[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3625 Introduced in House (IH)]







109th CONGRESS
  1st Session
                                H. R. 3625

 To provide that members of the Armed Forces and Selected Reserve may 
transfer certain educational assistance benefits to dependents, and for 
                            other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 29, 2005

  Mr. Bartlett of Maryland (for himself and Mr. Ross) 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

_______________________________________________________________________

                                 A BILL


 
 To provide that members of the Armed Forces and Selected Reserve may 
transfer certain 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 ``Bartlett 
Montgomery GI Bill Act''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
                      TITLE I--ACTIVE DUTY PROGRAM

Sec. 101. Transfer of entitlement to basic educational assistance under 
                            the Montgomery GI Bill.
Sec. 102. Application of annual adjustment to rates of educational 
                            assistance based on average costs of higher 
                            learning.
Sec. 103. Additional opportunity for certain VEAP participants to 
                            enroll in basic educational assistance 
                            under Montgomery GI Bill.
Sec. 104. Reimbursement of reductions of basic pay.
                       TITLE II--SELECTED RESERVE

Sec. 201. Transfer of entitlement to educational assistance under the 
                            Reserve Montgomery GI Bill.
Sec. 202. Credit for cumulative active duty service in the Selected 
                            Reserve.
Sec. 203. Increase in rates of educational assistance under the Reserve 
                            Montgomery GI Bill.
      TITLE III--SURVIVORS' AND DEPENDENTS' EDUCATIONAL ASSISTANCE

Sec. 301. Application of annual adjustment to rates of educational 
                            assistance based on average costs of higher 
                            learning.

                      TITLE I--ACTIVE DUTY PROGRAM

SEC. 101. TRANSFER OF ENTITLEMENT TO BASIC EDUCATIONAL ASSISTANCE UNDER 
              THE MONTGOMERY GI BILL.

    (a) All-Volunteer Force Educational Assistance Program.--(1) 
Section 3020 of title 38, United States Code, is amended to read as 
follows:
``Sec. 3020. Transfer of entitlement to basic Educational assistance
    ``(a) Election to Transfer Entitlement.--(1) An individual 
described in subsection (b) who is entitled to basic educational 
assistance under this subchapter may elect to transfer to one or more 
of the dependents specified in subsection (c) a portion of such 
individual's entitlement to such assistance.
    ``(2) An individual transferring entitlement under this section 
shall submit written notice to the Secretary concerned not later than 
the expiration date of the period described in section 3031 of this 
title that is applicable to such individual.
    ``(b) Eligible Individuals.--An individual referred to in 
subsection (a) is any member of the Armed Forces who, at the time of 
the approval by the Secretary concerned of the member's request to 
transfer entitlement to basic educational assistance under this 
section--
            ``(1) has completed six years of service in the Armed 
        Forces; and
            ``(2) enters into an agreement to serve at least four more 
        years as a member of the Armed Forces.
    ``(c) Eligible Dependents.--An individual may transfer entitlement 
under this section as follows:
            ``(1) To the individual's spouse.
            ``(2) To one or more of the individual's children.
            ``(3) To a combination of the individuals referred to in 
        paragraphs (1) and (2).
    ``(d) Designation of Transferee.--An individual transferring 
entitlement under this section shall--
            ``(1) designate the dependent or dependents to whom such 
        entitlement is being transferred;
            ``(2) designate the number of months of such entitlement to 
        be transferred to each such dependent; and
            ``(3) specify the period for which the transfer shall be 
        effective for each such dependent.
    ``(e) Revocation and Modification.--An individual transferring 
entitlement under this section may modify or revoke at any time the 
transfer of any unused portion of the entitlement so transferred. The 
modification or revocation of the transfer of entitlement under this 
subsection shall be made by the submittal of written notice of the 
action to both the Secretary concerned and the Secretary of Veterans 
Affairs.
    ``(f) Commencement of Use.--If the dependent to whom entitlement is 
transferred under this section is a child, the use of the transferred 
entitlement may not commence until the child--
            ``(1) completes the requirements of a secondary school 
        diploma (or equivalency certificate); or
            ``(2) attains 18 years of age.
    ``(g) Time Limitation for Use of Eligibility and Entitlement.--
Notwithstanding section 3031 of this title, and subject to subsection 
(d)(3), a dependent to whom entitlement is transferred under this 
section may use such entitlement not later than the expiration date of 
a 15-year period beginning on the commencement date of the period 
described in section 3031 of this title that is applicable to the 
individual who transferred such entitlement to the dependent.
    ``(h) Additional Administrative Matters.--(1) The use of any 
entitlement transferred under this section shall be charged against the 
entitlement of the individual making the transfer at the rate of one 
month for each month of transferred entitlement that is used.
    ``(2) Except as provided under paragraphs (2) and (3) of subsection 
(d) and subsection (g), and subject to paragraph (5), a dependent to 
whom entitlement is transferred under this section is entitled to basic 
educational assistance under this subchapter in the same manner as the 
individual from whom entitlement was transferred.
    ``(3)(A) Subject to subparagraph (B), the monthly rate of 
educational assistance payable to a dependent to whom entitlement is 
transferred under this section shall be the monthly amount payable 
under sections 3015 and 3022 of this title to the individual making the 
transfer.
    ``(B) The monthly rate of assistance payable to a dependent under 
subparagraph (A) shall be subject to the provisions of section 3032 of 
this title, except that the provisions of subsection (a)(1) of that 
section shall not apply even if the individual making the transfer to 
the dependent under this section is on active duty during all or any 
part of enrollment period of the dependent in which such entitlement is 
used.
    ``(4) The death of an individual transferring entitlement under 
this section shall not affect the use of the transferred entitlement by 
the dependent to whom entitlement is transferred.
    ``(5) Notwithstanding subsection (g) and section 3031 of this 
title, a child to whom entitlement is transferred under this section 
may not use any entitlement so transferred after attaining the age of 
26 years.
    ``(6) Except as provided in subsection (f), the purposes for which 
a dependent to whom entitlement is transferred under this section may 
use such entitlement shall include the pursuit and completion of the 
requirements of a secondary school diploma (or equivalency 
certificate).
    ``(i) Overpayment.--In the event of an overpayment of basic 
educational assistance with respect to a dependent to whom entitlement 
is transferred under this section, the dependent and the individual 
making the transfer shall be jointly and severally liable to the United 
States for the amount of the overpayment for purposes of section 3685 
of this title.
    ``(j) Authority for Certain Individuals Who Opted Out of 
Educational Assistance to Transfer Entitlement.--(1) Subject to the 
succeeding provisions of this subsection, a specified individual may 
elect to transfer to one or more of the dependents specified in 
subsection (c) such individual's entitlement to such assistance in the 
same manner, and under the same terms and conditions, that apply to an 
individual referred to in subsection (a).
    ``(2) In this subsection, the term `specified individual' means an 
individual--
            ``(A) who made an election under section 3011(c)(1) or 
        3012(d)(1) of this title, as the case may be;
            ``(B) who withdraws such election (in a form and manner 
        determined by the Secretary concerned) not later than one year 
        after the date of the enactment of the Bartlett Montgomery GI 
        Bill Act;
            ``(C) whose conditional delimiting period (as described in 
        paragraph (3)) has not expired; and
            ``(D) from whom the Secretary has reduced basic pay or 
        collected payment as provided in paragraph (4).
    ``(3) The conditional delimiting period referred to in paragraph 
(2)(C) is the period described in section 3031 of this title that would 
have been applicable to such individual but for the election made by 
the individual under section 3011(c)(1) or 3012(d)(1) of this title, as 
the case may be.
    ``(4)(A) Subject to subparagraph (B), with respect to a specified 
individual who withdraws an election under paragraph (2)(B) to transfer 
entitlement to basic educational assistance under this subchapter, the 
basic pay of the specified individual shall be reduced (in a manner 
determined by the Secretary concerned) until the total amount by which 
such basic pay is reduced is $1,200.
    ``(B) To the extent that basic pay is not reduced under 
subparagraph (A) before the specified individual's discharge or release 
from active duty, at the election of the specified individual--
            ``(i) the Secretary concerned shall collect from the 
        specified individual; or
            ``(ii) the Secretary concerned shall reduce the retired or 
        retainer pay of the specified individual by,
an amount equal to the difference between $1,200 and the total amount 
of reductions under subparagraph (A), which shall be paid into the 
Treasury of the United States as miscellaneous receipts.
    ``(5) A specified individual may only transfer, and may not use, 
entitlement under this chapter.
    ``(6) In carrying out this subsection--
            ``(A) the reference in subsection (a) to `not later than 
        the expiration date of the period described in section 3031 of 
        this title' is deemed to be a reference to `during the one year 
        period beginning on the date of the enactment of the Bartlett 
        Montgomery GI Bill Act'; and
            ``(B) the reference in subsection (f) to `commencement date 
        of the period described in section 3031 of tis title' is deemed 
        to be a reference to the `commencement date of the conditional 
        delimiting period under subsection (i)(3)'.
    ``(k) Regulations.--The Secretaries concerned shall prescribe 
regulations for purposes of this section.
    ``(l) Annual Report.--Not later than January 31 each year 
(beginning in 2007), the Secretary of Defense, in consultation with the 
other Secretaries concerned, shall submit to the Committees on Armed 
Services and the Committees on Veterans' Affairs of the Senate and 
House of Representatives a report on the number of individuals 
transferring entitlement to educational assistance under this section 
during the preceding fiscal year.
    ``(m) Secretary Concerned Defined.--Notwithstanding section 
101(25), in this section the term `Secretary concerned' means--
            ``(1) the Secretary of the Army with respect to matters 
        concerning the Army;
            ``(2) the Secretary of the Navy with respect to matters 
        concerning the Navy or the Marine Corps;
            ``(3) the Secretary of the Air Force with respect to 
        matters concerning the Air Force; and
            ``(4) the Secretary of Defense with respect to matters 
        concerning the Coast Guard, or the Secretary of Homeland 
        Security when it is not operating as a service in the Navy.''.
    (2) The table of sections at the beginning of chapter 30 of such 
title is amended by striking the item relating to section 3020 and 
inserting the following:

``3020. Transfer of entitlement to basic educational assistance.''.
    (b) Conforming Amendment.--Subsection (a) of section 3031 is 
amended by inserting ``in section 3020 of this title and''.

SEC. 102. APPLICATION OF ANNUAL ADJUSTMENT TO RATES OF EDUCATIONAL 
              ASSISTANCE BASED ON AVERAGE COSTS OF HIGHER LEARNING.

    (a) In General.--Section 3015(h) of title 38, United States Code, 
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.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to payments for months beginning after September 30, 2006.

SEC. 103. ADDITIONAL OPPORTUNITY FOR CERTAIN VEAP PARTICIPANTS TO 
              ENROLL IN BASIC EDUCATIONAL ASSISTANCE UNDER MONTGOMERY 
              GI BILL.

    (a) Additional One-Year Opportunity to Enroll.--Subsection (e) of 
section 3018C of title 38, United States Code, is amended by adding at 
the end the following new paragraph:
            ``(6) In addition to the one-year period applicable under 
        paragraph (1), a qualified individual (described in paragraph 
        (2)) may make an irrevocable election under this subsection 
        during the one-year period beginning on the date of the 
        enactment of this paragraph, except that in applying this 
        subsection as modified by this paragraph, the reference in 
        paragraph (2)(B) to `April, 1, 2000,' is deemed to be a 
        reference to `April, 1, 2005'.''.
    (b) Conforming Amendments.--Subsection (e)(3) of such section is 
amended by striking ``under paragraph (1)'' both places it appears and 
inserting ``under this subsection''.

SEC. 104. REIMBURSEMENT OF REDUCTIONS OF BASIC PAY.

    (a) Reimbursement for Extended Active Duty Service.--Sections 
3011(b) and 3012(c) of title 38, United States Code, are each amended 
by adding at the end the following new paragraph:
    ``(4)(A) Subject to subparagraph (C), in the case of an individual 
who, after the date of completion of the continuous period of active 
duty service applicable to the individual under this section, continues 
to serve on active duty service, the Secretary shall pay to the 
individual $100 for each consecutive12-month period of active duty 
service served by the individual after such date.
    ``(B) In the case of an individual who was discharged or released 
from active duty for a condition described in section 3011(a)(1)(A)(i) 
of this title, the Secretary shall pay to such individual the aggregate 
amount of reductions in basic pay made under paragraph (1).
    ``(C) In no case may the amount of payments to an individual under 
subparagraph (A) exceed the amount of reductions made with respect to 
the individual under paragraph (1).''.
    (b) Conforming Amendment.--Paragraph (2) of section 3017(b) of such 
title is amended--
            (1) by striking ``and'' at the end of paragraph (1);
            (2) by striking the period at the end of paragraph (2) and 
        inserting ``; and''; and
            (3) by adding at the end the following new paragraph:
                    ``(C) the amount of payments made to the individual 
                under section 3011(b)(4) or 3012(c)(4) of this title 
                (as the case may be).''.
    (c) Effective Date.--The amendments made by this section shall 
apply to periods of active duty served on or after the date of the 
enactment of this Act.

                       TITLE II--SELECTED RESERVE

SEC. 201. TRANSFER OF ENTITLEMENT TO EDUCATIONAL ASSISTANCE UNDER THE 
              RESERVE MONTGOMERY GI BILL.

    (a) Selected Reserve.--(1) Chapter 1606 of title 10, United States 
Code, is amended by adding at the end the following new section:
``Sec. 16138 Transfer of entitlement to educational assistance
    ``(a) In General.--An individual described in subsection (b) who is 
entitled to educational assistance under this chapter may elect to 
transfer to one or more of the dependents specified in subsection (c) a 
portion of such individual's entitlement to such assistance. An 
individual transferring entitlement under this section shall submit 
written notice to the Secretary concerned not later than the expiration 
date of the period described in section 16133 of this title that is 
applicable to such individual.
    ``(b) Eligible Individuals.--An individual referred to in 
subsection (a) is any member of the Armed Forces who, at the time of 
the approval by the Secretary concerned of the member's request to 
transfer entitlement to basic educational assistance under this 
section--
            ``(1) has completed six years of service in the Selected 
        Reserve; and
            ``(2) enters into an agreement to remain a member of the 
        Selected Reserve for a period of not less than four years.
    ``(c) Eligible Dependents.--An individual may transfer entitlement 
under this section as follows:
            ``(1) To the individual's spouse.
            ``(2) To one or more of the individual's children.
            ``(3) To a combination of the individuals referred to in 
        paragraphs (1) and (2).
    ``(d) Designation of Transferee.--An individual transferring 
entitlement under this section shall--
            ``(1) designate the dependent or dependents to whom such 
        entitlement is being transferred;
            ``(2) designate the number of months of such entitlement to 
        be transferred to each such dependent; and
            ``(3) specify the period for which the transfer shall be 
        effective for each such dependent.
    ``(e) Revocation and Modification.--An individual transferring 
entitlement under this section may modify or revoke at any time the 
transfer of any unused portion of the entitlement so transferred. The 
modification or revocation of the transfer of entitlement under this 
subsection shall be made by the submittal of written notice of the 
action to both the Secretary concerned and the Secretary of Veterans 
Affairs.
    ``(f) Commencement of Use.--If the dependent to whom entitlement is 
transferred under this section is a child, the use of the transferred 
entitlement may not commence until the child--
            ``(1) completes the requirements of a secondary school 
        diploma (or equivalency certificate); or
            ``(2) attains 18 years of age.
    ``(g) Time Limitation for Use of Eligibility and Entitlement.--
Notwithstanding section 16133 of this title, and subject to subsection 
(d)(3), a dependent to whom entitlement is transferred under this 
section may use such entitlement until the later of--
            ``(1) the expiration date of a 15-year period beginning on 
        the commencement date of the period prescribed by section 
        16133(a)(1) that is applicable to the individual who 
        transferred such entitlement to the dependent; or
            ``(2) the date that is 10 years after the date the 
        individual who transferred such entitlement to the dependent is 
        separated from the Selected Reserve,
whichever occurs first.
    ``(h) Additional Administrative Matters.--(1) The use of any 
entitlement transferred under this section shall be charged against the 
entitlement of the individual making the transfer at the rate of one 
month for each month of transferred entitlement that is used.
    ``(2) Except as provided under paragraphs (2) and (3) of subsection 
(d) and subsection (g), and subject to paragraph (5), a dependent to 
whom entitlement is transferred under this section is entitled to 
educational assistance under this chapter in the same manner as the 
individual from whom entitlement was transferred.
    ``(3) The monthly rate of educational assistance payable to a 
dependent to whom entitlement is transferred under this section shall 
be the monthly amount payable under section 16131 of this title to the 
individual making the transfer.
    ``(4) The death of an individual transferring entitlement under 
this section shall not affect the use of the transferred entitlement by 
the dependent to whom entitlement is transferred.
    ``(5) Notwithstanding subsection (g) and section 16133 of this 
title, a child to whom entitlement is transferred under this section 
may not use any entitlement so transferred after attaining the age of 
26 years.
    ``(6) Except as provided in subsection (f), the purposes for which 
a dependent to whom entitlement is transferred under this section may 
use such entitlement shall include the pursuit and completion of the 
requirements of a secondary school diploma (or equivalency 
certificate).
    ``(i) Overpayment.--In the event of an overpayment of basic 
educational assistance with respect to a dependent to whom entitlement 
is transferred under this section, the dependent and the individual 
making the transfer shall be jointly and severally liable to the United 
States for the amount of the overpayment for purposes of section 3685 
of title 38.
    ``(j) Regulations.--The Secretaries concerned shall prescribe 
regulations for purposes of this section.
    ``(k) Secretary Concerned Defined.--Notwithstanding section 
101(a)(9), in this section the term `Secretary concerned' means--
            ``(1) the Secretary of the Army with respect to matters 
        concerning the Army;
            ``(2) the Secretary of the Navy with respect to matters 
        concerning the Navy or the Marine Corps;
            ``(3) the Secretary of the Air Force with respect to 
        matters concerning the Air Force; and
            ``(4) the Secretary of Defense with respect to matters 
        concerning the Coast Guard, or the Secretary of Homeland 
        Security when it is not operating as a service in the Navy.''.
    (2) The table of sections at the beginning of such chapter is 
amended by adding at the end the following new item:

``16138. Transfer of entitlement to educational assistance.''.
    (b) Conforming Amendments.--(1) Section 16133(a) of such title is 
amended by inserting ``and section 16138'' after ``subsection (b)''.
    (2) Section 16137 of such title is amended by inserting ``Each such 
report shall also include the number of members of the Selected Reserve 
of the Ready Reserve of each armed force transferring entitlement to 
educational assistance under section 16138.'' after ``those fiscal 
years.''.

SEC. 202. CREDIT FOR CUMULATIVE ACTIVE DUTY SERVICE IN THE SELECTED 
              RESERVE.

    (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) while in the Selected Reserve--
                            ``(i) is first ordered to serve on active 
                        duty in the Armed Forces under section 
                        12301(a), 12301(d), 12301(g), 12302, or 12304 
                        of title 10, during the period beginning on 
                        September 11, 2001, and ending December 31, 
                        2006; and
                            ``(ii) serves on active duty in the Armed 
                        Forces for one or more periods (whether 
                        continuous or otherwise) aggregating not less 
                        than two years of service on active duty during 
                        a five period beginning on the date the 
                        individual is first ordered to serve on active 
                        duty during the period referred to in clause 
                        (i);''.
    (b) Duration of Assistance.--Subsection (b) of section 3013 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) or section 3012(a)(1)(C) of this 
                title, for each month of continuous active duty served 
                by such individual after June 30, 1985;
                    ``(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).''.
    (c) Amount of Assistance.--Section 3015 of such title is amended by 
adding at the end the following new subsection:
    ``(i) 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).''.
    (d) Contribution.--Paragraph (1) of section 3012(c) of such title 
is amended by inserting ``or subsection (a)(1)(D)'' after ``subsection 
(a)(1)(A)''.
    (e) Election to Opt Out.--Paragraph (1) of section 3012(d) of such 
title is amended--
            (1) by inserting ``(A)'' after ``(d)(1)'';
            (2) by designating the last sentence as subparagraph (C);
            (3) in subparagraph (C), as so designated, by striking 
        ``such an election'' and inserting ``an election under this 
        paragraph''; and
            (4) by inserting before subparagraph (C), as so designated, 
        the following new subparagraph (B):
    ``(B) 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 at the time the individual completes the 
aggregate period of active duty service required under such 
subsection.''.
    (f) 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. 203. INCREASE IN RATES OF EDUCATIONAL ASSISTANCE UNDER THE RESERVE 
              MONTGOMERY GI BILL.

    (a) In General.--Section 16131(b) of title 10, United States Code, 
is amended to read as follows:
    ``(b) Except as provided in subsections (d) through (f), each 
educational assistance program established under subsection (a) shall 
provide for payment by the Secretary concerned, through the Secretary 
of Veterans Affairs, to each person entitled to educational assistance 
under this chapter who is pursuing a program of education of an 
educational assistance allowance at the following monthly rates:
            ``(1) For such a program of education pursued on a full-
        time basis, at the monthly rate equal to 40 percent of the rate 
        that applies for the month under section 3015(a)(1) of title 
        38.
            ``(2)(A) Subject to subparagraph (B), for such a program of 
        education pursued on a less than a full-time basis, at an 
        appropriately reduced rate, as determined under regulations 
        which the Secretaries concerned shall prescribe.
            ``(B) No payment may be made to a person for less than 
        half-time pursuit of such a program of education if tuition 
        assistance is otherwise available to the person for such 
        pursuit from the military department concerned.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply with respect to educational assistance allowances under section 
16131(b) of such title paid for months occuring or or after the date of 
the enactment of this Act.
    (c) Conforming Increase to Educational Assistance Rates Under 
Chapter 1607.--Paragraph (4) of section 16162(c) of title 10, United 
States Code, is amended--
            (1) by striking ``40 percent'' in subparagraph (A) and 
        inserting ``50 percent''; and
            (2) by striking ``60 percent'' in subparagraph (B) and 
        inserting ``65 percent''.

      TITLE III--SURVIVORS' AND DEPENDENTS' EDUCATIONAL ASSISTANCE

SEC. 301. APPLICATION OF ANNUAL ADJUSTMENT TO RATES OF EDUCATIONAL 
              ASSISTANCE BASED ON AVERAGE COSTS OF HIGHER LEARNING.

    (a) In General.--Subsection (a) of section 3564 of title 38, United 
States Code, is amended to read as follows:
    ``(a) With respect to any fiscal year, the Secretary shall provide 
for the same percentage increase in the rates payable under sections 
3532, 3534(b), and 3542(a) of this title as the Secretary applies under 
subsection (h)(1) of section 3015 of this title to the rates applicable 
under subsections (a)(1) and (b)(1) of such section.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to payments for months beginning after September 30, 2006.
                                 <all>