[Congressional Record Volume 149, Number 57 (Wednesday, April 9, 2003)]
[House]
[Pages H3000-H3004]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
ARMED FORCES TAX FAIRNESS ACT OF 2003
Mr. THOMAS. Mr. Speaker, I move to suspend the rules and pass the
bill (H.R. 1664) to amend the Internal Revenue Code of 1986 to provide
a special rule for members of the uniformed services in determining the
exclusion of gain from the sale of a principal residence and to restore
the tax exempt status of death gratuity payments to members of the
uniformed services, and for other purposes.
The Clerk read as follows:
H.R. 1664
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; REFERENCES.
(a) Short Title.--This Act may be cited as the ``Armed
Forces Tax Fairness 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.
SEC. 2. SPECIAL RULE FOR MEMBERS OF UNIFORMED SERVICES AND
FOREIGN SERVICE IN DETERMINING EXCLUSION OF
GAIN FROM SALE OF PRINCIPAL RESIDENCE.
(a) In General.--Subsection (d) of section 121 of the
Internal Revenue Code of 1986 (relating to exclusion of gain
from sale of principal residence) is amended by adding at the
end the following new paragraph:
``(10) 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
referred to 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.
``(B) Maximum period of suspension.--Such 5-year period
shall not be extended more than 5 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 150 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.--The term `member of the Foreign
Service' 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.
[[Page H3001]]
``(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 180 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 amendment 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 amendment 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. 3. RESTORATION OF FULL EXCLUSION FROM GROSS INCOME OF
DEATH GRATUITY PAYMENT.
(a) In General.--Paragraph (3) of section 134(b) (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 before December 31, 1991.''.
(b) Conforming Amendment.--Section 134(b)(3)(A) 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.
SEC. 4. EXCLUSION FOR AMOUNTS RECEIVED UNDER DEPARTMENT OF
DEFENSE HOMEOWNERS ASSISTANCE PROGRAM.
(a) In General.--Subsection (a) of section 132 (relating to
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.--
``(1) In general.--For purposes of this section, 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).
``(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 such payments related to such
property exceeds the 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. 5. EXPANSION OF COMBAT ZONE FILING RULES TO CONTINGENCY
OPERATIONS.
(a) In General.--Subsection (a) of section 7508 (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. 6. 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. 7. CLARIFICATION OF THE TREATMENT OF CERTAIN DEPENDENT
CARE ASSISTANCE PROGRAMS.
(a) In General.--Subsection (b) of section 134 (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
further 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.
SEC. 8. 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 amendment made by this section
shall take effect for taxable years beginning after December
31, 2002.
SEC. 9. 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 services.''.
(b) Deduction Allowed Whether or Not Taxpayer Elects To
Itemize.--Paragraph (2) of section 62(a) (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, and not in excess of $1,500,
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. 10. TAX RELIEF AND ASSISTANCE FOR FAMILIES OF ASTRONAUTS
WHO LOSE THEIR LIVES ON A SPACE MISSION.
(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:
[[Page H3002]]
``(5) Relief with respect to astronauts.--The provisions of
this subsection shall apply to any astronaut whose death
occurs while on a space mission, 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 while on a space mission.''.
(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.--Subsection (b) of section 2201 (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 while on a space
mission.''.
(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.
SEC. 11. PROTECTION OF SOCIAL SECURITY.
The amounts transferred to any trust fund under title II of
the Social Security Act shall be determined as if this Act
(other than this section) had not been enacted.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
California (Mr. Thomas) and the gentleman from Maryland (Mr. Cardin)
each will control 20 minutes.
The Chair recognizes the gentleman from California (Mr. Thomas).
Mr. THOMAS. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I am a firm believer that no bill should pass this House
until it is ready. I am prepared to tell the House this bill is more
than ready. It passed twice last year, and the Senate failed to act. As
recently as March 20 of this year, the bill, in its current form save a
technical correction, passed as H.R. 1307. That vote was 422-0.
H.R. 1664 is in its current form virtually, as I said, except for
technical correction, in the same form as H.R. 1307. There are two
modifications that we are adding to this bill based upon discussions
with the Senate so that the good and worthy purposes contained in this
bill which no one has challenged can go to the President for his long-
overdue signature.
The two provisions which the Chair believes, if added to this bill,
will initiate a process in the Senate which will move the bill
immediately to the floor of the Senate; and this version which passes
the House, when it passes, will move through the Senate without the
need for a conference. The two provisions that we are adding is that in
the special rule provided for military personnel to determine if they
have met the 24 months out of 5-year residency to trigger the capital
gain exclusion on a home sale, would be extended to members of the
foreign service.
Secondly, the underlying benefits of the bill, the income and estate
tax relief provisions that were provided, for example, for the victims
of terrorism in the Tax Relief Act of 2002, would be extended to
astronauts who lose their lives during a space mission; and, of course,
that would apply to those astronauts who unfortunately lost their lives
during the recent Columbia Shuttle disaster.
Adding those two provisions, which I do not believe are
controversial, to the underlying bill means we can finally, and long
overdue, provide these benefits. It means that the history of this bill
will be that the House and the Senate agree, and the President is
prepared to sign.
Mr. Speaker, I reserve the balance of my time.
Mr. CARDIN. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I must admit I am somewhat baffled by the comments of my
distinguished chairman. If it is in the interest of this body to enact
legislation quickly, then we should just take the Senate bill and
ratify the Senate bill and send it to the President, and we can get it
signed. It seems to me that is the easiest way for us to work this out
for our military.
Mr. THOMAS. Mr. Speaker, will the gentleman yield?
Mr. CARDIN. I yield to the gentleman from California.
Mr. THOMAS. If the Senate bill were not flawed in several different
ways, the suggestion the gentleman makes would be acceptable. I think
it is evidence that even the Senate recognizes some fundamental
problems when they are willing to accept a bill that we are going to
send over, rather than going to a conference.
Mr. CARDIN. Mr. Speaker, I appreciate the gentleman's comments, but
the differences here in substance between what we will be voting on and
what the other body has voted on is that the Senate provided unlimited
exclusions for death benefits payable to our military, and the
legislation before us is less generous.
The House bill provides less generous eligibility rules for capital
gains relief, and the Senate bill provided unlimited deductions for
travel expenses of our National Guard members and Reservists, yet the
legislation before us imposes a $1,500 cap on those deductions.
I do not know the logic of us limiting the reasonable expenses of our
National Guard members, particularly when they have been called upon in
this most recent conflict. It seems to me that those changes in every
case work against our military, and I am surprised that we are not
ratifying the Senate's bill.
But the most important difference is that the Senate included a
provision to stop tax avoidance by those who have renounced their
citizenship in this country, and the legislation before us today does
not include that provision. I would suggest that is probably the major
reason why we are acting on yet another version of this bill, which is
extremely important for us to pass.
I agree with the chairman on that point, but it seems to me that we
are now faced with the option of providing less benefits than we should
to our military and losing an opportunity to close a major loophole in
our Tax Code for those who renounce their citizenship, still taking
advantage of U.S. tax law.
Mr. Speaker, I reserve the balance of my time.
Mr. THOMAS. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I have to tell Members I think we have come full circle.
One of the reasons there was so much, I assume, angst on the other side
of the aisle was that at one time the bill contained extraneous
material. Now the gentleman is complaining that I am not accepting the
Senate version of the bill which contains, oh, my goodness, extraneous
material. The gentleman knows well that the, quote/unquote, extraneous
material has been contained in another bill which is moving on the
Senate side and which will become law is a far more appropriate vehicle
than this particular measure.
In addition to that, the extraneous material that the gentlemen
insists that we agree to, coming from the Senate, is not the solution
on the individual expatriation that our own Joint Committee on Taxation
recommends is the most appropriate solution.
Mr. CARDIN. Mr. Speaker, will the gentleman yield?
Mr. THOMAS. I yield to the gentleman from Maryland.
Mr. CARDIN. Mr. Speaker, I do not think that it is ever extraneous to
try to offset the cost of the bill, and that is the reason this
provision was put in, so we do not add to the deficit.
Mr. THOMAS. Mr. Speaker, I must tell the gentleman that offsetting
costs with extraneous material is one thing; accepting a solution which
our committee that we utilize to recommend
[[Page H3003]]
appropriate changes does not believe is the appropriate exchange is
another.
The gentleman also pointed out two differences between the House and
the Senate bill, and it is true. I understand the gentleman and where
his party is coming from. They do not see a problem with absolute,
open-ended, unlimited ability to write off expenses. That is just very,
very typical.
What we have accepted, by the Senate, are reasonable and appropriate
limits. Whenever the phrase ``reasonable and appropriate'' is used, the
counterargument always seems to be unlimited. The Senate thinks it is
appropriate to accept a reasonable and appropriate, and so do we.
Mr. Speaker, I ask unanimous consent to yield the balance of my time
to the gentleman from Texas (Mr. Sam Johnson) and that he may control
that time.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from California?
There was no objection.
{time} 1815
Mr. CARDIN. Mr. Speaker, I yield myself such time as I may consume.
Let me first point out to my distinguished chairman that business
people have no limit in the Tax Code as to what they can take on their
travel expenses, and yet we are telling our National Guard that there
is going to be a limit as to how much they can take on their taxes for
travel expenses.
Mr. Speaker, I yield such time as he may consume to the gentleman
from Washington (Mr. McDermott), a distinguished member of our
committee.
Mr. McDERMOTT. Mr. Speaker, I thank the gentleman from Maryland (Mr.
Cardin) for yielding me this time.
It is really an honor to have a part in another example of the
Republican tax follies. This bill could have been passed weeks and
weeks and weeks ago. As we celebrate and are grateful for the fact that
the war seems to be winding down in Iraq, the people who have been over
there, we have been trying to do this for them for about, I do not
know, 3 or 4 or 5 months. First the bill got over in the committee, and
we had to add on fishing tackle and a whole bunch of other stuff, and
that did not work out here. So it had to go back and come back on a
rule, and now it has gone over to the Senate. They have more generous
provisions. There is just no question about it. And they also added
this provision that would make it a little bit more difficult for
people who want to avoid taxes to leave this country, to give up their
citizenship. At a time when this country ought to be thinking about
sacrifice because we have asked men and women to sacrifice their lives
for us, we have people leaving this country saying I do not like this
country. I have made a whole bunch of money here, but I do not want to
pay any taxes; so I am leaving. And we let them get out of paying taxes
for that.
What kind of statement is that to our troops overseas that this
Congress will not close the loophole that lets somebody drop their
citizenship in order to avoid their taxes? If that is not folly at a
time when our deficit is $400 billion this year and going up and we
expect the young men and women who are over in Iraq to sacrifice for us
but we will sacrifice in terms of taxation even on people who are
giving up their citizenship, there is something really weird about this
bill. And I certainly know that everybody is going to vote for it.
What is also strange is they say we are going to give the tax benefit
to the soldiers and those people, the Marines and whatnot, give it to
the State Department; but when we offered an amendment in the House
committee for people in the Peace Corps who are out there risking
themselves for the United States, they say no. No, not them.
Let us talk about people who are doing a service to this country,
which is what this is all about; and yet finally we come out here and
of course it is almost the day we pay our taxes. So every year for the
last 8 years we have always had the April 15 tax follies, and this is
act one and will be followed by act two, which we will get to in a few
minutes. But this is a bill that we should have accepted the other
body's construction. It is more generous, and it closes an egregious
tax loophole.
Mr. CARDIN. Mr. Speaker, I yield back the balance of my time.
Mr. SAM JOHNSON of Texas. Mr. Speaker, I yield myself such time as I
may consume.
I would like to say that I too rise in strong support of the Armed
Forces Tax Fairness Act of 2003, and today's bill goes to great lengths
to help our brave military men and women and their families despite
what has been said out there.
I had the distinct honor of serving my country in the Air Force for
about 29 years. So my family and I know something about military life.
And my wife, Shirley, told me that one her worst moments was when the
military chaplain pulled up in front of the house after I was shot down
in Vietnam, and her heart just stopped. We never know what they are
going to say, but we know it is not going to be good.
I imagine the unspeakable horror of despair and utmost despair of a
family who just lost a loved one in the military, only to be followed
up by a visit from the taxman. That is just wrong. So this bill fixes
that. Let us change it and pass it today.
This bill permits the entire amount of the death benefit gratuity to
be tax free. Let us eliminate the unfair, immoral tax on the death
benefit a serviceman's survivor receives from the Armed Forces. It is
the least we can do. These families have given the ultimate sacrifice
for our country. We do not need to take any more from them.
On a more positive note, I would like to thank all those who helped
eliminate the penalty on military academy students and their families
when it comes to withdrawing funds from a 529 education savings
account. The Miesses of Plano brought that to my attention. Now the
Plebe, the Zoomie, and the Middy will all have the same benefit of
being able to take out money tax free like an athlete on a scholarship.
This is a good bill. This bill is a shining example of democracy at
its best, in my opinion. It helps our military now, and they need it;
and they are doing a great job.
Mrs. JONES of Ohio. Mr. Speaker, I rise to recognize the passage of
S. 351, the United States Senate version of H.R. 1307, as well as what
is presented before us at this hour. The new House bill for the Armed
Forces Tax Fairness Act of 2003, and the Senate amendment to H.R. 1307,
contained several identical provisions. Those identical provisions
include exclusion for amounts received under the Defense Homeowners
Assistance Program. Expansion of combat zone filing rules, modification
of membership requirements for veterans organizations, clarification of
treatment of dependent care benefits, treatment of service academy
appointments for certain tax benefits, and tax relief for the families
of the Columbia space shuttle astronauts.
The new House bill provides smaller tax benefits for the military.
Both bills provide an exclusion from gross income for death benefits.
However, the House bill would tax increased death benefits to the
extent that they were the result of legislation enacted after December
31, 1991. The Senate bill does not have that restriction.
Both bills provide more liberal treatment for gain on sale of
principal residence by members of the military and foreign service.
However, the Senate bill provides the benefits for a longer period. A
10-year extension rather than a 5-year extension.
Both bills provide an above the line deduction for overnight travel
expenses of National Guard and reserve members. However, the House bill
limits the deduction to $1,500 per year, whereas the Senate bill
provides no dollar limit on the deduction.
The Senate bill contains a provision suspending tax-exempt status for
terrorist organizations. The House bill contains no such provision.
Furthermore, the cost of the Senate bill is offset, with the largest
offset being a provision preventing tax avoidance by individuals
renouncing their citizenship in this country. For military death
benefits, under current law, a $6,000 death gratuity is paid to the
survivors of members of the Armed Forces killed in the line of duty.
This death benefit was increased from $3,000 to $6,000 in 1991 during
the Persian Gulf War. Prior to the increase, the entire benefit was
tax-free; however, because the Tax Code was not changed to reflect the
1991 increase, only the first $3,000 is currently exempt from Federal
tax.
Let us--Republicans and Democrats--work to pass a measure that we all
can find common ground. Our U.S. Senators have found a way to pass an
effective measure for the Armed Forces Tax Fairness Act, let us do the
same.
Mr. Speaker, I yield back the balance of my time.
Ms. JACKSON-LEE of Texas. Mr. Speaker, I rise today to express my
support of H.R.
[[Page H3004]]
1664, the Armed Forces Tax Fairness Act of 2003. It has been long
overdue that we provide real relief to the men and women who serve in
our armed forces. Many of the members of the military are minorities,
and this bill will help many in my own 18th Congressional District in
Houston. More than 200,000 troops are now being employed to the Persian
Gulf. In Houston, many soldiers have been called upon to serve on the
front lines.
This bill includes tax benefits for the families of astronauts who
die in the line of duty, including those of the space shuttle Columbia.
It provides National Guard and reservists with a tax deduction of up to
$1,500 for transportation, meals and lodging to attend required
meetings. This bill also makes tax-free the full $6,000 death gratuity
paid to survivors of members of the armed forces killed in the line of
duty. The measure also exempts from taxable income amounts received
under the Department of Defense's Homeowners Assistance Program, which
provides payments to certain employees and members of the armed forces
to offset the adverse effects on housing values resulting from military
base realignment or closure.
The bill also provides National Guard and reserve members as ``above-
the-line'' tax deduction, that is, taken directly from gross income
before any itemized or standard deductions for overnight
transportation, meals and lodging expenses for member who travel more
than 100 miles from home to attend National Guard and Reserve meetings.
Under this bill, a member could deduct up to $1,500 in connection with
their service.
I am pleased that this bill waives income tax liability for the year
of death and the year prior to death for astronauts who die in the line
of duty.
Under current law, the time for filing tax returns, paying taxes and
other Internal Revenue Service requirements is generally suspended for
anyone serving in a combat zone during the period of combatant
activities. This bill applies the suspension of tax-filing rules to
person deployed outside the United States away from their permanent
duty station while participating in an operation designated by the
Defense secretary as a ``contingency operation'' or that becomes a
contingency operation. This is defined as a military operation
designated by the Defense secretary as one in which members of the
armed forces are, or may become, involved in military actions,
operations or hostilities against an enemy of the United States. This
provision will help our armed forces serving in Iraq.
This legislation provides tax relief to the members of our military.
Our soldiers are on frontlines, and now as the war with Iraq continues,
we are calling upon these men and women to make even greater
sacrifices. This bill represents a compromise between the House and
Senate versions in order to avoid a conference. I support this
legislation to provide immediate tax relief to the members of our armed
forces and our veterans.
Studies have shown pay rates in the military consistently lag behind
comparable jobs in the private sector. I believe that this legislation
would help military families as they struggle like so many to pay basic
expenses.
The provisions in this legislation would provide tax breaks on home
sales, travel expenses, and death benefits. We have ample tax benefits
for corporations, it is time to help our officers and enlisted soldiers
in the armed forces.
Now more than ever, it's important to support America's top-notch
armed forces. I've always believed that in order for Americans to enjoy
the freedom that characterizes our country, and for Texans to be able
to fully enjoy the natural beauty and resources of our state, it is
crucial for the citizens of the nation and our state to feel safe.
To achieve this goal, it's vital that we keep America's armed forces
strong. Throughout the years, I've fought for funding to constantly
improve the quality of defense-related activities in my state of Texas.
The importance of national defense is increasing every day, and I
will continue to support our armed forces--they are the young men and
women on the front lines who are called to sacrifice for this great
nation and to preserve our Constitutional protections and liberties.
I urge my colleagues to support this bill. Thank you.
Mr. SAM JOHNSON of Texas. Mr. Speaker, I yield back the balance of my
time.
The SPEAKER pro tempore (Mr. Bass). The question is on the motion
offered by the gentleman from California (Mr. Thomas) that the House
suspend the rules and pass the bill, H.R. 1664.
The question was taken; and (two-thirds having voted in favor
thereof) the rules were suspended and the bill was passed.
A motion to reconsider was laid on the table.
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