To improve certain compensation, health care, and education benefits for individuals who serve on active duty in a reserve component of the uniformed services, and for other purposes.

June 25, 2004

Mr. SMITH of Washington introduced the following bill; which was referred to the Committee on Armed Services, and in addition to the Committees on Government Reform and 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 improve certain compensation, health care, and education benefits for individuals who serve on active duty in a reserve component of the uniformed services, 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; TABLE OF CONTENTS.

(a) Short Title- This Act may be cited as the `Enhancing America's Guard and Reserve Act'.

(b) Table of Contents- The table of contents for this Act is as follows:

Sec. 1. Short title; table of contents.

TITLE I--COMPENSATION MATTERS

Sec. 101. Nonreduction in pay while Federal employee is serving on active duty in a reserve component of the uniformed services.

Sec. 102. Assistance for State and local governments that continue to pay employees who serve on active duty in a reserve component of the uniformed services.

Sec. 103. Active-duty reserve component employee credit added to general business credit.

Sec. 104. Eligibility for retired pay for non-regular service.

TITLE II--HEALTH CARE AND EDUCATION MATTERS

Sec. 201. Permanent authority for certain TRICARE benefits for Reserves.

Sec. 202. Increase in amount of basic educational assistance under the Montgomery GI Bill for members of reserve components; indexing payment amounts to higher education costs.

Sec. 203. Prohibition on denial of benefits under the Montgomery GI Bill for members of reserve components in conjunction with calls to active duty.

TITLE III--COMMUTING MATTERS

Sec. 301. Limited use of telecommuting to satisfy inactive-duty training prescribed or authorized for members of reserve components.

Sec. 302. Priority for space-available travel for members of reserve components.

TITLE I--COMPENSATION MATTERS

SEC. 101. 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:

`Sec. 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 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)(1) In consultation with the Office, the head of each agency referred to in section 2302(a)(2)(C)(ii) of this title shall prescribe procedures to ensure that the rights under this section apply to the employees of such agency.

`(2) The Administrator of the Federal Aviation Administration shall, in consultation with the Office, prescribe procedures to ensure that the rights under this section apply to the employees of that 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' includes any amount payable under section 5304 of this title.

`(3) The term `employing agency', as used with respect to an employee entitled to any payments under this section, means the agency or other entity of the Government (including an agency referred to in section 2302(a)(2)(C)(ii) of this title) with respect to which the employee has reemployment rights under chapter 43 of title 38.

`(4) The term `military compensation' has the meaning given the term `pay' in section 101(21) of title 37.'.

(b) Clerical Amendment- The table of sections at the beginning of chapter 55 of title 5, United States Code, 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.

SEC. 102. ASSISTANCE FOR STATE AND LOCAL GOVERNMENTS THAT CONTINUE TO PAY EMPLOYEES WHO SERVE ON ACTIVE DUTY IN A RESERVE COMPONENT OF THE UNIFORMED SERVICES.

(a) In General- Chapter 17 of title 37, United States Code, is amended by adding at the end the following new section:

`Sec. 910. Assistance for State and local governments that continue to pay employees who serve on active duty

`(a) Continuation of Civilian Basic Pay- It is the purpose of this section to encourage States and local governments to continue to pay a portion of the civilian compensation of those employees who are also members of a reserve component and are absent from a position of employment with the State or local government under a call or order to serve on active duty for a period of more than 30 days so that the employees receive compensation in an amount that, when taken together with their military pay, is at least equal to their civilian compensation.

`(b) Reimbursement Offered- (1) At the request of a State or local government that continues to pay all or a portion of the civilian compensation of an employee described in subsection (a), the Secretary concerned shall reimburse the State or local government for 50 percent of the civilian compensation paid by the State or local government for each pay period described in subsection (c), but not to exceed 50 percent of the difference (if any) between--

`(A) the amount of civilian compensation that would otherwise have been payable to the employee for such pay period if the employee's civilian employment with the State or local government had not been interrupted by the service on active duty; and

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

`(2) If the pay periods described in subsection (c) extend more than nine consecutive months after the first day of the first month during which the employee began to serve on active duty for a period of more than 30 days, the reimbursement rate shall become 100 percent for the subsequent payments. However, as is the case under paragraph (1), reimbursement shall be provided only for the difference (if any) between--

`(A) the amount of civilian compensation that would otherwise have been payable to the employee for such pay period if the employee's civilian employment with the State or local government had not been interrupted by the service on active duty; and

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

`(c) Pay Periods- Reimbursement shall be provided under this section with respect to each pay period (which would otherwise apply if the employee's civilian employment had not been interrupted) that occurs--

`(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).

`(d) Effect of Failure to Return to Employment- (1) If an employee described in subsection (a), with respect to whom reimbursement is provided to a State or local government under this section, fails to report or apply for employment or reemployment with the State or local government by the end of the period referred to in subsection (c)(3), the employee shall refund to the Secretary concerned the total amount of the reimbursement provided with respect to the employee.

`(2) Subject to paragraph (3), an obligation to refund moneys to the United States imposed under paragraph (1) is for all purposes a debt owed to the United States.

`(3) The Secretary concerned may waive, in whole or in part, a refund required under paragraph (1) if the Secretary concerned determines that recovery would be against equity and good conscience or would be contrary to the best interests of the United States.

`(4) A discharge in bankruptcy under title 11 that is entered less than five years after the end of the period referred to in subsection (c)(3) does not discharge the employee from a debt arising under paragraph (1). This paragraph applies to any case commenced under title 11 after the date of the enactment of this section.

`(e) Regulations- The Secretaries concerned shall prescribe regulations to carry out this section.

`(f) Definitions- In this section:

`(1) The term `civilian compensation' means the wages or salary that an employee of a State or local government normally receives from the employee's employment by the State or local government.

`(2) The term `local government' means an agency or political subdivision of a State.

`(3) The term `military pay' has the meaning given the term `pay' in section 101(21) of this title.

`(4) The term `State' means each of the several States of the United States, the District of Columbia, the Commonwealth of Puerto Rico, Guam, the Virgin Islands, and other territories or possessions of the United States.'.

(b) Clerical Amendment- The table of sections at the beginning of chapter 17 of title 37, United States Code, is amended by inserting after the item relating to section 909 the following new item:

`910. Assistance for State and local governments that continue to pay employees who serve on active duty.'.

(c) Application of Amendment- Section 910 of title 37, 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.

SEC. 103. 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, in the case of an employer, the active-duty reserve component employee credit determined under this section for the taxable year is an amount equal to 50 percent of the compensation paid by the employer to an employee who is also a member of a reserve component during the taxable year when the employee was absent from employment for a reason described in subsection (b), but not to exceed 50 percent of the difference (if any) between--

`(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; and

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

`(b) Covered Pay Periods- Subsection (a) shall apply with respect to an employee 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; 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 an 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) Definitions- For purposes of 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).'.

(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, 2001.

SEC. 104. ELIGIBILITY FOR RETIRED PAY FOR NON-REGULAR SERVICE.

(a) Age and Service Requirements- Subsection (a) of section 12731 of title 10, United States Code, is amended to read as follows:

`(a)(1) Except as provided in subsection (c), a person is entitled, upon application, to retired pay computed under section 12739 of this title, if the person--

`(A) satisfies one of the combinations of requirements for minimum age and minimum number of years of service (computed under section 12732 of this title) that are specified in the table in paragraph (2);

`(B) performed the last six years of qualifying service while a member of any category named in section 12732(a)(1) of this title, but not while a member of a regular component, the Fleet Reserve, or the Fleet Marine Corps Reserve, except that in the case of a person who completed 20 years of service computed under section 12732 of this title before October 5, 1994, the number of years of qualifying service under this subparagraph shall be eight; and

`(C) is not entitled, under any other provision of law, to retired pay from an armed force or retainer pay as a member of the Fleet Reserve or the Fleet Marine Corps Reserve.

`(2) The combinations of minimum age and minimum years of service required of a person under subparagraph (A) of paragraph (1) for entitlement to retired pay as provided in such paragraph are as follows:

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--20'.

(b) 20-Year Letter- Subsection (d) of such section is amended by striking `the years of service required for eligibility for retired pay under this chapter' in the first sentence and inserting `20 years of service computed under section 12732 of this title'.

(c) Effective Date- The amendments made by subsection (a) shall take effect on the first day of the first month beginning on or after the date of the enactment of this Act and shall apply with respect to retired pay payable for that month and subsequent months.

TITLE II--HEALTH CARE AND EDUCATION MATTERS

SEC. 201. PERMANENT AUTHORITY FOR CERTAIN TRICARE BENEFITS FOR RESERVES.

(a) Permanent Authority for Coverage of Ready Reserve Members Under TRICARE Program- Section 1076b of title 10, United States Code, is amended by striking subsection (l).

(b) Permanent Authority for Earlier Eligibility Date for TRICARE Benefits for Members of Reserve Components- Section 1074(d) of title 10, United States Code, is amended by striking paragraph (3).

(c) Permanent Extension of Transitional Health Care Benefits-

(1) Paragraph (3) of section 1145(a) of title 10, United States Code, is amended to read as follows:

`(3) Transitional health care for a member under subsection (a) shall be available for 180 days beginning on the date on which the member is separated from active duty.'.

(2) Paragraph (3) of section 1145(a) of title 10, United States Code, shall apply with respect to separations from active duty that take effect on or after November 24, 2003.

(3) Section 704 of the National Defense Authorization Act for Fiscal Year 2004 (Public Law 108-136; 117 Stat. 1527) and section 1117 of the Emergency Supplemental Appropriations Act for Defense and for the Reconstruction of Iraq and Afghanistan, 2004 (Public Law 108-106; 117 Stat. 1218) are repealed.

SEC. 202. INCREASE IN AMOUNT OF BASIC EDUCATIONAL ASSISTANCE UNDER THE MONTGOMERY GI BILL FOR MEMBERS OF RESERVE COMPONENTS; INDEXING PAYMENT AMOUNTS TO HIGHER EDUCATION COSTS.

(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, 2005, and shall apply with respect to educational assistance allowances under section 16131(b)(1) of such title paid for months after September 2005.

(3) In the case of an educational assistance allowance under such section paid for months occurring during fiscal year 2005--

(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 2005 and 2006- Section 16131(b)(2) of such title shall not apply to rates of basic educational assistance paid under such section during fiscal years 2005 and 2006.

(c) Application of Index Based on Higher Education Costs- (1) Section 16131(b)(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, 2006, 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)(A) 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.'.

(B) The amendment made by subparagraph (A) shall apply to fiscal years beginning on or after October 1, 2006.

SEC. 203. PROHIBITION ON DENIAL OF BENEFITS UNDER THE MONTGOMERY GI BILL FOR MEMBERS OF RESERVE COMPONENTS IN CONJUNCTION WITH CALLS TO ACTIVE DUTY.

(a) In General- Section 16134 of title 10, United States Code, is amended--

(1) by striking `Educational' and inserting `(a) General Rule- Educational'; and

(2) by adding at the end the following new subsection:

`(b) Prohibition on Termination of Assistance Due Solely to Call to Active Duty- Service on active duty pursuant to an order to active duty issued under section 12301(a), 12301(d), 12301(g), 12302, or 12304 of this title alone does not constitute failure to participate satisfactorily in required training as a member of the Selected Reserve under subsection (a)(2).'.

(b) Effective Date- The amendment made by subsection (a) shall apply before, on, or after the date of the enactment of this Act.

TITLE III--COMMUTING MATTERS

SEC. 301. LIMITED USE OF TELECOMMUTING TO SATISFY INACTIVE-DUTY TRAINING PRESCRIBED OR AUTHORIZED FOR MEMBERS OF RESERVE COMPONENTS.

Section 206 of title 37, United States Code, is amended by adding at the end the following new subsection:

`(f) The Secretary concerned may authorize a member of the National Guard or of a reserve component of the uniformed services to use telecommuting to satisfy a regular period of instruction or period of appropriate duty prescribed or authorized for the member or to perform such other equivalent training, instruction, duty, or appropriate duties as the Secretary may prescribe or authorize. Telecommuting may not account for more than 16 hours of inactive-duty training by a member in any calendar-year quarter.'.

SEC. 302. PRIORITY FOR SPACE-AVAILABLE TRAVEL FOR MEMBERS OF RESERVE COMPONENTS.

(a) Priority on Same Basis as Active-Duty Members- (1) Chapter 1805 of title 10, United States Code, is amended by adding at the end the following new section:

`Sec. 18507. Reserve component members: priority for space-available travel

`The Secretary of Defense shall provide that members of the Selected Reserve are accorded eligibility for travel on Department of Defense aircraft on a space-available basis in the same category (or with the same priority) as is accorded to members of the armed forces serving on active duty.'.

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

`18507. Reserve component members: priority for space-available travel.'.

(b) Effective Date- Section 18507 of title 10, United States Code, as added by subsection (a), shall take effect at the end of the 180-day period beginning on the date of the enactment of this Act.

END