ACTION:
____________________________
Clerk/Secretary
Department: City Manager Item No: D1
Prepared by:
Imelda M. Huerta, Assistant to the City
Manager Meeting Date: August 22, 2023
Approved by: John Conley, City Manager Agenda Location: Discussion SUBJECT: RESOLUTION SUPPORTING AB 46 (RAMOS)
RECOMMENDATION: Adopt City Council Resolution No. 2023- , supporting California Assembly Bill 46.
CORRELATION TO CITY COUNCIL GOALS: Does not directly correlate to current City Council goals; however, aligns with City Council initiatives with respect to Vista’s military and veteran population.
PRIOR ACTION: None.
STATEMENT ON THE SUBJECT: Mayor Franklin requested the City Manager place a discussion item on an upcoming agenda to discuss a Resolution in support of California Assembly Bill (AB) 46 (Ramos) Personal income taxes: exclusion: Military Services Retirement and Surviving Spouse Benefit Payment Act.
This bill would, for taxable years beginning on or after January 1, 2024, and before January 1, 2034, exclude from gross income retirement pay received by a taxpayer from the federal government for service performed in the uniformed services, as defined, during the taxable year. The bill, for taxable years beginning on or after January 1, 2024, and before January 1, 2034, would also exclude from gross income annuity payments received by a qualified taxpayer, as defined, pursuant to a United States Department of Defense Survivor Benefit Plan during the taxable year. The bill would make related findings and declarations. The bill text is attached for reference as Exhibit 2.
This legislation seeks to exempt members of the Armed Forces retirement pay once they have retired after twenty years of service. California is currently the only state that fully taxes both military retirement pay and Survivor Benefit Plan.
FISCAL IMPACT: There is no direct fiscal impact associated with the staff recommendation.
EXHIBITS:
1.City Council Resolution No. 2023- , supporting California Assembly Bill 46
2.AB 46 (Ramos) bill text
AGENDA
REPORT
CITY COUNCIL
COMMUNITY DEVELOPMENT COMMISSION
SUCCESSOR AGENCY
BUENA SANITATION DISTRICT
JOINT POWERS FINANCING AUTHORITY
Approved above recommendation, adopted City Council Resolution No. 2023-157. Vote: 5-0.
00029213 7
RESOLUTION NO. 2023-
A RESOLUTION OF THE CITY COUNCIL OF THE CHARTERED CITY OF VISTA, CALIFORNIA, SUPPORTING CALIFORNIA ASSEMBLY BILL 46 The City Council of the City of Vista does resolve as follows:
1. Findings. The City Council hereby finds and declares the following:
A. There are over 1.8 million veterans residing in the State of California, currently representing eight percent of the total U.S. veteran population.
B. U.S. Armed Forces Servicemembers are eligible to retire from the military after 20 years of service, and these retirees devoted the prime years of their life to defending the freedom of all Americans.
C. United States Department of Defense’s Survivor Benefit Plan allows a retiree to ensure, after death, a continuous lifetime annuity for their dependents.
D. Veterans who retired from the uniformed services receive retirement pay and survivor benefits that are subject to California state income tax, reducing their financial resources and potentially hindering their ability to live comfortably in California.
E. Veterans who have served in the U.S. Armed Forces long enough to receive a pension have made significant sacrifices for our country and should be recognized and honored for their service.
F. Providing a state income tax exclusion to military retirees not only signifies the gratitude of Californians for these men and women who chose to serve our country, it also benefits the state and local economies by helping to retain skilled and motivated individuals in California.
G. Providing a state income tax exclusion to Survivor Benefit Plan beneficiaries can provide critical financial support for vulnerable community members.
H. Providing additional financial benefits to California veterans both honors their service and provides fiscal incentives for them and their families to retire and remain in California.
I. Assembly Member James C. Ramos, representing District 45, introduced Assembly Bill (AB) 46 on December 5, 2022, which would amend the California Revenue and Taxation Code to exempt military retirement and Survivor Benefit Plan income from state income taxes for a ten-year period (January 1, 2024 thru January 1, 2034).
2. Action.
A. The City Council supports AB 46 and urges the California Legislature to pass this bill.
B. The City Council further resolves that the City Manager, or designee, continue to advocate for AB 46’s passage.
08/22/2023 D1 2 of 9
EXHIBIT 1
RESOLUTION NO. 2023-
CITY COUNCIL OF THE CHARTERED CITY OF VISTA
PAGE 2
00029213 7EXH1 - 2022 Resolution template -COV (00029213-8xBECB1) - AB 46 Suppo.docx
3. Adoption. PASSED AND ADOPTED at a meeting of the City Council of the City of Vista held on August 22, 2023, by the following vote:
AYES:
NOES:
ABSTAIN:
APPROVED AS TO FORM:
WALTER CHUNG, CITY ATTORNEY
By:
APPROVED
Walter C. Chung
20230809144627
JOHN B. FRANKLIN, MAYOR
ATTEST:
KATHY VALDEZ, CITY CLERK
By:
08/22/2023 D1 3 of 9
AMENDED IN SENATE JULY 12, 2023
california legislature—2023–24 regular session
ASSEMBLY BILL No. 46
Introduced by Assembly Members Ramos, Mathis, and Soria (Coauthors: Assembly Members Addis, Alanis, Alvarez, Arambula, Bains, Berman, Boerner, Bryan, Juan Carrillo, Chen, Connolly, Megan Dahle, Davies, Dixon, Essayli, Flora, Lackey, Muratsuchi, Joe Patterson, Quirk-Silva, Robert Rivas, Rodriguez,
Blanca Rubio, Sanchez, Ta, Waldron, Ward, Weber, and Wilson) (Coauthors: Senators Archuleta, Atkins, Dahle, Dodd, Grove, Jones, Menjivar, Newman, Nguyen, Ochoa Bogh, Seyarto, and Wilk) December 5, 2022
An act to add and repeal Sections 17132.9 and 17132.10 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.
legislative counsel’s digest
AB 46, as amended, Ramos. Personal income taxes: exclusion:
Military Services Retirement and Surviving Spouse Benefit Payment Act.
The Personal Income Tax Law imposes a tax on individual taxpayers measured by the taxpayer’s taxable income for the taxable year, but excludes certain items of income from the computation of tax, including an exclusion for combat-related special compensation.
This bill, for taxable years beginning on or after January 1, 2024, and before January 1, 2034, would exclude from gross income retirement pay received by a taxpayer from the federal government for service performed in the uniformed services, as defined, during the taxable year. The bill, for taxable years beginning on or after January 1, 2024, Corrected 7-13-23—See last page.98
08/22/2023 D1 4 of 9
EXHIBIT 2
and before January 1, 2034, would also exclude from gross income annuity payments received by a qualified taxpayer, as defined, pursuant to a United States Department of Defense Survivor Benefit Plan during the taxable year. The bill would make related findings and declarations.
Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals, purposes, and objectives that the tax expenditure will achieve, detailed performance indicators, and data collection requirements.
This bill also would include additional information required for any bill authorizing a new tax expenditure. The bill would require the Franchise Tax Board and the Department of Veterans Affairs to provide any data requested by the Legislative Analyst to write the report, as provided, and would make taxpayer information received by the Legislative Analyst subject to limitation on the collection and use of that information. By expanding the scope of a crime, this bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state.
Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
This bill would take effect immediately as a tax levy.
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.
The people of the State of California do enact as follows:
line 1 SECTION 1. This measure shall be known, and may be cited, line 2 as the Military Services Retirement and Surviving Spouse Benefit line 3 Payment Act.
line 4 SEC. 2. The Legislature finds and declares all of the following:
line 5 (a) Servicemembers are eligible to retire from the military after line 6 20 years of service. These retirees devoted the prime years of their line 7 life to defending the freedom of all Americans.
line 8 (b) To preserve the current policy of an all-volunteer force while line 9 still maintaining critical skills and readiness requires the retention line 10 of qualified military personnel, both enlisted and officers. This line 11 retention of military professionals also saves the costs to the line 12 taxpayer associated with training replacement personnel in essential line 13 skills.
98 — 2 — AB 46
08/22/2023 D1 5 of 9
line 1 (c) Retired members of the nation’s two nonarmed uniformed line 2 services, which consist of the commissioned corps of the United line 3 States Public Health Service and the National Oceanic and line 4 Atmospheric Administration Commissioned Officer Corps, also line 5 provide valuable service to the nation’s health and environmental line 6 safety.
line 7 (d) Providing a state income tax exclusion to retirees of the line 8 uniformed services not only signifies the gratitude of Californians line 9 for these men and women who chose to serve our country, it also line 10 benefits the state and local economies by helping to retain skilled line 11 and motivated individuals in California.
line 12 (e) The number one issue for employers in California is line 13 attracting a qualified workforce. Approximately 60,000 high-tech line 14 jobs are unfilled. Uniformed service retirees are highly skilled, line 15 often in areas requiring technical and management expertise. These line 16 men and women often continue to be valuable assets to our schools, line 17 local charities, and nonprofit organizations.
line 18 (f) Substantial new federal funds are infused into the state and line 19 local economies not only from retirement pay, but also from the line 20 full taxation of their second careers. These retirees may also qualify line 21 for federal veterans’ benefits, which further bring new monies into line 22 the state.
line 23 (g) The United States Department of Defense’s Survivor Benefit line 24 Plan allows a retiree to ensure, after death, a continuous lifetime line 25 annuity for their dependents. The maximum annuity for a spouse line 26 is based on 55 percent of the member’s retirement pay. Eligible line 27 children may also be beneficiaries. State income taxation of these line 28 funds, which are critical to the economic well-being of those who line 29 have suffered the loss of a husband, wife, father, or mother, can line 30 place the surviving family members in risk of falling into the state line 31 and local safety nets.
line 32 SEC. 3. Section 17132.9 is added to the Revenue and Taxation line 33 Code, to read:
line 34 17132.9. (a) For taxable years beginning on or after January line 35 1, 2024, and before January 1, 2034, gross income shall not include line 36 retirement pay received by a taxpayer from the federal government line 37 for service in the uniformed services during the taxable year. line 38 (b) For purposes of this section, the following definitions apply:
line 39 (1) “Armed Forces of the United States” includes all regular line 40 and reserve components of the uniformed services which are 98 AB 46 — 3 —
08/22/2023 D1 6 of 9
line 1 subject to the jurisdiction of the Secretary of Defense, the Secretary line 2 of the Army, the Secretary of the Navy, or the Secretary of the Air line 3 Force, and each term also includes the Coast Guard and United line 4 States Space Force. The members of such forces include line 5 commissioned officers and personnel below the grade of line 6 commissioned officers in such forces.
line 7 (2) “Uniformed services” means the Armed Forces of the United line 8 States, the Army National Guard and the Air National Guard when line 9 engaged in active duty for training, inactive duty training, or line 10 full-time National Guard duty, the commissioned corps of the line 11 United States Public Health Service, and the National Oceanic and line 12 Atmospheric Administration Commissioned Officer Corps. line 13 (c) This section shall remain in effect only until December 1, line 14 2034, and as of that date is repealed.
line 15 SEC. 4. Section 17132.10 is added to the Revenue and Taxation line 16 Code, to read:
line 17 17132.10. (a) For taxable years beginning on or after January line 18 1, 2024, and before January 1, 2034, gross income shall not include line 19 annuity payments received by a qualified taxpayer pursuant to a line 20 United States Department of Defense Survivor Benefit Plan during line 21 the taxable year.
line 22 (b) For purposes of this section, the following definitions apply:
line 23 (1) “Qualified taxpayer” means the surviving spouse or other line 24 named beneficiary of a plan.
line 25 (2) “United States Department of Defense Survivor Benefit line 26 Plan” or “plan” means a survivor benefit plan established pursuant line 27 to Sections 1447 to 1455, inclusive, of Title 10 of the United States line 28 Code.
line 29 (c) This section shall remain in effect only until December 1, line 30 2034, and as of that date is repealed.
line 31 SEC. 5. For purposes of complying with the requirements of line 32 Section 41 of the Revenue and Taxation Code, with respect to the line 33 exclusions allowed by Sections 17132.9 and 17132.10 of the line 34 Revenue and Taxation Code, as added by this act, hereafter known line 35 as “the exclusions,” the Legislature finds and declares the line 36 following:
line 37 (a) The specific goals, purposes, and objectives of the exclusions line 38 are as follows:
98 — 4 — AB 46
08/22/2023 D1 7 of 9
line 1 (1) To honor the service of California veterans and provide line 2 fiscal relief so that they and their families will remain or retire in line 3 California.
line 4 (2) To increase the number of highly skilled retired veterans in line 5 California’s workforce.
line 6 (b) Detailed performance indicators for the Legislature to use line 7 in determining whether the exclusions meet the goals, purposes, line 8 and objectives described in subdivision (a) are as follows:
line 9 (1) The number of retired veterans and survivor benefit plan line 10 beneficiaries taking advantage of the tax exclusions. line 11 (2) The economic security of retired veterans and survivor line 12 benefit plan beneficiaries in California.
line 13 (3) The number of retired veterans and survivor benefit plan line 14 beneficiaries leaving California.
line 15 (4) The earned income generated by retired veterans and line 16 survivor benefit plan beneficiaries subject to state income tax line 17 under the Revenue and Taxation Code.
line 18 (c) The data collection requirements for the exclusions are as line 19 follows:
line 20 (1) On or before December 1, 2034, the Legislative Analyst, in line 21 collaboration with the Department of Veterans Affairs, Affairs and line 22 the Franchise Tax Board, shall write and submit a report to the line 23 Legislature on the effectiveness of the exclusions. The To the extent line 24 data is available, the report shall include, but not be limited to, an line 25 analysis of the number of retired veterans and survivor benefit line 26 plan beneficiaries taking advantage of the exclusions, the impact line 27 of the exclusions on the economic security of retired veterans and line 28 survivor benefit plan beneficiaries in California, and the number line 29 of retired veterans and survivor benefit plan beneficiaries leaving line 30 California. California, and the earned income generated by retired line 31 veterans and survivor benefit plan beneficiaries subject to state line 32 income tax under the Revenue and Taxation Code. The report shall line 33 be submitted in compliance with Section 9795 of the Government line 34 Code. Code and shall not include any personally identifiable line 35 information.
line 36 (2) To write the report required by this subdivision, the line 37 Legislative Analyst may request information from the Franchise line 38 Tax Board and the Department of Veterans Affairs. line 39 (3) Notwithstanding Section 19542 of the Revenue and Taxation line 40 Code, the Franchise Tax Board and the Department of Veterans 98 AB 46 — 5 —
08/22/2023 D1 8 of 9
line 1 Affairs shall provide any data requested by the Legislative Analyst line 2 pursuant to this subdivision. subdivision to the extent that data is line 3 available. Taxpayer information received pursuant to this section line 4 by the Legislative Analyst is subject to Section 19542 of the line 5 Revenue and Taxation Code.
line 6 SEC. 6. No reimbursement is required by this act pursuant to line 7 Section 6 of Article XIIIB of the California Constitution because line 8 the only costs that may be incurred by a local agency or school line 9 district will be incurred because this act creates a new crime or line 10 infraction, eliminates a crime or infraction, or changes the penalty line 11 for a crime or infraction, within the meaning of Section 17556 of line 12 the Government Code, or changes the definition of a crime within line 13 the meaning of Section 6 of Article XIIIB of the California line 14 Constitution.
line 15 SEC. 7. This act provides for a tax levy within the meaning of line 16 Article IV of the California Constitution and shall go into line 17 immediate effect.
line 18
line 19
CORRECTIONS: line 20
Heading—Line 3. line 21
line 22
O
98 — 6 — AB 46
08/22/2023 D1 9 of 9
California lawmakers consider
repealing taxes on military pensions
AUGUST 11, 2023 / 6:02 PM i CBS SAN FRANCISCO
SACRAMENTO — California has long been the only state to fully tax military pensions, but that could all change with a proposal being considered in the legislature next week.
It all started with an exodus of veterans from California to states with lower tax rates. According to U.S.
Census data, more than 500,000 U.S. military veterans have vacated California since 2020. Meanwhile states like Nevada and Florida that do not fully tax military pensions have seen an increase.
After several failed attempts, state lawmakers are now widely backing Assembly Bill 46, new legislation that would repeal the tax for the next decade.
Asm. James Ramos (D-San Bernardino) is sponsoring AB46. He argues the high -value second careers many veterans pursue after their 20+ years in service to earn a pension pour in more money into California than the dollars the estimated $85 million annual revenue the state may lose if the tax is repealed.
For Air Force veteran Ramona Chavez, joining the military was a simple decision to save for college, but today she faces the tough decision of planning for where her money will go the farthest. "We were on the same vision of supporting the freedoms that we so enjoy," Chavez told CBS News Bay Area. "A lot of people join the military when they're 18 years old, so you get 20 years of service and 38 years old. So they're looking beyond their retirement in the military. So when they spend 20 years in business, they're building all their skills and experience and they're ready to carry that out to their next career so pension is huge."
The camaraderie she felt in the military persists today as she fights for the legislation to repeal taxation on military pensions in California. Washington, D.C. is the only other U.S. location where military pension is taxed at 100%.
"It's shocking," she said about the tax. "We have 49 states that recognize the service of members that have served for more than 20 years. It's not a handout. So I'm really surprised but I think it's just been a problem that has gone unnoticed here in California."
California remains one of the most expensive places to live in the country and Chavez says veterans have earned the right for each penny to stay in their pockets.
"Every dollar counts. You know, if you want a home, you need a lot of money to buy a home here in California," said Chavez. "You want to raise your children you need a lot of money. And so pension is huge as we're looking at their second careers and trying to figure out where are they going to land." The average enlisted officer who serves for the minimum 20 years receives an annual $30,000 pension.
California is home to the highest number of military retirees at more than 140,000. But the pension tax forces many to question a departure, even Chavez.
"My husband and I are looking, we live in Oakland, and we're looking where does our dollar go farther? And when you look in different states, it's gonna go a little further outside of California. So that definitely does come into play," she said.
But the tax is on the verge of being repealed, at least until 2034. AB 46 has passed out of a several key committees in Sacramento and Ramos says it's all in the name of military appreciation. "We want to keep our veteran population in the state of California and if offering them a tax exemption to their military service that comes to them in retirement, that's a small step towards keeping those in the state of California that put their lives on the line for us," Ramos told CBS News Bay Area.
Chavez agrees. She testified before Ramos in July in her push to get the legislation passed with a goal of putting thousands back into the pockets of California veterans each month. "California stands out in so many great ways. But to be the only state to fully tax military retirement should not be one of them," she said in her testimony. "When you say thank you for your service, act on it."
If passed, Chavez says it would do more than repeal a tax, but reaffirm that California in fact supports its veterans.
"It's not a handout. It is people that every day, got up and did what they were supposed to do to protect this country and protect the state," said Chavez. "It just seems like it's an obvious thing to do for the veterans."
AB 46 is set for a full Assembly vote on Monday.
https://www.cbsnews.com/sanfrancisco/news/ab-46-califomia-lawmakers-miltary-pension-tax-repeal/
8/22/23, 3:55 PM Bill Text: CAAB46 1 2023-2024 1 Regular Session I Introduced I LegiScan numa,.LEGICAN
11�w
Bill Text: CA AB46 1 2023-2024 1 Regular Session I Introduced California Assembly Bill 46
NOTE: There are more recent revisions of this legislation. Read Latest Draft Bill Title: Personal income taxes: exclusion: Military Services Retirement and Surviving Spouse Benefit Payment Act.
Spectrum: Bipartisan Bill
Status: (Engrossed) 2023-08-14 - In committee: Referred to APPR suspense file. [AB46 Detail] Download: California-2023-AB46-Introduced.html
CALIFORNIA LEGISLATURE— 2023 2024 REGULAR SESSION
ASSEMBLY BILL NO. 46
Introduced by Assembly Member Ramos
December 05, 2022
An act to add and repeal Sections 17132.9 and 17132.10 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.
LEGISLATIVE COUNSEL'S DIGEST
AB 46, as introduced, Ramos. Personal income taxes: exclusion: Military Services Retirement and Surviving Spouse Benefit Payment Act.
The Personal Income Tax Law imposes a tax on individual taxpayers measured by the taxpayer's taxable income for the taxable year, but excludes certain items of income from the computation of tax, including an exclusion for combat -related special compensation.
This bill, for taxable years beginning on or after January 1, 2024, and before January 1, 2034, would exclude from gross income retirement pay received by a taxpayer from the federal government for service performed in the uniformed services, as defined, during the taxable year. The bill, for taxable years beginning on or after January 1, 2024, and before January 1, 2034, would also exclude from gross income annuity payments received by a qualified taxpayer, as defined, pursuant to a United States Department of Defense Survivor Benefit Plan during the taxable year. The bill would make related findings and declarations.
Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals, purposes, and objectives that the tax expenditure will achieve, detailed performance indicators, and data collection requirements.
This bill also would include additional information required for any bill authorizing a new tax expenditure. The bill would require the Franchise Tax Board and the Department of Veterans Affairs to provide any data requested by the Legislative Analyst to write the report, and would make taxpayer information received by the Legislative Analyst subject to limitation on the collection and use of that information. By expanding the scope of a crime, this bill would impose a state -mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state.
Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
This bill would take effect immediately as a tax levy.
hftps://Iegiscan.com/CA/text/AB46/id/2615859 1/3
8/22/23, 3:55 PM Bill Text: CAAB46 1 2023-2024 1 Regular Session I Introduced I LegiScan Digest Key
Vote: majority Appropriation: no Fiscal Committee: yes Local Program: yes Bill Text
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. This measure shall be known, and may be cited, as the Military Services Retirement and Surviving Spouse Benefit Payment Act.
SEC. 2. The Legislature finds and declares all of the following:
(a) Servicemembers are eligible to retire from the military after 20 years of service. These retirees devoted the prime years of their life to defending the freedom of all Americans.
(b) To preserve the current policy of an all -volunteer force while still maintaining critical skills and readiness requires the retention of qualified military personnel, both enlisted and officers. This retention of military professionals also saves the costs to the taxpayer associated with training replacement personnel in essential skills. (c) Retired members of the nation's two nonarmed uniformed services, which consist of the commissioned corps of the United States Public Health Service and the National Oceanic and Atmospheric Administration Commissioned Officer Corps, also provide valuable service to the nation's health and environmental safety. (d) Providing a state income tax exclusion to retirees of the uniformed services not only signifies the gratitude of Californians for these men and women who chose to serve our country, it also benefits the state and local economies by helping to retain skilled and motivated individuals in California.
(e) The number one issue for employers in California is attracting a qualified workforce. Approximately 60,000 high-tech jobs are unfilled. Uniformed service retirees are highly skilled, often in areas requiring technical and management expertise. These men and women often continue to be valuable assets to our schools, local charities, and nonprofit organizations. (f) Substantial new federal funds are infused into the state and local economies not only from retirement pay, but also from the full taxation of their second careers. These retirees may also qualify for federal veterans' benefits, which further bring new monies into the state.
(g) The United States Department of Defense's Survivor Benefit Plan allows a retiree to ensure, after death, a continuous lifetime annuity for their dependents. The maximum annuity for a spouse is based on 55 percent of the member's retirement pay. Eligible children may also be beneficiaries. State income taxation of these funds, which are critical to the economic well-being of those who have suffered the loss of a husband, wife, father, or mother, can place the surviving family members in risk of falling into the state and local safety nets.
SEC. 3. Section 17132.9 is added to the Revenue and Taxation Code, to read:
17132.9. (a) For taxable years beginning on or after January 1, 2024, and before January 1, 2034, gross income shall not include retirement pay received by a taxpayer from the federal government for service in the uniformed services during the taxable year. (b) For purposes of this section, the following definitions apply:
(1) "Armed Forces of the United States" includes all regular and reserve components of the uniformed services which are subject to the jurisdiction of the Secretary of Defense, the Secretary of the Army, the Secretary of the Navy, or the Secretary of the Air Force, and each term also includes the Coast Guard and United States Space Force. The members of such forces include commissioned officers and personnel below the grade of commissioned officers in such forces. (2) "Uniformed services" means the Armed Forces of the United States, the Army National Guard and the Air National Guard when engaged in active duty for training, inactive duty training, or full-time National Guard duty, the commissioned corps of the United States Public Health Service, and the National Oceanic and Atmospheric Administration Commissioned Officer Corps. (c) This section shall remain in effect only until December 1, 2034, and as of that date is repealed.
SEC, 4. Section 17132.10 is added to the Revenue and Taxation Code, to read:
17132.10. (a) For taxable years beginning on or after January 1, 2024, and before January 1, 2034, gross income shall not include annuity payments received by a qualified taxpayer pursuant to a United States Department of Defense Survivor Benefit Plan during the taxable year.
(b) For purposes of this section, the following definitions apply:
(1) "Qualified taxpayer" means the surviving spouse or other named beneficiary of a plan. https://Iegiscan.com/CA/text/AB46/id/2615859 2/3
8/22/23, 3:55 PM Bill Text: CAAB46 1 2023-2024 1 Regular Session I Introduced I LegiScan (2) "United States Department of Defense Survivor Benefit Plan" or "plan" means a survivor benefit plan established pursuant to Sections 1447 to 1455, inclusive, of Title 10 of the United States Code. (c) This section shall remain in effect only until December 1, 2034, and as of that date is repealed.
SEC. S. For purposes of complying with the requirements of Section 41 of the Revenue and Taxation Code, with respect to the exclusions allowed by Sections 17132.9 and 17132.10 of the Revenue and Taxation Code, as added by this act, hereafter known as "the exclusions," the Legislature finds and declares the following:
(a) The specific goals, purposes, and objectives of the exclusions are as follows:
(1) To honor the service of California veterans and provide fiscal relief so that they and their families will remain or retire in California.
(2) To increase the number of highly skilled retired veterans in California's workforce. (b) Detailed performance indicators for the Legislature to use in determining whether the exclusions meet the goals, purposes, and objectives described in subdivision (a) are as follows:
(1) The number of veterans and survivor benefit plan beneficiaries taking advantage of the tax exclusions. (2) The economic security of veterans and survivor benefit plan beneficiaries in California. (3) The number of retired veterans and survivor benefit plan beneficiaries leaving California. (c) The data collection requirements for the exclusions are as follows:
(1) On or before December 1, 2034, the Legislative Analyst, in collaboration with the Department of Veterans Affairs, shall write and submit a report to the Legislature on the effectiveness of the exclusions. The report shall include, but not be limited to, an analysis of the number of veterans and survivor benefit plan beneficiaries taking advantage of the exclusions, the impact of the exclusions on the economic security of veterans and survivor benefit plan beneficiaries in California, and the number of retired veterans and survivor benefit plan beneficiaries leaving California. The report shall be submitted in compliance with Section 9795 of the Government Code.
(2) To write the report required by this subdivision, the Legislative Analyst may request information from the Franchise Tax Board and the Department of Veterans Affairs.
(3) Notwithstanding Section 19542 of the Revenue and Taxation Code, the Franchise Tax Board and the Department of Veterans Affairs shall provide any data requested by the Legislative Analyst pursuant to this subdivision. Taxpayer information received pursuant to this section by the Legislative Analyst is subject to Section 19542 of the Revenue and Taxation Code.
SEC. 6. No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.
SEC. 7. This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.
hftps://legiscan.com/CA/texUAB46/id/2615859 3/3
8/22/23, 3:54 PM CAAB46 1 2023-2024 1 Regular Session I LegiScan fryCAN
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,law
CA AB46 1 2023-2024 1 Regular Session
California Assembly Bill 46
Status
Spectrum: Bipartisan Bill
Status: Engrossed on May 22 2023 - 50% progression
Action: 2023-08-14 - In committee: Referred to APPR suspense file.
Pending: Senate Appropriations Committee
Text: Latest bill text (Amended) [HTML]
Summary
An act to add and repeal Sections 17132.9 and 17132.10 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.
Title
Personal income taxes: exclusion: Military Services Retirement and Surviving Spouse Benefit Payment Act.
Sponsors
Asm. Devon
Asm. James
Asm. Esmeralda
Asm. Dawn
Mathis [R]
Ramos [D]
Soria [D]
Addis [D]
Asm. Juan
Asm. David
Asm. Joaquin
Sen. Bob
Alanis [R]
Alvarez [D]
Arambula [D]
Archuleta [D]
Asm. Jasmeet
Asm. Marc
Asm. Blanca
Sen. Toni Atkins [D]
Bains [D]
Berman [D]
Rubio [D]
Asm. Tasha Boerner
Asm. Isaac
Asm. Phillip
Asm. Damon
Horvath [D]
Bryan [D]
Chen [R]
Connolly [D]
Sen. Brian Dahle [R]
Asm. Laurie
Asm. Diane
Sen. Bill Dodd [D]
Davies [R]
Dixon [R]
Asm. Heath
Sen. Shannon
Asm. Joe
Asm. Bill Essayli [R]
Flora [R]
Grove [R]
Patterson [R]
Sen. Brian Jones [R]
Asm. Juan
Asm. Tom
Asm. Megan
Carrillo [D]
Lackey [R]
Dahle [R]
Sen. Caroline
Asm. Al
Sen. Josh
Sen. Janet
Menjivar [D]
Muratsuchi [D]
Newman [D]
Nguyen [R]
Sen. Rosilicie Ochoa
Asm. Sharon Quirk-
Asm. Robert
Asm. Freddie
Bogh [R]
Silva [D]
Rivas [D]
Rodriguez [D]
Asm. Kate
Sen. Kelly
Asm. Tri Ta [R]
Asm. Marie
Sanchez [R]
Seyarto [R]
Waldron [R]
Asm. Chris Ward [D]
Asm. Akilah
Weber [D]
Sen. Scott Wilk [R]
Asm. Lori
Wilson [D]
Roll Calls
2023-08-14 - Senate - Placed on suspense file (Y: 7 N: 0 NV: 0 Abs: 0) [PASS] 2023-07-10 - Senate - Do pass as amended, but first amend, and re -refer to the Committee on [Appropriations] (Y: 5 N: 0 NV: 0 Abs: 0) [PASS]
2023-06-14 - Senate - Do pass, but first be re -referred to the Committee on [Military and Veterans Affairs] (Y: 7 N: 0 NV: 0 Abs:
1) [PASS]
2023-05-22 - Assembly - AB 46 Ramos Assembly Third Reading (Y: 77 N: 0 NV: 0 Abs: 3) [PASS] 2023-05-18 - Assembly - Do pass (Y: 15 N: 0 NV: 0 Abs: 1) [PASS] 2023-05-01 - Assembly - Do pass and be re -referred to the Committee on [Appropriations] (Y: 11 N: 0 NV: 0 Abs: 0) [PASS] hftps://Iegiscan.com/CA/bilVAB46/2023 1/3
8/22/23, 3:54 PM
History
CAAB46 1 2023-2024 1 Regular Session I LegiScan
Date
Chamber
Action
2023-08-14
Senate
In committee: Referred to APPR suspense file.
2023-07-13
Senate
Measure version as amended on July 12 corrected.
2023-07-12
Senate
Read second time and amended. Re -referred to Com. on APPR. 2023-07-11
Senate
From committee: Amend, and do pass as amended and re -refer to Com. on APPR. (Ayes 5. Noes 0.) (July 10).
2023-06-14
Senate
From committee: Do pass and re -refer to Com. on M. & V.A. (Ayes 7. Noes 0.) (June 14). Re -referred to Com. on M. & V.A.
2023-05-31
Senate
Referred to Corns. on GOV. & F. and M. & V.A.
2023-05-23
Senate
In Senate. Read first time. To Com. on RLS. for assignment. 2023-05-22
Assembly
Read third time. Passed. Ordered to the Senate. (Ayes 77. Noes 0.) 2023-05-18
Assembly
Read second time. Ordered to third reading.
2023-05-18
Assembly
From committee: Do pass. (Ayes 15. Noes 0.) (May 18).
2023-05-18
Assembly
Joint Rule 62(a), file notice suspended.
2023-05-17
Assembly
In committee: Set, first hearing. Referred to APPR. suspense file. 2023-05-02
Assembly
From committee: Do pass and re -refer to Com, on APPR. (Ayes 11. Noes 0.) (May 1). Re -referred to Com. on APPR.
2023-03-14
Assembly
In committee: Set, first hearing. Referred to REV. & TAX. suspense file. 2023-02-07
Assembly
Coauthors revised.
2023-01-26
Assembly
Referred to Com. on REV. & TAX.
2022-12-06
Assembly
From printer. May be heard in committee January 5.
2022-12-05
Assembly
Read first time. To print.
Code Citations
Chapter
Section
Citation Type
Statute Text
Revenue and Taxation Code
17132.10
Repealed Code
Citation Text
Revenue and Taxation Code
17132.9
Repealed Code
Citation Text
California State Sources
Type
Source
Summary
https:Hleginfo.legislature.ca.gov/faces/biIlStatusClient.xhtmI?bill_id=202320240AB46 Text
https:Hleginfo.legislature.ca.gov/faces/billTextClient.xhtmI?bill_id=202320240AB46#99INT Text
https:Hleginfo.legislature.ca.gov/faces/billTextClient.xhtmI?bill_id=202320240AB46#98AMD Roll Call
https:Hieginfo.legislature.ca.gov/faces/billVotesCiient.xhtmI?bill_id=202320240AB46 Bill Comments
hftps://Iegiscan.com/CA/bilVAB46/2023 2/3