
            (3) Effective date.--The amendments made by this subsection 
        shall take effect on the date of the enactment of this Act.
            (4) Applicability.--Notwithstanding paragraph (3), the 
        provisions of section 1477 of title 10, United States Code, as 
        in effect on the day before the date of the enactment of this 
        Act, shall continue to apply to each member of the Armed Forces 
        covered by such section until the earlier of the following--
                    (A) the date on which such member makes the 
                designation contemplated by paragraph (1) of section 
                1477(a) of such title (as amended by paragraph (1) of 
                this subsection); or
                    (B) January 1, 2008.
    (d) Regulations.--
            (1) In general.--Not later than April 1, 2007, the 
        Secretary of Defense shall prescribe regulations to implement 
        the amendments to section 1477 of title 10, United States Code, 
        made by subsection (c).
            (2) Elements.--The regulations required by paragraph (1) 
        shall include forms for the making of the designation 
        contemplated by paragraph (1) of section 1477(a) of title 10, 
        United States Code (as amended by subsection (c)), and 
        instructions for members of the Armed Forces in the filling out 
        of such forms.
Output: Expresses the sense of Congress that all members of the Armed Forces should be permitted to select who shall receive the death gratuity (awarded for members who die while on active duty or inactive duty training), and that the Secretaries of Defense and the military departments should take appropriate action to afford members such opportunity, along with appropriate counseling.

Revises the current statutory priority list of designated death gratuity beneficiaries to place first in such list any individual designated by the person (member) in writing.