TREATMENT OF DEATH GRATUITIES PAYABLE WITH RESPECT TO DECEASED MEMBERS OF THE ARMED FORCES.

SEC. 102. TREATMENT OF DEATH GRATUITIES PAYABLE WITH RESPECT TO DECEASED MEMBERS OF THE ARMED FORCES.(a) Increase in Amount of Death Gratuity.—(1) In general.—Section 1478(a) of title 10, United States Code, is amended by striking “$6,000” and inserting “$12,000”.(2) Effective date.—The amendment made by this subsection shall take effect as of September 11, 2001, and shall apply with respect to deaths occurring on or after that date.(b) Exclusion From Gross Income.—(1) In general.—Subsection (b)(3) of section 134 (relating to certain military benefits) is amended by adding at the end the following new subparagraph:“(C) Exception for death gratuity adjustments made by law.—Subparagraph (A) shall not apply to any adjustment to the amount of death gratuity payable under chapter 75 of title 10, United States Code, which is pursuant to a provision of law enacted after September 9, 1986.”.(2) Conforming amendment.—Subparagraph (A) of section 134(b)(3) is amended by striking “subparagraph (B)” and inserting “subparagraphs (B) and (C)”.(3) Effective date.—The amendments made by this subsection shall apply with respect to deaths occurring after September 10, 2001.