To expand the travel and transportation allowances available to members of the Armed Forces granted leave under the Rest and Recuperation Leave program, to amend title 10, United States Code, to provide TRICARE program eligibility for members of the Ready Reserve and financial support for continuation of health insurance for mobilized members of reserve components, and to increase the amount of basic educational assistance for members of the Selected Reserve, and for other purposes.

October 16, 2003

Mr. POMEROY introduced the following bill; which was referred to the Committee on Armed Services, and in addition to the Committee on Ways and Means, 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

To expand the travel and transportation allowances available to members of the Armed Forces granted leave under the Rest and Recuperation Leave program, to amend title 10, United States Code, to provide TRICARE program eligibility for members of the Ready Reserve and financial support for continuation of health insurance for mobilized members of reserve components, and to increase the amount of basic educational assistance for members of the Selected Reserve, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Guard and Reserve Fairness Act'.

SEC. 2. LIMITATION ON PERIOD OF DEPLOYMENT FOR MEMBERS OF RESERVE COMPONENTS.

(a) LIMITATION- During a period when there is in effect a policy of assigning units or members of one or more of the active components of the Armed Forces to duty in the area of responsibility of the United States Central Command for a specified period of time of not less than one year, the Secretary of Defense shall provide that the length of such an assignment in the case of members of the reserve components may not exceed the length of such period for the corresponding active component reduced by the period of time between the date of entry of the reserve component members onto active duty and the date of the deployment of such members for such assignment.

(b) TRANSITION- Subsection (a) applies to members of reserve components assigned to duty in the area of responsibility of the United States Central Command on or after the date of the enactment of this Act and to such members assigned to such duty before such date who as of the date of the enactment of this Act have more than 90 days remaining in such assignment.

SEC. 3. 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:

`SEC. 45G. ACTIVE-DUTY RESERVE COMPONENT EMPLOYEE CREDIT.

`(a) GENERAL RULE- For purposes of section 38, the active-duty reserve component employment credit determined under this section is an amount equal to the sum of--

`(1) the employment credit with respect to all employees of the taxpayer who are members of a reserve component during the taxable year, plus

`(2) the self-employment credit of a qualified self-employed taxpayer.

`(b) EMPLOYMENT CREDIT- The employment credit is, with respect to each employee who is also a member of a reserve component during the taxable year, an amount equal to 50 percent of the compensation paid by the employer to such employee for the period during which such employee was absent from employment for a reason described in subsection (d), but not to exceed 50 percent of the excess (if any) of--

`(1) the amount of compensation that would otherwise have been payable to the employee during such absence if the employee's employment with the employer had not been interrupted by the employee's absence, over

`(2) the amount of military pay that is payable to the employee during the absence.

`(c) SELF-EMPLOYMENT CREDIT-

`(1) IN GENERAL- The self-employment credit of a qualified self-employed taxpayer for any taxable year is equal to 50 percent of the excess, if any, of--

`(A) the product of--

`(i) the self-employed taxpayer's average daily self-employment income for the taxable year, multiplied by

`(ii) the number of qualified days during the taxable year, over

`(B) the product of--

`(i) the average daily military pay received by the taxpayer (taking into account only qualified days during the taxable year), multiplied by

`(ii) the number of qualified days during the taxable year.

`(2) AVERAGE DAILY SELF-EMPLOYMENT- For purposes of this subsection, the term `average daily self-employment income' means the self-employment income (as defined in section 1402) of the taxpayer for the taxable year divided by the excess of 365 over the number of qualified days during the taxable year.

`(3) QUALIFIED DAY- For purposes of this subsection, the term `qualified day' means, with respect to any individual, any day such individual was absent from self-employment duties for a reason described in subsection (d).

`(d) COVERED PAY PERIODS- This section shall apply with respect to an employee or qualified self-employed taxpayer who is also a member of a reserve component--

`(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; and

`(3) during the 14-day period beginning at the end of such active duty or the end of the period referred to in paragraph (2).

`(e) LIMITATION- No credit shall be allowed under this section with respect to an employee or qualified self-employed individual for any day on which the employee or taxpayer was not scheduled to work (for a reason other than such service on active duty) and ordinarily would not have worked.

`(f) DEFINITIONS- For purposes of this section--

`(1) The term `qualified self-employed taxpayer' means a taxpayer who--

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

`(B) is a member of a reserve component.

`(2) 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.

`(3) 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).'.

(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 (14), by striking the period at the end of paragraph (15) and inserting `, plus', and by adding at the end the following new paragraph:

`(16) the active-duty reserve component employee credit determined under section 45G(a).'.

(c) CONFORMING AMENDMENT- 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 45F the following new item:

`45G. Active-duty reserve component employee credit.'.

(d) EFFECTIVE DATE- The amendments made by this section shall apply to taxable years beginning after December 31, 2002.

SEC. 4. EXPANSION OF REST AND RECUPERATION LEAVE PROGRAM ALLOWANCES TO INCLUDE TRAVEL AND TRANSPORTATION TO PERMANENT STATION OR HOME.

(a) EXPANDED ALLOWANCES- The Secretary of Defense shall expand the Central Command Rest and Recuperation Leave program for Operation Iraqi Freedom and Operation Enduring Freedom to provide travel and transportation allowances to each member of the Armed Forces granted leave under the program to permit the member to travel at the expense of the United States between the deployment location of the member and the permanent station or home of record of the member.

(b) METHOD OF PROVIDING ALLOWANCES- The travel and transportation allowances authorized under subsection (a) shall be provided in the manner otherwise provided in section 411c of title 37, United States Code.

(c) RELATION TO OTHER ALLOWANCES- Travel and transportation allowances provided for travel under subsection (a) are in addition to any other travel and transportation or other allowances that may be provided for such travel by law.

(d) TREATMENT OF RESERVE COMPONENT MEMBERS- It is the sense of Congress that, to the extent practicable, members of the reserve components should continue to be provided the same benefits under the Rest and Recuperation program of the United States Central Command as are provided to members of the active components.

(e) RETROACTIVE APPLICATION- In the case of a member of the Armed Forces granted leave as described in subsection (a) before the date of the enactment of this Act and who received travel and transportation allowances under section 411c of title 37, United States Code, during the period beginning on September 20, 2003, and ending on the date of the enactment of this Act in connection with such leave, the Secretary of Defense shall reimburse the member for any transportation costs incurred by the member before that date to procure transportation between the designated port of entry in the United States or the designated overseas location under such section and the permanent duty station or home of record of the member.

(f) REPORT ON PERMANENT EXPANSION OF ALLOWANCES- Not later than one year after the date of the enactment of this Act, the Secretary of Defense shall submit to Congress a report evaluating the feasibility and cost of amending section 411c of title 37, United States Code, to permanently expand the travel and transportation allowances available to members of the Armed Forces granted leave under future rest and recuperation leave programs to cover travel and transportation to the members' permanent station or home of record.

SEC. 5. INCREASE IN AMOUNT OF BASIC EDUCATIONAL ASSISTANCE UNDER THE MONTGOMERY GI BILL.

(a) IN GENERAL- (1) Paragraph (1) of Section 16131(b) of title 10, United States Code, is amended--

(A) in subparagraph (A), by striking `$251' and inserting `$600';

(B) in subparagraph (B), by striking `$188' and inserting `$450'; and

(C) in subparagraph (C), by striking `$125' and inserting `$300'.

(2) The amendments made by paragraph (1) shall take effect on October 1, 2004, and shall apply with respect to educational assistance allowances under section 16131(b)(1) of such title paid for months after September 2004.

(3) In the case of an educational assistance allowance under such section paid for months occurring during fiscal year 2004--

(A) subparagraph (A) of such section shall be applied by substituting `$475' for `$251';

(B) subparagraph (B) of such section shall be applied by substituting `$325' for `$188'; and

(C) subparagraph (C) of such section shall be applied by substituting `$215' for `$125'.

(b) NO ADJUSTMENT FOR FISCAL YEARS 2004 AND 2005- Section 16131(b)(2) of such title shall not apply to rates of basic educational assistance paid under such section during fiscal years 2004 and 2005.

(c) APPLICATION OF INDEX BASED ON COSTS OF HIGHER LEARNING-

(1) IN GENERAL- Section 16131(f)(2) of title 10, United States Code, is amended to read as follows:

`(2)(A) With respect to any fiscal year beginning on or after October 1, 2004, the Secretary shall provide a percentage increase (rounded to the nearest dollar) in the rates payable under paragraph (1) equal to the percentage (as determined by the Secretary) by which--

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

`(ii) such average monthly costs for the preceding fiscal year.

`(B) The Secretary shall make the determination under subparagraph (A) after consultation with the Secretary of Education.

`(C) A determination made under subparagraph (A) 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.

`(D) 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 subparagraph (A) in that year.'.

(2) CONFORMING AMENDMENT- Section 3015(h) of title 38, United States Code, is amended by striking `by which--' and all that follows and inserting `determined by the Secretary under section 16131(b)(2) of title 10 for the fiscal year involved.'.

(3) APPLICATION- The amendment made by paragraph (1) shall apply to fiscal years beginning on or after October 1, 2004.

SEC. 6. ALLOWANCE FOR CONTINUATION OF NON-TRICARE HEALTH BENEFITS COVERAGE FOR CERTAIN MOBILIZED RESERVES.

(a) PAYMENT OF PREMIUMS- (1) Chapter 55 of title 10, United States Code, is amended by inserting after section 1078a the following new section:

`Sec. 1078b. Continuation of non-TRICARE health benefits plan coverage for certain reserves called or ordered to active duty and their dependents

`(a) PAYMENT OF PREMIUMS- The Secretary concerned shall pay the applicable premium to continue in force any qualified health benefits plan coverage for an eligible reserve component member for the benefits coverage continuation period if timely elected by the member in accordance with regulations prescribed under subsection (j).

`(b) ELIGIBLE MEMBER- A member of a reserve component is eligible for payment of the applicable premium for continuation of qualified health benefits plan coverage under subsection (a) while serving on active duty pursuant to a call or order issued under a provision of law referred to in section 101(a)(13)(B) of this title during a war or national emergency declared by the President or Congress.

`(c) QUALIFIED HEALTH BENEFITS PLAN COVERAGE- For the purposes of this section, health benefits plan coverage for a member called or ordered to active duty is qualified health benefits plan coverage if--

`(1) the coverage was in force on the date on which the Secretary notified the member that issuance of the call or order was pending or, if no such notification was provided, the date of the call or order;

`(2) on such date, the coverage applied to the member and dependents of the member described in subparagraph (A), (D), or (I) of section 1072(2) of this title; and

`(3) the coverage has not lapsed.

`(d) APPLICABLE PREMIUM- The applicable premium payable under this section for continuation of health benefits plan coverage in the case of a member is the amount of the premium payable by the member for the coverage of the member and dependents.

`(e) MAXIMUM AMOUNT- The total amount that may be paid for the applicable premium of a health benefits plan for a member under this section in a fiscal year may not exceed the amount determined by multiplying--

`(1) the sum of one plus the number of the member's dependents covered by the health benefits plan, by

`(2) the per capita cost of providing TRICARE coverage and benefits for dependents under this chapter for such fiscal year, as determined by the Secretary of Defense.

`(f) BENEFITS COVERAGE CONTINUATION PERIOD- The benefits coverage continuation period under this section for qualified health benefits plan coverage in the case of a member called or ordered to active duty is the period that--

`(1) begins on the date of the call or order; and

`(2) ends on the earlier of the date on which--

`(A) the member's eligibility for transitional health care under section 1145(a) of this title terminates under paragraph (3) of such section; or

`(B) the member elects to terminate the continued qualified health benefits plan coverage of the dependents of the member.

`(g) EXTENSION OF PERIOD OF COBRA COVERAGE- Notwithstanding any other provision of law--

`(1) any period of coverage under a COBRA continuation provision (as defined in section 9832(d)(1) of the Internal Revenue Code of 1986) for a member under this section shall be deemed to be equal to the benefits coverage continuation period for such member under this section; and

`(2) with respect to the election of any period of coverage under a COBRA continuation provision (as so defined), rules similar to the rules under section 4980B(f)(5)(C) of such Code shall apply.

`(h) NONDUPLICATION OF BENEFITS- A dependent of a member who is eligible for benefits under qualified health benefits plan coverage paid on behalf of a member by the Secretary concerned under this section is not eligible for benefits under the TRICARE program during a period of the coverage for which so paid.

`(i) REVOCABILITY OF ELECTION- A member who makes an election under subsection (a) may revoke the election. Upon such a revocation, the member's dependents shall become eligible for benefits under the TRICARE program as provided for under this chapter.

`(j) REGULATIONS- The Secretary of Defense shall prescribe regulations for carrying out this section. The regulations shall include such requirements for making an election of payment of applicable premiums as the Secretary considers appropriate.'.

(2) The table of sections at the beginning of such chapter is amended by inserting after the item relating to section 1078a the following new item:

`1078b. Continuation of non-TRICARE health benefits plan coverage for certain Reserves called or ordered to active duty and their dependents.'.

(b) APPLICABILITY- Section 1078b of title 10, United States Code (as added by subsection (a)), shall apply with respect to calls or orders of members of reserve components of the Armed Forces to active duty as described in subsection (b) of such section, that are issued by the Secretary of a military department on or after the date of the enactment of this Act.

SEC. 7. TRICARE COVERAGE FOR MEMBERS OF THE READY RESERVE.

(a) ELIGIBILITY- (1) Chapter 55 of title 10, United States Code, is amended by inserting after section 1076a the following new section:

`Sec. 1076b. TRICARE program: coverage for members of the Ready Reserve

`(a) ELIGIBILITY- Members of the Selected Reserve of the Ready Reserve and members of the Individual Ready Reserve described in subsection 10144(b) of this title are eligible, subject to subsection (h)(1), to enroll in the following TRICARE program options:

`(1) TRICARE Prime.

`(2) TRICARE Standard.

`(b) TYPES OF COVERAGE- (1) A member eligible under subsection (a) may enroll for either of the following types of coverage:

`(A) Self alone coverage.

`(B) Self and family coverage.

`(2) An enrollment by a member for self and family covers the member and the dependents of the member who are described in subparagraph (A), (D), or (I) of section 1072(2) of this title.

`(c) OPEN ENROLLMENT PERIODS- The Secretary of Defense shall provide for at least one open enrollment period each year. During an open enrollment period, a member eligible under subsection (a) may enroll in the TRICARE program or change or terminate an enrollment in the TRICARE program.

`(d) SCOPE OF CARE- (1) A member and the dependents of a member enrolled in the TRICARE program under this section shall be entitled to the same benefits under this chapter as a member of the uniformed services on active duty or a dependent of such a member, respectively.

`(2) Section 1074(c) of this title shall apply with respect to a member enrolled in the TRICARE program under this section.

`(e) PREMIUMS- (1) The Secretary of Defense shall charge premiums for coverage pursuant to enrollments under this section. The Secretary shall prescribe for each of the TRICARE program options referred to in subsection (a) a premium for self alone coverage and a premium for self and family coverage.

`(2) The monthly amount of the premium in effect for a month for a type of coverage under this section shall be the amount equal to 28 percent of the total amount determined by the Secretary on an appropriate actuarial basis as being reasonable for the coverage.

`(3) The premiums payable by a member under this subsection may be deducted and withheld from basic pay payable to the member under section 204 of title 37 or from compensation payable to the member under section 206 of such title. The Secretary shall prescribe the requirements and procedures applicable to the payment of premiums by members not entitled to such basic pay or compensation.

`(4) Amounts collected as premiums under this subsection shall be credited to the appropriation available for the Defense Health Program Account under section 1100 of this title, shall be merged with sums in such Account that are available for the fiscal year in which collected, and shall be available under subsection (b) of such section for such fiscal year.

`(f) OTHER CHARGES- A person who receives health care pursuant to an enrollment in a TRICARE program option under this section, including a member who receives such health care, shall be subject to the same deductibles, copayments, and other nonpremium charges for health care as apply under this chapter for health care provided under the same TRICARE program option to dependents described in subparagraph (A), (D), or (I) of section 1072(2) of this title.

`(g) TERMINATION OF ENROLLMENT- (1) A member enrolled in the TRICARE program under this section may terminate the enrollment only during an open enrollment period provided under subsection (c), except as provided in subsection (h)(2).

`(2) An enrollment of a member for self alone or for self and family under this section shall terminate on the first day of the first month beginning after the date on which the member ceases to be eligible under subsection (a).

`(3) The enrollment of a member under this section may be terminated on the basis of failure to pay the premium charged the member under this section.

`(h) RELATIONSHIP TO TRANSITION TRICARE COVERAGE UPON SEPARATION FROM ACTIVE DUTY- (1) A member may not enroll in the TRICARE program under this section while entitled to transitional health care under subsection (a) of section 1145 of this title or while authorized to receive health care under subsection (c) of such section.

`(2) A member who enrolls in the TRICARE program under this section within 90 days after the date of the termination of the member's entitlement or eligibility to receive health care under subsection (a) or (c) of section 1145 of this title may terminate the enrollment at any time within one year after the date of the enrollment.

`(i) REGULATIONS- The Secretary of Defense, in consultation with the other administering Secretaries, shall prescribe regulations for the administration of this section.'.

(2) The table of sections at the beginning of such chapter is amended by inserting after the item relating to section 1076a the following new item:

`1076b. TRICARE program: coverage for members of the Ready Reserve.'.

(b) DEFINITIONS- (1) Section 1072 of title 10, United States Code, is amended by adding at the end the following new paragraphs:

`(10) The term `TRICARE Prime' means the managed care option of the TRICARE program.

`(11) The term `TRICARE Standard' means the option of the TRICARE program that is also known as the Civilian Health and Medical Program of the Uniformed Services'.

(2) Section 1097a(f) of such title is amended by striking `Definitions- In this section:' and all that follows through `(2) The term' and inserting `Catchment Area Defined- In this section, the term'.

(c) PERIOD FOR IMPLEMENTATION- Section 1076b of title 10, United States Code (as added by subsection (a)), shall apply with respect to months that begin on or after the date that is 180 days after the date of the enactment of this Act.

SEC. 8. REPORT ON TARGETED COMPENSATION PROGRAM TO ADDRESS INCOME LOSS FACED BY MEMBERS OF RESERVE COMPONENTS DEPLOYED OVERSEAS.

Not later than 180 days after the date of the enactment of this Act, the Secretary of Defense shall submit to Congress a report evaluating the adverse financial effects of deployments of greater than six months on members of the reserve components and the feasibility and cost of developing a targeted compensation program for the reserve components to offset some or all of those adverse effects.

END