[Congressional Record Volume 153, Number 63 (Thursday, April 19, 2007)]
[Senate]
[Pages S4757-S4758]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. WARNER:
  S. 1166. A bill to amend the Internal Revenue Code of 1986 to exclude 
from gross income certain zone compensation of civilian employees of 
the United States; to the Committee on Finance.
  Mr. WARNER. Mr. President, I rise today to introduce the Federal 
Employee Combat Zone Tax Parity Act, which would provide parity to 
civilian Federal employees by extending the tax credit currently 
received by military personnel in combat zones to the civilian Federal 
employees working alongside them. My fellow Virginian, Congressman 
Frank Wolf, has introduced a similar bill in the House of 
Representatives.
  In addition, several Federal employee organizations, such as the 
American Federation of Government Employees (AFGE), the National 
Treasury Employees Union (NTEU), the Financial Management Association 
(FMA), the Senior Executives Association (SEA), the American Foreign 
Service Association (AFSA), and the National Federation of Federal 
Employees (NFFE), strongly support this legislation.
  As of today, I have made eleven separate trips to Iraq and 
Afghanistan to see firsthand the work of our military personnel, which 
is essential to success in these regions. In addition, the work of our 
Federal civilian employees in these regions is significantly important.

[[Page S4758]]

  At the moment, a majority of the work in the reconstruction of these 
countries is being done by the military and the Department of State 
(DOS). These dedicated men and women deserve our gratitude. However, as 
I have said on a number of occasions, our challenging task requires the 
coordination and work of Federal agencies across the spectrum.
  Regardless of whether one is in the military or a civilian, there are 
certain risks and hardships associated with working overseas. As a 
result, the Federal Government provides certain incentives to 
individuals when they take on extremely challenging jobs. For example, 
those in the military working in a combat zone receive the Combat Zone 
Tax Credit.
  This tax credit permits military personnel working in combat zones to 
exclude a certain amount of income from their Federal income taxes. 
This benefit for the military was established in 1913.
  Private contractors working in Iraq and Afghanistan get a similar 
benefit. Under the Foreign Earned Income Tax Credit, contractors are 
allowed to exclude a portion of their income from taxes while they work 
abroad, like in Iraq and Afghanistan.
  To date, however, no similar benefit exists for Federal employees 
serving in the same combat zones. I do not believe it is fair for our 
Federal employees to be excluded from the same benefits available to 
military personnel and private contractors in the same combat zone.
  The Commonwealth of Virginia, of which I have been honored to serve 
for the last 28 years in the Senate, is home to over 200,000 Federal 
employees. I have long been a strong supporter of our Federal employees 
as I have been for our military personnel.
  Our efforts in the war on terrorism can only be successful with a 
highly skilled and experienced workforce. I can personally attest to 
the dedication of civil service employees throughout the Federal 
Government. Since the September 11th attacks, Federal employees have 
been relocated, reassigned, and worked long hours under strenuous 
circumstances without complaints, proving time and again their loyalty 
to their country is first and foremost.
  During my service as Secretary of the Navy--during which I was 
privileged to have some 650,000 civilian employees working side by side 
with the uniformed Navy--I valued very highly the sense of teamwork 
between the civilian and uniformed members of the United States Navy. 
Teamwork is an intrinsic military value, in my judgment, and essential 
to mission accomplishment. A sense of parity and fairness is important 
for developing this teamwork.
  In Iraq and Afghanistan, the teamwork of the entire Federal 
Government is essential to harness our overall efforts to secure a 
measure of democracy for the peoples of those countries, and we need to 
make it easier for our Federal employees to participate.
  Last year, I offered additional legislation that became law under an 
emergency supplemental bill to achieve this goal. My bill, S. 2600, 
provided the heads of agencies other than DOS and the Department of 
Defense (DOD) with the authority, at their discretion, to give their 
employees who serve in Iraq and Afghanistan allowances, benefits, and 
gratuities comparable to those provided to State Department and DOD 
employees serving in those countries.
  At that time, the agency heads of non-DOD and DOS agencies did not 
have such authority, and it is essential, as part of the U.S. effort to 
bring democracy and freedom to Iraq and Afghanistan, that agency heads 
be able to give their workers in those countries the same benefits as 
those they work beside.
  In the last estimate, there are almost 2,000 Federal employees 
working a variety of jobs in Iraq and Afghanistan. I am grateful for 
their hard work in potentially dangerous situations. And, I know there 
are many other Federal employees who are anxious to serve their country 
and engage in these efforts, but it is a lot to risk.
  Providing parity in this important tax credit would provide a 
significant incentive for individuals to take on this challenge--a 
challenge that America desperately needs Federal employees to 
undertake.
  Throughout the world, America's civil servants are serving our 
government and our people, often in dangerous situations. They are on 
the ground in the war on terrorism taking over new roles to relieve 
military personnel of tasks civilian employees can perform. They are 
playing a vital role in the reconstruction of Iraq and Afghanistan.
  We have a long tradition in Congress of recognizing the valuable 
contributions of our Federal employees in both the military service and 
in the civil service by providing fair and equitable treatment. This 
bill gives us the ability to continue this tradition while at the same 
time providing an important incentive to help America meet its needs.
  I urge my colleagues to join with me in support of this legislation.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 1166

       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 ``Federal Employee Combat Zone 
     Tax Parity Act''.

     SEC. 2. EXCLUSION FROM GROSS INCOME FOR CERTAIN COMBAT ZONE 
                   COMPENSATION OF CIVILIAN EMPLOYEES OF THE 
                   UNITED STATES.

       (a) In General.--Section 112 of the Internal Revenue Code 
     of 1986 (relating to certain combat zone compensation of 
     members of the Armed Forces) is amended by redesignating 
     subsections (c) and (d) as subsections (d) and (e), 
     respectively, and by inserting after subsection (b) the 
     following new subsection:
       ``(c) Civilian Employees of the United States Government.--
       ``(1) In general.--Gross income does not include so much of 
     the compensation as does not exceed the maximum amount 
     specified in subsection (b) for active service as an employee 
     of the United States for any month during any part of which 
     such employee--
       ``(A) served in a combat zone, or
       ``(B) was hospitalized as a result of wounds, disease, or 
     injury incurred while serving in a combat zone; but this 
     subparagraph shall not apply for any month beginning more 
     than 2 years after the date of the termination of combatant 
     activities in such zone.
       ``(2) Definitions.--For purposes of this subsection--
       ``(A) Employee of the united states.--The term `employee of 
     the United States' has the meaning given such term by section 
     2105 of title 5, United States Code, and includes--
       ``(i) an individual in the commissioned corps of the Public 
     Health Service or the commissioned corps of the National 
     Oceanic and Atmospheric Administration, and
       ``(ii) an individual not otherwise described in the 
     preceding provisions of this subparagraph who is treated as 
     an employee of the United States or an agency thereof for 
     purposes of section 911(b).
       ``(B) Active service.--The term `active service' means 
     active Federal service by an employee of the United 
     States.''.
       (b) Conforming Amendments.--
       (1) Section 2201(b) of such Code is amended by striking 
     ``112(c)'' both places it appears and inserting ``112(d)''.
       (2) The heading for section 112 of such Code is amended to 
     read as follows:

     ``SEC. 112. CERTAIN COMBAT ZONE COMPENSATION OF MEMBERS OF 
                   THE ARMED FORCES AND CIVILIAN EMPLOYEES OF THE 
                   UNITED STATES.''.

       (3) The item relating to section 112 in the table of 
     sections for part III of subchapter B of chapter 1 of such 
     Code is amended to read as follows:

``Sec. 112. Certain combat zone compensation of members of the Armed 
              Forces and civilian employees of the United States.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.
                                 ______