[Congressional Record (Bound Edition), Volume 149 (2003), Part 7]
[Extensions of Remarks]
[Page 9711]
[From the U.S. Government Publishing Office, www.gpo.gov]




                 ARMED FORCES TAX FAIRNESS ACT OF 2003

                                 ______
                                 

                               speech of

                         HON. GERALD D. KLECZKA

                              of wisconsin

                    in the house of representatives

                        Wednesday, April 9, 2003

  Mr. KLECZKA. Mr. Speaker; thousands of former servicemen and 
servicewomen in five states are currently prohibited from receiving 
state-financed home mortgages backed by the sale of federally tax-
exempt bonds. That is why Congressman Herger and I, along with 36 of 
our colleagues, are introducing the Veterans American Dream 
Homeownership Assistance Act. This legislation is similar to bills we 
introduced in the 104th, 105th, 106th, and 107th Congresses.
  In order to help veterans own a home, Congress created a program 
where states could issue bonds exempt from federal income tax in order 
to raise funds to finance mortgages for owner-occupied residences. Five 
states--Wisconsin, Alaska, Oregon, California, and Texas--implemented 
such a program for their veterans. Under a little-known provision in 
the 1984 tax bill, Congress limited the veterans eligible for this 
program to those who began military service before 1977.
  As a result of the 1984 tax bill, veterans who entered military 
service after January 1, 1977 are prohibited from receiving a low-
interest mortgage financed by federal tax-exempt bonds. This means 
veterans who served honorably in Panama, Grenada, the Gulf War, Bosnia, 
Afghanistan, and now Iraq cannot benefit from this partnership between 
the federal government and these five states. Are those who began 
serving our country after January 1, 1977 any less deserving than those 
who served before?
  This arbitrary cutoff was created to raise additional revenue in the 
1984 tax bill by limiting the issuance of tax-exempt bonds. When this 
provision was enacted, post-1976 veterans were a small percentage of 
all veterans, without much voice to protest this discriminatory change. 
But, over two decades later, there are thousands of veterans who have 
served our nation honorably.
  Mr. Speaker, as time goes by, this legislation takes on increasing 
importance. The State of Wisconsin Department of Veterans Affairs has 
informed me that if the cap on veterans bonds is not lifted, the State 
will be forced to disband the program because too few veterans are 
eligible for the program.
  This legislation would simply eliminate the cutoff that exists under 
current law. Under our proposal, former servicemen and servicewomen in 
the five states who served our country beginning before or after 
January 1, 1977 will be eligible to qualify for a low cost mortgage 
financed by federal tax-exempt bonds. This legislation does not 
increase federal discretionary spending by 1 cent. It simply allows the 
five states that have a mortgage finance program for their veterans to 
provide mortgages to all veterans regardless of when they served in the 
military.
  There is no justification to allow some veterans to qualify for these 
home mortgages while others cannot. Mr. Speaker, I urge the House to 
help those veterans who have served after January 1, 1977 to own a home 
and pass this important legislation into law.

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