Amended in Senate April 4, 2013

Senate Bill No. 720

Introduced by Senator Correa

February 22, 2013

begin delete An act to amend Section 51 of the Military and Veterans Code, relating to the Military Department. end delete begin insert An act to amend Section 409.3 of the Military and Veterans Code, relating to military service. end insert

LEGISLATIVE COUNSEL’S DIGEST

SB 720, as amended, Correa. begin delete Military Department. end delete begin insert Military service: benefits. end insert

begin insert

Existing law authorizes a service member to apply to the court for relief of an obligation, liability, tax, or assessment, as specified. Existing law authorizes, in the case of an obligation payable under its terms in installments under a contract for the purchase of real estate, or secured by a mortgage or other instrument, as specified, a stay of the enforcement of the obligation during the applicant’s period of military service and, from the date of termination of the period of military service or from the date of the application if made after the service, for a period equal to the period of the remaining life of the installment contract or other instrument plus a period of time equal to the period of military service of the applicant or any part of the combined period, as specified.

end insert begin insert

This bill would instead authorize, in the case of an obligation payable under its terms in installments under a contract for the purchase of real estate, or secured by a mortgage or other instrument, a deferment of the payments on the obligation during the service member’s period of military service, or should the service member request such relief after the start of his or her current period of military service, or within 6 months thereafter, a deferment of such payments for a period of time equal to the period of military service starting from the date of application, as specified. The bill would prohibit penalties from being imposed on the nonpayment of principal or interest during this period and interest from being charged or accumulated on the principal or interest on which the payment was delayed. The bill would also prohibit foreclosure or repossession of property on which payment has been deferred, as specified. The bill would require mortgage payments deferred during this period to be due and payable upon the occurrence of specified conditions. The bill would provide that a service member with a mortgage subject to an impound account for the payment of property taxes, special assessments, and certain insurance shall not be relieved from making monthly payments, as specified, and that a service member shall not be precluded from making payments toward mortgage payments deferred, as specified.

end insert begin delete

Existing law establishes in state government the Military Department, which includes the office of the Adjutant General, the State Military Reserve, the California Cadet Corps, and the Naval Militia.

end delete begin delete

This bill would make nonsubstantive changes to this provision.

end delete

Vote: majority. Appropriation: no. Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program: no.

The people of the State of California do enact as follows:

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Section 409.3 of the end insert begin insert Military and Veterans Code end insert
begin insert is amended to read: end insert

409.3.  

(a) A service member may, at any time during his or
her most current period of military service or within six months
thereafter, petition a court for relief in respect of any obligation
or liability incurred by the service member begin delete prior to end delete begin insert before end insert the
effective date of the orders for his or her most current period of
military service or in respect of any tax or assessment whether
falling due begin delete prior to end delete begin insert before end insert or during his or her most current period
of military service.

(b) The court shall set a hearing on the petition within 25 days
from the date the petition is filed, unless the court shows good
cause for extending the date of the hearing. The petition shall be
served at least 10 days before the hearing. The respondent shall
file and serve a response to the petition at least five days before
the hearing.

(c) The court shall not charge a filing fee or court costs for a
petition filed pursuant to this section.

(d) The court, after notice and hearing, begin delete unless in its opinion the
ability of the petitioner end delete begin insert if the court finds the ability of the service
member end insert to comply with the terms of begin delete the end delete begin insert any such end insert obligation or
begin delete liability end delete begin insert liability, end insert or to pay the tax or begin delete assessment end delete begin insert assessment, end insert has
begin delete not end delete been materially affected by reason of begin insert orders for end insert his or her most
current period of military service, may grant the following relief:

(1) In the case of an obligation payable under its terms in
installments under a contract for the purchase of real estate, or
secured by a mortgage or other instrument in the nature of a
mortgage upon real estate, a begin delete stay end delete begin insert deferment end insert of the begin delete enforcement of end delete
begin insert payments on end insert the obligation during the begin delete applicant’s end delete begin insert service member’s end insert
period of military service begin delete and, from the date of termination of the
period of military service or end delete begin insert , or should the service member request
such relief after the start of his or her current period of military
service, or within six months thereafter, a deferment of such
payments for a period of time equal to the period of military service
starting end insert from the date of application begin delete if made after the service, for
a period equal to the period of the remaining life of the installment
contract or other instrument plus a period of time equal to the
period of military service of the applicant or any part of the
combined period, subject to payment of the balance of principal
and accumulated interest due and unpaid at the date of termination
of the period of military service or from the date of application,
as the case may be, end delete begin insert even if such payments extend beyond the
termination of the current period of military service. The obligation
shall be extended for the period of time that payments were
deferred, and the deferred principal shall be paid end insert in equal
installments during the combined period at the rate of interest on
the unpaid balance as is prescribed in the contract, or other
instrument evidencing the obligation, for installments paid when
due, and subject to any other terms as may be just.

(2) In the case of any other obligation, liability, tax, or
assessment, a begin delete stay of the enforcement thereof end delete begin insert deferment of any
payments on the obligation end insert during the begin delete applicant’s end delete begin insert service member’s end insert
period of military service and, from the date of termination of the
period of military service or from the date of application if made
after the service, for a period of time equal to the period of military
service of the applicant or any part of that period, subject to
payment of the balance of principal and accumulated interest due
and unpaid at the date of termination of the period of military
service or the date of application, as the case may be, in equal
periodic installments during the extended period at the rate of
interest as may be prescribed for the obligation, liability, tax, or
assessment, if paid when due, and subject to any other terms as
may be just.

(e) (1) When any court has granted a begin delete stay end delete begin insert deferment end insert as provided
in this section, no fine or penalty shall accrue during the period
the terms and conditions of the begin delete stay end delete begin insert deferment end insert are complied with
by reason of failure to comply with the terms or conditions of the
obligation, liability, tax, or assessment in respect of which the begin delete stay end delete
begin insert deferment end insert was granted begin insert , including penalties on the nonpayment of
principal or interest during this period. Interest shall not be
charged or accumulated on the principal or interest on which the
payment was delayed. end insert begin insert Foreclosure or repossession of property on
which payment has been deferred shall not take place during the
period specified in this section end insert .

(2) If a person has charged or accrued a fine or penalty in
violation of paragraph (1), that person shall be liable for actual
damages, reasonable attorney’s fees, and costs incurred by the
injured party as a result of the violation.

begin insert

(f) Notwithstanding subdivision (d), any mortgage payments
deferred pursuant to this section are due and payable upon the
earlier of the following:

end insert begin insert

(1) The sale of the property or other event specified in the
documents creating the obligation permitting the lender to
accelerate the loan, other than a deferment of payments authorized
by this section.

end insert begin insert

(2) Further encumbrance of the property other than for
preservation or protection of the property.

end insert begin insert

(3) The maturity of the obligation, as defined under the terms
of the documents creating the obligation, or, if applicable, as
extended pursuant to subdivision (d).

end insert begin insert

(g) This section shall not relieve a service member with a
mortgage subject to an impound account for the payment of
property taxes, special assessments, mortgage insurance, and
hazard insurance from making monthly payments of an amount
that is at least sufficient to pay these amounts, unless the borrower
and lender agree to a lesser amount.

end insert begin insert

(h) This section shall not preclude a service member from
making payments toward the mortgage payments deferred before
the occurrence of any of the events in subdivision (d).

end insert begin delete

(f)

end delete

begin insert (i) end insert   begin delete Nothing in this end delete begin insert This end insert section shall begin insert not end insert permit a service member
ordered to military service to obtain a delay, deferment, or stay on
an obligation to pay child support. begin delete Nothing in this end delete begin insert This end insert section
shall begin insert not end insert preclude a service member ordered to military service
from seeking a modification of an order to pay child support due
to a reduction in income resulting from the order to service, or
from seeking the imposition of the maximum interest rate provided
by this chapter on arrearages in child support payments existing
begin delete prior to end delete begin insert before end insert the order to service.

begin delete

SECTION 1.  

Section 51 of the Military and Veterans Code is
amended to read:

51.  

The Military Department includes all of the following:

(a) The office of the Adjutant General.

(b) The California National Guard.

(c) The State Military Reserve.

(d) The California Cadet Corps.

(e) The Naval Militia.

end delete