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	<ns0:Description>
		<ns0:Id>20250SB__000198AMD</ns0:Id>
		<ns0:VersionNum>98</ns0:VersionNum>
		<ns0:History>
			<ns0:Action>
				<ns0:ActionText>INTRODUCED</ns0:ActionText>
				<ns0:ActionDate>2024-12-02</ns0:ActionDate>
			</ns0:Action>
			<ns0:Action>
				<ns0:ActionText>AMENDED_SENATE</ns0:ActionText>
				<ns0:ActionDate>2025-02-20</ns0:ActionDate>
			</ns0:Action>
		</ns0:History>
		<ns0:LegislativeInfo>
			<ns0:SessionYear>2025</ns0:SessionYear>
			<ns0:SessionNum>0</ns0:SessionNum>
			<ns0:MeasureType>SB</ns0:MeasureType>
			<ns0:MeasureNum>1</ns0:MeasureNum>
			<ns0:MeasureState>AMD</ns0:MeasureState>
		</ns0:LegislativeInfo>
		<ns0:AuthorText authorType="LEAD_AUTHOR">Introduced by Senator Seyarto</ns0:AuthorText>
		<ns0:AuthorText authorType="COAUTHOR_ORIGINATING">(Coauthors: Senators Dahle, Jones, Ochoa Bogh, and Valladares)</ns0:AuthorText>
		<ns0:AuthorText authorType="COAUTHOR_OPPOSITE">(Coauthors: Assembly Members Alanis, Davies, DeMaio, Lackey, and Sanchez)</ns0:AuthorText>
		<ns0:Authors>
			<ns0:Legislator>
				<ns0:Contribution>LEAD_AUTHOR</ns0:Contribution>
				<ns0:House>SENATE</ns0:House>
				<ns0:Name>Seyarto</ns0:Name>
			</ns0:Legislator>
			<ns0:Legislator>
				<ns0:Contribution>COAUTHOR</ns0:Contribution>
				<ns0:House>SENATE</ns0:House>
				<ns0:Name>Dahle</ns0:Name>
			</ns0:Legislator>
			<ns0:Legislator>
				<ns0:Contribution>COAUTHOR</ns0:Contribution>
				<ns0:House>SENATE</ns0:House>
				<ns0:Name>Jones</ns0:Name>
			</ns0:Legislator>
			<ns0:Legislator>
				<ns0:Contribution>COAUTHOR</ns0:Contribution>
				<ns0:House>SENATE</ns0:House>
				<ns0:Name>Ochoa Bogh</ns0:Name>
			</ns0:Legislator>
			<ns0:Legislator>
				<ns0:Contribution>COAUTHOR</ns0:Contribution>
				<ns0:House>SENATE</ns0:House>
				<ns0:Name>Valladares</ns0:Name>
			</ns0:Legislator>
			<ns0:Legislator>
				<ns0:Contribution>COAUTHOR</ns0:Contribution>
				<ns0:House>ASSEMBLY</ns0:House>
				<ns0:Name>Alanis</ns0:Name>
			</ns0:Legislator>
			<ns0:Legislator>
				<ns0:Contribution>COAUTHOR</ns0:Contribution>
				<ns0:House>ASSEMBLY</ns0:House>
				<ns0:Name>Davies</ns0:Name>
			</ns0:Legislator>
			<ns0:Legislator>
				<ns0:Contribution>COAUTHOR</ns0:Contribution>
				<ns0:House>ASSEMBLY</ns0:House>
				<ns0:Name>DeMaio</ns0:Name>
			</ns0:Legislator>
			<ns0:Legislator>
				<ns0:Contribution>COAUTHOR</ns0:Contribution>
				<ns0:House>ASSEMBLY</ns0:House>
				<ns0:Name>Lackey</ns0:Name>
			</ns0:Legislator>
			<ns0:Legislator>
				<ns0:Contribution>COAUTHOR</ns0:Contribution>
				<ns0:House>ASSEMBLY</ns0:House>
				<ns0:Name>Sanchez</ns0:Name>
			</ns0:Legislator>
		</ns0:Authors>
		<ns0:Title>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.</ns0:Title>
		<ns0:RelatingClause>taxation, to take effect immediately, tax levy</ns0:RelatingClause>
		<ns0:GeneralSubject>
			<ns0:Subject>Personal income taxes: exclusion: Military Services Retirement and Surviving Spouse Benefit Payment Act.</ns0:Subject>
		</ns0:GeneralSubject>
		<ns0:DigestText>
			<html:p>The Personal Income Tax Law, in conformity with federal income tax laws, defines “gross income” as income from whatever source derived, except as specifically excluded, and provides various exclusions from gross income, including an exclusion for combat-related special compensation.</html:p>
			<html:p>This bill, for taxable years beginning on or after January 1,
			 2025, and before January 1, 2035, would exclude from gross income retirement pay received by a qualified taxpayer, as defined, during the taxable year, not to exceed $20,000, from the federal government for service performed in the uniformed services, as defined. The bill, for taxable years beginning on or after January 1,
			 2025, and before January 1, 2035, would also exclude from gross income annuity payments received by a qualified taxpayer, as defined, during the taxable year, not to exceed $20,000, pursuant to a United States Department of Defense Survivor Benefit Plan. The bill would make related findings and declarations.</html:p>
			<html:p>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.</html:p>
			<html:p>This bill also would include additional information required for any bill authorizing a new tax expenditure.</html:p>
			<html:p>This bill would take effect immediately as a tax levy.</html:p>
		</ns0:DigestText>
		<ns0:DigestKey>
			<ns0:VoteRequired>MAJORITY</ns0:VoteRequired>
			<ns0:Appropriation>NO</ns0:Appropriation>
			<ns0:FiscalCommittee>YES</ns0:FiscalCommittee>
			<ns0:LocalProgram>NO</ns0:LocalProgram>
		</ns0:DigestKey>
		<ns0:MeasureIndicators>
			<ns0:ImmediateEffect>YES</ns0:ImmediateEffect>
			<ns0:ImmediateEffectFlags>
				<ns0:Urgency>NO</ns0:Urgency>
				<ns0:TaxLevy>YES</ns0:TaxLevy>
				<ns0:Election>NO</ns0:Election>
				<ns0:UsualCurrentExpenses>NO</ns0:UsualCurrentExpenses>
				<ns0:BudgetBill>NO</ns0:BudgetBill>
				<ns0:Prop25TrailerBill>NO</ns0:Prop25TrailerBill>
			</ns0:ImmediateEffectFlags>
		</ns0:MeasureIndicators>
	</ns0:Description>
	<ns0:Bill id="bill">
		<ns0:Preamble>The people of the State of California do enact as follows:</ns0:Preamble>
		<ns0:BillSection id="id_FA8D8051-F5FD-48EF-AF20-663CF7FA9821">
			<ns0:Num>SECTION 1.</ns0:Num>
			<ns0:Content>
				<html:p>This measure shall be known, and may be cited, as the Military Services Retirement and Surviving Spouse Benefit Payment Act.</html:p>
			</ns0:Content>
		</ns0:BillSection>
		<ns0:BillSection id="id_B03B4AC9-EAE7-43AC-B2F6-57B4F76AB9FA">
			<ns0:Num>SEC. 2.</ns0:Num>
			<ns0:Content>
				<html:p>The Legislature finds and declares all of the following:</html:p>
				<html:p>
					(a)
					<html:span class="EnSpace"/>
					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.
				</html:p>
				<html:p>
					(b)
					<html:span class="EnSpace"/>
					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.
				</html:p>
				<html:p>
					(c)
					<html:span class="EnSpace"/>
					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.
				</html:p>
				<html:p>
					(d)
					<html:span class="EnSpace"/>
					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.
				</html:p>
				<html:p>
					(e)
					<html:span class="EnSpace"/>
					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.
				</html:p>
				<html:p>
					(f)
					<html:span class="EnSpace"/>
					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 moneys into the state.
				</html:p>
				<html:p>
					(g)
					<html:span class="EnSpace"/>
					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.
				</html:p>
			</ns0:Content>
		</ns0:BillSection>
		<ns0:BillSection id="id_3AF28775-DCBB-4920-AC6D-3C5A3C06EB09">
			<ns0:Num>SEC. 3.</ns0:Num>
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				Section 17132.9 is added to the 
				<ns0:DocName>Revenue and Taxation Code</ns0:DocName>
				, to read:
			</ns0:ActionLine>
			<ns0:Fragment>
				<ns0:LawSection id="id_A39DF884-F843-434B-A095-FE9CAF7C34FB">
					<ns0:Num>17132.9.</ns0:Num>
					<ns0:LawSectionVersion id="id_319824F7-B2DC-4641-8E6C-BE7B84F55131">
						<ns0:Content>
							<html:p>
								(a)
								<html:span class="EnSpace"/>
								For taxable years beginning on or after January 1, 2025, and before January 1, 2035, gross income shall not include retirement pay received by a qualified taxpayer during the taxable year, not to exceed twenty thousand dollars
						($20,000), from the federal government for service in the uniformed services.
							</html:p>
							<html:p>
								(b)
								<html:span class="EnSpace"/>
								For purposes of this section, the following definitions apply:
							</html:p>
							<html:p>
								(1)
								<html:span class="EnSpace"/>
								“Qualified taxpayer” means a taxpayer that satisfies either of the following:
							</html:p>
							<html:p>
								(A)
								<html:span class="EnSpace"/>
								In the case of a surviving spouse or spouses filing a joint return, adjusted gross income does not exceed two hundred fifty thousand dollars ($250,000).
							</html:p>
							<html:p>
								(B)
								<html:span class="EnSpace"/>
								In the case of any other individual, adjusted gross income does not exceed one hundred twenty-five thousand dollars ($125,000).
							</html:p>
							<html:p>
								(2)
								<html:span class="EnSpace"/>
								“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.
							</html:p>
							<html:p>
								(c)
								<html:span class="EnSpace"/>
								This section shall remain in effect only until December 1, 2035, and as of that date is repealed.
							</html:p>
						</ns0:Content>
					</ns0:LawSectionVersion>
				</ns0:LawSection>
			</ns0:Fragment>
		</ns0:BillSection>
		<ns0:BillSection id="id_6A0ABCB7-9A68-4F4E-A948-77327552D5AB">
			<ns0:Num>SEC. 4.</ns0:Num>
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				Section 17132.10 is added to the 
				<ns0:DocName>Revenue and Taxation Code</ns0:DocName>
				, to read:
			</ns0:ActionLine>
			<ns0:Fragment>
				<ns0:LawSection id="id_39B031E6-135C-4E77-A76B-3B76CA1FFA3E">
					<ns0:Num>17132.10.</ns0:Num>
					<ns0:LawSectionVersion id="id_4C65E966-09FC-400F-9A56-CA17E76D6247">
						<ns0:Content>
							<html:p>
								(a)
								<html:span class="EnSpace"/>
								For taxable years beginning on or after January 1, 2025, and before January 1, 2035, gross income shall not include annuity payments received by a qualified taxpayer during the taxable year, not to exceed twenty thousand dollars
						($20,000), pursuant to a United States Department of Defense Survivor Benefit Plan.
							</html:p>
							<html:p>
								(b)
								<html:span class="EnSpace"/>
								For purposes of this section, the following definitions apply:
							</html:p>
							<html:p>
								(1)
								<html:span class="EnSpace"/>
								“Qualified taxpayer” means the surviving spouse or other named beneficiary of a plan who satisfies either of the following:
							</html:p>
							<html:p>
								(A)
								<html:span class="EnSpace"/>
								In the case of a surviving spouse or spouses filing a joint return, adjusted gross income does not exceed two hundred fifty thousand dollars ($250,000).
							</html:p>
							<html:p>
								(B)
								<html:span class="EnSpace"/>
								In the case of any other individual, adjusted gross income does not exceed one hundred twenty-five thousand dollars ($125,000).
							</html:p>
							<html:p>
								(2)
								<html:span class="EnSpace"/>
								“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.
							</html:p>
							<html:p>
								(c)
								<html:span class="EnSpace"/>
								This section shall remain in effect only until December 1, 2035, and as of that date is repealed.
							</html:p>
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					</ns0:LawSectionVersion>
				</ns0:LawSection>
			</ns0:Fragment>
		</ns0:BillSection>
		<ns0:BillSection id="id_7881E72B-1451-4AFD-BED5-E960320411C1">
			<ns0:Num>SEC. 5.</ns0:Num>
			<ns0:Content>
				<html:p>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:</html:p>
				<html:p>
					(a)
					<html:span class="EnSpace"/>
					The specific goals, purposes, and objectives of the exclusions are as follows:
				</html:p>
				<html:p>
					(1)
					<html:span class="EnSpace"/>
					To honor the service of California veterans and provide fiscal relief so that they and their families will remain or retire in California.
				</html:p>
				<html:p>
					(2)
					<html:span class="EnSpace"/>
					To increase the number of highly skilled retired veterans in California’s workforce.
				</html:p>
				<html:p>
					(b)
					<html:span class="EnSpace"/>
					There is no available data to collect or report with respect to the exclusions.
				</html:p>
			</ns0:Content>
		</ns0:BillSection>
		<ns0:BillSection id="id_C2EB6733-74CA-4BBD-A05F-8853F9177603">
			<ns0:Num>SEC. 6.</ns0:Num>
			<ns0:Content>
				<html:p>This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.</html:p>
			</ns0:Content>
		</ns0:BillSection>
	</ns0:Bill>
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