S. 789
A BILL
Be it enacted by the Senate and
House of Representatives of the United States of America in Congress assembled,
It is the purpose of this Act to
promote the retention of members of the Armed Forces in critical specialties by
establishing a bonus savings plan that provides significant resources for
meeting the expenses encountered by the members in providing for the education
of the members of their families and other contingencies.
(a) ESTABLISHMENT OF SAVINGS PLAN-
(1) Chapter 5 of title 37, United States Code, is amended by adding at the end
the following new section:
`(a) BENEFIT AND ELIGIBILITY- The
Secretary concerned shall purchase United States savings bonds under this
section for a member of the armed forces who is eligible as follows:
`(1) A member who, before
completing three years of service on active duty, enters into a commitment to
perform qualifying service.
`(2) A member who, after
completing three years of service on active duty but not more than nine years
of service on active duty, enters into a commitment to perform qualifying
service.
`(3) A member who, after
completing nine years of service on active duty, enters into a commitment to
perform qualifying service.
`(b) QUALIFYING SERVICE- For the
purposes of this section, qualifying service is service on active duty in a
specialty designated by the Secretary concerned as critical to meet
requirements (whether such specialty is designated as critical to meet wartime or
peacetime requirements) for a period that--
`(1) is not less than six years;
and
`(2) does not include any part of
a period for which the member is obligated to serve on active duty under an
enlistment or other agreement for which a benefit has previously been paid
under this section.
`(c) FORMS OF COMMITMENT TO
ADDITIONAL SERVICE- For the purposes of this section, a commitment means--
`(1) in the case of an enlisted
member, a reenlistment; and
`(2) in the case of a commissioned
officer, an agreement entered into with the Secretary concerned.
`(d) AMOUNTS OF BONDS- The total of
the face amounts of the United States savings bonds purchased for a member
under this section for a commitment shall be as follows:
`(1) In the case of a purchase for
a member under paragraph (1) of subsection (a), $5,000.
`(2) In the case of a purchase for
a member under paragraph (2) of subsection (a), the amount equal to the excess
of $15,000 over the total of the face amounts of any United States savings
bonds previously purchased for the member under this section.
`(3) In the case of a purchase for
a member under paragraph (3) of subsection (a), the amount equal to the excess
of $30,000 over the total of the face amounts of any United States savings
bonds previously purchased for the member under this section.
`(e) TOTAL AMOUNT OF BENEFIT- The
total amount of the benefit payable for a member when United States savings
bonds are purchased for the member under this section by reason of a commitment
by that member shall be the sum of--
`(1) the purchase price of the
United States savings bonds; and
`(2) the amounts that would be
deducted and withheld for the payment of individual income taxes if the total
amount computed under this subsection for that commitment were paid to the
member as a bonus.
`(f) AMOUNT WITHHELD FOR TAXES- The
total amount payable for a member under subsection (e)(2) for a commitment by
that member shall be withheld, credited, and otherwise treated in the same
manner as amounts deducted and withheld from the basic pay of the member.
`(g) REPAYMENT FOR FAILURE TO
COMPLETE OBLIGATED SERVICE- (1) If a person fails to complete the qualifying
service for which the person is obligated under a commitment for which a
benefit has been paid under this section, the person shall refund to the United
States the amount that bears the same ratio to the total amount paid for the
person (as computed under subsection (e)) for that particular commitment as the
uncompleted part of the period of qualifying service bears to the total period
of the qualifying service for which obligated.
`(2) Subject to paragraph (3), an
obligation to reimburse the United States imposed under paragraph (1) is for
all purposes a debt owed to the United States.
`(3) The Secretary concerned may
waive, in whole or in part, a refund required under paragraph (1) if the
Secretary concerned determines that recovery would be against equity and good
conscience or would be contrary to the best interests of the United States.
`(4) A discharge in bankruptcy
under title 11 that is entered less than five years after the termination of an
enlistment or other agreement under this section does not discharge the person
signing such reenlistment or other agreement from a debt arising under the
reenlistment or agreement, respectively, or this subsection.
`(h) RELATIONSHIP TO OTHER SPECIAL
PAYS- The benefit provided under this section is in addition to any other bonus
or incentive or special pay that is paid or payable to a member under any other
provision of this chapter for any portion of the same qualifying service.
`(i) REGULATIONS- This section shall be administered
under regulations prescribed by the Secretary of Defense for the armed forces
under his jurisdiction and by the Secretary of Transportation for the Coast
Guard when the Coast Guard 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:
`323. Incentive bonus: savings
plan for education and other contingencies.'.
(b) EFFECTIVE DATE- Section 323 of
title 37, United States Code (as added by subsection (a)), shall take effect on
October 1, 2001, and shall apply with respect to reenlistments and other agreements
for qualifying service (described in that section) that are entered into on or
after that date.