I
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 de-
clared 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.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. TAX TREATMENT FOR PARTICIPANTS IN MILI-
TARY CONTINGENCY OPERATIONS.
(a) ENLISTED PERSONNEL.—Subsection (a) of sec-
tion 112 of the Internal Revenue Code of 1986 is amend-
ed—
(1) by striking ‘‘or’’ at the end of paragraph
(1);
(2) by redesignating paragraph (2) as para-
graph (3) and inserting after paragraph (1) the fol-
lowing new paragraph (2):
‘‘(2) served in a contingency operation zone,
or’’; and
(3) in paragraph (3), as so redesignated, by in-
serting ‘‘or in a contingency operation zone’’ after
‘‘in a combat zone’’.
(b) COMMISSIONED OFFICERS.—Subsection (b) of
such section is amended—
(1) by striking ‘‘or’’ at the end of paragraph
(1);
(2) by redesignating paragraph (2) as para-
graph (3) and inserting after paragraph (1) the fol-
lowing new paragraph (2):
‘‘(2) served in a contingency operation zone,
or’’; and
(3) in paragraph (3), as so redesignated, by in-
serting ‘‘or in a contingency operation zone’’ after
‘‘in a combat zone’’.
(c) DEFINITION.—Subsection (c) of such section is
amended by adding at the end the following new para-
graph:
‘‘(5)(A) The term ‘contingency operation zone’
means any area which the President of the United
States by Executive Order designates, for purposes
of this section, as an area in which Armed Forces
of the United States are or have been engaged in a
contingency operation.
‘‘(B) Service is performed in a contingency op-
eration zone only if performed (i) on or after the
date designated by the President by Executive Order
as the date of the commencing of contingency oper-
ation activities in such zone, and (ii) on or before
the date designated by the President by Executive
Order as the date of the termination of contingency
operation activities in such zone.
‘‘(C) The term ‘contingency operation’ means a
military operation that—
‘‘(i) is a contingency operation with the
meaning of section 101(a)(13) of title 10,
United States Code, as in effect on the date of
the enactment of this section; and
‘‘(ii) is designated by the President as a
contingency operation for the purposes of this
section.’’.
SEC. 2. AMOUNT OF INCOME EXCLUSION FOR SERVICE IN
COMBAT 
ZONE 
OR 
CONTINGENCY 
OPER-
ATION ZONE.
Subsection (b) of section 112 of the Internal Revenue
Code of 1986, as amended by section 1(b), is amended
by striking ‘‘$500’’ and inserting ‘‘$2400’’.
SEC. 3. EFFECTIVE DATE.
The amendments made by this Act shall apply with
respect to periods beginning on or after November 1,
1995.
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