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SECTION 1. SHORT TITLE.

This Act may be cited as the ''Uniformed Services Former Spouses
Equity Act of 1997''.

SEC. 2. TERMINATION OF PAYMENTS UPON REMARRIAGE OF FORMER SPOUSE.

(a) In General.--Section 1408(c) of title 10, United States Code,
is amended by adding at the end the following new paragraph:
''(5) Payment from the monthly disposable retired pay of a member
to a former spouse of the member pursuant to this section shall
terminate upon the remarriage of that former spouse, except to the
extent that the amount of such payment includes an amount other than an
amount resulting from the treatment by the court under paragraph (1) of
disposable retired pay of the member as property of the member or
property of the member and his spouse. Any such termination shall be
effective as of the last day of the month in which the remarriage
occurs.''.
(b) Effective Date.--The amendment made by subsection (a) shall
apply with respect to marriages terminated by court orders issued
before, on, or after the date of the enactment of this Act. In the case
of such a court order issued before the date of the enactment of this
Act, such amendment shall apply only with respect to amounts of a
member's retired pay that are payable for months beginning more than
180 days after the date of the enactment of this Act.

SEC. 3. AWARD OF RETIRED PAY TO BE BASED ON RETIREE'S LENGTH OF SERVICE
AND PAY GRADE AT TIME OF DIVORCE.

(a) In General.--Section 1408(c) of title 10, United States Code,
as amended by section 2, is further amended by adding at the end the
following new paragraph:
''(6) In the case of a member as to whom a final decree of divorce,
dissolution, annulment, or legal separation is issued before the date
on which 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, 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.''.
(b) Implementation.--With respect to payments to a former spouse
from a member's disposable retired pay pursuant to court orders issued
before the date of the enactment of this Act, the Secretary shall--
(1) within 90 days of such date, recompute the amounts of
those payments in accordance with paragraph (5) of section
1408(c) of title 10, United States Code, as added by subsection
(a); and
(2) within 180 days of such date, adjust the amount of
disposable retired pay payable to that former spouse
accordingly.
(c) Effective Date.--The amendment made by subsection (a) shall
apply with respect to court orders issued on or after June 25, 1981.

SEC. 4. LIMITATION ON TIME FOR SEEKING DIVISION OF RETIRED PAY.

(a) In General.--Subsection (c)(4) of section 1408 of title 10,
United States Code, is amended to read as follows:
''(4) A court may not after the date of the enactment of the
Uniformed Services Former Spouses Equity Act of 1997 treat the
disposable retired pay of a member in the manner described in paragraph
(1) unless--
''(A) the court has jurisdiction over the member by reason
of (i) the member's residence, other than because of military
assignment, in the territorial jurisdiction of the court, (ii)
the member's domicile in the territorial jurisdiction of the
court, or (iii) the member's consent to the jurisdiction of the
court; and
''(B) the member's spouse or former spouse obtains a court
order for apportionment of the retired pay of the member not
later than (i) two years after the date of final decree of
divorce, dissolution, annulment, or legal separation, including
a court ordered, ratified, or approved property settlement
incident to such a decree, or (ii) the end of the six-month
period beginning on the date of the enactment of the Uniformed
Services Former Spouses Equity Act of 1997, whichever is
later.''.
(b) Effective Date.--The amendment made by subsection (a) shall
apply with respect to final decrees of divorce, dissolution, annulment,
or legal separation issued on or after June 25, 1981.

SEC. 5. LIMITATION ON APPORTIONMENT OF DISABILITY PAY WHEN RETIRED PAY
HAS BEEN WAIVED.

(a) In General.--Subsection (e)(4) of section 1408 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 pursuant to legal processes
under section 459 of the Social Security Act (42 U.S.C. 659) amounts
which 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 compensation
under title 38.''.
(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)--
(A) by inserting ''or'' at the end of subclause
(III);
(B) by striking out ''or'' at the end of subclause
(IV) and inserting in lieu thereof ''and''; and
(C) by striking out subclause (V); and
(2) in paragraph (2)--
(A) by redesignating subparagraphs (E) and (F) as
subparagraphs (F) and (G), respectively; and
(B) by inserting after subparagraph (D) the
following new subparagraph:
''(E) are paid by the Secretary of Veterans Affairs
as compensation for a service-connected disability
under title 38, United States Code, when military
retired pay has been waived in order to receive such
compensation;''.
(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.
Uniformed Services Former Spouses Equity Act of 1997 - Requires payment from the monthly disposable retired pay of a member to his or her former spouse in compliance with court orders (division of property) to terminate upon the remarriage of that spouse, effective as of the last day of the month in which the remarriage occurs.
Provides that, in the case of a member to whom a final decree of divorce, dissolution, annulment, or legal separation is issued before the member begins to receive retired pay, the disposable retired pay of such member, for purposes of such monthly payments, 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.
Requires a member's spouse or former spouse to obtain a court order for reapportionment of a member's monthly disposable retired pay by the later of the following dates: (1) two years of the date of the final decree of divorce, dissolution, annulment, or legal separation; or (2) six months after the enactment of this Act.
Prohibits the court from treating as part of a member's disposable retired pay amounts which have been waived from such pay in order to receive veterans' disability compensation.