To provide pay protection for members of the Reserve and the National Guard, and for other purposes.

February 25, 2003

Ms. LANDRIEU introduced the following bill; which was read twice and referred to the Committee on Finance

To provide pay protection for members of the Reserve and the National Guard, 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 `Reservists and Guardsmen Pay Protection Act of 2003'.

SEC. 2. NONREDUCTION IN PAY WHILE FEDERAL EMPLOYEE IS PERFORMING ACTIVE SERVICE IN 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:

`Sec. 5538. Nonreduction in pay while serving in the uniformed services

`(a) An employee who is absent from a position of employment with the Federal Government in order to perform service in the uniformed services shall be entitled to receive, for each pay period described in subsection (b), an amount equal to the amount by which--

`(1) the amount of basic pay which would otherwise have been payable to such employee for such pay period if such employee's civilian employment with the Government had not been interrupted by that service, exceeds (if at all)

`(2) the amount of pay and allowances which (as determined under subsection (d))--

`(A) is payable to such employee for that service; and

`(B) 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)--

`(A) during which such employee is entitled to reemployment rights under chapter 43 of title 38 with respect to the position from which such employee is absent (as referred to in subsection (a)); and

`(B) for which such employee does not otherwise receive basic pay (including by taking any annual, military, or other paid leave) to which such employee is entitled by virtue of such employee's civilian employment with the Government.

`(2) For purposes of this section, the period during which an employee is entitled to reemployment rights under chapter 43 of title 38--

`(A) shall be determined disregarding the provisions of section 4312(d) of title 38; and

`(B) shall include any period of time specified in section 4312(e) of title 38 within which an employee may report or apply for employment or reemployment following completion of service in the uniformed services.

`(c) Any amount payable under this section to an employee shall be paid--

`(1) by such employee's employing agency;

`(2) from the appropriation or fund which would be used to pay the employee if such employee were in a pay status; and

`(3) to the extent practicable, at the same time and in the same manner as would basic pay if such employee's civilian employment had not been interrupted.

`(d) The Office of Personnel Management shall, in consultation with Secretary of Defense, prescribe any regulations necessary to carry out the preceding provisions of this section.

`(e)(1) The head of each agency referred to in section 2302(a)(2)(C)(ii) shall, in consultation with the Office, 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) For purposes of this section--

`(1) the terms `employee', `Federal Government', and `uniformed services' have the same respective meanings as given in section 4303 of title 38;

`(2) the term `service in the uniformed services' has the meaning given that term in section 4303 of title 38 and includes duty performed by a member of the National Guard under section 502(f) of title 32 at the direction of the Secretary of the Army or Secretary of the Air Force;

`(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)) with respect to which such employee has reemployment rights under chapter 43 of title 38; and

`(4) the term `basic pay' includes any amount payable under section 5304.'.

(b) CLERICAL AMENDMENT- The table of sections for chapter 55 of title 5, United States Code, is amended by inserting after the item relating to section 5537 the following:

`5538. Nonreduction in pay while serving in the uniformed services or National Guard.'.

(c) EFFECTIVE DATE- The amendments made by this section shall apply with respect to pay periods (as described in section 5538(b) of title 5, United States Code,

as added by this section) beginning on or after September 11, 2001.

SEC. 3. READY RESERVE-NATIONAL GUARD EMPLOYEE CREDIT ADDED TO GENERAL BUSINESS CREDIT.

(a) READY RESERVE-NATIONAL GUARD 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:

`SEC. 45G. READY RESERVE-NATIONAL GUARD 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 is an amount equal to 50 percent of the actual compensation amount for such taxable year.

`(b) DEFINITION OF ACTUAL COMPENSATION AMOUNT- For purposes of this section, the term `actual compensation amount' means the amount of compensation paid or incurred by an employer with respect to a Ready Reserve-National Guard employee on any day during a taxable year when the employee was absent from employment for the purpose of performing qualified active duty.

`(c) LIMITATIONS-

`(1) MAXIMUM PERIOD FOR CREDIT PER EMPLOYEE- The maximum period with respect to which the credit may be allowed with respect to any Ready Reserve-National Guard employee shall not exceed the 12-month period beginning on the first day such credit is so allowed with respect to such employee.

`(2) DAYS OTHER THAN WORK DAYS- No credit shall be allowed with respect to a Ready Reserve-National Guard employee who performs qualified active duty on any day on which the employee was not scheduled to work (for reason other than to participate in qualified active duty).

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

`(1) QUALIFIED ACTIVE DUTY- The term `qualified active duty' means--

`(A) active duty, other than the training duty specified in section 10147 of title 10, United States Code (relating to training requirements for the Ready Reserve), or section 502(a) of title 32, United States Code (relating to required drills and field exercises for the National Guard), in connection with which an employee is entitled to reemployment rights and other benefits or to a leave of absence from employment under chapter 43 of title 38, United States Code, and

`(B) hospitalization incident to such duty.

`(2) COMPENSATION- 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) READY RESERVE-NATIONAL GUARD EMPLOYEE- The term `Ready Reserve-National Guard employee' means an employee who is a member of the Ready Reserve or of the National Guard.

`(4) NATIONAL GUARD- The term `National Guard' has the meaning given such term by section 101(c)(1) of title 10, United States Code.

`(5) READY RESERVE- The term `Ready Reserve' has the meaning given such term by section 10142 of title 10, United States Code.'.

(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:

`(16) the Ready Reserve-National Guard 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:

`Sec. 45G. Ready Reserve-National Guard employee credit.'.

(d) EFFECTIVE DATE- The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.

END