To amend title 38, United States Code, to improve benefits under the Montgomery GI Bill by establishing an enhanced educational assistance program, by increasing the amount of basic educational assistance, by repealing the requirement for reduction in pay for participation in the program, by eliminating the time limitation for use of benefits under the program, by expanding the opportunities to transfer educational assistance benefits to dependents, and for other purposes.

May 11, 2005

Mr. EVANS (for himself, Mr. DINGELL, Mr. FILNER, Mr. GUTIERREZ, Ms. CORRINE BROWN of Florida, Ms. HERSETH, Mr. STRICKLAND, Ms. HOOLEY, Mr. REYES, Mr. UDALL of New Mexico, Mr. SHERMAN, Mr. PALLONE, Ms. CARSON, Mr. SCHIFF, Mr. HOLT, Mr. DAVIS of Florida, Mrs. MALONEY, Mr. SERRANO, Mrs. JONES of Ohio, Mr. HIGGINS, Mr. GRIJALVA, Mr. MORAN of Virginia, and Mr. CONYERS) introduced the following bill; which was referred to the Committee on Veterans' Affairs, and in addition to the Committee on 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

To amend title 38, United States Code, to improve benefits under the Montgomery GI Bill by establishing an enhanced educational assistance program, by increasing the amount of basic educational assistance, by repealing the requirement for reduction in pay for participation in the program, by eliminating the time limitation for use of benefits under the program, by expanding the opportunities to transfer educational assistance benefits to dependents, 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 `Montgomery GI Bill Improvements Act of 2005'.

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

Sec. 1. Short title; table of contents.

Sec. 2. Enhanced benefits under the Montgomery GI Bill for four years of active-duty service.

Sec. 3. Increase in rates of basic educational assistance under the Montgomery GI Bill.

Sec. 4. Repeal of pay reduction and high school graduation requirement for participation in basic educational assistance under the Montgomery GI Bill.

Sec. 5. Repeal of delimiting date for use of entitlement to basic educational assistance under the Montgomery GI Bill.

Sec. 6. Elimination of limitation to critical military skills for authority to transfer entitlement.

Sec. 7. Increase in repayment amounts under the student loan repayment programs for servicemembers.

Sec. 8. Expansion of programs of education eligible for accelerated payments of educational assistance under the Montgomery GI Bill.

SEC. 2. 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:

`SUBCHAPTER V--ENHANCED EDUCATIONAL ASSISTANCE

`Sec. 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.

`Sec. 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.

`Sec. 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.

`Sec. 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.'.

SEC. 3. 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.

SEC. 4. 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.'.

SEC. 5. 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.

SEC. 6. 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).

SEC. 7. 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.'.

SEC. 8. 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:

`SEC. 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.'.

END