BILL NUMBER: AB 2724 CHAPTERED
BILL TEXT
CHAPTER 290
FILED WITH SECRETARY OF STATE AUGUST 13, 1998
APPROVED BY GOVERNOR AUGUST 12, 1998
PASSED THE ASSEMBLY AUGUST 3, 1998
PASSED THE SENATE JULY 30, 1998
AMENDED IN SENATE JULY 21, 1998
AMENDED IN SENATE JUNE 22, 1998
AMENDED IN SENATE JUNE 8, 1998
AMENDED IN ASSEMBLY MAY 7, 1998
INTRODUCED BY Assembly Member Cardenas
(Coauthors: Assembly Members Aroner, Knox, Kuehl, and Washington)
(Coauthors: Senators Solis and Watson)
FEBRUARY 23, 1998
An act to amend Section 704.080 of the Code of Civil Procedure,
relating to debtor-creditor relations.
LEGISLATIVE COUNSEL'S DIGEST
AB 2724, Cardenas. Judgments: exemptions.
Existing law specifies exemptions from the enforcement of a money
judgment, including an exemption for $2,000, for one designated
payee, or $3,000, for specified joint payees, held in a deposit
account consisting of directly deposited payments authorized by the
Social Security Administration and an exemption, subject to a
specified claim procedure, for excess funds in that account that also
consist of such directly deposited payments.
This bill would, on and after January 1, 2000, extend this
exemption for social security payments to public benefits payments,
as defined, but set the amount of the exemption at $1,000, and $1,500
for specified joint payees of public benefits payments.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 704.080 of the Code of Civil Procedure is
amended to read:
704.080. (a) For the purposes of this section:
(1) "Deposit account" means a deposit account in which payments of
public benefits or social security benefits are directly deposited
by the government or its agent.
(2) "Social security benefits" means payments authorized by the
Social Security Administration for regular retirement and survivors'
benefits, supplemental security income benefits, coal miners' health
benefits, and disability insurance benefits. "Public benefits" means
aid payments authorized pursuant to subdivision (a) of Section 11450
of the Welfare and Institutions Code, payments for supportive
services as described in Section 11323.2 of the Welfare and
Institutions Code, and general assistance payments made pursuant to
Section 17000.5 of the Welfare and Institutions Code.
(b) A deposit account is exempt without making a claim in the
following amount:
(1) One thousand dollars ($1,000) where one depositor is the
designated payee of the directly deposited public benefits payments,
and two thousand dollars ($2,000) where one depositor is the
designated payee of directly deposited social security payments.
(2) One thousand five hundred dollars ($1,500) where two or more
depositors are the designated payees of the directly deposited public
benefits payments, unless those depositors are joint payees of
directly deposited payments that represent a benefit to only one of
the depositors, in which case the exempt amount is one thousand
dollars ($1,000). Three thousand dollars ($3,000) where two or more
depositors are the designated payees of directly deposited social
security payments, unless those depositors are joint payees of
directly deposited payments that represent a benefit to only one of
the depositors, in which case the exempt amount is two thousand
dollars ($2,000).
(c) The amount of a deposit account that exceeds the exemption
provided in subdivision (b) is exempt to the extent that it consists
of payments of public benefits or social security benefits.
(d) Notwithstanding Article 5 (commencing with Section 701.010) of
Chapter 3, when a deposit account is levied upon or otherwise sought
to be subjected to the enforcement of a money judgment, the
financial institution that holds the deposit account shall either
place the amount that exceeds the exemption provided in subdivision
(b) in a suspense account or otherwise prohibit withdrawal of that
amount pending notification of the failure of the judgment creditor
to file the affidavit required by this section or the judicial
determination of the exempt status of the amount. Within 10 business
days after the levy, the financial institution shall provide the
levying officer with a written notice stating (1) that the deposit
account is one in which payments of public benefits or social
security benefits are directly deposited by the government or its
agent and (2) the balance of the deposit account that exceeds the
exemption provided by subdivision (b). Promptly upon receipt of the
notice, the levying officer shall serve the notice on the judgment
creditor. Service shall be made personally or by mail.
(e) Notwithstanding the procedure prescribed in Article 2
(commencing with Section 703.510), whether there is an amount exempt
under subdivision (c) shall be determined as follows:
(1) Within five days after the levying officer serves the notice
on the judgment creditor under subdivision (d), a judgment creditor
who desires to claim that the amount is not exempt shall file with
the court an affidavit alleging that the amount is not exempt and
file a copy with the levying officer. The affidavit shall be in the
form of the notice of opposition provided by Section 703.560, and a
hearing shall be set and held, and notice given, as provided by
Sections 703.570 and 703.580. For the purpose of this subdivision,
the "notice of opposition to the claim of exemption" in Sections
703.570 and 703.580 means the affidavit under this subdivision.
(2) If the judgment creditor does not file the affidavit with the
levying officer and give notice of hearing pursuant to Section
703.570 within the time provided in paragraph (1), the levying
officer shall release the deposit account and shall notify the
financial institution.
(3) The affidavit constitutes the pleading of the judgment
creditor, subject to the power of the court to permit amendments in
the interest of justice. The affidavit is deemed controverted and no
counteraffidavit is required.
(4) At a hearing under this subdivision, the judgment debtor has
the burden of proving that the excess amount is exempt.
(5) At the conclusion of the hearing, the court by order shall
determine whether or not the amount of the deposit account is exempt
pursuant to subdivision (c) in whole or in part and shall make an
appropriate order for its prompt disposition. No findings are
required in a proceeding under this subdivision.
(6) Upon determining the exemption claim for the deposit account
under subdivision (c), the court shall immediately transmit a
certified copy of the order of the court to the financial institution
and to the levying officer. If the order determines that all or
part of the excess is exempt under subdivision (c), with respect to
the amount of the excess which is exempt, the financial institution
shall transfer the exempt excess from the suspense account or
otherwise release any restrictions on its withdrawal by the judgment
debtor. The transfer or release shall be effected within three
business days of the receipt of the certified copy of the court order
by the financial institution.
(f) If the judgment debtor claims that a portion of the amount is
exempt other than pursuant to subdivision (c), the claim of exemption
shall be made pursuant to Article 2 (commencing with Section
703.510). If the judgment debtor also opposes the judgment creditor'
s affidavit regarding an amount exempt pursuant to subdivision (c),
both exemptions shall be determined at the same hearing, provided the
judgment debtor has complied with Article 2 (commencing with Section
703.510).
SEC. 2. This act shall become operative on January 1, 2000.