B-158198, JAN. 4, 1966, 45 COMP. GEN. 379

B-158198, JAN. 4, 1966, 45 COMP. GEN. 379

GRATUITIES - REENLISTMENT BONUS - CRITICAL MILITARY SKILLS - DEATH OF A MEMBER THE ADDITIONAL VARIABLE REENLISTMENT BONUS ENTITLEMENT AUTHORIZED IN 37 U.S.C. 308 (G), ADDED BY THE ACT OF AUGUST 21, 1965, FOR FIRST-TERM ENLISTED PERSONNEL OF THE UNIFORMED SERVICES DESIGNATED AS HAVING A CRITICAL MILITARY SKILL, PAYABLE IN EQUAL YEARLY INCREMENTS, VESTS IN THE MEMBER UPON COMPLETION OF THE REENLISTMENT PROCEDURE, AND IN THE EVENT OF A MEMBER'S DEATH PRIOR TO RECEIVING THE FULL AMOUNT OF THE BONUS PAYABLE TO HIM, THE UNPAID BALANCE IS FOR INCLUSION IN THE SETTLEMENT OF THE DECEDENT'S FINAL MILITARY PAY ACCOUNT IN THE MANNER PRESCRIBED IN 10 U.S.C. 2771. GRATUITIES - REENLISTMENT BONUS - CRITICAL MILITARY SKILLS - CONDITIONS TO QUALIFY FOR CONTINUED ENTITLEMENT ENTITLEMENT TO PAYMENT OF THE "EQUAL YEARLY INSTALLMENT," OR IN MERITORIOUS CASES PAYMENT IN FEWER INSTALLMENTS, OF THE ADDITIONAL VARIABLE REENLISTMENT BONUS AUTHORIZED IN 37 U.S.C. 308 (G) FOR FIRST TERM ENLISTED PERSONNEL OF THE UNIFORMED SERVICES HAVING A CRITICAL MILITARY SKILL VESTING AT THE TIME OF REENLISTMENT, THE SECRETARY OF DEFENSE, OR THE SECRETARY OF THE TREASURY WHEN THE COAST GUARD IS NOT OPERATING AS A SERVICE IN THE NAVY, MAY NOT DIMINISH THE AMOUNT OF THE VARIABLE ENLISTMENT BONUS AUTHORIZED TO BE PAID TO A MEMBER OR CURTAIL THE SUBSEQUENT PAYMENT OR PAYMENTS OF ANY PORTION OF THE BONUS DUE HIM BY PROMULGATING REGULATIONS TO IMPOSE THE CONDITION THAT THE MEMBER MUST CONTINUE TO QUALIFY, BY TESTS OR OTHERWISE, IN HIS CRITICAL SKILL, AND SATISFACTORILY PERFORM HIS DUTIES IN THE SPECIALTY FOR WHICH THE VARIABLE REENLISTMENT BONUS WAS AUTHORIZED FOR CONTINUED ENTITLEMENT TO THE BONUS. GRATUITIES - REENLISTMENT BONUS - CRITICAL MILITARY SKILLS FAILURE TO COMPLETE ENLISTMENT WHEN AN ENLISTED MEMBER OF THE UNIFORMED SERVICES DOES NOT COMPLETE THE TERM OF ENLISTMENT FOR WHICH HE RECEIVED THE VARIABLE REENLISTMENT BONUS PROVIDED IN 37 U.S.C. 308 (G) FOR MEMBERS HAVING A CRITICAL MILITARY SKILL UNDER CONDITIONS THAT DO NOT REQUIRE RECOUPMENT OF THE BONUS, THE RIGHT TO THE VARIABLE BONUS HAVING VESTED AT THE TIME OF THE REENLISTMENT, THE MEMBER IS ENTITLED TO RETAIN THE BONUS INSTALLMENTS PAID, AND IN THE ABSENCE OF A REGULATION PROVIDING FOR LUMP-SUM PAYMENT OF INSTALLMENTS DUE UPON TERMINATION FROM THE SERVICE, THE BALANCE DUE CONTINUES TO BE PAYABLE ON AN INSTALLMENT BASIS; HOWEVER, IF DISCHARGED FROM THE SERVICE UNDER CIRCUMSTANCES REQUIRING RECOUPMENT OF ANY PART OF THE BASIC REENLISTMENT BONUS PAYABLE UNDER SECTION 308 (A), THE MEMBER IS NOT ENTITLED TO THE UNPAID INSTALLMENTS OF THE VARIABLE REENLISTMENT BONUS, AND THE RECOUPMENT PROVISIONS OF SECTION 308 (E), HAVING EQUAL APPLICATION TO SECTION 308 (G), HE IS SUBJECT TO RECOUPMENT OF THE VARIABLE BONUS PAID TO HIM PRIOR TO SEPARATION ON THE PERCENTAGE BASIS PRESCRIBED IN SECTION 308 (E).

TO THE SECRETARY OF DEFENSE, JANUARY 4, 1966:

REFERENCE IS MADE TO LETTER OF DECEMBER 14, 1965, AND ENCLOSURE (DEPARTMENT OF DEFENSE MILITARY PAY AND ALLOWANCE COMMITTEE ACTION NO. 370), RECEIVED FROM THE ASSISTANT SECRETARY OF DEFENSE (COMPTROLLER), REQUESTING DECISION ON CERTAIN QUESTIONS WHICH HAVE ARISEN CONCERNING THE PROVISIONS OF SUBSECTION (G), ADDED TO SECTION 308, TITLE 37, U.S. CODE, BY SECTION 3, PUBLIC LAW 89-132, 79 STAT. 547.

SUBSECTION (G) OF 37 U.S.C. 308 BECAME EFFECTIVE SEPTEMBER 1, 1965, AND PROVIDES AS FOLLOWS:

(G) UNDER REGULATIONS TO BE PRESCRIBED BY THE SECRETARY OF DEFENSE, OR THE SECRETARY OF THE TREASURY WITH RESPECT TO THE COAST GUARD WHEN IT IS NOT OPERATING AS A SERVICE IN THE NAVY, A MEMBER WHO IS DESIGNATED AS HAVING A CRITICAL MILITARY SKILL AND WHO IS ENTITLED TO A BONUS COMPUTED UNDER SUBSECTION (A) OF THIS SECTION UPON HIS FIRST REENLISTMENT MAY BE PAID AN ADDITIONAL AMOUNT NOT MORE THAN FOUR TIMES THE AMOUNT OF THAT BONUS. THE ADDITIONAL AMOUNT SHALL BE PAID IN EQUAL YEARLY INSTALLMENTS IN EACH YEAR OF THE REENLISTMENT PERIOD. HOWEVER, IN MERITORIOUS CASES THE ADDITIONAL AMOUNT MAY BE PAID IN FEWER INSTALLMENTS IF THE SECRETARY CONCERNED DETERMINES IT TO BE IN THE BEST INTEREST OF THE MEMBERS. AMOUNT PAID UNDER THIS SUBSECTION DOES NOT COUNT AGAINST THE LIMITATION PRESCRIBED BY SUBSECTION (C) OF THIS SECTION ON THE TOTAL AMOUNT THAT MAY BE PAID UNDER THIS SECTION.

THE STATUTE IN CLEAR TERMS OUTLINES THE CONDITIONS UNDER WHICH THE RIGHT TO ADDITIONAL REENLISTMENT BONUS ACCRUES AND VESTS AND THE METHOD OF PAYMENT TO BE FOLLOWED. THERE APPEARS TO BE NOTHING IN THE LAW WHICH SUGGESTS THAT THE SECRETARIES CONCERNED MAY, IN THE REGULATIONS AUTHORIZED TO BE PRESCRIBED BY THEM, DENY OR CURTAIL PAYMENT OF THAT ADDITIONAL AMOUNT, OR OF ANY PART THEREOF, AFTER THE RIGHT THERETO HAS VESTED IN THE ENLISTED MEMBER.

THE LEGISLATIVE HISTORY OF THIS ENACTMENT DISCLOSES THAT THE PRIMARY PURPOSE OF THE NEW VARIABLE REENLISTMENT BONUS IS TO RETAIN IN THE ARMED FORCES MEMBERS HAVING CERTAIN SKILLS THAT ARE IN SHORT SUPPLY. THE VARIABLE REENLISTMENT BONUS FURNISHES A STRONG FINANCIAL INCENTIVE FOR REENLISTMENT TO FIRST-TERM ENLISTED PERSONNEL WHOSE SKILLS ARE CRITICALLY REQUIRED BY THE MILITARY DEPARTMENTS. IN URGING CONGRESSIONAL APPROVAL OF THIS LEGISLATION THE DEPARTMENT OF DEFENSE IS STATED TO HAVE ADVISED THE COMMITTEE ON ARMED SERVICES, HOUSE OF REPRESENTATIVES, IN PART AS FOLLOWS (SEE H.REPT. NO. 549, 89TH CONG., TO ACCOMPANY H.R. 9075, WHICH BECAME PUBLIC LAW 89-132):

ADDITIONAL REENLISTMENTS ARE NEEDED IN SPECIALTIES ACCOUNTING FOR ABOUT 40 PERCENT OF TOTAL ENLISTED FORCE STRENGTH IN ORDER TO ACHIEVE ALL OF THE SERVICES' MANNING OBJECTIVES. THE PROBLEM IS MUCH MORE SERIOUS IN A SMALLER PORTION OF OUR FORCE. IN A FEW OF THE MOST CRITICALLY UNDERMANNED SPECIALTIES, COMPRISING ABOUT 5 PERCENT OF OUR FORCE STRENGTH, LOSSES OF $10,000 OR MORE OCCUR WHENEVER A FIRST TERMER FAILS TO REENLIST AND OPERATIONAL CAPABILITY SUFFERS BECAUSE OF SEVERE SHORTAGES OF CAREERISTS. IN THESE SKILLS, ADDITIONAL REENLISTMENT INCENTIVES ARE CLEARLY NEEDED.

THE MOST ATTRACTIVE WAY TO PROVIDE A STRONG REENLISTMENT INCENTIVE TO FIRST TERMERS IN A SMALL PART OF THE FORCE IS THROUGH A VARIABLE REENLISTMENT BONUS. A REENLISTMENT BONUS CONCENTRATES RETENTION MONEY AT THE REENLISTMENT DECISION POINT, THEREBY GETTING THE MOST DRAWING POWER PER RETENTION DOLLAR. A VARIABLE BONUS CAN BE TAILORED TO FIT PARTICULAR SKILL RETENTION REQUIREMENTS AND CAN BE CHANGED AS THOSE REQUIREMENTS CHANGE SINCE THERE ARE NO EXPRESS OR IMPLIED COMMITMENTS ABOUT FUTURE PAYMENTS. THE PRESENT REENLISTMENT BONUS DOES NOT DISCRIMINATE AMONG SKILLS AND THEREBY DOES NOT HELP SOLVE THE SELECTIVE RETENTION PROBLEM.

THE PROPOSED LEGISLATION REQUESTS CONGRESS TO AMEND THE PRESENT BONUS LAW PERMITTING THE DEPARTMENT OF DEFENSE TO PAY A PERSON DESIGNATED AS HAVING A CRITICAL SKILL AN ADDITIONAL AMOUNT UP TO FOUR TIMES THE BONUS TO WHICH HE IS NOW ENTITLED AT THE FIRST REENLISTMENT POINT. * * *

THE COMMITTEE ACCEPTED THE DEPARTMENT RECOMMENDATION AND RECOMMENDS APPROVAL OF THE VARIABLE REENLISTMENT BONUS. HOWEVER, THE COMMITTEE MODIFIED THE DEPARTMENT'S LANGUAGE SO AS TO PROVIDE THAT THE VARIABLE REENLISTMENT BONUS WILL BE PAID IN YEARLY INCREMENTS OVER THE INDIVIDUAL'S REENLISTMENT PERIOD. THE PURPOSE OF THIS CHANGE IS TO SOFTEN THE (PERSONAL INCOME) TAX IMPACT WHICH WOULD OTHERWISE OCCUR IF THE INDIVIDUAL RECEIVED THE TOTAL BONUS IN THE YEAR OF ORIGINAL REENLISTMENT.

THE THREE SPECIFIC QUESTIONS POSED IN THE LETTER OF DECEMBER 14, 1965, ARE AS FOLLOWS:

1. DOES ENTITLEMENT TO PAYMENT OF THE VARIABLE REENLISTMENT BONUS AUTHORIZED BY SUBSECTION (G) OF SECTION 308 OF TITLE 37 U.S. CODE, AS ADDED BY SECTION 3 OF P.L. 89-132, ACCRUE AT THE TIME OF REENLISTMENT SO AS TO ENTITLE THE MEMBER'S ESTATE, IN THE EVENT OF HIS DEATH PRIOR TO THE EXPIRATION OF HIS AGREED PERIOD OF ENLISTMENT, TO A LUMP SUM PAYMENT OF ALL UNPAID "EQUAL YEARLY INSTALLMENTS?

2. MAY REGULATIONS PROMULGATED BY THE SECRETARY OF DEFENSE PROVIDE, AS A CONDITION TO CONTINUED ENTITLEMENT TO PAYMENT OF THE "EQUAL YEARLY INSTALLMENT," THAT THE MEMBER CONTINUE TO QUALIFY, BY TESTS AND OTHERWISE, IN THE CRITICAL MILITARY SKILL AND SATISFACTORILY PERFORMS HIS DUTIES IN THE SPECIALTY FOR WHICH THE VARIABLE REENLISTMENT BONUS WAS AUTHORIZED?

3. WHERE A MEMBER WHO OTHERWISE WOULD BE ENTITLED TO AN "EQUAL YEARLY INSTALLMENT" IS DISCHARGED PRIOR TO COMPLETION OF HIS REENLISTMENT PERIOD, UNDER CONDITIONS WHERE RECOUPMENT OF THE BONUS IS NOT REQUIRED, IS HE LEGALLY ENTITLED TO PAYMENT OF THE REMAINING UNPAID INSTALLMENTS ON EACH ANNIVERSARY DATE OF REENLISTMENT?

AS STATED ABOVE, THE PURPOSE OF THE VARIABLE REENLISTMENT BONUS IS TO PROVIDE A SUBSTANTIAL FINANCIAL INDUCEMENT TO THOSE ENLISTED MEMBERS OF THE ARMED FORCES DESIGNATED AS HAVING A CRITICAL MILITARY SKILL TO REENLIST FOLLOWING THEIR FIRST PERIOD OF SERVICE. IN BRIEF, THE GOVERNMENT OFFERS THIS STRONG FINANCIAL INDUCEMENT SOLELY IN EXCHANGE FOR SUCH A REENLISTMENT. THE REENLISTMENT OF A MEMBER ACCOMPLISHED PURSUANT TO REGULATIONS TO BE PRESCRIBED AS PROVIDED IN SUBSECTION (G) CONSTITUTES AN ACCEPTANCE OF THE GOVERNMENT'S OFFER AND AT THAT POINT THE GOVERNMENT BECOMES OBLIGATED TO PAY THE VARIABLE REENLISTMENT BONUS COMPUTED IN ACCORDANCE WITH THE PARTICULAR FACTS OF THE CASE. HENCE, IT IS OUR VIEW THAT THE RIGHT TO RECEIVE THE VARIABLE REENLISTMENT BONUS VESTS IN THE ENLISTED MEMBER CONCERNED UPON COMPLETION OF THE REENLISTMENT PROCEDURE. THEREFORE, IN THE CASE OF A MEMBER WHO DIES PRIOR TO RECEIVING THE FULL AMOUNT OF THE VARIABLE REENLISTMENT BONUS PAYABLE TO HIM, THE BALANCE REMAINING UNPAID WOULD BE PAYABLE (AS A LUMP SUM TO BE INCLUDED IN THE SETTLEMENT OF THE DECEASED MEMBER'S FINAL MILITARY PAY ACCOUNT) IN THE MANNER PRESCRIBED IN 10 U.S.C. 2771. QUESTION 1 IS ANSWERED AFFIRMATIVELY.

SINCE THE RIGHT TO RECEIVE A VARIABLE REENLISTMENT BONUS UNDER THE AUTHORITY OF SUBSECTION (G) IS DEEMED TO VEST AT THE TIME OF REENLISTMENT (SUBJECT, OF COURSE, TO THE STATUTORY PROVISION REQUIRING PAYMENT IN EQUAL YEARLY INSTALLMENTS IN EACH YEAR OF THE REENLISTMENT PERIOD OR IN MERITORIOUS CASES PAYMENT IN FEWER INSTALLMENTS), REGULATIONS WHICH MAY BE PROMULGATED BY THE SECRETARY OF DEFENSE OR SECRETARY OF THE TREASURY WITH RESPECT TO ENLISTED MEMBERS OF THE COAST GUARD WHEN IT IS NOT OPERATING AS A SERVICE IN THE NAVY, MAY NOT DIMINISH THE AMOUNT OF THE VARIABLE REENLISTMENT BONUS WHICH BECAME FIXED AT THE POINT OF REENLISTMENT NOR IN ANY MANNER CURTAIL THE SUBSEQUENT PAYMENT OR PAYMENTS OF ANY PORTION OF SUCH VARIABLE REENLISTMENT BONUS. QUESTION 2 IS ANSWERED ACCORDINGLY.

QUESTION 3 CORRECTLY INFERS THAT AN ENLISTED MEMBER WHO DOES NOT COMPLETE THE TERM OF ENLISTMENT UPON WHICH HIS VARIABLE REENLISTMENT BONUS ACCRUED (OTHER THAN "A MEMBER WHO VOLUNTARILY, OR BECAUSE OF HIS MISCONDUCT" DOES NOT COMPLETE SUCH TERM OF ENLISTMENT, SEE SUBSECTION (C) OF SECTION 308) IS ENTITLED TO RETAIN ALL INSTALLMENTS OF VARIABLE REENLISTMENT BONUS THAT HAVE BEEN PAID TO HIM, IF OTHERWISE CORRECT. QUESTION 3 ALSO PROPERLY INFERS THAT AN ENLISTED MEMBER WHO HAS QUALIFIED FOR A VARIABLE REENLISTMENT BONUS AS PRESCRIBED IN SUBSECTION (G) AND WHO IS DISCHARGED FROM THE SERVICE UNDER CIRCUMSTANCES WHICH REQUIRE RECOUPMENT OF ANY PART OF THE BASIC REENLISTMENT BONUS PAYABLE TO HIM UNDER SUBSECTION (A) OF SECTION 308 IS NOT ENTITLED TO PAYMENT OF ANY REMAINING UNPAID INSTALLMENTS OF THE VARIABLE REENLISTMENT BONUS AND, IN ADDITION, IS SUBJECT TO RECOUPMENT ON THE SAME PERCENTAGE BASIS PRESCRIBED IN SUBSECTION (E) AS TO ANY PART OF THE VARIABLE REENLISTMENT BONUS WHICH HAS BEEN PAID TO HIM PRIOR TO THE DATE OF HIS SEPARATION FROM THE ACTIVE SERVICE.

SUBSECTION (G) PROVIDES THAT THE VARIABLE REENLISTMENT BONUS "SHALL BE PAID IN EQUAL YEARLY INSTALLMENTS IN EACH YEAR OF THE REENLISTMENT PERIOD.' IT IS FURTHER PROVIDED THAT IN MERITORIOUS CASES "THE ADDITIONAL AMOUNT MAY BE PAID IN FEWER INSTALLMENTS.' ALTHOUGH NO SPECIFIC PROVISION WAS MADE THEREFOR, IT APPEARS LIKELY THAT CONGRESS WAS AWARE OF THE POSSIBILITY THAT IN THE NORMAL COURSE OF EVENTS SOME ENLISTED MEMBERS OTHERWISE ENTITLED TO RECEIVE A VARIABLE REENLISTMENT BONUS WOULD BE SEPARATED FROM ACTIVE SERVICE PRIOR TO THE COMPLETION OF THE PERIOD FOR WHICH REENLISTED AND PRIOR TO RECEIPT OF ALL THE INSTALLMENTS OF VARIABLE REENLISTMENT BONUS DUE AND PAYABLE TO THEM. SINCE THE PROVISIONS OF SUBSECTION (G), AS ADDED BY PUBLIC LAW 89-132, NOW FORM A PART OF SECTION 308, TITLE 37, U.S. CODE, WE AGREE WITH THE BASIC INFERENCE IN QUESTION 3 THAT THE RECOUPMENT PROVISIONS OF SUBSECTION (E) HAVE EQUAL APPLICATION TO THE VARIABLE REENLISTMENT BONUS PRESCRIBED IN SUBSECTION (G). THAT, HOWEVER, IS THE SOLE STATUTORY AUTHORITY TO CURTAIL THE AMOUNT OF VARIABLE REENLISTMENT BONUS AND SINCE CONGRESS HAS PRESCRIBED NO OTHER CONDITION OF ENTITLEMENT OR RECOUPMENT--- THE AMOUNT OF THE VARIABLE REENLISTMENT BONUS IS EVEN EXCEPTED FROM THE $2,000 LIMITATION CONTAINED IN SUBSECTION (C) OF SECTION 308--- REGULATIONS ISSUED BY THE SECRETARY CONCERNED MAY NOT PRECLUDE THE PAYMENT OF ANY REMAINING UNPAID INSTALLMENT OF VARIABLE REENLISTMENT BONUS EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF SUBSECTION (E). COMPARE ANSWER TO QUESTION 2 ABOVE. WHILE THE LAW WOULD PERMIT, IN CASES COVERED BY QUESTION 3, REGULATIONS TO THE EFFECT THAT WHEN THE REENLISTMENT PERIOD IS TERMINATED BEFORE THE END OF THE TERM THEREOF, ANY ,EQUAL YEARLY INSTALLMENTS" OF THE VARIABLE REENLISTMENT BONUS REMAINING UNPAID MAY BE PAID AS A LUMP SUM AT THE TIME OF TERMINATION, IT IS OUR VIEW THAT, IN THE ABSENCE OF REGULATIONS TO THAT EFFECT, SUCH UNPAID INSTALLMENTS SHOULD BE MADE ON THE INSTALLMENT BASIS SET OUT IN THE STATUTE.