BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 182|
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THIRD READING
Bill No: AB 182
Author: Harman (R)
Amended: 6/4/03 in Senate
Vote: 21
SENATE JUDICIARY COMMITTEE : 5-0, 6/10/03
AYES: Escutia, Ackerman, Ducheny, Kuehl, Sher
NO VOTE RECORDED: Morrow, Cedillo
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 71-2, 3/6/03 - See last page for vote
SUBJECT : Exempt property: evaluation
SOURCE : California Law Revision Commission
DIGEST : This bill increases the personal property
exemption amounts by approximately 20 percent, to reflect
changes in the cost of living since the amounts were last
adjusted in 1994. In addition, this bill would create a
mechanism for triennial automatic adjustments in the
personal property exemption amounts tied to the increase in
the All Urban Consumer Price Index.
ANALYSIS : Existing law provides for exemptions from
enforcement of a money judgment for certain dollar amounts
in motor vehicles, residential improvement materials,
jewelry, heirlooms, and works of art, tools and implements
used in the exercise of the debtor's trade, business or
profession, public benefit accounts, inmate trust funds,
CONTINUED
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and unmatured life insurance.
This bill would increase the dollar amounts of the
exemptions listed above by approximately 20 percent.
Existing law provides that various state bankruptcy
exemptions shall be adjusted in accordance with periodic
adjustments of federal exemption amounts.
This bill would provide that the Judicial Council shall
triennially adjust the dollar amounts for bankruptcy and
money judgment exemptions based on the change in the annual
California Consumer Price Index for All Urban Consumers.
This exemption for inmate trust funds would not be
automatically adjusted.
Existing law provides that a county may recover general
assistance funds expended on an individual when that
individual acquires property in excess of that needed to
support him or herself and any dependents.
Existing law provides that certain amounts of personal
property are exempt from an action by the county to recover
general assistance payments.
This bill would double the exemption amounts described
above.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 8/19/03)
California Law Revision Commission (source)
Business Law Section, State Bar of California
Insolvency Law Committee, State Bar of California
Kenneth Klee, Professor of Law, University of California,
Los Angeles
ARGUMENTS IN SUPPORT : This bill is sponsored by the
California Law Revision Commission (CLRC), which is charged
with reviewing various exemption amounts every ten years
and making recommendations to the Legislature. CLRC writes
that:
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Exemptions are necessary to protect an amount of property
sufficient to support the judgment debtor and dependent
family and to facilitate the debtor's financial
rehabilitation. To fulfill this purpose, exemption
amounts need to be adjusted periodically to reflect
changes in the cost of living . . . .
Legislation comprehensively adjusting personal property
exemption amounts was last enacted on commission
recommendation in 1994. . . . Since that time, the
average cost of living in California has increased by
approximately 21 percent, making revision of exempt
amounts appropriate to account for inflation . . . .
The commission's existing duty to review exemption
statutes every ten years should be supplemented with an
automatic triennial cost-of-living adjustment. This will
bring the enforcement of judgments personal property
exemptions in line with the automatic COLA applicable to
the bankruptcy-only exemptions . . . .
Automatic COLA provisions relieve the Legislature of the
burden of considering routine adjustments needed to
preserve important protections in the face of inflation .
. . The commission recommends using the California All
Urban Consumer Price Index as the best single measure of
cost-of-living changes affecting Californians . . . .
Responsibility for determining the appropriate COLA
factor should be placed on the Judicial Council. This is
appropriate because the Judicial Council is responsible
for rules of practice and procedure under the Enforcement
of Judgments Law . . . This responsibility would also be
analogous to the role of the Judicial Conference of the
United States in determining and publishing the COLA
factor under the Bankruptcy Code.
ASSEMBLY FLOOR :
AYES: Bates, Benoit, Berg, Bermudez, Bogh, Calderon,
Campbell, Canciamilla, Chan, Chavez, Cogdill, Cohn,
Corbett, Correa, Cox, Daucher, Diaz, Dutra, Dutton,
Dymally, Firebaugh, Frommer, Garcia, Goldberg, Hancock,
Harman, Jerome Horton, Shirley Horton, Jackson, Keene,
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Kehoe, Koretz, La Malfa, Laird, Leno, Leslie, Levine,
Lieber, Liu, Longville, Lowenthal, Maddox, Maldonado,
Matthews, Maze, McCarthy, Montanez, Mullin, Nakano,
Nation, Negrete McLeod, Nunez, Pacheco, Parra, Pavley,
Reyes, Richman, Ridley-Thomas, Runner, Salinas,
Samuelian, Simitian, Spitzer, Steinberg, Strickland,
Vargas, Wiggins, Wolk, Wyland, Yee, Wesson
NOES: Haynes, Nakanishi
RJG:sl 8/19/03 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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