BILL NUMBER: AB 198 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MARCH 21, 2013
INTRODUCED BY Assembly Member Wieckowski
JANUARY 29, 2013
An act to amend Section 2983.3 of the Civil Code, and to
amend Sections 703.140, 704.010, 704.100, 704.113,
704.115, 704.720, 704.730, and 704.960 of, and to
add Section Sections 704.085, 704.111
, and 704.165 to, the Code of Civil Procedure, relating to
exempt property bankruptcy .
LEGISLATIVE COUNSEL'S DIGEST
AB 198, as amended, Wieckowski. Exempt property.
Debtor exemptions.
(1) Existing law provides prohibits the seller or holder of a
conditional sale contract for a motor vehicle from accelerating the
maturity of any part or all of the amount due under the contract or
repossessing the vehicle in the absence of default in the performance
of any of the buyer's obligations under the contract.
This bill would provide that neither the act of filing a
bankruptcy petition by the buyer or other individual liable on the
contract nor the status of either of those persons as a debtor in
bankruptcy constitutes a default in the performance of any of the
buyer's obligations under the contract and neither may be used as a
basis for accelerating the maturity of any part or all of the amount
due under the contract or for repossessing the motor vehicle.
Existing
( 2) Existing law
identifies various types of property of a judgment debtor that are
exempt from the 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.
Existing law authorizes a husband and wife who jointly file a
bankruptcy petition to jointly elect to utilize the general
exemptions or the alternative exemptions, but not both. The general
exemptions are applicable if a bankruptcy petition is filed
individually, and not jointly, for a husband or a wife, except that
the husband and wife may jointly waive in writing their right to
claim, during the period the case commenced by filing the petition is
pending, the general exemptions and instead elect to utilize the
alternative exemptions.
This bill would provide that a joint waiver is not required from a
debtor who is separated from his or her spouse as of the date the
bankruptcy petition is filed.
This bill would require, for purposes of determining the
exemptions that are available to the debtor in a federal bankruptcy
case, that the value of the debtor's interest in property be
determined as of the date the bankruptcy petition is filed. The bill
would provide an exemption for the debtor's entire interest in the
property, including any appreciation in value of that interest
following the date the bankruptcy petition is filed, if the value of
the debtor's interest in the property on the date the petition is
filed is less than or equal to the amount the debtor is permitted to
exempt.
Existing law includes an alternative exemption for the debtor's
right to receive 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 several specified conditions apply,
including that the plan or contract does not qualify under specified
provisions of the federal Internal Revenue Code of 1986.
This bill would provide that a plan or contract covered by this
alternative exemption would be exempt even if it did not qualify
under the specified provisions of the federal Internal Revenue Code
of 1986 so long as the sole basis for the failure to qualify is a
technical defect.
Existing law includes alternative exemptions for the debtor's
right to receive, or property that is traceable to, a payment on
account of the wrongful death of an individual of whom the debtor was
a dependent and 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.
This bill would make these exemptions applicable, as well, to
payments regarding an individual of whom the debtor was a spouse.
Existing law includes an alternative exemption for the debtor's
right to receive, or property that is traceable to, a payment up to
$24,060 on account of personal bodily injury of the debtor or an
individual of whom the debtor is a dependent.
This bill would make this exemption applicable, as well, to a
payment on account of personal bodily injury of the spouse of the
debtor.
Existing law includes an alternative exemption for the debtor's
right to receive, or property that is traceable to, 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 a dependent of
the debtor.
This bill would make this exemption applicable, as well, to a
payment regarding an individual of whom the debtor is or was a
spouse, and would provide that the exemption applies to the extent
reasonably necessary for the support of the debtor and a spouse or
dependent of the debtor.
(1) Existing
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 aggregate
amount of benefits up to $300,000
$500,000 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
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
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.
This bill would provide that the aggregate interest of a debtor
who is engaged in business, not to exceed five thousand dollars
($5,000), in cash or deposit accounts, accounts receivable, and
inventory of the business is exempt.
(5) Existing
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.
Existing law provides that all amounts held, controlled, or in
process of distribution by a private retirement plan, for the payment
of benefits as an annuity, pension, retirement allowance, disability
payment, or death benefit from a private retirement plan are exempt.
Existing law defines "private retirement plan" to include
self-employed retirement plans and individual retirement annuities or
accounts provided for in the federal Internal Revenue Code of 1986,
including individual retirement accounts qualified under specified
provisions of that code.
This bill would expand this exemption to also include individual
retirement accounts that do not qualify under those specified
provisions on the basis of a technical defect alone.
Existing law provides that various causes of action and awards of
damages or settlements arising out of those actions are exempt to
various extents, as specified.
This bill would provide that a cause of action arising out of or
regarding the violation of any law relating to the judgment debtor's
employment is exempt without making a claim, except as provided in
specified statutory provisions, and an award of damages or a
settlement arising out of or regarding the violation of any law
relating to the judgment debtor's employment is exempt to the extent
necessary for the support of the judgment debtor and the spouse and
dependents of the judgment debtor. The bill also would add identical
alternative exemptions in this regard.
This bill would increase the homestead exemptions described above
to $200,000, $300,000, and $400,000, respectively. The bill would
revise the age-defined eligibility criteria for the $400,000
exemption to include any judgment debtor or spouse of a judgment
debtor residing in the homestead who is 55 years of age or older at
the time of the sale, regardless of his or her income.
(6) Existing
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.
Existing law provides that a specified portion of equity in a
homestead, as defined, is exempt from execution to satisfy a judgment
debt. Existing law provides a base exemption of $75,000, an
exemption of $100,000 if the judgment debtor or his or her spouse who
resides in the homestead is, at the time of the sale, a member of a
family unit, and one member of the family unit is without an
interest, or with only a limited interest, as specified, in the
homestead, and an exemption of $175,000 if the judgment debtor or the
spouse of the judgment debtor who resides in the homestead is, at
the time of the sale, 65 years of age or older, disabled, or 55 years
of age or older with a limited income, as specified.
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 2983.3 of the Civil
Code is amended to read:
2983.3. (a) (1) In the absence of default
in the performance of any of the buyer's obligations under the
contract, the seller or holder may not accelerate the maturity of any
part or all of the amount due thereunder or repossess the motor
vehicle.
(2) Neither the act of filing a petition commencing a case for
bankruptcy under Title 11 of the United States Code by the buyer or
other individual liable on the contract nor the status of either of
those persons as a debtor in bankruptcy constitutes a default in the
performance of any of the buyer's obligations under the contract, and
neither may be used as a basis for accelerating the maturity of any
part or all of the amount due under the contract or for repossessing
the motor vehicle.
(b) If after default by the buyer, the seller or holder
repossesses or voluntarily accepts surrender of the motor vehicle,
any person liable on the contract shall have a right to reinstate the
contract and the seller or holder shall not accelerate the maturity
of any part or all of the contract prior to expiration of the right
to reinstate, unless the seller or holder reasonably and in good
faith determines that any of the following has occurred:
(1) The buyer or any other person liable on the contract by
omission or commission intentionally provided false or misleading
information of material importance on his or her credit application.
(2) The buyer, any other person liable on the contract, or any
permissive user in possession of the motor vehicle, in order to avoid
repossession has concealed the motor vehicle or removed it from the
state.
(3) The buyer, any other person liable on the contract, or any
permissive user in possession of the motor vehicle, has committed or
threatens to commit acts of destruction, or has failed to take care
of the motor vehicle in a reasonable manner, so that the motor
vehicle has become substantially impaired in value, or the buyer, any
other person liable on the contract, or any nonoccasional permissive
user in possession of the motor vehicle has failed to take care of
the motor vehicle in a reasonable manner, so that the motor vehicle
may become substantially impaired in value.
(4) The buyer or any other person liable on the contract has
committed, attempted to commit, or threatened to commit criminal acts
of violence or bodily harm against an agent, employee, or officer of
the seller or holder in connection with the seller's or holder's
repossession of or attempt to repossess the motor vehicle.
(5) The buyer has knowingly used the motor vehicle, or has
knowingly permitted it to be used, in connection with the commission
of a criminal offense, other than an infraction, as a consequence of
which the motor vehicle has been seized by a federal, state, or local
agency or authority pursuant to federal, state, or local law.
(6) The motor vehicle has been seized by a federal, state, or
local public agency or authority pursuant to (A) Section 1324 of
Title 8 of the United States Code or Part 274 of Title 8 of the Code
of Federal Regulations, (B) Section 881 of Title 21 of the United
States Code or Part 9 of Title 28 of the Code of Federal Regulations,
or (C) other federal, state, or local law, including regulations,
and, pursuant to that other law, the seizing authority, as a
precondition to the return of the motor vehicle to the seller or
holder, prohibits the return of the motor vehicle to the buyer or
other person liable on the contract or any third person claiming the
motor vehicle by or through them or otherwise effects or requires the
termination of the property rights in the motor vehicle of the buyer
or other person liable on the contract or claimants by or through
them.
(c) Exercise of the right to reinstate the contract shall be
limited to once in any 12-month period and twice during the term of
the contract.
(d) The provisions of this subdivision cover the method by which a
contract shall be reinstated with respect to curing events of
default which were a ground for repossession or occurred subsequent
to repossession:
(1) Where the default is the result of the buyer's failure to make
any payment due under the contract, the buyer or any other person
liable on the contract shall make the defaulted payments and pay any
applicable delinquency charges.
(2) Where the default is the result of the buyer's failure to keep
and maintain the motor vehicle free from all encumbrances and liens
of every kind, the buyer or any other person liable on the contract
shall either satisfy all encumbrances and liens or, in the event the
seller or holder satisfies the encumbrances and liens, the buyer or
any other person liable on the contract shall reimburse the seller or
holder for all reasonable costs and expenses incurred therefor.
(3) Where the default is the result of the buyer's failure to keep
and maintain insurance on the motor vehicle, the buyer or any other
person liable on the contract shall either obtain the insurance or,
in the event the seller or holder has obtained the insurance, the
buyer or any other person liable on the contract shall reimburse the
seller or holder for premiums paid and all reasonable costs and
expenses, including, but not limited to, any finance charge in
connection with the premiums permitted by Section 2982.8, incurred
therefor.
(4) Where the default is the result of the buyer's failure to
perform any other obligation under the contract, unless the seller or
holder has made a good faith determination that the default is so
substantial as to be incurable, the buyer or any other person liable
on the contract shall either cure the default or, if the seller or
holder has performed the obligation, reimburse the seller or holder
for all reasonable costs and expenses incurred in connection
therewith.
(5) Additionally, the buyer or any other person liable on the
contract shall, in all cases, reimburse the seller or holder for all
reasonable and necessary collection and repossession costs and fees
incurred, including attorney's fees and legal expenses expended in
retaking and holding the vehicle.
(e) If the seller or holder denies the right to reinstatement
under subdivision (b) or paragraph (4) of subdivision (d), the seller
or holder shall have the burden of proof that the denial was
justified in that it was reasonable and made in good faith. If the
seller or holder fails to sustain the burden of proof, the seller or
holder shall not be entitled to a deficiency, but it shall not be
presumed that the buyer is entitled to damages by reason of the
failure of the seller or holder to sustain the burden of proof.
(f) This section shall not apply to a loan made by a lender
licensed under Division 9 (commencing with Section 22000) or
Division 10 (commencing with Section 24000) of the
Financial Code.
SECTION 1. SEC. 2. 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). A waiver is
not required, however, from a debtor who is separated from his or her
spouse as of the date of the petition commencing the case under
Title 11 of the United States Code is filed.
(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.
(4) For purposes of determining the exemptions available to the
debtor in a case under Title 11 of the United States Code, the value
of the debtor's interest in property shall be determined as of the
date the petition commencing the case was filed. If the value of the
debtor's interest in the property on that date is less than or equal
to the amount the debtor is permitted to exempt, the debtor's entire
interest in the property, including any appreciation in value of that
interest following the date of the petition, is exempt.
(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 aggregate interest, not to exceed
three five hundred thousand dollars
($300,000) ($500,000) 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.
(10) Professionally prescribed health aids for the debtor or a
dependent of the debtor.
(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
on a basis other than a technical defect alone .
(F) Vacation credits or accrued or unused vacation pay.
(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 spouse or 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 spouse or
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 ,
the spouse 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 spouse
dependent, to the extent reasonably necessary for the support
of the debtor and any a spouse or
dependent of the debtor.
(13) (A) Except as provided in Article 5 (commencing with Section
708.410) of Chapter 6, a cause of action arising out of or regarding
the violation of any law relating to the judgment debtor's employment
is exempt without making a claim.
(B) An award of damages from or a settlement arising out of or
regarding the violation of any law relating to the judgment debtor's
employment is exempt to the extent necessary for the support of the
judgment debtor and the spouse and dependents of the judgment debtor.
SEC. 2. SEC. 3. 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 four thousand eight hundred dollars ($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 four thousand eight hundred dollars ($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. 4. Section 704.085 is added to the
Code of Civil Procedure , to read:
704.085. The aggregate interest of a debtor who is engaged in
business, not to exceed five thousand dollars ($5,000), in cash or
deposit accounts, accounts receivable, and inventory of the business
is exempt.
SEC. 3. SEC. 5. Section 704.100 of
the Code of Civil Procedure is amended to read:
704.100. (a) An unmatured Unmatured
life insurance policy policies ,
including an endowment or annuity policy
policies , excluding the loan value of the
policy, is policies, are exempt without
making a claim.
(b) The aggregate loan value of an unmatured
life insurance policy policies ,
including an endowment or annuity policy,
is policies, are subject to the enforcement of
a money judgment but is are 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 policy
policies 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
policy policies , including an
endowment or annuity policy and
annuity policies , are exempt in an aggregate amount
not to exceed three five hundred
thousand dollars ($300,000)
($500,000) 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. SEC. 6. 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. SEC. 7. Section 704.113 of
the Code of Civil Procedure is amended to read:
704.113. (a) All vacation credits or accrued or unused vacation
pay is exempt without making a claim.
(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. 8. Section 704.115 of the Code of
Civil Procedure is amended to read:
704.115. (a) As used in this section, "private retirement plan"
means:
(1) Private retirement plans, including, but not limited to, union
retirement plans.
(2) Profit-sharing plans designed and used for retirement
purposes.
(3) Self-employed retirement plans and individual retirement
annuities or accounts provided for in the Internal Revenue Code of
1986, as amended, including individual retirement accounts qualified
under Section 408 or 408A of that code and accounts that do not
qualify on the basis of a technical defect alone ,
to the extent the amounts held in the plans, annuities, or accounts
do not exceed the maximum amounts exempt from federal income taxation
under that code.
(b) All amounts held, controlled, or in process of distribution by
a private retirement plan, for the payment of benefits as an
annuity, pension, retirement allowance, disability payment, or death
benefit from a private retirement plan are exempt.
(c) Notwithstanding subdivision (b), where an amount described in
subdivision (b) becomes payable to a person and is sought to be
applied to the satisfaction of a judgment for child, family, or
spousal support against that person:
(1) Except as provided in paragraph (2), the amount is exempt only
to the extent that the court determines under subdivision (c) of
Section 703.070.
(2) If the amount sought to be applied to the satisfaction of the
judgment is payable periodically, the amount payable is subject to an
earnings assignment order for support as defined in Section 706.011
or any other applicable enforcement procedure, but the amount to be
withheld pursuant to the assignment order or other procedure shall
not exceed the amount permitted to be withheld on an earnings
withholding order for support under Section 706.052.
(d) After payment, the amounts described in subdivision (b) and
all contributions and interest thereon returned to any member of a
private retirement plan are exempt.
(e) Notwithstanding subdivisions (b) and (d), except as provided
in subdivision (f), the amounts described in paragraph (3) of
subdivision (a) are exempt only to the extent necessary to provide
for the support of the judgment debtor when the judgment debtor
retires and for the support of the spouse and dependents of the
judgment debtor, taking into account all resources that are likely to
be available for the support of the judgment debtor when the
judgment debtor retires. In determining the amount to be exempt under
this subdivision, the court shall allow the judgment debtor such
additional amount as is necessary to pay any federal and state income
taxes payable as a result of the applying of an amount described in
paragraph (3) of subdivision (a) to the satisfaction of the money
judgment.
(f) Where the amounts described in paragraph (3) of subdivision
(a) are payable periodically, the amount of the periodic payment that
may be applied to the satisfaction of a money judgment is the amount
that may be withheld from a like amount of earnings under Chapter 5
(commencing with Section 706.010) (Wage Garnishment Law). To the
extent a lump-sum distribution from an individual retirement account
is treated differently from a periodic distribution under this
subdivision, any lump-sum distribution from an account qualified
under Section 408A of the Internal Revenue Code shall be treated the
same as a lump-sum distribution from an account qualified under
Section 408 of the Internal Revenue Code for purposes of determining
whether any of that payment may be applied to the satisfaction of a
money judgment.
SEC. 9. Section 704.165 is added to the
Code of Civil Procedure , to read:
704.165. (a) Except as provided in Article 5 (commencing with
Section 708.410) of Chapter 6, a cause of action arising out of or
regarding the violation of any law relating to the judgment debtor's
employment is exempt without making a claim.
(b) An award of damages from or a settlement arising out of or
regarding the violation of any law relating to the judgment debtor's
employment is exempt to the extent necessary for the support of the
judgment debtor and the spouse and dependents of the judgment debtor.
SEC. 6. SEC. 10. 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.
(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. 11. Section 704.730 of the Code of
Civil Procedure is amended to read:
704.730. (a) The amount of the homestead exemption is one of the
following:
(1) Seventy-five Two hundred
thousand dollars ($75,000) ($200,000)
unless the judgment debtor or spouse of the judgment debtor who
resides in the homestead is a person described in paragraph (2) or
(3).
(2) One Three hundred
thousand dollars ($100,000) ($300,000)
if the judgment debtor or spouse of the judgment debtor who resides
in the homestead is at the time of the attempted sale of the
homestead a member of a family unit, and there is at least one member
of the family unit who owns no interest in the homestead or whose
only interest in the homestead is a community property interest with
the judgment debtor.
(3) One Four hundred
seventy-five thousand dollars ($175,000)
($400,000) if the judgment debtor or spouse of the
judgment debtor who resides in the homestead is at the time of the
attempted sale of the homestead any one of the following:
(A) A person
65 55 years of age or older.
(B) A person physically or mentally disabled who as a result of
that disability is unable to engage in substantial gainful
employment. There is a rebuttable presumption affecting the burden of
proof that a person receiving disability insurance benefit payments
under Title II or supplemental security income payments under Title
XVI of the federal Social Security Act satisfies the requirements of
this paragraph as to his or her inability to engage in substantial
gainful employment.
(C) A person 55 years of age or older with a gross annual income
of not more than twenty-five thousand dollars ($25,000) or, if the
judgment debtor is married, a gross annual income, including the
gross annual income of the judgment debtor's spouse, of not more than
thirty-five thousand dollars ($35,000) and the sale is an
involuntary sale.
(b) Notwithstanding any other provision of this section, the
combined homestead exemptions of spouses on the same judgment shall
not exceed the amount specified in paragraph (2) or (3), whichever is
applicable, of subdivision (a), regardless of whether the spouses
are jointly obligated on the judgment and regardless of whether the
homestead consists of community or separate property or both.
Notwithstanding any other provision of this article, if both spouses
are entitled to a homestead exemption, the exemption of proceeds of
the homestead shall be apportioned between the spouses on the basis
of their proportionate interests in the homestead.
SEC. 7. SEC. 12. Section 704.960 of
the Code of Civil Procedure is amended to read:
704.960. If a declared homestead is voluntarily sold, the
proceeds of sale are exempt in the amount provided by Section
704.730.