I 108th CONGRESS 2d Session H. R. 3962 IN THE HOUSE OF REPRESENTATIVES March 11, 2004 Mr. Shaw introduced the following bill; which was referred to the Committee on Armed Services A BILL To amend title 10, United States Code, to establish a program of interest-free loans to members of the Selected Reserve who experience financial hardship due to service on active duty in the Armed Forces.
1.
Short title
This Act may be cited as the &short-title1;.
2.
Loan program for members of the Selected Reserve
(a)
In general
Part II of subtitle E of title 10, United States Code, is amended by inserting after chapter 1215 the following new chapter: 1216
Ready Reserve Mobilization Loan Program
12591. Definitions 12592. Establishment of loan program 12593. Members eligible for loans 12594. Loan amounts 12595. Interest 12596. Payment
12591.
Definitions
In this chapter: (1)The term eligible member means a member of the Ready Reserve who has one or more dependents enrolled in the Department of Defense program Defense Enrollment Eligibility Reporting System (DEERS). (2)The term covered service means active duty performed by a member of a reserve component under an involuntary call or order to active duty in support of a contingency operation.
12592.
Establishment of loan program
(a)
Establishment
The Secretary of Defense shall establish for members of the Ready Reserve (including the Coast Guard Reserve) a loan program to be known as the Ready Reserve Mobilization Loan Program. (b)
Administration
The loan program shall be administered by the Secretary under such regulations as the Secretary considers appropriate for carrying out the program. (c)
Agreement with Secretary of homeland security
The Secretary and the Secretary of Homeland Security shall enter into an agreement with respect to the administration of the program for the Coast Guard Reserve.
12593.
Members eligible for loans
(a)
In general
The Secretary of Defense shall make a loan under the program under this chapter to an eligible member, upon receipt of an application for such loan from such member, for any period during which the member performs covered service if, as determined by the Secretary— (1)the income of the member during such service is less than the member’s income before being called or ordered to such service; and (2)the member incurs a financial hardship by reason of such service. (b)
Determination of income
The Secretary shall make a determination under paragraph (1) of subsection (a) by comparing— (1)the member’s regular military compensation (as defined in section 101 of title 37), stated as an annualized amount; with (2)the amount of income of the member over the 52 weeks preceding the beginning of such service derived from sources that will not be available to the member while performing such service. (c)
Use of loan amounts
The Secretary shall take such steps as the Secretary considers necessary to ensure that a loan under the program is not used for investment purposes (other than deposit in a demand account).
12594.
Loan amounts
(a)
Amount of loan
The amount of a loan to an eligible member under this chapter may be in any amount specified by the eligible member up to $500 for each full month of covered service performed by the member. (b)
Disbursement of loan amount
The Secretary of Defense shall disburse a loan under the program under this chapter in such manner as may be directed by the member taking out the loan. The Secretary shall provide means to assist the member in facilitating the making of the amount of such loan available for the use or benefit of dependents of the member. A member may designate in writing another person to receive the amount of a loan under the program, and the member may direct that such an amount for a person so designated be deposited with a bank or other financial institution to the credit of the designated person.
12595.
Interest
(a)
Interest free period
Except as provided in subsection (b)(2), a loan under this chapter for any month of covered service shall bear no interest for the period beginning on the date of the loan and ending at the end of— (1)five years from the end of the period of covered service including that month, if that period of covered service is a period of less than 12 consecutive months; and (2)ten years from the end of the period of covered service including that month, if that period of covered service is a period of 12 consecutive months or more. (b)
5 percent interest
A loan under this chapter shall bear interest at the rate of 5 percent per year commencing to accrue— (1)as of the date that is the end of the interest-free period specified in subsection (a); or (2)if the service of the member in the Selected Reserve ends before the date referred to in paragraph (1), as of the date such service in the Selected Reserve ends.
12596.
Payment
(a)
Period of payment
(1)Repayment of a loan under this chapter shall commence when the member to whom the loan is made is released from the period of active duty that includes the covered service for which the loan is made. Unless the member enters into an alternative repayment agreement with the Secretary, the loan shall be repaid over the period beginning on the date of the loan and ending at the end of— (1)five years, if the period of covered service is a period of less than 12 consecutive months; and (2)ten years, if that period of covered service is a period of 12 consecutive months or more. (b)
Method of payment
Unless the member enters into an alternative repayment agreement with the Secretary, payment on a loan under this chapter shall be by deduction from the amount of basic pay or inactive-duty pay earned by the member while in an active status but not on active duty (other than for training).
. (b)
Clerical amendment
The tables of chapters at the beginning of subtitle E, and at the beginning of part II of subtitle E, of title 10, United States Code, are amended by inserting after the item relating to chapter 1215 the following new item: 1216.Ready Reserve Mobilization Loan Program12591.