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104TH CONGRESS

1ST SESSION H. R. 2776

To amend the Internal Revenue Code of 1986 to provide that members

of the Armed Forces performing service in a contingency operation declared by the President shall be entitled (if the President so designates

that operation for such purpose) to exclude from gross income military

compensation received for active service in the same manner as if such

service was performed in a combat zone, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

DECEMBER 13, 1995

Mr. SKELTON (for himself, Mr. MONTGOMERY, Mr. SPENCE, Mr. MCHALE,

Mr. BUYER, and Mrs. FOWLER) introduced the following bill; which was

referred to the Committee on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to provide

that members of the Armed Forces performing service

in a contingency operation declared by the President

shall be entitled (if the President so designates that

operation for such purpose) to exclude from gross income

military compensation received for active service in the

same manner as if such service was performed in a

combat zone, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
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1 SECTION 1. TAX TREATMENT FOR PARTICIPANTS IN MILI2 TARY CONTINGENCY OPERATIONS.

3 (a) ENLISTED PERSONNEL.—Subsection (a) of sec4 tion 112 of the Internal Revenue Code of 1986 is amend5 ed—

6 (1) by striking ‘‘or’’ at the end of paragraph

7 (1);

8 (2) by redesignating paragraph (2) as para9 graph (3) and inserting after paragraph (1) the fol10 lowing new paragraph (2):

11 ‘‘(2) served in a contingency operation zone,

12 or’’; and

13 (3) in paragraph (3), as so redesignated, by in14 serting ‘‘or in a contingency operation zone’’ after

15 ‘‘in a combat zone’’.

16 (b) COMMISSIONED OFFICERS.—Subsection (b) of

17 such section is amended—

18 (1) by striking ‘‘or’’ at the end of paragraph

19 (1);

20 (2) by redesignating paragraph (2) as para21 graph (3) and inserting after paragraph (1) the fol22 lowing new paragraph (2):

23 ‘‘(2) served in a contingency operation zone,

24 or’’; and
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1 (3) in paragraph (3), as so redesignated, by in2 serting ‘‘or in a contingency operation zone’’ after

3 ‘‘in a combat zone’’.

4 (c) DEFINITION.—Subsection (c) of such section is

5 amended by adding at the end the following new para6 graph:

7 ‘‘(5)(A) The term ‘contingency operation zone’

8 means any area which the President of the United

9 States by Executive Order designates, for purposes

10 of this section, as an area in which Armed Forces

11 of the United States are or have been engaged in a

12 contingency operation.

13 ‘‘(B) Service is performed in a contingency op14 eration zone only if performed (i) on or after the

15 date designated by the President by Executive Order

16 as the date of the commencing of contingency oper17 ation activities in such zone, and (ii) on or before

18 the date designated by the President by Executive

19 Order as the date of the termination of contingency

20 operation activities in such zone.

21 ‘‘(C) The term ‘contingency operation’ means a

22 military operation that—

23 ‘‘(i) is a contingency operation with the

24 meaning of section 101(a)(13) of title 10,
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1 United States Code, as in effect on the date of

2 the enactment of this section; and

3 ‘‘(ii) is designated by the President as a

4 contingency operation for the purposes of this

5 section.’’.

6 SEC. 2. AMOUNT OF INCOME EXCLUSION FOR SERVICE IN

7 COMBAT ZONE OR CONTINGENCY OPER8 ATION ZONE.

9 Subsection (b) of section 112 of the Internal Revenue

10 Code of 1986, as amended by section 1(b), is amended

11 by striking ‘‘$500’’ and inserting ‘‘$2400’’.

12 SEC. 3. EFFECTIVE DATE.

13 The amendments made by this Act shall apply with

14 respect to periods beginning on or after November 1,

15 1995.

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