[Congressional Record Volume 150, Number 107 (Friday, September 10, 2004)]
[Senate]
[Pages S9078-S9081]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. DASCHLE (for himself, Mrs. Murray, Ms. Mikulski, Mr. 
        Leahy, Mrs. Lincoln, Mr. Corzine, Mr. Akaka, Mr. Dorgan, Mr. 
        Pryor, Mr. Johnson, and Mr. Reid):
  S. 2791. A bill to enhance the benefits and protections for members 
of the reserve components of the Armed Forces who are called or ordered 
to extend active duty, and for other purposes; to the Committee on 
Armed Services.
  Mr. DASCHLE. Mr. President, I ask unanimous consent that the text of 
the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2791

       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 ``National Guard and Reserve 
     Bill of Rights Act of 2004''.

     SEC. 2. PERIODS OF DEPLOYMENTS OF RESERVES OVERSEAS.

       (a) United States Central Command Deployments.--
       (1) Limitation.--During a period when there is in effect a 
     policy of assigning units or members of one or more of the 
     active components of the Armed Forces to duty in the area of 
     responsibility of the United States Central Command for a 
     specified period of time of not less than one year, the 
     Secretary of Defense shall provide that the length of such an 
     assignment in the case of members of the reserve components 
     of the Armed Forces may not exceed the length of such period 
     for the corresponding active component reduced by the period 
     of time between the date of entry of the reserve component 
     members onto active duty and the date of the deployment of 
     such members for such assignment.
       (2) Transition.--Paragraph (1) applies to members of 
     reserve components assigned to duty in the area of 
     responsibility of the United States Central Command on or 
     after the date of the enactment of this Act and to such 
     members assigned to such duty before such date who as of the 
     date of the enactment of this Act have more than 90 days 
     remaining in such assignment.
       (b) Communication of Lengths of Deployment Periods to 
     Reserves in Operation Iraqi Freedom.--
       (1) Findings.--Congress makes the following findings:
       (A) Members of all components of the Armed Forces, active 
     and reserve, exhibit a remarkable commitment and willingness 
     to serve their country in Iraq and Afghanistan, and other 
     United States military efforts around the world and, in doing 
     so, frequently face grave risks and difficulties.
       (B) While the members of the Armed Forces have clearly and 
     consistently demonstrated their dedication to duty, much 
     uncertainty has arisen among them about the lengths of their 
     deployments and when they will be returned to their loved 
     ones. This confusion impairs our troops' morale and places 
     undue strain on their families and their civilian employers.
       (C) Fairness to the men and women of the Armed Forces 
     deployed overseas requires that the Department of Defense--
       (i) have clear policies regarding lengths of deployment 
     periods; and
       (ii) communicate these policies and other deployment-
     related information to them and their families.
       (D) While many military units were deployed months before 
     Operation Iraqi Freedom was launched on March 19, 2003, the 
     Department of Defense did not announce a policy about the 
     length of deployments until August 2003.
       (E) Even after the Department of Defense issued its so-
     called ``one year boots-on-the-ground'' policy regarding 
     lengths of deployment periods, many of the members of units 
     deployed overseas in Operation Iraqi Freedom learned shortly 
     before their scheduled return dates that their deployments 
     would

[[Page S9079]]

     be extended for months beyond the one-year period provided 
     under that policy.
       (2) Report.--
       (A) Requirement for report.--Not later than March 1, 2005, 
     the Secretary of Defense shall submit to the Committees on 
     Armed Services of the Senate and the House of Representatives 
     a report on Department of Defense policies governing the 
     length of deployment periods applicable to members of reserve 
     components of the Armed Forces in connection with Operation 
     Iraqi Freedom, and on the communication between the 
     Department of Defense and reserve component personnel and 
     their families regarding the length of the deployment 
     periods.
       (B) Consultation requirement.--In preparing the report 
     under this section the Secretary shall consult with the 
     Chairman and other members of the Joint Chiefs of Staff and 
     with such other officials as the Secretary considers 
     appropriate.
       (C) Content.--The report under this paragraph shall contain 
     a discussion of the matters described in subparagraph (A), 
     including the following matters:
       (i) The process by which the Department of Defense 
     determined its policy regarding the length of deployment 
     periods.
       (ii) The reason that no such policy was in place before 
     Operation Iraqi Freedom began.
       (iii) A comparison of the policy during Operation Iraqi 
     Freedom with Department of Defense deployment policies that 
     applied to previous contingency operations.
       (iv) The timeliness of the process for notifying reserve 
     component units for activation.
       (v) The process for communicating with activated reserve 
     component members and their families about demobilization 
     schedules.
       (vi) The family support programs provided by the National 
     Guard and other reserve components for families of activated 
     Reserves.
       (vii) An assessment of lessons learned about how the 
     increased operations tempo of the National Guard and other 
     reserve components can be expected to affect readiness, 
     recruitment and retention, civilian employers of Reserves, 
     and equipment and supply resources of the National Guard and 
     the other reserve components.
       (D) Matters for Particular Emphasis.--In the discussion of 
     the matters included in the report under this subsection, the 
     Secretary of Defense shall place particular emphasis on--
       (i) lessons learned, including deficiencies identified; and
       (ii) near-term and long-term corrective actions to address 
     the identified deficiencies.
       (E) Form of report.--The report shall be submitted in 
     unclassified form, but may include a classified annex.

     SEC. 3. MILITARY PAY.

       (a) Correction of Pay Problems for Activated Reserve 
     Component Personnel.--
       (1) Requirement for senior level action.--The Secretary of 
     the Army shall designate a senior level official of the 
     Department of the Army to implement--
       (A) the recommendations for executive action set forth in 
     the report of the Comptroller General of the United States 
     entitled ``Military Pay, Army National Guard Personnel 
     Mobilized to Active Duty Experienced Significant Pay 
     Problems'', dated November 2003; and
       (B) the recommendations for executive action set forth in 
     the report of the Comptroller General of the United States 
     entitled ``Military Pay, Army Reserve Soldiers Mobilized to 
     Active Duty Experienced Significant Pay Problems'', dated 
     August 2004.
       (2) Supervision by comptroller of department of defense.--
     The official designated under paragraph (1) shall report 
     directly to, and be subject to the direction of, the Under 
     Secretary of Defense (Comptroller) regarding performance of 
     the duties that the official is designated to carry out under 
     such paragraph.
       (3) Termination of requirement.--The designation under 
     paragraph (1) shall terminate upon the certification of the 
     Under Secretary of Defense (Comptroller) to Congress that all 
     recommendations referred to in such paragraph have been 
     implemented.
       (b) Reenlistment Bonus for Selected Reserve.--
       (1) Expanded eligibility.--Subsection (a)(1) of section 
     308b of title 37, United States Code, is amended by striking 
     ``14 years'' and inserting ``17 years''.
       (2) Increased maximum amount.--Subsection (b) of such 
     section is amended by striking ``(b) Bonus Amount; Payment.--
     (1) The amount of a bonus under this section may not exceed--
     '' and all that follows through the end of paragraph (1) and 
     inserting the following:
       ``(b) Bonus Amount.--The amount of a bonus under this 
     section may not exceed $10,000.''.
       (3) Option to receive lump-sum payment.--Section 308b of 
     title 37, United States Code, is further amended--
       (A) by striking paragraphs (1) and (2) of subsection (c); 
     and
       (B) in paragraph (2) of subsection (b)--
       (i) by striking ``(2) Any bonus payable under this 
     section'' and inserting the following:
       ``(c) Payment in Lump Sum or Installments.--(1) A bonus 
     payable to a member under this section shall be paid, upon 
     the election of the member, in one lump sum or in partial 
     payments under paragraph (2).
       ``(2) Any bonus payable in partial payments under this 
     section''.
       (4) Redesignation of provisions.--Such section is further 
     amended--
       (A) by redesignating subsections (d), (e), and (f), as 
     subsections (e), (f), and (g), respectively; and
       (B) in subsection (c)(3)--
       (i) by striking ``(3) In the case of'' and inserting ``(d) 
     Personnel in Certain Contingency Operations.--In the case 
     of''; and
       (ii) by striking ``paragraph (1)(B) or''.

     SEC. 4. TRICARE FOR RESERVE COMPONENT PERSONNEL.

       (a) Expanded Eligibility of Ready Reserve Members Under 
     TRICARE Program.--
       (1) Unconditional eligibility.--Subsection (a) of section 
     1076b of title 10, United States Code, is amended by striking 
     ``is eligible, subject to subsection (h), to enroll in 
     TRICARE'' and all that follows through ``an employer-
     sponsored health benefits plan'' and inserting ``, except for 
     a member who is enrolled or is eligible to enroll in a health 
     benefits plan under chapter 89 of title 5, is eligible to 
     enroll in TRICARE, subject to subsection (h)''.
       (2) Permanent authority.--Subsection (l) of such section is 
     repealed.
       (3) Conforming repeal of obsolete provisions.--Such section 
     is further amended--
       (A) by striking subsections (i) and (j); and
       (B) by redesignating subsection (k) as subsection (i).
       (b) Continuation of Non-TRICARE Health Benefits Plan 
     Coverage for Certain Reserves Called or Ordered to Active 
     Duty and Their Dependents.--
       (1) Required continuation.--
       (A) Requirement.--Chapter 55 of title 10, United States 
     Code, is amended by inserting after section 1078a the 
     following new section:

     ``Sec. 1078b. Continuation of non-TRICARE health benefits 
       plan coverage for dependents of certain Reserves called or 
       ordered to active duty

       ``(a) Payment of Premiums.--The Secretary concerned shall 
     pay the applicable premium to continue in force any qualified 
     health benefits plan coverage for the members of the family 
     of an eligible reserve component member for the benefits 
     coverage continuation period if timely elected by the member 
     in accordance with regulations prescribed under subsection 
     (j).
       ``(b) Eligible Member; Family Members.--(1) A member of a 
     reserve component is eligible for payment of the applicable 
     premium for continuation of qualified health benefits plan 
     coverage under subsection (a) while serving on active duty 
     pursuant to a call or order issued under a provision of law 
     referred to in section 101(a)(13)(B) of this title during a 
     war or national emergency declared by the President or 
     Congress.
       ``(2) For the purposes of this section, the members of the 
     family of an eligible reserve component member include only 
     the member's dependents described in subparagraphs (A), (D), 
     and (I) of section 1072(2) of this title.
       ``(c) Qualified Health Benefits Plan Coverage.--For the 
     purposes of this section, health benefits plan coverage for 
     the members of the family of a reserve component member 
     called or ordered to active duty is qualified health benefits 
     plan coverage if--
       ``(1) the coverage was in force on the date on which the 
     Secretary notified the reserve component member that issuance 
     of the call or order was pending or, if no such notification 
     was provided, the date of the call or order;
       ``(2) on such date, the coverage applied to the reserve 
     component member and members of the family of the reserve 
     component member; and
       ``(3) the coverage has not lapsed.
       ``(d) Applicable Premium.--The applicable premium payable 
     under this section for continuation of health benefits plan 
     coverage for the family members of a reserve component member 
     is the amount of the premium payable by the member for the 
     coverage of the family members.
       ``(e) Maximum Amount.--The total amount that the Department 
     of Defense may pay for the applicable premium of a health 
     benefits plan for the family members of a reserve component 
     member under this section in a fiscal year may not exceed the 
     amount determined by multiplying--
       ``(1) the sum of one plus the number of the family members 
     covered by the health benefits plan, by
       ``(2) the per capita cost of providing TRICARE coverage and 
     benefits for dependents under this chapter for such fiscal 
     year, as determined by the Secretary of Defense.
       ``(f) Benefits Coverage Continuation Period.--The benefits 
     coverage continuation period under this section for qualified 
     health benefits plan coverage for the family members of an 
     eligible reserve component member called or ordered to active 
     duty is the period that--
       ``(1) begins on the date of the call or order; and
       ``(2) ends on the earlier of--
       ``(A) the date on which the reserve component member's 
     eligibility for transitional health care under section 
     1145(a) of this title terminates under paragraph (3) of such 
     section; or
       ``(B) the date on which the reserve component member elects 
     to terminate the continued qualified health benefits plan 
     coverage of the member's family members.
       ``(g) Extension of Period of COBRA Coverage.--
     Notwithstanding any other provision of law--

[[Page S9080]]

       ``(1) any period of coverage under a COBRA continuation 
     provision (as defined in section 9832(d)(1) of the Internal 
     Revenue Code of 1986) for an eligible reserve component 
     member under this section shall be deemed to be equal to the 
     benefits coverage continuation period for such member under 
     this section; and
       ``(2) with respect to the election of any period of 
     coverage under a COBRA continuation provision (as so 
     defined), rules similar to the rules under section 
     4980B(f)(5)(C) of such Code shall apply.
       ``(h) Nonduplication of Benefits.--A member of the family 
     of a reserve component member who is eligible for benefits 
     under qualified health benefits plan coverage paid on behalf 
     of the reserve component member by the Secretary concerned 
     under this section is not eligible for benefits under the 
     TRICARE program during a period of the coverage for which so 
     paid.
       ``(i) Revocability of Election.--A reserve component member 
     who makes an election under subsection (a) may revoke the 
     election. Upon such a revocation, the member's family members 
     shall become eligible for benefits under the TRICARE program 
     as provided for under this chapter.
       ``(j) Regulations.--The Secretary of Defense shall 
     prescribe regulations for carrying out this section. The 
     regulations shall include such requirements for making an 
     election of payment of applicable premiums as the Secretary 
     considers appropriate.''.
       (B) Clerical amendment.--The table of sections at the 
     beginning of such chapter is amended by inserting after the 
     item relating to section 1078a the following new item:

``1078b. Continuation of non-TRICARE health benefits plan coverage for 
              dependents of certain Reserves called or ordered to 
              active duty.''.

       (2) Applicability.--Section 1078b of title 10, United 
     States Code (as added by paragraph (1)), shall apply with 
     respect to calls or orders of members of reserve components 
     of the Armed Forces to active duty as described in subsection 
     (b) of such section, that are issued by the Secretary of a 
     military department before, on, or after the date of the 
     enactment of this Act, but only with respect to qualified 
     health benefits plan coverage (as described in subsection (c) 
     of such section) that is in effect on or after the date of 
     the enactment of this Act.

     SEC. 5. CHILD CARE FOR CHILDREN OF MEMBERS OF ARMED FORCES ON 
                   ACTIVE DUTY FOR OPERATION ENDURING FREEDOM OR 
                   OPERATION IRAQI FREEDOM.

       (a) Child Care for Children Without Access to Military 
     Child Care.--
       (1) Authority.--In any case where the children of a covered 
     member of the Armed Forces are geographically dispersed and 
     do not have practical access to a military child development 
     center, the Secretary of Defense may, to the extent funds are 
     available for such purpose, provide such funds as are 
     necessary permit the member's family to secure access for 
     such children to State licensed child care and development 
     programs and activities in the private sector that are 
     similar in scope and quality to the child care and 
     development programs and activities the Secretary would 
     otherwise provide access to under subchapter II of chapter 88 
     of title 10, United States Code, and other applicable 
     provisions of law.
       (2) Procedures.--Funds may be provided under paragraph (1) 
     in accordance with the provisions of section 1798 of title 
     10, United States Code, or by such other mechanism as the 
     Secretary considers appropriate.
       (3) Priorities.--The Secretary shall prescribe in 
     regulations priorities for the allocation of funds for the 
     provision of access to child care under paragraph (1) in 
     circumstances where funds are inadequate to provide all 
     children described in that paragraph with access to child 
     care as described in that paragraph.
       (b) Preservation of Services and Programs.--The Secretary 
     shall provide for the attendance and participation of 
     children in military child development centers and child care 
     and development programs and activities under subsection (a) 
     in a manner that preserves the scope and quality of child 
     care and development programs and activities otherwise 
     provided by the Secretary.
       (c) Funding.--Amounts otherwise available to the Department 
     of Defense and the military departments under this Act may be 
     available for purposes of providing access to child care 
     under subsection (a).
       (d) Definitions.--In this section:
       (1) Covered members of the armed forces.--The term 
     ``covered members of the Armed Forces'' means members of the 
     Armed Forces on active duty, including members of the 
     Reserves who are called or ordered to active duty under a 
     provision of law referred to in section 101(a)(13)(B) of 
     title 10, United States Code, for Operation Enduring Freedom 
     or Operation Iraqi Freedom.
       (2) Military child development center.--The term ``military 
     child development center'' has the meaning given such term in 
     section 1800(1) of title 10, United States Code.

     SEC. 6. RIGHTS AND DUTIES UNDER USERRA.

       (a) Requirement for Employers To Provide Notice of Rights 
     and Duties Under USERRA.--
       (1) Notice.--
       (A) Requirement for notice.--Chapter 43 of title 38, United 
     States Code, is amended by adding at the end the following 
     new section:

     ``Sec. 4334. Notice of rights and duties

       ``(a) Requirement to Provide Notice.--Each employer shall 
     provide to persons entitled to rights and benefits under this 
     chapter a notice of the rights, benefits, and obligations of 
     such persons and such employers under this chapter. The 
     requirement for the provision of notice under this section 
     may be met by the posting of the notice where employers 
     customarily place notices for employees.
       ``(b) Content of Notice.--The Secretary shall provide to 
     employers the text of the notice to be provided under this 
     section.''.
       (B) Clerical amendment.--The table of sections at the 
     beginning of such chapter is amended by adding at the end the 
     following new item:

``4334. Notice of rights and duties.''.

       (2) Implementation.--
       (A) Requirement.--Not later than the date that is 90 days 
     after the date of the enactment of this Act, the Secretary of 
     Labor shall make available to employers the notice required 
     under section 4334 of title 38, United States Code, as added 
     by paragraph (1).
       (B) Applicability.--The amendments made by this subsection 
     shall apply to employers under chapter 43 of such title on 
     and after the first date referred to in subparagraph (A).
       (b) Demonstration Project for Referral of USERRA Claims 
     Against Federal Agencies to the Office of Special Counsel.--
       (1) Establishment of project.--The Secretary of Labor and 
     the Office of Special Counsel shall carry out a demonstration 
     project under which certain claims against Federal executive 
     agencies under the Uniformed Services Employment and 
     Reemployment Rights Act under chapter 43 of title 38, United 
     States Code, are referred to, or otherwise received by, the 
     Office of Special Counsel for assistance, including 
     investigation and resolution of the claim as well as 
     enforcement of rights with respect to the claim.
       (2) Referral of all prohibited personnel action claims to 
     the office of special.--
       (A) Covered claims.--Under the demonstration project, the 
     Office of Special Counsel shall receive and investigate all 
     claims under the Uniformed Services Employment and 
     Reemployment Rights Act with respect to Federal executive 
     agencies in cases where the Office of Special Counsel has 
     jurisdiction over related claims pursuant to section 1212 of 
     title 5, United States Code.
       (B) Related claims.--For purposes of subparagraph (A), a 
     related claim is a claim involving the same Federal executive 
     agency and the same or similar factual allegations or legal 
     issues as those being pursued under a claim under the 
     Uniformed Services Employment and Reemployment Rights Act.
       (3) Referral of other claims against federal executive.--
       (A) Other claims.--Under the demonstration project, the 
     Secretary--
       (i) shall refer to the Office of Special Counsel all claims 
     described in subparagraph (B) made during the period of the 
     demonstration project; and
       (ii) may refer any claim described in subparagraph (B) 
     filed before the demonstration project that is pending before 
     the Secretary at the beginning of the demonstration project.
       (B) Covered claims.--A claim referred to in subparagraph 
     (A) is a claim under chapter 43 of title 38, United States 
     Code, against a Federal executive agency by a claimant with a 
     social security account number with an odd number as its 
     terminal digit, or, in the case of a claim that does not 
     contain a social security account number, a case number 
     assigned to the claim with an odd number as its terminal 
     digit.
       (4) Administration of demonstration --
       (A) Office of special counsel.--The Office of Special 
     Counsel shall administer the demonstration project. The 
     Secretary shall cooperate with the Office of Special Counsel 
     in carrying out the demonstration project.
       (B) Law administered by the secretary of veterans 
     affairs.--In the case of any claim referred, or otherwise 
     received by, to the Office of Special Counsel under the 
     demonstration project, any reference to the ``Secretary'' in 
     sections 4321, 4322, and 4326 of title 38, United States 
     Code, is deemed a reference to the ``Office of Special 
     Counsel''.
       (C) Retention of jurisdiction over referred claims.--In the 
     case of any claim referred to, or otherwise received by, the 
     Office of Special Counsel under the demonstration project, 
     the Office of Special Counsel shall retain administrative 
     jurisdiction over the claim.
       (5) Period of project.--The demonstration project shall be 
     carried out during the period beginning on the date that is 
     60 days after the date of the enactment of this Act, and 
     ending on September 30, 2007.
       (6) Periodic evaluations.--The Comptroller General of the 
     United States shall conduct periodic evaluations of the 
     demonstration project under this subsection.
       (7) Report on evaluations.--Not later than April 1, 2007, 
     the Comptroller General shall submit to Congress a report on 
     the evaluations conducted under paragraph (6). The report 
     shall include the following information and recommendations:
       (A) A description of the operation and results of the 
     demonstration program, including--
       (i) the number of claims described in paragraph (3) 
     referred to, or otherwise received by, the Office of Special 
     Counsel and the number of such claims referred to the 
     Secretary of Labor; and

[[Page S9081]]

       (ii) for each Federal executive agency, the number of 
     claims resolved, the type of corrective action obtained, the 
     period of time for final resolution of the claim, and the 
     results obtained.
       (B) An assessment of whether referral to the Office of 
     Special Counsel of claims under the demonstration project--
       (i) improved services to servicemembers and veterans; or
       (ii) significantly reduced or eliminated duplication of 
     effort and unintended delays in resolving meritorious claims 
     of those servicemembers and veterans.
       (C) An assessment of the feasibility and advisability of 
     referring all claims under chapter 43 of title 38, United 
     States Code, against Federal executive agencies to the Office 
     of Special Counsel for investigation and resolution.
       (D) Such other recommendations for administrative action or 
     legislation as the Comptroller General determines 
     appropriate.
       (8) Definitions.--In this subsection:
       (A) Office of special counsel.--The term ``Office of 
     Special Counsel'' means the Office of Special Counsel 
     established by section 1211 of title 5, United States Code.
       (B) Secretary.--The term ``Secretary'' means the Secretary 
     of Labor.
       (C) Federal executive agency.--The term ``Federal executive 
     agency'' has the meaning given that term in section 4303(5) 
     of title 38, United States Code.
       (c) USERRA Implementing Regulations.--
       (1) Requirement for regulations.--Subsections (a) and 
     (b)(1) of section 4331 of title 38, United States Code, are 
     amended by striking ``may prescribe'' and inserting ``shall 
     prescribe''.
       (2) Clarification of right to merit pay increases.--The 
     regulations prescribed for the implementation of chapter 43 
     of title 38, United States Code, under section 4331 of such 
     title shall include regulations that clarify that the 
     entitlement of persons returning to employment under such 
     chapter to receive pay increases under merit pay systems of 
     employers may not be denied on the basis of lack of work 
     performance evaluations for periods of absence for active 
     duty in the uniformed services.

     SEC. 7. IMPROVED EDUCATIONAL ASSISTANCE BENEFITS FOR MEMBERS 
                   OF THE SELECTED RESERVE.

       (a) Increase in Amount of Basic Educational Assistance.--
       (1) 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 the applicable 
     percentage (as defined in paragraph (3)) 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.
       ``(3) In this subsection, the term `applicable percentage' 
     means, with respect to months occurring during--
       ``(A) fiscal year 2005, 33 percent;
       ``(B) fiscal year 2006, 37 percent;
       ``(C) fiscal year 2007, 41 percent;
       ``(D) fiscal year 2008, 45 percent; and
       ``(E) fiscal year 2009, and each subsequent fiscal year, 50 
     percent.''.
       (2) Effective date.--The amendments made by paragraph (1) 
     shall take effect on October 1, 2004, and shall apply with 
     respect to educational assistance allowances under section 
     16131(b) of such title paid for months after September 2004.
       (b)  Expansion of Eligibility Requirements for Members of 
     the Selected Reserve Having Served on Active Duty for a 
     Period of 24 Non-consecutive Months Under Chapter 30 of Title 
     38, United States Code.--
       (1) Credit for 24 months of active duty service over a 
     period of 5 years.--Subsection 3012(a) of title 38, United 
     States Code, is amended in paragraphs (1)(A)(i), (1)(B)(i), 
     and (1)(C)(iii)(I) by striking ``two years of continuous 
     active duty'' each place it appears and inserting ``a 
     cumulative period of 24 months during any 5-year period''.
       (2) Conforming amendment.--Subsection (b) of section 3012 
     of such title is amended in paragraph (1) by striking 
     ``during such two years'' and inserting ``at any time during 
     such 5-year period''.
       (3) Effective date.--The amendments made by this subsection 
     shall apply on or after October 1, 2005.

     SEC. 8. REDUCTION IN AGE FOR RECEIPT OF MILITARY RETIRED PAY 
                   FOR NONREGULAR SERVICE.

       (a) Reduction in Age.--Section 12731(a)(1) of title 10, 
     United States Code, is amended by striking ``at least 60 
     years of age'' and inserting ``at least 55 years of age''.
       (b) Application to Existing Provisions of Law or Policy.--
     With respect to any provision of law, or of any policy, 
     regulation, or directive of the executive branch, that refers 
     to a member or former member of the uniformed services as 
     being eligible for, or entitled to, retired pay under chapter 
     1223 of title 10, United States Code, but for the fact that 
     the member or former member is under 60 years of age, such 
     provision shall be carried out with respect to that member or 
     former member by substituting for the reference to being 60 
     years of age a reference to the age in effect for 
     qualification for such retired pay under section 12731(a) of 
     title 10, United States Code, as amended by subsection (a).
       (c) Effective Date.--The amendment made by 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 to retired pay payable for that month and 
     subsequent months.

     SEC. 9. DEPUTY UNDER SECRETARY OF DEFENSE FOR PERSONNEL AND 
                   READINESS (RESERVE AFFAIRS).

       (a) Establishment of Position.--
       (1) Position and duties.--Chapter 4 of title 10, United 
     States Code, is amended by inserting after section 136a the 
     following new section:

     ``Sec. 136b. Deputy Under Secretary of Defense for Personnel 
       and Readiness (Reserve Affairs)

       ``(a) There is a Deputy Under Secretary of Defense for 
     Personnel and Readiness (Reserve Affairs), appointed from 
     civilian life by the President, by and with the advice and 
     consent of the Senate.
       ``(b) The Deputy Under Secretary of Defense for Personnel 
     and Readiness (Reserve Affairs) shall have as his principal 
     duty the overall supervision of reserve component affairs of 
     the Department of Defense.''.
       (2) Clerical amendment.--The table of sections at the 
     beginning of such chapter is amended by inserting after the 
     item relating to section 136a the following new item:

``136b. Deputy Under Secretary of Defense for Personnel and Readiness 
              (Reserve Affairs).''.

       (b) Executive Level IV.--Section 5315 of title 5, United 
     States Code, is amended by inserting after ``Deputy Under 
     Secretary of Defense for Personnel and Readiness.'' the 
     following:
       ``Deputy Under Secretary of Defense for Personnel and 
     Readiness (Reserve Affairs).''.
       (c) Elimination of Position of Assistant Secretary of 
     Defense for Reserve Affairs.--
       (1) Repeal of requirement for position.--Subsection (b) of 
     section 138 of title 10, United States Code, is amended--
       (A) by striking paragraph (2); and
       (B) by redesignating paragraphs (3), (4), and (5), as 
     paragraphs (2), (3), and (4), respectively.
       (2) Reduction in total number of assistant secretaries of 
     defense.--
       (A) Authorized number.--Subsection (a) of such section is 
     amended by striking ``nine'' and inserting ``eight''.
       (B) Conforming amendment.--Section 5315 of title 5, United 
     States Code, is amended by striking ``(9)'' after ``Assistant 
     Secretaries of Defense'' and inserting ``(8)''.
       (d) Effective Date.--The amendments made by subsection (c) 
     shall take effect on the date on which a person is first 
     appointed as Deputy Under Secretary of Defense for Personnel 
     and Readiness (Reserve Affairs).

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