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[Senate Report 111-46]
[From the U.S. Government Publishing Office]

                                                       Calendar No. 108
111th Congress                                                   Report
                                 SENATE
 1st Session                                                     111-46

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

 
                 MILITARY SPOUSES RESIDENCY RELIEF ACT

                                _______
                                

                 July 15, 2009.--Ordered to be printed

                                _______
                                

          Mr. Akaka, from the Committee on Veterans' Affairs,
                        submitted the following

                              R E P O R T

                             together with

                           SUPPLEMENTAL VIEWS

                          [To accompany S.475]

    The Committee on Veterans' Affairs (hereinafter, 
``Committee''), to which was referred the bill (S.475) to amend 
the Servicemembers Civil Relief Act (hereinafter, ``SCRA'') to 
guarantee the equity of spouses of military personnel with 
regard to matters of residency, and for other purposes, having 
considered the same, reports favorably thereon without 
amendment, and recommends that the bill do pass.

                              Introduction

    On February 25, 2009, Committee Ranking Member Richard Burr 
introduced S.475, the proposed ``Military Spouses Residency 
Relief Act.'' Senator Dianne Feinstein is an original 
cosponsor. Senators John Barrasso, Evan Bayh, Mark Begich, 
Christopher S. Bond, Sherrod Brown, Sam Brownback, Jim Bunning, 
Roland W. Burris, Robert C. Byrd, Maria Cantwell, Benjamin L. 
Cardin, Saxby Chambliss, Tom Coburn, Thad Cochran, John Cornyn, 
Jim DeMint, Richard Durbin, John Ensign, Judd Gregg, Orrin G. 
Hatch, Kay Bailey Hutchison, James M. Inhofe, Johnny Isakson, 
Mike Johanns, Tim Johnson, Mary L. Landrieu, Joseph I. 
Lieberman, Blanche L. Lincoln, Mel Martinez, Lisa Murkowski, 
James E. Risch, Jeff Sessions, Richard C. Shelby, Olympia J. 
Snowe, Arlen Specter, Jon Tester, John Thune, Mark Udall, David 
Vitter, Roger F. Wicker, and Ron Wyden were later added as 
cosponsors. The bill was referred to the Committee.
    On April 29, 2009, the Committee held a hearing on 
legislation pending before the Committee. Testimony on S.475, 
among other bills, was offered by: Robert Jackson, Assistant 
Director, National Legislative Service, Veterans of Foreign 
Wars of the United States; Raymond C. Kelley, National 
Legislative Director, AMVETS; R. Chuck Mason, Legislative 
Attorney, Congressional Research Service; Ian de Planque, 
Assistant Director for Claims Service, Veterans Affairs and 
Rehabilitation Commission, The American Legion; and Rebecca 
Poynter, Director, Military Spouse Business Organization.

                           Committee Meeting

    On May 21, 2009, the Committee met in open session to 
consider legislation pending before the Committee. Among the 
measures so considered was S.475. The Committee voted without 
dissent to report favorably S.475 to the Senate.

                      Summary of S.475 as Reported

    S.475 (hereinafter, ``the Committee bill'') would extend 
several SCRA protections to certain spouses of servicemembers:
          Section 2 would, in certain circumstances, allow the 
        spouse of a servicemember, for purposes of voting in 
        Federal, state, or local elections, to retain residency 
        in a state from which the spouse is absent.
          Section 3 would, in certain circumstances, allow the 
        spouse of a servicemember, for purposes of income taxes 
        and personal property taxes, to retain residency in a 
        tax jurisdiction from which the spouse is absent.
          Section 4 would suspend certain residency 
        requirements for the spouse of a servicemember seeking 
        to exercise certain land rights, such as mining claims 
        or homesteading, on public lands.

                       Background and Discussion

    The Committee bill contains several provisions designed to 
afford certain SCRA protections to the spouses of military 
personnel.
    Congress has long recognized that the men and women of our 
military should be afforded civil legal protections, in order 
to allow them ``to devote their entire energy to the defense 
needs of the Nation.'' 50 U.S.C. App. 502. Currently, these 
protections are provided by the Servicemembers Civil Relief Act 
or SCRA.
    Among a wide range of protections, the SCRA allows a 
servicemember to maintain his or her residency for certain 
purposes, such as voting, income taxes, and personal property 
taxes, in a state from which the servicemember is absent in 
compliance with military orders. These protections essentially 
allow a servicemember to retain a ``home'' state while he or 
she is ordered to new locations by the military and to avoid 
many of the difficulties, burdens, and distractions associated 
with a permanent change of duty station.
    The amendments to the SCRA that would be made by the 
Committee bill would provide military spouses with SCRA 
residency protections similar to those afforded to 
servicemembers.

Sec. 2. Guarantee of residency for spouses of military personnel for 
        voting purposes.

    Section 2 of the Committee bill would, in certain 
circumstances, allow the spouse of a servicemember, for 
purposes of voting in Federal, state, or local elections, to 
retain residency in a state from which the spouse is absent.
    Background. Under section 705 of the SCRA (50 U.S.C. App. 
595), for purposes of voting in Federal, state, or local 
elections, if a servicemember leaves a state in compliance with 
military or naval orders, the servicemember will not, solely 
based on that absence, be deemed to have lost residence or 
domicile in that state, be deemed to have acquired residence or 
domicile in any other state, or be deemed to have become a 
resident of any other state. These protections allow the 
servicemember, as he or she is moved around the country by the 
military, to continue voting in the state he or she considers 
home and to avoid the confusion and difficulties of frequently 
changing his or her voter registration.
    However, if the servicemember's spouse moves with the 
servicemember, that spouse is not afforded the same SCRA 
protections. The negative impact this may have on military 
spouses was described at the Committee's April 29, 2009, 
hearing by Rebecca Poynter:

          Military 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 * 
        * *.

    Similarly, in an April 28, 2009, letter to the Chairman and 
Ranking Member of the Committee, the Air Force Association 
stressed that ``the burdens placed on military spouses to 
simply exercise their Constitutional right to vote are a 
constant source of consternation and frustration for our 
military families.''
    Committee Bill. Section 2 of the Committee bill would amend 
section 705 of the SCRA (50 U.S.C. App. 595) to add a new 
subsection providing that, for purposes of voting in Federal, 
state, or local elections, if a spouse of a servicemember 
leaves a state in order to accompany the servicemember who is 
absent from that same state in compliance with military or 
naval orders, the spouse will not, solely based on that 
absence, be deemed to have lost residence or domicile in that 
state, be deemed to have acquired residence or domicile in any 
other state, or be deemed to have become a resident of any 
other state. These changes would apply with respect to absences 
from states on or after the date of enactment, regardless of 
the date of the relevant military or naval orders.
    These changes will allow certain military spouses, like 
servicemembers, to vote in the states they consider home and 
will reduce the confusion and difficulties now encountered by 
military spouses attempting to exercise their right to vote.

Sec. 3. Determination for tax purposes of residence of spouses of 
        military personnel.

    Section 3 of the Committee bill would, in certain 
circumstances, allow the spouse of a servicemember, for 
purposes of income taxes and personal property taxes, to retain 
residency in a tax jurisdiction from which the spouse is 
absent.
    Background. Under section 511(a) of the SCRA (50 U.S.C. 
App. 571), a servicemember does not lose or acquire residence 
or domicile, for purposes of income taxes and personal property 
taxes, based on the fact that the servicemember is absent from 
or present in any tax jurisdiction of the United States solely 
in compliance with military orders. Under section 511(b) of the 
SCRA, the servicemember's military compensation will not be 
considered income in a tax jurisdiction where the servicemember 
is serving in accordance with military orders and is not a 
resident. Also, under section 511(c), the personal property of 
a servicemember will not be deemed to be present in a tax 
jurisdiction in which the servicemember is serving in 
accordance with military orders, unless that jurisdiction is 
the servicemember's domicile or residence.
    With these protections, if a servicemember is ordered to a 
duty location in a new state, the servicemember is free to 
bring to the new state his or her personal property, such as an 
automobile, without risk that the property will be taxed in 
that state. Also, the servicemember will not be required to pay 
income taxes on his or her military income in a state other 
than the one he or she has declared as his or her home state.
    However, in some states, if the servicemember's personal 
property is jointly titled with his or her spouse, the SCRA 
protection regarding personal property taxes will not apply. In 
fact, in 1992, the National Military Family Association 
testified before the House Committee on Veterans' Affairs that, 
``in some States, [the family] car must be registered in the 
servicemember's name only in order for the family to be 
protected against personal property tax'' and that, ``[i]n 
addition to creating difficulties if the servicemember dies or 
in cases of divorce, the current situation has left many 
military spouses feeling they are perceived as excess 
baggage.''
    More recently, the Department of Defense submitted 
testimony for the Committee's April 29, 2009, hearing 
addressing the same issue. In part, the Department of Defense 
provided this explanation of the current problem:
          (i) Section 511 of the SCRA states that the personal 
        property of a servicemember shall not be deemed to be 
        located 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.
          (ii) Many states conclude that property (most often 
        this is an automobile) jointly held by a servicemember 
        and spouse is not protected from taxation by Section 
        511 of the SCRA.
          (iii) Thus to ensure the tax benefit, the 
        servicemember must register the property in his or her 
        name only. This is contrary to the recommendations that 
        we provide Servicemembers for estate planning purposes.
    In addition, at the Committee's April 29, 2009, hearing, 
Rebecca Poynter provided a description of how this impacts 
military families:

          For personal property; current, and often 
        conflicting, state laws create financial and 
        administrative burdens for the military spouse 
        resulting in the suppression of assets. While an active 
        duty servicemember may title, register, and maintain, a 
        car in their home state, their spouse may not. With 
        each move, if a spouse chooses to keep his/her joint 
        tenancy of personal property, they must change the 
        registration and/or titling to the new state; requiring 
        the spouse pay several hundred dollars each time they 
        relocate. To alleviate these types of fees, many 
        spouses are forced to put all property in the name of 
        the servicemember.

    Military families are also impacted by the current state of 
the law regarding state income taxes. There are significant 
differences between the states, ranging from states that have 
no income tax to those that impose up to an 11% marginal income 
tax. Because the income of a military spouse is not protected 
under the SCRA, a spouse's income may be taxed in any 
jurisdiction where the spouse moves to accompany the 
servicemember. As a result, if a working military spouse moves 
around the country with the servicemember, their family income 
may vary significantly based on where the servicemember is sent 
by the military.
    In addition to the potential financial burdens this may 
cause for military families, the military spouse may be 
required to file tax returns in multiple jurisdictions. The 
complexities of this situation were described by a military 
spouse in the attachment to testimony for the Committee's April 
29, 2009, hearing:

          Taxes are a confusing mess. My husband has residency 
        in one state and I have residency in another state. 
        Just this year our tax attorney had to redo our taxes 
        because she was confused about both of our states of 
        residence * * *. Next year is going to be even more 
        confusing when I have a business registered in one 
        state. My husband is a resident in another state and I 
        will have been a resident of both Virginia and 
        California * * *.

    Committee Bill. Section 3 of the Committee bill would amend 
section 511 of the SCRA (50 U.S.C. App. 571) to provide that, 
for purposes of income taxes and personal property taxes, the 
spouse of a servicemember will not be deemed to have lost or 
acquired domicile or residence by reason of being absent from 
or present in a tax jurisdiction solely to be with a 
servicemember who is in compliance with military orders and has 
the same original residence or domicile as the spouse. In 
addition, it would add a new subsection to section 511 
providing that income for services performed by the spouse of a 
servicemember will not be deemed to be income in a tax 
jurisdiction where the spouse is located solely to be with the 
servicemember who is serving there in compliance with military 
orders.
    Also, the Committee bill would amend section 511 to provide 
that the personal property of the spouse of a servicemember 
will not be deemed to be present in a tax jurisdiction in which 
the servicemember is serving in accordance with military 
orders, unless that jurisdiction is the servicemember's or the 
spouse's domicile or residence. These changes would apply with 
respect to any state or local income tax return filed for any 
taxable year beginning with the taxable year that includes the 
date of enactment.
    These changes will allow spouses to title personal property 
in their own names or jointly with their servicemember-spouses, 
without the potential tax ramifications that are possible under 
current law. In addition, these changes will reduce some of the 
confusion, difficulties, and burdens now faced by military 
families when they are moved to a new state.

Sec. 4. Suspension of land rights residency requirements for spouses of 
        military personnel.

    Section 4 of the Committee bill would suspend certain 
residency requirements for the spouse of a servicemember 
seeking to exercise certain land rights, such as mining claims 
or homesteading, on public lands.
    Background. Under section 508 of the SCRA (50 U.S.C. App. 
568), a servicemember is entitled to have certain residency 
requirements suspended for purposes of exercising land rights, 
such as mining claims or homesteading, on public lands. This 
protection applies with respect to requirements related to the 
establishment of residency within a limited time. Those 
requirements will be suspended for a servicemember seeking 
entry onto public lands until 180 days after termination of or 
release from military service. Similar rights are not provided 
to the spouses of servicemembers.
    Committee Bill. Section 4 of the Committee bill would amend 
section 508 of the SCRA to suspend certain residency 
requirements for the spouse of a servicemember seeking entry 
onto public lands. This protection would apply with respect to 
requirements related to the establishment of residency within a 
limited time. Those requirements would be suspended for the 
spouse of a servicemember seeking entry onto public lands until 
180 days after the servicemember's termination of or release 
from military service. These changes would apply with respect 
to servicemembers in the military on or after the date of 
enactment.
    These changes would afford the spouse of a servicemember 
some of the same SCRA land-rights protections that are now 
afforded to servicemembers.

                             Cost Estimate

    In compliance with paragraph 11(a) of rule XXVI of the 
Standing Rules of the Senate, the Committee, based on 
information supplied by the Congressional Budget Office 
(hereinafter, ``CBO''), estimates that enactment of the 
Committee bill would, relative to current law, not have a 
significant effect on the Federal budget. It would impose an 
intergovernmental mandate that would fall below the annual 
threshold established by the Unfunded Mandates Reform Act.
    The cost estimate provided by CBO, setting forth a detailed 
breakdown of costs, follows:

                               Congressional Budget Office,
                                     Washington, DC, June 26, 2009.
Hon. Daniel K. Akaka, Chairman,
Committee on Veterans' Affairs,
U.S. Senate, Washington, DC.

    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S.475, the Military 
Spouses Residency Relief Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Dwayne M. 
Wright.
            Sincerely,
                                      Douglas W. Elmendorf,
                                                          Director.
    Enclosure.

S.475, Military Spouses Residency Relief Act

    Summary: S.475 would extend to military spouses several 
residency-related benefits afforded to servicemembers under the 
Servicemember Civil Relief Act (SCRA). CBO estimates that 
implementing the bill would not have a significant effect on 
the Federal budget.
    S.475 would impose an intergovernmental mandate as defined 
in the Unfunded Mandates Reform Act (UMRA) by limiting the 
ability of state and local governments to collect income and 
property taxes. CBO estimates the total cost of complying with 
the mandate would fall well below the annual threshold 
established in UMRA ($69 million in 2009, adjusted annually for 
inflation). The bill contains no private-sector mandates as 
defined in UMRA.
    Section 4 of UMRA excludes from the application of that act 
any legislative provisions that are necessary for enforcing the 
constitutional rights of individuals. CBO has determined that 
section 2 of this bill falls within that exclusion; we have not 
reviewed it for intergovernmental or private-sector mandates.
    Basis of estimate: S.475 would extend to military spouses 
certain benefits afforded servicemembers under the SCRA. 
Sections 2 and 3 would allow military spouses to maintain a 
home-of-record for purposes of voting and taxation when they 
are absent from their home state to join active-duty spouses at 
military duty stations.
    Similarly, section 4 would suspend for military spouses the 
residency requirements for land rights under laws--such as 
mining and mineral leasing laws--relating to federally owned 
lands. Under S.475, absence from the land due to a 
servicemember's military orders would not require the military 
spouse to forfeit those land rights, regardless of their state 
of domicile, for a period ending six months after the 
servicemember's discharge from active-duty 
service.
    Intergovernmental and private-sector impact: S.475 contains 
an intergovernmental mandate as defined in UMRA. It would 
prohibit state and local governments from collecting taxes on 
an individual's income or personal property, if that individual 
moved to the jurisdiction to accompany his or her spouse at a 
military-duty station. It would transfer authority to tax those 
individuals to the states in which they were legal residents 
before moving to the duty station. The effect on individual 
state and local revenue collections would vary depending on the 
number and income of these individuals and where they reside or 
maintain legal residence. However, CBO estimates the net effect 
across states to be small and well below the annual threshold 
established in UMRA ($69 million in 2009, adjusted annually for 
inflation).
    The bill contains no private-sector mandates as defined in 
UMRA.
    Section 4 of UMRA excludes from the application of that act 
any legislative provisions that are necessary for enforcing the 
constitutional rights of individuals. CBO has determined that 
section 2 of this bill falls within that exclusion because it 
would protect individual's voting rights; we have not reviewed 
it for intergovernmental or private-sector mandates.
    Estimate prepared by: Federal Costs: Dwayne M. Wright; 
Impact on State, Local, and Tribal Governments: Burke Doherty; 
Impact on the Private Sector: Elizabeth Bass.
    Estimate approved by: Theresa Gullo, Deputy Assistant 
Director for Budget Analysis.

                      Regulatory Impact Statement

    In compliance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee on Veterans' 
Affairs has made an evaluation of the regulatory impact that 
would be incurred in carrying out the Committee bill. The 
Committee finds that the Committee bill would not entail any 
regulation of individuals or businesses or result in any impact 
on the personal privacy of any individuals and that the 
paperwork resulting from enactment would be minimal.

                 Tabulation of Votes Cast in Committee

    In compliance with paragraph 7 of rule XXVI of the Standing 
Rules of the Senate, the following is a tabulation of votes 
cast in person or by proxy by Members of the Committee on 
Veterans' Affairs at its May 21, 2009, meeting. On that date, 
the Committee considered and ordered reported S.475, as 
amended, a bill to guarantee the equity of spouses of military 
personnel with regard to matters of residency, and for other 
purposes. The Committee bill was agreed to by a vote of 14to0.

----------------------------------------------------------------------------------------------------------------
                Yeas                                 Senator                                 Nays
----------------------------------------------------------------------------------------------------------------
                      X (by proxy)   Mr. Rockefeller
                                 X   Mrs. Murray
                      X (by proxy)   Mr. Sanders
                                 X   Mr. Brown
                                 X   Mr. Webb
                                 X   Mr. Tester
                                 X   Mr. Begich
                                 X   Mr. Burris
                      X (by proxy)   Mr. Specter
                                 X   Mr. Burr
                                 X   Mr. Isakson
                      X (by proxy)   Mr. Wicker
                                 X   Mr. Johanns
                                     Mr. Graham
                                 X   Mr. Akaka, Chairman
----------------------------------------------------------------------------------------------------------------
                                14   TALLY                                                                    0
----------------------------------------------------------------------------------------------------------------

                  SUPPLEMENTAL VIEWS OF SENATOR AKAKA

    I have been concerned for some time that the Senate 
Veterans' Affairs Committee is not the appropriate committee to 
have jurisdiction over the Servicemembers' Civil Relief Act 
(SCRA). This bill is a perfect example of the reason for my 
concern since it, like all of the SCRA, has no relationship to 
an individual's rights as a veteran but relates solely to the 
rights and protections afforded those who are serving on active 
duty.
    That overarching issue aside, I have significant concerns 
about this legislation.
    First, as reported, the legislation addressing the state of 
residency for tax purposes would create a disparity in the 
treatment between a servicemember and his or her spouse which 
would place the spouse in a better position than the 
servicemember. As proposed, any income earned by a spouse while 
accompanying a servicemember would not be subject to taxation 
in the jurisdiction of military service. However, if a 
servicemember were to earn additional income, through a 
business endeavor or a part-time job, the servicemember's 
additional income would be subject to taxation in that 
jurisdiction.
    Second, I make special note of the informal comments of the 
Department of Defense on this measure which were received from 
the Office of the Under Secretary of Defense (Personnel and 
Readiness). These views, which I am including at the end of my 
views, raise issues of limited Federal interest, impact on 
employability, and heightened scrutiny of servicemembers' 
declared domiciles by the states.
    Finally, I note that, according to testimony received by 
the Committee at its hearing on April 29, there are legitimate 
questions about the constitutionality of the legislation. 
Although the Supreme Court ruled in 1953 in Dameron v. 
Brodhead, 345 U.S. 322, that SCRA is constitutional under 
Congress' authority ``to declare War'' and ``to raise and 
support Armies,'' it is not clear that exempting individuals 
who are not members of the Armed Forces from taxation in the 
jurisdiction in which their spouses are stationed contributes 
to those authorities. I have appended to my views an analysis 
of the measure from a constitutional perspective that was 
prepared in response to a request I made of the Congressional 
Research Service of the Library of Congress.

           *       *       *       *       *       *       *

                Office of the Under Secretary of Defense
                       (Personnel and Readiness)

                               July 2009

                           INFORMAL COMMENTS

    Subject: S.475, ``Military Spouses Residency Relief Act'' 
(The Act)
    Language/Provision: The Act amends several provisions of 
the Servicemembers Civil Relief Act (SCRA) (50 U.S.C. App. 
Sec. Sec. 501, et seq.) to:
          a. guarantee residency for spouses of military 
        personnel for voting purposes;
          b. guarantee residency for spouses of military 
        personnel for tax purposes and to exempt income earned 
        in the non-domiciliary State from taxation; and
          c. extend suspension of homestead residency 
        requirements to spouses.

                        DOD POSITIONS/COMMENTS:

    a. For the reasons noted in paragraph b, the Department of 
Defense (DOD):
          (1) does not object to Section 2 of the proposed 
        bill: ``Guarantee of Residency for Spouses for 
        Voting'';
          (2) strongly objects to Section 3 of the proposed 
        bill: ``Determination for Tax Purposes of Residence of 
        Spouses of Military Personnel'' and recommends an 
        alternate consideration; and
          (3) does not object to Section 4 of the proposed 
        bill.
    b. Comments by Section:
          (1) Guaranteeof ResidencyforSpousesforVoting 
        (Section2).
                  (a) The guarantee of residency for voting in 
                new section 705(b) of the SCRA (50 U.S.C. App. 
                Sec. 595) would not provide any protections 
                when the servicemember and spouse are co-
                located in the State from which they would be 
                absent but are not both domiciliaries of that 
                State. Furthermore, new section 705(b) of the 
                SCRA would not provide any protections if both 
                the servicemember and the spouse were 
                domiciliaries of the same State and left that 
                same State, but not together (e.g., the 
                servicemember is assigned unaccompanied to 
                Korea, and the spouse goes to a different State 
                to live with a relative).
                  (b) Even though the above two scenarios are 
                not uncommon, there may be some practical 
                benefits to those spouses who are covered under 
                the proposed amendment and seek to vote in the 
                domiciliary State. Accordingly, we do not 
                object to this section of the proposed 
                amendment.
          (2) Guarantee of Residency for Spouses for Taxation 
        (Section 3). The proposed amendment to section 511 of 
        the SCRA (50 U.S.C. App. Sec. 571) shields the income 
        of a spouse (under the stated conditions) from taxation 
        in the non-domiciliary State where the spouse is 
        currently located with the servicemember. Although, the 
        proposed amendment would provide a financial windfall 
        for military families whose State of domicile would not 
        tax the income earned in the non-domiciliary State, it 
        could have significant and detrimental long-term 
        effects that would offset the arbitrary tax windfall 
        that some would receive.
                  (a) This proposed amendment upsets the entire 
                theory of taxation as it has traditionally 
                applied to the spouse. In general, a State 
                imposes tax on the worldwide income of 
                individuals who are resident or domiciled in 
                that State. States impose tax on nonresidents 
                of the State to the extent the nonresident 
                receives income earned or derived from that 
                State. The burden on a spouse who is employed 
                in a tax jurisdiction where the member is 
                assigned is 
                the same as that of every other citizen of that 
                State--no greater or less. Furthermore, the 
                spouse receives the benefits of services and 
                employment protections provided by the State.
                  (b) There is limited Federal interest 
                involved in ensuring the spouse's income is not 
                taxed in the non-domiciliary State where it is 
                earned. There would be, however, great Federal 
                interest in ensuring that the spouse's income 
                is not taxed in both the domiciliary State and 
                the non-domiciliary State where earned, but we 
                are not aware that this is happening or that 
                this bill is in any way intended to address 
                that possibility. Rather, the purpose of this 
                bill appears to be to encourage military 
                members and their spouses to seek assignments 
                to one of the seven States that do not have a 
                personal income tax and to become a domiciliary 
                of that State. For those not so fortunate, the 
                spouses could find themselves paying more State 
                taxes when moving from a domiciliary State with 
                higher income taxes to a non-domiciliary State 
                with lower income taxes.
                  (c) The inherent unfairness and arbitrary 
                nature of this scheme compounds the States' 
                legitimate concerns if prohibited from taxing 
                compensation earned within their borders by 
                those who live there and use its resources and 
                services. Some might question why DOD would 
                care about this proposal's effect on any 
                particular State. The Department is and should 
                always be concerned when the proper and fair 
                balancing of interests under the SCRA becomes 
                too far skewed in favor of the servicemember. 
                Such imbalance could lead to a backlash of ill 
                will from the State.
                          (i) For example, approximately 24 
                        States currently do not pay spouses 
                        unemployment benefits when they are 
                        forced to relocate under military 
                        orders with their military member 
                        spouse. For some time, DOD has urged 
                        those 24 States to reconsider their 
                        position and extend unemployment 
                        benefits to such spouses. The proposed 
                        legislation would provide a compelling 
                        disincentive for the remaining 24 
                        States to adopt a more favorable 
                        practice.
                          (ii) In addition, this proposal could 
                        undercut employment opportunities for 
                        spouses who seek employment with State 
                        governments. States could choose to 
                        hire someone who will be part of the 
                        tax base instead of the spouse. 
                        Although there are anti-discrimination 
                        provisions in the SCRA, such 
                        discrimination would be difficult to 
                        prove.
                          (iii) Also, the loss of revenue for 
                        the States could cause them to 
                        challenge assertions of domicile for 
                        the spouse and then for the 
                        servicemember as well. Proving domicile 
                        can be complicated and time consuming. 
                        It may well prove impossible if the 
                        servicemember and spouse have not 
                        established the appropriate contacts to 
                        prove their intent with respect to 
                        domicile. The unintended consequences 
                        of increased scrutiny of the spouse's 
                        assertion of domicile, and the likely 
                        scrutiny of the servicemember's own 
                        domicile as well, could well lead to 
                        the collection of back taxes that would 
                        offset any benefits this provision 
                        might provide.
                  (d) This proposal would actually provide 
                greater tax protection for the spouse than for 
                the servicemember (assuming the tax rate in the 
                non-domiciliary State is less than the rate in 
                the domiciliary State). It would shield all 
                income by the spouse (at least in the non-
                domiciliary State) under the noted conditions. 
                Conversely, only military compensation for the 
                servicemember is shielded. Thus, the 
                servicemember who moonlighted on the weekend 
                would pay State taxes on that income to the 
                non-domiciliary State, but the spouse would pay 
                none for any work performed in the non-
                domiciliary State, and, depending on the law of 
                the domiciliary State, may not pay any taxes at 
                all.
                  (e) If in spite of our objections, Congress 
                believes that this provision should become law, 
                we recommend that a provision be added that 
                would eliminate the requirement for an employer 
                in the non-domiciliary State to withhold State 
                income taxes from the spouse on behalf of the 
                domiciliary State for services performed in the 
                non-domiciliary State. This would result in an 
                additional administrative burden on the 
                employer solely because the employer hired a 
                spouse of a military member. We are concerned 
                that such an administrative burden could 
                provide another disincentive for the non-
                domiciliary State to hire the spouse.
                  (f) The proposed amendment to current section 
                511(c)(1) of the SCRA would relieve the spouse 
                from personal property tax in the non-
                domiciliary State to the same extent that the 
                Servicemember would be relieved. We support 
                this initiative but recommend that it be 
                accomplished by amending current section 
                511(f)(1) of the SCRA to redefine personal 
                property to include property owned jointly by a 
                servicemember and his or her dependent or 
                dependents.
                          (i) We are concerned that the 
                        requirement in proposed section 
                        511(a)(2) of the SCRA that the spouse 
                        be present in the non-domiciliary State 
                        (``to be with the servicemember'') 
                        could qualify the proposed language in 
                        current section 511(c)(1) and (2) so 
                        that the benefits of the section would 
                        not apply when the servicemember is 
                        present in a non-domiciliary State 
                        without the spouse--as is frequently 
                        the case with mobilized reservists--and 
                        the property is held jointly.
                          (ii) Our proposed amendment to 
                        current section 511(f)(1) (as opposed 
                        to the proposed amendment to current 
                        section 511(c) (1) and (2)) would avoid 
                        all the difficulties we have voiced 
                        above and also extend protections to 
                        property held not simply with the 
                        spouse but with dependents as well.
                  (3) Suspension of Land Rights Residency 
                Requirement for Spouses of Military Personnel 
                (Section 4). The proposed amendment to section 
                508 (b) of the SCRA (50 U.S.C. App. Sec. 568) 
                extends the suspension of residency requirement 
                for the establishment of a property right to 
                spouses. Section 508 deals with land rights of 
                Servicemembers who may have an interest in 
                mining claims or homesteading public lands. We 
                have no objections to the proposed amendment to 
                section 508(b).

           *       *       *       *       *       *       *

                               Library of Congress,
                            Congressional Research Service,
                                      Washington, DC, May 26, 2009.
Ms. Babette Polzer,
Committee on Veterans' Affairs,
U.S. Senate, Washington, DC.

     Constitutional Analysis of S.475, 111th Cong., 1st Sess., the 
               ``Military Spouses Residency Relief Act''

    This memorandum is in response to your request to evaluate 
the constitutionality of S.475, the ``Military Spouses 
Residency Relief Act.'' The bill, if enacted, would extend 
certain protections under the Servicemembers Civil Relief Act 
(SCRA)\1\ to the spouses of servicemembers. S.475 would amend 
three sections of the SCRA: (1) 50 U.S.C. Sec. 568, Land rights 
of servicemembers; (2) 50 U.S.C. Sec. 571, Residence for tax 
purposes; and (3) 50 U.S.C. Sec. 595, Guarantee of residency 
for military personnel. Arguably, the proposed amendments could 
reduce burdens on military families related to residency and 
taxation issues that often arise as a result of frequent duty 
station transfers. However, to the extent that the bill, as 
drafted, confers certain benefits on a servicemember's spouse 
that are independent from those of the servicemember, its 
constitutionality may raise a question of first impression.
---------------------------------------------------------------------------
    \1\50 U.S.C. app. Sec. Sec. 501 et seq.
---------------------------------------------------------------------------
    The SCRA was enacted on December 19, 2003, as a 
modernization and restatement of protections and rights 
previously available to servicemembers.\2\ The purpose of the 
Act is to provide for, strengthen, and expedite the national 
defense by protecting servicemembers, enabling them to ``devote 
their entire energy to the defense needs of the Nation.''\3\ 
The SCRA generally protects servicemembers by temporarily 
suspending certain judicial and administrative proceedings and 
transactions that may adversely affect their legal rights 
during military service.
---------------------------------------------------------------------------
    \2\Congress has long recognized the need for protective legislation 
for servicemembers whose service to the Nation compromises their 
ability to meet obligations and protect their legal interests. During 
the Civil War an absolute moratorium on civil actions brought against 
soldiers and sailors was enacted (Act of June 11, 1864, ch. 118, 13 
Stat. 123). During World War I, Congress enacted the Soldiers' and 
Sailors' Civil Relief Act of 1918 (40 Stat. 440 (1918); followed by the 
Soldiers' and Sailors' Act of 1940 (Act of October 17, 1940, ch. 888, 
54 Stat. 1178) during World War II.
    \3\50 U.S.C. app. Sec. 502.
---------------------------------------------------------------------------
Proposed changes to the SCRA
    50 U.S.C. Sec. 568 provides various land right protections 
for servicemembers, including rights in public lands, desert 
lands, mining claims, and mineral permits and leases. Under 
these protections, servicemembers may maintain rights to access 
and use public lands and to enter desert lands obtained before 
entering military service. The servicemember may also retain 
mining claims and mineral permits and leases in the event of 
nonperformance of the requirements of the lease while on active 
duty. Generally, an individual must be at least 21 years old in 
order to exercise such land rights; however the Act creates an 
exception to the age requirement and allows all servicemembers, 
regardless of age, to exercise rights related to lands owned or 
controlled by the United States. Additionally, residency 
requirements for purposes of exercising the land rights, are 
suspended for six months after release from military service. 
As enacted, the Act does not provide the same protections and 
rights to a servicemember's spouse or dependents. Under S.475, 
the spouse of a servicemember would be entitled to the same 
suspension of residency requirements for a period of 6 months 
after the servicemember is released from military service.
    50 U.S.C. Sec. 571 prevents multiple state taxation on the 
property and income of military personnel serving within 
various tax jurisdictions\4\ by reason of military service. The 
Act provides that ``[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.'' The duty station tax jurisdiction may not 
include military compensation earned by a nonresident 
servicemember to compute its state income tax liability. The 
duty station jurisdiction may tax non-military income earned by 
the servicemember and/or the spouse. Additionally, personal 
property of a servicemember is not be subject to taxation by a 
jurisdiction other than his or her domicile or residence while 
serving at a duty station outside of his or her home state. 
S.475 would expand the language concerning residency for tax 
purposes to include the spouse of a servicemember. Under the 
proposed language, the spouse would neither lose nor acquire a 
state of domicile or residence for taxation purposes when he or 
she accompanies the servicemember to a duty station outside the 
home state in compliance with military orders. Income earned 
by, and personal property of, the spouse, while in a 
jurisdiction pursuant to the military orders, would not be 
subject to taxation by that jurisdiction. Rather, the income 
and property of the spouse would be subject to taxation only by 
his or her home state.
---------------------------------------------------------------------------
    \4\``Tax jurisdiction'' is defined to include ``a State or a 
political subdivision of a State,'' which would include the District of 
Columbia and any commonwealth, territory or possession of the United 
States (Sec. 101(6)). ``Taxation'' includes licenses, fees, or excises 
imposed on an automobile that is also subject to licensing, fees or 
excise in the servicemember's state of residence. ``Personal property'' 
includes intangible and tangible property including motor vehicles.
---------------------------------------------------------------------------
    50 U.S.C. Sec. 595 provides that military personnel are not 
deemed to have changed their state residence or domicile for 
the purpose of voting for any Federal, state, or local office, 
solely because of their absence from the respective state in 
compliance with military or naval orders. S.475 would expand 
the provision to apply to the spouse of a servicemember, 
therefore guaranteeing that his or her state residence or 
domicile for the purpose of voting for any Federal, state, or 
local office, would not change solely because of an absence 
from the respective state while accompanying a spouse to a duty 
station in compliance with military orders.
Constitutional Analysis
    The question at issue is whether the proposed amendment 
could precipitate a conflict between congressional power to 
regulate the military pursuant to its constitutional War Powers 
and the reserved right of the states to tax. The powers of the 
Federal Government, while limited to those enumerated in the 
Constitution,\5\ have been interpreted broadly, so as to create 
a large potential overlap with state authority.\6\ Significant 
powers exercised by Congress are the War Powers,\7\ which 
include the power to raise and support an army. The scope of 
the congressional and executive authority to prescribe the 
rules for the governance of the military is broad and subject 
to great deference by the judiciary.\8\
---------------------------------------------------------------------------
    \5\Article I, Sec. 1, of the Constitution provides that ``All 
legislative Powers herein granted shall be vested in a Congress of the 
United States * * *.'' Unlike a typical grant of power to states, 
Article I, Sec. 1, does not grant to Congress ``all legislative 
power,'' but rather grants to Congress only those specific powers 
enumerated in Sec. 8 and elsewhere in the Constitution.
    \6\For instance, Article I, Sec. 8, cl. 18 provides that ``[t]he 
Congress will have power * * *. To make all Laws which shall be 
necessary and proper for carrying into Execution the foregoing Powers, 
and all other Powers vested by this Constitution in the Government of 
the United States or in any Department or Officer thereof.'' Early in 
the history of the Constitution, the Supreme Court found that this 
clause enlarges rather than narrows the powers of Congress. As stated 
by Chief Justice Marshall in McCulloch v. Maryland, 17 U.S. (4 Wheat.) 
316 (1819): ``Let the end be legitimate, let it be within the scope of 
the Constitution, and all means which are appropriate, which are 
plainly adapted to that end, which are not prohibited, but consistent 
with the letter and spirit of the Constitution, are constitutional.''
    \7\U.S. Const., Art. I, Sec. 8, cl. 11-14 provide that: The 
Congress shall have power * * *. To declare War, grant Letters of 
Marque and Reprisal, and make Rules concerning Captures on Land and 
Water[;] To raise and support Armies, but no Appropriation of Money to 
that Use shall be for a longer Term than two Years[;] To provide and 
maintain a Navy[;] To make Rules for the Government and Regulation of 
the land and naval Forces.
    \8\Rostker v. Goldberg, 453 U.S.57, 64-68 (1981); Brown v. Glines, 
444 U.S.348, 353-58 (1980); Schlesinger v. Councilman, 420 U.S.738, 
746-48 (1975); Greer v. Spock, 424 U.S.828, 837-38 (1976). See Johnny 
Killian, Kenneth Thomas, & George Costello, United States Constitution: 
Analysis And Interpretation 332 (2002 ed.).
---------------------------------------------------------------------------
    Although such issues have rarely come before the U.S. 
Supreme Court, it has considered the structure and balance of 
the SCRA in circumscribing state law in order to promote the 
interests of the military as an entity, and servicemembers in 
their individual capacity. In Dameron v. Brodhead,\9\ the Court 
addressed the question of the power of the Federal Government 
to limit a state's right to tax property within its 
jurisdiction. The case involved a challenge to the provision in 
the Act prohibiting state taxation on the property and income 
of military personnel serving within a tax jurisdiction in 
compliance with military orders.\10\ Dameron, a commissioned 
officer in the U.S. Air Force, sued Brodhead, in his capacity 
as a city and county official of Denver, Colorado, for the 
recovery of $23.51 in taxes on his personal property assessed 
while Dameron was stationed in Colorado. Dameron argued that 
his domicile was Louisiana and that pursuant to the SCRA he was 
exempt from assessment by a tax jurisdiction other than his 
domicile. Brodhead asserted that the language of the Act did 
not prevent Colorado from taxing the servicemember's personal 
property because the law's purpose was to prevent multiple 
taxation of military personnel, and since Louisiana had not 
taxed Dameron's personal property, Colorado could. If the SCRA 
did prevent the tax in question, Dameron contended that it was 
unconstitutional. With respect to the constitutional question, 
the Court stated that:
---------------------------------------------------------------------------
    \9\Dameron v. Brodhead, 345 U.S.322 (1953) (The case questioned a 
provision in the Soldier's and Sailor's Civil Relief Act, but for ease 
of discussion this memorandum will refer to the SCRA and its 
predecessor as the ``Act'').
    \10\The challenged section being Sec. 514 of the SSCRA (50 U.S.C. 
App. Sec. 574), restated and codified as Sec. 571 of the SCRA (50 
U.S.C. Sec. 571).

        [t]he constitutionality of Federal legislation 
        exempting servicemen from the substantial burdens of 
        seriate taxation by the states in which they may be 
        required to be present by virtue of their service, 
        cannot be doubted. Generally similar relief has often 
        been accorded other types of Federal operations or 
        functions. And we have upheld the validity of such 
        enactments, even when they reach beyond the activities 
        of Federal agencies and corporations to private parties 
        who have seen fit to contract to carry on functions of 
        the Federal Government.\11\
---------------------------------------------------------------------------
    \11\Brodhead at 324-325 (Citing Carson v. Roane-Anderson Co., 342 
U.S.232 (holding that contractors with the Atomic Energy Commission 
were exempt from state sales and use tax by section 9(b) of the Atomic 
Energy Act of 1946)).

    The Court held that servicemembers' ``duties are directly 
related to an activity which the Constitution delegated to the 
National Government * * * `to declare war' and `to raise and 
support Armies.'''\12\ The Court further held that 
``congressional exercise of a `necessary and proper' 
supplementary power such as this statute must be upheld.''\13\ 
In effect, SCRA preempts state laws which would tax the 
service-related income or personal property of servicemembers 
at their duty station when it is not their domicile. The Court 
concluded the constitutional discussion by stating, ``[w]hat 
has been said in no way affects the reserved powers of the 
states to tax. For this statute merely states that the taxable 
domicile of servicemen shall not be changed by military 
assignments. This we think is within the Federal power.''\14\
---------------------------------------------------------------------------
    \12\Id. at 325 (internal citations omitted).
    \13\Id.
    \14\Id.
---------------------------------------------------------------------------
    In contrast, the dissent in Dameron emphasized states' 
right to tax over Congress' War Powers authority, stating 
``[t]he power to tax is basic to the sovereignty of the 
states.''\15\ Acknowledging that limits exist on congressional 
restrictions on states' right to tax, the dissent looked to 
those instances where a Federal instrumentality, or the means 
by which an instrumentality performs its functions, are immune 
from state tax as being most similar to the prohibition under 
the Act.\16\ It noted a previous holding in Graves v. New 
York\17\ that wages of Federal employees, which include 
servicemembers, could be taxed on a nondiscriminatory basis by 
the states.\18\ The dissent further argued that a servicemember 
``receives protection and benefits from the society which the 
states create and maintain * * *. If he gets tax immunity, it 
means that other citizens must pay his share.''\19\ It 
concluded with the assertion that ``[w]hen Congress undertakes 
to protect [servicemembers] from state taxation or regulation, 
it is not acting to protect either a Federal instrumentality or 
any function which a Federal agency performs. Congress, 
therefore, acts without constitutional authority.''\20\
---------------------------------------------------------------------------
    \15\Id. at 327 (Citing Railroad Co. v. Peniston, 18 Wall. 5).
    \16\Id.
    \17\New York v. Graves, 306 U.S.466 (1939).
    \18\Brodhead at 328 (Douglas, J., dissenting).
    \19\Id. at 328-329.
    \20\Id. at 329.
---------------------------------------------------------------------------
    A solid majority (seven of the nine Justices) concurred in 
the majority opinion in Dameron, with much of the discussion 
focused on the servicemember's relationship to the Federal 
Government. The Court reasoned that servicemember's ``duties'' 
are directly related to an activity (to raise and support an 
army) delegated to Congress, and, as such, within Congress' 
authority to regulate. The full extent of Congress' authority 
to extend limitations on the reach of state law with regard to 
individuals, based exclusively on a spousal relationship with a 
servicemember, is less clear. Previously Congress expanded 
certain protections of the Act to include spouses and/or 
dependents of servicemembers (e.g., maximum interest rate on 
debts\21\), but generally these protections require the 
existence of a joint obligation before the Act may be invoked. 
The Act does allow for a spouse and/or dependent of a 
servicemember to petition a court for certain protections under 
the SCRA, but the court may only extend the protections if it 
finds that the ability to comply with the terms of a covered 
contract are materially impaired by the military service of the 
person upon whom he or she is dependent.\22\ If enacted, S.475 
would provide individual protections to the spouse of a 
servicemember with respect to residency for land rights, taxes 
and voting purposes. The common requirement of the expanded 
protections is that the spouse must accompany the servicemember 
on military orders away from his or her domicile. However, it 
appears that the proposed amendments create an inconsistency in 
taxation of servicemembers and their spouses. Currently, any 
income earned by a spouse and any non-military income earned by 
the servicemember may be taxed by the duty station tax 
jurisdiction. Under the proposed amendments, the spouse would 
not be subject to tax at the duty station, but non-military 
income earned by the servicemember would still be subject to 
taxation 
by the duty station tax jurisdiction. Arguably, the spouse of a 
servicemember would enjoy greater protections, i.e., immunity 
from duty station income tax, under the SCRA than would the 
servicemember.
---------------------------------------------------------------------------
    \21\50 U.S.C. app. Sec. 527.
    \22\50 U.S.C. app. Sec. 518.
---------------------------------------------------------------------------
    Federal regulation of state residency requirements may in 
itself be unusual, but there does not appear to be a 
significant question as to whether Congress' War Powers are 
sufficient to support such a regulation. The interest of the 
Armed Forces in family cohesion and troop morale may be 
sufficient justification for a legal requirement allowing 
servicemembers and their dependants to maintain the same 
domicile regardless of where they are stationed. It could be 
argued that this requirement would serve the broader interests 
of the Federal Government in raising and maintaining its troops 
and therefore be within Congress' constitutional authority. In 
Boone v. Lightner, the U.S. Supreme Court, while addressing the 
level of discretion afforded courts under the SCRA, stated that 
``[t]he [Act] is always to be liberally construed to protect 
those who have been obliged to drop their own affairs to take 
up the burdens of the Nation.''\23\ The stated purpose of the 
Act is ``to provide for, strengthen, and expedite the national 
defense'' by minimizing burdens on servicemembers, enabling 
them to ``devote their entire energy to the defense needs of 
the Nation.''\24\ It may be plausibly argued that simplifying 
residence requirements to include spouses, presumably 
individuals who organize their affairs to accompany 
servicemembers to their duty station, allows servicemembers to 
``devote their entire energy to the defense needs of the 
Nation.''\25\ The degree to which permitting military families 
to limit income tax payable on non-military income earned in 
the duty station jurisdiction achieves comparable goals, 
without imposing undue limitations on the duty-station state, 
is not settled.
---------------------------------------------------------------------------
    \23\Boone v. Lightner, 319 U.S.561, 575 (1943).
    \24\50 U.S.C. app. Sec. 502.
    \25\In a similar manner, Congress has acted to prohibit states and/
or local jurisdictions from assessing a personal property tax on a 
motor vehicle owned by a Member of Congress (or by his or her spouse) 
while maintaining a place of abode for purposes of attending sessions 
of Congress (H.R. 3067, Sec. 3067, incorporated into Act of December 
19, 1985, Public Law 99-190, Sec. 101(c), 99 Stat. 1224 by Act of 
December 22, 1987, Public Law 100-202, Sec. 106, 101 Stat. 1329).

                                            R. Chuck Mason,
                                              Legislative Attorney.

                   SUPPLEMENTAL VIEWS OF SENATOR BURR

    On February 25, 2009, I introduced S.475, the Military 
Spouses Residency Relief Act, along with Senator Feinstein, in 
order to provide military spouses with residency protections 
similar to those afforded to military personnel under the 
Servicemembers Civil Relief Act (hereinafter, ``SCRA''). Since 
then, 41 Senators have been added as cosponsors and the bill 
has been endorsed by a long list of organizations, including 
the Air Force Association, the Military Officers Association of 
America, Veterans of Foreign Wars of the United States, and 
AMVETS. I am pleased that the Senate Committee on Veterans' 
Affairs (hereinafter, ``Committee'') also demonstrated its 
support for this bill by voting to favorably report it to the 
full Senate. Although the Committee report explains the 
Committee's rationale for that decision, I am including these 
supplemental views to explain the reasons why I personally 
believe this bill is the right thing to do.
    The law this bill amends, the SCRA, is the most recent in a 
series of laws passed during the past two centuries to afford 
civil protections to the men and women who serve in our 
Nation's Armed Forces. In part, the SCRA allows a servicemember 
to maintain residency in a single state, for purposes of voting 
and paying taxes, as he or she is moved around the country by 
the military. See 50 U.S.C. App. 571, 595. These and other 
protections in the SCRA are one way a grateful nation accounts 
for the fact that military personnel ``drop their own affairs 
to take up the burdens of the Nation.'' Boone v. Lightner, 319 
U.S.561, 575 (1943).
    But, today, the burdens of the Nation are not borne by 
servicemembers alone; they are shared by the military spouses 
who move around the country and the world in support of our 
Nation's all-volunteer force. These spouses leave behind their 
homes, friends, and jobs in order to put servicemembers and the 
military ahead of their own needs. Indeed, studies by the RAND 
Corporation have found that military wives move farther and 
more often than their civilian counterparts; are more likely to 
be unemployed than the average civilian spouse; and, even if 
they do find work, tend to earn less than civilian wives. See 
``Working Around the Military: Challenges to Military Spouse 
Employment and Education,'' at 18, 48 (2004); ``Working Around 
the Military'' Revisited, at 1, 3 (2007).
    In addition to making great personal sacrifices to support 
the military, it is now widely recognized that military spouses 
play an important role in the success of our Armed Forces. In 
fact, Military Spouse Day was first proclaimed by President 
Ronald Reagan 25 years ago to acknowledge ``the profound 
importance of spouse commitment to the readiness and well-being 
of servicemembers * * * and to the security of our Nation.'' 
Proclamation 5184 (April 17, 1984). More recently, the RAND 
Corporation stressed in its 2004 study that ``[s]uccessful 
recruiting and retention of the active duty force relies in 
large part on the extent to which servicemembers and their 
spouses experience both job satisfaction and contentment with 
life in the military.'' ``Working Around the Military: 
Challenges to Military Spouse Employment and Education,'' at 
xvii.
    These sentiments clearly are shared by senior Army leaders 
who recently signed the Army Family Covenant, in which they 
``recognize the commitment and increasing sacrifices that our 
families are making every day'' and ``recognize the strength of 
our Soldiers comes from the strength of their Families.'' As 
Secretary of the Army Pete Geren said in signing the covenant, 
``[t]he readiness of our all-volunteer force depends on the 
health of the Families.'' http://www.military.com/features/
0,15240,153120,00.html (last visited June 9, 2009). In short, 
servicemembers and their families are a package deal--if you 
lose the family, you will lose the servicemember.
    Unfortunately, the SCRA has not yet been updated to 
recognize the role of military spouses or to ease their burdens 
as they move to new duty stations with their servicemember-
spouses. For example, under the SCRA, if a servicemember moves 
to a new state in compliance with military orders, the 
servicemember may continue to vote in the state he or she 
considers home; the servicemember's military pay may be taxed 
only in that home state; and any personal property the 
servicemember brings to the new state will not be subjected to 
taxation in that state. See 50 U.S.C. App. 571, 595. However, 
if a servicemember's spouse leaves the same state and travels 
to a new state with that servicemember, the spouse is not 
afforded similar protections. The spouse may have to register 
to vote and file tax returns in every state in which they live. 
Also, in some states, the family assets must be held solely in 
the servicemember's name in order to protect them from being 
taxed by those states.
    In addition to the hassles this may cause for military 
families, as they move to a new state every few years, this 
sends the wrong message to military spouses. As the National 
Military Family Association testified back in 1992, ``the 
current situation has left many military spouses feeling they 
are perceived as excess baggage.'' H. Hrg. 102-35, at 3, House 
Committee on Veterans' Affairs, April 29, 1992. Similarly, the 
Committee recently heard from a military spouse who provided 
this assessment: ``As a military spouse I feel like I am forced 
into unnecessary hardships that could be easily rectified.'' 
Attachment to testimony of Mrs. Rebecca Poynter, at 4, Hearing 
on Pending Benefits Legislation, Senate Committee on Veterans' 
Affairs, April 29, 2009.
    In my view, this situation should not be allowed to 
continue. It is time for Congress to update the law to reflect 
the true role of military spouses and to alleviate these 
unnecessary hardships. I believe this bill would take a 
significant step in that direction, by allowing military 
spouses to vote and pay taxes in their home states. This should 
reduce some of the hassles and confusion of moving every time 
the servicemember is ordered to a new duty station and will 
allow military spouses the flexibility to hold property in 
their own names. Perhaps more importantly, it will send a clear 
message to military spouses that we, as a Nation, appreciate 
their sacrifices and are grateful for the contributions they 
make every day to the success of our Armed Forces.

           *       *       *       *       *       *       *

                        Changes in Existing Law

    In compliance with paragraph 12 of Rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
the Committee bill, as reported, are shown as follows (existing 
law proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman).

                   TITLE 50. WAR AND NATIONAL DEFENSE

              TITLE 50 APPENDIX--WAR AND NATIONAL DEFENSE

SEC. 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as 
the``Servicemembers Civil Relief Act''.
    (b) Table of Contents.--The table of contents of this Act 
is as follows:

SEC. 1. SHORT TITLE; TABLE OF CONTENTS.

SEC. 2. PURPOSE.

TITLE I--GENERAL PROVISIONS

           *       *       *       *       *       *       *

                       TITLE VII--FURTHER RELIEF

SEC. 701. ANTICIPATORY RELIEF.

SEC. 702. POWER OF ATTORNEY.

SEC. 703. PROFESSIONAL LIABILITY PROTECTION.

SEC. 704. HEALTH INSURANCE REINSTATEMENT.

[SEC. 705. GUARANTEE OF RESIDENCY FOR MILITARY PERSONNEL.]

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

SEC. 706. BUSINESS OR TRADE OBLIGATIONS.

SEC. 2. PURPOSE.

           *       *       *       *       *       *       *

TITLE V--TAXES AND PUBLIC LANDS

           *       *       *       *       *       *       *

SEC. 508. LAND RIGHTS OF SERVICEMEMBERS.

    (a) * * *
    (b) Residency Requirement.--Any requirement related to the 
establishment of a residence within a limited time shall be 
suspended as to entry by a servicemember in military service or 
the spouse of such servicemember until 180 days after 
termination of or release from military service.
    (c) * * *

           *       *       *       *       *       *       *

SEC. 511. RESIDENCE FOR TAX PURPOSES.

    (a) Residence or Domicile.--[A servicemember] (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.
    (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.
    [(c)] (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.
    [(d)] (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.
    [(e)] (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.
    [(f)] (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. 701. * * *

           *       *       *       *       *       *       *

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

    [For] (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--
          (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.

                                  
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