meet the accreditation standards of such body or bodies prior to the beginning of the academic year following the normal graduation date of students who are in their first year of instruction at such school during the fiscal year in which such finding by the Commissioner is made.

(h) The term "eligible lender" means an eligible institution, an agency or instrumentality of a State, or a financial or credit institution (including an insurance company) which is subject to examination and supervision by an agency of the United States or of any State.

(i) The term "line of credit" means an arrangement or agreement between the lender and the borrower whereby a loan is paid out by the lender to the borrower in annual installments, or whereby the lender agrees to make, in addition to the initial loan, additional loans in subsequent years.

89TH CONGRESS HOUSE OF REPRESENTATIVES 2d Session

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REPORT No. 1629

CREDITING INACTIVE RESERVE SERVICE FOR
ENLISTED PERSONNEL

JUNE 16, 1966.-Committed to the Committee of the Whole House on the State of the Union and ordered to be printed

Mr. BOB WILSON, from the Committee on Armed Services, submitted the following

REPORT

[To accompany H.R. 5256]

The Committee on Armed Services, to whom was referred the bill (H.R. 5256) to amend title 10, United States Code, to change the method of computing retired pay of certain enlisted members of the Army, Navy, Air Force, or Marine Corps, having considered the same, report favorably thereon with amendments and recommend that the bill as amended do pass.

The amendments are as follows:

On page 4, delete lines 3 through 5, and insert in lieu thereof the following:

SEC. 4. This Act is applicable to enlisted members heretofore or hereafter retired or granted retainer pay. However, no person retired or granted retainer pay before the effective date of this Act is entitled to a retroactive increase in retired pay or retainer pay because of this Act.

Add a new section 5 as follows:

SEC. 5. To accrue rights under this Act, a person who is entitled to retired or retainer pay on the effective date of this Act must file an application with the Secretary of the military department concerned.

EXPLANATION OF THE AMENDMENTS

The rewording of section 4 is to make it clearer that enlisted men are entitled to credit for Reserve service performed prior to as well as subsequent to the enactment of the bill, but that no retroactive pay will accrue for any period prior to the date of enactment.

The new section 5 is to require application for credit under the bill for those already retired or on retainer pay status at the time of enactment so as to eliminate the necessity for costly screening of the records of all retired and retainer pay enlisted personnel.

PURPOSE OF THE BILL

The purpose of the bill is to authorize career enlisted personnel to credit non-Active Reserve service for retired pay and retainer pay purposes to the extent such service would be creditable under section 1333 of title 10. This section provides credit on a point basis in computing service for retired pay for non-active-duty Reserve service. Commissioned officers may count Inactive Reserve service in their multiplier in computing their retired pay. Enlisted men, under present law, are limited to their years of "active service in the Armed Forces" in determining their retired pay multiplier.

Commissioned officers receive credit for Inactive Reserve service prior to June 1, 1958, on the full-year basis in determining their retired pay multiplier once they have completed sufficient active duty service to qualify for retirement. Public Law 85-422 of 1958 modified the law to provide officers could only count Inactive Reserve service accrued after June 1, 1958, to the extent that such service is credited on the point system for nonregular service as provided in section 1333 of title 10. Inactive service accrued prior to June 1, 1958, may still be fully credited for officer retirement computation, since the Congress, in changing the law, did not wish to retroactively deprive officers of a benefit they had been led to expect.

H.R. 5256 would allow enlisted men to credit their Inactive Reserve service, regardless when accrued, in the same manner that officers can count such service accrued since June 1, 1958.

It should be noted that the personnel who will benefit from enactment of this proposed legislation must first qualify for retirement. The service creditable under H.R. 5256 may not be used to qualify for retirement, but only in determining service creditable for the retired pay multiplier. Thus, enlisted personnel who retire for length of service, must for practical purposes, have a minimum of 20 years' active duty in order to qualify for retirement.

The legislation provides no retroactive payments. But those now retired who have a sufficient number of points to earn additional credit in their multiplier would have their retired pay adjusted accordingly in the future.

Cost

The Department of Defense estimates that the bill would result in an increase in the annual budgetary requirements of the Department. The estimated cost for the first fiscal year following enactment is $1,687,025, broken down as follows:

H.R. 5256 is identical, except for amendments, with H.R. 6000 of the 88th Congress which passed the House of Representatives in July 1963 but received no action in the Senate.