H.R. 2131House109th Congress (2005-2007)In Committee

New GI Bill of Rights for the 21st Century Act

Legislative Activity

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HouseCommittee Latest Action

Referred to the Subcommittee on Military Personnel.

Military Personnel Subcommittee

June 21, 2005

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HouseIntro Referral

Introduced in House

May 5, 2005

HouseIntro Referral

Referred to the Committee on Veterans' Affairs, and in addition to the Committees on Ways and Means, and Armed Services, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.

May 5, 2005

HouseCommittee

Referred to the Subcommittee on Military Personnel.

Military Personnel Subcommittee

June 21, 2005

Floor Debate

1 member

What members said about H.R. 2131 on the floor

1 Democrat

Rep. Hilda L. SolisD-CA-32 · Nov 10, 2005

Mr. Speaker, I rise today to pay tribute to America's 24.5 million living veterans who have served and sacrificed for our country--including the 28,000 veterans in my district. Veterans Day is the…

Mr. Speaker, I rise today to pay tribute to America's 24.5 million living veterans who have served and sacrificed for our country--including the 28,000 veterans in my district.

Veterans Day is the time to honor the servicemen and women that have protected this country and the freedom we hold so dear. Throughout history, our veterans have served our nation with great distinction and honor. Today, we recognize both those who have worn the uniform and those who are currently serving.

That is why I support several key pieces of legislation that serve to benefit our nation's veterans. I am proud to be a cosponsor of H.R. 2131, the New GI Bill of Rights for the 21st Century. The new GI Bill would repeal unfair tax burdens on military families, provide veterans with affordable health care, education, and job training benefits, and strengthen our support for men and women in uniform, including our National Guard and Reservists.

On this Veterans Day, our servicemen and women continue to risk their lives in Iraq and Afghanistan to protect our country. Recently, the 2,000th soldier was killed in Iraq and more than 15,000 troops have been wounded there. During the Iraqi conflict, my district has suffered the loss often brave servicemen who did not return to their families. They are Marine Corporal Jorge A. Gonzalez; Army Sergeant Atanasio Haromarin; Army Private First Class Jose Casanova; Marine Private First Class Francisco A. Martinez Flores; Army Specialist Leroy Harris-Kelly III; Marine Corporal Rudy Salas; Lance Corporal Benjamin M. Gonzalez; Lance Corporal Manuel A. Ceniceros; Specialist Private First Class Marcos O. Nolasco; and Corporal Stephen P. Johnson. These men, our fallen soldiers, are heroes. My heart and prayers go out to their families and friends.

We have learned that freedom is not free and no one has paid a higher price and sacrifice for our freedom than our veterans. I join the rest of the nation in remembering their service to our country. Let us renew our efforts to keep our promises to our veterans. We can do that by making sure that legislation is passed that will help our veterans. Our nation's veterans and service members need to know that their families will be taken care of while they sacrifice so much.

I urge my colleagues to keep our promises to our veterans and fight for the improvement of services to them.

Bill Text

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Introduced in HouseIssued May 5, 2005

109th CONGRESS

1st Session

H. R. 2131

IN THE HOUSE OF REPRESENTATIVES

May 5, 2005

Mr. Edwards (for himself, Mr. Abercrombie, Mr. Ackerman, Mr. Allen, Mr. Baca, Ms. Baldwin, Mr. Becerra, Ms. Berkley, Mr. Berman, Mr. Berry, Mr. Bishop of Georgia, Mr. Bishop of New York, Mr. Blumenauer, Ms. Bordallo, Mr. Boyd, Ms. Corrine Brown of Florida, Mr. Brown of Ohio, Mr. Butterfield, Mrs. Capps, Mr. Capuano, Mr. Cardin, Mr. Cardoza, Mr. Carnahan, Mr. Case, Mr. Chandler, Mrs. Christensen, Mr. Clay, Mr. Cleaver, Mr. Clyburn, Mr. Conyers, Mr. Costa, Mr. Costello, Mr. Cramer, Mr. Crowley, Mr. Cuellar, Mr. Cummings, Mrs. Davis of California, Mr. DeFazio, Mr. Delahunt, Ms. DeLauro, Mr. Dicks, Mr. Dingell, Mr. Doggett, Mr. Emanuel, Mr. Engel, Ms. Eshoo, Mr. Etheridge, Mr. Evans, Mr. Faleomavaega, Mr. Farr, Mr. Filner, Mr. Ford, Mr. Frank of Massachusetts, Mr. Gonzalez, Mr. Gene Green of Texas, Mr. Grijalva, Mr. Gutierrez, Mr. Hastings of Florida, Ms. Herseth, Mr. Higgins, Mr. Hinchey, Mr. Hinojosa, Mr. Holden, Mr. Holt, Mr. Honda, Mr. Hoyer, Mr. Inslee, Mr. Israel, Mr. Jackson of Illinois, Ms. Jackson-Lee of Texas, Mr. Jefferson, Ms. Eddie Bernice Johnson of Texas, Mrs. Jones of Ohio, Ms. Kaptur, Mr. Kennedy of Rhode Island, Mr. Kildee, Ms. Kilpatrick of Michigan, Mr. Kind, Mr. Langevin, Mr. Lantos, Mr. Larsen of Washington, Mr. Larson of Connecticut, Ms. Lee, Mr. Levin, Mr. Lewis of Georgia, Mr. Lipinski, Ms. Zoe Lofgren of California, Mrs. Lowey, Mr. Lynch, Mrs. Maloney, Mr. Markey, Ms. Matsui, Mrs. McCarthy, Ms. McCollum of Minnesota, Mr. McDermott, Mr. McGovern, Mr. McIntyre, Mr. McNulty, Mr. Meehan, Mr. Meek of Florida, Mr. Meeks of New York, Mr. Menendez, Mr. Michaud, Mr. George Miller of California, Mr. Mollohan, Mr. Moore of Kansas, Mr. Murtha, Mr. Nadler, Mrs. Napolitano, Ms. Norton, Mr. Oberstar, Mr. Olver, Mr. Ortiz, Mr. Owens, Mr. Pallone, Mr. Payne, Ms. Pelosi, Mr. Peterson of Minnesota, Mr. Price of North Carolina, Mr. Rahall, Mr. Rangel, Mr. Reyes, Mr. Ross, Mr. Rothman, Ms. Roybal-Allard, Mr. Ruppersberger, Mr. Rush, Mr. Ryan of Ohio, Ms. Linda T. Sánchez of California, Ms. Schakowsky, Mr. Schiff, Ms. Wasserman Schultz, Ms. Schwartz of Pennsylvania, Mr. Scott of Georgia, Mr. Scott of Virginia, Mr. Serrano, Mr. Sherman, Mr. Skelton, Ms. Slaughter, Mr. Smith of Washington, Ms. Solis, Mr. Spratt, Mr. Stark, Mr. Strickland, Mr. Stupak, Mr. Thompson of Mississippi, Mr. Tierney, Mr. Towns, Mr. Udall of New Mexico, Mr. Van Hollen, Ms. Waters, Ms. Watson, Mr. Waxman, Mr. Weiner, Mr. Wexler, Ms. Woolsey, and Mr. Wynn) introduced the following bill; which was referred to the Committee on Veterans’ Affairs, and in addition to the Committees on Ways and Means and Armed Services, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

A BILL

To improve benefits for members of the Armed Forces and veterans and for their dependents and survivors.

Short title; table of contents

(a)

Short title

This Act may be cited as the New GI Bill of Rights for the 21st Century Act.

(b)

Table of contents

The table of contents of this Act is as follows:

Sec. 1. Short title; table of contents

Title I—Veterans Health Care

Subtitle A—Increase in Funding

Sec. 101. Authorization of additional funding for veterans medical care

Subtitle B—Equitable Medication Copayments and Enrollment Fees

Sec. 111. Prohibition on increases in medication copayment for veterans and imposition of healthcare enrollment fee for veterans

Subtitle C—Mental Health Benefits

Sec. 121. Definition

Chapter 1—Veterans of past deployments

Sec. 125. Six-year extension of eligibility for readjustment counseling services for Vietnam-era veterans

Chapter 2—Military issues

Sec. 131. Department of Veterans Affairs-Department of Defense Health Care Sharing Incentive Fund

Sec. 132. Collection of data from pre- and post-deployment health assessments

Sec. 133. Preventative maintenance post-deployment intervention

Chapter 3—Prevention, early detection, and treatment for returning troops

Sec. 141. Study to identify factors that decrease the likelihood of the development of chronic PTSD despite combat exposure

Sec. 142. Extension of period of enhanced eligibility for VA health services for veterans who served in combat theaters of operations

Sec. 143. Demonstration project to station Department of Veterans Affairs psychologists and psychiatrists at major demobilization sites and military treatment facilities

Sec. 144. Model programs for post-deployment mental health practice

Sec. 145. Performance measures for Department of Veterans Affairs health care administrators

Chapter 4—Department of Defense/Department of Veterans Affairs Council on Post-Deployment Mental Health

Sec. 151. Establishment of Council

Sec. 152. Duties of Council

Chapter 5—Capacity Building in Department of Veterans Affairs

Sec. 161. Plan for expansion of Department of Veterans Affairs system to expand access to specialized PTSD care

Sec. 162. Additional Department of Veterans Affairs resources

Chapter 6—Family therapy

Sec. 165. Eligibility for family counseling and bereavement counseling

Chapter 7—Educational initiatives

Sec. 171. Training program for health-care providers

Sec. 172. Curriculum and protocols for cross-training of Department of Veterans Affairs clinicians

Sec. 173. Publication of state-of-the-art post-deployment mental health problems diagnosis and treatment

Sec. 174. Protocols for pain management for PTSD and war-related pain

Sec. 175. Protocols for treatment of substance use disorders

Sec. 176. Protocols for diagnosis of post-traumatic stress disorder

Chapter 8—National Steering Committee on PTSD Education

Sec. 181. National Steering Committee

Sec. 182. Funding support for National Center for PTSD

Sec. 183. Continuing education to mental health providers

Sec. 184. Web-based curriculum to sponsor clinician training initiatives

Chapter 9—Benefits

Sec. 191. Identification of deficiencies in PTSD disability examinations

Sec. 192. Criteria for determining medical conditions associated with PTSD

Chapter 10—Public awareness

Sec. 195. Public awareness program

Sec. 196. Web site and materials for general campaign of awareness of PTSD

Title II—Disabled Veterans

Subtitle A—Payment Matters

Sec. 201. Eligibility for payment of both retired pay and veterans’ disability compensation for certain additional military retirees with compensable service-connected disabilities

Sec. 202. Coordination of service eligibility for combat-related special compensation and concurrent receipt

Sec. 203. Interim payments under certain veterans claims when decision is delayed following remand

Subtitle B—Outreach

Sec. 211. Rescission of Department of Veterans Affairs memorandum

Sec. 212. Outreach activities

Sec. 213. Requirement for outreach efforts and dedicated staff at each regional office

Title III—Survivors and Dependents

Sec. 301. Repeal of dependency and indemnity compensation offset from survivor benefit plan surviving spouse annuities

Sec. 302. Increase in monthly dependency and indemnity compensation payable to a surviving spouse for so long as there are minor children

Title IV—Additional Support for Active Duty Servicemembers

Sec. 401. One-time bonus for certain service in connection with Operation Iraqi Freedom or Operation Enduring Freedom

Sec. 402. Increase in active-duty end-strength levels for the Armed Forces

Sec. 403. Additional fiscal year 2006 pay increase for middle- and senior-level enlisted members and warrant officers

Title V—Education, Employment and Compensation

Subtitle A—Active Duty Montgomery GI Bill

Sec. 501. Enhanced benefits under the Montgomery GI Bill for four years of active-duty service

Sec. 502. Increase in rates of basic educational assistance under the Montgomery GI Bill

Sec. 503. Repeal of pay reduction and high school graduation requirement for participation in basic educational assistance under the Montgomery GI Bill

Sec. 504. Repeal of delimiting date for use of entitlement to basic educational assistance under the Montgomery GI Bill

Sec. 505. Elimination of limitation to critical military skills for authority to transfer entitlement

Sec. 506. Increase in repayment amounts under the student loan repayment programs for servicemembers

Sec. 507. Expansion of programs of education eligible for accelerated payments of educational assistance under the Montgomery GI Bill

Subtitle B—Reserve Montgomery GI Bill

Sec. 511. Educational assistance under Montgomery GI Bill for members of the Selected Reserve who aggregate more than 2 years of active duty service during any 5-year period

Subtitle C—Employment Assistance for Homeless Veterans

Sec. 521. Reauthorization of appropriations for Homeless Veterans Reintegration Program

Sec. 522. Expansion of Homeless Veterans Reintegration Program to include veterans at imminent risk for homelessness

Subtitle D—Payment Matters

Sec. 531. No reduction in monthly military pay and allowances for members of the uniformed services wounded or injured in combat zones

Sec. 532. Repeal of time limitation on exclusion of combat zone compensation by reason of hospitalization

Title VI—Reserve Components and Recruitment and Retention Initiatives

Subtitle A—Health Care

Sec. 601. Expanded Eligibility of selected reserve members under TRICARE program

Subtitle B—Recruitment and Retention Incentives

Sec. 611. Increase in authorized maximum annual amount of special pay for Selected Reserve health care professionals in critically short wartime specialties and authorized duration of pay

Sec. 612. Reenlistment bonus for members of Selected Reserve

Sec. 613. Increase in authorized maximum amount of Selected Reserve enlistment bonus

Sec. 614. Increase in authorized maximum amount for reserve affiliation bonus under reserve affiliation agreements entered into during fiscal year 2006

Sec. 615. Increase in authorized maximum amount of general enlistment bonus

Sec. 616. Use of referral bonus to promote enlistments in Selected Reserve

Sec. 617. Extension of active-duty retention bonuses and special pays for health care professionals to reserve component officers

Sec. 618. Critical-skills accession bonus for persons enrolled in Senior Reserve Officers’ Training Corps who are obtaining nursing degrees

Subtitle C—Payment Matters

Sec. 621. Nonreduction in pay while Federal employee is serving on active duty in a reserve component of the uniformed services

Sec. 622. Active-duty reserve component employee credit added to general business credit

Sec. 623. Differential wage payments

Sec. 624. Credit for income differential for employment of activated military reservist and replacement personnel

Sec. 625. Employer contributions to IRAs of certain members of the uniformed services

Title VII—Funding

Sec. 701. Repeal of 2001 tax cut for high income taxpayers

Sec. 702. Repeal of scheduled termination of phaseout of personal exemptions

Sec. 703. Repeal of scheduled phaseout of overall limitation on itemized deductions

Veterans Health Care

Increase in Funding

101.

Authorization of additional funding for veterans medical care

(a)

Authorization

There are authorized to be appropriated to the Department of Veterans Affairs, in addition to amounts otherwise authorized to be appropriated, the amount of $3,200,000,000 for fiscal year 2006.

(b)

Improved access to care

Amounts appropriated pursuant to the authorization of appropriations in subsection (a) shall be used to ensure that veterans seeking healthcare from the Department of Veterans Affairs receive their initial appointment for healthcare for a date that is not later than 30 days after the date on which the request is made.

Equitable Medication Copayments and Enrollment Fees

111.

Prohibition on increases in medication copayment for veterans and imposition of healthcare enrollment fee for veterans

(a)

Medication copayments

During the period beginning on the date of the enactment of this Act and ending on October 1, 2007, the Secretary of Veterans Affairs may not implement under subsection (b) of section 1722A of title 38, United States Code, an increase in the copayment for medications required under subsection (a) of that section.

(b)

Enrollment fee

During the period beginning on the date of the enactment of this Act and ending on October 1, 2007, the Secretary of Veterans Affairs may not implement an enrollment fee for veterans enrolling (or renewing enrollment) in the Department of Veterans Affairs healthcare system under section 1705 of such title.

Mental Health Benefits

121.

Definition

In this subtitle, the term PTSD means post-traumatic stress disorder.

Veterans of past deployments

125.

Six-year extension of eligibility for readjustment counseling services for Vietnam-era veterans

Section 1712A(a)(1)(B)(ii) of title 38, United States Code, is amended by striking January 1, 2004 and inserting January 1, 2010.

Military issues

131.

Department of Veterans Affairs-Department of Defense Health Care Sharing Incentive Fund

(a)

In general

The Secretary of Veterans Affairs and the Secretary of Defense shall jointly take such steps as necessary to implement the proposal of the Center for the Study of Traumatic Stress at the Uniformed Services University of the Health Sciences for a Department of Veterans Affairs-Department of Defense Health Care Sharing Incentive Fund.

(b)

Telecommunications support

As part of the implementation of the proposal referred to in subsection (a), the two Secretaries shall provide for a system of telecommunications to support the following:

(1)

Continuing education and support for front-line (forward-deployed) providers of health-care services.

(2)

Enhanced treatment capacity for addressing acute episodes of PTSD and other mental health disorders in combat theaters, including—

(A)

real-time access to clinical specialty support;

(B)

web-based information on state-of-the-art protocols for the treatment and diagnosis of PTSD and other mental health disorders; and

(C)

educational programs concerning PTSD and other mental health disorders commonly associated with deployment.

132.

Collection of data from pre- and post-deployment health assessments

(a)

Data collection

The Secretary of Defense shall take appropriate steps to assist the Secretary of Veterans Affairs with the collection of data from pre- and post-deployment health assessments of members of the Armed Forces that may be relevant for identification and treatment by the Secretary of Veterans Affairs of PTSD and other post-deployment mental health issues. The Secretary of Defense may provide such information in aggregate, unidentified format and may provide such information on a monthly basis or on such other schedule as the two Secretaries may agree to.

(b)

Consent forms

The Secretary of Defense shall develop forms for use in obtaining the written consent of members of the Armed Forces to allow the Department of Veterans Affairs to collect data contained on pre-deployment and post-deployment health assessment forms with relevant treatment information concerning PTSD and other mental health problems that may be associated with combat stress or readjustment to civilian life from those members of the Armed Forces to be discharged or demobilized within 90 days. Such consent forms shall be developed and made available for use by members of the Armed Forces covered by the preceding sentence not later than 60 days after the date of the enactment of this Act.

(c)

Identification of substance use disorders

The Secretary of Defense shall include in pre-deployment and post-deployment health assessments questions to assist in identification of existing or potential substance use disorders among members of the Armed Forces.

133.

Preventative maintenance post-deployment intervention

(a)

In general

The Secretary of Veterans Affairs shall conduct routine preventative maintenance intervention for all members of the Armed Forces returning from deployment in a combat theater. Such intervention shall be conducted between 90 and 180 days after such members return from such deployment.

(b)

Personnel

For purposes of such intervention, the Secretary of Veterans Affairs may use—

(1)

staff of the Department of Veterans Affairs, including readjustment counseling staff; and

(2)

persons trained by the Department of Veterans Affairs, including volunteers from military unit associations, veteran service organizations, or other nonprofit organizations.

(c)

Size

Such intervention shall be conducted with no more than six returning servicemembers at a time.

(d)

Purpose

The purpose of such intervention shall be the following:

(1)

To identify and distinguish symptoms of common acute stress reactions from those of chronic and severe post-traumatic stress disorder.

(2)

To discuss concerns of combat personnel and those expressed by their family members.

(3)

To refer returning servicemembers to appropriate services, as necessary.

(4)

To disseminate educational materials about post-deployment mental health issues, including PTSD to servicemembers.

(5)

To provide follow-up educational materials by mail to family members.

(6)

To provide information concerning homelessness, including risk factors, awareness assessment, and contact information for preventative assistance associated with homelessness.

(e)

VA participation in additional demobilization activities

The Secretary of Defense shall provide for the Secretary of Veterans Affairs to participate in additional demobilization activities, including the Transitional Assistance Program, that are conducted within the Department of Defense for the purposes specified in subsection (d).

Prevention, early detection, and treatment for returning troops

141.

Study to identify factors that decrease the likelihood of the development of chronic PTSD despite combat exposure

(a)

Study

The Secretary of Veterans Affairs shall provide for a study, to be conducted by an entity other than the Department of Veterans Affairs and the Department of Defense, to identify factors that decrease the likelihood of the development of chronic post-traumatic stress disorder (PTSD) in servicemembers and veterans who have had combat exposure, including exposure to guerilla warfare.

(b)

Report

The Secretary shall provide for the entity conducting the study under subsection (a) to submit a report on the results of the study to the Secretary and the Congress not later than one year after the date of the enactment of this Act.

142.

Extension of period of enhanced eligibility for VA health services for veterans who served in combat theaters of operations

Section 1710(e)(3)(C) of title 38, United States Code, is amended by striking 2 years and inserting five years.

143.

Demonstration project to station Department of Veterans Affairs psychologists and psychiatrists at major demobilization sites and military treatment facilities

(a)

Demonstration project

The Secretary of Defense and the Secretary of Veterans Affairs shall jointly provide for the conduct of a demonstration project under which Department of Veterans Affairs psychologists and psychiatrists are stationed at major demobilization sites and military treatment facilities.

(b)

Purpose

The purposes of the demonstration project shall be as follows:

(1)

Identify, on an aggregate level, need for mental health services among active-duty, Reserve, and National Guard members.

(2)

Provide such services or refer members for necessary services.

(3)

Advise servicemembers of the need for continuous services.

(4)

Identify the obstacles servicemembers have in seeking appropriate mental health care.

(c)

Funding

There is authorized to be appropriated such sums as may be necessary for each of fiscal years 2006, 2007, and 2008 for the conduct of the demonstration project. Amounts for the conduct of the project shall be provided equally by the Secretary of Veterans Affairs and the Secretary of Defense.

(d)

Eligibility criteria

Based on the results of the demonstration project, the Secretaries shall identify appropriate eligibility criteria for programs to best respond to the needs of veterans, servicemembers, and their families for post-deployment mental health services. The criteria identified shall be included in the report under subsection (e).

(e)

Report

The Secretary of Veterans Affairs shall submit to the Committees on Veterans’ Affairs of the Senate and House of Representatives a report providing the results of the demonstration project. The report shall be submitted not later than 18 months after the date of the enactment of this Act.

144.

Model programs for post-deployment mental health practice

(a)

Model programs

The Secretary of Veterans Affairs, in consultation with the Secretary of Defense, shall develop model programs to respond to a variety of mental health disorders prevalent among veterans of service in Operation Iraqi Freedom and Operation Enduring Freedom. The program shall be implemented at three sites selected by the Secretary, of which—

(1)

at least one site shall assign case managers to veterans receiving care under such program; and

(2)

at least one site shall use an integrated mental health and primary care model for post-deployment mental health practice.

(b)

Purpose

The purpose of the model program shall be as follows:

(1)

Development of training protocols for involved clinicians.

(2)

Identification of medical conditions which may be associated with post-deployment mental health problems including PTSD.

(3)

Identification of best practices for treatment of post-deployment mental health problems including PTSD.

(4)

Dissemination of results to the Veterans Health Administration and the Veterans Benefits Administration of the Department of Veterans Affairs.

(c)

Authorization

There is authorized to be appropriated for the purposes of subsection (a) the amount of $5,000,000 for each of fiscal years 2006, 2007, and 2008.

145.

Performance measures for Department of Veterans Affairs health care administrators

(a)

Performance measures

The Secretary of Defense and the Secretary of Veterans Affairs, acting through the Department of Defense/Department of Veterans Affairs Council on Post-Deployment Mental Health established under section 151, shall develop performance measures for Department of Veterans Affairs regional health-care directors (referred to as VISN directors) and Department of Defense TRICARE regional managers to ensure the appropriate deployment of resources to implement the treatment protocols referred to as Iraq War Clinical Practice Guidelines.

(b)

Use of performance measures

The performance measures under subsection (a) shall be designed to assess—

(1)

access and availability of PTSD treatment for servicemembers returned from deployment in a combat theater; and

(2)

implementation of protocols referred to in subsection (a).

Department of Defense/Department of Veterans Affairs Council on Post-Deployment Mental Health

151.

Establishment of Council

The Secretary of Defense and the Secretary of Veterans Affairs shall jointly establish a council to be known as the Department of Defense/Department of Veterans Affairs Council on Post-Deployment Mental Health. The council shall be composed of leadership of the two departments in the areas of mental health, PTSD, substance abuse, and military sexual trauma. The council shall be established not later than 120 days after the date of the enactment of this Act.

152.

Duties of Council

(a)

Duties

The Department of Defense/Department of Veterans Affairs Council on Post-Deployment Mental Health shall have the following duties:

(1)

Review of the continuum of care between the Department of Defense and the Department of Veterans Affairs for mental health, PTSD, substance abuse, and military sexual trauma.

(2)

Identification of gaps in the treatment capability of the health-care systems of the Department of Defense and Department of Veterans Affairs for mental health, PTSD, substance abuse, and military sexual trauma and expected gaps in such continuum, with emphasis on access to services in rural areas, to meet the expected demand from current users and servicemembers returning from Operation Iraqi Freedom and Operation Enduring Freedom and other deployments.

(3)

Promotion, within both systems, of an educational program to implement the jointly developed Iraq War Clinical Practice Guidelines.

(4)

Development of outcome monitors and quality improvement instruments to ensure that internal policy regarding PTSD is implemented (including TRICARE and VISN directors’ performance measures under section 307).

(5)

Recommendation of policies to reduce the stigma associated with the seeking of mental health care by active-duty, Reserve, and National Guard members.

(6)

Identification of the highest post-deployment mental health research priorities for the two departments.

(7)

Communications to inform active-duty servicemembers and veterans of matters relating to PTSD.

(b)

Annual meeting with stakeholders

The Council shall meet at least annually with stakeholder groups comprised of veterans, veterans service organizations, and family members of veterans receiving care from the Department of Veterans Affairs mental health programs, and mental health associations.

(c)

Report

The Council shall prepare a report based on the reviews under paragraphs (1) and (2) of subsection (a) to identify the necessary resources to create or enhance PTSD treatment capabilities. The report shall be made available to the Secretary of both Departments for comment. The Secretaries shall indicate recommendations in which they concur or disagree and include specific plans for implementation of any recommendations accepted. The report, with the comments and recommendations of the two Secretaries shall be submitted to the Committees on Veterans’ Affairs and the Committees on Armed Services of the Senate and House of Representatives not later than one year after the date of the enactment of this Act. The report shall include priority listing of sites which require investments according to the greatest perceived need for PTSD services.

Capacity Building in Department of Veterans Affairs

161.

Plan for expansion of Department of Veterans Affairs system to expand access to specialized PTSD care

(a)

Development of plan

Based upon the report under section 152(b), the Secretary of Veterans Affairs shall develop a plan for the Department of Veterans Affairs to expand access to specialized PTSD care through—

(1)

Readjustment Counseling Service centers operated under section 1712A of title 38, United States Code;

(2)

community-based outpatient clinics; and

(3)

telemedicine.

(b)

Inspector General investigation

The Inspector General of the Department of Veterans Affairs shall investigate specialized programs of the Department of Veterans Affairs for the treatment of post-traumatic stress disorder in order to determine—

(1)

the current workloads of those programs;

(2)

staff associated with each of those programs;

(3)

funds obligated for those programs; and

(4)

any waiting times associated with those programs.

(c)

Report

The Inspector General shall submit to the Committees on Veterans’ Affairs of the Senate and House of Representatives a report containing the Inspector General’s findings under subsection (b), together with an assessment of the ability of the Department of Veterans Affairs to address such findings, along with recommendations for accommodating—

(1)

the current workload of the Department in specialized treatment program;

(2)

102 percent of the current workload of the Department; and

(3)

110 percent of the current workload of the Department.

162.

Additional Department of Veterans Affairs resources

In order to improve access to mental health services, the Secretary of Veterans Affairs shall provide the following:

(1)

100 additional full-time equivalent employees to Readjustment Counseling Service outstations.

(2)

A PTSD clinical team at every medical center of the Veterans Health Administration.

(3)

A family therapist at each Vet Center under section 1712A of title 38, United States Code.

(4)

A PTSD coordinator in each regional network referred to as a Veterans Integrated Service Network (VISN ) whose duties shall include—

(A)

development of plans for meeting PTSD and other post-deployment mental health treatment needs consistent with the report under section 152(b);

(B)

assurance of implementation of clinical practice guidelines throughout the VISN;

(C)

liaison among all health-care sites in the VISN and the Department Central Office on matters relating to PTSD.

(5)

A PTSD coordinator in each regional office of the Readjustment Counseling Service whose duties shall include liaison with regional office staff and medical centers for veterans seeking service-connection for PTSD.

Family therapy

165.

Eligibility for family counseling and bereavement counseling

(a)

Counseling for family members of veterans being treated for Service-Connected disabilities

Section 1782(a) of title 38, United States Code, is amended by adding at the end the following new sentence: In addition, the Secretary shall provide to an individual described in subsection (c) such professional counseling and mental health services as are necessary as a consequence of a disability of a veteran described in the preceding sentence. Counseling and mental health services under the preceding sentence shall be provided (if so requested by the individual) for a period of two years from the date on which the individual first receives such counseling or mental health services under the preceding sentence..

(b)

Bereavement counseling

Section 1783 of such title is amended—

(1)

by striking may provide in subsections (a) and (b) and inserting shall, upon request, provide; and

(2)

by adding at the end the following new subsection:

(d)

Duration of counseling

Counseling under subsection (a) or with respect to the death of a veteran or under subsection (b) with respect to the death of a member who dies in the active military, naval, or air service shall be provided to an individual eligible for such counseling (if so requested by that individual) for a period of two years from the date on which the individual first receives counseling under this section with respect to that death.

Educational initiatives

171.

Training program for health-care providers

The Secretary of Veterans Affairs and the Secretary of Defense shall jointly develop a broad training program for all health-care providers in the Department of Veterans Affairs and the Department of Defense to familiarize those providers with mental health-care issues that are likely to arise among persons deployed to combat theaters during the five years after such a deployment.

172.

Curriculum and protocols for cross-training of Department of Veterans Affairs clinicians

The Secretary of Veterans Affairs shall develop a curriculum and required protocols for cross-training to allow the following clinicians of the Department of Veterans Affairs to screen for post-deployment mental health problems, including PTSD, and, as appropriate, provide information and appropriate referral to—

(1)

primary care providers;

(2)

practitioners assigned as Gulf War points-of-contact; and

(3)

clinicians assigned as case managers.

173.

Publication of state-of-the-art post-deployment mental health problems diagnosis and treatment

The Secretary of Veterans Affairs and the Secretary of Defense shall jointly develop a plan for the production and dissemination of publications to advise clinicians on state-of-the-art diagnosis and treatment of PTSD and other mental health disorders experienced after deployment, including any medical conditions associated with such disorders.

174.

Protocols for pain management for PTSD and war-related pain

The Secretary of Veterans Affairs and the Secretary of Defense shall jointly develop protocols for pain management for PTSD and war-related pain.

175.

Protocols for treatment of substance use disorders

The Secretary of Defense shall develop appropriate substance use disorder treatment protocols for assistance in combat areas of operations and on return to the United States.

176.

Protocols for diagnosis of post-traumatic stress disorder

(a)

Findings

The Congress finds as follows:

(1)

The symptoms of post-traumatic stress disorder are often similar to those of traumatic brain injury and some neurological disorders.

(2)

Some veterans with PTSD have co-morbidities that may mask or compound the symptoms associated with PTSD.

(3)

Correct diagnosis of PTSD and other disorders is critical to effective treatment of those disorders.

(b)

Clinical practice guidelines

The Secretary of Veterans Affairs shall develop clinical practice guidelines to ensure that clinicians are able to effectively distinguish between diagnoses with similar symptoms that may manifest as post-traumatic stress disorder.

National Steering Committee on PTSD Education

181.

National Steering Committee

(a)

Establishment

There is a National Steering Committee on PTSD Education, to be appointed by the joint council established under section 151. The committee shall be comprised of mental health and other health professionals and health educators involved in the care of veterans of a deployment to a theater of combat on or after the date of the enactment of this Act.

(b)

Purpose

The committee shall review training protocols for health-care providers and plans for dissemination of educational materials to veterans, their families, and other relevant parties and shall identify the resources available to provide for those purposes.

(c)

Meetings

The committee shall meet at least once annually.

182.

Funding support for National Center for PTSD

There is authorized to be appropriated to the Secretary of Veterans Affairs for the National Center for PTSD to assist in carrying out a joint educational initiative with the Uniformed Services University of the Health Sciences the amount of $5,000,000 for each of fiscal years 2005 through 2014.

183.

Continuing education to mental health providers

The National Steering Committee established under section 181 shall provide continuing education to mental health providers in the Department of Veterans Affairs and the Department of Defense.

184.

Web-based curriculum to sponsor clinician training initiatives

The National Steering Committee established under section 181 shall develop a Web-based curriculum to sponsor clinician training initiatives.

Benefits

191.

Identification of deficiencies in PTSD disability examinations

(a)

Evaluation of adjudication of claims

The Secretary of Veterans Affairs, in consultation with the National Center for PTSD, shall obtain an evaluation of the quality and consistency of adjudication of claims for PTSD, including the adequacy of service-connected compensation examinations for rating purposes and the extent to which veterans who are service-connected for PTSD are actually employed and employable.

(b)

Report

Not later than 12 months after the date of the enactment of this Act, the Secretary shall submit to the Committees on Veterans Affairs of the Senate and House of Representatives a report that includes the following information and recommendations:

(1)

The types of evidence sufficient to confirm combat experience for veterans filing claims for PTSD based on combat.

(2)

The policies and procedures used to obtain confirmation of a stressor, including documentation of service in combat for claims based on PTSD.

(3)

Based on a representative national sample, the number and percentage of veterans for each period of war whose claims for PTSD have been denied based upon the lack of a credible stressor.

(4)

Based on a representative national sample, the number and percentage of veterans for each period of war whose claims for PTSD have been denied based upon the lack of a diagnosis of PTSD.

(5)

Based on a representative national sample, the number and percentage of veterans for each period of war whose claims for PTSD have been granted and the rating which was initially awarded for that claim.

(6)

The number of initial and subsequent claims and average time to process claims for PTSD which have been granted (including the rating assigned and any determination as to employability) and denied for each regional office for a consecutive six month period.

(7)

The number and percentage of initial claims for PTSD selected from a representative national sample during a consecutive six month period which had a compensation and pension examination conducted in compliance with best practices for PTSD examinations.

(8)

The number and percentage of examinations selected from a representative national sample during a consecutive six month period in which the compensation and pension examinations for PTSD were judged to be inadequate.

(9)

The number and percentage of claims for PTSD selected from a representative national sample during that consecutive six month period for which the examination was returned as inadequate.

(10)

The maximum, minimum and average time based upon a representative national sample allocated for completion of an initial compensation and pension examination for PTSD.

(11)

An assessment comparing the employment of veterans rated for psychiatric impairments with similar ratings based upon physical impairments including, the number of veterans in each sample who are employed on a full time or part time basis, the average time such veterans have been unemployed and a comparison of the amount of work lost from employment due to disability and the average earnings of veterans in each group.

(12)

Taking into account criteria such as the information in the Dictionary of Occupational Titles (DOT), including its companion publication, the Selected Characteristics of Occupations Defined in the Revised Dictionary of Occupational Titles (SCO), published by the Department of Labor, examples of the types of employment that an average veteran rated at 30 percent, at 50 percent, and at 70 percent disabled for PTSD can be expected to obtain and retain.

(13)

The number of claims for PTSD appealed to the Board of Veterans Appeals during fiscal year 2005, including the specific issue appealed (service-connection, effective date, rating) and the results of such appeals (affirmed, denied, remanded, other disposition).

(14)

Recommendations for improving the accuracy and consistency of PTSD examinations, claim development and decisions.

(15)

Barriers to successful employment for veterans who have been service-connected for PTSD.

(16)

Recommendations for removing barriers to employment for veterans who have been service-connected for PTSD.

(17)

Recommendations for legislative changes which could improve the potential for vocational rehabilitation and employment of persons service-connected for PTSD.

192.

Criteria for determining medical conditions associated with PTSD

The Secretary of Veterans Affairs shall develop—

(1)

criteria for determining those medical conditions that are as likely as not to be associated with PTSD; and

(2)

standards for determining when secondary service-connection should be granted for those conditions.

Public awareness

195.

Public awareness program

The Secretary of Veterans Affairs shall conduct an aggressive, comprehensive outreach program to enhance the awareness of veterans, and the public in general, of the symptoms of PTSD and of the services available for veterans with those symptoms. The Secretary of Defense shall provide the Secretary of Veterans Affairs with such assistance as may be required for the purposes of such program. To the extent practicable, the program shall be conducted through the joint council established under section 151.

196.

Web site and materials for general campaign of awareness of PTSD

As part of the program under this title, the Secretary of Veterans Affairs shall develop and continually update a Web site and materials, including pamphlets, news releases, fact sheets, and other materials, for the purposes of a general campaign of awareness of post-traumatic stress disorder.

Disabled Veterans

Payment Matters

201.

Eligibility for payment of both retired pay and veterans’ disability compensation for certain additional military retirees with compensable service-connected disabilities

(a)

Extension of concurrent receipt authority to retirees with service-connected disabilities rated less than 50 percent

Section 1414 of title 10, United States Code, is amended by striking paragraph (2) of subsection (a).

(b)

Repeal of phase-in of concurrent receipt of retired pay and veterans' disability compensation

Such section is further amended—

(1)

in subsection (a), by striking the final sentence of paragraph (1);

(2)

by striking subsection (c) and redesignating subsections (d) and (e) as subsections (c) and (d), respectively; and

(3)

in subsection (d) (as so redesignated), by striking subparagraph (4).

(c)

Clerical amendments

(1)

The heading for section 1414 of such title is amended to read as follows:

1414.

Members eligible for retired pay who are also eligible for veterans’ disability compensation: concurrent payment of retired pay and disability compensation

(2)

The item relating to such section in the table of sections at the beginning of chapter 71 of such title is amended to read as follows:

1414. Members eligible for retired pay who are also eligible for veterans’ disability compensation: concurrent payment of retired pay and disability compensation.

(d)

Effective date

The amendments made by this section shall take effect as of January 1, 2006, and shall apply to payments for months beginning on or after that date.

202.

Coordination of service eligibility for combat-related special compensation and concurrent receipt

(a)

Eligibility for TERA retirees

Subsection (c) of section 1413a of title 10, United States Code, is amended by striking entitled to retired pay who— and all that follows and inserting

who—

(1)

is entitled to retired pay, other than a member retired under chapter 61 of this title with less than 20 years of service creditable under section 1405 of this title and less than 20 years of service computed under section 12732 of this title; and

(2)

has a combat-related disability

(b)

Amendments to standardize similar provisions

(1)

Clerical amendment

The heading for paragraph (3) of section 1413a(b) of such title is amended by striking rules and inserting rule.

(2)

Specification of qualified retirees for concurrent receipt purposes

Subsection (a) of section 1414 of such title, as amended by section 2(a), is amended—

(A)

by striking a member or and all that follows through retiree’) and inserting an individual who is a qualified retiree for any month;

(B)

by inserting retired pay and veterans’ disability compensation after both; and

(C)

by adding at the end the following new paragraph:

(2)

Qualified retirees

For purposes of this section, a qualified retiree, with respect to any month, is a member or former member of the uniformed services who—

(A)

is entitled to retired pay, other than in the case of a member retired under chapter 61 of this title with less than 20 years of service creditable under section 1405 of this title and less than 20 years of service computed under section 12732 of this title; and

(B)

is also entitled for that month to veterans’ disability compensation.

(3)

Standardization with crsc rule for chapter 61 retirees

Subsection (b) of section 1414 of such title is amended—

(A)

by striking Special rules in the subsection heading and all that follows through is subject to in paragraph (1) and inserting Special rule for chapter 61 disability retirees.—In the case of a qualified retiree who is retired under chapter 61 of this title, the retired pay of the member is subject to; and

(B)

by striking paragraph (2).

(c)

Effective date

The amendments made by this section shall take effect as of January 1, 2006, and shall apply to payments for months beginning on or after that date.

203.

Interim payments under certain veterans claims when decision is delayed following remand

(a)

In general

(1)

Chapter 53 of title 38, United States Code, is amended by adding at the end the following new section:

5320.

Interim benefits under certain remanded cases

(a)

Interim benefits

When a claim for benefits under the jurisdiction of the Secretary is remanded by the United States Court of Appeals for Veterans Claims or by the Board for Veterans’ Appeals in a case involving a claim under chapters 11, 13 or 15 of this title and to which sections 5109B or 7112 of this title applies, if the Secretary does not make a decision on the matter within 180 days of the date of the remand decision, then until such matter is finally decided, the Secretary shall pay an interim benefit in the amount of $500 per month to each claimant under the claim. Such payments shall commence as of the first month beginning after the end of such 180-day period.

(b)

Effect on interim benefit payments of final decision on claim

When a claim with respect to which interim benefits are being paid under subsection (b) is finally decided—

(1)

if the final decision is to award benefits, the amounts paid as interim benefits shall be considered to be an advance payment of benefits owed for any period before the date of such final decision (except that if the total amount of interim benefits paid is greater than the amount of retroactive benefits, the amount of the difference shall not be considered to be an overpayment for any purpose); and

(2)

if the final decision is not to award benefits, the amounts paid as interim benefits shall not be considered to be an overpayment for any purpose.

(2)

The table of sections at the beginning of such chapter is amended by adding at the end the following new item:

Sec. 5320. Interim benefits under certain remanded cases

(b)

Effective date

Section 5320 of title 38, United States Code, as added by subsection (a), shall apply with respect to any decision remanded by the Court of Appeals for Veterans Claims or the Board of Veterans’ Appeals on or after the date of the enactment of this Act.

(c)

Report

Not later than 6 months after the date of the enactment of this Act, the Secretary of Veterans Affairs shall submit to Congress a report on measures the Secretary intends to take to expedite the processing of remanded claims for veterans benefits.

Outreach

211.

Rescission of Department of Veterans Affairs memorandum

(a)

Rescission of memorandum

The memorandum of the Department of Veterans Affairs dated July 18, 2002, from the Deputy Under Secretary for Health for Operations and Management with the subject Status of VHA Enrollment and Associated Issues is hereby rescinded. Marketing activities of directors of health service networks (known as Veterans Integrated Service Networks) of the Department of Veterans Affairs to enroll new veterans within their respective networks shall be carried out without regard to such memorandum.

(b)

Funding limitation

No funds available to the Department of Veterans Affairs may be used to carry out the memorandum referred to in subsection (a) or otherwise to implement the policy contained in that memorandum.

212.

Outreach activities

(a)

Annual plan required

Subchapter II of chapter 77 of title 38, United States Code, is amended by adding at the end the following new sections:

7728.

Annual plan on outreach activities

(a)

Annual plan required

The Secretary shall prepare each year a plan for the outreach activities of the Department for the following year.

(b)

Elements

Each annual plan under subsection (a) shall include the following:

(1)

Plans for efforts to identify veterans who are not enrolled or registered with the Department for benefits or services under the programs administered by the Secretary.

(2)

Plans for informing veterans and their dependents of modifications of the benefits and services under the programs administered by the Secretary, including eligibility for medical and nursing care and services.

(c)

Coordination in development

In developing an annual plan under subsection (a), the Secretary shall consult with the following:

(1)

Directors or other appropriate officials of organizations recognized by the Secretary under section 5902 of this title.

(2)

Directors or other appropriate officials of State and local education and training programs.

(3)

The Administration on Aging of the Department of Health and Human Services.

(4)

Representatives of nongovernmental organizations that carry out veterans outreach programs.

(5)

Representatives of State and local veterans employment organizations.

(6)

Businesses and professional organizations.

(7)

Other individuals and organizations that assist veterans in adjusting to civilian life.

(d)

Incorporation of assessment of previous annual plans

In developing an annual plan under subsection (a), the Secretary shall take into account the lessons learned from the implementation of previous annual plans under that subsection and program evaluations from the Office of Policy, Planning, and Preparedness of the Department.

7729.

Outreach activities: coordination of activities within Department

(a)

The Secretary shall establish and maintain procedures for ensuring the effective coordination of the outreach activities of the Department between and among the following:

(1)

The Office of the Secretary.

(2)

The Office of Public Affairs.

(3)

The Veterans Health Administration.

(4)

The Veterans Benefits Administration.

(5)

The National Cemetery Administration.

(b)

The Secretary shall—

(1)

periodically review the procedures maintained under subsection (a) for the purpose of ensuring that such procedures meet the requirement in that subsection; and

(2)

make such modifications to such procedures as the Secretary considers appropriate in light of such review in order to better achieve that purpose.

(b)

Clerical amendment

The table of sections at the beginning of such chapter is amended by inserting after the item relating to section 7727 the following new items:

7728. Annual plan on outreach activities

7729. Outreach activities: coordination of activities within Department

(c)

Initial Annual Plan

The first annual outreach activities plan under section 7728 of title 38, United States Code, as added by subsection (a), shall be prepared for the first year beginning after the date of the enactment of this Act.

213.

Requirement for outreach efforts and dedicated staff at each regional office

(a)

Findings

Congress and the Department of Veterans Affairs historically have targeted certain specific populations for outreach efforts concerning benefits under laws administered by the Secretary of Veterans Affairs. Groups currently targeted for such outreach efforts and for which program outreach coordinators have been designated at each regional office of the Department of Veterans Affairs are the following:

(1)

Former prisoners of war.

(2)

Women veterans.

(3)

Minority veterans.

(4)

Active duty personnel.

(5)

Homeless veterans.

(6)

Elderly veterans.

(7)

Recently separated veterans.

(b)

Eligible dependent defined

Paragraph (2) of section 7721(b) of title 38, United States Code, is amended to read as follows:

(2)

the term eligible dependent means a spouse, surviving spouse (whether or not remarried), child (regardless of age or marital status), or parent of a person who served in the active military, naval, or air service.

(c)

Improved outreach program

Section 7727 of title 38, United States Code, is amended to read as follows:

7727.

Outreach for eligible dependents

(a)

In carrying out this subchapter, the Secretary shall ensure that the needs of eligible dependents are fully addressed.

(b)

(1)

In order to carry out subsection (a), the Secretary shall assign such employees of the Veterans Benefits Administration as the Secretary considers appropriate to conduct outreach programs and provide outreach services for eligible dependents. In areas where the number of eligible dependents warrant doing so, the Secretary shall assign at least one employee in the Veterans Benefits Administration regional office to serve as a full-time coordinator of outreach programs and services for eligible dependents in that region.

(2)

Responsibilities of employees assigned to outreach functions under paragraph (1) shall include providing eligible dependents with—

(A)

information about benefits under laws administered by the Secretary; and

(B)

contacting responsible regional office employees to facilitate—

(i)

assistance in claims preparation and inquiry resolution; and

(ii)

in the case of a dependent of a deceased veteran for whom necessary records are incomplete, assistance in obtaining such records and other necessary information concerning the veteran.

(c)

(1)

Information provided an eligible dependent under this section shall include information on how to apply for benefits for which the dependent may be eligible, including information about assistance available under subsection (b) and section 7722(d) of this title.

(2)

In the case of eligible dependents who are members of distinct beneficiary populations (such as survivors of deceased veterans), the Secretary shall ensure that information provided under this section includes specific information about benefits relating to that population.

(d)

For any geographic area in which there is a significant population of eligible dependents whose primary language is a language other than English, the Secretary shall make information provided under this subsection available to those dependents in the dominant language in that area (in addition to English).

(e)

Outreach services and assistance shall be provided for eligible dependents through the same means that are used for other specially targeted groups.

(f)

The Secretary shall ensure that the availability of outreach services and assistance for eligible dependents under this subchapter is made known through a variety of means, including the Internet, correspondence of the Department, announcements in veterans publications, announcements to the media, telephone directories, direct correspondence to congressional offices, military bases, public affairs offices, military retiree affairs offices, and United States embassies.

(g)

The Secretary shall support the Department’s periodic evaluation under section 527 of this title concerning the Department’s efforts to address the needs of eligible dependents.

(h)

The Secretary shall include in the Secretary’s annual report under section 529 of this title an assessment of the programs of the Department addressing the information and assistance needs of veterans and eligible dependents. The Secretary shall include in each such report the following:

(1)

Information about expenditures, costs, and workload under the program of the Department directed towards the information and assistance needs of veterans and eligible dependents.

(2)

Information about outreach efforts directed toward veterans and eligible dependents.

(3)

Information about emerging needs within the program that relate to other provisions of law, including section 7725 of this title with respect to language needs of veterans and eligible dependents.

(4)

Information as to the timeline for implementation of improvements to meet existing and emerging needs of veterans and eligible dependents in addition to those specified in this section.

III

Survivors and Dependents

301.

Repeal of dependency and indemnity compensation offset from survivor benefit plan surviving spouse annuities

(a)

Repeal

Subsections (c), (e), and (k) of section 1450 of title 10, United States Code, and subsection (c)(2) of section 1451 of such title are repealed.

(b)

Effective date

The amendments made by subsection (a)—

(1)

shall take effect on the later of October 1, 2005, or the date of the enactment of this Act; and

(2)

shall apply with respect to payment of annuities under subchapter II of chapter 73 of title 10, United States Code, for months beginning on or after that date.

(c)

Recoupment of certain amounts previously refunded to SBP recipients

(1)

A surviving spouse who is in receipt of an SBP annuity that is in effect before the date specified in subsection (b) and that is adjusted by reason of the amendments made by subsection (a) and who had previously received an SBP retired pay refund shall repay an amount determined under paragraph (2). Any such repayment shall be made in the same manner as a repayment under subsection (k)(2) of section 1450 of title 10, United States Code, as in effect on the day before the date of the enactment of this Act.

(2)

The amount of a repayment under paragraph (1) shall be the amount that bears the same ratio to the amount of that refund as the surviving spouse’s life expectancy (determined in accordance with standard actuarial practices) bears to the anticipated total duration of the annuity (determined as the sum of such life expectancy and the duration of the annuity already received).

(3)

In this subsection:

(A)

The term SBP annuity means an annuity under the program established under subchapter II of chapter 73 of title 10, United States Code.

(B)

The term SBP retired pay refund means a refund under subsection (e) of section 1450 of title 10, United States Code, as in effect before the date specified in subsection (b).

302.

Increase in monthly dependency and indemnity compensation payable to a surviving spouse for so long as there are minor children

(a)

Increase in DIC

Subsection (b) of section 1311 of title 38, United States Code, is amended by inserting $250, plus after shall be increased by.

(b)

Conforming repeal of Two-Year limitation

Subsection (e) of such section is repealed.

(c)

Effective date

The amendment made by subsection (a) shall take effect with respect to payments of dependency and indemnity compensation under section 1311 of title 38, United States Code, for the first month beginning on or after the date of the enactment of this Act.

Additional Support for Active Duty Servicemembers

401.

One-time bonus for certain service in connection with Operation Iraqi Freedom or Operation Enduring Freedom

(a)

Army, navy, air force, and Marine Corps

The Secretary of Defense shall provide for the payment of a bonus under this section to each member of the Army, Navy, Air Force, or Marine Corps who, at any time during the service of the member in connection with Operation Iraqi Freedom or Operation Enduring Freedom, satisfied or satisfies the eligibility criteria for receipt of special pay under section 310 of title 37, United States Code, for duty subject to hostile fire or imminent danger.

(b)

Coast Guard

The Secretary of Homeland Security shall provide for the payment of a bonus under this section to each member of the Coast Guard who, at any time during the service of the member in connection with Operation Iraqi Freedom or Operation Enduring Freedom, satisfied or satisfies the eligibility criteria for receipt of special pay under such section.

(c)

Amount of bonus

The amount of the bonus paid under this section shall be equal to $1,000.

(d)

Entitlement limited to single bonus payment

A member may not receive more than one bonus under the authority of this section.

402.

Increase in active-duty end-strength levels for the Armed Forces

(a)

In general

The Armed Forces are authorized strengths for active duty personnel as of September 30, 2006, as follows:

(1)

The Army, 512,400.

(2)

The Navy, 365,900.

(3)

The Marine Corps, 180,000.

(4)

The Air Force, 359,700.

(b)

Revision in permanent active duty end strength minimum levels

Section 691(b) of title 10, United States Code, is amended by striking paragraphs (1) through (4) and inserting the following:

(1)

For the Army, 512,400.

(2)

For the Navy, 365,900.

(3)

For the Marine Corps, 180,000.

(4)

For the Air Force, 359,700.

403.

Additional fiscal year 2006 pay increase for middle- and senior-level enlisted members and warrant officers

(a)

Targeted pay increase

The Secretary of Defense shall increase the rates of monthly basic pay for enlisted members of the Armed Forces in the pay grades E–5 through E–9 and all warrant officers of the Armed Forces as necessary to ensure that, by the end of fiscal year 2006, the compensation received by such enlisted members and warrant officers is equal to not less than 80 percent of the compensation for persons in the private sector with comparable educational levels and experience, as determined by the Secretary.

(b)

Relation to other pay increases

The pay increase required by subsection (a) shall be in addition to any other adjustment to become effective during fiscal year 2006 in the rates of monthly basic pay authorized members of the Armed Forces, whether made pursuant to section 1009 of title 37, United States Code, or a law authorizing appropriations for the Department of Defense for fiscal year 2006.

Education, Employment and Compensation

Active Duty Montgomery GI Bill

501.

Enhanced benefits under the Montgomery GI Bill for four years of active-duty service

(a)

In general

Chapter 30 of title 38, United States Code, is amended by adding at the end the following new subchapter:

Enhanced educational assistance

3041.

Enhanced educational assistance entitlement

(a)

Entitlement

An eligible individual is entitled to enhanced educational assistance under this subchapter.

(b)

Eligible individual defined

(1)

For purposes of this subchapter, the term eligible individual means an individual who meets the service requirement described in subsection (c) and whose status after completion of such service is described in section 3011(a)(3) of this title (relating to continuation on active duty, honorable discharge, or honorable service, as the case may be).

(2)

Such term does not include an individual described in paragraph (1) or (2) of section 3011(c) of this title (relating to individuals not electing basic educational assistance under subchapter II of this chapter or certain commissioned officers, respectively).

(c)

Service requirement

(1)

The service requirement referred to in subsection (b) is as follows:

(A)

After September 30, 2005, the individual—

(i)

first enters on active duty;

(ii)

reenlists or extends an enlistment on active duty as a member of the Armed Forces; or

(iii)

in the case of an officer, continues to serve on active duty after that date.

(B)

From the date of such entry, reenlistment, extension, or continuation, as the case may be, the individual—

(i)

serves a continuous period of active duty of at least four years in the Armed Forces; or

(ii)

serves on active duty in the Armed Forces and is discharged or released from active duty—

(I)

as provided in subclause (I) of section 3011(a)(1)(A)(ii) of this title (relating to service-connected disabilities and other medical conditions);

(II)

for the convenience of the Government, after having completed not less than 42 months of continuous active duty; or

(III)

as provided in subclause (III) of section 3011(a)(1)(A)(ii) of this title (relating to involuntary discharge or release for the convenience of the Government as a result of a reduction in force).

(2)

In determining service under paragraph (1), the following rules apply:

(A)

Any period of service described in paragraph (2) or (3) of section 3011(d) of this title (relating to periods of service terminated because of a defective enlistment and periods of service on active duty which individuals in the Selected Reserve were ordered to perform under certain provisions of chapter 1209 of title 10, respectively) that applies to an eligible individual under this section shall not be considered a part of the individual’s period of active duty.

(B)

A member described in paragraph (2) of section 3011(f) of this title (relating to certain members discharged or released who subsequently reenlist or re-enter on a period of active duty) who serves the periods of active duty referred to in such paragraph shall be deemed to have served a continuous period of active duty the length of which is the aggregate length of the periods of active duty referred to in such paragraph.

(C)

Subsections (g) and (h) of section 3011 of this title (relating to assignment full time at a civilian institution for courses of education and to commencement of courses of education at a service academy, respectively) apply with respect to an eligible individual under this section in the same manner as they apply to an individual under section 3011 of this title.

(d)

Election of basic educational assistance

(1)

An eligible individual entitled to enhanced educational assistance under this subchapter may elect (in a form and manner prescribed by the Secretary) to receive basic educational assistance under subchapter II in lieu of such enhanced educational assistance for an enrollment period. Such an election shall be made by not later than 30 days before the beginning of the enrollment period.

(2)

An eligible individual may revoke an election made pursuant to paragraph (1), but in no case may such revocation be made later than 30 days before the beginning of the enrollment period.

3042.

Duration of enhanced educational assistance

(a)

In general

Subject to section 3695 of this title and except as provided in subsection (b), each individual entitled to enhanced educational assistance under section 3041 of this title is entitled to a monthly enhanced educational assistance allowance under this subchapter for a period or periods not to exceed a total of 36 months (or the equivalent thereof in part-time enhanced educational assistance).

(b)

Special rule for certain early separations

Subject to section 3695 of this title, in the case of an individual described in subclause (I) or (III) of section 3041(c)(1)(B)(ii) of this title (relating to individuals discharged for service-connected disabilities or medical conditions or whose service is involuntarily terminated for the convenience of the Government as a result of a reduction in force, respectively) who does not serve a continuous period of active duty of at least four years in the Armed Forces (as described in section 3041(c)(1)(B)(i) of this title), the individual is entitled to one month of enhanced educational assistance benefits under this subchapter (not to exceed a total of 36 months (or the equivalent thereof in part-time enhanced educational assistance)) for each month of continuous active duty served by the individual beginning with the date on which the entry on active duty, reenlistment, enlistment extension, or continuation applicable to that individual under section 3041(c)(1)(A) of this title begins.

3043.

Payment of educational expenses

(a)

In general

(1)

Subject to paragraph (2), the Secretary shall pay to the educational institution providing a course under an approved program of education to an eligible individual under this subchapter who is enrolled in the course the actual cost of tuition and fees otherwise payable by the individual.

(2)

Such cost may not exceed the amount charged to nonveterans in similar circumstances.

(b)

Stipend; costs of books and supplies

The Secretary shall pay to each eligible individual under this subchapter who is pursuing an approved program of education—

(1)

a stipend as provided in section 3044 of this title; and

(2)

in accordance with regulations prescribed by the Secretary, an amount equal to the average cost, for the year involved, of books and supplies payable by individuals pursuing courses of education at educational institutions.

3044.

Amount of stipend

(a)

In general

Except as provided in section 3042 of this title, the stipend under this subchapter shall be paid at a monthly rate (as that rate may be increased pursuant to subsection (b)) as follows:

(1)

At the monthly rate of $900 for an approved program of education pursued on a full-time basis.

(2)

At the monthly rate of $700 for an approved program of education pursued on a three-quarter-time basis.

(3)

At the monthly rate of $500 for an approved program of education pursued on a half-time basis.

(4)

At the monthly rate of $300 for an approved program of education pursued on less than a half-time basis.

(b)

Adjustment for inflation

With respect to any fiscal year beginning after fiscal year 2006, the Secretary shall provide a percentage increase (rounded to the nearest dollar) in the rates payable under subsection (a) equal to the percentage by which—

(1)

the Consumer Price Index (all items, United States city average) for the 12–month period ending on the June 30 preceding the beginning of the fiscal year for which the increase is made, exceeds

(2)

such Consumer Price Index for the 12–month period preceding the 12-month period described in paragraph (1).

(b)

Conforming amendments

(1)

Section 3002 of such title is amended by inserting at the end the following new paragraph:

(9)

The term enhanced educational assistance means educational assistance provided under subchapter V.

(2)

Section 3011 of such title is amended in subsection (f)(1) and (g) by striking chapter each place it appears and inserting subchapter.

(3)

Section 3018A(a) of such title is amended by striking education assistance under this chapter and inserting educational assistance under this subchapter.

(4)

Section 3018B of such title is amended by striking education assistance under this chapter each place it appears and inserting educational assistance under this subchapter.

(5)

Section 3018C of such title is amended by striking educational assistance under this chapter each place it appears and inserting educational assistance under this subchapter.

(6)

Section 3019 of such title is amended by striking chapter each place it appears and inserting subchapter.

(7)

Section 3032(e)(3) of such title is amended by inserting , or section 3044(a)(1) after section 3015.

(c)

Clerical amendment

The table of sections at the beginning of chapter 30 of title 38, United States Code, is amended by adding at the end the following new items:

Subchapter V—Enhanced educational assistance

3041. Enhanced educational assistance entitlement

3042. Duration of enhanced educational assistance

3043. Payment of educational expenses

3044. Amount of stipend

502.

Increase in rates of basic educational assistance under the Montgomery GI Bill

(a)

Rates for basic educational assistance

Section 3015 of title 38, United States Code, is amended—

(1)

in subsection (a)(1)—

(A)

in subparagraph (C), by striking and at the end;

(B)

by redesignating subparagraph (D) as subparagraph (F); and

(C)

by inserting after subparagraph (C) the following new subparagraphs:

(D)

for months occurring during fiscal year 2005, $1,004;

(E)

for months occurring during fiscal year 2006, $1,300; and

; and

(2)

in subsection (b)(1)—

(A)

in subparagraph (C), by striking and at the end;

(B)

by redesignating subparagraph (D) as subparagraph (F); and

(C)

by inserting after subparagraph (C) the following new subparagraphs:

(D)

for months occurring during fiscal year 2005, $816;

(E)

for months occurring during fiscal year 2006, $1,000; and

(b)

Application of index based on costs of higher learning

Section 3015(h) of such title is amended to read as follows:

(h)

(1)

With respect to any fiscal year, the Secretary shall provide a percentage increase (rounded to the nearest dollar) in the rates payable under subsections (a)(1) and (b)(1) equal to the percentage (as determined by the Secretary) by which—

(A)

the average monthly costs of tuition and expenses for commuter students at public institutions of higher learning that award baccalaureate degrees for purposes of subsections (a)(1) and (b)(1) for the fiscal year involved, exceeds

(B)

such average monthly costs for the preceding fiscal year.

(2)

The Secretary shall make the determination under paragraph (1) after consultation with the Secretary of Education.

(3)

A determination made under paragraph (1) in a year shall take effect on October 1 of that year and apply with respect to basic educational assistance allowances payable under this section for the fiscal year beginning in that year.

(4)

Not later than September 30 each year, the Secretary shall publish in the Federal Register the average monthly costs of tuition and expenses as determined under paragraph (1) in that year.

(c)

Effective dates

(1)

The amendments made by subsection (a) shall apply with respect to payments for months beginning after September 30, 2005.

(2)

The amendment made by subsection (b) shall apply with respect to payments for months beginning after September 30, 2006. No adjustment in rates of educational assistance shall be made under section 3015(h) of title 38, United States Code, for months occurring during fiscal year 2006.

503.

Repeal of pay reduction and high school graduation requirement for participation in basic educational assistance under the Montgomery GI Bill

(a)

Repeal of pay reduction and election of benefits

(1)

Section 3011 of title 38, United States Code, is amended—

(A)

by striking subsection (b); and

(B)

in subsection (c), by striking paragraph (1) and redesignating paragraphs (2) and (3) as paragraphs (1) and (2), respectively.

(2)

Section 3012 of such title is amended—

(A)

by striking subsection (c); and

(B)

in subsection (d), by striking paragraph (1) and redesignating paragraphs (2) and (3) as paragraphs (1) and (2), respectively.

(3)

Section 3016(a)(1) of such title is amended by striking , and does not make an election under section 3011(c)(1) or section 3012(d)(1).

(4)

The amendments made by this subsection shall take effect on October 1, 2005, and apply to individuals whose initial obligated period of active duty under section 3011 or 3012 of title 38, United States Code, as the case may be, begins on or after such date.

(5)

Any reduction in the basic pay of an individual referred to in subsection (b) of section 3011 of title 38, United States Code, by reason of such subsection, or of any individual referred to in subsection (c) of section 3012 of such title by reason of such subsection, shall cease commencing with months beginning after September 30, 2005, and any obligation of such individual under such subsections, as the case may be, as of September 30, 2005, shall be deemed to be fully satisfied as of such date.

(b)

Repeal of high school graduation requirement

(1)

Section 3011(a) of title 38, United States Code, is amended—

(A)

by striking paragraph (2); and

(B)

by redesignating paragraph (3) as paragraph (2).

(2)

Section 3012(a) of such title is amended—

(A)

by striking paragraph (2); and

(B)

by redesignating paragraph (3) as paragraph (2).

(3)

Section 3018(b) of such title is amended—

(A)

by striking paragraph (4);

(B)

by inserting and at the end of paragraph (3)(C); and

(C)

by redesignating paragraph (5) as paragraph (4).

(4)

The amendments made by this subsection shall take effect on the date of the enactment of this Act and apply with respect to individuals applying for basic educational assistance under chapter 30 of title 38, United States Code, on or after such date.

(c)

Exclusion from income for eligibility determinations for Federal educational loans

Section 3015 of such title is amended—

(1)

by redesignating subsection (h), as amended in section 3(b), as subsection (i); and

(2)

by inserting after subsection (g) the following new subsection:

(h)

Exclusion from income for eligibility determinations for Federal educational loans

Notwithstanding any other provision of law, amounts payable by the Secretary under this subchapter with respect to an eligible individual shall not be considered as income for purposes of determining eligibility of such individual for education grants or loans under any other provision of Federal law.

504.

Repeal of delimiting date for use of entitlement to basic educational assistance under the Montgomery GI Bill

(a)

Repeal

Section 3031 of title 38, United States Code, and section 16133 of title 10, United States Code, are repealed.

(b)

Conforming amendments

(1)

Section 3018C(e)(3)(B) of such title is amended—

(A)

by striking clause (ii); and

(B)

by striking (B)(i) and inserting (B).

(2)

Section 3020 of such title is amended—

(A)

in subsection (f)(1), by striking Subject to the time limitation for use of entitlement under section 3031 of this title, an and inserting An; and

(B)

in subsection (h)(5), by striking Notwithstanding section 3031 of this title, a and inserting A.

(3)

Section 16164 of title 10, United States Code, is repealed.

(c)

Effective date

The amendments made by this section shall apply to individuals entitled to educational assistance under chapter 30 of title 38, United States Code, on or after the date of the enactment of this Act.

505.

Elimination of limitation to critical military skills for authority to transfer entitlement

Subsection (b) of section 3020 of title 38, United States Code, is amended—

(1)

by striking paragraph (2);

(2)

be redesignating paragraph (3) as paragraph (2); and

(3)

by inserting and at the end of paragraph (1).

506.

Increase in repayment amounts under the student loan repayment programs for servicemembers

(a)

Active duty

Subsection (b) of section 2171 of title 10, United States Code, is amended—

(1)

by striking is 33 1/3 percent or $1,500, whichever is greater, and inserting is $6,000;

(2)

by inserting (1) after (b); and

(3)

by adding at the end the following new paragraph:

(2)

The total amount that may be repaid on behalf of any person under this section may not exceed $40,000.

(b)

Selected reserve

Subsection (b) of section 16301 of title 10, United States Code, is amended—

(1)

by striking is 15 percent or $500, whichever is greater, and inserting is $3,000;

(2)

by inserting (1) after (b); and

(3)

by adding at the end the following new paragraph:

(2)

The total amount that may be repaid on behalf of any person under this section may not exceed $20,000.

507.

Expansion of programs of education eligible for accelerated payments of educational assistance under the Montgomery GI Bill

(a)

In general

Subsection (b)(1) of section 3014A of title 38, United States Code, is amended by striking that leads to employment in a high technology occupation in a high technology industry (as determined pursuant to regulations prescribed by the Secretary).

(b)

Conforming amendments

(1)

The heading of section 3014A of such title is amended to read as follows:

3014A.

Accelerated payment of basic educational assistance for certain approved programs of education

(2)

The table of sections at the beginning of chapter 30 of such title is amended by striking the item relating to section 3014A and inserting after the item relating to section 3014 the following new item:

3014A. Accelerated payment of basic educational assistance for certain approved programs of education

Reserve Montgomery GI Bill

511.

Educational assistance under Montgomery GI Bill for members of the Selected Reserve who aggregate more than 2 years of active duty service during any 5-year period

(a)

Entitlement

Section 3012(a)(1) of title 38, United States Code, is amended—

(1)

in subparagraph (B), by striking or at the end;

(2)

in subparagraph (C), by adding or at the end; and

(3)

by inserting after subparagraph (C) the following new subparagraph (D):

(D)

while in the Selected Reserve—

(i)

is first ordered to serve on active duty in the Armed Forces under section 12301(a), 12301(d), 12301(g), 12302, or 12304 of title 10, during the period beginning on September 11, 2001, and ending December 31, 2006; and

(ii)

serves on active duty in the Armed Forces for one or more periods (whether continuous or otherwise) aggregating not less than two years of service on active duty during a five-year period beginning on the date the individual is first ordered to serve on active duty during the period referred to in clause (i);

(b)

Duration of assistance

Section 3013(b) of such title is amended by striking is entitled to and all that follows and inserting the following:

is entitled to—

(1)

one month of educational assistance benefits under this chapter—

(A)

in the case of an individual described in section 3012(a)(1)(A) of this title, for each month of continuous active duty served by such individual after June 30, 1985, as part of the obligated period of active duty on which such entitlement is based;

(B)

in the case of an individual described in section 3012(a)(1)(B) or section 3012(a)(1)(C) of this title, for each month of continuous active duty served by such individual after June 30, 1985; or

(C)

in the case of an individual described in section 3012(a)(1)(D) of this title, for each month of active duty served by such individual after September 11, 2001, as part of the aggregate period of active duty on which such entitlement is based; and

(2)

one month of educational assistance benefits under this chapter for each four months served by such individual in the Selected Reserve after the applicable date specified in paragraph (1) (other than any month in which the individual served on active duty).

(c)

Amount of assistance

Section 3015 of such title is amended—

(1)

in subsections (a)(1)(D) and (b)(1)(D), by striking subsection (h) and inserting subsection (i);

(2)

by redesignating subsection (h) as subsection (i); and

(3)

by inserting after subsection (g) the following new subsection (h):

(h)

In the case of an individual entitled to an educational assistance allowance under section 3012(a)(1)(D) of this title, the amount of the basic educational assistance allowance payable under this chapter is the amount determined under subsection (b) of this section.

(d)

Contribution

Paragraph (1) of section 3012(c) of such title is amended by inserting or subsection (a)(1)(D) after subsection (a)(1)(A).

(e)

Election to opt out

Subsection (d)(1) of section 3012 of such title is amended—

(1)

by inserting (A) after (d)(1);

(2)

by designating the last sentence as subparagraph (C);

(3)

in subparagraph (C), as so designated, by striking such an election and inserting an election under this paragraph; and

(4)

by inserting before subparagraph (C), as so designated, the following new subparagraph (B):

(B)

An individual described in subsection (a)(1)(D) may make an election not to receive educational assistance under this chapter. Any such election shall be made at the time the individual completes the aggregate period of active duty service required under such subsection.

(f)

Outreach

(1)

The Secretaries concerned shall take actions to inform members of the Selected Reserve who are or may become entitled to basic educational assistance benefits under chapter 30 of title 38, United States Code, as a result of section 3012(a)(1)(D) of such title (as amended by subsection (a) of this section) of the minimum service requirements for entitlement to such benefits under that chapter and of the scope and nature of such benefits.

(2)

In this subsection:

(A)

The term Secretary concerned has the meaning given such term in section 101(25) of title 38, United States Code.

(B)

The term Selected Reserve has the meaning given such term in section 3002(4) of title 38, United States Code.

Employment Assistance for Homeless Veterans

521.

Reauthorization of appropriations for Homeless Veterans Reintegration Program

Subsection (e)(1) of section 2021 of title 38, United States Code, is amended by adding at the end the following new subparagraph:

(F)

$50,000,000 for each of fiscal years 2007 through 2011.

522.

Expansion of Homeless Veterans Reintegration Program to include veterans at imminent risk for homelessness

Subsection (a) of section 2021 of title 38, United States Code, is amended by inserting and veterans who are at imminent risk of homelessness after to expedite the reintegration of homeless veterans.

Payment Matters

531.

No reduction in monthly military pay and allowances for members of the uniformed services wounded or injured in combat zones

(a)

In general

Subsection (b) of section 310 of title 37, United States Code, is amended to read as follows:

(b)

No reduction in monthly military pay for wounded or injured members

(1)

Effect of wound or injury in combat zone

For each month during the period specified in paragraph (2), the total amount of monthly military pay paid to a member who was wounded or otherwise injured while assigned to duty in an area for which special pay was available under this section at the time the member was wounded or otherwise injured shall not be less than the total amount of military pay paid to the member for the month during which the member was wounded or otherwise injured.

(2)

Duration

Paragraph (1) shall apply with respect to a wounded or injured member until the end of the first month during which any of the following occurs:

(A)

The member is found to be physically able to perform the duties of the member’s office, grade, rank, or rating.

(B)

The member is discharged or separated from the uniformed services.

(C)

The member dies.

(3)

Military pay defined

In this subsection, the term military pay has the meaning given the term pay in section 101(21) of this title, except that the term includes allowances under chapter 7 of this title.

(b)

Retroactive effective date

Subsection (b) of section 310 of title 37, United States Code, as amended by this section, shall apply with respect to any pay period ending on or after September 11, 2001, for members of the uniformed services described in paragraph (1) of such section who were wounded or otherwise injured on or after that date.

532.

Repeal of time limitation on exclusion of combat zone compensation by reason of hospitalization

(a)

In general

Subsections (a)(2) and (b)(2) of section 112 of the Internal Revenue Code of 1986 are each amended by striking ; but this paragraph shall not apply for any month beginning more than 2 years after the date of the termination of combatant activities in such zone.

(b)

Effective date

Subsections (a)(2) and (b)(2) of section 112 of the Internal Revenue Code of 1986, as amended by this section, shall apply to compensation received for months ending on or after September 11, 2001, for members of the uniformed services described in such subsections who were wounded or otherwise injured on or after that date.

Reserve Components and Recruitment and Retention Initiatives

Health Care

601.

Expanded Eligibility of selected reserve members under TRICARE program

(a)

General Eligibility

Subsection (a) of section 1076d of title 10, United States Code, is amended—

(1)

by striking (a) Eligibility.—A member and inserting (a) Eligibility.—(1) Except as provided in paragraph (2), a member;

(2)

by striking after the member completes and all that follows through one or more whole years following such date; and

(3)

by adding at the end the following new paragraph:

(2)

Paragraph (1) does not apply to a member who is enrolled, or is eligible to enroll, in a health benefits plan under chapter 89 of title 5.

(b)

Condition for termination of Eligibility

Subsection (b) of such section is amended by striking (b) Period of Coverage.—(1) TRICARE Standard and all that follows through (3) Eligibility and inserting (b) Termination of Eligibility Upon Termination of Service.—Eligibility.

(c)

Conforming amendments

(1)

Such section is further amended—

(A)

by striking subsection (e); and

(B)

by redesignating subsection (g) as subsection (e) and transferring such subsection within such section so as to appear following subsection (d).

(2)

The heading for such section is amended to read as follows:

1076d.

TRICARE program: TRICARE standard coverage for members of the selected reserve

(d)

Repeal of obsolete provision

Section 1076b of title 10, United States Code, is repealed.

(e)

Clerical amendments

The table of sections at the beginning of chapter 55 of title 10, United States Code, is amended—

(1)

by striking the item relating to section 1076b; and

(2)

by striking the item relating to section 1076d and inserting the following:

1076d. TRICARE program: TRICARE Standard coverage for members of the Selected Reserve

(f)

Savings provision

Enrollments in TRICARE Standard that are in effect on the day before the date of the enactment of this Act under section 1076d of title 10, United States Code, as in effect on such day, shall be continued until terminated after such day under such section 1076d as amended by this section.

Recruitment and Retention Incentives

611.

Increase in authorized maximum annual amount of special pay for Selected Reserve health care professionals in critically short wartime specialties and authorized duration of pay

Section 302g of title 37, United States Code, is amended—

(1)

in subsection (a)—

(A)

by striking nor more than three years; and

(B)

by striking $10,000 and inserting $25,000; and

(2)

in subsection (f), by striking 2005 and inserting 2006.

612.

Reenlistment bonus for members of Selected Reserve

(a)

Eligibility of senior enlisted members

Subsection (a)(1) of section 308b of title 37, United States Code, is amended by striking 16 years of total military service and inserting 18 years of total military service.

(b)

Reenlistment options

Subsection (a)(2) of such section is amended by striking three years or for a period of six years and inserting one to six years, in increments of whole years,.

(c)

Bonus amounts

Paragraph (1) of subsection (b) of such section is amended to read as follows

(1)

The amount of a bonus under this section may not exceed—

(A)

$15,000, in the case of a member who reenlists or extends an enlistment for a period of six years;

(B)

$12,500, in the case of a member who reenlists or extends an enlistment for a period of five years;

(C)

$10,000, in the case of a member who reenlists or extends an enlistment for a period of four years;

(D)

$7,500, in the case of a member who, having never received a bonus under this section, reenlists or extends an enlistment for a period of three years;

(E)

$5,000, in the case of a member who, having never received a bonus under this section, reenlists or extends an enlistment for a period of two years;

(F)

$2,500, in the case of a member who, having never received a bonus under this section, reenlists or extends an enlistment for a period of one year; and

(G)

$6,000, in the case of a member who, having received a bonus under this section for a previous one-, two-, or three-year reenlistment or extension of an enlistment, reenlists or extends the enlistment for an additional period of one, two, or three years.

(d)

Authority to waive eligibility requirements

Subsection (c)(2) of such section is amended by striking In the case and all that follows through the Secretary and inserting In time of war or national emergency, the Secretary.

(e)

Duration of authority

Subsection (g) of such section is amended by striking 2005 and inserting 2006.

(f)

Conforming amendments

Subsection (c)(1) of such section is amended—

(1)

in the matter preceding subparagraph (A), by striking subsection (b)(1)(C) and inserting subsection (b)(1)(G); and

(2)

in subparagraph (A), by striking three years and inserting one, two, or three years.

613.

Increase in authorized maximum amount of Selected Reserve enlistment bonus

Section 308c of title 37, United States Code, is amended—

(1)

in subsection (b), by striking $10,000 and inserting $32,000; and

(2)

in subsection (e), by striking 2005 and inserting 2006.

614.

Increase in authorized maximum amount for reserve affiliation bonus under reserve affiliation agreements entered into during fiscal year 2006

(a)

Increase

Section 308e of title 37, United States Code, is amended by adding at the end the following new subsection:

(h)

Notwithstanding subsection (c), the maximum amount of the bonus that may be paid under this section pursuant to a reserve affiliation agreement entered into during fiscal year 2006 shall not exceed $15,000. The Secretary of Defense, and the Secretary of Homeland Security with respect to the Coast Guard, may amend the regulations prescribed under subsection (f) to modify the method by which bonus payments will be made under such reserve affiliation agreements.

(b)

Conforming amendment

Subsection (e) of such section is amended by striking 2005 and inserting 2006.

615.

Increase in authorized maximum amount of general enlistment bonus

Section 309 of title 37, United States Code, is amended—

(1)

in subsection (a), by striking $20,000 and inserting $50,000; and

(2)

in subsection (e), by striking 2005 and inserting 2006.

616.

Use of referral bonus to promote enlistments in Selected Reserve

(a)

Bonus authorized

Chapter 5 of title 37, United States Code, is amended by inserting after section 308 the following new section:

308a.

Selected Reserve referral bonus

(a)

Bonus authorized

The Secretary concerned may pay a referral bonus to a member of the Selected Reserve who refers, to a member of the uniformed services assigned to recruiting duties, a person who, after such referral, enlists or is appointed, for a period of not less than two years, in the Selected Reserve of the same reserve component as the member making the referral.

(b)

Amount of bonus

The referral bonus may not exceed $2,500 per referral.

(c)

Relation to prohibition on bounties

The referral bonus authorized by this section is not a bounty for purposes of section 514(a) of title 10.

(d)

Duration of authority

A referral bonus may not be paid under this section with respect to any referral made after December 31, 2006.

(b)

Clerical amendment

The table of sections at the beginning of such chapter is amended by inserting after the item relating to section 308 the following new item:

308a. Selected Reserve referral bonus

617.

Extension of active-duty retention bonuses and special pays for health care professionals to reserve component officers

Section 303a of title 37, United States Code, is amended by adding at the end the following new subsection:

(e)

Availability for reserve component health care professionals

The Secretary of Defense shall modify the eligibility requirements for each special pay authorized under sections 301d, 301e, 302 through 302j, and 303 of this title as necessary to ensure that commissioned officers of the reserve components who are not serving under a call or order to active duty, but who otherwise satisfy the eligibility requirements for the special pay, are eligible to receive the special pay in amounts, and under terms and conditions, comparable to those applicable to commissioned officers of the regular components. The requirements of this subsection are in addition to the policy expressed in section 302f of this title to expand the availability of certain special pays to reserve officers who are health care professionals.

618.

Critical-skills accession bonus for persons enrolled in Senior Reserve Officers’ Training Corps who are obtaining nursing degrees

(a)

Provision of bonus in reduced amount

Section 324 of title 37, United States Code, as amended by section 614(f) of this Act, is further amended—

(1)

by redesignating subsections (f) and (g) as subsections (g) and (h), respectively; and

(2)

by inserting after subsection (e) the following new subsection:

(f)

Nurse candidates in senior reserve officers’ training corps

(1)

A person enrolled in the Senior Reserve Officers’ Training Corps program of the Army for advanced training under chapter 103 of title 10, including a person receiving financial assistance under section 2107 of such title, may receive an accession bonus under this section if the person—

(A)

has completed the second year of an accredited baccalaureate degree program in nursing; and

(B)

executes an agreement under this section to serve on active duty as a commissioned officer in the Army Nurse Corps.

(2)

Notwithstanding subsection (c), the amount of the accession bonus paid to a person described in paragraph (1) may not exceed $5,000.

(b)

Retroactive application to existing agreements

Subsection (f) of section 324 of title 37, United States Code, as added by subsection (a), shall apply with respect to agreements referred to in paragraph (1)(B) of such subsection executed on or after October 5, 2004.

Payment Matters

621.

Nonreduction in pay while Federal employee is serving on active duty in a reserve component of the uniformed services

(a)

In general

Subchapter IV of chapter 55 of title 5, United States Code, is amended by adding at the end the following new section:

5538.

Nonreduction in pay while serving on active duty in a reserve component

(a)

An employee who is also a member of a reserve component and is absent from a position of employment with the Federal Government under a call or order to serve on active duty for a period of more than 30 days shall be entitled to receive, for each pay period described in subsection (b), an amount equal to the difference (if any) between—

(1)

the amount of civilian basic pay that would otherwise have been payable to the employee for such pay period if the employee’s civilian employment with the Government had not been interrupted by the service on active duty; and

(2)

the amount of military compensation that is payable to the employee for the service on active duty and is allocable to such pay period.

(b)

(1)

Amounts under this section shall be payable with respect to each pay period (which would otherwise apply if the employee’s civilian employment had not been interrupted) that occurs—

(A)

while the employee serves on active duty for a period of more than 30 days;

(B)

while the employee is hospitalized for, or convalescing from, an illness or injury incurred in, or aggravated during, the performance of such active duty; or

(C)

during the 14-day period beginning at the end of such active duty or the end of the period referred to in subparagraph (B).

(2)

Paragraph (1) shall not apply with respect to a pay period for which the employee receives civilian basic pay (including by taking any annual, military, or other paid leave) to which the employee is entitled by virtue of the employee’s civilian employment with the Government.

(c)

Any amount payable under this section to an employee shall be paid—

(1)

by the employing agency of the employee;

(2)

from the appropriations or fund that would be used to pay the employee if the employee were in a pay status; and

(3)

to the extent practicable, at the same time and in the same manner as would civilian basic pay if the employee’s civilian employment had not been interrupted.

(d)

In consultation with Secretary of Defense, the Office of Personnel Management shall prescribe such regulations as may be necessary to carry out this section.

(e)

In consultation with the Office of Personnel Management, the head of each employing agency shall prescribe procedures to ensure that the rights under this section apply to the employees of such agency.

(f)

In this section:

(1)

The terms active duty for a period of more than 30 days, member, and reserve component have the meanings given such terms in section 101 of title 37.

(2)

The term civilian basic pay, with respect to an employee, includes any amount payable under section 5304 of this title or under such other law providing for the compensation of the employee by the employing agency for work performed.

(3)

The term employing agency, as used with respect to an employee entitled to any payments under this section, means the agency with respect to which the employee has reemployment rights under chapter 43 of title 38. The term agency has the meaning given such term in subparagraph (C) of section 2302(a)(2) of this title, except that the term includes Government corporations and agencies excluded by clause (i) or (ii) of such subparagraph.

(4)

The term military compensation has the meaning given the term pay in section 101(21) of title 37, except that the term includes allowances under chapter 7 of such title.

(b)

Clerical amendment

The table of sections at the beginning of chapter 55 of title 5, is amended by inserting after the item relating to section 5537 the following new item:

5538. Nonreduction in pay while serving on active duty in a reserve component

(c)

Application of amendment

Section 5538 of title 5, United States Code, as added by subsection (a), shall apply with respect to pay periods (as described in subsection (b) of such section) beginning on or after the date of the enactment of this Act.

622.

Active-duty reserve component employee credit added to general business credit

(a)

Addition of credit

Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to business-related credits) is amended by adding at the end the following new section:

45J.

Active-duty reserve component employee credit

(a)

General rule

For purposes of section 38, the Ready Reserve-National Guard employee credit determined under this section for any taxable year with respect to each Ready Reserve-National Guard employee of an employer is an amount equal to the lesser of—

(1)

50 percent of the actual compensation amount paid with respect to such Ready Reserve-National Guard employee for such taxable year while the employee is absent from employment for a reason described in subsection (b); or

(2)

$30,000.

(b)

Covered pay periods

Subsection (a) shall apply with respect to a Ready Reserve-National Guard employee—

(1)

while the employee serves on active duty for a period of more than 30 days;

(2)

while the employee is hospitalized for, or convalescing from, an illness or injury incurred in, or aggravated during, the performance of such active duty; or

(3)

during the 14-day period beginning at the end of such active duty or the end of the period referred to in subparagraph (B).

(c)

Limitation

No credit shall be allowed under subsection (a) with respect to a Ready Reserve-National Guard employee on any day on which the employee was not scheduled to work (for a reason other than such service on active duty) and ordinarily would not have worked.

(d)

Portion of credit refundable

(1)

In general

In the case of an employer described in paragraph (2), the aggregate credits allowed to a taxpayer under subpart C shall be increased by the lesser of—

(A)

the credit which would be allowed under this section without regard to this subsection and the limitation under section 38(c), or

(B)

the amount by which the aggregate amount of credits allowed by this subpart (determined without regard to this subsection) would increase if the limitation imposed by section 38(c) for any taxable year were increased by the amount of employer payroll taxes imposed on the taxpayer during the calendar year in which the taxable year begins.

The amount of the credit allowed under this subsection shall not be treated as a credit allowed under this subpart and shall reduce the amount of the credit otherwise allowable under subsection (a) without regard to section 38(c).

(2)

Employer described

An employer is described in this paragraph if the employer is—

(A)

an organization exempt from tax under this chapter,

(B)

any State or political subdivision thereof, the District of Columbia, any possession of the United States, or any agency or instrumentality of any of the foregoing, or

(C)

any Indian tribal government (within the meaning of section 7871) or any agency or instrumentality thereof.

(3)

Employer payroll taxes

For purposes of this subsection—

(A)

In general

The term employer payroll taxes means the taxes imposed by—

(i)

section 3111(b), and

(ii)

sections 3211(a) and 3221(a) (determined at a rate equal to the rate under section 3111(b)).

(B)

Special rule

A rule similar to the rule of section 24(d)(2)(C) shall apply for purposes of subparagraph (A).

(e)

Definitions

In this section—

(1)

The terms active duty for a period of more than 30 days, member, and reserve component have the meanings given such terms in section 101 of title 37, United States Code.

(2)

The term compensation means any remuneration for employment, whether in cash or in kind, which is paid or incurred by a taxpayer and which is deductible from the taxpayer’s gross income under section 162(a)(1).

(3)

The term Ready Reserve-National Guard employee with respect to an employer, means an employee of the employer who is also a member of a reserve component during a taxable year.

(b)

Credit to be part of general business credit

Subsection (b) of section 38 of such Code (relating to general business credit) is amended by striking plus at the end of paragraph (18), by striking the period at the end of paragraph (19) and inserting , plus, and by adding at the end the following new paragraph:

(20)

the active-duty reserve component employee credit determined under section 45J(a).

(c)

Conforming amendment

(1)

Paragraph (2) of section 1324(b) of title 31, United States Code, is amended by inserting or 45J after section 35.

(2)

The table of sections for subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after the item relating to section 45I the following new item:

Sec. 45J. Active-duty reserve component employee credit

(d)

Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2004.

623.

Differential wage payments

(a)

Income tax withholding

Section 3401 of the Internal Revenue Code of 1986 (relating to definitions) is amended by adding at the end the following new subsection:

(i)

Differential wage payments to active duty members of the uniformed services

(1)

In general

For purposes of subsection (a), any differential wage payment shall be treated as a payment of wages by the employer to the employee.

(2)

Differential wage payment

For purposes of paragraph (1), the term differential wage payment means any payment which—

(A)

is made by an employer to an individual with respect to any period during which the individual is performing service in the uniformed services while on active duty for a period of more than 30 days, and

(B)

represents all or a portion of the wages the individual would have received from the employer if the individual were performing service for the employer.

(b)

Treatment of differential wage payments for retirement plan purposes

(1)

Pension plans

(A)

In general

Section 414(u) of such Code (relating to special rules relating to veterans’ reemployment rights under USERRA) is amended by adding at the end the following new paragraph:

(11)

Treatment of differential wage payments

(A)

In general

Except as provided in this paragraph, for purposes of applying this title to a retirement plan to which this subsection applies—

(i)

an individual receiving a differential wage payment shall be treated as an employee of the employer making the payment,

(ii)

the differential wage payment shall be treated as compensation, and

(iii)

the plan shall not be treated as failing to meet the requirements of any provision described in paragraph (1)(C) by reason of any contribution which is based on the differential wage payment.

(B)

Special rule for distributions

(i)

In general

Notwithstanding subparagraph (A)(i), for purposes of section 401(k)(2)(B)(i)(I), 403(b)(7)(A)(ii), 403(b)(11)(A), or 457(d)(1)(A)(ii), an individual shall be treated as having been severed from employment during any period the individual is performing service in the uniformed services described in section 3401(i)(2)(A).

(ii)

Limitation

If an individual elects to receive a distribution by reason of clause (i), the plan shall provide that the individual may not make an elective deferral or employee contribution during the 6-month period beginning on the date of the distribution.

(C)

Nondiscrimination requirement

Subparagraph (A)(iii) shall apply only if all employees of an employer performing service in the uniformed services described in section 3401(i)(2)(A) are entitled to receive differential wage payments on reasonably equivalent terms and, if eligible to participate in a retirement plan maintained by the employer, to make contributions based on the payments . For purposes of applying this subparagraph, the provisions of paragraphs (3), (4), and (5), of section 410(b) shall apply.

(D)

Differential wage payment

For purposes of this paragraph, the term differential wage payment has the meaning given such term by section 3401(i)(2).

(B)

Conforming amendment

The heading for section 414(u) of such Code is amended by inserting and to differential wage payments to members on active duty after USERRA.

(2)

Differential wage payments treated as compensation for individual retirement plans

Section 219(f)(1) of such Code (defining compensation) is amended by adding at the end the following new sentence: The term compensation includes any differential wage payment (as defined in section 3401(i)(2)).

(c)

Effective dates

(1)

Subsection (a)

The amendments made by subsection (a) shall apply to remuneration paid after December 31, 2004.

(2)

Subsection (b)

The amendments made by subsection (b) shall apply to plan years beginning after December 31, 2004.

(d)

Provisions relating to plan amendments

(1)

In general

If this subsection applies to any plan or annuity contract amendment—

(A)

such plan or contract shall be treated as being operated in accordance with the terms of the plan or contract during the period described in paragraph (2)(B)(i), and

(B)

except as provided by the Secretary of the Treasury, such plan shall not fail to meet the requirements of the Internal Revenue Code of 1986 or the Employee Retirement Income Security Act of 1974 by reason of such amendment.

(2)

Amendments to which section applies

(A)

In general

This subsection shall apply to any amendment to any plan or annuity contract which is made—

(i)

pursuant to any amendment made by this section, and

(ii)

on or before the last day of the first plan year beginning on or after January 1, 2007.

(B)

Conditions

This subsection shall not apply to any plan or annuity contract amendment unless—

(i)

during the period beginning on the date the amendment described in subparagraph (A)(i) takes effect and ending on the date described in subparagraph (A)(ii) (or, if earlier, the date the plan or contract amendment is adopted), the plan or contract is operated as if such plan or contract amendment were in effect; and

(ii)

such plan or contract amendment applies retroactively for such period.

624.

Credit for income differential for employment of activated military reservist and replacement personnel

(a)

In general

Subpart B of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to other credits) is amended by adding at the end the following new section:

30B.

Employer wage credit for activated military reservists

(a)

General rule

There shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the sum of—

(1)

in the case of a small business employer, the employment credit with respect to all qualified employees and qualified replacement employees of the taxpayer, plus

(2)

the self-employment credit of a qualified self-employed taxpayer.

(b)

Employment credit

For purposes of this section—

(1)

Qualified employees

(A)

In general

The employment credit with respect to a qualified employee of the taxpayer for any taxable year is equal to 50 percent of the lesser of—

(i)

the excess, if any, of—

(I)

the qualified employee’s average daily qualified compensation for the taxable year, over

(II)

the average daily military pay and allowances received by the qualified employee during the taxable year, while participating in qualified reserve component duty to the exclusion of the qualified employee’s normal employment duties for the number of days the qualified employee participates in qualified reserve component duty during the taxable year, including time spent in a travel status, or

(ii)

$30,000.

The employment credit, with respect to all qualified employees, is equal to the sum of the employment credits for each qualified employee under this subsection.

(B)

Average daily qualified compensation and average daily military pay and allowances

As used with respect to a qualified employee—

(i)

the term average daily qualified compensation means the qualified compensation of the qualified employee for the taxable year divided by the difference between—

(I)

365, and

(II)

the number of days the qualified employee participates in qualified reserve component duty during the taxable year, including time spent in a travel status, and

(ii)

the term average daily military pay and allowances means—

(I)

the amount paid to the qualified employee during the taxable year as military pay and allowances on account of the qualified employee’s participation in qualified reserve component duty, divided by

(II)

the total number of days the qualified employee participates in qualified reserve component duty, including time spent in travel status.

(C)

Qualified compensation

When used with respect to the compensation paid or that would have been paid to a qualified employee for any period during which the qualified employee participates in qualified reserve component duty, the term qualified compensation means—

(i)

compensation which is normally contingent on the qualified employee’s presence for work and which would be deductible from the taxpayer’s gross income under section 162(a)(1) if the qualified employee were present and receiving such compensation,

(ii)

compensation which is not characterized by the taxpayer as vacation or holiday pay, or as sick leave or pay, or as any other form of pay for a nonspecific leave of absence, and with respect to which the number of days the qualified employee participates in qualified reserve component duty does not result in any reduction in the amount of vacation time, sick leave, or other nonspecific leave previously credited to or earned by the qualified employee, and

(iii)

group health plan costs (if any) with respect to the qualified employee.

(D)

Qualified employee

The term qualified employee means a person who—

(i)

has been an employee of the taxpayer for the 31-day period immediately preceding the period during which the employee participates in qualified reserve component duty, and

(ii)

is a member of the Ready Reserve of a reserve component of an Armed Force of the United States as defined in sections 10142 and 10101 of title 10, United States Code.

(2)

Qualified replacement employees

(A)

In general

The employment credit with respect to a qualified replacement employee of the taxpayer for any taxable year is equal to 50 percent of the lesser of—

(i)

the individual’s qualified compensation attributable to service rendered as a qualified replacement employee, or

(ii)

$12,000.

The employment credit, with respect to all qualified replacement employees, is equal to the sum of the employment credits for each qualified replacement employee under this subsection.

(B)

Qualified compensation

When used with respect to the compensation paid to a qualified replacement employee, the term qualified compensation means—

(i)

compensation which is normally contingent on the qualified replacement employee’s presence for work and which is deductible from the taxpayer’s gross income under section 162(a)(1),

(ii)

compensation which is not characterized by the taxpayer as vacation or holiday pay, or as sick leave or pay, or as any other form of pay for a nonspecific leave of absence, and

(iii)

group health plan costs (if any) with respect to the qualified replacement employee.

(C)

Qualified replacement employee

The term qualified replacement employee means an individual who is hired to replace a qualified employee or a qualified self-employed taxpayer, but only with respect to the period during which such employee or taxpayer participates in qualified reserve component duty, including time spent in travel status.

(D)

Failure to make differential wage payments

The employment credit with respect to a qualified replacement employee of the taxpayer for any taxable year shall be zero if the taxpayer does not make all differential wage payments (as defined by section 3401(i)(2)) for the taxable year to the qualified employee or the qualified self-employed taxpayer (as the case may be) who is replaced by the qualified replacement employee.

(c)

Self-employment credit

For purposes of this section—

(1)

In general

The self-employment credit of a qualified self-employed taxpayer for any taxable year is equal to 50 percent of the lesser of—

(A)

the excess, if any, of—

(i)

the self-employed taxpayer’s average daily self-employment income for the taxable year over

(ii)

the average daily military pay and allowances received by the taxpayer during the taxable year, while participating in qualified reserve component duty to the exclusion of the taxpayer’s normal self-employment duties for the number of days the taxpayer participates in qualified reserve component duty during the taxable year, including time spent in a travel status, or

(B)

$30,000.

(2)

Average daily self-employment income and average daily military pay and allowances

As used with respect to a self-employed taxpayer—

(A)

the term average daily self-employment income means the self-employment income (as defined in section 1402(b)) of the taxpayer for the taxable year plus the amount paid for insurance which constitutes medical care for the taxpayer for such year (within the meaning of section 162(l)) divided by the difference between—

(i)

365, and

(ii)

the number of days the taxpayer participates in qualified reserve component duty during the taxable year, including time spent in a travel status, and

(B)

the term average daily military pay and allowances means—

(i)

the amount paid to the taxpayer during the taxable year as military pay and allowances on account of the taxpayer’s participation in qualified reserve component duty, divided by

(ii)

the total number of days the taxpayer participates in qualified reserve component duty, including time spent in travel status.

(3)

Qualified self-employed taxpayer

The term qualified self-employed taxpayer means a taxpayer who—

(A)

has net earnings from self-employment (as defined in section 1402(a)) for the taxable year, and

(B)

is a member of the Ready Reserve of a reserve component of an Armed Force of the United States.

(d)

Credit in addition to deduction

The employment credit or the self-employment credit provided in this section is in addition to any deduction otherwise allowable with respect to compensation actually paid to a qualified employee, qualified replacement employee, or qualified self-employed taxpayer during any period the qualified employee or qualified self-employed taxpayer participates in qualified reserve component duty to the exclusion of normal employment duties.

(e)

Coordination with other credits

The amount of credit otherwise allowable under sections 51(a) and 1396(a) with respect to any employee shall be reduced by the credit allowed by this section with respect to such employee.

(f)

Limitations

(1)

Application with other credits

The credit allowed under subsection (a) for any taxable year shall not exceed the excess (if any) of—

(A)

the regular tax for the taxable year reduced by the sum of the credits allowable under subpart A and sections 27, 29, and 30, over

(B)

the tentative minimum tax for the taxable year.

(2)

Disallowance for failure to comply with employment or reemployment rights of members of the reserve components of the Armed Forces of the United States

No credit shall be allowed under subsection (a) to a taxpayer for—

(A)

any taxable year, beginning after the date of the enactment of this section, in which the taxpayer is under a final order, judgment, or other process issued or required by a district court of the United States under section 4323 of title 38 of the United States Code with respect to a violation of chapter 43 of such title, and

(B)

the 2 succeeding taxable years.

(3)

Disallowance with respect to persons ordered to active duty for training

No credit shall be allowed under subsection (a) to a taxpayer with respect to any period by taking into account any person who is called or ordered to active duty for any of the following types of duty:

(A)

Active duty for training under any provision of title 10, United States Code.

(B)

Training at encampments, maneuvers, outdoor target practice, or other exercises under chapter 5 of title 32, United States Code.

(C)

Full-time National Guard duty, as defined in section 101(d)(5) of title 10, United States Code.

(g)

General definitions and special rules

For purposes of this section—

(1)

Small business employer

(A)

In general

The term small business employer means, with respect to any taxable year, any employer who employed an average of 50 or fewer employees on business days during such taxable year.

(B)

Controlled groups

For purposes of subparagraph (A), all persons treated as a single employer under subsection (b), (c), (m), or (o) of section 414 shall be treated as a single employer.

(2)

Military pay and allowances

The term military pay means pay as that term is defined in section 101(21) of title 37, United States Code, and the term allowances means the allowances payable to a member of the Armed Forces of the United States under chapter 7 of that title.

(3)

Qualified reserve component duty

The term qualified reserve component duty includes only active duty performed, as designated in the reservist’s military orders, in support of a contingency operation as defined in section 101(a)(13) of title 10, United States Code.

(4)

Special rule for certain manufacturers

(A)

In general

In the case of any qualified manufacturer, paragraph (1)(A) of this subsection shall be applied by substituting 100 for 50.

(B)

Qualified manufacturer

For purposes of this paragraph, the term qualified manufacturer means any person if—

(i)

the primary business of such person is classified in sector 31, 32, or 33 of the North American Industrial Classification System, and

(ii)

all of such person’s facilities which are used for production in such business are located in the United States.

(5)

Carryback and carryforward allowed

(A)

In general

If the credit allowable under subsection (a) for a taxable year exceeds the amount of the limitation under subsection (f)(1) for such taxable year (in this paragraph referred to as the unused credit year), such excess shall be a credit carryback to each of the 3 taxable years preceding the unused credit year and a credit carryforward to each of the 20 taxable years following the unused credit year.

(B)

Rules

Rules similar to the rules of section 39 shall apply with respect to the credit carryback and credit carryforward under subparagraph (A).

(6)

Certain rules to apply

Rules similar to the rules of subsections (c), (d), and (e) of section 52 shall apply.

(b)

Conforming amendment

Section 55(c)(2) of the Internal Revenue Code of 1986 is amended by inserting 30B(f)(1), after 30(b)(3),.

(c)

Clerical amendment

The table of sections for subpart B of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end of 30A the following new item:

Sec. 30B. Employer wage credit for activated military reservists

(d)

Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2004.

625.