BILL NUMBER: SB 469	CHAPTERED  07/13/99

	CHAPTER   98
	FILED WITH SECRETARY OF STATE   JULY 13, 1999
	APPROVED BY GOVERNOR   JULY 13, 1999
	PASSED THE SENATE   JULY 1, 1999
	PASSED THE ASSEMBLY   JUNE 24, 1999
	AMENDED IN ASSEMBLY   JUNE 21, 1999
	AMENDED IN SENATE   MAY 27, 1999

INTRODUCED BY   Senator Poochigian

                        FEBRUARY 17, 1999

   An act to amend Sections 703.140 and 704.115 of the Code of Civil
Procedure, relating to exempt assets.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 469, Poochigian.  Exempt assets:  Roth IRAs.
   Existing law provides that, among other assets, specified private
retirement plans and individual retirement annuities or accounts are
exempt from the enforcement of money judgments, subject to certain
conditions and limitations.  Existing law provides similar exemptions
from the debtor's bankruptcy estate in cases under federal
bankruptcy law.
   This bill would specify that individual retirement accounts known
as "Roth IRAs," established and qualified under specified provisions
of the Internal Revenue Code of 1968, shall be subject to those
exemptions.


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 fifteen
thousand dollars ($15,000) 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, or in a burial plot for
the debtor or a dependent of the debtor.
   (2) The debtor's interest, not to exceed two thousand four hundred
dollars ($2,400) in value, in one motor vehicle.
   (3) The debtor's interest, not to exceed four hundred dollars
($400) 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
dollars ($1,000) 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 eight
hundred dollars ($800) plus any unused amount of the exemption
provided under paragraph (1), in any property.
   (6) The debtor's aggregate interest, not to exceed one thousand
five hundred dollars ($1,500) 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.
   (8) The debtor's aggregate interest, not to exceed in value eight
thousand dollars ($8,000) 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) Professionally prescribed health aids for the debtor or a
dependent of the debtor.
   (10) 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.
   (11) 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 fifteen thousand dollars ($15,000),
on account of personal bodily injury, not including pain and
suffering or compensation for actual pecuniary loss, 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 704.115 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, 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.