[Congressional Record Volume 153, Number 171 (Tuesday, November 6, 2007)]
[House]
[Pages H12752-H12764]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
HEROES EARNINGS ASSISTANCE AND RELIEF TAX ACT OF 2007
Mr. McDERMOTT. Madam Speaker, I move to suspend the rules and pass
the bill (H.R. 3997) to amend the Internal Revenue Code of 1986 to
provide earnings assistance and tax relief to members of the uniformed
services, volunteer firefighters, and Peace Corps volunteers, and for
other purposes, as amended.
The Clerk read the title of the bill.
The text of the bill is as follows:
[[Page H12753]]
H.R. 3997
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 ``Heroes
Earnings Assistance and Relief Tax Act of 2007''.
(b) Reference.--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--BENEFITS FOR MILITARY AND VOLUNTEER FIREFIGHTERS
Sec. 101. Election to include combat pay as earned income for purposes
of earned income tax credit.
Sec. 102. Modification of mortgage revenue bonds for veterans.
Sec. 103. Survivor and disability payments with respect to qualified
military service.
Sec. 104. Treatment of differential military pay as wages.
Sec. 105. Exclusion from income for benefits provided to volunteer
firefighters and emergency medical responders.
Sec. 106. Special period of limitation when uniformed services retired
pay is reduced as a result of award of disability
compensation.
Sec. 107. Distributions from retirement plans to individuals called to
active duty.
Sec. 108. Disclosure of return information relating to veterans
programs made permanent.
Sec. 109. Contributions of military death gratuities to Roth IRAs and
Education Savings Accounts.
Sec. 110. Suspension of 5-year period during service with the Peace
Corps.
TITLE II--IMPROVEMENTS IN SUPPLEMENTAL SECURITY INCOME
Sec. 201. Treatment of uniformed service cash remuneration as earned
income.
Sec. 202. State annuities for certain veterans to be disregarded in
determining supplemental security income benefits.
Sec. 203. Exclusion of AmeriCorps benefits for purposes of determining
supplemental security income eligibility and benefit
amounts.
Sec. 204. Effective date.
TITLE III--REVENUE PROVISIONS
Sec. 301. Modification of penalty for failure to file partnership
returns.
Sec. 302. Penalty for failure to file S corporation returns.
Sec. 303. Increase in information return penalties.
Sec. 304. Increase in minimum penalty on failure to file a return of
tax.
TITLE I--BENEFITS FOR MILITARY AND VOLUNTEER FIREFIGHTERS
SEC. 101. ELECTION TO INCLUDE COMBAT PAY AS EARNED INCOME FOR
PURPOSES OF EARNED INCOME TAX CREDIT.
(a) In General.--Clause (vi) of section 32(c)(2)(B)
(defining earned income) is amended to read as follows:
``(vi) a taxpayer may elect to treat amounts excluded from
gross income by reason of section 112 as earned income.''.
(b) Sunset Not Applicable.--Section 105 of the Working
Families Tax Relief Act of 2004 (relating to application of
EGTRRA sunset to this title) shall not apply to section
104(b) of such Act.
(c) Effective Date.--The amendment made by this section
shall apply to taxable years ending after December 31, 2007.
SEC. 102. MODIFICATION OF MORTGAGE REVENUE BONDS FOR
VETERANS.
(a) Qualified Mortgage Bonds Used To Finance Residences for
Veterans Without Regard to First-Time Homebuyer
Requirement.--Subparagraph (D) of section 143(d)(2) (relating
to exceptions) is amended by striking ``and before January 1,
2008''.
(b) Increase in Bond Limitation for Alaska, Oregon, and
Wisconsin.--Clause (ii) of section 143(l)(3)(B) (relating to
State veterans limit) is amended by striking ``$25,000,000''
each place it appears and inserting ``$100,000,000''.
(c) Definition of Qualified Veteran.--Paragraph (4) of
section 143(l) (defining qualified veteran) is amended to
read as follows:
``(4) Qualified veteran.--For purposes of this subsection,
the term `qualified veteran' means any veteran who--
``(A) served on active duty, and
``(B) applied for the financing before the date 25 years
after the last date on which such veteran left active
service.''.
(d) Effective Date.--The amendments made by this section
shall apply to bonds issued after December 31, 2007.
SEC. 103. SURVIVOR AND DISABILITY PAYMENTS WITH RESPECT TO
QUALIFIED MILITARY SERVICE.
(a) Plan Qualification Requirement for Death Benefits Under
USERRA-Qualified Active Military Service.--Subsection (a) of
section 401 (relating to requirements for qualification) is
amended by inserting after paragraph (36) the following new
paragraph:
``(37) Death benefits under userra-qualified active
military service.--A trust shall not constitute a qualified
trust unless the plan provides that, in the case of a
participant who dies while performing qualified military
service (as defined in section 414(u)), the survivors of the
participant are entitled to any additional benefits (other
than benefit accruals relating to the period of qualified
military service) provided under the plan had the participant
resumed and then terminated employment on account of
death.''.
(b) Treatment in the Case of Death or Disability Resulting
From Active Military Service for Benefit Accrual Purposes.--
Subsection (u) of section 414 (relating to special rules
relating to veterans' reemployment rights under USERRA) is
amended by redesignating paragraphs (9) and (10) as
paragraphs (10) and (11), respectively, and by inserting
after paragraph (8) the following new paragraph:
``(9) Treatment in the case of death or disability
resulting from active military service.--
``(A) In general.--For benefit accrual purposes, an
employer sponsoring a retirement plan may treat an individual
who dies or becomes disabled (as defined under the terms of
the plan) while performing qualified military service with
respect to the employer maintaining the plan as if the
individual has resumed employment in accordance with the
individual's reemployment rights under chapter 43 of title
38, United States Code, on the day preceding death or
disability (as the case may be) and terminated employment on
the actual date of death or disability. In the case of any
such treatment, and subject to subparagraphs (B) and (C), any
full or partial compliance by such plan with respect to the
benefit accrual requirements of paragraph (8) with respect to
such individual shall be treated for purposes of paragraph
(1) as if such compliance were required under such chapter
43.
``(B) Nondiscrimination requirement.--Subparagraph (A)
shall apply only if all individuals performing qualified
military service with respect to the employer maintaining the
plan (as determined under subsections (b), (c), (m), and (o))
who die or became disabled as a result of performing
qualified military service prior to reemployment by the
employer are credited with service and benefits on reasonably
equivalent terms.
``(C) Determination of benefits.--The amount of employee
contributions and the amount of elective deferrals of an
individual treated as reemployed under subparagraph (A) for
purposes of applying paragraph (8)(C) shall be determined on
the basis of the individual's average actual employee
contributions or elective deferrals for the lesser of--
``(i) the 12-month period of service with the employer
immediately prior to qualified military service, or
``(ii) if service with the employer is less than such 12-
month period, the actual length of continuous service with
the employer.''.
(c) Conforming Amendments.--
(1) Section 404(a)(2) is amended by striking ``and (31)''
and inserting ``(31), and (37)''.
(2) Section 403(b) is amended by adding at the end the
following new paragraph:
``(14) Death benefits under userra-qualified active
military service.--This subsection shall not apply to an
annuity contract unless such contract meets the requirements
of section 401(a)(37).''.
(3) Section 457(g) is amended by adding at the end the
following new paragraph:
``(4) Death benefits under userra-qualified active military
service.--A plan described in paragraph (1) shall not be
treated as an eligible deferred compensation plan unless such
plan meets the requirements of section 401(a)(37).''.
(d) Effective Date.--
(1) In general.--The amendments made by this section shall
apply with respect to deaths and disabilities occurring on or
after January 1, 2007.
(2) Provisions relating to plan amendments.--
(A) In general.--If this subparagraph applies to any plan
or contract amendment, such plan or contract shall be treated
as being operated in accordance with the terms of the plan
during the period described in subparagraph (B)(iii).
(B) Amendments to which subparagraph (A) applies.--
(i) In general.--Subparagraph (A) shall apply to any
amendment to any plan or annuity contract which is made--
(I) pursuant to the amendments made by subsection (a) or
pursuant to any regulation issued by the Secretary of the
Treasury under subsection (a), and
(II) on or before the last day of the first plan year
beginning on or after January 1, 2009.
In the case of a governmental plan (as defined in section
414(d) of the Internal Revenue Code of 1986), this clause
shall be applied by substituting ``2011'' for ``2009'' in
subclause (II).
(ii) Conditions.--This paragraph shall not apply to any
amendment unless--
(I) the plan or contract is operated as if such plan or
contract amendment were in effect for the period described in
clause (iii), and
(II) such plan or contract amendment applies retroactively
for such period.
(iii) Period described.--The period described in this
clause is the period--
(I) beginning on the effective date specified by the plan,
and
[[Page H12754]]
(II) ending on the date described in clause (i)(II) (or, if
earlier, the date the plan or contract amendment is adopted).
SEC. 104. TREATMENT OF DIFFERENTIAL MILITARY PAY AS WAGES.
(a) Income Tax Withholding on Differential Wage Payments.--
(1) In general.--Section 3401 (relating to definitions) is
amended by adding at the end the following new subsection:
``(h) Differential Wage Payments to Active Duty Members of
the Uniformed Services.--
``(1) In general.--For purposes of subsection (a), any
differential wage payment shall be treated as a payment of
wages by the employer to the employee.
``(2) Differential wage payment.--For purposes of paragraph
(1), the term `differential wage payment' means any payment
which--
``(A) is made by an employer to an individual with respect
to any period during which the individual is performing
service in the uniformed services (as defined in chapter 43
of title 38, United States Code) while on active duty for a
period of more than 30 days, and
``(B) represents all or a portion of the wages the
individual would have received from the employer if the
individual were performing service for the employer.''.
(2) Effective date.--The amendment made by this subsection
shall apply to remuneration paid after December 31, 2007.
(b) Treatment of Differential Wage Payments for Retirement
Plan Purposes.--
(1) Pension plans.--
(A) In general.--Section 414(u) (relating to special rules
relating to veterans' reemployment rights under USERRA), as
amended by section 103(b), is amended by adding at the end
the following new paragraph:
``(12) Treatment of differential wage payments.--
``(A) In general.--Except as provided in this paragraph,
for purposes of applying this title to a retirement plan to
which this subsection applies--
``(i) an individual receiving a differential wage payment
shall be treated as an employee of the employer making the
payment,
``(ii) the differential wage payment shall be treated as
compensation, and
``(iii) the plan shall not be treated as failing to meet
the requirements of any provision described in paragraph
(1)(C) by reason of any contribution or benefit which is
based on the differential wage payment.
``(B) Special rule for distributions.--
``(i) In general.--Notwithstanding subparagraph (A)(i), for
purposes of section 401(k)(2)(B)(i)(I), 403(b)(7)(A)(ii),
403(b)(11)(A), or 457(d)(1)(A)(ii), an individual shall be
treated as having been severed from employment during any
period the individual is performing service in the uniformed
services described in section 3401(h)(2)(A).
``(ii) Limitation.--If an individual elects to receive a
distribution by reason of clause (i), the plan shall provide
that the individual may not make an elective deferral or
employee contribution during the 6-month period beginning on
the date of the distribution.
``(C) Nondiscrimination requirement.--Subparagraph (A)(iii)
shall apply only if all employees of an employer (as
determined under subsections (b), (c), (m), and (o))
performing service in the uniformed services described in
section 3401(h)(2)(A) are entitled to receive differential
wage payments on reasonably equivalent terms and, if eligible
to participate in a retirement plan maintained by the
employer, to make contributions based on the payments on
reasonably equivalent terms. For purposes of applying this
subparagraph, the provisions of paragraphs (3), (4), and (5)
of section 410(b) shall apply.
``(D) Differential wage payment.--For purposes of this
paragraph, the term `differential wage payment' has the
meaning given such term by section 3401(h)(2).''.
(B) Conforming amendment.--The heading for section 414(u)
is amended by inserting ``and to Differential Wage Payments
to Members on Active Duty'' after ``USERRA''.
(2) Differential wage payments treated as compensation for
individual retirement plans.--Section 219(f)(1) (defining
compensation) is amended by adding at the end the following
new sentence: ``The term compensation includes any
differential wage payment (as defined in section
3401(h)(2)).''.
(3) Effective date.--The amendments made by this subsection
shall apply to years beginning after December 31, 2007.
(c) Provisions Relating to Plan Amendments.--
(1) In general.--If this subsection applies to any plan or
annuity contract amendment, such plan or contract shall be
treated as being operated in accordance with the terms of the
plan or contract during the period described in paragraph
(2)(B)(i).
(2) Amendments to which section applies.--
(A) In general.--This subsection shall apply to any
amendment to any plan or annuity contract which is made--
(i) pursuant to any amendment made by subsection (b)(1),
and
(ii) on or before the last day of the first plan year
beginning on or after January 1, 2009.
In the case of a governmental plan (as defined in section
414(d) of the Internal Revenue Code of 1986), this
subparagraph shall be applied by substituting ``2011'' for
``2009'' in clause (ii).
(B) Conditions.--This subsection shall not apply to any
plan or annuity contract amendment unless--
(i) during the period beginning on the date the amendment
described in subparagraph (A)(i) takes effect and ending on
the date described in subparagraph (A)(ii) (or, if earlier,
the date the plan or contract amendment is adopted), the plan
or contract is operated as if such plan or contract amendment
were in effect, and
(ii) such plan or contract amendment applies retroactively
for such period.
SEC. 105. EXCLUSION FROM INCOME FOR BENEFITS PROVIDED TO
VOLUNTEER FIREFIGHTERS AND EMERGENCY MEDICAL
RESPONDERS.
(a) In General.--Part III of subchapter B of chapter 1
(relating to items specifically excluded from gross income)
is amended by inserting after section 139A the following new
section:
``SEC. 139B. BENEFITS PROVIDED TO VOLUNTEER FIREFIGHTERS AND
EMERGENCY MEDICAL RESPONDERS.
``(a) In General.--In the case of any member of a qualified
volunteer emergency response organization, gross income shall
not include--
``(1) any qualified State and local tax benefit, and
``(2) any qualified payment.
``(b) Denial of Double Benefits.--In the case of any member
of a qualified volunteer emergency response organization--
``(1) the deduction under 164 shall be determined with
regard to any qualified State and local tax benefit, and
``(2) expenses paid or incurred by the taxpayer in
connection with the performance of services as such a member
shall be taken into account under section 170 only to the
extent such expenses exceed the amount of any qualified
payment excluded from gross income under subsection (a).
``(c) Definitions.--For purposes of this section--
``(1) Qualified state and local tax benefit.--The term
`qualified state and local tax benefit' means any reduction
or rebate of a tax described in paragraph (1), (2), or (3) of
section 164(a) provided by a State or political division
thereof on account of services performed as a member of a
qualified volunteer emergency response organization.
``(2) Qualified payment.--
``(A) In general.--The term `qualified payment' means any
payment (whether reimbursement or otherwise) provided by a
State or political division thereof on account of the
performance of services as a member of a qualified volunteer
emergency response organization.
``(B) Applicable dollar limitation.--The amount determined
under subparagraph (A) for any taxable year shall not exceed
$30 multiplied by the number of months during such year that
the taxpayer performs such services.
``(3) Qualified volunteer emergency response
organization.--The term `qualified volunteer emergency
response organization' means any volunteer organization--
``(A) which is organized and operated to provide
firefighting or emergency medical services for persons in the
State or political subdivision, as the case may be, and
``(B) which is required (by written agreement) by the State
or political subdivision to furnish firefighting or emergency
medical services in such State or political subdivision.''.
(b) Clerical Amendment.--The table of sections for such
part is amended by inserting after the item relating to
section 139A the following new item:
``Sec. 139B. Benefits provided to volunteer firefighters and emergency
medical responders.''.
(c) 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. SPECIAL PERIOD OF LIMITATION WHEN UNIFORMED
SERVICES RETIRED PAY IS REDUCED AS A RESULT OF
AWARD OF DISABILITY COMPENSATION.
(a) In General.--Subsection (d) of section 6511 (relating
to special rules applicable to income taxes) is amended by
adding at the end the following new paragraph:
``(8) Special rules when uniformed services retired pay is
reduced as a result of award of disability compensation.--
``(A) Period of limitation on filing claim.--If the claim
for credit or refund relates to an overpayment of tax imposed
by subtitle A on account of--
``(i) the reduction of uniformed services retired pay
computed under section 1406 or 1407 of title 10, United
States Code, or
``(ii) the waiver of such pay under section 5305 of title
38 of such Code,
as a result of an award of compensation under title 38 of
such Code pursuant to a determination by the Secretary of
Veterans Affairs, the 3-year period of limitation prescribed
in subsection (a) shall be extended, for purposes of
permitting a credit or refund based upon the amount of such
reduction or waiver, until the end of the 1-year period
beginning on the date of such determination.
``(B) Limitation to 5 taxable years.--Subparagraph (A)
shall not apply with respect to any taxable year which began
more than 5 years before the date of such determination.''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to claims
[[Page H12755]]
for credit or refund filed after the date of the enactment of
this Act.
(c) Transition Rules.--In the case of a determination
described in paragraph (8) of section 6511(d) of the Internal
Revenue Code of 1986 (as added by this section) which is made
by the Secretary of Veterans Affairs after December 31, 2000,
and before the date of the enactment of this Act, such
paragraph--
(1) shall not apply with respect to any taxable year which
began before January 1, 2001, and
(2) shall be applied by substituting for ``the date of such
determination'' in subparagraph (A) thereof.
SEC. 107. DISTRIBUTIONS FROM RETIREMENT PLANS TO INDIVIDUALS
CALLED TO ACTIVE DUTY.
(a) In General.--Clause (iv) of section 72(t)(2)(G) is
amended by striking ``, and before December 31, 2007''.
(b) Effective Date.--The amendment made by this section
shall apply to individuals ordered or called to active duty
on or after December 31, 2007.
SEC. 108. DISCLOSURE OF RETURN INFORMATION RELATING TO
VETERANS PROGRAMS MADE PERMANENT.
(a) In General.--Subparagraph (D) of section 6103(l)(7)
(relating to disclosure of return information to Federal,
State, and local agencies administering certain programs
under the Social Security Act, the Food Stamp Act of 1977, or
title 38, United States Code or certain housing assistance
programs) is amended by striking the last sentence.
(b) Effective Date.--The amendments made by this section
shall apply to requests made after September 30, 2008.
SEC. 109. CONTRIBUTIONS OF MILITARY DEATH GRATUITIES TO ROTH
IRAS AND EDUCATION SAVINGS ACCOUNTS.
(a) Provision in Effect Before Pension Protection Act.--
Subsection (e) of section 408A (relating to qualified
rollover contribution), as in effect before the amendments
made by section 824 of the Pension Protection Act of 2006, is
amended to read as follows:
``(e) Qualified Rollover Contribution.--For purposes of
this section--
``(1) In general.--The term `qualified rollover
contribution' means a rollover contribution to a Roth IRA
from another such account, or from an individual retirement
plan, but only if such rollover contribution meets the
requirements of section 408(d)(3). Such term includes a
rollover contribution described in section 402A(c)(3)(A). For
purposes of section 408(d)(3)(B), there shall be disregarded
any qualified rollover contribution from an individual
retirement plan (other than a Roth IRA) to a Roth IRA.
``(2) Military death gratuity.--
``(A) In general.--The term `qualified rollover
contribution' includes a contribution to a Roth IRA
maintained for the benefit of an individual made before the
end of the 1-year period beginning on the date on which such
individual receives an amount under section 1477 of title 10,
United States Code, or section 1967 of title 38 of such Code,
with respect to a person, to the extent that such
contribution does not exceed--
``(i) the sum of the amounts received during such period by
such individual under such sections with respect to such
person, reduced by
``(ii) the amounts so received which were contributed to a
Coverdell education savings account under section 530(d)(9).
``(B) Annual limit on number of rollovers not to apply.--
Section 408(d)(3)(B) shall not apply with respect to amounts
treated as a rollover by subparagraph (A).
``(C) Application of section 72.--For purposes of applying
section 72 in the case of a distribution which is not a
qualified distribution, the amount treated as a rollover by
reason of subparagraph (A) shall be treated as investment in
the contract.''.
(b) Provision in Effect After Pension Protection Act.--
Subsection (e) of section 408A, as in effect after the
amendments made by section 824 of the Pension Protection Act
of 2006, is amended to read as follows:
``(e) Qualified Rollover Contribution.--For purposes of
this section--
``(1) In general.--The term `qualified rollover
contribution' means a rollover contribution--
``(A) to a Roth IRA from another such account,
``(B) from an eligible retirement plan, but only if--
``(i) in the case of an individual retirement plan, such
rollover contribution meets the requirements of section
408(d)(3), and
``(ii) in the case of any eligible retirement plan (as
defined in section 402(c)(8)(B) other than clauses (i) and
(ii) thereof), such rollover contribution meets the
requirements of section 402(c), 403(b)(8), or 457(e)(16), as
applicable.
For purposes of section 408(d)(3)(B), there shall be
disregarded any qualified rollover contribution from an
individual retirement plan (other than a Roth IRA) to a Roth
IRA.
``(2) Military death gratuity.--
``(A) In general.--The term `qualified rollover
contribution' includes a contribution to a Roth IRA
maintained for the benefit of an individual made before the
end of the 1-year period beginning on the date on which such
individual receives an amount under section 1477 of title 10,
United States Code, or section 1967 of title 38 of such Code,
with respect to a person, to the extent that such
contribution does not exceed--
``(i) the sum of the amounts received during such period by
such individual under such sections with respect to such
person, reduced by
``(ii) the amounts so received which were contributed to a
Coverdell education savings account under section 530(d)(9).
``(B) Annual limit on number of rollovers not to apply.--
Section 408(d)(3)(B) shall not apply with respect to amounts
treated as a rollover by the subparagraph (A).
``(C) Application of section 72.--For purposes of applying
section 72 in the case of a distribution which is not a
qualified distribution, the amount treated as a rollover by
reason of subparagraph (A) shall be treated as investment in
the contract.''.
(c) Education Savings Accounts.--Subsection (d) of section
530 is amended by adding at the end the following new
paragraph:
``(9) Military death gratuity.--
``(A) In general.--For purposes of this section, the term
`rollover contribution' includes a contribution to a
Coverdell education savings account made before the end of
the 1-year period beginning on the date on which the
contributor receives an amount under section 1477 of title
10, United States Code, or section 1967 of title 38 of such
Code, with respect to a person, to the extent that such
contribution does not exceed--
``(i) the sum of the amounts received during such period by
such contributor under such sections with respect to such
person, reduced by
``(ii) the amounts so received which were contributed to a
Roth IRA under section 408A(e)(2) or to another Coverdell
education savings account.
``(B) Annual limit on number of rollovers not to apply.--
The last sentence of paragraph (5) shall not apply with
respect to amounts treated as a rollover by the subparagraph
(A).
``(C) Application of section 72.--For purposes of applying
section 72 in the case of a distribution which is includible
in gross income under paragraph (1), the amount treated as a
rollover by reason of subparagraph (A) shall be treated as
investment in the contract.''.
(d) Effective Dates.--
(1) In general.--Except as provided by paragraphs (2) and
(3), the amendments made by this section shall apply with
respect to deaths from injuries occurring on or after the
date of the enactment of this Act.
(2) Application of amendments to deaths from injuries
occurring on or after october 7, 2001, and before
enactment.--The amendments made by this section shall apply
to any contribution made pursuant to section 408A(e)(2) or
530(d)(5) of the Internal Revenue Code of 1986, as amended by
this Act, with respect to amounts received under section 1477
of title 10, United States Code, or under section 1967 of
title 38 of such Code, for deaths from injuries occurring on
or after October 7, 2001, and before the date of the
enactment of this Act if such contribution is made not later
than 1 year after the date of the enactment of this Act.
(3) Pension protection act changes.--Section 408A(e)(1) of
the Internal Revenue Code of 1986 (as in effect after the
amendments made by subsection (b)) shall apply to taxable
years beginning after December 31, 2007.
SEC. 110. SUSPENSION OF 5-YEAR PERIOD DURING SERVICE WITH THE
PEACE CORPS.
(a) In General.--Subsection (d) of section 121 (relating to
special rules) is amended by adding at the end the following
new paragraph:
``(12) Peace corps.--
``(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 outside the United States--
``(i) on qualified official extended duty (as defined in
paragraph (9)(C)) as an employee of the Peace Corps, or
``(ii) as an enrolled volunteer or volunteer leader under
section 5 or 6 (as the case may be) of the Peace Corps Act
(22 U.S.C. 2504, 2505).
``(B) Applicable rules.--For purposes of subparagraph (A),
rules similar to the rules of subparagraphs (B) and (D) shall
apply.''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to taxable years beginning after December 31,
2007.
TITLE II--IMPROVEMENTS IN SUPPLEMENTAL SECURITY INCOME
SEC. 201. TREATMENT OF UNIFORMED SERVICE CASH REMUNERATION AS
EARNED INCOME.
(a) In General.--Section 1612(a)(1)(A) of the Social
Security Act (42 U.S.C. 1382a(a)(1)(A)) is amended by
inserting ``(and, in the case of cash remuneration paid for
service as a member of a uniformed service (other than
payments described in paragraph (2)(H) of this subsection or
subsection (b)(20)), without regard to the limitations
contained in section 209(d))'' before the semicolon.
(b) Certain Housing Payments Treated as In-Kind Support and
Maintenance.--Section 1612(a)(2) of such Act (42 U.S.C.
1382a(a)(2)) is amended--
(1) by striking ``and'' at the end of subparagraph (F);
(2) by striking the period at the end of subparagraph (G)
and inserting ``; and''; and
(3) by adding at the end the following:
``(H) payments to or on behalf of a member of a uniformed
service for housing of the
[[Page H12756]]
member (and his or her dependents, if any) on a facility of a
uniformed service, including payments provided under section
403 of title 37, United States Code, for housing that is
acquired or constructed under subchapter IV of chapter 169 of
title 10 of such Code, or any related provision of law, and
any such payments shall be treated as support and maintenance
in kind subject to subparagraph (A) of this paragraph.''.
SEC. 202. STATE ANNUITIES FOR CERTAIN VETERANS TO BE
DISREGARDED IN DETERMINING SUPPLEMENTAL
SECURITY INCOME BENEFITS.
(a) Income Disregard.--Section 1612(b) of the Social
Security Act (42 U.S.C. 1382a(b)) is amended--
(1) by striking ``and'' at the end of paragraph (22);
(2) by striking the period at the end of paragraph (23) and
inserting ``; and''; and
(3) by adding at the end the following:
``(24) any annuity paid by a State to the individual (or
such spouse) on the basis of the individual's being a veteran
(as defined in section 101 of title 38, United States Code),
and blind, disabled, or aged.''.
(b) Resource Disregard.--Section 1613(a) of such Act (42
U.S.C. 1382b(a)) is amended--
(1) by striking ``and'' at the end of paragraph (14);
(2) by striking the period at the end of paragraph (15) and
inserting ``; and''; and
(3) by inserting after paragraph (15) the following:
``(16) for the month of receipt and every month thereafter,
any annuity paid by a State to the individual (or such
spouse) on the basis of the individual's being a veteran (as
defined in section 101 of title 38, United States Code), and
blind, disabled, or aged.''.
SEC. 203. EXCLUSION OF AMERICORPS BENEFITS FOR PURPOSES OF
DETERMINING SUPPLEMENTAL SECURITY INCOME
ELIGIBILITY AND BENEFIT AMOUNTS.
Section 1612(b) of the Social Security Act (42 U.S.C.
1382a(b)), as amended by section 202(a) of this Act, is
amended--
(1) in paragraph (23), by striking ``and'' at the end;
(2) in paragraph (24), by striking the period and inserting
``; and''; and
(3) by adding at the end the following:
``(25) any benefit (whether cash or in-kind) conferred upon
(or paid on behalf of) a participant in an AmeriCorps
position approved by the Corporation for National and
Community Service under section 123 of the National and
Community Service Act of 1990 (42 U.S.C. 12573).''.
SEC. 204. EFFECTIVE DATE.
The amendments made by this title shall be effective with
respect to benefits payable for months beginning after 60
days after the date of the enactment of this Act.
TITLE III--REVENUE PROVISIONS
SEC. 301. MODIFICATION OF PENALTY FOR FAILURE TO FILE
PARTNERSHIP RETURNS.
(a) Extension of Time Limitation.--Subsection (a) of
section 6698 (relating to general rule) is amended by
striking ``5 months'' and inserting ``12 months''.
(b) Increase in Penalty Amount.--Paragraph (1) of section
6698(b) is amended by striking ``$50'' and inserting
``$100''.
(c) Effective Date.--The amendments made by this section
shall apply to returns required to be filed after the date of
the enactment of this Act.
SEC. 302. PENALTY FOR FAILURE TO FILE S CORPORATION RETURNS.
(a) In General.--Part I of subchapter B of chapter 68
(relating to assessable penalties) is amended by adding at
the end the following new section:
``SEC. 6699. FAILURE TO FILE S CORPORATION RETURN.
``(a) General Rule.--In addition to the penalty imposed by
section 7203 (relating to willful failure to file return,
supply information, or pay tax), if any S corporation
required to file a return under section 6037 for any taxable
year--
``(1) fails to file such return at the time prescribed
therefor (determined with regard to any extension of time for
filing), or
``(2) files a return which fails to show the information
required under section 6037,
such S corporation shall be liable for a penalty determined
under subsection (b) for each month (or fraction thereof)
during which such failure continues (but not to exceed 12
months), unless it is shown that such failure is due to
reasonable cause.
``(b) Amount Per Month.--For purposes of subsection (a),
the amount determined under this subsection for any month is
the product of--
``(1) $100, multiplied by
``(2) the number of persons who were shareholders in the S
corporation during any part of the taxable year.
``(c) Assessment of Penalty.--The penalty imposed by
subsection (a) shall be assessed against the S corporation.
``(d) Deficiency Procedures Not to Apply.--Subchapter B of
chapter 63 (relating to deficiency procedures for income,
estate, gift, and certain excise taxes) shall not apply in
respect of the assessment or collection of any penalty
imposed by subsection (a).''.
(b) Clerical Amendment.--The table of sections for part I
of subchapter B of chapter 68 is amended by adding at the end
the following new item:
``Sec. 6699. Failure to file S corporation return.''.
(c) Effective Date.--The amendments made by this section
shall apply to returns required to be filed after the date of
the enactment of this Act.
SEC. 303. INCREASE IN INFORMATION RETURN PENALTIES.
(a) Failure To File Correct Information Returns.--
(1) In general.--Subsections (a)(1), (b)(1)(A), and
(b)(2)(A) of section 6721 are each amended by striking
``$50'' and inserting ``$100''.
(2) Aggregate annual limitation.--Subsections (a)(1),
(d)(1)(A), and (e)(3)(A) of section 6721 are each amended by
striking ``$250,000'' and inserting ``$600,000''.
(b) Reduction Where Correction Within 30 Days.--
(1) In general.--Subparagraph (A) of section 6721(b)(1) is
amended by striking ``$15'' and inserting ``$25''.
(2) Aggregate annual limitation.--Subsections (b)(1)(B) and
(d)(1)(B) of section 6721 are each amended by striking
``$75,000'' and inserting ``$200,000''.
(c) Reduction Where Correction on or Before August 1.--
(1) In general.--Subparagraph (A) of section 6721(b)(2) is
amended by striking ``$30'' and inserting ``$60''.
(2) Aggregate annual limitation.--Subsections (b)(2)(B) and
(d)(1)(C) of section 6721 are each amended by striking
``$150,000'' and inserting ``$400,000''.
(d) Aggregate Annual Limitations for Persons With Gross
Receipts of Not More Than $5,000,000.--Paragraph (1) of
section 6721(d) is amended--
(1) by striking ``$100,000'' in subparagraph (A) and
inserting ``$250,000'',
(2) by striking ``$25,000'' in subparagraph (B) and
inserting ``$75,000'', and
(3) by striking ``$50,000'' in subparagraph (C) and
inserting ``$150,000''.
(e) Penalty in Case of Intentional Disregard.--Paragraph
(2) of section 6721(e) is amended by striking ``$100'' and
inserting ``$250''.
(f) Failure To Furnish Correct Payee Statements.--
(1) In general.--Subsection (a) of section 6722 is amended
by striking ``$50'' and inserting ``$100''.
(2) Aggregate annual limitation.--Subsections (a) and
(c)(2)(A) of section 6722 are each amended by striking
``$100,000'' and inserting ``$600,000''.
(3) Penalty in case of intentional disregard.--Paragraph
(1) of section 6722(c) is amended by striking ``$100'' and
inserting ``$250''.
(g) Failure To Comply With Other Information Reporting
Requirements.--Section 6723 is amended--
(1) by striking ``$50'' and inserting ``$100'', and
(2) by striking ``$100,000'' and inserting ``$600,000''.
(h) Effective Date.--The amendments made by this section
shall apply with respect to information returns required to
be filed on or after January 1, 2008.
SEC. 304. INCREASE IN MINIMUM PENALTY ON FAILURE TO FILE A
RETURN OF TAX.
(a) In General.--Subsection (a) of section 6651 is amended
by striking ``$100'' in the last sentence and inserting
``$225''.
(b) Effective Date.--The amendment made by this section
shall apply to returns the due date for the filing of which
(including extensions) is after December 31, 2007.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Washington (Mr. McDermott) and the gentleman from Pennsylvania (Mr.
English) each will control 20 minutes.
The Chair recognizes the gentleman from Washington.
Mr. McDERMOTT. Madam Speaker, Martin Luther King said, ``Everybody
can be great because anybody can serve. You only need a heart full of
grace and a soul generated by love.''
Those that volunteer to serve our country deserve our thanks and our
support. Members of our Armed Forces make tremendous sacrifices as they
honorably perform their duties and deserve so much in return for their
service.
The Heroes Earnings Assistance and Relief Act is an important piece
of legislation that would eliminate many inequities that presently
exist in Federal statutes affecting those performing service to our
country.
The bill makes several improvements in the Tax Code for
servicemembers and their families. It includes a provision to remove
obstacles for Americans who wish to serve our Nation overseas through
the Peace Corps by providing relief from capital gains taxes on the
sale of a home.
Additionally, the bill makes several important changes to the
Supplemental Security Income program, known as SSI. The SSI program
provides critical benefits for servicemembers who are caring for a
severely disabled spouse or child. This bill would change SSI's
treatment of certain forms of military compensation when determining
SSI eligibility and benefit amounts for military families. As a result,
more military families will be able to benefit from this important
safety net. This bill would remove penalties that presently exist for
blind,
[[Page H12757]]
disabled, and elderly veterans under the SSI program.
And, finally, the bill would end the disparate treatment of
compensation that is paid to some AmeriCorps volunteers but not to
others under the SSI program. This modest change would enable disabled
Americans to serve their country and their community despite their
disability. For some Americans, AmeriCorps can provide a pathway for
the disabled to gain the skills to reenter the workforce.
At this time, I would like to enter into the Record the following
documents.
Stories of Americans With Disabilities in National Service
People with disabilities volunteer for the same reasons
that anyone else does--to give back to their communities, to
improve their surroundings, and to be active and engaged in
life. Some national service participants who have
disabilities volunteer with organizations that serve other
people with disabilities, while others focus their efforts on
helping to meet a wide range of critical community needs. The
individuals profiled here represent a small sampling of the
many people with disabilities involved in the Corporation for
National and Community Service's Senior Corps, AmeriCorps,
and Learn and Serve America programs.
americorps*state and national
Steve Hoad, AmeriCorps Alumnus 2001, AmeriCorps*VISTA
Alumnus 2003 Augusta, Maine; disability: blind.
Steve Hoad served with the Maine Conservation Corps in
Augusta as a coordinator of volunteers on a statewide basis.
The program, called SERVE--Maine (State Environmental
Resource Volunteer Effort for Maine), identifies volunteers
for outdoor or natural resource projects sponsored by
government agencies or nonprofit groups. As a person who is
blind, Steve thinks it's important for lots of organizations,
including the Corporation for National and Community Service,
to address inclusion. Steve feels his contributions are
important for the additional reason that, in his opinion, ``.
. . people with disabilities have been left on the sidelines
and pushed into isolation by a couple of different ideas that
people seem to have. One is that because maybe someone looks
different or acts differently or speaks differently, that
they're not as smart; and the other is that because someone
is disabled, they can't contribute anything, they need to be
helped. Those two ideas become very exclusionary.''
americorps*vista
Dawn Facka, AmeriCorps*VISTA Alumna 2001, Anchorage,
Alaska; current location: Charleston, South Carolina;
disability: hearing impaired.
Dawn Facka, a service-learning coordinator with
AmeriCorps*VISTA, advocates for people with disabilities and
serves as a role model for young men and women with
disabilities that come to serve in AmeriCorps Programs. In
addition, she teaches others about the importance of
inclusion and facilitates disability awareness and diversity
training to AmeriCorps*NCCC members. She strives to create a
work environment that is welcoming and understanding to those
individuals with disabilities by advocating for community
involvement and supporting organizations that support and
help individuals with disabilities. She says that ``If
AmeriCorps, had not opened the doors of opportunity to me, I
most likely would still be ashamed and embarrassed of who I
am and [how] society has labeled me. I would still be
apologizing to people who did not tolerate or accept my
hearing loss. I can't begin to show my gratitude . . . to
AmeriCorps for showing me another world.''
americorps*nccc
Joe Tierney, AmeriCorps*NCCC Alumnus 2001 and 2002,
Charleston, South Carolina; current location: Boston,
Massachusetts; disability: traumatic brain injury.
Joe Tierney dedicated two years of his life to service with
Americorps*NCCC. During these years he tutored children,
built houses, designed and built wheelchair ramps, surveyed
and mapped a historical graveyard, blazed trails, worked at a
camp for children and adults with disabilities, and much
more. Of his time there he writes, ``Throughout my service I
met some amazing individuals, traveled to some fascinating
locations, and learned a variety of skills, but most
importantly my service gave me the opportunity to recover,
the ability to experience life with a smile. I made the
decision to join AmeriCorps because I felt an obligation to
give back, I understood that I was very fortunate to have
recovered and that I would have never done it without the
help of many thoughtful, committed, competent individuals.''
learn and serve america
Jared (not his real name), Learn and Serve America Alumnus
2002, Hampshire, Massachusetts; current location: Hampshire,
Massachusetts; disability: significant disabilities.
Jared (not his real name), a high school student with
significant disabilities, participated fully in a water
quality testing initiative though a school-based service-
learning project in Western Massachusetts. During the
project, Jared spoke of all that he learned about water
quality and the effects on the environment. His family and
teachers were impressed with the project because it provided
Jared with a meaningful experience to give back to his
community as well as taught him vital life skills. His mother
speaks of the project as being one of the few opportunities
Jared has had to mingle with other students outside of
special education.
rsvp
Dean Homerick, RSVP Volunteer, current location: Lexington,
Ohio; disability: debilitating arthritis.
Dean Homerick began service as an RSVP volunteer as soon as
he became eligible--the day he turned 55. He is involved in
environmental issues and emergency operations. He volunteers
regularly at the Columbus Zoo, participating in education
programs to teach children about animals, as well as
volunteering at a local nature center and at the Ohio Bird
Sanctuary, where he edits a monthly newsletter. He also
volunteers for the American Red Cross and is the volunteer
coordinator for the Richland County Emergency Operations
Center, charged with alerting volunteers in the event of an
emergency.
corporation for national and community service
The Corporation for National and Community Service provides
opportunities for Americans of all ages and backgrounds to
serve their communities and country through three programs:
Senior Corps, AmeriCorps, and Learn and Serve America. This
year, more than 1.6 million individuals will participate in
the Corporation's programs, helping thousands of nonprofit
organizations, faith- based groups, schools, and government
agencies build their capacity to meet critical local needs in
education, the environment, public safety, disaster relief,
and other areas. Together with the USA Freedom Corps, the
Corporation is working to build a culture of citizenship,
service, and responsibility in America.
____
Delaware Man Honored With President's Volunteer Service Award at
National Disability Inclusion and National Service Conference
On December 9, Claude Allen, Assistant to the President for
Domestic Policy, spoke at the National Disability Inclusion
and National Service Conference. At the conclusion of his
remarks, Allen honored outstanding volunteer Emmanuel Jenkins
with the President's Volunteer Service Award.
Jenkins, who suffers from Cerebral Palsy, has volunteered
for nearly ten years and recently graduated from his second
term as an AmeriCorps member. His primary reason for
participation in AmeriCorps was to help people. Emmanuel, now
21, started volunteering with children when he was only 11
years old. He ran a computer lab for the Boys and Girls Club
as well as a program called Ticket to the Future, which
taught students how to set and attain life goals. As a junior
staff member, he assisted with a program called Family Day
and tutored children in math. Emmanuel talks about the
importance of encouraging students and always tells them,
``You can do that because a winner never stops trying.''
Emmanuel currently lives in Dover, Delaware and volunteers
with his local school district mentoring a local at-risk
youth. His motivation stems from a public service
announcement he saw on TV that said, ``You can be part of the
problem or part of the solution.'' He strives to be part of
the solution. Emmanuel is also a certified motivational
speaker and his message is to challenge others with the
quote, ``When you give, you get!''
The President's Volunteer Service Award was created at the
President's direction by the President's Council on Service
and Civic Participation. The Award is available to youth ages
14 and under who have completed 50 or more hours of volunteer
service; to individuals 15 and older who have completed 100
or more hours; and to families or groups who have completed
200 or more hours. For more information about the Award,
please visit http://www.presidentialserviceawards
.gov.
The 2005 National Conference on Disability Inclusion and
National Service provided a forum for the national service
and disability communities to come together and identify,
develop, and share, new innovations that ensure a meaningful
opportunity for all Americans to engage in volunteer service.
The conference, sponsored by the Corporation for National and
Community Service, brought together some 350 leaders from the
disability and national service communities across the
country to develop strategies for engaging more people with
disabilities in volunteering and service.
I thank Mr. Rangel for being a champion for those that unselfishly
serve our Nation.
Madam Speaker, I reserve the balance of my time.
{time} 1130
Mr. ENGLISH of Pennsylvania. Madam Speaker, I yield myself such time
as I may consume.
Madam Speaker, we cannot express enough the tremendous debt of
gratitude we owe the brave men and women who defend our freedoms every
day. It is with great honor that I join my colleagues on the House
floor today and
[[Page H12758]]
help lead the debate on H.R. 3997, the Heroes Earnings Assistance and
Relief Tax Act. This legislation is more than a simple cleanup of some
of the disincentives, distortions and oversights that have
disadvantaged our active duty military and veterans in the Tax Code.
This legislation is significant because it sends a clear message that
even as many of our best and brightest are currently in harm's way in
theaters where they are facing hostile fire, this Congress is prepared
to work on a bipartisan basis to consider every option and every
opportunity to improve the lives of their families and their
predecessors.
The $2.3 billion tax package which was reported out of the House Ways
and Means Committee last week will bolster tax and Social Security
benefits for military servicemembers, veterans and volunteers. This
important measure will allow our active military men and women to
benefit from the earned income tax credit by allowing them to pair
their nontaxable combat pay with their earned income.
H.R. 3997 will ease the financial burden of losing a loved one by
allowing survivors to put military death benefits into Roth IRAs
without limitations. Furthermore, this legislation will ensure military
Reservists will have the opportunity to make penalty-free withdrawals
from their retirement plans, including 401(k) and IRA accounts. If
deployed, these men and women will be able to provide the financial
footing their families may depend on during their absence.
I am also pleased that the majority, in bringing this bill to the
floor today, included in it an amendment I offered and withdrew in
committee. I appreciate the bipartisan support displayed on this
critical issue. Specifically, my provision will expand Social Security
income benefits to our aged, disabled and blind veterans.
Under current law, the Social Security Administration counts
annuities paid by State governments to veterans who are blind, disabled
or aged as earned income. As a result, veterans in certain States like
Pennsylvania, which provides paralyzed vets with an $1,800-per-year
annuity, may be denied Federal benefits or receive a lower amount than
veterans in States that do not provide such annuities. H.R. 3997 will
correct this inequity in the law and ensure that annuities awarded by
States to vets with certain disabilities are disregarded when
determining SSI benefits.
Madam Speaker, the dedication and bravery made by American soldiers
have allowed us to exercise our everyday freedoms. Many have made the
ultimate sacrifice, and it is our duty in Congress to make sure that
veterans rights and interests are protected and served. As many of us
prepare for this upcoming Veterans Day, this legislation reaches our
Chamber at the proper time and includes the right incentives to help
our men and women in uniform. Overall, this legislation is a bundle of
commonsense changes to help those who have contributed to the defense
of our country and the protection of our freedoms. I am proud to be a
supporter of this initiative, and I retain the balance of my time.
Mr. McDERMOTT. Madam Speaker, I yield 2 minutes to the gentleman from
Massachusetts (Mr. Neal).
Mr. NEAL of Massachusetts. Madam Speaker, I am delighted that this
bipartisan legislation to assist our veterans is before the House
today. It also is certainly of great assistance to our active duty
military and Reservists and indeed their families. The bill we are
considering today is the product of a joint hearing held last month by
the Select Revenue Measures Subcommittee led by myself and the Ranking
Member English and the Income Security Subcommittee led by Chairman
McDermott and Ranking Member Weller. We heard from a number of veterans
advocates, military families groups, the Social Security
Administration, Members of Congress and others who discussed their
proposals to either enhance tax provisions or reduce burdens on those
who serve or volunteer for America.
The bill we are considering today, which passed out of the full
committee last week, is a product of those deliberations and will go
far to assist those serving this country, again, emphasizing support
for their families. This country is fortunate that so many soldiers and
sailors have been willing to sacrifice for our defense. We must
remember, once again, that this is a shared sacrifice. The families of
someone serving this country can suffer financially, as well as
emotionally, during extended tours. Congress has a responsibility to
ensure that the Tax Code and other income security provisions do not
create problems but, rather, solve them for military families. That is
exactly what this bill will allow us to do.
Mr. McDERMOTT. Madam Speaker, I ask unanimous consent to allow Mr.
Neal to handle the rest of the time.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Washington?
There was no objection.
Mr. ENGLISH of Pennsylvania. Madam Speaker, at this point, I would
like to yield 2 minutes to a leader on our committee, the distinguished
gentleman from Illinois (Mr. Weller).
Mr. WELLER of Illinois. Madam Speaker, last month the members of the
Ways and Means Committee heard compassionate testimony on several of
the tax and benefit provisions for veterans, military families and
volunteers in the bill we are considering on the floor today. Several
provisions amend the Supplemental Security Income program that operates
under the jurisdiction of the Ways and Means Subcommittee on Income
Security and Family Support, which I have the privilege of serving as
ranking member. These would effectively expand eligibility for and
increase SSI benefit payments to certain military families, veterans
and AmeriCorps participants. The bill also includes provisions offered
by my friends and colleagues, Phil English of Pennsylvania and Tom
Reynolds of New York, that would ensure comparable treatment under the
SSI program when it comes to State annuities for blind and other
disabled veterans.
It is important that we look for ways to ensure that those in the
military and their families who make sacrifices receive appropriate and
timely support. The bill before us today will provide more help to our
veterans, to our military families and to others who volunteer in
service to our Nation. That is something I support, and I urge all my
colleagues to join me in supporting our soldiers, our families and
others who volunteer to help America by voting ``yes'' for this
legislation.
Mr. NEAL of Massachusetts. Madam Speaker, I yield 1 minute to the
gentleman from Texas, a member of the Ways and Means Committee, Mr.
Doggett.
Mr. DOGGETT. Madam Speaker, support for our troops does not begin on
the battlefield and it must not end there. With approval of this
legislation, Texas veterans will be eligible for below-market home
loans of up to $325,000. Under the previous law, this benefit was
restricted to veterans who had served prior to 1977. Today, we close
the gap for the many who have been our heroes in the last 30 years who
are not currently eligible. Those who have served to keep us safe in
our homes deserve a chance of a home of their own. That is what this
bill does.
We know that Veterans Day is approaching, but every day that we enjoy
freedom bestowed by the sacrifices of those in uniform is a day that we
should honor them. It is often said that we should honor our vets not
only with our words but also with our deeds. Well, today we expand the
opportunity for each vet to obtain a deed for their home. As veterans
paid the price to build our great democracy, we can afford the price of
building a foundation for their home ownership.
Mr. ENGLISH of Pennsylvania. Madam Speaker, it is now my privilege to
yield 2 minutes to another member of our committee and a strong
advocate of the cause of veterans, the gentleman from Texas (Mr.
Brady).
Mr. BRADY of Texas. Madam Speaker, I rise in support of this bill on
the floor today that will provide additional tax relief to our Nation's
veterans, especially those who are seeking to purchase a home. This
bill updates current law to ensure that veterans who served after 1977
can qualify for low-interest home loans financed by the Qualified
Veterans Mortgage Bonds.
Back home in Texas, this bill is going to enable Texas' Veterans Land
Board to expand its existing low-interest loan
[[Page H12759]]
program to several thousand more Texas veterans, several thousand,
helping a new generation of veterans own a piece of the American Dream.
Our land commissioner, Jerry Patterson, a Marine veteran himself, does
an excellent job supervising this program and reaching out to veterans.
This bill is going to allow him, and our State, to help more veterans
get into a home they can afford. My thought is for all the sacrifice
our veterans make to defend our country, it is only right that we help
them upon their return home.
Mr. NEAL of Massachusetts. Madam Speaker, I would like to yield 1\1/
2\ minutes to the gentleman from North Dakota and member of the Ways
and Means Committee, Mr. Pomeroy.
Mr. POMEROY. This is a photograph of Major Alan Johnson, his wife,
Tori, and his daughter, Megan. This beautiful family suffered the
tragedy of losing Major Johnson in Iraq. Last winter, we buried Major
Johnson at Arlington Cemetery. His widow contacted me 2 weeks later to
tell me that what had happened in the State of Washington is the
pension plan there had simply given the money back that Alan Johnson
had paid in as if he had terminated his employment at the time he was
called to duty, called to deployment in his status as a Reserve
officer.
It brought to light a gap in the law that protects our deployed
Reservists and Guardsmen. When they come back, this law seamlessly
reintegrates them into the pension plan of their employer, but there
was no provision if we tragically lose our soldiers under deployment.
Included in this bill is the HEROES Act, introduced by Doc Hastings and
myself, that allows for survivor benefits to be paid in this situation.
It is a very important addition. It is terribly important that
survivors of our soldiers who paid the ultimate price have survivors
benefits under the pension. This law will afford that.
Madam Speaker, I include for the Record a letter to this effect from
Mrs. Tori Johnson.
November 5, 2007.
Hon. Charles Rangel,
Chairman, Committee on Ways and Means, Longworth House Office
Building, Washington, DC.
Dear Chairman Rangel: I am writing to thank you for
introducing the Heroes Earnings Assistance and Relief Tax
(HEART) Act, H.R. 3997. Your bill makes many important
changes to the tax law that will be of great help to the men
and women who serve in the Reserve and the National Guard and
their families.
My husband, Major Alan R. Johnson, who was killed in Iraq
earlier this year, was a public servant both in the Reserve
and in his full time job. In his civilian life, he worked for
fifteen years with the Yakima County Department of
Corrections. We were a team. He was a strong leader and he
depended on the strength of his family. We needed to be
strong so he did not need to worry about us when he was
serving his county in the Reserves.
Dealing with the problems and technicalities our family had
to face after we learned that Alan was killed has not been
easy. My husband was 44 and we were planning on his
retirement for our future. Because his employer considered
Alan as an employee who had voluntarily terminated when he
left for his deployment, the survivor benefit under his
pension that we would be paid was less than the amount we
would have received if he was still an active employee. When
I asked why, I found out that in order to have his pension
protected under existing law he had to return to work.
The HEART Act corrects the gap in the Uniform Services
Employment and Reemployment Right Act's pension protections
for survivors of National Guard and Reserve soldiers who are
killed in action and can not return to work. Our Guard and
Reservists should know that the families that they leave
behind will be able to rely on the survivor benefits that
they have earned in their civilian employment.
Over 81,000 Reservist and National Guard members have
responded to our Nation's call to duty. They believe in our
country and are willing to make that ultimate sacrifice. When
they cannot return to their former jobs your bill will make
sure that their families will get the full survivor benefits
that they earned from their jobs at home.
Again, I thank you for your leadership and that of
Congressman Pomeroy and Congressman Hastings in making sure
that the country that Reservists, like my husband, have
sacrificed everything for will take care of their families. I
hope that your bill, H.R. 3997, will become law soon.
Sincerely,
Victoria C. Johnson.
Mr. ENGLISH of Pennsylvania. Madam Speaker, may I inquire how much
time is remaining on both sides.
The SPEAKER pro tempore. The gentleman from Pennsylvania has 14\1/2\
minutes remaining. The gentleman from Massachusetts has 13\1/2\ minutes
remaining.
Mr. ENGLISH of Pennsylvania. Madam Speaker, at this point, it would
be my honor to yield 4 minutes to a leader in our committee who made a
seminal contribution to the SSI component of this legislation, the
gentleman from New York (Mr. Reynolds).
(Mr. REYNOLDS asked and was given permission to revise and extend his
remarks.)
Mr. REYNOLDS. I thank the gentleman from Pennsylvania.
I want to thank both Chairman Rangel and Ranking Member McCrery, as
well as Chairman Neal and Chairman McDermott and Ranking Members
English and Weller, for their outstanding leadership in crafting this
legislation.
Madam Speaker, we come together today not as Democrats and
Republicans but as Americans. We are united in our respect for those
who wear the uniform of the United States armed services. We are united
in our desire to ensure that Federal programs within the Ways and Means
Committee's jurisdiction, from the Tax Code to the SSI program, work
effectively for members of the military, veterans, first responders and
their families. I strongly urge the passage of this legislation.
I would like to highlight two specific provisions in the bill that
have been of particular interest to me during my time in Congress. The
first provision, section 202, is modeled on legislation, the Blind
Veterans Fairness Act, that I first introduced in the year 2000. My
legislation would correct a problem in the Federal SSI rules that
affects blind veterans in four States, New York, New Jersey,
Pennsylvania and Massachusetts, that provide these veterans modest
annuities in recognition of the substantial sacrifice they have made in
service to our country.
Regrettably, under current Federal law, these State annuities
actually reduce any SSI payments for which blind veterans would
otherwise be eligible. As we heard from Michelle LaRock of New York's
Division of Veterans' Affairs at our Ways and Means Committee hearing 3
weeks ago, this quirk in the Federal SSI rules creates a hardship not
only for the affected veterans themselves, but for the States that
administer these annuity programs as well.
As in years past, the bill I have introduced in the 110th Congress,
H.R. 649, has enjoyed bipartisan support. It has been strongly endorsed
by the Blinded Veterans Association. I would also like to publicly
thank Chairman Rangel, not just the Chair of our committee but the dean
of my State's congressional delegation, for his cosponsorship of prior
versions of this bill, and I look forward to working closely with him
to see the proposal finally enacted into law.
Let me turn briefly to a separate provision, section 107 of the bill,
which will permanently allow penalty-free withdrawals from IRAs,
401(k)'s and other retirement funds for Reservists and National
Guardsmen called to active duty. As we all know, when Guardsmen and
Reservists are called up, they often face significant reductions in pay
compared to their civilian salaries, putting an economic strain on
their families.
To lessen this economic hardship, many of them chose to draw down on
their retirement funds. Unfortunately, under prior law, they faced a 10
percent early withdrawal tax when they did so, and they faced
restrictions on making repayments to their retirement funds upon
returning from active duty.
{time} 1145
Last year's Pension Protection Act provided relief from this penalty
tax and permitted unlimited repayments within 2 years after leaving
active duty, but only for Guardsmen or Reservists called to active duty
before December 31, 2007.
To ensure that this important relief remains available on a permanent
basis going forward, I introduced H.R. 867, the Guardsmen and Reservist
Tax Fairness Act, on February 7 of this year. This legislation has also
attracted a bipartisan group of cosponsors, as well as endorsements
from several leading veteran service organizations. I look forward to
seeing these commonsense changes enacted into law over the coming
weeks.
[[Page H12760]]
I urge a ``yes'' vote.
Blinded Veterans Association,
Washington, DC, February 9, 2007.
Hon. Thomas Reynolds,
House of Representatives,
Washington, DC.
Dear Representative Reynolds: On behalf of the Blinded
Veterans Association (BVA), the only congressionally
chartered Veterans Service Organization exclusively dedicated
to serving the needs of our Nation's blinded veterans and
their families we commend you for the introduction of H.R.
649 ``Blind Veterans Fairness Act.'' BVA is grateful to you
for sponsoring this bill for those blind veterans who have
their state annuities counted against the income levels by
Social Security. Cornell University Disability Statistics
research has found that the poverty rates for the disabled
working age population in 2004, ages 21-64, has risen to 3.33
times the rate of poverty for the non-disabled population.
They also found that the poverty rate for those with a
sensory disability in this age group was 24.6% in 2005 as
compared to 9.3% for the non-disability population.
These annuities from the states are clearly meant as a
``gift'' to help prevent these veterans from falling into
these terrible statistics and in appreciation for their
service to our nation. BVA appreciates that you not only
understand this issue, but are willing to take action to
correct the problems blinded veterans have had with these
annuities from some states being provided to them. These
should not be considered additional income by Social
Security, but instead a special disability benefit for their
service to our grateful nation. This penalty should be
removed and the annuities excluded from all income for
purposes of SSI for purposes of pension benefits.
BVA strongly supports H.R. 649, and we appreciate all your
strong efforts in regards to this issue for blinded veterans.
Sincerely,
Thomas Zampieri,
Director, Government Relations.
____
Military Officers
Association of America,
Alexandria, VA, March 29, 2007.
Representative Tom Reynolds,
House of Representatives,
Washington, DC.
Dear Representative Reynolds: I am writing on behalf of the
362,000 members of the Military Officers Association of
America (MOAA) to thank you for your leadership in sponsoring
H.R. 867, the Guardsmen and Reservists' Tax Fairness Act of
2007.
Your bill would make permanent a provision in law for
reservists to make penalty- free withdrawals from IRAs, 401ks
and similar retirement funds while they are on active duty of
at least 6 months. It would also permit them to make
unlimited repayments to their retirement plans within two
years after leaving active duty. The existing authority will
sunset on December 31, 2007.
Under our nation's ``operational reserve'' policy, National
Guard and Reserve forces are integrated in all military
missions worldwide and are expected to serve on active duty
tours one year out of every five or six years. This policy is
expected to remain in place for the indefinite future. While
Guard and Reserve retention remains strong, it is unrealistic
to expect that families and employers can be expected to
remain committed to reserve service for the long term without
additional support from Congress. One simple way to help
Guard and Reserve service men and women is to allow them to
withdraw funds from their civilian retirement plans during an
activation and to repay those accounts on an unlimited basis
following deactivation for up to two years. Making the
existing authority permanent will help reserve families make
ends meet, support their future financial security, and
reduce the enormous stress and strain they endure in service
to our nation.
MOAA strongly endorses H.R. 867 and we pledge our full
support for its early enactment.
Thank you for your leadership!
Sincerely,
Norbert R. Ryan, Jr.,
President.
____
Association of the
United States Army,
Arlington, VA, February 12, 2007.
Hon. Tom Reynolds,
House of Representatives,
Washington, DC.
Dear Mr. Reynolds: On behalf of the more than 100,000
members of the Association of the United States Army, I write
to thank you for your leadership in sponsoring H.R. 867, the
Guardsmen and Reservists' Tax Fairness Act of 2007. This bill
would make permanent a provision in law for reservists to
make penalty-free withdrawals from IRAs, 401-ks, and similar
retirement funds while they are on active duty for at least 6
months. It would also permit them to make unlimited
repayments to their retirement plans within two years after
leaving active duty. The existing authority authorizing these
provisions will end on 31 December 2007.
Under our nation's ``operational reserve'' policy, National
Guard and Reserve forces are integrated in all military
missions worldwide and are expected to serve on active duty
tours one year out of every five or six years. This policy is
expected to remain in place for the indefinite future. While
Guard and Reserve retention remains strong, it is unrealistic
to expect that families and employers will remain committed
to reserve service for the long term without additional
support from Congress.
Making the existing authority permanent will help Reserve
Component families make ends meet, support their future
financial security, and reduce the enormous stress and strain
they endure serving our nation.
The Association of the United States Army strongly endorses
H.R. 867, and we pledge our full support for its early
enactment.
Sincerely,
Gordon R. Sullivan,
General, USA, Retired,
President.
____
Naval Reserve Association,
Alexandria, VA, February 12, 2007.
Hon. Thomas M. Reynolds,
House of Representatives,
Washington, DC.
Dear Congressman Reynolds: I am writing on behalf of the
membership of the Naval Reserve Association to thank you for
your leadership in sponsoring H.R. 867, the Guardsmen and
Reservists' Tax Fairness Act of 2007. Your bill would make
permanent a provision in law for reservists to make penalty-
free withdrawals from IRAs, 401ks and similar retirement
funds while they are on active duty of at least 6 months. It
would also permit them to make unlimited repayments to their
retirement plans within two years after leaving active duty.
The existing authority will sunset on December 31, 2007.
Under our nation's ``operational reserve'' policy, National
Guard and Reserve forces are integrated in all military
missions worldwide and are expected to serve on active duty
tours one year out of every five or six years. This policy is
expected to remain in place for the indefinite future. While
Guard and Reserve retention remains strong, it is unrealistic
to assume that families and employers can be expected to
remain committed to reserve service for the long term without
additional support from Congress.
One simple way to help Guard and Reserve service men and
women is to allow them to withdraw funds from their civilian
retirement plans during an activation and to repay those
accounts on an unlimited basis following deactivation for up
to two years. Making the existing authority permanent will
help reserve families make ends meet, support their future
financial security, and reduce the enormous stress and strain
they endure in service to our nation.
The Naval Reserve Association strongly endorses H.R. 867,
and we pledge our full support for its early enactment.
Sincerely,
C. Williams Coane,
RADM, USNR (Ret),
Executive Director.
____
Enlisted Association
of the National Guard,
Alexandria, VA, February 12, 2007.
Hon. Tom Reynolds,
House of Representatives,
Washington, DC.
The Enlisted Association of the National Guard of the
United States (EANGUS) is the only military service
association that represents the interests of every enlisted
soldier and airmen in the Army and Air National Guard. With a
constituency base of over 414,000 soldiers and airmen, their
families, and a large retiree membership, EANGUS engages
Capitol Hill on behalf of courageous Guard persons across
this nation.
On behalf of EANGUS, and the soldiers and airmen it
represents, I am writing on behalf of our membership to thank
you for your leadership in sponsoring H.R. 867, the Guardsmen
and Reservists' Tax Fairness Act of 2007. Your bill would
make permanent a provision in law for reservists to make
penalty-free withdrawals from IRA, 401k and similar
retirement funds while they are on active duty of at least 6
months. It would also permit them to make unlimited
repayments to their retirement plans within two years after
leaving active duty. The existing authority will sunset on
December 31, 2007.
Under our nation's ``operational reserve'' policy, National
Guard and Reserve forces are integrated in all military
missions worldwide and are expected to serve on active duty
tours one year out of every five or six years. This policy is
expected to remain in place for the indefinite future. While
Guard and Reserve retention remains strong, it is unrealistic
to expect that families and employers can be expected to
remain committed to reserve service for the long term without
additional support from Congress. One simple way to help
Guard and Reserve service men and women is to allow them to
withdraw funds from their civilian retirement plans during
activation and to repay those accounts on an unlimited basis
following deactivation for up to two years. Making the
existing authority permanent will help reserve families make
ends meet, support their future financial security, and
reduce the enormous stress and strain they endure in service
to our nation.
EANGUS strongly endorses H.R. 867 and we pledge our full
support for its early enactment.
Working for America's Best!
Michael P. Cline,
Executive Director.
Mr. NEAL of Massachusetts. Madam Speaker, at this time I yield 2
minutes to the gentleman from Connecticut (Mr. Larson), a member of the
Ways and Means Committee.
[[Page H12761]]
(Mr. LARSON of Connecticut asked and was given permission to revise
and extend his remarks.)
Mr. LARSON of Connecticut. Madam Speaker, I want to extend as well
and compliment Chairman Rangel, Chairman McDermott, and especially
Chairman Neal, for the timely manner in which they have handled very
important legislation that addresses veterans, but specifically to Mr.
Neal because it was not lost on him in this piece of legislation that
we also needed to address an important segment of our society, our
volunteer firefighters.
It wasn't lost on Mr. Neal that volunteer firefighters protect
approximately 38 percent of America's population and more than 70
percent of our land. It wasn't lost on Mr. Neal that volunteer
firefighters save taxpayers nearly $37 billion annually with their
efforts.
Two-thirds of the 1.2 million firefighters in this country are in
fact volunteers. More importantly, it wasn't lost on anyone in this
body that it wasn't the FBI, the CIA or the Department of Defense, it
was our front line defenders, first responders that were there at the
World Trade Center, at the Pentagon and in the fields of Pennsylvania.
It's to them, of course, that we owe this debt of gratitude.
It was lost, however, on the IRS that when States like mine in
Connecticut moved to provide a rebate on their local property taxes,
that they sought to tax it and make it ordinary income on behalf of
these brave volunteers. This legislation corrects that. I want to
commend the Mitchell brothers, both John and Billy, from South Windsor,
Connecticut, John McAuliffe of Whethersfield, and Chief Phil Crombie,
who are the genesis of this idea and concept and brought it to my
attention.
Madam Speaker, I again thank Chairman Neal for making it all happen.
Mr. ENGLISH of Pennsylvania. Madam Speaker, it is now my privilege to
yield 3 minutes to the gentleman from North Carolina (Mr. Jones), a
strong advocate of the cause of veterans.
Mr. JONES of North Carolina. Madam Speaker, first, I would like to
thank Chairman Rangel and Ranking Member McCrery for including H.R. 418
into the Heroes Earnings Assistance and Relief Tax Act of 2007. For
several years I have tried to get this measure to the House floor. So
thank you, Mr. Neal, Mr. McDermott, and Mr. English.
H.R. 418 is a bill that would permit military families who receive
the death gratuity to invest the full amount into certain tax-favored
accounts. As you may know, a death gratuity is a $100,000 payment paid
to survivors of servicemembers whose death resulted from combat-related
circumstances. Current tax law limits the amount that recipients of the
death gratuity can place in tax-preferred accounts, such as a Roth IRA
or a Coverdell Educational Savings Account. This legislation would
change that to allow recipients to contribute up to the full amount of
the gratuity payment to any of those two accounts.
As the families of our fallen heroes try to put their lives back
together, they need help. The death of a loved one is difficult enough,
without having to worry about saving the death gratuity to pay for
retirement, college or other expenses and then have the government come
in and tax the interest on that savings.
Madam Speaker, the need for this assistance was brought to my
attention by Captain Michael Ceres, a constituent stationed at Marine
Corps Air Station New River. Captain Ceres, who just returned from
serving in Iraq and will soon be redeployed, contacted my office and
suggested that Congress institute this change to ease the burden on
grieving military families. We owe it to our fallen military heroes to
expand the options to the families who receive the death gratuity,
families who have paid the ultimate cost with the loss of their loved
one.
Today, I call on all my colleagues in the House to support this major
piece of legislation, known as the Heroes Earnings Assistance and
Relief Tax Act of 2007. With that, I want to thank the leadership on
the Democratic side, the leadership on the Republican side for this
comprehensive bill to help our military and their families.
Mr. NEAL of Massachusetts. Madam Speaker, I yield 1 minute to the
gentleman from Oregon (Mr. Blumenauer), a member of the Ways and Means
Committee.
Mr. BLUMENAUER. Madam Speaker, I appreciate the gentleman's courtesy
in recognizing me and in working with us.
For over 60 years, Oregonians have provided a benefit to our
returning veterans of home loans that were below market rate to be able
to help them reestablish themselves in the community and as a small
gesture of our appreciation for their sacrifice. Unfortunately, with
the recent flood of returning veterans from Iraq and Afghanistan, we
found that that program has been stretched to the limit and we were
faced with denying them access.
Working with Mr. Neal, Chairman Rangel, the committee and
subcommittee, we were able to make an important adjustment, a 400
percent increase in the loan cap, so that we will be able to fully meet
the needs of returning Oregon veterans, and along the way it will help
people in Alaska, Wisconsin, Texas, and California. In this time of
uncertainty in the housing market, giving these important loans to our
veterans is an important gesture. I appreciate the work that the
committee has done to make this a reality.
Mr. ENGLISH of Pennsylvania. Madam Speaker, it is now my privilege to
yield 4 minutes to the distinguished gentleman from Kansas (Mr. Moran),
a true advocate of the veterans, as well as all of the military
facilities in his district.
Mr. MORAN of Kansas. I thank the gentleman from Pennsylvania for
recognizing me.
This, as you can hear, is an important piece of legislation that is
widely supported and praised here on the House floor today, but I am
disappointed that the majority in the committee rejected an amendment
that the gentleman from Pennsylvania (Mr. English) offered.
This amendment was a commonsense, bipartisan fix to the Tax Code to
prevent lower-income military personnel and their families from being
discriminated against when applying to live in affordable housing built
under the Low Income Housing Tax Credit Program.
A number of military installations across the country are
experiencing housing shortages as a result of the 2005 BRAC. One of
those facilities, Fort Riley, an Army post located in the State of
Kansas, is nearly doubling in size and is now seeing an influx of
30,000 soldiers, civilian workers, and others.
When the new soldiers live off base, they receive a military housing
allowance from the government that they use for payment of rent. Though
the Tax Code does not treat the housing allowance as taxable income, it
is considered income when determining a military family's eligibility
to live in facilities financed with low-income housing tax credits. The
result is that some servicemembers, particularly our enlisted men and
women, are considered to earn too much income and are thus disqualified
from living in affordable housing.
However, comparatively low-income civilians receiving section 8
housing vouchers from the Federal Government are more likely to qualify
for this housing. This is because, unlike the military housing subsidy,
the Tax Code exempts section 8 assistance from being considered income.
Our Nation's military families deserve access to safe, decent, and
affordable housing; and they should be given a fair opportunity to
qualify for it. The House acted in May to exempt military housing
allowance from income eligibility requirements when qualifying for the
Head Start program. The USDA's WIC nutrition program for Women, Infants
and Children also provides for this exemption. Unfortunately, the
discrimination persists when military families apply to live in
affordable housing and enlisted servicemembers and their families
continue to be treated unfairly in communities across the country.
I had hoped to offer amendment here today on the House floor to
address this issue, but the procedure by which this bill is brought to
the floor does not allow me that opportunity. I would urge and
encourage my colleagues to join me in cosponsoring H.R. 1481, The
[[Page H12762]]
Military Access to Housing Act, to correct this inequality, and to
encourage the leadership of this House to bring this measure to the
floor for a vote.
Mr. NEAL of Massachusetts. Madam Speaker, I yield 1 minute to the
gentleman from New Jersey (Mr. Pascrell), also a member of the Ways and
Means Committee.
(Mr. PASCRELL asked and was given permission to revise and extend his
remarks.)
Mr. PASCRELL. Madam Speaker, I rise today in strong support of H.R.
3997, and I want to commend Chairman Rangel, Congressman Neal, and
Congressman English for their persistence.
Tax changes, if done wrong, can exacerbate existing inequalities,
hurt our moral fabric, and slow the economy; so I am glad today with
this bill we will take up a tax measure that is not geared towards
increasing the fortunes of the already fortunate, but instead we will
provide a measure of relief for those brave men and women serving in
the military and as first responders.
In particular, I am glad to see that this bill excludes from income
certain reimbursable expenses incurred in the line of duty by volunteer
firefighters; and I commend my friend, Congressman Larson from
Connecticut, who has worked on this issue for some time.
I am truly heartened we are permanently extending combat pay in the
calculations of the earned income tax credit. Recent law allowed
members of the Armed Forces to exclude combat pay, which is generally
nontaxable, for purposes of computing the earned income credit. But
this will only last through the 2006 tax year. Many of us have worked
for some time to make this proposal permanent. I am tremendously
pleased that this provision has made it into the broader package that
we are discussing today. There is no reason a member of the Armed
Forces should lose their earned income tax credit when they are
mobilized serving their country.
Again, I thank the chairman and I thank Mr. Neal and Mr. English for
their work and diligence on this critical issue.
Mr. ENGLISH of Pennsylvania. Madam Speaker, I reserve the balance of
my time.
Mr. NEAL of Massachusetts. Madam Speaker, I yield 1 minute to the
gentlewoman from Nevada (Ms. Berkley), a distinguished member of the
Ways and Means Committee.
Ms. BERKLEY. Madam Speaker, as Veterans Day approaches, the timing
could not be more appropriate for Congress to be considering the HEART
Act. This legislation will help veterans and their families, and it
will also show them that their fellow citizens appreciate their service
and honor their sacrifices for our country.
Nevada has one of the fastest growing veterans populations in the
country, and I have seen firsthand the economic hardship that extended
military deployment in Iraq and Afghanistan have caused. The HEART Act
will allow more families to qualify for the earned income tax credit or
to make penalty-free withdrawals from retirement plans in time of true
economic need to help ease the burden of deployment.
Nevada has suffered 59 deaths during the global war on terror,
including 46 in Iraq. I support the provisions of this bill that will
allow the spouses of those who sacrificed their lives to be better able
to plan for their futures and those of their children.
As a member of both the Ways and Means Committee and the Veterans'
Affairs Committee, I strongly support this bill. I urge my colleagues
to vote for this bipartisan legislation.
{time} 1200
Mr. NEAL of Massachusetts. Madam Speaker, I yield Mr. Altmire from
Pennsylvania, a good friend of the veteran, 1 minute.
Mr. ALTMIRE. I thank the chairman for including in this bill
legislation I introduced to assist our brave men and women in uniform.
My bill, H.R. 3827, the Active Duty Military Tax Relief Act, ensures
that active duty military personnel will be able to treat combat pay as
earned income when computing the earned income tax credit.
My bill also allows Reservists called to active duty to make penalty-
free withdrawals from their retirement plans. And servicemembers who
receive differential pay from their civilian employer will be able to
contribute those wages to their retirement plan.
Finally, family members of those killed in the line of duty will be
able to contribute up to $100,000 of the military death gratuity into
tax-favored accounts, such as Roth IRAs and education savings accounts.
I thank the chairman for working with me to ensure that all of these
provisions from my bill have been included in full in this legislation
which I strongly support.
Mr. NEAL of Massachusetts. Madam Speaker, I recognize a great friend
of the veteran, the gentlewoman from Kansas (Mrs. Boyda) for 1 minute.
Mrs. BOYDA of Kansas. Madam Speaker, unless we act now, over 150,000
of our American troops and their families will pay sharply higher
taxes. Unless Congress extends the military eligibility for the earned
income tax credit, we will, through inaction, slash the EITC for
hundreds of thousands of troops. It would be a tax borne solely by our
soldiers and our military families. We call it a soldier tax.
Our military continues to serve our country with honor and
distinction. The last thing we need is for our soldiers and their
families to have to worry about paying higher taxes next year. That is
why I authored the Tax Relief for Armed Combat Families Act for 2007.
It will permanently end the soldier tax. Our military families should
not have to worry from year to year what funds are going to be
available to take care of their families.
I thank Chairman Rangel and Chairman Neal for working my language
into today's legislation, and I call on my colleagues to pass this
important legislation. Let's permanently end the soldier tax.
Mr. NEAL of Massachusetts. I yield 1 minute to the gentlewoman from
Arizona (Ms. Giffords), a friend of the veteran.
Ms. GIFFORDS. Madam Speaker, I rise today in support of tax cuts for
true American heroes: our combat troops, our veterans, and our
firefighters.
Last month I introduced H.R. 3808, the Combat Troops Tax Relief Act.
I am very pleased that the first provision in the HEART Act is taken
from my tax bill.
This bill honors the patriotic commitment of military families such
as the Heberts in southern Arizona. Army Specialist Adam Hebert is
currently serving at Fort Huachuca. He is married with two children,
and soon will be deployed abroad for combat service. This bill will
give the Heberts concrete tax relief. It will permanently protect their
eligibility for the Earned Income Tax Credit.
In southern Arizona and across the United States, we must honor our
heroes with true tax relief. I urge my colleagues on both sides of the
aisle to join with me to pass H.R. 3997, the HEART Act.
Mr. NEAL of Massachusetts. Mr. Speaker, I would like to recognize the
gentlewoman from California (Mrs. Davis), a good friend of the American
veteran as well, for 1 minute.
Mrs. DAVIS of California. Mr. Speaker, I want to thank my colleagues
from the Ways and Means Committee for including provisions from H.R.
337 and H.R. 551 in the HEART Act. These are two important bills that I
have been championing since I came to Congress.
The first bill addresses a glitch in the SSI program. Because
eligibility for SSI benefits is based on a family's income, military
families lose benefits when additional pay is added to their income. A
military family struggling to make ends meet loses benefits for their
children if they receive jump pay, hazardous duty pay or a number of
other pays considered ``unearned income.'' I think I speak for my
colleagues when I say these pays are not unearned but hard earned.
The second bill addresses qualified veterans mortgage bonds. And as a
Californian, I join with other colleagues in the desire to provide
veterans who signed up for service after 1977 with a better opportunity
to achieve homeownership. Why should a veteran who served in Iraq be
treated any differently than somebody who signed up before 1977?
Correcting this flaw in current law will allow those returning from
Iraq and Afghanistan to have
[[Page H12763]]
great opportunities towards owning a home in California's high-cost
real estate market.
Mr. NEAL of Massachusetts. Mr. Speaker, I yield 1 minute to the
gentleman from California (Mr. Farr), a friend of the American veteran
as well.
Mr. FARR. Mr. Speaker, I would like to thank the leadership of the
Ways and Means Committee and the members because I think this bill
takes a commonsense approach of having, as you have heard, the stories
told about people who have had problems that just don't make sense.
This is sort of fix the dumb-dumb in the tax law, and that is what this
bill does for military veterans, volunteer firefighters, and eligible
Peace Corps volunteers and others.
I am pleased that the committee included my legislation I authorized
to provide tax relief for thousands of military retirees whose VA
disability claims have been delayed by dysfunctional VA claims backlog.
The issue was brought to my attention by a constituent, Michael St.
Germain, whose VA claim took over 8 years to process. Imagine, 8 years
to process one VA claim. I am proud in the MilCon-VA appropriations
bill that we have appropriated $124 million to provide 1,800 new claims
processors to work on the 400,000 backlog of claims. I thank the
committee for extending for another 2 years the claims adjustment.
Mr. NEAL of Massachusetts. Mr. Speaker, I reserve the balance of my
time.
Mr. ENGLISH of Pennsylvania. Mr. Speaker, may I inquire of the other
gentleman, does he have just one more speaker?
Mr. NEAL of Massachusetts. I believe we have concluded the speakers
who have asked for time on our side.
Mr. ENGLISH of Pennsylvania. Mr. Speaker, I yield myself the balance
of my time.
In conclusion, I believe the case has been made compellingly that
this legislation consists of many components, but they have been
developed within the Ways and Means Committee as a benefit for our
veterans and our active duty military.
I don't believe there is a great controversy here. What I do believe
is there is a lesson. When Republicans and Democrats work together on a
bipartisan basis, when they put aside political posturing, when they
put aside ideological poses, when they insist on procedural fairness,
then I think we can find common ground to move forward on things that
are genuinely important.
I want to particularly credit the chairman of our committee, Mr.
Rangel, and the gentleman from Massachusetts, the chairman of our
Select Revenue Subcommittee, for having moved this legislation forward
and having set a very high standard. And I would like to take credit
for the fact that there has been substantial Republican participation
in the development of this bill.
This bill, I think, is important to move forward now, but not only
for what it consists of, but for what it symbolizes, and that is what
this Chamber can achieve when both parties work together.
Mr. Speaker, I yield back the balance of my time.
General Leave
Mr. NEAL of Massachusetts. Mr. Speaker, I ask unanimous consent that
all Members may have 5 legislative days in which to revise and extend
their remarks and include extraneous material on H.R. 3997, as amended.
The SPEAKER pro tempore (Mr. Serrano). Is there objection to the
request of the gentleman from Massachusetts?
There was no objection.
Mr. NEAL of Massachusetts. Mr. Speaker, I yield myself the balance of
my time.
First of all, I thank the gentleman from Pennsylvania (Mr. English)
for the usual courtesy that he extends to all Members of this body, and
particularly those of us who are on the Ways and Means Committee. I
also wish to acknowledge Chairman Rangel and Mr. McCrery who worked to
accommodate suggestions from several Members of the House. We thank
those Members, both Republicans and Democrats, for generating many of
the good ideas contained in this bipartisan bill.
Let me describe some of the provisions in this bill. The bill makes
permanent the current provision waiving the 10 percent withdrawal
penalty for those called up to active duty who need to tap into
retirement accounts.
The bill allows families to roll over amounts received as death
gratuity benefits into Roth IRAs or education savings accounts.
The bill makes a number of changes related to supplemental security
income or SSI eligibility and military service.
And the bill makes permanent the special rule treating combat pay as
earned income for the purposes of the earned income tax credit, or
EITC.
The bill also provides a number of changes to allow employers the
flexibility to extend benefits to workers called up to duty and will
expand certain provisions that provide mortgage assistance to veterans
through qualified bond programs.
The bill also includes incentives for those who volunteer their
services Stateside, such as firefighters and emergency responders.
And for those who had an opportunity to attend our hearing and listen
to the moving testimony by the widow of a Reservist whose pension was
cut in half because he did not ``return to work'' after being killed in
action, you will be pleased to know, as all Members of the body will,
that this bill we are considering today fixes that problem for good.
The British leader Benjamin Disraeli noted, ``The legacy of heroes is
the memory of a great name and the inheritance of a great example.''
Let us set our own example today of a Congress that responds to
families in need. Let us show our heroes and their families that we
acknowledge and appreciate their service.
Not only do I encourage support for this bipartisan bill, I want to
reiterate what was stated a few moments ago by my friend, Mr. English.
This is a very firm example of what happens in this House of
Representatives when Members put aside differences and proceed with the
common principle that American veterans deserve help. So let us show
our support for this legislation. I urge adoption of this bill.
Mr. KIND. Mr. Speaker, I rise today in strong support of H.R. 3997,
the Heroes Earnings Assistance and Relief Tax, HEART Act of 2007. This
bill provides a number of much-needed and deserved tax benefits to
members of the military, their families, and veterans. Specifically, I
am proud that the Qualified Veterans' Mortgage Bonds, QVMB, program,
which impacts my home State of Wisconsin, was renewed and reformed so
that the dream of home-ownership will continue to be a reality for
thousands of veterans.
Under the HEART Act, the QVMB program will be expanded to allow $100
million annually in tax-exempt bonding for the Wisconsin Department of
Veterans Affairs, WDVA, State veterans home loan program--enough
funding to aid about 600 State veterans in obtaining low-interest rate
home loans. This program is more important now than ever before with
the ongoing credit crisis in this country, and I am proud we were able
to expand this crucial program, In Wisconsin alone, the WDVA has made
over 54,000 home loans to veterans through this program.
Our military servicemen and women have sacrificed a great deal to
protect the freedoms that we so deeply cherish in this country. Their
sacrifices and extended tours of duty in Iraq and Afghanistan, however,
have placed greater economic hardships on their families here at home.
The bill before us today will help alleviate some of those hardships by
giving military families much needed and deserved tax relief and making
permanent some of the temporary provisions that Congress has previously
enacted.
The HEART Act is one simple but significant way we can thank our
troops for their service to our country. I thank Chairman Rangel and
Ranking Member McCrery for their bipartisan leadership on this
legislation and I urge my colleagues to support our men and women in
the military by passing this legislation.
Mr. BRALEY of Iowa. Mr. Speaker, I rise today in support of H.R.
3997, the Heroes Earnings Assistance and Relief Tax Act. I am
especially pleased that this bill includes a crucial provision from
H.R. 3736, the Combat Pay Tax Flexibility Act, which I recently
introduced to permanently allow members of the Armed Forces to treat
combat pay as earned income in calculating their Earned Income Tax
Credit (EITC).
Because income earned while serving in a combat zone is exempt from
income taxes, many low-income military families recently faced the loss
or reduction of their EITC, as deployments to Iraq and Afghanistan
shifted their income to nontaxable combat pay. While Congress acted to
fix this problem by providing troops the option of calculating combat
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pay for the EITC, without further Congressional action this tax credit
will expire at the end of the year.
I introduced the Combat Pay Tax Flexibility Act to ensure that this
tax savings provision is always there for the military families that
need it. Soldiers who serve in hostile places make a great sacrifice
for our country, and the least we can do is help them make the most of
the tax savings available to them.
I would like to thank Chairman Rangel for working with me to
incorporate the Combat Pay Tax Flexibility Act into the legislation
before us today, and for moving this legislation swiftly. I urge all of
my colleagues to vote in favor of H.R. 3997 today to ensure that our
troops have the financial resources they need throughout the cycle of
deployment.
Mr. HASTINGS of Washington. Mr. Speaker, I am pleased this bill, H.R.
3997, is being considered by the House today and specifically that it
includes language similar to the legislation, H.R. 2540, introduced by
myself and Congressman Pomeroy.
Our legislation was written to assist the families of members of our
military and National Guard who are killed while on active duty. It was
developed after Congressman Pomeroy and I each met with Mrs. Victoria
Johnson from my central Washington district.
While grieving the loss of her husband, Major Alan Johnson, Victoria
discovered that State law treated her husband as a retiree rather than
a brave servicemember. Victoria worked to change State law, and with
her support, Congressman Pomeroy and I introduced legislation to ensure
that servicemembers who die protecting our Nation will have their time
on active military duty counted into their employer's retirement
benefits.
This simple change ensures that the survivors of our brave
servicemembers, like Major Johnson, receive the maximum amount of their
loved ones' pension benefits, and are not penalized for their family
members' volunteering to serve their country.
This is the right thing to do and I encourage my colleagues to
support this bill.
Mr. NEAL of Massachusetts. Mr. Speaker, I yield back the balance of
my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from Washington (Mr. McDermott) that the House suspend the
rules and pass the bill, H.R. 3997, as amended.
The question was taken.
The SPEAKER pro tempore. In the opinion of the Chair, two-thirds
being in the affirmative, the ayes have it.
Mr. NEAL of Massachusetts. Mr. Speaker, on that I demand the yeas and
nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX and the
Chair's prior announcement, further proceedings on this motion will be
postponed.
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