To authorize the Secretary of Veterans Affairs to issue exemplary rehabilitation certificates for certain individuals discharged from the Armed Forces.

Authorizes the Secretary of Veterans Affairs, in the case of any individual discharged or dismissed from the armed forces under conditions other than honorable, to consider an application for, and issuance to such person of, an Exemplary Rehabilitation Certificate, if it is established that such person has rehabilitated himself, that his character is good, and that his conduct, activities, and habits since he was discharged or dismissed have been exemplary for a reasonable period of time, but not less than three years.

Directs the Secretary to supply to the Secretary of Defense a copy of each such certificate issued, and requires the Secretary of Defense to place such certificate in the military personnel record of the affected individual. Permits the use of both oral and written evidence in the determination of the appropriateness of the certificate, including an appearance in person before the Secretary of Labor by the individual being considered.

Provides that no military or veterans' benefits shall accrue to an individual receiving such a certificate, unless the individual was previously eligible for such benefits under the original discharge or dismissal.

Directs the Secretary of Labor to ensure that public employment offices accord to any person so discharged or dismissed but receiving an Exemplary Rehabilitation Certificate special counseling and job development assistance.

Directs the Secretary of Veterans Affairs, no later than January 15 of each year, to report to the Congress the number of cases reviewed under this Act and the number of certificates issued. Authorizes the Secretary to issue regulations, delegate authority, and utilize the services of the Office of Personnel Management in carrying out this Act.