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[DOCID: f:s789is.txt]






107th CONGRESS
  1st Session
                                 S. 789

   To amend title 37, United States Code, to establish an education 
 savings plan to encourage reenlistments and extensions of service by 
  members of the Armed Forces in critical specialties, and for other 
                               purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             April 26, 2001

 Mr. Hutchinson (for himself and Mr. Warner) introduced the following 
   bill; which was read twice and referred to the Committee on Armed 
                                Services

_______________________________________________________________________

                                 A BILL


 
   To amend title 37, United States Code, to establish an education 
 savings plan to encourage reenlistments and extensions of service by 
  members of the Armed Forces in critical specialties, 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. PURPOSE.

    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.

SEC. 2. EDUCATION SAVINGS PLAN FOR REENLISTMENTS AND EXTENSIONS OF 
              SERVICE IN CRITICAL SPECIALTIES.

    (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:
``Sec. 323. Incentive bonus: savings plan for education expenses and 
              other contingencies
    ``(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.
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