President Bush has signed into law the Servicemembers Civil Relief Act, new legislation to help ease the economic and legal burdens on military personnel called to active duty status in Operation Iraqi Freedom. 

    Authored by Veterans’ Affairs Committee Chairman Chris Smith, the new law contains dozens of provisions to assist soldiers, sailors, airmen, and marines to help managing their financial and legal obligations while they are away from home in Iraq, Afghanistan, and other locations around the world.

    “Servicemembers called to active duty or deployed to new duty stations often find it difficult to meet their personal financial and legal obligations in a timely manner,” said Chairman Smith. “The Servicemembers Civil Relief Act will help these brave men and women, as well as their families back home, by strengthening and expanding the current civil relief statute.”

    “For example, servicemembers deploying to new duty stations will have the ability to terminate automobile leases without having to pay any early termination penalties. Furthermore, it will prevent personal property (such as automobiles) from being repossessed without a specific court order in order to take into account their military duty status,” he added.

    “In addition, it is often difficult for servicemembers to be physically present during civil court proceedings when then they have been called up to active duty or deployed to new duty stations. “To protect their rights, H.R. 100 will provide servicemembers with automatic 90-day stays in civil proceedings. Furthermore, if an additional stay is subsequently requested but denied, the court will be required to appoint a counsel to protect the servicemember’s rights while he remains on active duty.”

    “The new law will even allow the possibility of servicemembers reopening default judgments rendered against them when the failure to appear was caused by military service. And the civil protections under this law will now also be applied to administrative proceedings, such as licensing and zoning matters, which are much more common today,” said Smith.

    “For Guard and reserve members called to active duty – especially for extended periods such as Operation Iraqi Freedom – the reduction in income can place significant economic pressure on them and their families. The Servicemembers Civil Relief Act recognizes that these men and women need and deserve special relief to meet a number of financial obligations and liabilities, such as rent, mortgages, installment contracts and leases,” Smith added.

    Now that it is enacted into law, H.R. 100 will also:     

• Expand current law that protects servicemembers and their families from eviction from housing while on active duty due to nonpayment of rents that are $1,200 per month or less. Under the new provisions this protection would be significantly updated to meet today’s higher cost of living – covering housing leases up to $2,400 per month – and then be adjusted annually to account for inflation.
  
• Provide a servicemember who receives permanent change of station orders or who is deployed to a new location for 90 days or more the right to terminate a housing lease.
  
• Clarify and restate existing law that limits to 6 percent interest on credit obligations, including credit card debt, for active duty servicemembers. HR 100 unambiguously states that no interest above 6 percent can accrue for credit obligations while on active duty, nor can that excess interest become due once the servicemember leaves active duty – instead that portion above 6 percent is permanently forgiven. Furthermore, the monthly payment must be reduced by the amount of interest saved during the covered period.
  
• Update life insurance protections provided to activated Guard and reserve members by increasing from $10,000 to $250,000 the maximum policy coverage that the federal government will protect from default for nonpayment while on active duty.
  
• Prevent servicemembers from a form of double taxation that can occur when they have a spouse who works and is taxed in a state other than the state in which they maintain their permanent legal residence. HR 100 will prevent states from using the income earned by a servicemember in determining the spouse’s tax rate when they do not maintain their permanent legal residence in that state.

    “With hundreds of thousands of our military personnel stationed around the world today in the war on terrorism, it is imperative that Congress do all that it can to ease the burdens that they and their loved ones face back at home,” Smith said. “Enactment of the ‘Servicemembers’ Civil Relief Act’ strengthens current civil protections, as well as provide important new ones, to help prevent soldiers, sailors, airmen, and marines defending our nation and our freedom from being negatively affected by their service."