BILL ANALYSIS �
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THIRD READING
Bill No: AB 1945
Author: Wieckowski (D)
Amended: 3/28/14 in Assembly
Vote: 21
SENATE JUDICIARY COMMITTEE : 6-1, 6/10/14
AYES: Jackson, Corbett, Lara, Leno, Monning, Vidak
NOES: Anderson
ASSEMBLY FLOOR : 72-0, 4/24/14 - See last page for vote
SUBJECT : Enforcement of money judgments: exemptions
SOURCE : Author
DIGEST : This bill authorizes a community property exemption
for a domestic partner of a judgment debtor.
ANALYSIS :
Existing law:
1.Provides that, except as otherwise provided by law, all
property of the judgment debtor is subject to enforcement of a
money judgment.
2.Provides, under the 704 exemptions, for 21 specific exemptions
that limit the enforceability of a money judgment against a
debtor's personal property, including motor vehicles,
residential improvement materials, jewelry, heirlooms, and
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AB 1945
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works of art, tools and implements used in the exercise of the
debtor's trade, business, or profession, public benefit
accounts, inmate trust funds, and unmatured life insurance
policies.
3.Provides, under the 703 exemptions, 11 similar exemptions
available to debtors in personal bankruptcy proceedings.
4.Provides that the 703 exemptions apply only to property of a
natural person, and may be claimed by any of the following
persons: (a) in all cases, by the judgment debtor or a person
acting on behalf of the judgment debtor; and (b) in the case
of community property, by the spouse of the judgment debtor,
whether or not the spouse is also a judgment debtor under the
judgment.
5.Provides for the creation of a legal entity called a domestic
partnership, wherein two adults have chosen to share one
another's lives in an intimate and committed relationship of
mutual caring.
6.Provides that registered domestic partners have the same
rights, protections, and benefits, and are subject to the same
responsibilities, obligations, and duties under law, whether
they derive from statutes, administrative regulations, court
rules, government policies, common law, or any other
provisions or sources of law, as are granted to and imposed
upon spouses.
This bill provides that, in the case of community property
subject to the enforceability of a money judgment against a
debtor's property, the domestic partner of a judgment debtor may
claim a 703 exemption, whether or not the domestic partner is
also a judgment debtor under the judgment.
Background
In a bankruptcy action, exemptions generally allow a person to
protect certain types of assets during the bankruptcy process.
If an asset is exempt, the asset can generally not be taken to
pay creditors' claims. These property exemptions are designed
to ensure that a debtor maintains the ability to support
himself/herself, as well as dependent family members, after the
entry of judgment, and also to facilitate the debtor's financial
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recovery. Individuals filing bankruptcy in California can
choose between two different sets of exemptions: the 703
exemptions or the 704 exemptions.
The "703 exemptions," located in Code of Civil Procedure Section
703.140(b), consist of 11 categories that are modeled after
federal bankruptcy law. In comparison, the "704 exemptions,"
contained in Code of Civil Procedure Sections 704.010 through
704.210, provide 21 different types of exemptions that protect a
wider range of property. Additionally, the 703 exemptions are
specific exemptions that a bankruptcy debtor may elect in lieu
of all other exemptions while the 704 exemptions are available
to all bankruptcy or non-bankruptcy debtors in California
seeking to exempt specified property from enforcement of a money
judgment.
Existing law authorizes the spouse of a judgment debtor to claim
a community property exemption from a judgment creditor's
enforcement of the money judgment against the debtor in a
bankruptcy action.
Prior Legislation
AB 198 (Wieckowski, 2013) would have created additional new
categories of property exemptions available to debtors and would
raise the amount of the homestead exemption from between $75,000
and $175,000 to between $200,000 and $400,000. AB 198 was held
under submission in the Assembly Committee on Appropriations.
AB 929 (Wieckowski, Chapter 678, Statutes of 2012) increased the
dollar amount of the exemptions for a debtor's interest in motor
vehicles, jewelry, professional books, and tools of the trade of
the debtor or the debtor's dependent, and also increased the
amount of the homestead exemption for persons 55 years of age or
older who meet specified low-income criteria.
AB 1046 (Anderson, Chapter 499, Statutes of 2009) raised the
amounts of a debtor's homestead exemption by $25,000 in each
available category, establishing the current statutory levels of
$75,000, $150,000, and $175,000.
AB 182 (Harman, Chapter 379, Statutes of 2003) raised the dollar
amounts a debtor may claim for exemptions from enforcement of a
money judgment and in bankruptcy actions.
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SB 832 (Kopp, Chapter 196, Statutes of 1995) raised the dollar
amounts a debtor may claim for exemptions from enforcement of a
money judgment and in bankruptcy actions.
AB 707 (McAlister, Chapter 1364, Statutes of 1982) codified the
Enforcement of Judgments Law including the statutory dollar
amount of personal property exempted from the enforcement of
monetary judgments.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No Local:
No
ARGUMENTS IN SUPPORT : According to the author:
The [United States] Bankruptcy Court of the Central District of
[California] examined in 2011 whether it was legal to dismiss a
homosexual married couple's joint bankruptcy filing because they
were homosexual. It held that [the federal Defense of Marriage
Act (DOMA)] violated the debtor's equal protection rights
afforded under the Fifth Amendment of the United States
Constitution, either under heightened scrutiny or under rational
basis review (In re Balas, 449 BR 567 (Case No. 2:11-bk-17831
TD)). However, since the overturning of DOMA by the Supreme
Court, it is unclear whether domestic partners may file for
bankruptcy jointly.
AB 1945 makes clear that registered domestic partners can claim
property exemptions in a bankruptcy just as spouses in a
marriage can, regardless of whether the partners file jointly or
not. While state law says that registered domestic partners
have the same rights, protections and benefits as spouses, it is
unclear whether domestic partners can file jointly in a
bankruptcy.
ASSEMBLY FLOOR : 72-0, 4/24/14
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Bigelow, Bloom,
Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian
Calderon, Campos, Chau, Ch�vez, Chesbro, Conway, Cooley,
Dababneh, Dahle, Daly, Dickinson, Eggman, Fong, Fox, Frazier,
Garcia, Gatto, Gomez, Gonzalez, Gordon, Gorell, Grove, Hagman,
Hall, Roger Hern�ndez, Holden, Jones, Jones-Sawyer, Levine,
Linder, Logue, Lowenthal, Maienschein, Medina, Melendez,
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AB 1945
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5
Mullin, Muratsuchi, Nestande, Olsen, Pan, Perea, V. Manuel
P�rez, Quirk, Quirk-Silva, Rendon, Ridley-Thomas, Rodriguez,
Salas, Skinner, Stone, Ting, Wagner, Waldron, Weber,
Wieckowski, Wilk, Williams, Yamada, John A. P�rez
NO VOTE RECORDED: Donnelly, Beth Gaines, Gray, Harkey, Mansoor,
Nazarian, Patterson, Vacancy
AL:e 6/11/14 Senate Floor Analyses
SUPPORT/OPPOSITION: NONE RECEIVED
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