BILL ANALYSIS
AB 182
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 182 (Harman)
As Amended June 4, 2003
Majority vote
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|ASSEMBLY: |71-2 |(March 6, 2003) |SENATE: |30-1 |(August 27, |
| | | | | |2003) |
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Original Committee Reference: JUD.
SUMMARY : Creates a mechanism for automatic adjustment for
inflation of the amounts of personal property exempt from
enforcement in bankruptcy proceedings or proceedings to enforce
a money judgment. Specifically, this bill :
1)Requires Judicial Council (JC) to include, in the form it
prepares listing the federal and state exemptions from
enforcement of a money judgment against a natural person,
information on how to obtain the list of personal property
exemption amounts.
2)Deletes the provision for adjustment of bankruptcy exemptions
under California law in accordance with the periodic
adjustments of similar exemptions provided under federal
bankruptcy law.
3)Provides that, beginning on April 1, 2004, and every three
years thereafter, the dollar amounts of personal property
exemptions applicable in bankruptcy matters shall be adjusted
as determined by JC rule, based on the change in the annual
California Consumer Price Index (CPI) for All Urban Consumers
(AUCs). Requires, beginning April 1, 2004, and every three
years thereafter JC to publish a list of the current dollar
amounts of such personal property exemptions and the date of
the next scheduled adjustment.
4)Provides that, beginning on April 1, 2007, and every three
years thereafter, the dollar amounts of personal property
exempt from enforcement of money judgments shall be adjusted
as determined by JC rule, based on the change in the annual
California CPI for AUCs.
5)Adjusts for inflation the amounts of personal property exempt
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from enforcement of money judgments, based on the change in
the annual California CPI for AUCs since the last adjustment.
The Senate amendments :
1)Add the requirement that beginning April 1, 2004, and every
three years thereafter JC must publish a list of the current
dollar amounts of personal property exemptions applicable in
bankruptcy and the date of the next scheduled adjustment.
2)Delete a provision that required, in the form prepared by JC
containing a list of each of the federal and California
exemptions from enforcement of a money judgment against a
natural person, a listing of the amounts of personal property
exemptions, and instead add a requirement that the form
include information on how to get the list of such exemption
amounts.
3)Add a requirement that when a levying officer is levying on a
judgment debtor, that the officer serve on the judgment debtor
a copy of the list of personal property amounts exempt from
enforcement of a money judgment.
AS PASSED BY THE ASSEMBLY , this bill:
1)Created a system for periodic adjustment, in accordance with
inflation, of the amounts of personal property exemptions
applicable in bankruptcy and with regard to enforcement of a
money judgment.
2)Did not require JC to publish a list of the dollar amounts of
personal property exemptions applicable in bankruptcy.
Required the inclusion of a list of such amounts to be
included in the form prepared by JC listing federal and state
exemptions from enforcement of a money judgment, rather than
information on how to get the list.
3)Did not require a list of dollar amounts of personal property
exemptions applicable in bankruptcy to be served on a judgment
debtor by a levying officer.
FISCAL EFFECT : None
COMMENTS : This bill is sponsored by the California Law Revision
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Commission (CLRC) to update the dollar amounts of personal
property exemptions in cases to enforce money judgments, and to
create an automatic mechanism to update for inflation the
exemption amounts in bankruptcy cases and cases to enforce money
judgments.
In bankruptcy law, dollar amounts of various types of property
are set aside as exempt from inclusion in the bankruptcy estate
against which creditors may collect. This is necessary to
protect property necessary for the basic support of the debtor
and his or her dependent family. Thus, for example, a bankrupt
debtor may claim an exemption of up to $17, 425 in value in
property that the debtor uses as a residence, in addition to
other exemptions in specified dollar amounts for a motor
vehicle, household goods, and additional items. Similarly,
dollar amounts of various types of property exempt from
enforcement of a money judgment are set in state law.
Federal bankruptcy law sets dollar amounts of property exempt
from the bankruptcy estate and provides for the periodic
automatic adjustment of these amounts for inflation. Federal
law also allows states to opt out and set their own amounts for
exemptions in bankruptcy. California has opted out of the
federal exemptions, but its state exemptions for bankruptcy
mirror the federal exemptions and provide for adjustment in
accordance with any adjustments made in federal law.
Unlike federal law, under California law regarding exemptions
from enforcement of a money judgment, there is no automatic
adjustment of exemption amounts for inflation. Instead, the law
provides for a review of these amounts every 10 years by CLRC.
Legislative action is required to implement any recommendations
that CLRC would make. Under this bill, adjustments for
inflation would become automatic every three years, as under
federal law. The mechanism for adjustment under this bill uses
the California CPI for AUCs as the basis for the percentage
adjustment, rounded to the nearest $25. This bill makes the
first needed adjustments to the exemption amounts with regard to
enforcement of money judgments. The first automatic adjustment
of the bankruptcy exemptions would take place on April 1, 2007.
This bill does not create automatic adjustment of the homestead
exemption from enforcement of money judgments. CLRC states:
"The homestead exemption receives frequent legislative
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attention, because of the obvious importance of the home, the
high level of the exemption, and the role played by interest
groups that can effectively sponsor legislation."
Analysis Prepared by : Kathy Sher / JUD. / (916) 319-2334
FN:
0002756