BILL ANALYSIS Ó
SENATE COMMITTEE ON VETERANS AFFAIRS
Senator Jim Nielsen, Chair
2015 - 2016 Regular
Bill No: AB 2562 Hearing Date: 6/14/16
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|Author: |Committee on Veterans Affairs |
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|Version: |2/19/16 |
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|Urgency: |No |Fiscal: |No |
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|Consultant:|Wade Teasdale |
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Subject: Military service: benefits
DESCRIPTION
Summary:
Deletes references to specific dates on which a military
reservist was called to active duty.
(Note: Existing law provides certain financial protections
to military reservists called onto active duty. Eligibility
for some protections is limited, in part, by specified
calendar dates of activation. This bill makes the
protections available to any activated reservist,
regardless of date of activation, who otherwise meets the
definition of reservist, as defined.)
Existing law:
1)Authorizes a reservist- who is called to active duty on and
after January 1, 2014 - for the period of active duty plus 60
calendar days, or a total of 180 days, whichever is the
lesser, to defer payments on:
a. Mortgages;
b. Credit cards;
c. Retail installment accounts and contracts;
d. Real property taxes and assessments;
e. Vehicle leases; and
f. Obligations owed to utility companies.
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2)Also authorizes similar provisions to a reservist who was
called to active duty before January 1, 2014, as a part of the
Iraq and Afghanistan conflicts.
This bill deletes references to the date a reservist is called
to active duty, in both the definition of a reservist and the
payment deferral provisions,
BACKGROUND
State financial protections for reservists
The State's intent to provide increased financial protections
for servicemembers called to active service can be found in
several places in California Law.
In response to the events of September 11, 2001, the California
Military Department (CMD) sponsored AB 1433 (Horton), which
borrowed heavily from federal law. This bill enabled National
Guard members serving in state or federal status and other
military reservists performing federal duty to receive financial
protections consistent with those found within the federal
Soldiers and Sailors Civil Relief Act (SSCRA). These protections
were placed in MVC §§400-420.
In 2005, the Legislature enacted AB 306 (Baca) to amend MVC
§§800-810, which originally had been enacted in 1991 to address
service in the first Gulf War (Desert Storm). This bill expanded
and enhanced financial protections of existing laws for members
called to active duty due to ongoing conflicts in Iraq (Iraqi
and Afghanistan.
Both the §§400 and §§800 portions of the MVC provide for
deferment of loans and other obligations during a reserve
servicemember's call to active military service; however these
sections are inconsistent in three ways: (1) applicability, (2)
the process of obtaining deferrals, and (3) repayment of
deferred loans and obligations. This discrepancy inadvertently
financially penalizes members who must defer a portion or the
entirety of their loan or obligation under MVC §409.3.
In 2010, AB 2455 (Nava) was chaptered into law and made minor,
technical corrections to MVC §§800-811. These corrections
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ensured that all car loans are eligible for deferment and also
clarified those financial protections pursuant to MVC §§800-811
were to be extended to the Servicemember's spouse and/or legal
dependents.
In 2010, AB 2365 (Lieu) was enacted, allowing California
National Guard members and Reservists to receive court awarded
damages, including reasonable attorney fees and court costs,
incurred while pursuing certain protections under sections of
the MVC.
In 2013, SB 720 (Correa) was chaptered into law and revised MVC
§409.3 to align with its companion statutes in MVC §§800. These
separate statutes both addressed deferment of loans and
obligations upon a Servicemember's call to active military
service; however they treated the repayment of the deferred loan
or obligation differently. By reconciling and clarifying MVC
§409.3 to be consistent with MVC §§800, both Servicemembers and
financial institutions now benefit from a more clear and concise
statute that protects the interests of both parties.
Also in 2013, AB 526 (Melendez) was chaptered and expanded
financial protections given to military reservists called to
active duty as part of the Iraq and Afghanistan conflicts to all
military reservists called to active duty on and after January
1, 2014. Additionally, this bill authorized the deferral of
obligations owed to a utility company and added a requirement
for the reservist to provide a copy of their active duty orders
to their obligor for the period in which they are deferring a
loan or obligation.
COMMENT
Author Comments :
A reservist who is called to active duty on and after January 1,
2014, is authorized to defer payments on mortgages, credit
cards, retail installment accounts and contracts, real property
taxes and assessments, vehicle leases, and obligations owed to
utility companies, for the period of active duty plus 60
calendar days, or 180 days, whichever is less. Similar
provisions are authorized to a reservist who was called to
active duty before January 1, 2014, as a part of the Iraq and
Afghanistan conflicts. Assembly Bill 2562 deletes the references
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to the date a reservist is called to active duty, in both the
definition of a reservist and the payment deferral provisions,
thereby making the benefits available to any reservist who
otherwise meets the definition.
The current wording is a result of drafting to make it
abundantly clear that the status quo would be preserved until
the effective date of AB 236 (Melendez, 2013), which enhanced
certain financial protections for servicemembers.
This current wording has proven to be confusing to financial
institutions. AB 2562 removes the obsolete section of existing
code which covered the period before January 1, 2014 and removes
the obsolete references to January 1, 2014, since that date has
passed. The obsolete language renders this section confusing.
This bill does not expand the universe of eligible
servicemembers in terms of time or conflict or any other way.
POSITIONS
Sponsor: Author.
Support: None on file.
Oppose: None on file.
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