[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3365 Enrolled Bill (ENR)]
H.R.3365
One Hundred Eighth Congress
of the
United States of America
AT THE FIRST SESSION
Begun and held at the City of Washington on Tuesday,
the seventh day of January, two thousand and three
An Act
To amend title 10, United States Code, and the Internal Revenue Code of
1986 to increase the death gratuity payable with respect to deceased
members of the Armed Forces and to exclude such gratuity from gross
income, to provide additional tax relief for members of the Armed Forces
and their families, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE, ETC.
(a) Short Title.--This Act may be cited as the ``Military Family
Tax Relief Act of 2003''.
(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in this Act an amendment or repeal is expressed in
terms of an amendment to, or repeal of, a section or other provision,
the reference shall be considered to be made to a section or other
provision of the Internal Revenue Code of 1986.
(c) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title, etc.
TITLE I--IMPROVING TAX EQUITY FOR MILITARY PERSONNEL
Sec. 101. Exclusion of gain from sale of a principal residence by a
member of the uniformed services or the Foreign Service.
Sec. 102. Treatment of death gratuities payable with respect to deceased
members of the Armed Forces.
Sec. 103. Exclusion for amounts received under Department of Defense
homeowners assistance program.
Sec. 104. Expansion of combat zone filing rules to contingency
operations.
Sec. 105. Modification of membership requirement for exemption from tax
for certain veterans' organizations.
Sec. 106. Clarification of the treatment of certain dependent care
assistance programs.
Sec. 107. Clarification relating to exception from additional tax on
certain distributions from qualified tuition programs, etc.,
on account of attendance at military academy.
Sec. 108. Suspension of tax-exempt status of terrorist organizations.
Sec. 109. Above-the-line deduction for overnight travel expenses of
National Guard and Reserve members.
Sec. 110. Tax relief and assistance for families of Space Shuttle
Columbia heroes.
TITLE II--REVENUE PROVISION
Sec. 201. Extension of customs user fees.
TITLE I--IMPROVING TAX EQUITY FOR MILITARY PERSONNEL
SEC. 101. EXCLUSION OF GAIN FROM SALE OF A PRINCIPAL RESIDENCE BY A
MEMBER OF THE UNIFORMED SERVICES OR THE FOREIGN SERVICE.
(a) In General.--Subsection (d) of section 121 (relating to
exclusion of gain from sale of principal residence) is amended by
redesignating paragraph (9) as paragraph (10) and by inserting after
paragraph (8) the following new paragraph:
``(9) Members of uniformed services and foreign service.--
``(A) In general.--At the election of an individual with
respect to a property, the running of the 5-year period
described in subsections (a) and (c)(1)(B) and paragraph (7) of
this subsection with respect to such property shall be
suspended during any period that such individual or such
individual's spouse is serving on qualified official extended
duty as a member of the uniformed services or of the Foreign
Service of the United States.
``(B) Maximum period of suspension.--The 5-year period
described in subsection (a) shall not be extended more than 10
years by reason of subparagraph (A).
``(C) Qualified official extended duty.--For purposes of
this paragraph--
``(i) In general.--The term `qualified official
extended duty' means any extended duty while serving at a
duty station which is at least 50 miles from such property
or while residing under Government orders in Government
quarters.
``(ii) Uniformed services.--The term `uniformed
services' has the meaning given such term by section
101(a)(5) of title 10, United States Code, as in effect on
the date of the enactment of this paragraph.
``(iii) Foreign service of the united states.--The term
`member of the Foreign Service of the United States' has
the meaning given the term `member of the Service' by
paragraph (1), (2), (3), (4), or (5) of section 103 of the
Foreign Service Act of 1980, as in effect on the date of
the enactment of this paragraph.
``(iv) Extended duty.--The term `extended duty' means
any period of active duty pursuant to a call or order to
such duty for a period in excess of 90 days or for an
indefinite period.
``(D) Special rules relating to election.--
``(i) Election limited to 1 property at a time.--An
election under subparagraph (A) with respect to any
property may not be made if such an election is in effect
with respect to any other property.
``(ii) Revocation of election.--An election under
subparagraph (A) may be revoked at any time.''.
(b) Effective Date; Special Rule.--
(1) Effective date.--The amendments made by this section shall
take effect as if included in the amendments made by section 312 of
the Taxpayer Relief Act of 1997.
(2) Waiver of limitations.--If refund or credit of any
overpayment of tax resulting from the amendments made by this
section is prevented at any time before the close of the 1-year
period beginning on the date of the enactment of this Act by the
operation of any law or rule of law (including res judicata), such
refund or credit may nevertheless be made or allowed if claim
therefor is filed before the close of such period.
SEC. 102. TREATMENT OF DEATH GRATUITIES PAYABLE WITH RESPECT TO
DECEASED MEMBERS OF THE ARMED FORCES.
(a) Increase in Amount of Death Gratuity.--
(1) In general.--Section 1478(a) of title 10, United States
Code, is amended by striking ``$6,000'' and inserting ``$12,000''.
(2) Effective date.--The amendment made by this subsection
shall take effect as of September 11, 2001, and shall apply with
respect to deaths occurring on or after that date.
(b) Exclusion From Gross Income.--
(1) In general.--Subsection (b)(3) of section 134 (relating to
certain military benefits) is amended by adding at the end the
following new subparagraph:
``(C) Exception for death gratuity adjustments made by
law.--Subparagraph (A) shall not apply to any adjustment to the
amount of death gratuity payable under chapter 75 of title 10,
United States Code, which is pursuant to a provision of law
enacted after September 9, 1986.''.
(2) Conforming amendment.--Subparagraph (A) of section
134(b)(3) is amended by striking ``subparagraph (B)'' and inserting
``subparagraphs (B) and (C)''.
(3) Effective date.--The amendments made by this subsection
shall apply with respect to deaths occurring after September 10,
2001.
SEC. 103. EXCLUSION FOR AMOUNTS RECEIVED UNDER DEPARTMENT OF DEFENSE
HOMEOWNERS ASSISTANCE PROGRAM.
(a) In General.--Section 132(a) (relating to the exclusion from
gross income of certain fringe benefits) is amended by striking ``or''
at the end of paragraph (6), by striking the period at the end of
paragraph (7) and inserting ``, or'', and by adding at the end the
following new paragraph:
``(8) qualified military base realignment and closure
fringe.''.
(b) Qualified Military Base Realignment and Closure Fringe.--
Section 132 is amended by redesignating subsection (n) as subsection
(o) and by inserting after subsection (m) the following new subsection:
``(n) Qualified Military Base Realignment and Closure Fringe.--For
purposes of this section--
``(1) In general.--The term `qualified military base
realignment and closure fringe' means 1 or more payments under the
authority of section 1013 of the Demonstration Cities and
Metropolitan Development Act of 1966 (42 U.S.C. 3374) (as in effect
on the date of the enactment of this subsection) to offset the
adverse effects on housing values as a result of a military base
realignment or closure.
``(2) Limitation.--With respect to any property, such term
shall not include any payment referred to in paragraph (1) to the
extent that the sum of all of such payments related to such
property exceeds the maximum amount described in clause (1) of
subsection (c) of such section (as in effect on such date).''.
(c) Effective Date.--The amendments made by this section shall
apply to payments made after the date of the enactment of this Act.
SEC. 104. EXPANSION OF COMBAT ZONE FILING RULES TO CONTINGENCY
OPERATIONS.
(a) In General.--Section 7508(a) (relating to time for performing
certain acts postponed by reason of service in combat zone) is
amended--
(1) by inserting ``, or when deployed outside the United States
away from the individual's permanent duty station while
participating in an operation designated by the Secretary of
Defense as a contingency operation (as defined in section
101(a)(13) of title 10, United States Code) or which became such a
contingency operation by operation of law'' after ``section 112'',
(2) by inserting in the first sentence ``or at any time during
the period of such contingency operation'' after ``for purposes of
such section'',
(3) by inserting ``or operation'' after ``such an area'', and
(4) by inserting ``or operation'' after ``such area''.
(b) Conforming Amendments.--
(1) Section 7508(d) is amended by inserting ``or contingency
operation'' after ``area''.
(2) The heading for section 7508 is amended by inserting ``or
contingency operation'' after ``combat zone''.
(3) The item relating to section 7508 in the table of sections
for chapter 77 is amended by inserting ``or contingency operation''
after ``combat zone''.
(c) Effective Date.--The amendments made by this section shall
apply to any period for performing an act which has not expired before
the date of the enactment of this Act.
SEC. 105. MODIFICATION OF MEMBERSHIP REQUIREMENT FOR EXEMPTION FROM TAX
FOR CERTAIN VETERANS' ORGANIZATIONS.
(a) In General.--Subparagraph (B) of section 501(c)(19) (relating
to list of exempt organizations) is amended by striking ``or widowers''
and inserting ``, widowers, ancestors, or lineal descendants''.
(b) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after the date of the enactment of
this Act.
SEC. 106. CLARIFICATION OF THE TREATMENT OF CERTAIN DEPENDENT CARE
ASSISTANCE PROGRAMS.
(a) In General.--Section 134(b) (defining qualified military
benefit) is amended by adding at the end the following new paragraph:
``(4) Clarification of certain benefits.--For purposes of
paragraph (1), such term includes any dependent care assistance
program (as in effect on the date of the enactment of this
paragraph) for any individual described in paragraph (1)(A).''.
(b) Conforming Amendments.--
(1) Section 134(b)(3)(A), as amended by section 102, is amended
by inserting ``and paragraph (4)'' after ``subparagraphs (B) and
(C)''.
(2) Section 3121(a)(18) is amended by striking ``or 129'' and
inserting ``, 129, or 134(b)(4)''.
(3) Section 3306(b)(13) is amended by striking ``or 129'' and
inserting ``, 129, or 134(b)(4)''.
(4) Section 3401(a)(18) is amended by striking ``or 129'' and
inserting ``, 129, or 134(b)(4)''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2002.
(d) No Inference.--No inference may be drawn from the amendments
made by this section with respect to the tax treatment of any amounts
under the program described in section 134(b)(4) of the Internal
Revenue Code of 1986 (as added by this section) for any taxable year
beginning before January 1, 2003.
SEC. 107. CLARIFICATION RELATING TO EXCEPTION FROM ADDITIONAL TAX ON
CERTAIN DISTRIBUTIONS FROM QUALIFIED TUITION PROGRAMS,
ETC., ON ACCOUNT OF ATTENDANCE AT MILITARY ACADEMY.
(a) In General.--Subparagraph (B) of section 530(d)(4) (relating to
exceptions from additional tax for distributions not used for
educational purposes) is amended by striking ``or'' at the end of
clause (iii), by redesignating clause (iv) as clause (v), and by
inserting after clause (iii) the following new clause:
``(iv) made on account of the attendance of the
designated beneficiary at the United States Military
Academy, the United States Naval Academy, the United States
Air Force Academy, the United States Coast Guard Academy,
or the United States Merchant Marine Academy, to the extent
that the amount of the payment or distribution does not
exceed the costs of advanced education (as defined by
section 2005(e)(3) of title 10, United States Code, as in
effect on the date of the enactment of this section)
attributable to such attendance, or''.
(b) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2002.
SEC. 108. SUSPENSION OF TAX-EXEMPT STATUS OF TERRORIST ORGANIZATIONS.
(a) In General.--Section 501 (relating to exemption from tax on
corporations, certain trusts, etc.) is amended by redesignating
subsection (p) as subsection (q) and by inserting after subsection (o)
the following new subsection:
``(p) Suspension of Tax-Exempt Status of Terrorist Organizations.--
``(1) In general.--The exemption from tax under subsection (a)
with respect to any organization described in paragraph (2), and
the eligibility of any organization described in paragraph (2) to
apply for recognition of exemption under subsection (a), shall be
suspended during the period described in paragraph (3).
``(2) Terrorist organizations.--An organization is described in
this paragraph if such organization is designated or otherwise
individually identified--
``(A) under section 212(a)(3)(B)(vi)(II) or 219 of the
Immigration and Nationality Act as a terrorist organization or
foreign terrorist organization,
``(B) in or pursuant to an Executive order which is related
to terrorism and issued under the authority of the
International Emergency Economic Powers Act or section 5 of the
United Nations Participation Act of 1945 for the purpose of
imposing on such organization an economic or other sanction, or
``(C) in or pursuant to an Executive order issued under the
authority of any Federal law if--
``(i) the organization is designated or otherwise
individually identified in or pursuant to such Executive
order as supporting or engaging in terrorist activity (as
defined in section 212(a)(3)(B) of the Immigration and
Nationality Act) or supporting terrorism (as defined in
section 140(d)(2) of the Foreign Relations Authorization
Act, Fiscal Years 1988 and 1989); and
``(ii) such Executive order refers to this subsection.
``(3) Period of suspension.--With respect to any organization
described in paragraph (2), the period of suspension--
``(A) begins on the later of--
``(i) the date of the first publication of a
designation or identification described in paragraph (2)
with respect to such organization, or
``(ii) the date of the enactment of this subsection,
and
``(B) ends on the first date that all designations and
identifications described in paragraph (2) with respect to such
organization are rescinded pursuant to the law or Executive
order under which such designation or identification was made.
``(4) Denial of deduction.--No deduction shall be allowed under
any provision of this title, including sections 170, 545(b)(2),
556(b)(2), 642(c), 2055, 2106(a)(2), and 2522, with respect to any
contribution to an organization described in paragraph (2) during
the period described in paragraph (3).
``(5) Denial of administrative or judicial challenge of
suspension or denial of deduction.--Notwithstanding section 7428 or
any other provision of law, no organization or other person may
challenge a suspension under paragraph (1), a designation or
identification described in paragraph (2), the period of suspension
described in paragraph (3), or a denial of a deduction under
paragraph (4) in any administrative or judicial proceeding relating
to the Federal tax liability of such organization or other person.
``(6) Erroneous designation.--
``(A) In general.--If--
``(i) the tax exemption of any organization described
in paragraph (2) is suspended under paragraph (1),
``(ii) each designation and identification described in
paragraph (2) which has been made with respect to such
organization is determined to be erroneous pursuant to the
law or Executive order under which such designation or
identification was made, and
``(iii) the erroneous designations and identifications
result in an overpayment of income tax for any taxable year
by such organization,
credit or refund (with interest) with respect to such
overpayment shall be made.
``(B) Waiver of limitations.--If the credit or refund of
any overpayment of tax described in subparagraph (A)(iii) is
prevented at any time by the operation of any law or rule of
law (including res judicata), such credit or refund may
nevertheless be allowed or made if the claim therefor is filed
before the close of the 1-year period beginning on the date of
the last determination described in subparagraph (A)(ii).
``(7) Notice of suspensions.--If the tax exemption of any
organization is suspended under this subsection, the Internal
Revenue Service shall update the listings of tax-exempt
organizations and shall publish appropriate notice to taxpayers of
such suspension and of the fact that contributions to such
organization are not deductible during the period of such
suspension.''.
(b) Effective Date.--The amendments made by this section shall
apply to designations made before, on, or after the date of the
enactment of this Act.
SEC. 109. ABOVE-THE-LINE DEDUCTION FOR OVERNIGHT TRAVEL EXPENSES OF
NATIONAL GUARD AND RESERVE MEMBERS.
(a) Deduction Allowed.--Section 162 (relating to certain trade or
business expenses) is amended by redesignating subsection (p) as
subsection (q) and inserting after subsection (o) the following new
subsection:
``(p) Treatment of Expenses of Members of Reserve Component of
Armed Forces of the United States.--For purposes of subsection (a)(2),
in the case of an individual who performs services as a member of a
reserve component of the Armed Forces of the United States at any time
during the taxable year, such individual shall be deemed to be away
from home in the pursuit of a trade or business for any period during
which such individual is away from home in connection with such
service.''.
(b) Deduction Allowed Whether or Not Taxpayer Elects To Itemize.--
Section 62(a)(2) (relating to certain trade and business deductions of
employees) is amended by adding at the end the following new
subparagraph:
``(E) Certain expenses of members of reserve components of
the armed forces of the united states.--The deductions allowed
by section 162 which consist of expenses, determined at a rate
not in excess of the rates for travel expenses (including per
diem in lieu of subsistence) authorized for employees of
agencies under subchapter I of chapter 57 of title 5, United
States Code, paid or incurred by the taxpayer in connection
with the performance of services by such taxpayer as a member
of a reserve component of the Armed Forces of the United States
for any period during which such individual is more than 100
miles away from home in connection with such services.''.
(c) Effective Date.--The amendments made by this section shall
apply to amounts paid or incurred in taxable years beginning after
December 31, 2002.
SEC. 110. TAX RELIEF AND ASSISTANCE FOR FAMILIES OF SPACE SHUTTLE
COLUMBIA HEROES.
(a) Income Tax Relief.--
(1) In general.--Subsection (d) of section 692 (relating to
income taxes of members of Armed Forces and victims of certain
terrorist attacks on death) is amended by adding at the end the
following new paragraph:
``(5) Relief with respect to astronauts.--The provisions of
this subsection shall apply to any astronaut whose death occurs in
the line of duty, except that paragraph (3)(B) shall be applied by
using the date of the death of the astronaut rather than September
11, 2001.''.
(2) Conforming amendments.--
(A) Section 5(b)(1) is amended by inserting ``,
astronauts,'' after ``Forces''.
(B) Section 6013(f)(2)(B) is amended by inserting ``,
astronauts,'' after ``Forces''.
(3) Clerical amendments.--
(A) The heading of section 692 is amended by inserting ``,
astronauts,'' after ``forces''.
(B) The item relating to section 692 in the table of
sections for part II of subchapter J of chapter 1 is amended by
inserting ``, astronauts,'' after ``Forces''.
(4) Effective date.--The amendments made by this subsection
shall apply with respect to any astronaut whose death occurs after
December 31, 2002.
(b) Death Benefit Relief.--
(1) In general.--Subsection (i) of section 101 (relating to
certain death benefits) is amended by adding at the end the
following new paragraph:
``(4) Relief with respect to astronauts.--The provisions of
this subsection shall apply to any astronaut whose death occurs in
the line of duty.''.
(2) Clerical amendment.--The heading for subsection (i) of
section 101 is amended by inserting ``or Astronauts'' after
``Victims''.
(3) Effective date.--The amendments made by this subsection
shall apply to amounts paid after December 31, 2002, with respect
to deaths occurring after such date.
(c) Estate Tax Relief.--
(1) In general.--Section 2201(b) (defining qualified decedent)
is amended by striking ``and'' at the end of paragraph (1)(B), by
striking the period at the end of paragraph (2) and inserting ``,
and'', and by adding at the end the following new paragraph:
``(3) any astronaut whose death occurs in the line of duty.''.
(2) Clerical amendments.--
(A) The heading of section 2201 is amended by inserting ``,
deaths of astronauts,'' after ``forces''.
(B) The item relating to section 2201 in the table of
sections for subchapter C of chapter 11 is amended by inserting
``, deaths of astronauts,'' after ``Forces''.
(3) Effective date.--The amendments made by this subsection
shall apply to estates of decedents dying after December 31, 2002.
TITLE II--REVENUE PROVISION
SEC. 201. EXTENSION OF CUSTOMS USER FEES.
Section 13031(j)(3) of the Consolidated Omnibus Budget
Reconciliation Act of 1985 (19 U.S.C. 58c(j)(3)) is amended by striking
``March 31, 2004'' and inserting ``March 1, 2005''.
Speaker of the House of Representatives.
Vice President of the United States and
President of the Senate.