BILL NUMBER: SB 1407	CHAPTERED  07/07/04

	CHAPTER  119
	FILED WITH SECRETARY OF STATE  JULY 7, 2004
	APPROVED BY GOVERNOR  JULY 7, 2004
	PASSED THE SENATE  JUNE 24, 2004
	PASSED THE ASSEMBLY  JUNE 21, 2004
	AMENDED IN ASSEMBLY  MAY 27, 2004
	AMENDED IN SENATE  MAY 4, 2004

INTRODUCED BY   Senator Kuehl

                        FEBRUARY 19, 2004

   An act to amend Section 2640 of the Family Code, relating to
property.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 1407, Kuehl.  Community property:  separate property
contributions.
   Existing law regulates the division of property upon the
dissolution of marriage or the legal separation of the parties.
Existing law provides for reimbursement, as specified, of a party's
contributions to the acquisition of community property to the extent
the party traces the contributions to a separate property source,
unless the party has waived this right.  Existing law, relating to
the characterization of marital property, addresses the application
of separate property for specified debts under certain circumstances,
and establishes specific conditions governing the right of
reimbursement in this regard.
   This bill would require, in connection with the division of
property upon the dissolution of marriage, that a party be reimbursed
for the party's separate property contributions to the acquisition
of property of the other spouse's separate property estate during the
marriage, unless there has been a transmutation in writing, as
specified, or a written waiver of this right.  The bill would require
that the reimbursed amount be without interest or adjustment for
change in monetary value and would prohibit it from exceeding the net
value of the property at the time of the division.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 2640 of the Family Code is amended to read:
   2640.  (a) "Contributions to the acquisition of property," as used
in this section, include downpayments, payments for improvements,
and payments that reduce the principal of a loan used to finance the
purchase or improvement of the property but do not include payments
of interest on the loan or payments made for maintenance, insurance,
or taxation of the property.
   (b) In the division of the community estate under this division,
unless a party has made a written waiver of the right to
reimbursement or has signed a writing that has the effect of a
waiver, the party shall be reimbursed for the party's contributions
to the acquisition of property of the community property estate to
the extent the party traces the contributions to a separate property
source.  The amount reimbursed shall be without interest or
adjustment for change in monetary values and may not exceed the net
value of the property at the time of the division.
   (c) A party shall be reimbursed for the party's separate property
contributions to the acquisition of property of the other spouse's
separate property estate during the marriage, unless there has been a
transmutation in writing pursuant to Chapter 5 (commencing with
Section 850) of Part 2 of Division 4, or a written waiver of the
right to reimbursement.  The amount reimbursed shall be without
interest or adjustment for change in monetary values and may not
exceed the net value of the property at the time of the division.