To amend the Internal Revenue Code of 1986 to extend the tax treatment of members of the Armed Forces who die while serving in, or as a result of serving in, a combat zone to employees of contractors of the Federal Government.

Amends the Internal Revenue Code to extend to employees of federal government contractors who die while, or as a result of, serving in a combat zone the same tax exclusions for decedent income and death gratuities allowed to members of the Armed Forces.

[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3745 Introduced in House (IH)]







109th CONGRESS
  1st Session
                                H. R. 3745

To amend the Internal Revenue Code of 1986 to extend the tax treatment 
of members of the Armed Forces who die while serving in, or as a result 
of serving in, a combat zone to employees of contractors of the Federal 
                              Government.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 13, 2005

 Mr. Hoekstra (for himself, Mr. Schwarz of Michigan, and Mr. Wilson of 
 South Carolina) 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 extend the tax treatment 
of members of the Armed Forces who die while serving in, or as a result 
of serving in, a combat zone to employees of contractors of the Federal 
                              Government.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. EMPLOYEES OF CONTRACTORS OF FEDERAL GOVERNMENT WHO DIE IN 
              COMBAT ZONES.

    (a) Decedent Income.--Section 692 of the Internal Revenue Code of 
1986 (relating to income taxes of members of Armed Forces, astronauts, 
and victims of certain terrorist attacks on death) is amended by adding 
at the end the following new subsection:
    ``(e) Federal Government Contractor Employees Dying With Respect to 
Service in a Combat Zone.--The provisions of subsections (a) and (b) 
shall apply to any employee of an entity under contract with the 
Federal Government whose death occurred while serving in a combat zone 
(as determined under section 112) or as a result of wounds, disease, or 
injury incurred while so serving. For purposes of the preceding 
sentence, rules similar to the rules of subsection (b) regarding 
missing status shall apply.''.
    (b) Death Gratuity Payable With Respect to Service of Federal 
Government Contractors in a Combat Zone.--
            (1) In general.--Section 134 of such Code (relating to 
        certain military benefits) is amended by adding at the end the 
        following new subsection:
    ``(c) Death Gratuity Payable With Respect to Service of Federal 
Government Contractors in a Combat Zone.--
            ``(1) In general.--For purposes of this section, the term 
        `qualified military benefit' includes a death gratuity payable 
        with respect to any employee of an entity under contract with 
        the Federal Government whose death occurred while serving in a 
        combat zone (as determined under section 112) or as a result of 
        wounds, disease, or injury incurred while so serving. This 
        subsection shall be applied without regard to any limitation in 
        subsection (b) relating to the date on which a benefit is in 
        effect.
            ``(2) Limitation.--Paragraph (1) shall not apply to the 
        portion of any death gratuity that exceeds the amount of the 
        maximum death gratuity described in subsection (b)(3)(C).''.
            (2) Conforming amendment.--Section 134(b)(3)(A) of such 
        Code is amended by striking ``and paragraphs (4) and (5)'' and 
        inserting ``, and paragraphs (4) and (5), and subsection (c)''.
    (c) Clerical Amendments.--
            (1) The heading of section 134 of such Code is amended by 
        inserting ``, etc'' after ``benefits''.
            (2) The heading of section 692 of such Code is amended by 
        inserting ``, etc.,'' after ``attacks''.
            (3) The item in the table of sections for part III of 
        subchapter B of chapter 1 of such Code relating to section 134 
        is amended by inserting ``, etc'' after ``benefits''.
            (4) The item in the table of sections for part II of 
        subchapter J of chapter 1 of such Code relating to section 692 
        is amended by inserting ``, etc.,'' after ``attacks''.
    (d) Effective Date.--The amendments made by this section shall 
apply with respect to deaths occurring after December 31, 2003.
                                 <all>