BILL ANALYSIS
SENATE JUDICIARY COMMITTEE
Senator Ellen M. Corbett, Chair
2009-2010 Regular Session
SB 285
Senator Wright
As Amended April 2, 2009
Hearing Date: April 21, 2009
Family Code
KB:jd
SUBJECT
Veterans' benefits
DESCRIPTION
This bill would provide that federal disability benefits awarded
to veterans for service-connected disabilities pursuant to
Chapter 11 of Title 38 of the United States Code shall be exempt
from the claims of creditors, and shall not be liable to
attachment, levy, or seizure by or under any legal or equitable
process whatever, either before or after receipt by the
beneficiary.
(This analysis reflects author's amendments to be offered in
committee.)
BACKGROUND
Disability compensation benefits are tax-free benefits paid to a
veteran for disabilities that are a result of or made worse by
injuries or diseases that happened while on active duty, active
duty for training, or inactive duty training. These federal
disability benefits are outlined in 38 U.S.C. 1110 et seq., and
38 U.S.C. 1131 et seq. Pursuant to 38 U.S.C. Section 5301(a),
veterans' benefits are This bill seeks to conform to federal law
by providing that veterans' disability benefits are exempt from
the claims of creditors, shall not be liable to attachment,
levy, or seizure under by or under any legal or equitable
process whatever, either before or after receipt by the
beneficiary. This bills seeks to codify similar protections for
veterans' benefits in state law.
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CHANGES TO EXISTING LAW
Existing federal law provides that payments or benefits due or
to become due under any law administered by the Secretary of
Veterans Affairs are exempt from claims of creditors, and will
not be liable to attachment, levy, or seizure by or under any
legal or equitable process whatever, either before or after
receipt by the beneficiary. (38 U.S.C. Sec. 5301(a).)
Existing state law generally governs civil actions in which
attachments are authorized. (Code of Civ. Proc. Section
483.010. et seq.)
This bill would provide that federal disability benefits awarded
to veterans for service-connected disabilities pursuant to
Chapter 11 of Title 38 of the United States Code shall be exempt
from the claims of creditors, and shall not be liable to
attachment, levy, or seizure by or under any legal or equitable
process whatever, either before or after receipt by the
beneficiary.
This bill would declare the intent of the Legislature to conform
to existing federal law.
COMMENT
1. Stated need for the bill
The author states:
Although United States Code, Title 38, Section 5301 is very
clear in its wording and intent, civil court judges
nationwide, including courts in California have routinely
ignored the U.S. Code and calculated veteran's disability
compensation into divorce settlements as a divisible asset and
not treated the same as SSI in calculating child support
awards. Very often these payments are the only assets a
veteran may have. Unlawful attachment creates hardship for
those veterans who rarely have the resources to hire legal
help to contest the taking of their benefits.
2.Current version of the bill would have prohibited the
consideration of a veteran's federal disability benefits in
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determining the veteran's income for the purposes of
calculating a support obligation, or to satisfy any support
This bill would declare the intent of the Legislature to enact
legislation to conform to existing federal law. As explained
further below, however, the current version of the bill would
have created inconsistencies with federal law. Consequently,
the author has proposed author's amendments which are outlined
in Comment 3.
In its current form the bill would have prohibited the
consideration of a veteran's federal disability benefits in
determining the veteran's income for the purposes of calculating
a support obligation, or to satisfy any support, which is
inconsistent with current federal law. Pursuant to federal case
law, the provisions of 38 U.S.C. Section 5301, which prohibit
specified payments or benefits due to a veteran from being
assigned or liable to attachment, levy or seizure, do not
preempt state laws which allow the consideration of disability
benefits in ordering support.
In Rose v. Rose (1987) 481 U.S. 619, a veteran was held in
contempt for failing to pay his child support obligations. The
question before the Supreme Court was whether a Tennessee state
court had jurisdiction to hold a disabled veteran in contempt
for failing to pay child support where the veteran's only means
of paying support was to utilize benefits received from the
Veterans' Administration. After reviewing Section 3101(a)'s
(presently Section 5301) legislative history, the Court
determined that neither of the section's purposes-to avoid the
VA's being placed in the role of a collection agency and to
prevent the deprivation and depletion of veteran's means of
subsistence - is constrained by allowing the state courts to
hold the appellant in contempt. (Id. at 630.) The Court
further noted that legislative history establishes that
disability benefits are intended to provide compensation for
disabled veterans and their families. (Id. at 631.)
Accordingly, the Court held that the Tennessee law allowing
state courts to award veterans' disability benefits as child
support did not conflict with, and was not preempted by 38
U.S.C. Section 3101, which the Court found does not shield
disability payments from seizure under an otherwise valid child
support order. (Id. at 634.)
The Supreme Court's decision in Rose was consistent with an
already existing California appellate case. In Gaskins v.
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Security-First National Bank (1939) 30 Cal.App.2d 409, the
appellate court considered whether provisions of the World War
Veteran's Act of 1924 (the Act) applied to debts and claims for
the care of a veteran's minor children. The Act provided in
part that payments of benefits shall not be assignable, and such
payments made under any laws relating to veterans shall be
exempt from the claims of creditors either before or after
receipt by the beneficiary. (Id. at 419.) The court noted that
the obligation of a father to support his minor children was not
a debt contemplated by the Act, but an obligation growing out of
the parental status and public policy. (Id. at 417.) Refusing
to assume that the federal government ever intended to enable
veteran's receiving benefits to refuse to discharge their duty
to support the children, the court found that the Act did not
exempt benefits from claims for the care of minor children.
(Id. at 418.)
Thus, it appears from both federal and state case law that
states may currently consider veteran's benefits in making
support orders without preempting federal law. As such, this
bill in its current form would not actually conform California
law to federal law, but would create a new policy regarding the
use of veteran's benefits in calculating support obligations
that currently does not exist. Accordingly, the author has
proposed amendments which are outlined in Comment 3.
3.Author's amendments would narrow the scope of the bill to only
apply to claims of creditors and attachments for collections
of debts
In order to avoid creating inconsistencies with federal law, the
author has offered amendments which would narrow the scope of
the bill to only apply to claims of creditors, and attachments
in civil actions. The amendments would be as follows:
On page 2, strike out lines 6 to 11, inclusive, and insert:
SEC. 2. Section 483.013 is added to the Code of Civil
Procedure, to read:
483.13.Notwithstanding Section 483.013, federal disability benefits
awarded to veterans for service-connected disabilities pursuant
to Chapter 11 of Title 38 of the United States Code shall be
exempt from the claims of creditors, and shall not be liable to
attachment, levy, or seizure by or under any legal or equitable
process whatever, either before or after receipt by the
beneficiary.
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This language mirrors that of 38 U.S.C. Section 5301. As noted
by the Supreme Court in Rose, disability benefits were intended
to support both the veteran, and his/her family. 38 U.S.C.
Section 5301 was accordingly enacted to afford some degree to
security to the veteran and his/her family by placing benefits
beyond the reach of creditors and from seizure or attachment
under process issued for collections of debts. By exempting
veterans' disability benefits from claims of creditors, and
prohibiting them from attachment in civil proceedings, the
Author's amendments would serve to conform state law to existing
federal law. Further, the Author's amendments would remove any
reference to support judgments or payments from the bill, which
as previously discussed, would not have been consistent with the
purpose and intent of 38 U.S.C. Section 5301.
Support : Operation Firing For Effect; California Alliance for
Families & Children
Opposition :None Known
HISTORY
Source :American Retirees Association
Related Pending Legislation :None Known
Prior Legislation :None Known
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