§325. Incentive bonus: savings plan for education expenses and other contingencies

(a) Benefit and Eligibility.-The Secretary concerned may 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 or not 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 authorized to be 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 authorized 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.-If a person does not 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 be subject to the repayment provisions of section 303a(e) of this title.

(h) Relationship to Other Special Pays.-The benefit authorized 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 Homeland Security for the Coast Guard when the Coast Guard is not operating as a service in the Navy.

(Added Pub. L. 107–107, div. A, title VI, §622(a)(1), Dec. 28, 2001, 115 Stat. 1140 ; amended Pub. L. 107–296, title XVII, §1704(c), Nov. 25, 2002, 116 Stat. 2314 ; Pub. L. 109–163, div. A, title VI, §687(b)(33), Jan. 6, 2006, 119 Stat. 3332 .)

Editorial Notes

Amendments

2006-Subsec. (g). Pub. L. 109–163, amended heading and text of subsec. (g) generally, substituting provisions referring to repayment provisions of section 303a(e) for specific provisions relating to refunds required when person fails to complete qualifying service for which person is obligated under commitment for which benefit was paid.

2002-Subsec. (i). Pub. L. 107–296 substituted "of Homeland Security" for "of Transportation".

Statutory Notes and Related Subsidiaries

Effective Date of 2002 Amendment

Amendment by Pub. L. 107–296 effective on the date of transfer of the Coast Guard to the Department of Homeland Security, see section 1704(g) of Pub. L. 107–296, set out as a note under section 101 of Title 10, Armed Forces.

Effective Date

Pub. L. 107–107, div. A, title VI, §622(b), Dec. 28, 2001, 115 Stat. 1142 , provided that: "Section 325 of title 37, United States Code, as added by subsection (a), shall apply with respect to reenlistments and other agreements for qualifying service, as described in that section, that are entered into on or after October 1, 2001."

Savings Provision

For savings provision relating to payment or repayment of any bonus, incentive pay, special pay, or similar pay obligated to be paid before Apr. 1, 2006, under a provision of this section amended by section 687(b) of Pub. L. 109–163, see section 687(f) of Pub. L. 109–163, set out as a note under section 510 of Title 10, Armed Forces.