§ 403b. — Costofliving allowance in the continental United States.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 37USC403b]
TITLE 37--PAY AND ALLOWANCES OF THE UNIFORMED SERVICES
CHAPTER 7--ALLOWANCES
Sec. 403b. Cost-of-living allowance in the continental United
States
(a) Payment Authorized.--The Secretary concerned may pay a cost-of-
living allowance to the eligible members of a uniformed service under
the jurisdiction of the Secretary.
(b) Eligible Members.--The following members are eligible to receive
a cost-of-living allowance under this section:
(1) A member assigned to a high cost area in the continental
United States.
(2) A member assigned to an unaccompanied tour of duty outside
the continental United States if the primary dependent of the member
resides in a high cost area in the continental United States.
(3) A member assigned to duty in the continental United States
if the Secretary of the uniformed service concerned determines
that--
(A) the primary dependent of the member must reside in a
high cost area in the continental United States by reason of the
member's duty location or other circumstances; and
(B) it would be inequitable for the member's eligibility for
the allowance to be determined on the basis of the duty location
of the member.
(c) High Cost Area Defined.--An area is a high cost area for a
fiscal year for purposes of this section if the uniformed services cost
of living for that area for the base period exceeds the average cost of
living in the continental United States for such base period by at least
the threshold percentage. The Secretary of Defense, in consultation with
the other administering Secretaries, shall establish the threshold
percentage, except that the threshold percentage may not be less than 8
percent. The administering Secretaries shall prescribe a higher
threshold percentage to be applied for a fiscal year when it is
necessary to do so in order to ensure that the total amount of the
payments of the cost-of-living allowance made to members of the
uniformed services under this section for such fiscal year does not
exceed the total amount available to all uniformed services for that
fiscal year for paying such allowance.
(d) Amount of Allowance.--The cost-of-living allowance that may be
paid to a member for a high cost area for a fiscal year shall be the
amount that is equal to the product of--
(1) the amount of the average spendable income determined
applicable for the regular military compensation level of such
member under subsection (g); and
(2) the percentage equal to the excess of--
(A) the percentage by which the uniformed services cost of
living for the member's high cost area for the base period
exceeds the average cost of living in the continental United
States for such base period, over
(B) the threshold percentage applicable to such fiscal year
under subsection (c).
(e) Limitation to One Allowance.--If primary dependents of a member
reside separately in different high cost areas--
(1) the member may be paid only one cost-of-living allowance
under this section; and
(2) the cost-of-living allowance payable to the member shall be
the highest of the amounts computed under this section for such high
cost areas.
(f) Service Not Covered.--(1) A cost-of-living allowance may not be
paid a member under this section for the days authorized for travel of
the member in connection with a permanent change of duty station.
(2) A member of a reserve component is not eligible for a cost-of-
living allowance under this section unless the member is on active duty
under a call or order to active duty that--
(A) specifies a period of 140 days or more; or
(B) states that the call or order to active duty is in support
of a contingency operation.
(g) Average Spendable Income.--The Secretary of Defense shall
determine, using a methodology and assumptions that the Secretary
considers appropriate, the amounts of average spendable income of
members of the uniformed services for various ranges of regular military
compensation. For purposes of this subsection, spendable income is the
total amount of regular military compensation that is available for
purchase of goods and services after allocation of amounts for taxes,
insurance, housing, gifts and contributions, and savings.
(h) Joint Regulations.--The Secretary of Defense and the other
administering Secretaries shall jointly prescribe regulations to carry
out this section.
(i) Other Definitions.--In this section:
(1) The term ``primary dependent'', with respect to a member,
means--
(A) the member's spouse; or
(B) in the case of an unmarried member, a dependent
described in paragraph (2) or (4) of section 401(a) of this
title.
(2) The term ``cost of living'' means a price index selected by
the Secretary of Defense, in consultation with the other
administering Secretaries, from among the following indices:
(A) The Consumer Price Index (all items-United States city
average) published monthly by the Bureau of Labor Statistics.
(B) Any other index developed in the private sector that the
Secretary of Defense, in consultation with the other
administering Secretaries, determines is comparable to the
Consumer Price Index and is appropriate for use for purposes of
this section.
(3) The term ``uniformed services cost of living'' means the
price index selected as described in paragraph (2) and adjusted as
the Secretary of Defense, in consultation with the other
administering Secretaries, considers appropriate to reflect
variations between expenses of members of the uniformed services (as
offset by the basic allowance for subsistence) and the corresponding
expenses of persons not members of the uniformed services with
regard to the following:
(A) Nonhousing costs (including costs of transportation,
goods, and services, taking into consideration savings
attributable to use of such military facilities as commissary
stores and exchange stores).
(B) Average income tax paid.
(C) Cost of health care.
(4) The term ``base period'', with respect to a fiscal year,
means the 12-month period ending on June 30 of the year in which
such fiscal year begins.
(5) The term ``administering Secretaries'' means the following:
(A) The Secretary of Defense, with respect to the armed
forces (other than the Coast Guard when it is not operating as a
service in the Navy).
(B) The Secretary of Homeland Security, with respect to the
Coast Guard when it is not operating as a service in the Navy.
(C) The Secretary of Commerce, with respect to the National
Oceanic and Atmospheric Administration.
(D) The Secretary of Health and Human Services, with respect
to the Public Health Service.
(Added Pub. L. 103-337, div. A, title VI, Sec. 602(a)(1), Oct. 5, 1994,
108 Stat. 2779; amended Pub. L. 107-296, title XVII, Sec. 1704(c), Nov.
25, 2002, 116 Stat. 2314; Pub. L. 107-314, div. A, title VI,
Sec. 654(b)(2), Dec. 2, 2002, 116 Stat. 2582.)
Amendments
2002--Subsec. (i)(5)(B). Pub. L. 107-296 substituted ``of Homeland
Security'' for ``of Transportation''.
Subsec. (i)(6). Pub. L. 107-314 struck out par. (6) which read as
follows: ``The term `continental United States' means the 48 contiguous
States and the District of Columbia.''
Effective Date of 2002 Amendment
Amendment by Pub. L. 107-296 effective on the date of transfer of
the Coast Guard to the Department of Homeland Security, see section
1704(g) of Pub. L. 107-296, set out as a note under section 101 of Title
10, Armed Forces.
Transfer of Functions
For transfer of authorities, functions, personnel, and assets of the
Coast Guard, including the authorities and functions of the Secretary of
Transportation relating thereto, to the Department of Homeland Security,
and for treatment of related references, see sections 468(b), 551(d),
552(d), and 557 of Title 6, Domestic Security, and the Department of
Homeland Security Reorganization Plan of November 25, 2002, as modified,
set out as a note under section 542 of Title 6.
Conditions on Provision of Allowance
Section 602(b) of Pub. L. 103-337 provided that:
``(1) A cost-of-living allowance under section 403b of title 37,
United States Code, as added by subsection (a), may not be provided
until after the end of the 90-day period beginning on the date the
Secretary of Defense submits the report required under paragraph (2).
``(2) Before implementing section 403b of title 37, United States
Code, the Secretary of Defense, in consultation with the other
administering Secretaries (as defined in subsection (h)(6) [probably
should be (i)(5)] of such section), shall submit to Congress a report
describing--
``(A) the methods by which the Secretary of Defense would
determine the price index to be used under such section and the
types of nonhousing related costs that will be considered under such
price index;
``(B) the manner by which the Secretary will establish the
threshold percentage for purposes of such section;
``(C) the manner in which savings attributable to use of such
military facilities as commissary stores, exchange stores, and
military medical treatment facilities will be taken into
consideration; and
``(D) the methods by which the Secretary proposes to prevent
uncontrolled growth in Government expenditures through the cost-of-
living allowance available under such section.''
[Report submitted by Secretary of Defense on Mar. 31, 1995.]
