To expand and improve retired pay, burial, education, and other mobilization benefits for members of the National Guard and Reserves who are called or ordered to active duty, and for other purposes.

April 1, 2004

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

To expand and improve retired pay, burial, education, and other mobilization benefits for members of the National Guard and Reserves who are called or ordered to active duty, 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 `21st Century Citizen Soldier Benefits Act'.

SEC. 2. 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:

The minimum years of service

at least:

--required for that age is:

30

28

26

24

22

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- This section and the amendments made by this 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.

SEC. 3. CERTAIN BURIAL BENEFITS FOR RESERVES WHO SERVED IN CAMPAIGN OR EXPEDITION FOR WHICH A CAMPAIGN MEDAL WAS AUTHORIZED.

(a) ELIGIBILITY FOR HEADSTONE OR GRAVE MARKER- Section 2306(a) of title 38, United States Code, is amended by adding at the end the following new paragraph:

`(6) Any individual who, while a member of a reserve component, served on active duty in a campaign or expedition for which a campaign medal was authorized and who was discharged or released from service in the Armed Forces under other than dishonorable conditions.'.

(b) ELIGIBILITY FOR INTERMENT IN NATIONAL CEMETERIES- Section 2402 of such title is amended by adding at the end the following new paragraph:

`(9) Any individual who, while a member of a reserve component, served on active duty in a campaign or expedition for which a campaign medal was authorized and who was discharged or released from service in the Armed Forces under other than dishonorable conditions.'.

(c) EFFECTIVE DATE- The amendments made by this section shall apply with respect to deaths occurring on or after the date of the enactment of this Act.

SEC. 4. 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) during any five-year period beginning on or after September 11, 2001, while in the Selected Reserve, serves on active duty in the Armed Forces for one or more periods aggregating not less than two years of service on active duty during such period;'.

(b) CONTRIBUTIONS FOR BASIC ASSISTANCE- Section 3012(c) of such title is amended--

(1) by inserting `(1)' after `(c)';

(2) by designating the second sentence as paragraph (3) and indenting such paragraph, as so designated, two ems from the left margin; and

(3) by inserting after paragraph (1), as so designated, the following new paragraph:

`(2)(A) Except as provided in subparagraph (B), in the case of an individual described in subsection (a)(1)(D) who does not make an election under subsection (d)(4), the basic pay of such individual shall be reduced by $100 for each of any of the first 12 months that such individual is entitled to such pay commencing with the first month after the date on which such individual becomes entitled to educational assistance under this chapter by reason of subsection (a)(1)(D).

`(B) An individual described in subparagraph (A) may pay the Secretary $1,200 in a lump sum payment in lieu of the reduction in basic pay otherwise required by subparagraph (A). Such payment shall be made before the commencement of the receipt by the individual of amounts of basic educational assistance under this chapter.

`(C) If the total amount of basic pay of an individual reduced under subparagraph (A) is less than $1,200 as of the completion of all service of such individual on active duty, the individual shall pay the Secretary in a lump sum payment an amount equal to the difference between $1,200 and the amount so reduced. The payment shall be made before the commencement of the receipt by such individual of amounts of basic educational assistance under this chapter.

`(D) The Secretary shall deposit any amounts received as payments under subparagraph (B) or (C) into the Treasury as miscellaneous receipts.'.

(c) ELECTION NOT TO RECEIVE ASSISTANCE- Section 3012(d) of such title is amended by adding at the end the following new paragraph:

`(4) 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 not later than 30 days after the date on which the individual otherwise becomes entitled to such assistance under subsection (a)(1)(D). Any individual who makes such an election is not entitled to educational assistance under this chapter.'.

(d) CONTRIBUTIONS FOR ADDITIONAL ASSISTANCE- Section 3012(f) of such title is amended--

(1) in paragraph (1), by inserting `or (d)(4)' after `subsection (d)(1)'; and

(2) in the second sentence, by inserting `, or any payments by such individual,' after `pay of such individual'.

(e) 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) 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).'.

(f) 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).'.

(g) DEATH BENEFIT- Section 3017(b)(1) of such title is amended--

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

(2) in subparagraph (D), by striking `, less' and inserting `; and'; and

(3) by adding at the end the following new subparagraph:

`(E) the amount of any payments made by the individual under section 3012(c)(2) of this title, less'.

(h) ENTITLEMENT DATE FOR CERTAIN MEMBERS- In the case of any member or former member of the Selected Reserve who, under section 3012(a)(1)(D) of title 38, United States Code (as amended by subsection (a)), is entitled to educational assistance under chapter 30 of title 38, United States Code, as of the date of the enactment of this Act by reason of active duty served by such member during the period beginning on September 11, 2001, and ending on the date of the enactment of this Act, the date on which such individual becomes entitled to such educational assistance by reason of that section shall be deemed to be the date of the enactment of this Act.

(i) 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.

SEC. 5. MODIFICATION OF MAXIMUM RATE OF INTEREST PAYABLE BY SERVICEMEMBERS ON OBLIGATIONS INCURRED BEFORE MILITARY SERVICE.

(a) MODIFICATION- Section 207 of the Servicemembers Civil Relief Act (50 U.S.C. App. 527) is amended--

(1) in subsection (a), by striking `6 percent' each place it appears in the text of paragraphs (1) and (2) and inserting `the interest rate limitation percentage';

(2) in subsection (c), by striking `6 percent' and inserting `the interest rate limitation percentage'; and

(3) by striking subsection (d) and inserting the following new subsection (d):

`(d) DEFINITIONS- In this section:

`(1) INTEREST- The term `interest' includes service charges, renewal charges, fees, or any other charges (except bona fide insurance) with respect to an obligation or liability.

`(2) INTEREST RATE LIMITATION PERCENTAGE- The term `interest rate limitation percentage' means the lesser of--

`(A) 6 percent; or

`(B) the prime lending rate, as identified by the Administration and published in the Federal Register on a quarterly basis, plus 1 percent.'.

(b) EFFECT OF ADJUSTMENT OF INTEREST RATE LIMITATION PERCENTAGE DURING MILITARY SERVICE- Subsection (a) of such section is further amended by adding at the end the following new paragraph:

`(4) EFFECT OF ADJUSTMENT OF INTEREST RATE LIMITATION PERCENTAGE DURING SERVICE- If during the military service of a servicemember the interest rate limitation percentage is adjusted as a result of a quarterly identification of the prime lending rate by the Administration, the interest rate limitation under this subsection on obligations and liabilities incurred before such service shall be so adjusted.'.

(c) CONFORMING AMENDMENTS- Subsection (a) of such section is further amended--

(1) in the paragraph caption of paragraph (1), by striking `LIMITATION TO 6 PERCENT' and inserting `LIMITATION'; and

(2) in the paragraph caption of paragraph (2), by striking `FORGIVENESS OF INTEREST IN EXCESS OF 6 PERCENT' and inserting `FORGIVENESS OF INTEREST IN EXCESS OF INTEREST RATE LIMITATION PERCENTAGE'.

SEC. 6. 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. 7. 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.

SEC. 8. LEAVE OF ABSENCE FROM EDUCATIONAL INSTITUTIONS FOR MILITARY SERVICE.

(a) OBLIGATION AS PART OF PROGRAM PARTICIPATION REQUIREMENTS- Section 487(a)(22) of the Higher Education Act of 1965 (20 U.S.C. 1094(a)(22)) is amended by inserting `and with the policy on leave of absence for active duty military service established pursuant to section 484C' after `section 484B'.

(b) LEAVE OF ABSENCE FOR MILITARY SERVICE- Part G of title IV of the Higher Education Act of 1965 is amended by inserting after section 484B (20 U.S.C. 1091b) the following new section:

`SEC. 484C. LEAVE OF ABSENCE FOR MILITARY SERVICE.

`(a) LEAVE OF ABSENCE REQUIRED- Whenever a student who is a member of the National Guard or other reserve component of the Armed Forces of the United States, or a member of such Armed Forces in a retired status, is called or ordered to active duty, the institution of higher education in which the student is enrolled shall grant the student a military leave of absence from the institution while such student is serving on active duty, and for one year after the conclusion of such service.

`(b) CONSEQUENCES OF MILITARY LEAVE OF ABSENCE-

`(1) PRESERVATION OF STATUS AND ACCOUNTS- A student on a military leave of absence from an institution of higher education shall be entitled, upon release from serving on active duty, to be restored to the educational status such student had attained prior to being ordered to such duty without loss of academic credits earned, scholarships or grants awarded, or, subject to paragraph (2), tuition and other fees paid prior to the commencement of the active duty.

`(2) REFUNDS-

`(A) OPTION OF REFUND OR CREDIT- An institution of higher education shall refund tuition or fees paid or credit the tuition and fees to the next period of enrollment after the student returns from a military leave of absence, at the option of the student. Notwithstanding the 180-day limitation referred to in section 484B(a)(2)(B), a student on a military leave of absence under this section shall not be treated as having withdrawn for purposes of section 484B unless the student fails to return at the end of the military leave of absence (as determined under subsection (a) of this section).

`(B) PROPORTIONATE REDUCTION OF REFUND FOR TIME COMPLETED- If a student requests a refund during a period of enrollment, the percentage of the tuition and fees that shall be refunded shall be equal to 100 percent minus--

`(i) the percentage of the period of enrollment (for which the tuition and fees were paid) that was completed (as determined in accordance with section 484B(d)) as of the day the student withdrew, provided that such date occurs on or before the completion of 60 percent of the period of enrollment; or

`(ii) 100 percent, if the day the student withdrew occurs after the student has completed 60 percent of the period of enrollment.

`(c) ACTIVE DUTY- In this section, the term `active duty' has the meaning given such term in section 101(d)(1) of title 10, United States Code, except that such term--

`(1) does not include active duty for training or attendance at a service school; but

`(2) includes, in the case of members of the National Guard, active State duty.'.

END