A bill to amend title 10, United States Code, to authorize the selective continuation of certain regular commissioned officers on the active lists of the Army, Navy, Marine Corps, and Air Force upon recommendation of a selection board.

Provides that a regular officer on the active list of the Army, Navy, Marine Corps, or Air Force serving in the grade of (1) lieutenant colonel or commander (Navy) who has failed of selection for temporary or permanent promotion to the grade of colonel or captain (Navy) two or more times and whose name is not on a promotion list; or (2) colonel or captain (Navy) who has served at least four years in grade and whose name is not on a promotion list; may be considered for continuation on the active list upon the recommendation of a selection board.

States that specified officers who (1) are not recommended for promotion to a higher grade after the effective date of this Act; and (2) are considered but not selected for continuation on active duty under this Act; are entitled to a lump-sum transition payment of $4,000. (Adds 10 U.S.C. 1235-1237.)