[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3365 Received in Senate (RDS)]

  1st Session
                                H. R. 3365


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            October 30, 2003

                                Received

_______________________________________________________________________

                                 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.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Fallen Patriots Tax Relief Act''.

SEC. 2. FINDINGS.

    The Congress finds the following:
            (1) The tragic events of September 11, 2001, and subsequent 
        worldwide combat operations in the Global War on Terrorism and 
        in Operation Iraqi Freedom have highlighted the significant 
        contributions of members of the Armed Forces in support of the 
        national security of the United States and the sacrifices made 
        by those members in the defense of freedom.
            (2) The sacrifices made by the members of the Armed Forces 
        are significant and are worthy of meaningful expressions of 
        gratitude by the Government of the United States, especially in 
        the case of sacrifice through loss of life.
            (3) The death gratuity payment made by the United States 
        Government for deaths while in military service has 
        historically been tax exempt.
            (4) The military death gratuity payment should remain tax 
        exempt in order to assist families of fallen patriots to 
        continue their quality of life during their greatest time of 
        need.
            (5) The Congress should periodically increase the amount of 
        the military death gratuity payment to ensure that its value is 
        not diminished.

SEC. 3. INCREASE IN DEATH GRATUITY PAYABLE WITH RESPECT TO DECEASED 
              MEMBERS OF THE ARMED FORCES.

    (a) Amount of Death Gratuity.--Section 1478(a) of title 10, United 
States Code, is amended by striking ``$6,000'' and inserting 
``$12,000''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect as of September 11, 2001, and shall apply with respect to 
deaths occurring on or after that date.

SEC. 4. RESTORATION OF FULL EXCLUSION FROM GROSS INCOME OF DEATH 
              GRATUITY PAYMENT.

    (a) In General.--Paragraph (3) of section 134(b) of the Internal 
Revenue Code of 1986 (relating to qualified military benefit) 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 on or before 
                the date of the enactment of this subparagraph.''.
    (b) Conforming Amendment.--Section 134(b)(3)(A) of such Code is 
amended by striking ``subparagraph (B)'' and inserting ``subparagraphs 
(B) and (C)''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to deaths occurring after September 10, 2001.

            Passed the House of Representatives October 29, 2003.

            Attest:

                                                 JEFF TRANDAHL,

                                                                 Clerk.