(3) The item relating to section 7508 in the
table of sections for chapter 77 is amended by in-
serting ‘‘or contingency operation’’ after ‘‘combat
zone’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to any period for performing an
act which has not expired before the date of the enactment
of this Act.
SEC. 6. MODIFICATION OF MEMBERSHIP REQUIREMENT
FOR EXEMPTION FROM TAX FOR CERTAIN
VETERANS’ ORGANIZATIONS.
(a) IN GENERAL.—Subparagraph (B) of section
501(c)(19) (relating to list of exempt organizations) is
amended by striking ‘‘or widowers’’ and inserting ‘‘, wid-
owers, ancestors, or lineal descendants’’.
(b) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
the date of the enactment of this Act.
SEC. 7. CLARIFICATION OF THE TREATMENT OF CERTAIN
DEPENDENT CARE ASSISTANCE PROGRAMS.
(a) IN GENERAL.—Subsection (b) of section 134 (de-
fining qualified military benefit) is amended by adding at
the end the following new paragraph:
‘‘(4) CLARIFICATION OF CERTAIN BENEFITS.—
For purposes of paragraph (1), such term includes
any dependent care assistance program (as in effect
on the date of the enactment of this paragraph) for
any individual described in paragraph (1)(A).’’.
(b) CONFORMING AMENDMENTS.—
(1) Section 134(b)(3)(A) (as amended by sec-
tion 102) is further amended by inserting ‘‘and
paragraph (4)’’ after ‘‘subparagraphs (B) and (C)’’.
(2) Section 3121(a)(18) is amended by striking
‘‘or 129’’ and inserting ‘‘, 129, or 134(b)(4)’’.
(3) Section 3306(b)(13) is amended by striking
‘‘or 129’’ and inserting ‘‘, 129, or 134(b)(4)’’.
(4) Section 3401(a)(18) is amended by striking
‘‘or 129’’ and inserting ‘‘, 129, or 134(b)(4)’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 2002.
SEC. 8. CLARIFICATION RELATING TO EXCEPTION FROM
ADDITIONAL TAX ON CERTAIN DISTRIBU-
TIONS 
FROM 
QUALIFIED 
TUITION 
PRO-
GRAMS, ETC., ON ACCOUNT OF ATTENDANCE
AT MILITARY ACADEMY.
(a) IN GENERAL.—Subparagraph (B) of section
530(d)(4) (relating to exceptions from additional tax for
distributions not used for educational purposes) is amend-
ed by striking ‘‘or’’ at the end of clause (iii), by redesig-
nating clause (iv) as clause (v), and by inserting after
clause (iii) the following new clause:
‘‘(iv) made on account of the attend-
ance of the designated beneficiary at the
United States Military Academy, the
United States Naval Academy, the United
States Air Force Academy, the United
States Coast Guard Academy, or the
United States Merchant Marine Academy,
to the extent that the amount of the pay-
ment or distribution does not exceed the
costs of advanced education (as defined by
section 2005(e)(3) of title 10, United
States Code, as in effect on the date of the
enactment of this section) attributable to
such attendance, or’’.
(b) EFFECTIVE DATE.—The amendment made by
this section shall take effect for taxable years beginning
after December 31, 2002.
SEC. 9. ABOVE-THE-LINE DEDUCTION FOR OVERNIGHT
TRAVEL EXPENSES OF NATIONAL GUARD
AND RESERVE MEMBERS.
(a) DEDUCTION ALLOWED.—Section 162 (relating to
certain trade or business expenses) is amended by redesig-
nating subsection (p) as subsection (q) and inserting after
subsection (o) the following new subsection:
‘‘(p) TREATMENT OF EXPENSES OF MEMBERS OF
RESERVE COMPONENT
OF ARMED FORCES
OF
THE
UNITED STATES.—For purposes of subsection (a)(2), in
the case of an individual who performs services as a mem-
ber of a reserve component of the Armed Forces of the
United States at any time during the taxable year, such
individual shall be deemed to be away from home in the
pursuit of a trade or business for any period during which
such individual is away from home in connection with such
services.’’.
(b) DEDUCTION ALLOWED WHETHER OR NOT TAX-
PAYER ELECTS TO ITEMIZE.—Paragraph (2) of section
62(a) (relating to certain trade and business deductions
of employees) is amended by adding at the end the fol-
lowing new subparagraph:
‘‘(E) CERTAIN EXPENSES OF MEMBERS OF
RESERVE COMPONENTS OF THE ARMED FORCES
OF THE UNITED STATES.—The deductions al-
lowed by section 162 which consist of expenses,
not in excess of $1,500, paid or incurred by the
taxpayer in connection with the performance of
services by such taxpayer as a member of a re-
serve component of the Armed Forces of the
United States for any period during which such
individual is more than 100 miles away from
home in connection with such services.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to amounts paid or incurred in tax-
able years beginning after December 31, 2002.
SEC. 10. PROTECTION OF SOCIAL SECURITY.
The amounts transferred to any trust fund under
title II of the Social Security Act shall be determined as
if this Act (other than this section) had not been enacted.
Passed the House of Representatives March 20,
2003.
Attest:
Clerk.
108TH CONGRESS
1ST SESSION
H. R. 1307
AN ACT
To amend the Internal Revenue Code of 1986 to
provide a special rule for members of the uni-
formed services in determining the exclusion of
gain from the sale of a principal residence and to
restore the tax exempt status of death gratuity
payments to members of the uniformed services,
and for other purposes.