To repeal the requirement for the reduction of certain Survivor Benefit Plan annuities by the amount of dependency and indemnity compensation and to modify the effective date for paid-up coverage under the Survivor Benefit Plan.

1. Adds SEC. 642. REPEAL OF REQUIREMENT OF REDUCTION OF SBP SURVIVOR ANNUITIES BY DEPENDENCY AND INDEMNITY COMPENSATION at the end of subtitle D of title VI

   Adds a section

   In S. 1042 · Placed on Calendar Senate

   (8) Effective date.--This subsection and the amendments made by this subsection shall take effect on October 1, 2005, immediately after the termination of the amendments made to sections 1967, 1969, 1970, and 1977 of title 38, United States Code, by the Emergency Supplemental Appropriations Act for Defense, the Global War on Terror, and Tsunami Relief, 2005 (Public Law 109-13).

   Inserted: SEC. 642. REPEAL OF REQUIREMENT OF REDUCTION OF SBP SURVIVOR ANNUITIES BY DEPENDENCY AND INDEMNITY COMPENSATION.

   Inserted: (a) Repeal.--Subchapter II of chapter 73 of title 10, United States Code is amended--

   Inserted: (1) in section 1450(c)(1), by inserting after "to whom section 1448 of this title applies" the following: "(except in the case of a death as described in subsection (d) or (f) of such section)"; and

   Inserted: (2) in section 1451(c)--

   Inserted: (A) by striking paragraph (2); and

   Inserted: (B) by redesignating paragraphs (3) and (4) as paragraphs (2) and (3), respectively.

   Inserted: (b) Prohibition on Retroactive Benefits.--No benefits may be paid to any person for any period before the effective date provided under subsection (e) by reason of the amendments made by subsection (a).

   Inserted: (c) Prohibition on Recoupment of Certain Amounts Previously Refunded to SBP Recipients.--A surviving spouse who is or has been in receipt of an annuity under the Survivor Benefit Plan under subchapter II of chapter 73 of title 10, United States Code, that is in effect before the effective date provided under subsection (e) and that is adjusted by reason of the amendments made by subsection (a) and who has received a refund of retired pay under section 1450(e) of title 10, United States Code, shall not be required to repay such refund to the United States.

   Inserted: (d) Reconsideration of Optional Annuity.--Section 1448(d)(2) of title 10, United States Code, is amended by adding at the end the following new sentences: "The surviving spouse, however, may elect to terminate an annuity under this subparagraph in accordance with regulations prescribed by the Secretary concerned. Upon such an election, payment of an annuity to dependent children under this subparagraph shall terminate effective on the first day of the first month that begins after the date on which the Secretary concerned receives notice of the election, and, beginning on that day, an annuity shall be paid to the surviving spouse under paragraph (1) instead.".

   Inserted: (e) Effective Date.--The amendments made by this section shall take effect on the later of--

   Inserted: (1) the first day of the first month that begins after the date of the enactment of this Act; or

   Inserted: (2) the first day of the fiscal year that begins in the calendar year in which this Act is enacted.

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   Inserted: SEC. 643. EFFECTIVE DATE FOR PAID-UP COVERAGE UNDER SURVIVOR BENEFIT PLAN.

   Inserted: Section 1452(j) of title 10, United States Code, is amended by striking "October 1, 2008" and inserting "October 1, 2005".

   Original wording

   At the end of subtitle D of title VI, add the following:

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As printed