BILL ANALYSIS �
AB 929
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CONCURRENCE IN SENATE AMENDMENTS
AB 929 (Wieckowski)
As Amended August 23, 2012
Majority vote
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|ASSEMBLY: |54-21|(May 19, 2011) |SENATE: |24-14|(August 28, |
| | | | | |2012) |
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Original Committee Reference: JUD.
SUMMARY : Increases the amounts of property exemptions for motor
vehicles, jewelry, and tools of the trade that a bankruptcy
debtor may elect to exempt such property from enforcement of a
money judgment. Specifically, this bill :
1)Increases the amounts of the following property exemptions
under CCP Section 703.140:
a) The exemption for the debtor's interest in a motor
vehicle or vehicles is set at an amount not to exceed
$4,800 for one or more vehicles (an increase from $2,775
for a single vehicle);
b) The exemption for the debtor's aggregate interest in
jewelry, held primarily for personal, family, or household
use of the debtor, is set at an amount not to exceed $1,425
(an increase from $1,150); and,
c) The exemption for the debtor's aggregate interest in any
implements, professional books, or tools of the trade of
the debtor or the trade of a dependent of the debtor, is
set at an amount not to exceed $7,175 (an increase from
$1,750).
d) The exemption for the debtor's aggregate interest in
real property or personal property used by a debtor or his
dependent as a residence, or in a cooperative that owns
property that the debtor or dependent uses as a residence,
is set at an amount not to exceed $24,060 (an increase from
$17,425).
2)Increases the income eligibility threshold for a judgment
debtor or spouse aged 55 years or older to claim the $175,000
AB 929
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homestead exemption.
The Senate amendments significantly narrow the bill to restore
the amounts of the homestead exemptions to current levels, and
revise the dollar amounts of certain exemptions to reflect
federal exemption base amounts adjusted upward for inflation
according to recent California Consumer Price Index data.
AS PASSED BY THE ASSEMBLY , this bill was substantially similar
to the version approved by the Senate.
FISCAL EFFECT : According to the Senate Appropriations
Committee, the California homestead exemption amounts were last
adjusted in 2009, when the above exemptions were raised from
$50,000, $75,000, and $150,000, respectively. Under current
law, the Judicial Council, on April 1, 2013, and at each
three-year interval thereafter, is required to submit to the
Legislature the amount by which the dollar amounts of the above
homestead exemptions may be increased based on the change in the
annual California Consumer Price Index (CPI) for All Urban
Consumers and post the updated rates on their Web site. The
Judicial Council has indicated there would be minor and
absorbable costs to adjust the homestead exemption limits as
required by this bill and post them on the Web site.
The fiscal effect associated with the increase in the exemption
limits for motor vehicles, jewelry, and tools/equipment as a
result of these narrowing amendments is unknown at this time.
COMMENTS : According to the author, an increase in the amount of
certain exemptions under CCP Section 703.140 is warranted to
assist bankruptcy debtors in California, especially in light of
the current mortgage crisis and poor economy. This bill would
increase the amounts of exemption for the bankruptcy debtor's
aggregate interest in real property used as a residence, motor
vehicle(s), and so-called "tools of the trade." With respect to
the latter, the author contends that debtors who need tools for
their job are at increased risk of not being able to continue
working if the total value of their tools exceeds the current
exemption amount of $1,750 which is often the case. Therefore,
the author contends "permitting debtors to keep more assets such
as tools of the trade and a work-related automobile will enable
debtors to recover from financial insolvency more quickly and
successfully."
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This bill also makes a small increase to income eligibility
criteria that potentially allow a judgment debtor or his spouse
age 55 years or older to claim the $175,000 homestead exemption.
Specifically, the bill allows an unmarried person age 55 or
older to have an annual income of up to $25,000 (rather than
$15,000) and still claim the $175,000 homestead exemption. For
married persons age 55 or older, the bill increases the annual
income threshold to $35,000 (rather than $20,000).
Recent amendments to the bill significantly narrow the bill to
restore the amounts of the homestead exemptions to current
levels, and makes a corresponding change to relieve the Judicial
Council from adjusting those amounts for inflation in 2016,
because such adjustment would no longer be appropriate at that
time.
Analysis Prepared by : Anthony Lew / JUD. / (916) 319-2334
FN: 0005703