RESERVE OFFICER DISTRIBUTION.

SEC. 207. RESERVE OFFICER DISTRIBUTION. Section 724 of title 14, United States Code, is amended—(1) in subsection (a) by inserting after the first sentence the following: “Reserve officers on an active-duty list shall not be counted as part of the authorized number of officers in the Reserve.”; and120 STAT. 522(2) in subsection (b) by striking all that precedes paragraph (2) and inserting the following:“(b)(1) The Secretary shall make, at least once each year, a computation to determine the number of Reserve officers in an active status authorized to be serving in each grade. The number in each grade shall be computed by applying the applicable percentage to the total number of such officers serving in an active status on the date the computation is made. The number of Reserve officers in an active status below the grade of rear admiral (lower half) shall be distributed by pay grade so as not to exceed percentages of commissioned officers authorized by section 42(b) of this title. When the actual number of Reserve officers in an active status in a particular pay grade is less than the maximum percentage authorized, the difference may be applied to the number in the next lower grade. A Reserve officer may not be reduced in rank or grade solely because of a reduction in an authorized number as provided for in this subsection, or because an excess results directly from the operation of law.”.