BILL NUMBER: AB 198 INTRODUCED
BILL TEXT
INTRODUCED BY Assembly Member Wieckowski
JANUARY 29, 2013
An act to amend Sections 703.140, 704.010, 704.100, 704.113,
704.720, and 704.960 of, and to add Section 704.111 to, the Code of
Civil Procedure, relating to exempt property.
LEGISLATIVE COUNSEL'S DIGEST
AB 198, as introduced, Wieckowski. Exempt property.
Existing law identifies various types of property of a judgment
debtor that are exempt from enforcement of a money judgment. Existing
law provides that property described in statute as exempt may be
claimed within the time and in the manner prescribed in the
applicable enforcement procedure, and property described in statute
as exempt without making a claim is not subject to any procedure for
enforcement of a money judgment. These general exemptions are
available to a debtor in a federal bankruptcy case, whether a money
judgment is being enforced by execution sale or other procedure,
unless the debtor elects certain alternative exemptions.
(1) Existing law provides that the benefits from a matured life
insurance policy, including an endowment or annuity policy, are
exempt to the extent reasonably necessary for the support of the
debtor and the spouse and dependents of the debtor.
This bill would expand this exemption to include an amount of
benefits up to $300,000 plus any amount that is reasonably necessary
for the support, as defined, of the debtor and his or her spouse and
dependents. The bill also would add an alternative exemption for the
debtor's interest in these expanded benefits.
(2) Existing law includes an alternative exemption for any
unmatured life insurance contract owned by the debtor, other than a
credit life insurance contract.
This bill would clarify that this alternative exemption applies
regardless of the age or physical health of the debtor.
(3) Existing law provides that vacation credits, as defined, are
exempt from enforcement of a money judgment without making a claim.
This bill would delete the definition of "vacation credits" set
forth in these provisions and expand this general exemption to also
include accrued or unused vacation pay. The bill also would add an
alternative exemption for the debtor's right to receive these
expanded assets.
(4) Existing law provides that up to $2,300 of any combination of
aggregate equity in motor vehicles, the proceeds of an execution sale
of a motor vehicle, and the proceeds of insurance or other
indemnification for the loss, damage, or destruction of a motor
vehicle, is exempt. Existing law includes an alternative exemption
for up to $4,800 of the debtor's interest in one or more motor
vehicles.
This bill would increase the amount of the general exemption for
motor vehicle equity to $4,800, matching the maximum amount of the
alternative exemption for motor vehicles, and make conforming
changes.
(5) Existing law includes an alternative exemption for the debtor'
s right to receive alimony, support, or separate maintenance, to the
extent reasonably necessary for the support of the debtor and any
dependent of the debtor.
This bill would provide that these assets are exempt, thereby
adding a general exemption matching the existing alternative
exemption.
(6) Existing law provides that the proceeds of sale or of
insurance or other indemnification for damage or destruction of a
homestead, the proceeds received as compensation for a homestead
acquired for public use, or the proceeds from a voluntary sale of a
declared homestead are exempt in the amount of the homestead
exemption provided in a specified statute for a period of six months
after the time the proceeds are actually received by the judgment
debtor, except as provided.
This bill would delete the six-month limitation on these
exemptions, thereby making these proceeds exempt indefinitely, and
make conforming changes.
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 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 twenty-four
thousand sixty dollars ($24,060) 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.
(2) The debtor's interest, not to exceed four thousand eight
hundred dollars ($4,800) in value, in one or more motor vehicles.
(3) The debtor's interest, not to exceed six hundred dollars
($600) 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
four hundred twenty-five dollars ($1,425) 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 one
thousand two hundred eighty dollars ($1,280) plus any unused amount
of the exemption provided under paragraph (1), in any property.
(6) The debtor's aggregate interest, not to exceed seven thousand
one hundred seventy-five dollars ($7,175) 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 , regardless of the
debtor's age or physical health .
(8) The debtor's aggregate interest, not to exceed in value twelve
thousand eight hundred sixty dollars ($12,860), 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) The debtor's interest, not to exceed three hundred thousand
dollars ($300,000) plus any amount that is reasonably necessary for
the support of the judgment debtor and his or her spouse and
dependents, in benefits from a matured life insurance policy,
including an endowment or annuity policy. As used in this paragraph,
"reasonably necessary for the support" means required to meet present
and future needs, as determined by the court after consideration of
the debtor's responsibilities and all the present and anticipated
property and income of the debtor, including exempt property.
(9)
(10) Professionally prescribed health aids
for the debtor or a dependent of the debtor.
(10)
(11) 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.
(F) Vacation credits or accrued or unused vacation pay.
(11)
(12) 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 twenty-four thousand sixty dollars
($24,060), on account of personal bodily injury 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. 2. 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 four thousand
three eight hundred dollars ($2,300)
($4,800) :
(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 four
thousand three eight hundred dollars
($2,300) ($4,800) 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. 3. Section 704.100 of the Code of Civil Procedure is amended
to read:
704.100. (a) Unmatured An unmatured
life insurance policies (including policy,
including an endowment and or
annuity policies), but not policy, excluding
the loan value of such policies, are
the policy, is exempt without making a claim.
(b) The aggregate loan value of an unmatured life
insurance policies (including policy,
including an endowment and or
annuity policies) policy, 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
policy belongs 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 a matured life insurance
policies (including policy, including an
endowment and or annuity
policies) policy, are exempt to the
extent in an amount not to exceed three hundred
thousand dollars ($300,000) plus any amount reasonably
necessary for the support of the judgment debtor and the spouse and
dependents of the judgment debtor. As used in this
paragraph, "reasonably necessary for the support" means an amount
required to meet present and future needs, as determined by the court
after consideration of the debtor's responsibilities and all the
present and anticipated property and income of the debtor, including
exempt property.
SEC. 4. Section 704.111 is added to the Code of Civil Procedure,
to read:
704.111. Alimony, support, and separate maintenance, to the
extent reasonably necessary for the support of the debtor and any
dependent of the debtor, are exempt.
SEC. 5. Section 704.113 of the Code of Civil Procedure is amended
to read:
704.113. (a) As used in this section, "vacation credits" means
vacation credits accumulated by a state employee pursuant to Section
18050 of the Government Code or by any other public employee pursuant
to any law for the accumulation of vacation credits applicable to
the employee.
(b)
704.113. (a) All vacation
credits are or accrued or unused vacation pay
is exempt without making a claim.
(c)
(b) Amounts paid periodically or as a lump
sum representing vacation credits are subject to any earnings
withholding order served under Chapter 5 (commencing with Section
706.010) or any earnings assignment order for support as defined in
Section 706.011 and are exempt to the same extent as earnings of a
judgment debtor.
SEC. 6. Section 704.720 of the Code of Civil Procedure is amended
to read:
704.720. (a) A homestead is exempt from sale under this division
to the extent provided in Section 704.800.
(b) If a homestead is sold under this division or is damaged or
destroyed or is acquired for public use, the proceeds of sale or of
insurance or other indemnification for damage or destruction of the
homestead or the proceeds received as compensation for a homestead
acquired for public use are exempt in the amount of the homestead
exemption provided in Section 704.730. The proceeds are
exempt for a period of six months after the time the proceeds are
actually received by the judgment debtor, except that, if a homestead
exemption is applied to other property of the judgment debtor or the
judgment debtor's spouse during that period, the proceeds thereafter
are not exempt.
(c) If the judgment debtor and spouse of the judgment debtor
reside in separate homesteads, only the homestead of one of the
spouses is exempt and only the proceeds of the exempt homestead are
exempt.
(d) If a judgment debtor is not currently residing in the
homestead, but his or her separated or former spouse continues to
reside in or exercise control over possession of the homestead, that
judgment debtor continues to be entitled to an exemption under this
article until entry of judgment or other legally enforceable
agreement dividing the community property between the judgment debtor
and the separated or former spouse, or until a later time period as
specified by court order. Nothing in this subdivision shall entitle
the judgment debtor to more than one exempt homestead.
Notwithstanding subdivision (d) of Section 704.710, for purposes of
this article, "spouse" may include a separated or former spouse
consistent with this subdivision.
SEC. 7. Section 704.960 of the Code of Civil Procedure is amended
to read:
704.960. (a) If a declared
homestead is voluntarily sold, the proceeds of sale are exempt in the
amount provided by Section 704.730 for a period of six
months after the date of sale .
(b) If the proceeds of a declared homestead are invested in a new
dwelling within six months after the date of a voluntary sale or
within six months after proceeds of an execution sale or of insurance
or other indemnification for damage or destruction are received, the
new dwelling may be selected as a declared homestead by recording a
homestead declaration within the applicable six-month period. In such
case, the homestead declaration has the same effect as if it had
been recorded at the time the prior homestead declaration was
recorded.