SECTION 1. SHORT TITLE.

    This Act may be cited as the ``National Guard and Reserve 
Educational Benefits Fairness Act of 2007''.

SEC. 2. EDUCATIONAL ASSISTANCE UNDER THE MONTGOMERY GI BILL FOR MEMBERS 
              OF THE NATIONAL GUARD AND RESERVE WHO SERVE EXTENDED 
              PERIOD OF CONTINUOUS ACTIVE DUTY THAT INCLUDE A PROLONGED 
              PERIOD OF SERVICE IN CERTAIN THEATERS OF OPERATION.

    (a) Basic Educational Assistance for Certain Members of the 
National Guard and Reserve.--
            (1) In general.--Chapter 30 of title 38, United States 
        Code, is amended by inserting after section 3012 the following 
        new section:
``Sec. 3012A.\\ Basic educational assistance entitlement for members of 
              the National Guard and Reserve for extended service on 
              active duty that includes prolonged service in certain 
              theaters of operation
    ``(a) An individual--
            ``(1) who as a Reserve (including as a member of the 
        National Guard)--
                    ``(A) on or after September 11, 2001, serves a 
                period of active duty of at least 20 months of 
                continuous active duty in the Armed Forces; and
                    ``(B) during the period of active duty service 
                described in subparagraph (A), serves a period of not 
                less than 12 months in a theater of operations 
                designated by the Secretary of Defense for purposes of 
                this section;
            ``(2) who completes the requirements of a secondary school 
        diploma (or equivalency certificate), or successfully completes 
        (or otherwise receives academic credit for) the equivalent of 
        12 semester hours in a program of education leading to a 
        standard college degree, before applying for benefits under 
        this section; and
            ``(3) who, after completion of the service described in 
        paragraph (1)--
                    ``(A) is discharged from service with an honorable 
                discharge, is placed on the retired list, or is 
                transferred to the Standby Reserve after service as a 
                Reserve (including service as a member of the National 
                Guard) characterized by the Secretary concerned as 
                honorable; or
                    ``(B) continues service as a Reserve (including as 
                a member of the National Guard);
is entitled to basic educational assistance under this chapter.
    ``(b)(1) An individual described by paragraph (1) of subsection (a) 
who seeks entitlement under this section to basic educational 
assistance under this chapter shall notify the Secretary of an election 
of entitlement to assistance under this chapter in such form and manner 
as the Secretary and the Secretary of Defense shall jointly prescribe 
for purposes of this section.
    ``(2) A notice of election under paragraph (1) shall be made at 
such time or times as the Secretary and the Secretary of Defense shall 
jointly prescribe for purposes of this section.
    ``(3) Notwithstanding a notice of election under paragraph (1), an 
individual covered by that paragraph is not entitled to basic 
educational assistance under this chapter unless and until the 
individual satisfies the requirements of paragraphs (2) and (3) of 
subsection (a).
    ``(c)(1)(A) In the case of an individual making a notice of 
election under subsection (b) who is on active duty in the Armed Forces 
at the time of such notice, the basic pay of such individual shall be 
reduced by $100 for each month following the month of the notice during 
which the individual remains on active duty in the Armed Forces until 
the number of months of such reduction equals 12 months.
    ``(B) If an individual covered by this paragraph ceases to be on 
active duty in the Armed Forces before the number of months of 
reduction in basic pay under subparagraph (A) equals 12 months, the 
Secretary of Defense shall collect from the individual, before the 
individual commences receipt of basic educational assistance under this 
chapter, an amount equal to--
            ``(i) $1,200; minus
            ``(ii) the aggregate amount of the reduction in basic pay 
        of the individual under subparagraph (A).
    ``(2) In the case of an individual making a notice of election 
under subsection (b) who is not on active duty in the Armed Forces at 
the time of such notice, the Secretary of Defense shall collect from 
the individual, before the individual commences receipt of basic 
educational assistance under this chapter, an amount equal to $1,200. 
The Secretary of Defense may collect any portion of such amount through 
reductions in basic pay in accordance with paragraph (1)(A) if the 
individual returns to active duty in the Armed Forces after making the 
notice of election but before the collection of such amount by the 
Secretary of Defense.
    ``(3)(A) Any amount by which the basic pay of an individual is 
reduced under this subsection shall revert to the Treasury and shall 
not, for purposes of any Federal law, be considered to have been 
received by or to be within the control of the individual.
    ``(B) Any amount collected by the Secretary of Defense under this 
subsection shall be deposited into the Treasury as miscellaneous 
receipts.''.
            (2) Clerical amendment.--The table of sections at the 
        beginning of chapter 30 of such title is amended by inserting 
        after the item relating to section 3012 the following new item:

``3012A.\\ Basic educational assistance entitlement for members of the 
                            National Guard and Reserve for extended 
                            service on active duty that includes 
                            prolonged service in certain theaters of 
                            operation.''.
    (b) Duration of Basic Educational Assistance.--Section 3013 of such 
title is amended--
            (1) by redesignating subsections (e) and (f) as subsections 
        (f) and (g), respectively; and
            (2) by inserting after subsection (d) the following new 
        subsection (e):
    ``(e) Subject to section 3695 of this title, each individual 
entitled to basic educational assistance under section 3012A of this 
title is entitled to 36 months of educational assistance benefits under 
this chapter (or the equivalent thereof in part-time educational 
assistance.''.
    (c) Amount of Assistance.--
            (1) In general.--Section 3015 of such title is amended by 
        adding at the end the following new subsection:
    ``(i) The amount of basic educational allowance payable under this 
chapter to an individual entitled to an educational assistance 
allowance under section 3012A of this title is the amount determined 
under subsection (a).''.
            (2) Conforming amendment.--Section 3014(b)(2)(C) of such 
        title is amended by striking ``or (e)(1)'' and inserting 
        ``(e)(1), or (i)(1)''.
Output: National Guard and Reserve Educational Benefits Fairness Act of 2007 - Provides educational assistance under the Montgomery GI Bill for members of the National Guard and Reserve for extended service on continuous active duty that includes prolonged service in certain theaters of operation.