BILL NUMBER: AB 182 AMENDED
BILL TEXT
AMENDED IN SENATE JUNE 4, 2003
AMENDED IN SENATE MARCH 27, 2003
INTRODUCED BY Assembly Member Harman
JANUARY 27, 2003
An act to amend Sections 681.030, 700.010, 703.140,
704.010, 704.030, 704.040, 704.060, 704.080, 704.090, and 704.100 of,
and to add Section 703.150 to, the Code of Civil Procedure, and to
amend Section 17409 of the Welfare and Institutions Code, relating to
exempt property.
LEGISLATIVE COUNSEL'S DIGEST
AB 182, as amended, Harman. Exempt property: evaluation.
(1) Existing law sets the maximum value of various forms of real
and personal property that is exempt from the enforcement of
judgments in bankruptcy proceedings, as specified. Existing law
further provides that certain, alternative exemptions, available at
the debtor's option, shall be increased in accordance with periodic
adjustments of similar exemptions provided under federal bankruptcy
laws.
This bill would delete the latter provision for periodic
adjustments of certain exempt property, and, instead, would require
the Judicial Council to determine on or before April 1, 2004, and at
each 3-year interval ending on April 1 thereafter to adjust, the
amount of the exemptions applicable to that exempt property based on
the change in the annual California Consumer Price Index for All
Urban Consumers, and to prepare conforming forms for those
adjustments. The bill would also make conforming changes, and
increase the statutory value of various forms of real and personal
property that are exempt under alternative provisions.
(2) Existing law sets the value of various forms of real and
personal property exempt from provisions governing transfers and
grants, and provisions governing execution on claims, with respect to
property acquired by persons for the support of whom public moneys
have been expended, as specified.
This bill would increase the statutory value of specified forms of
real and personal property that are exempt under the latter
provisions and require the Judicial Council to publish the current
exemptions.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 681.030 of the Code of Civil Procedure is
amended to read:
681.030. (a) The Judicial Council may provide by rule for the
practice and procedure in proceedings under this title.
(b) The Judicial Council may prescribe the form of the
applications, notices, orders, writs, and other papers to be used
under this title. The Judicial Council may prescribe forms in
languages other than English. The timely completion and return of a
Judicial Council form prescribed in a language other than English has
the same force and effect as the timely completion and return of an
English language form.
(c) The Judicial Council shall prepare a form containing
both all of the following:
(1) A list of each of the federal and this state's exemptions from
enforcement of a money judgment against a natural person.
(2) A citation to the relevant statute of the United States or
this state which creates each of the exemptions.
(3) Information on how to obtain the list of exemption amounts
published pursuant to subdivision (d) of Section 703.150.
SEC. 2. Section 700.010 of the Code of Civil Procedure is amended
to read:
700.010. (a) At the time of levy pursuant to this article or
promptly thereafter, the levying officer shall serve a copy of the
following on the judgment debtor:
(1) The writ of execution.
(2) A notice of levy.
(3) If the judgment debtor is a natural person, a copy of the form
listing exemptions prepared by the Judicial Council pursuant to
subdivision (c) of Section 681.030 and the list of exemption amounts
published pursuant to subdivision (d) of Section 703.150.
(4) Any affidavit of identity, as defined in Section 680.135, for
names of the debtor listed on the writ of execution.
(b) Service under this section shall be made personally or by
mail.
SEC. 3. Section 703.140 of the Code of Civil Procedure is amended
to read:
703.140. (a) In a case under Title 11 of the United States Code,
all of the exemptions provided by this chapter, including the
homestead exemption, other than the provisions of subdivision (b) are
applicable regardless of whether there is a money judgment against
the debtor or whether a money judgment is being enforced by execution
sale or any other procedure, but the exemptions provided by
subdivision (b) may be elected in lieu of all other exemptions
provided by this chapter, as follows:
(1) If a husband and wife are joined in the petition, they jointly
may elect to utilize the applicable exemption provisions of this
chapter other than the provisions of subdivision (b), or to utilize
the applicable exemptions set forth in subdivision (b), but not both.
(2) If the petition is filed individually, and not jointly, for a
husband or a wife, the exemptions provided by this chapter other than
the provisions of subdivision (b) are applicable, except that, if
both the husband and the wife effectively waive in writing the right
to claim, during the period the case commenced by filing the petition
is pending, the exemptions provided by the applicable exemption
provisions of this chapter, other than subdivision (b), in any case
commenced by filing a petition for either of them under Title 11 of
the United States Code, then they may elect to instead utilize the
applicable exemptions set forth in subdivision (b).
(3) If the petition is filed for an unmarried person, that person
may elect to utilize the applicable exemption provisions of this
chapter other than subdivision (b), or to utilize the applicable
exemptions set forth in subdivision (b), but not both.
(b) The following exemptions may be elected as provided in
subdivision (a):
(1) The debtor's aggregate interest, not to exceed seventeen
thousand four hundred twenty-five dollars ($17,425) in value, in real
property or personal property that the debtor or a dependent of the
debtor uses as a residence, in a cooperative that owns property that
the debtor or a dependent of the debtor uses as a residence, or in a
burial plot for the debtor or a dependent of the debtor.
(2) The debtor's interest, not to exceed two thousand seven
hundred seventy-five dollars ($2,775) in value, in one motor vehicle.
(3) The debtor's interest, not to exceed four hundred fifty
dollars ($450) in value in any particular item, in household
furnishings, household goods, wearing apparel, appliances, books,
animals, crops, or musical instruments, that are held primarily for
the personal, family, or household use of the debtor or a dependent
of the debtor.
(4) The debtor's aggregate interest, not to exceed one thousand
one hundred fifty dollars ($1,150) in value, in jewelry held
primarily for the personal, family, or household use of the debtor or
a dependent of the debtor.
(5) The debtor's aggregate interest, not to exceed in value nine
hundred twenty-five dollars ($925) plus any unused amount of the
exemption provided under paragraph (1), in any property.
(6) The debtor's aggregate interest, not to exceed one thousand
seven hundred fifty dollars ($1,750) in value, in any implements,
professional books, or tools of the trade of the debtor or the trade
of a dependent of the debtor.
(7) Any unmatured life insurance contract owned by the debtor,
other than a credit life insurance contract.
(8) The debtor's aggregate interest, not to exceed in value nine
thousand three hundred dollars ($9,300), in any accrued dividend or
interest under, or loan value of, any unmatured life insurance
contract owned by the debtor under which the insured is the debtor or
an individual of whom the debtor is a dependent.
(9) Professionally prescribed health aids for the debtor or a
dependent of the debtor.
(10) The debtor's right to receive any of the following:
(A) A social security benefit, unemployment compensation, or a
local public assistance benefit.
(B) A veterans' benefit.
(C) A disability, illness, or unemployment benefit.
(D) Alimony, support, or separate maintenance, to the extent
reasonably necessary for the support of the debtor and any dependent
of the debtor.
(E) A payment under a stock bonus, pension, profit-sharing,
annuity, or similar plan or contract on account of illness,
disability, death, age, or length of service, to the extent
reasonably necessary for the support of the debtor and any dependent
of the debtor, unless all of the following apply:
(i) That plan or contract was established by or under the auspices
of an insider that employed the debtor at the time the debtor's
rights under the plan or contract arose.
(ii) The payment is on account of age or length of service.
(iii) That plan or contract does not qualify under Section 401(a),
403(a), 403(b), 408, or 408A of the Internal Revenue Code of 1986.
(11) The debtor's right to receive, or property that is traceable
to, any of the following:
(A) An award under a crime victim's reparation law.
(B) A payment on account of the wrongful death of an individual of
whom the debtor was a dependent, to the extent reasonably necessary
for the support of the debtor and any dependent of the debtor.
(C) A payment under a life insurance contract that insured the
life of an individual of whom the debtor was a dependent on the date
of that individual's death, to the extent reasonably necessary for
the support of the debtor and any dependent of the debtor.
(D) A payment, not to exceed seventeen thousand four hundred
twenty-five dollars ($17,425), on account of personal bodily injury,
not including pain and suffering or compensation for actual pecuniary
loss, of the debtor or an individual of whom the debtor is a
dependent.
(E) A payment in compensation of loss of future earnings of the
debtor or an individual of whom the debtor is or was a dependent, to
the extent reasonably necessary for the support of the debtor and any
dependent of the debtor.
SEC. 4. Section 703.150 is added to the Code of Civil Procedure,
to read:
703.150. (a) On April 1, 2004, and at each three-year interval
ending on April 1 thereafter, the dollar amounts of exemptions
provided in subdivision (b) of Section 703.140 in effect immediately
before that date shall be adjusted as provided in subdivision (c).
(b) On April 1, 2007, and at each three-year interval ending on
April 1 thereafter, the dollar amounts of exemptions provided in
Article 3 (commencing with Section 704.010) in effect immediately
before that date shall be adjusted as provided in subdivision (c).
(c) The Judicial Council shall determine the amount of the
adjustment based on the change in the annual California Consumer
Price Index for All Urban Consumers, published by the Department of
Industrial Relations, Division of Labor Statistics, for the most
recent three-year period ending on December 31 preceding the
adjustment, with each adjusted amount rounded to the nearest
twenty-five dollars ($25).
(d) Beginning April 1, 2004, the Judicial Council shall publish a
list of the current dollar amounts of exemptions provided in
subdivision (b) of Section 703.140 and in Article 3 (commencing with
Section 704.010), together with the date of the next scheduled
adjustment.
(e) Adjustments made under subdivision (a) do not apply with
respect to cases commenced before the date of the adjustment, subject
to any contrary rule applicable under the federal Bankruptcy Code.
The applicability of adjustments made under subdivision (b) is
governed by Section 703.050.
SEC. 5. Section 704.010 of the Code of Civil Procedure is amended
to read:
704.010. (a) Any combination of the following is exempt in the
amount of two thousand three hundred dollars ($2,300):
(1) The aggregate equity in motor vehicles.
(2) The proceeds of an execution sale of a motor vehicle.
(3) The proceeds of insurance or other indemnification for the
loss, damage, or destruction of a motor vehicle.
(b) Proceeds exempt under subdivision (a) are exempt for a period
of 90 days after the time the proceeds are actually received by the
judgment debtor.
(c) For the purpose of determining the equity, the fair market
value of a motor vehicle shall be determined by reference to used car
price guides customarily used by California automobile dealers
unless the motor vehicle is not listed in such price guides.
(d) If the judgment debtor has only one motor vehicle and it is
sold at an execution sale, the proceeds of the execution sale are
exempt in the amount of two thousand three hundred dollars ($2,300)
without making a claim. The levying officer shall consult and may
rely upon the records of the Department of Motor Vehicles in
determining whether the judgment debtor has only one motor vehicle.
In the case covered by this subdivision, the exemption provided by
subdivision (a) is not available.
SEC. 6. Section 704.030 of the Code of Civil Procedure is amended
to read:
704.030. Material that in good faith is about to be applied to
the repair or improvement of a residence is exempt if the equity in
the material does not exceed two thousand four hundred twenty-five
dollars ($2,425) in the following cases:
(a) If purchased in good faith for use in the repair or
improvement of the judgment debtor's principal place of residence.
(b) Where the judgment debtor and the judgment debtor's spouse
live separate and apart, if purchased in good faith for use in the
repair or improvement of the spouse's principal place of residence.
SEC. 7. Section 704.040 of the Code of Civil Procedure is amended
to read:
704.040. Jewelry, heirlooms, and works of art are exempt to the
extent that the aggregate equity therein does not exceed six thousand
seventy-five dollars ($6,075).
SEC. 8. Section 704.060 of the Code of Civil Procedure is amended
to read:
704.060. (a) Tools, implements, instruments, materials, uniforms,
furnishings, books, equipment, one commercial motor vehicle, one
vessel, and other personal property are exempt to the extent that the
aggregate equity therein does not exceed:
(1) Six thousand seventy-five dollars $6,075), if reasonably
necessary to and actually used by the judgment debtor in the exercise
of the trade, business, or profession by which the judgment debtor
earns a livelihood.
(2) Six thousand seventy-five dollars ($6,075), if reasonably
necessary to and actually used by the spouse of the judgment debtor
in the exercise of the trade, business, or profession by which the
spouse earns a livelihood.
(3) Twice the amount of the exemption provided in paragraph (1),
if reasonably necessary to and actually used by the judgment debtor
and by the spouse of the judgment debtor in the exercise of the same
trade, business, or profession by which both earn a livelihood. In
the case covered by this paragraph, the exemptions provided in
paragraphs (1) and (2) are not available.
(b) If property described in subdivision (a) is sold at an
execution sale, or if it has been lost, damaged, or destroyed, the
proceeds of the execution sale or of insurance or other
indemnification are exempt for a period of 90 days after the proceeds
are actually received by the judgment debtor or the judgment debtor'
s spouse. The amount exempt under this subdivision is the amount
specified in subdivision (a) that applies to the particular case less
the aggregate equity of any other property to which the exemption
provided by subdivision (a) for the particular case has been applied.
(c) Notwithstanding subdivision (a), a motor vehicle is not exempt
under subdivision (a) if there is a motor vehicle exempt under
Section 704.010 which is reasonably adequate for use in the trade,
business, or profession for which the exemption is claimed under this
section.
(d) Notwithstanding subdivisions (a) and (b):
(1) The amount of the exemption for a commercial motor vehicle
under paragraph (1) or (2) of subdivision (a) is limited to four
thousand eight hundred fifty dollars ($4,850).
(2) The amount of the exemption for a commercial motor vehicle
under paragraph (3) of subdivision (a) is limited to twice the amount
of the exemption provided in paragraph (1) of this subdivision.
SEC. 9. Section 704.080 of the Code of Civil Procedure is amended
to read:
704.080. (a) For the purposes of this section:
(1) "Deposit account" means a deposit account in which payments of
public benefits or social security benefits are directly deposited
by the government or its agent.
(2) "Social security benefits" means payments authorized by the
Social Security Administration for regular retirement and survivors'
benefits, supplemental security income benefits, coal miners' health
benefits, and disability insurance benefits. "Public benefits" means
aid payments authorized pursuant to subdivision (a) of Section 11450
of the Welfare and Institutions Code, payments for supportive
services as described in Section 11323.2 of the Welfare and
Institutions Code, and general assistance payments made pursuant to
Section 17000.5 of the Welfare and Institutions Code.
(b) A deposit account is exempt without making a claim in the
following amount:
(1) One thousand two hundred twenty-five dollars ($1,225) where
one depositor is the designated payee of the directly deposited
public benefits payments.
(2) Two thousand four hundred twenty-five dollars ($2,425) where
one depositor is the designated payee of directly deposited social
security payments.
(3) One thousand eight hundred twenty-five dollars ($1,825) where
two or more depositors are the designated payees of the directly
deposited public benefits payments, unless those depositors are joint
payees of directly deposited payments that represent a benefit to
only one of the depositors, in which case the exemption under
paragraph (1) applies.
(4) Three thousand six hundred fifty dollars ($3,650) where two or
more depositors are the designated payees of directly deposited
social security payments, unless those depositors are joint payees of
directly deposited payments that represent a benefit to only one of
the depositors, in which case the exemption under paragraph (2)
applies.
(c) The amount of a deposit account that exceeds the exemption
provided in subdivision (b) is exempt to the extent that it consists
of payments of public benefits or social security benefits.
(d) Notwithstanding Article 5 (commencing with Section 701.010) of
Chapter 3, when a deposit account is levied upon or otherwise sought
to be subjected to the enforcement of a money judgment, the
financial institution that holds the deposit account shall either
place the amount that exceeds the exemption provided in subdivision
(b) in a suspense account or otherwise prohibit withdrawal of that
amount pending notification of the failure of the judgment creditor
to file the affidavit required by this section or the judicial
determination of the exempt status of the amount. Within 10 business
days after the levy, the financial institution shall provide the
levying officer with a written notice stating (1) that the deposit
account is one in which payments of public benefits or social
security benefits are directly deposited by the government or its
agent and (2) the balance of the deposit account that exceeds the
exemption provided by subdivision (b). Promptly upon receipt of the
notice, the levying officer shall serve the notice on the judgment
creditor. Service shall be made personally or by mail.
(e) Notwithstanding the procedure prescribed in Article 2
(commencing with Section 703.510), whether there is an amount exempt
under subdivision (c) shall be determined as follows:
(1) Within five days after the levying officer serves the notice
on the judgment creditor under subdivision (d), a judgment creditor
who desires to claim that the amount is not exempt shall file with
the court an affidavit alleging that the amount is not exempt and
file a copy with the levying officer. The affidavit shall be in the
form of the notice of opposition provided by Section 703.560, and a
hearing shall be set and held, and notice given, as provided by
Sections 703.570 and 703.580. For the purpose of this subdivision,
the "notice of opposition to the claim of exemption" in Sections
703.570 and 703.580 means the affidavit under this subdivision.
(2) If the judgment creditor does not file the affidavit with the
levying officer and give notice of hearing pursuant to Section
703.570 within the time provided in paragraph (1), the levying
officer shall release the deposit account and shall notify the
financial institution.
(3) The affidavit constitutes the pleading of the judgment
creditor, subject to the power of the court to permit amendments in
the interest of justice. The affidavit is deemed controverted and no
counteraffidavit is required.
(4) At a hearing under this subdivision, the judgment debtor has
the burden of proving that the excess amount is exempt.
(5) At the conclusion of the hearing, the court by order shall
determine whether or not the amount of the deposit account is exempt
pursuant to subdivision (c) in whole or in part and shall make an
appropriate order for its prompt disposition. No findings are
required in a proceeding under this subdivision.
(6) Upon determining the exemption claim for the deposit account
under subdivision (c), the court shall immediately transmit a
certified copy of the order of the court to the financial institution
and to the levying officer. If the order determines that all or
part of the excess is exempt under subdivision (c), with respect to
the amount of the excess which is exempt, the financial institution
shall transfer the exempt excess from the suspense account or
otherwise release any restrictions on its withdrawal by the judgment
debtor. The transfer or release shall be effected within three
business days of the receipt of the certified copy of the court order
by the financial institution.
(f) If the judgment debtor claims that a portion of the amount is
exempt other than pursuant to subdivision (c), the claim of exemption
shall be made pursuant to Article 2 (commencing with Section
703.510). If the judgment debtor also opposes the judgment creditor'
s affidavit regarding an amount exempt pursuant to subdivision (c),
both exemptions shall be determined at the same hearing, provided the
judgment debtor has complied with Article 2 (commencing with Section
703.510).
SEC. 10. Section 704.090 of the Code of Civil Procedure is amended
to read:
704.090. (a) The funds of a judgment debtor confined in a prison
or facility under the jurisdiction of the Department of Corrections
or the Department of the Youth Authority or confined in any county or
city jail, road camp, industrial farm, or other local correctional
facility, held in trust for or to the credit of the judgment debtor,
in an inmate's trust account or similar account by the state, county,
or city, or any agency thereof, are exempt without making a claim in
the amount of one thousand two hundred twenty-five dollars ($1,225).
If the judgment debtor is married, each spouse is entitled to a
separate exemption under this section or the spouses may combine
their exemptions.
(b) Notwithstanding subdivision (a), if the judgment is for a
restitution fine or order imposed pursuant to subdivision (a) of
Section 13967 of the Government Code, as operative on or before
September 28, 1994, or Section 1203.04 of the Penal Code, as
operative on or before August 2, 1995, or Section 1202.4 of the Penal
Code, the funds held in trust for, or to the credit of, a judgment
debtor described in subdivision (a) are exempt in the amount of three
hundred dollars ($300) without making a claim. The exemption
provided in this subdivision is not subject to adjustment under
Section 703.150.
SEC. 11. Section 704.100 of the Code of Civil Procedure is amended
to read:
704.100. (a) Unmatured life insurance policies (including
endowment and annuity policies), but not the loan value of such
policies, are exempt without making a claim.
(b) The aggregate loan value of unmatured life insurance policies
(including endowment and annuity policies) is subject to the
enforcement of a money judgment but is exempt in the amount of nine
thousand seven hundred dollars ($9,700). If the judgment debtor is
married, each spouse is entitled to a separate exemption under this
subdivision, and the exemptions of the spouses may be combined,
regardless of whether the policies belong to either or both spouses
and regardless of whether the spouse of the judgment debtor is also a
judgment debtor under the judgment. The exemption provided by this
subdivision shall be first applied to policies other than the policy
before the court and then, if the exemption is not exhausted, to the
policy before the court.
(c) Benefits from matured life insurance policies (including
endowment and annuity policies) are exempt to the extent reasonably
necessary for the support of the judgment debtor and the spouse and
dependents of the judgment debtor.
SEC. 12. Section 17409 of the Welfare and Institutions Code is
amended to read:
17409. There shall be exempt from the transfers and grants
authorized by Section 17109 and from execution on claims under
Section 17403 against property acquired by persons for the support of
whom public moneys have been expended all of the following property:
(a) Cash not exceeding one hundred dollars ($100).
(b) Personal effects and household furniture not exceeding one
thousand dollars ($1,000) in value.
(c) An interment space, crypt, or niche intended for the interment
of the applicant or recipient of aid.
(d) Funds placed in trust for funeral or burial expenses not
exceeding one thousand dollars ($1,000).
(e) Insurance policies having an actual cash surrender value not
exceeding one thousand dollars ($1,000).
(f) Real or personal property of a recipient of public assistance,
with respect to aid or county hospital care.
(g) For a period of six months from the date of receipt, the
compensation received from a public entity which acquires for a
public use a dwelling actually owned and occupied by the recipient.
Such compensation shall be exempt in the amount, over and above all
liens and encumbrances, provided by Section 704.730 of the Code of
Civil Procedure.
(h) Relocation benefits shall be exempt as provided by Section
704.180 of the Code of Civil Procedure.
No county shall withhold emergency medical or hospital care from
any person pending the person giving security for reimbursement to
the county for the care or hospitalization to be provided to the
person.