[Congressional Record Volume 142, Number 28 (Tuesday, March 5, 1996)]
[House]
[Pages H1670-H1673]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




        SPECIAL TAX TREATMENT FOR UNITED STATES TROOPS IN BOSNIA

  Mr. BUNNING of Kentucky. Mr. Speaker, I move to suspend the rules and 
pass the bill (H.R. 2778) to provide that members of the Armed Forces 
performing services for the peacekeeping effort in the Republic of 
Bosnia and Herzegovina shall be entitled to certain tax benefits in the 
same manner as if such services were performed in a combat zone, as 
amended.
  The Clerk read as follows:

                               H.R. 2778

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

     SECTION 1. TREATMENT OF CERTAIN INDIVIDUALS PERFORMING 
                   SERVICES IN CERTAIN HAZARDOUS DUTY AREAS.

       (a) General Rule.--For purposes of the following provisions 
     of the Internal Revenue Code of 1986, a qualified hazardous 
     duty area shall be treated in the same manner as if it were a 
     combat zone (as determined under section 112 of such Code):
       (1) Section 2(a)(3) (relating to special rule where 
     deceased spouse was in missing status).
       (2) Section 112 (relating to the exclusion of certain 
     combat pay of members of the Armed Forces).
       (3) Section 692 (relating to income taxes of members of 
     Armed Forces on death).
       (4) Section 2201 (relating to members of the Armed Forces 
     dying in combat zone or by reason of combat-zone-incurred 
     wounds, etc.).
       (5) Section 3401(a)(1) (defining wages relating to combat 
     pay for members of the Armed Forces).
       (6) Section 4253(d) (relating to the taxation of phone 
     service originating from a combat zone from members of the 
     Armed Forces).
       (7) Section 6013(f)(1) (relating to join return where 
     individual is in missing status).
       (8) Section 7508 (relating to time for performing certain 
     acts postponed by reason of service in combat zone).
       (b) Qualified Hazardous Duty Area.--For purposes of this 
     section, the term ``qualified hazardous duty area'' means 
     Bosnia and Herzegovina, Croatia, or Macedonia, if as of the 
     date of the enactment of this section any member of the Armed 
     Forces of the United States is entitled to special pay under 
     section 310 of title 37, United States Code (relating to 
     special pay; duty subject to hostile fire or imminent danger) 
     for services performed in such country. Such term includes 
     any such country only during the period such entitlement is 
     in effect. Solely for purposes of applying section 7508 of 
     the Internal Revenue Code of 1986, in the case of an 
     individual who is performing services as part of Operation 
     Joint Endeavor outside the United States while deployed away 
     from such individual's permanent duty station, the term 
     ``qualified hazardous duty area'' includes, during the period 
     for which such entitlement is in effect, any area in which 
     such services are performed.
       (c) Exclusion of Combat Pay From Withholding Limited to 
     Amount Excludable From Gross Income.--Paragraph (1) of 
     section 3401(a) of the Internal Revenue Code of 1986 
     (defining wages) is amended by inserting before the semicolon 
     the following: ``to the extent remuneration for such service 
     is excludable from gross income under such section''.
       (d) Increase in Combat Pay Exclusion for Officers to 
     Highest Amount Applicable to Enlisted Personnel.--
       (1) In general.--Subsection (b) of section 112 of such Code 
     (relating to commissioned officers) is amended by striking 
     ``$500'' and inserting ``the maximum enlisted amount''.
       (2) Maximum enlisted amount.--Subsection (c) of section 112 
     of such Code (relating to definitions) is amended by adding 
     at the end the following new paragraph:
       ``(5) The term `maximum enlisted amount' means, for any 
     month, the sum of--

[[Page H1671]]

       ``(A) the highest rate of basic pay payable for such month 
     to any enlisted member of the Armed Forces of the United 
     States at the highest pay grade applicable to enlisted 
     members, and
       ``(B) in the case of an officer entitled to special pay 
     under section 310 of title 37, United States Code, for such 
     month, the amount of such special pay payable to such officer 
     for such month.''.
       (e) Effective Date.--
       (1) In general.--Except as provided in paragraph (2), the 
     provisions of and amendments made by this section shall take 
     effect on November 21, 1995.
       (2) Withholding.--Subsection (a)(5) and the amendment made 
     by subsection (c) shall apply to remuneration paid after the 
     date of the enactment of this Act.

     SEC. 2. EXTENSION OF INTERNAL REVENUE SERVICE USER FEES.

       Subsection (c) of section 10511 of the Revenue Act of 1987 
     is amended by striking ``October 1, 2000'' and by inserting 
     ``October 1, 2003''.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Kentucky [Mr. Bunning] will be recognized for 20 minutes, and the 
gentleman from Florida [Mr. Gibbons] will be recognized for 20 minutes.
  The Chair recognizes the gentleman from Kentucky [Mr. Bunning].


                             general leave

  Mr. BUNNING of Kentucky. Mr. Speaker, I ask unanimous consent that 
all Members may have 5 legislative days within which to revise and 
extend their remarks and include extraneous material on H.R. 2778.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Kentucky?
  There was no objection.
  Mr. BUNNING of Kentucky. Mr. Speaker, I yield myself such time as I 
may consume.
  Mr. Speaker, I am proud to bring before the House today a bill I 
sponsored to make sure that our brave men and women serving in Bosnia 
are able to receive the benefits that they deserve while risking their 
lives in the service of their country.
  The Internal Revenue Code provides specific benefits to our service 
personnel who are on active duty in a combat zone. But, these benefits 
are available only if the President issues an Executive order 
designating the area as a combat zone.
  Unfortunately, the peacekeeping operations in the former Yugoslavia 
have not been designated by the President as being in a combat zone.
  There have already been casualties in Bosnia and more are likely. 
That means that our service personnel are in a combat zone type 
situation even if the President has not declared it a combat zone.
  Let us be honest. When you are being shot at or dodging landmines you 
are in a combat zone. Diplomatic niceties aside, these brave warriors 
are in danger because of the policies of their Government and we must 
take care of them.
  Quite frankly, we must act to insure that we do not have a repeat of 
what happened in Somalia.
  In Somalia, the families of the soldiers who lost their lives could 
not receive the benefits that should have gone to them under the Tax 
Code because the President never declared it a combat zone.
  Two of those who were killed were Congressional Medal of Honor 
winners. But because of the technical language of the Code they could 
not receive the tax benefits because Somalia had not been designated as 
a combat zone.
  H.R. 2778 provides that members of the Armed Forces in Bosnia and 
Herzegovina, Croatia, or Macedonia who receive hostile fire or imminent 
danger pay will receive combat zone tax benefits.
  That means enlisted personnel stationed in these countries would not 
be taxed on their pay for any month that they receive hostile fire or 
imminent danger pay.
  Officers would be taxed on only a portion of their pay. Members of 
the Armed Forces would be eligible to postpone their tax filing and 
payment obligations. Additional benefits would also apply.
  The bill also makes some technical and administrative improvements to 
the combat zone tax provisions. More importantly, it makes some long-
needed changes to the combat zone tax laws.
  Currently, enlisted personnel in a combat zone are not taxed on their 
pay for any month they are in the combat zone, but officers are allowed 
to receive only $500 each month tax-free.
  This $500 was set in 1966 and has not been increased for inflation. 
This bill would raise that $500 limit to equal the top pay grade for 
enlisted personnel.
  The bill also extends one of the combat zone tax benefits, the 
suspension of tax filing and payment obligations, to personnel involved 
in Operation Joint Endeavor even if they are not physically located in 
the former Yugoslavia.
  Members of the Armed Forces and Department of Defense personnel who 
have been deployed as part of Operation Joint Endeavor outside of the 
United States and away from their permanent duty stations would be 
eligible for this benefit.
  Plainly, these people do not have easy access to their tax records 
and have concerns other than finding the nearest post office.
  This is truly a bipartisan bill. More than 120 Members of Congress 
have cosponsored this bill. It was reported by the Ways and Means 
Committee on a unanimous voice vote.
  Moreover, as it was reported by the Ways and Means Committee, the 
bill incorporates the best of practically all of the various combat 
zone benefit bills introduced in recent months.
  In short, the bill before us reflects the input of many Members, 
Democrats and Republicans, as well as the Defense Department and the 
Treasury Department.
  In particular, I want to recognize Chairman Bill Archer, Sam Gibbons, 
and Ike Skelton for their contribution to this report.
  Making sure that our military personnel in Bosnia receive all of the 
benefits that we can give them under the Tax Code is the least that we 
can do for them.
  I hope that we will demonstrate our unqualified support for our 
troops in Bosnia by adopting the bill before us today.
  This is not about whether you agree with the policy that put United 
States forces in Bosnia. Many of us have had grave reservations about 
the policy that sent our troops there in the first place; but, the 
point is--they are there.
  And, since they are there, we need to do everything in our power to 
make sure that they are treated fairly in the Tax Code. This bill does 
that.

                              {time}  1130

  Mr. Speaker, I reserve the balance of my time.
  (Mr. GIBBONS asked and was given permission to revise and extend his 
remarks.)
  Mr. GIBBONS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, this is a needed piece of legislation. It is a 
bipartisan piece of legislation. The chairman has adequately and 
totally described it. I support what he is doing, what we are doing on 
a bipartisan basis. I would only say that it makes good common sense 
that soldiers who go to zones, such as the one they are now occupying 
in the former Yugoslavia and its surrounding areas, do not take with 
them their tax records. They are not in a position to file an income 
tax return. They are certainly entitled to all of the benefits that are 
included in this bill.
  This is something we have done in various forms for most soldiers, at 
least since World War II, in my own memory, so I urge a unanimous vote 
for it as a show of solidarity that we support those whose lives are at 
risk.
  Mr. Speaker, I yield such time as he may consume to the gentleman 
from Missouri [Mr. Skelton]. He is a distinguished member of this 
committee whose record is replete with his concern for the welfare of 
our country and of the military personnel who make it up.
  Mr. SKELTON. Mr. Speaker, I especially appreciate the gentleman's 
kind words. I am grateful for the opportunity to express my support for 
H.R. 2778. I commend the chairman of the committee, the gentleman from 
Texas [Mr. Archer], the gentleman from Florida [Mr. Gibbons], the 
ranking member, and the Committee on Ways and Means for bringing this 
legislation to the floor. I especially thank the gentleman from 
Kentucky [Mr. Bunning] for his hard work. I commend him for his 
thorough and painstaking effort. It was a pleasure to work with him on 
this legislation.
  Mr. Speaker, late last year I began working with the gentleman from 
Kentucky [Mr. Bunning] to draft legislation providing tax relief for 
United

[[Page H1672]]

States troops serving our Nation in contingency operations overseas, 
particularly those in Bosnia and Herzegovina, Croatia, and Macedonia. I 
introduced my own legislation, H.R. 2776, to meet this end. I am 
pleased the committee adopted a key provision originally from my bill 
that would expand a pay exemption.
  We need to take care of our troops. The American people can be proud 
of the fine service of the members of our Armed Forces. We are sending 
them into dangerous and difficult missions as participants in Operation 
Joint Endeavor and Operation Able Sentry, thousands of miles from their 
friends and families.
  It is only proper that we extend an exemption from Federal income 
taxes during their deployment, as we did those who served in the gulf 
war in Operation Desert Shield and Operation Desert Storm. In some 
instances, the living conditions and dangers are as bad or worse than 
some experienced in the gulf war.
  H.R. 2778 deserves, and I am sure will receive, a wide bipartisan 
support. Let us all express our support for our American troops by 
passing this legislation, hopefully unanimously, today.
  Mr. BUNNING of Kentucky. Mr. Speaker, I have the pleasure to yield 
such time as he may consume to the gentleman from Texas [Mr. Archer], 
chairman of the Committee on Ways and Means.
  Mr. ARCHER. Mr. Speaker, I thank the gentleman for yielding time to 
me.
  Mr. Speaker, I rise in strong support of H.R. 2778. I compliment the 
gentleman from Kentucky [Mr. Bunning], chairman of the Subcommittee on 
Social Security of the Committee on Ways and Means, for his leadership 
in introducing this bill, even though it does not have anything to do 
with Social Security.
  He has done a great service for our service men and women in Bosnia 
by pointing out the appropriateness of this legislation, because those 
people over there, as we know and we have heard, are placed in the same 
sort of danger as if it were a combat zone.
  Quite honestly, I do not know why the President did not declare it a 
combat zone. It clearly is a combat zone. But by the President failing 
to declare it as one, he has denied, effectively, the benefits to our 
service people over there that they would otherwise be entitled to. 
This legislation provides our troops and their families with a little 
relief and demonstrates Congress' support for our troops.
  In the past they would have, as I mentioned, in a combat zone 
automatically have received these benefits which now we will give 
especially to them by this legislation. This bill enjoys great 
bipartisan support, and I know of no opposition to it. I therefore urge 
my colleagues on both sides of the aisle to support it.
  Mr. SPENCE. Mr. Speaker, I rise in strong support of H.R. 2778, a 
bill to provide combat zone type tax exemption to our troops in the 
former Yugoslavia.
  Mr. Speaker, many Members of this body, including myself, may have 
considerable doubt about the wisdom of the President's decision to 
commit military forces to uphold the Dayton Peace agreement in Bosnia. 
But there is one thing about which there is no doubt in my mind, and 
that is my unshakable support for the military men and women assigned 
this arduous duty. I am confident that the vast majority of this House 
will not falter when the welfare of our troops is at stake, especially 
when they serve in such a dangerous place such as Bosnia.
  H.R. 2778 as reported by the Committee on Ways and Means is a superb 
bill. It provides full exclusion of income for enlisted members and 
warrant officers as would be provided under current law in a combat 
zone. Another important aspect of the legislation is the long overdue 
update in the income exemption for officers. We on the Committee on 
National Security have been working since the Persian Gulf war to 
update the $500 cap on officer exemptions in current law. The $500 cap 
dates back to 1966 and has long since lost any relevance to officer 
income levels. H.R. 2778 not only restores the value of this benefit 
for officers, it precludes this problem from reoccurring by linking the 
cap to the maximum pay for an enlisted person, or $3,377.10.
  The other very important aspect of this bill is that it provides a 
series of benefits to the survivors of members who lose their lives in 
Bosnia. We all hope that we have seen the last United States 
servicemember die in Bosnia, but we must acknowledge that the prospect 
for further casualties remains very real. H.R. 2778 ensures that a 
second tragedy is not visited upon a deceased member's family by the 
Internal Revenue Service.
  H.R. 2778 is an important bill that supports our troops. I urge my 
colleagues to vote ``yes.''
  Mr. BEREUTER. Mr. Speaker, this Member rises in the strongest 
possible support for H.R. 2778, legislation designed to provide that 
members of the Armed Forces serving in Bosnia will be entitled to 
combat zone tax benefits.
  The benefits provided in this legislation are relatively modest. 
Enlisted personnel will not be taxed on their base pay, and officers 
receive a $500 exclusion. Servicemembers killed in Bosnia are granted a 
reduced estate tax. They are given a filing extension so that our 
peacekeeping operation does not shut down on April 15 while our troops 
are filling out returns. Telephone calls back home are not subject to a 
3-percent excise tax.
  But while the provisions may seem modest, the effect on the morale of 
American troops serving in Bosnia, Croatia, and Macedonia will be 
significant. This Member recently had the opportunity to visit with 
General Nash, commanding general of the U.S. Army's 1st Armored 
Division in Bosnia. He expressed the troops' strong support for the 
passage of H.R. 2778. It was, General Nash argued, at this point 
perhaps the single most positive and personally important expression of 
support that the Congress could send to the troops serving in IFOR.
   Mr. Speaker, the very least we can do is ensure that, when our 
troops return, they will not be met at the airport by the IRS. This 
Member urges swift passage of H.R. 2778.
  Mr. GILMAN. Mr. Speaker, I rise today in strong support of H.R. 2778, 
a bill to give special tax treatment to U.S. troops in Bosnia. This 
legislation will assist the families of those troops serving in the 
Balkans with filing their taxes and is an appropriate gesture in 
response to the peacekeeping efforts of those troops who are serving in 
that region.
  The Dayton Peace Accord, signed in December 1995, outlined a peaceful 
settlement for the 3 year old conflict in Bosnia and Herzegovina. Part 
of this agreement called for the deployment of a NATO peackeeping force 
to enforce the cease-fire which was the foundation of the accord. The 
U.S. commitment to this force in Bosnia was 20, 000 soldiers. 
Furthermore, an additional 12,000 Americans are stationed in Croatia, 
Italy, Hungary, and other neighboring countries to provide support for 
the implementation force [IFOR]. In December, the Secretary of Defense 
estimated the cost of this mission to be $2 billion.
  Additionally, there are 550 Americans serving as part of a 1,000 man 
U.N. force in Macedonia. The purpose of this mission, Operation Able 
Sentry, which began in 1993, is to prevent the conflict in Bosnia from 
spilling over into Macedonia.
  Under current law, U.S. military personnel serving in Areas 
designated by the President as a combat zone are exempt from performing 
a number of tax-related duties, including filing tax returns, paying 
taxing, or filing a claim for credit until the individual is no longer 
serving in the designated area. This allows these individuals to attend 
to their financial affairs after their service is complete. 
Additionally, the families of active service personnel killed in a 
combat zone are not subject to income tax for the year of death and are 
entitled to a reduction in estate taxes.
  To date, President Clinton has not declared any areas within the 
Balkans as combat zones. By not classifying the area as a combat zone, 
the families of soldiers killed in service will not be able to receive 
a variety of special tax waivers and benefits.
  This legislation will correct the oversight of the administration and 
allow personnel serving in Bosnia and Herzegovina, Croatia, and 
Macedonia, all qualified hazardous duty areas, to be eligible for the 
eight specific provisions of the Internal Revenue Service Code which 
relate to personnel serving in a combat zone.
  In addition, this legislation will raise the amount of income an 
officer may claim as tax-exempt combat pay from $500 to the highest 
rate of basic pay for any enlisted member of the Armed Forces.
  I strongly support this legislation and urge its passage. By doing so 
we will be sending a vote of confidence to our troops in the Balkans 
regarding their ability and dedication to enforcing peace in a war-torn 
land.
  Ms. DeLAURO. Mr. Speaker, first, I want to express my sadness that 
our colleague, Representative Gibbons, is retiring. We will miss your 
leadership.
  I strongly support this bill to give favorable tax treatment to 
American troops, just as I strongly supported American troops during 
the debate on Bosnia. American service men and women who are keeping 
the peace in Bosnia deserve all of the support that we in Congress can 
give.
  Under this bill, we will allow our Armed Forces to focus on the 
difficult task at hand--keeping peace in a land ravaged by nearly 4

[[Page H1673]]

years of fighting--without worrying about filing their tax forms on 
time. We will signal how much we value the extraordinary service of 
American troops by exempting Operation Joint Endeavor pay from 
taxation. The bill also will make it easier for families to stay in 
touch during a time of separation by waiving the excise tax for troops 
to call home from Bosnia.
  This bill corrects a technicality, but one that I believe is 
extremely important. Troops in combat zones have traditionally received 
tax breaks, but American forces in Bosnia are there not to fight a war, 
but to keep the peace. I urge my colleagues to pass this bill and show 
our troops in Bosnia that we understand their sacrifice and value their 
service.
  Mr. TATE. Mr. Speaker, while I do not believe the President ever made 
the case to the American people and Congress that sending United States 
ground troops to Bosnia is clearly within our vital national security 
interests, I cannot express how profoundly proud and deeply 
appreciative I am of the men and women that once again have been called 
upon to serve our great Nation.
  The men and women of our military risk their lives every day in 
Bosnia. I believe if our Government can do anything to help our 
soldiers and their families during these difficult times, it is our 
obligation to do so. That is why I am so disappointed that the 
President has not extended combat zone tax benefits to troops serving 
in Bosnia. In the past, these benefits have been automatic.
  As a Member of the 104th Congress, I am proud this body has chosen to 
step up to the plate and show how profoundly grateful we are for those 
troops serving at the request of the President. Today, we will pass a 
measure to provide tax relief to our troops serving in Operation Joint 
Endeavor. This will include eliminating taxation of combat pay, 
reducing estate taxes in the event of combat-related death, and 
forgiving income tax upon a combat-related death.
  This tax relief cannot fully compensate members of the military for 
their service, but if it helps one family or service member through 
this trying ordeal, then it will have been worth it.
  Mr. FARR of California. Mr. Speaker, I rise today to speak in support 
of H.R. 2778. This important legislation would ensure that American 
soldiers now serving in the former Yugoslavia receive the same tax 
benefits as other soldiers in combat zones.
  Our troops serving in Operation Joint Endeavor face special dangers 
and challenges unique to their mission, including mine clearance and 
monitoring the withdrawal and redeployment of armed groups. Though they 
are not serving in conventional combat conditions, their work is no 
less dangerous. Clearly, they should not be treated any differently 
than other American soldiers who serve overseas in an area of potential 
danger.
  Unfortunately, without this bill, our troops in Bosnia would not get 
the same tax benefits as soldiers serving in a combat zone. This 
legislation will correct this discrepancy and ensure that the young 
American men and women enforcing the Dayton Peace Accords in the former 
Yugoslavia are treated the same as soldiers serving in equally 
hazardous areas.
  I am glad to see Congress take action on this issue, and I urge the 
prompt passage of the legislation to correct this oversight.
  Mr. GIBBONS. Mr. Speaker, I have no further requests for time, and I 
yield back the balance of my time.
  Mr. BUNNING of Kentucky. Mr. Speaker, I have no further requests for 
time, and I yield back the balance of my time.
  The SPEAKER pro tempore (Mr. Rogers). The question is on the motion 
offered by the gentleman from Kentucky [Mr. Bunning] that the House 
suspend the rules and pass the bill, H.R. 2778, as amended.
  The question was taken.
  Mr. BUNNING of Kentucky. Mr. Speaker, I object to the vote on the 
ground that a quorum is not present and make the point of order that a 
quorum is not present.
  The SPEAKER pro tempore. Pursuant to clause 5, rule I, and the 
Chair's prior announcement, further proceedings on this motion will be 
postponed.
  The point of no quorum is considered withdrawn.

                          ____________________