BILL ANALYSIS
SB 285
Page 1
Date of Hearing: June 23, 2009
ASSEMBLY COMMITTEE ON JUDICIARY
Mike Feuer, Chair
SB 285 (Wright) - As Amended: April 22, 2009
PROPOSED CONSENT (As Proposed to Be Amended)
SENATE VOTE : 37-0
SUBJECT : DISABILITY BENEFITS: ATTACHMENT
KEY ISSUE : IN ORDER TO ENSURE THAT CALIFORNIA LAW CONFORMS WITH
FEDERAL LAW, SHOULD THE LAW BE CLARIFIED THAT VETERANS'
DISABILITY BENEFITS ARE EXEMPT FROM CREDITOR CLAIMS AND NOT
SUBJECT TO ATTACHMENT, LEVY, OR SEIZURE?
FISCAL EFFECT : As currently in print this bill is keyed
non-fiscal.
SYNOPSIS
This non-controversial bill provides that, consistent with
federal law, benefits awarded to veterans for service-connected
disabilities are exempt from the claims of creditors, and are
not liable to attachment, levy, or seizure under any legal or
equitable process. The bill has no known opposition.
SUMMARY : Seeks to ensure that California law regarding
veterans' disability benefits conforms to existing federal law
which protects such benefits from creditors and attachments.
Specifically, this bill :
1)States that it is the intent of the Legislature to enact
legislation to conform with existing federal law that
prohibits veterans' disability payments or benefits from being
assigned, or liable to attachment, levy, or seizure under any
legal or equitable process.
2)Provides that federal disability benefits awarded to veterans
for service-connected disabilities 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
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whatever, either before or after receipt by the beneficiary.
EXISTING LAW :
1)Provides, under federal law, 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. section 5301(a).)
2)Provides for the procedure by which a plaintiff may request
that a defendant's property be attached in a civil action.
(Code of Civil Procedure section 483.010 et seq.)
COMMENTS : The author states that although federal law clearly
prohibits the attachment of federal disability benefits,
California courts continue inappropriately to mistakenly attach
such benefits. The author states, "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."
This bill would ensure that California law conforms with federal
law . The language of this bill essentially mirrors the language
of the federal statute (38 U.S.C. section 5301(a)). Both
federal law and this bill provide that federal disability
benefits are "exempt from the claim of creditors," and are not
"liable to attachment, levy, or seizure by or under any legal or
equitable process whatever, either before or after receipt by
the beneficiary."
However, the federal statute differs in one sense from the
language in this bill. Specifically, the federal statute
extends the attachment and other exemptions to "payments made
to, or on account of, a beneficiary," whereas this bill refers
only to "benefits awarded to veterans." In the event of a
veteran's death, federal law provides that his or her disability
payments may be awarded to the veteran's spouse, children, or
dependent parents. (38 U.S.C. 5121(a).) The author may wish to
add the "on account of" language to this bill so that it will
more closely conform with the federal statute, and therefore
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will protect not only payments to the veteran himself or
herself, but also payments made, on account of the veteran, to
the veteran's spouse, children, or dependent parents. (See
suggested language below.)
Author's Amendments:
Technical Amendment 1: Currently, the intent language in
Section 1 of the bill states the Legislature's intent to conform
to federal law, which prohibits veterans' disability payments
"from being assigned or liable to attachment, levy, or seizure
by or under any legal or equitable process." While it is true
that the federal statute does prohibit the assignment of these
benefits (in addition to attachment, taxation, and satisfaction
of creditor claims), there is nothing in this particular bill
that prohibits assignment of benefits. Instead, this bill deals
with creditor claims as well as attachment, levy, or seizure.
Therefore the author has agreed to make the following technical
clarifications to the intent section of the legislation to
reflect the provisions actually contained in this bill, as
follows:
On page 2, Section 1, beginning at line 1:
"SECTION 1. It is the intent of the Legislature to enact
legislation to conform to existing federal law that prohibits
federal law, which provides that payments or benefits due to a
veteran, with veteran for a service-connected disability, from
being assigned or disability shall be exempt from creditor
claims, and shall not be liable to attachment, levy, or seizure
by or under any legal or equitable process."
Technical Amendment 2:
On page 2, Section 2, beginning at line 12:
"SEC. 2. Section 483.013 is added to the Code of Civil
Procedure, to read:
483.013. Notwithstanding Section 483.010, federal
disability benefits awarded to or on account of veterans for
service-connected disabilities pursuant to Chapter 11 of Title
38 of the United States Code shall be exempt from the claim of
creditors, and shall not be liable to attachment, levy, or
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seizure by or under any legal or equitable process whatever,
either before or after receipt by the beneficiary."
Technical Amendment 3:
On page 2, line 19, strike out " process whatever, either before
or after receipt by the beneficiary" and insert:
process whatsoever, as provided by federal law.
PRIOR LEGISLATION : SB 469 (Poochigian), Chapter 98, 1999:
Roth IRAs: exemption from attachment by judgment creditors.
Extended protections of funds contained in traditional
individual retirement accounts (IRAs) to Roth IRAs. Provided
that Roth IRAs are exempt from attachment by judgment creditors
to the same extent traditional IRAs are exempt, and included in
the list of property that may be claimed as exempt from a
bankruptcy estate, the debtor's right to receive payments from a
Roth IRA.
AB 2724 (Cardenas), Chapter 290, 1998: Welfare payments:
exemption from attachment. Clarified that welfare payments made
by direct deposit are included on the list of payments that are
exempt from attachment by judgment creditors. For purposes of
this bill, welfare payments included general assistance payments
and CalWORKs payments, including payments for supportive
services (i.e., child care, transportation costs, personal
counseling and other ancillary expenses).
REGISTERED SUPPORT/OPPOSITION :
Support (as listed in the Senate Judiciary Committee Analysis) :
American Retirees Association (sponsor)
Operation Firing for Effect
California Alliance for Families and Children
Opposition :
None on file
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Analysis Prepared by : Drew Liebert and Rachel Anderson / JUD. /
(916) 319-2334