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[House Report 114-816]
[From the U.S. Government Publishing Office]

114th Congress   }                                     {        Report
                        HOUSE OF REPRESENTATIVES
 2d Session      }                                     {       114-816

======================================================================

 
                     MILITARY RESIDENCY CHOICE ACT

                                _______
                                

 November 14, 2016.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

    Mr. Miller of Florida, from the Committee on Veterans' Affairs, 
                        submitted the following

                              R E P O R T

                        [To accompany H.R. 5428]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Veterans' Affairs, to whom was referred 
the bill (H.R. 5428) to amend the Servicemembers Civil Relief 
Act to authorize spouses of servicemembers to elect to use the 
same residences as the servicemembers, having considered the 
same, report favorably thereon without amendment and recommend 
that the bill do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     2
Background and Need for Legislation..............................     2
Hearings.........................................................     3
Subcommittee Consideration.......................................     4
Committee Consideration..........................................     4
Committee Votes..................................................     4
Committee Oversight Findings.....................................     5
Statement of General Performance Goals and Objectives............     5
New Budget Authority, Entitlement Authority, and Tax Expenditures     5
Earmarks and Tax and Tariff Benefits.............................     5
Committee Cost Estimate..........................................     5
Congressional Budget Office Estimate.............................     5
Federal Mandates Statement.......................................     7
Advisory Committee Statement.....................................     7
Constitutional Authority Statement...............................     7
Applicability to Legislative Branch..............................     7
Statement on Duplication of Federal Programs.....................     7
Disclosure of Directed Rulemaking................................     7
Section-by-Section Analysis of the Legislation...................     7
Changes in Existing Law Made by the Bill as Reported.............     8

                          Purpose and Summary

    H.R. 5428, the ``Military Residency Choice Act,'' was 
introduced by Representative Randy Forbes of Virginia on June 
9, 2016. H.R. 5428 would amend the Servicemember Civil Relief 
Act (SCRA) to allow a servicemember's spouse to claim the same 
state of residency as the servicemember for voting and tax 
purposes even if the spouse has not lived in that state.

                  Background and Need for Legislation

Section 1. Short title

    Section 1 cites the short title of H.R. 5428, to be the 
``Military Residency Choice Act.''

Section 2. Residence of spouses of servicemembers for tax purposes

    Since the codification of the SCRA in 1942, Congress has 
recognized that active duty servicemembers should be afforded 
certain legal protections during their years of military 
service. Among other provisions, the SCRA allows servicemembers 
to maintain their place of residency in a State for certain 
purposes, such as voting and State and local income taxes, 
regardless of whether the servicemember is currently residing 
in that State or is absent from that State due to active duty 
military service. These protections are in place due to the 
transient nature of serving in the military, and they allow 
servicemembers to avoid the burdens of reestablishing a place 
of residence for tax purposes after each permanent change of 
duty station.
    Public Law (P.L.) 111-97 amended SCRA to extend these same 
protections to certain spouses of servicemembers. While the 
Committee believes that this extension of protections is 
commonsense for military spouses, unfortunately, the law only 
benefits the spouses of servicemembers who actually lived in 
the same State in which the servicemember established residency 
prior to a permanent change of duty station. Therefore, under 
current law, spouses who marry a servicemember, after the 
servicemember has already been transferred from the State where 
they established their residency, cannot claim that same State 
as their place of residency. This leaves that spouse having to 
legally change his/her State of residency for State and local 
income tax purposes after each move, whereas the servicemember 
does not have to.
    The Committee believes that this discrepancy was not the 
intention of P.L. 111-97 and can put an unfair burden on some 
military spouses despite the fact that these military families 
are facing the same transient lifestyle and undergoing the same 
stress as other military families. At a June 23, 2016 full 
Committee legislative hearing, Mr. Raymond C. Kelley, Director 
of the National Legislative Service of the Veterans of Foreign 
Wars of the United States agreed, stating, ``Protecting spouses 
of our military from losing residency in their home-of-record, 
while also allowing them to elect to have the same residency as 
their partner will greatly ease some of the stressors military 
families face.''
    Section 2 of H.R. 5428 would amend section 511(a)(2) of the 
SCRA to allow the spouse of a servicemember to elect to use the 
same State of residence as the servicemember for State or local 
tax purposes regardless of when or where the two individuals 
were married. These changes would apply with respect to any 
return of State or local income tax filed for any taxable year 
beginning with the taxable year that includes enactment. While 
this provision would not require the spouse to claim the same 
residence as the servicemember, the Committee believes that 
this change in the law would better fulfill the intent of the 
SCRA and the protections that are extended to our 
servicemembers and their families while they are serving on 
active duty.

Section 3. Residence of spouses of servicemembers for voting

    The SCRA also protects servicemembers by allowing them to 
maintain a certain State of residency or domicile, despite 
absence from that State due to military orders, for voting 
purposes in Federal, State, or local elections. Allowing them 
to continue voting in the State that they consider home 
regardless of where the military moves them, benefits the 
servicemember similarly as allowing them to maintain the same 
State of residence for tax purposes, and alleviates arduous 
voter registration requirements on our military men and woman 
after each move.
    P.L. 111-97 also extended these voting protections to 
military spouses after concern that ``[spouses] are 
disenfranchised from voting; often times not arriving to a new 
state in time to vote in primaries and do not have ample 
opportunity to get to know the Federal, state or local 
candidates or adequate time to learn their policies and 
legislative agendas. It is confusing when one state allows a 
military spouse to vote via absentee ballot, yet the state 
where the spouse is physically located does not.''\1\ 
Unfortunately, as was the case with maintaining a certain 
residence for tax purposes, this law did not extend these same 
voting protections to spouses who marry the servicemember after 
the active duty member has already moved from the State in 
which they are claiming residence. The Committee believes that 
comparable to updating tax forms after each move, updating 
voter registration paperwork after each permanent change in 
duty station puts an unfair and complicated burden on some 
military spouses that is not required for other spouses just 
due to when they married the servicemember. The Committee also 
believes that spouses and servicemembers should be able to vote 
in the same area for which they pay taxes.
---------------------------------------------------------------------------
    \1\Senate Report 111-046--Military Spouses Residency Relief Act.
---------------------------------------------------------------------------
    Section 3 of H.R. 5428 would amend Section 705(b) of SCRA 
by allowing the spouse of a servicemember to elect to use the 
same residence as the servicemember for State and local voting 
purposes, even if they are absent from that State due to 
military orders and regardless of when or where they got 
married. The Committee believes that this will fulfill the 
intent of SCRA and P.L. 111-97 and lessen the confusion and 
burdens of being a military spouse.

                                Hearings

    On June 23, 2016, the full Committee conducted a 
legislative hearing on various draft bills and bills introduced 
during the 114th Congress, including H.R. 5428. The following 
witnesses testified:
          The Honorable Doug Lamborn, U.S. House of 
        Representatives, 5th District of Colorado; The 
        Honorable Dina Titus, U.S. House of Representatives, 
        1st District of Nevada; The Honorable Raul Ruiz, U.S. 
        House of Representatives, 36th District of California; 
        The Honorable Beto O'Rourke, U.S. House of 
        Representatives, 16th District of Texas; The Honorable 
        Ron DeSantis, U.S. House of Representatives, 6th 
        District of Florida; The Honorable Ted Yoho, U.S. House 
        of Representatives, 3rd District of Florida; The 
        Honorable Jody Hice, U.S. House of Representatives, 
        10th District of Georgia; The Honorable Dan Newhouse, 
        U.S. House of Representatives, 4th District of 
        Washington; The Honorable David Young, U.S. House of 
        Representatives, 3rd District of Iowa; The Honorable 
        Sloan Gibson, Deputy Secretary, U.S. Department of 
        Veterans Affairs who was accompanied by Ms. Laura 
        Eskenazi, Executive in Charge and Vice Chairman, Board 
        of Veterans Appeals, U.S. Department of Veterans 
        Affairs, Mr. David McLenachen, Deputy Under Secretary 
        for Disability Assistance, Veterans Benefits 
        Administration, U.S. Department of Veterans Affairs, 
        and Dr. Maureen McCarthy, Assistant Deputy Under 
        Secretary for Health Patient Care Services, Veterans 
        Health Administration, U.S. Department of Veterans 
        Affairs; Mr. Raymond Kelley, Director of the National 
        Legislative Service, Veterans of Foreign Wars of the 
        United States; Mr. Paul Varela, Assistant National 
        Legislative Director, Disabled American Veterans; Mr. 
        Carl Blake, Associate Executive Director of Government 
        Relations, Paralyzed Veterans of America; Mr. Louis J. 
        Celli, Jr., Director of the National Veterans Affairs 
        and Rehabilitation Division, The American Legion; and 
        Mr. Rick Weidman, Executive Director for Policy and 
        Government Affairs, Vietnam Veterans of America.
    A Statement for the Record was submitted by the following:
          American Battle Monuments Commission; AMVETS; U.S. 
        Court of Appeals for Veterans Claims; Iraq and 
        Afghanistan Veterans of America; Military Officers 
        Association of America; Military Veterans Advocacy, 
        Inc.; National Organization of Veterans Advocates; 
        National Veterans Legal Services Program; P.A.W.S. 
        Foundation; Stetson University College of Law's 
        Veterans Law Institute; and the U.S. Department of 
        Labor.

                       Subcommittee Consideration

    There was no Subcommittee consideration of H.R. 5428.

                        Committee Consideration

    On September 21, 2016, the full Committee met in open 
markup session, a quorum being present, and ordered H.R. 5428, 
favorably reported to the House of Representatives by voice 
vote.
    A motion by Representative Mark Takano of California to 
report H.R. 5428 favorably to the House of Representatives was 
agreed to by voice vote.

                            Committee Votes

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, no recorded votes were taken on 
amendments or in connection with ordering H.R. 5428 reported to 
the House.

                      Committee Oversight Findings

    In compliance with clause 3(c)(1) of rule XIII and clause 
2(b)(1) of rule X of the Rules of the House of Representatives, 
the Committee's oversight findings and recommendations are 
reflected in the descriptive portions of this report.

         Statement of General Performance Goals and Objectives

    In accordance with clause 3(c)(4) of rule XIII of the Rules 
of the House of Representatives, the Committee's performance 
goals and objectives are to ensure that spouses of 
servicemembers are able to claim the same state of residence as 
the servicemember even if the spouse has not lived in that 
state to ensure that, for tax purposes and voting purposes, the 
spouse is not negatively impacted by the mobility of active 
duty service.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee adopts as its 
own the estimate of new budget authority, entitlement 
authority, or tax expenditures or revenues contained in the 
cost estimate prepared by the Director of the Congressional 
Budget Office pursuant to section 402 of the Congressional 
Budget Act of 1974.

                  Earmarks and Tax and Tariff Benefits

    H.R. 5428 does not contain any Congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined in 
clause 9 of rule XXI of the Rules of the House of 
Representatives.

                        Committee Cost Estimate

    The Committee adopts as its own the cost estimate on H.R. 
5428, prepared by the Director of the Congressional Budget 
Office pursuant to section 402 of the Congressional Budget Act 
of 1974.

               Congressional Budget Office Cost Estimate

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
for H.R. 5428, provided by the Congressional Budget Office 
pursuant to section 402 of the Congressional Budget Act of 
1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                  Washington, DC, October 25, 2016.
Hon. Jeff Miller,
Chairman, Committee on Veterans' Affairs,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 5428, the Military 
Residency Choice Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is David Newman.
            Sincerely,
                                                        Keith Hall.
    Enclosure.

H.R. 5428--Military Residency Choice Act

    Military personnel can retain their residences or domiciles 
for purposes of state and local taxation and voter registration 
when they leave a state if that move, and any subsequent moves, 
are made in compliance with military orders. Under the Military 
Spouses Residency Relief Act, spouses of service members can 
retain their states of residency if they move and reside with 
the service member; they cannot use the service members' states 
of residency for taxation or voting purposes unless they can 
independently establish entitlement according to state laws. 
H.R. 5428 would allow spouses of service members to claim the 
same state of residence as the service member for those 
purposes, regardless of whether the spouse had ever resided in 
that state.
    CBO estimates that enacting H.R. 5428 would have no effect 
on the federal budget. Because enacting the legislation would 
not affect direct spending or revenues, pay-as-you-go 
procedures do not apply.
    CBO estimates that enacting H.R. 5428 would not increase 
net direct spending or on-budget deficits in any of the four 
consecutive 10-year periods beginning in 2027.
    H.R. 5428 contains an intergovernmental mandate as defined 
in the Unfunded Mandates Reform Act (UMRA). CBO considers the 
residency benefit conferred on military spouses under the 
Military Spouses Residency Relief Act to be a preemption of 
taxing authority of state and local governments. H.R. 5428 
would marginally expand this preemption by allowing the spouses 
of service members to elect the residency of a service member 
that is not the residence in which the couple was married. CBO 
expects that some military spouses would elect new states of 
residency if income tax rates in those states are lower. 
Although the effect on revenue collections by individual state 
and local governments would vary, depending on the number and 
income of these individuals and where they reside or are legal 
residents, CBO estimates the net effect to be below the annual 
threshold established in UMRA ($77 million in 2016, adjusted 
annually for inflation).
    CBO has determined that section 3 of H.R 5428, which would 
allow spouses of military personnel to register to vote in the 
same state as the service member, is excluded from review for 
mandates under UMRA because it would enforce the constitutional 
rights of individuals. Therefore, as specified in UMRA, CBO has 
not reviewed the provisions of section 3 for intergovernmental 
or private-sector mandates. Other provisions of the bill 
contain no private-sector mandates as defined in UMRA.
    The CBO staff contacts for this estimate are David Newman 
(for federal costs) and Jon Sperl (for private-sector 
mandates). The estimate was approved by H. Samuel Papenfuss, 
Deputy Assistant Director for Budget Analysis.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates regarding H.R. 5428, prepared by the Director of the 
Congressional Budget Office pursuant to section 423 of the 
Unfunded Mandates Reform Act.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act would be created by H.R. 
5428.

                 Statement of Constitutional Authority

    Pursuant to Article I, section 8 of the United States 
Constitution, H.R. 5428 is authorized by Congress' power to 
``provide for the common Defense and general Welfare of the 
United States.''

                  Applicability to Legislative Branch

    The Committee finds that H.R. 5428 does not relate to the 
terms and conditions of employment or access to public services 
or accommodations within the meaning of section 102(b)(3) of 
the Congressional Accountability Act.

              Statement on Duplication of Federal Programs

    Pursuant to section 3(g) of H. Res. 5, 114th Cong. (2015), 
the Committee finds that no provision of H.R. 5428 establishes 
or reauthorizes a program of the Federal Government known to be 
duplicative of another Federal program, a program that was 
included in any report from the Government Accountability 
Office to Congress pursuant to section 21 of Public Law 111-
139, or a program related to a program identified in the most 
recent Catalog of Federal Domestic Assistance.

                   Disclosure of Directed Rulemaking

    Pursuant to section 3(i) of H. Res. 5, 114th Cong. (2015), 
the Committee estimates that H.R. 5428 contains no directed 
rule making that would require the Secretary to prescribe 
regulations.

             Section-by-Section Analysis of the Legislation

Section 1. Short title

    Section 1 cites the short title of H.R. 5428 to be the 
``Military Residency Choice Act.''

Section 2. Residence of spouses of servicemembers for tax purposes

    Section 2(a) would amend Section 511(a)(2) of the 
Servicemembers Civil Relief Act (50 U.S.C. 4001(a)(2)) by 
adding at the end of the section a new sentence to allow the 
spouse of a servicemember to elect to use the same residence as 
the servicemember for tax purposes, regardless of the date of 
when or where the spouse and the servicemember got married.
    Section 2(b) would make the changes made in Section 2(a) 
applicable for any return of State or local income tax filed 
for any taxable year beginning with the taxable year that 
includes the date of enactment.

Section. 3. Residence of spouses of servicemembers for voting

    Section 3(a) would amend Section 705(b) of the 
Servicemembers Civil Relief Act by striking ``State or local 
office'' and all that follows through the period and inserting 
a new paragraph which would allow a person who is absent from a 
State because the person is accompanying their spouse who is 
also absent from that same State due to military or naval 
orders shall not, solely by reason of that absence be deemed to 
have lost residence or domicile in that state regardless of 
whether that person intends to return to that state or gained 
residency in any other State. Section 3(a) would also allow for 
the spouse of a servicemember to elect to use the same State of 
residence as the servicemember regardless of the day on which 
they got married.
    Section 3(b) would make the changes made in Section 3(a) 
effective 90 days following enactment.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, and existing law in which no 
change is proposed is shown in roman):

SERVICEMEMBERS CIVIL RELIEF ACT

           *       *       *       *       *       *       *

TITLE V--TAXES AND PUBLIC LANDS

           *       *       *       *       *       *       *

SEC. 511. RESIDENCE FOR TAX PURPOSES.

  (a) Residence or Domicile.--
          (1) In general.--A servicemember shall neither lose 
        nor acquire a residence or domicile for purposes of 
        taxation with respect to the person, personal property, 
        or income of the servicemember by reason of being 
        absent or present in any tax jurisdiction of the United 
        States solely in compliance with military orders.
          (2) Spouses.--A spouse of a servicemember shall 
        neither lose nor acquire a residence or domicile for 
        purposes of taxation with respect to the person, 
        personal property, or income of the spouse by reason of 
        being absent or present in any tax jurisdiction of the 
        United States solely to be with the servicemember in 
        compliance with the servicemember's military orders if 
        the residence or domicile, as the case may be, is the 
        same for the servicemember and the spouse. The spouse 
        of a servicemember may elect to use the same residence 
        for purposes of taxation as the servicemember 
        regardless of the date on which the marriage of the 
        spouse and the servicemember occurred.
  (b) Military Service Compensation.--Compensation of a 
servicemember for military service shall not be deemed to be 
income for services performed or from sources within a tax 
jurisdiction of the United States if the servicemember is not a 
resident or domiciliary of the jurisdiction in which the 
servicemember is serving in compliance with military orders.
  (c) Income of a Military Spouse.--Income for services 
performed by the spouse of a servicemember shall not be deemed 
to be income for services performed or from sources within a 
tax jurisdiction of the United States if the spouse is not a 
resident or domiciliary of the jurisdiction in which the income 
is earned because the spouse is in the jurisdiction solely to 
be with the servicemember serving in compliance with military 
orders.
  (d) Personal Property.--
          (1) Relief from personal property taxes.--The 
        personal property of a servicemember or the spouse of a 
        servicemember shall not be deemed to be located or 
        present in, or to have a situs for taxation in, the tax 
        jurisdiction in which the servicemember is serving in 
        compliance with military orders.
          (2) Exception for property within member's domicile 
        or residence.--This subsection applies to personal 
        property or its use within any tax jurisdiction other 
        than the servicemember's or the spouse's domicile or 
        residence.
          (3) Exception for property used in trade or 
        business.--This section does not prevent taxation by a 
        tax jurisdiction with respect to personal property used 
        in or arising from a trade or business, if it has 
        jurisdiction.
          (4) Relationship to law of state of domicile.--
        Eligibility for relief from personal property taxes 
        under this subsection is not contingent on whether or 
        not such taxes are paid to the State of domicile.
  (e) Increase of Tax Liability.--A tax jurisdiction may not 
use the military compensation of a nonresident servicemember to 
increase the tax liability imposed on other income earned by 
the nonresident servicemember or spouse subject to tax by the 
jurisdiction.
  (f) Federal Indian Reservations.--An Indian servicemember 
whose legal residence or domicile is a Federal Indian 
reservation shall be taxed by the laws applicable to Federal 
Indian reservations and not the State where the reservation is 
located.
  (g) Definitions.--For purposes of this section:
          (1) Personal property.--The term ``personal 
        property'' means intangible and tangible property 
        (including motor vehicles).
          (2) Taxation.--The term ``taxation'' includes 
        licenses, fees, or excises imposed with respect to 
        motor vehicles and their use, if the license, fee, or 
        excise is paid by the servicemember in the 
        servicemember's State of domicile or residence.
          (3) Tax jurisdiction.--The term ``tax jurisdiction'' 
        means a State or a political subdivision of a State.

           *       *       *       *       *       *       *

TITLE VII--FURTHER RELIEF

           *       *       *       *       *       *       *

SEC. 705. GUARANTEE OF RESIDENCY FOR MILITARY PERSONNEL AND SPOUSES OF 
                    MILITARY PERSONNEL.

  (a) In General.--For the purposes of voting for any Federal 
office (as defined in section 301 of the Federal Election 
Campaign Act of 1971 (2 U.S.C. 431)) or a State or local 
office, a person who is absent from a State in compliance with 
military or naval orders shall not, solely by reason of that 
absence--
          (1) be deemed to have lost a residence or domicile in 
        that State, without regard to whether or not the person 
        intends to return to that State;
          (2) be deemed to have acquired a residence or 
        domicile in any other State; or
          (3) be deemed to have become a resident in or a 
        resident of any other State.
  (b) Spouses.--For the purposes of voting for any Federal 
office (as defined in section 301 of the Federal Election 
Campaign Act of 1971 (2 U.S.C. 431)) or a [State or local 
office, a person who is absent from a State because the person 
is accompanying the person's spouse who is absent from that 
same State in compliance with military or naval orders shall 
not, solely by reason of that absence] State or local office--
          [(1) be deemed to have lost a residence or domicile 
        in that State, without regard to whether or not the 
        person intends to return to that State;
          [(2) be deemed to have acquired a residence or 
        domicile in any other State; or
          [(3) be deemed to have become a resident in or a 
        resident of any other State.]
          (1) a person who is absent from a State because the 
        person is accompanying the person's spouse who is 
        absent from that same State in compliance with military 
        or naval orders shall not, solely by reason of that 
        absence--
                  (A) be deemed to have lost a residence or 
                domicile in that State, without regard to 
                whether or not the person intends to return to 
                that State;
                  (B) be deemed to have acquired a residence or 
                domicile in any other State; or
                  (C) be deemed to have become a resident in or 
                a resident of any other State; and
          (2) the spouse of a servicemember may elect to use 
        the same residence as the servicemember regardless of 
        the date on which the marriage of the spouse and the 
        servicemember occurred.

           *       *       *       *       *       *       *

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