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By Scott Nicholson
The Watauga Democrat

U.S. Rep. Virginia Foxx (R-N.C.) has introduced her first piece of federal legislation.

The Banner Elk native filed H.R. 1499 on Monday. The Heroes Earned Retirement Opportunities (HERO) Act seeks to change the tax code to allow soldiers earning hazard pay to be eligible for retirement account contributions. Foxx said she learned of the need for the bill when the father of a soldier in the Fifth District contacted her about his son's retirement account.

“After 10 years in the (state) legislature, I've learned most good ideas come from constituents,” Foxx said in a phone interview Thursday, while she was in the middle of voting on the House of Representatives floor.

The soldier, Michael Hensley of Forsyth County , had tried to invest some of his military pay in an Individual Retirement Account (IRA). Because combat pay is non-taxable income, current Internal Revenue Service code prevents such money from receiving any additional tax benefit from being invested in an IRA. Hensley had spent most of 2004 in Iraq , so his combat pay was almost entirely untaxed, which reduced his ability to invest in his own retirement.

“The main thing is to reward good behavior,” Foxx said. “It rewards his desire to be a good steward. We should be good to the people who serve in combat. Here's a young person who made about $25,000 last year and he wants to save some for his future.”

Foxx said the bill has received support from other legislators, she talked to, including members of the House Ways and Means Committee, where the bill is currently being heard. Foxx also has a key supporter on the Armed Services Committee.

The bill could be aided by an administrative atmosphere that is encouraging more personal responsibility for retirement savings, with the Bush Administration supporting privatization of Social Security and recent tax law changes that have expanded the amount of tax-deductible IRA contributions per year.

“If anyone has earned the opportunity to contribute to an IRA, it is these heroes,” Foxx said in statement.

The HERO Act would count hazard pay as taxable income for the purpose of IRA contributions while still keeping it tax-free for Internal Revenue Service purposes. The bill would allow soldiers to make the maximum yearly contribution to their retirement accounts, which increased this year to $3,500 for most taxpayers, though those over 50 can contribute more and still receive tax benefits.

“The purpose of hazard pay is to reward soldiers for their service, just as one goal of our tax code should be to encourage savings,” Foxx said. “The HERO Act is a common-sense, fiscally responsible piece of legislation that will help our servicemen and women without costing taxpayers a penny.”

Foxx said she didn't know how many soldiers would be affected by the new bill, though it would apply to all who serve in Iraq and Afghanistan this year. “Even if it only affects one person, it's a positive thing to do,” she said. If passed, the HERO Act would apply to all tax years beginning after Dec. 31, 2004, which means local National Guard troops who recently returned from active duty in Iraq may have some of their combat pay become eligible.

“I want to thank Rep. Foxx for not only listening to a problem that many men and women in uniform face, but moving so quickly to introduce a bill to fix it,” Hensley said in a statement. “On behalf of all soldiers, sailors, airmen and Marines, I thank Virginia Foxx for fighting on our behalf in the United States Congress.”

Foxx also hosted her first-ever public school class on a Washington , D.C. , visit Thursday. Fifth graders from Valle Crucis Elementary school visited Thursday and were shown some of the nation's capitol. Foxx said she was particularly pleased because her children attended Valle Crucis and her grandchildren are currently students there.

*Scott Nicholson can be contacted at nicholson@wataugademocrat.com