Bill Text: MI HB5427 | 2011-2012 | 96th Legislature | Introduced

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Bill Title: Civil procedure; execution; property exempt from garnishment and execution; modify. Amends sec. 6023 of 1961 PA 236 (MCL 600.6023) & repeals secs. 5451 & 6023a of 1961 PA 236 (MCL 600.5451 & 600.6023a).

Spectrum: Strong Partisan Bill (Democrat 11-1)

Status: (Introduced - Dead) 2012-02-23 - Printed Bill Filed 02/23/2012 [HB5427 Detail]

Download: Michigan-2011-HB5427-Introduced.html

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HOUSE BILL No. 5427

 

February 22, 2012, Introduced by Reps. Constan, Heise, Santana, Tlaib, Kandrevas, Hobbs, Womack, Meadows, Cavanagh, Darany, Stapleton and Jackson and referred to the Committee on Judiciary.

 

     A bill to amend 1961 PA 236, entitled

 

"Revised judicature act of 1961,"

 

by amending section 6023 (MCL 600.6023), as amended by 1998 PA 61;

 

and to repeal acts and parts of acts.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 6023. (1) The following property of the a judgment debtor

 

and the debtor's dependents shall be is exempt from garnishment,

 

attachment, levy and sale under any an execution, or other process

 

for satisfaction of a judgment:

 

     (a) All family Family pictures. , all arms

 

     (b) Arms and accouterments required by law to be kept by any a

 

person. , all wearing

 

     (c) Wearing apparel, of every person or family, and provisions

 

excluding furs.

 

     (d) Cemeteries, tombs, and rights of burial in use as

 

repositories for the dead of the debtor's family or kept for burial

 

of the debtor.

 

     (e) Professionally prescribed health aids.

 

     (f) Provisions and fuel for comfortable subsistence of each

 

householder and his or her family for 6 months.

 

     (g) (b) All The interest, not to exceed a value of $525.00 for

 

each item and an aggregate value of $3,450.00, in household goods,

 

furniture, utensils, books, and appliances, not exceeding in value

 

$1,000.00 and jewelry.

 

     (h) (c) A The interest, not to exceed $575.00 in value, in a

 

seat, pew, or slip occupied by the judgment debtor or the judgment

 

debtor's family in any a house or place of public worship. , and

 

all cemeteries, tombs, and rights of burial while in use as

 

repositories of the dead of the judgment debtor's family or kept

 

for burial of the judgment debtor.

 

     (d) To each householder, 10 sheep, 2 cows, 5 swine, 100 hens,

 

5 roosters, and a sufficient quantity of hay and grain, growing or

 

otherwise, for properly keeping the animals and poultry for 6

 

months.

 

     (i) The interest, not to exceed $2,300.00 in value, in crops,

 

farm animals, and feed for the farm animals.

 

     (j) The interest, not to exceed $575.00 in value, in household

 

pets.

 

     (k) The interest, not to exceed $3,175.00 in value, in 1 motor

 

vehicle.

 

     (l) The interest, not to exceed $575.00 in value, in 1 computer

 

and its accessories.

 

     (m) (e) The The interest, not to exceed $2,300.00 in value, in

 

the tools, implements, materials, stock, apparatus, team, vehicle,

 

motor vehicle, horses, harness, or other things to enable a person

 

to carry on the profession, trade, occupation, or business in which

 

the person is principally engaged. , not exceeding in value

 

$1,000.00.

 

     (n) (f) Any money Money or other benefits paid, provided, or

 

allowed to be paid, provided, or allowed, by any a stock or mutual

 

life, or health, or casualty insurance company , on account or a

 

voluntary employees' beneficiary association under section

 

501(c)(9) of the internal revenue code of 1986, 26 USC 501, because

 

of the disability due to injury or sickness of any an insured

 

person, whether the debt or liability of such the insured person or

 

beneficiary was incurred before or after the accrual of benefits

 

under the insurance policy or contract, except that the exemption

 

under this subdivision does not apply to actions to recover for

 

necessities contracted for after the accrual of the benefits.

 

     (g) The shares held by any member, being a householder, of any

 

association incorporated under the provisions of the savings and

 

loan act of 1980, 1980 PA 307, MCL 491.102 to 491.1202, to the

 

amount of $1,000.00 in such shares, at par value, except that this

 

exemption does not apply to any person who has a homestead exempted

 

under the general laws of this state.

 

     (h) A homestead of not exceeding 40 acres of land and the

 

dwelling house and appurtenances on that homestead, and not

 

included in any recorded plat, city, or village, or, instead, and

 

at the option of the owner, a quantity of land not exceeding in

 

amount 1 lot, being within a recorded town plat, city, or village,

 

and the dwelling house and appurtenances on that land, owned and

 

occupied by any resident of this state, not exceeding in value

 

$3,500.00. This exemption extends to any person owning and

 

occupying any house on land not his or her own and which the person

 

claims as a homestead. However, this exemption

 

     (o) Money in a medical savings account or health savings

 

account under section 220 or 223 of the internal revenue code of

 

1986, 26 USC 220 and 223, but excluding excess contributions as

 

defined in those sections.

 

     (p) All retirement funds, except that the exemption under this

 

subdivision does not apply if the application would exempt the

 

retirement funds from the operation of an order of a court pursuant

 

to a judgment of divorce or separate maintenance or concerning

 

child support.

 

     (q) The interest of the debtor, any codebtor, and the debtor's

 

dependents, not to exceed, in the aggregate, $34,450.00 in value

 

or, if the debtor or a dependent of the debtor at the time of the

 

execution is 65 years of age or older or disabled, not to exceed,

 

in the aggregate, $51,650.00 in value, in a homestead.

 

     (r) A homestead after the death of the owner of the homestead

 

for either of the following periods:

 

     (i) If the homestead is the homestead of the owner's family,

 

during the minority of the owner's children.

 

     (ii) If the owner leaves a surviving spouse but no children, if

 

the surviving spouse does not own a homestead in his or her own

 

right, and if the surviving spouse elects to exempt the homestead

 

and the rents and profits of the homestead, until the surviving

 

spouse remarries.

 

     (s) Real property or property described in section 1 of 1927

 

PA 212, MCL 557.151, or in section 504 of the Michigan limited

 

liability company act, 1993 PA 23, MCL 450.4504, held jointly by a

 

husband and wife in a tenancy by the entirety, except that the

 

exemption under this subdivision is subject to the limitations and

 

attributes developed in the common law, including nonapplication to

 

a claim based on a joint debt of the husband and wife.

 

     (t) All interests in an education savings account.

 

     (2) An exemption under this section does not apply to any a

 

mortgage, on the homestead, lien, or security interest in the

 

exempt property that is consensually given or lawfully obtained

 

unless the mortgage, lien, or security interest is obtained by

 

judgment, attachment, levy, or similar legal process in connection

 

with a court action or proceeding against the debtor. , except that

 

the mortgage is not valid without the signature of a married

 

judgment debtor's spouse unless either of the following occurs:

 

     (i) The mortgage is given to secure the payment of the purchase

 

money or a portion of the purchase money.

 

     (ii) The mortgage is recorded in the office of the register of

 

deeds of the county in which the property is located, for a period

 

of 25 years, and no notice of a claim of invalidity is filed in

 

that office during the 25 years following the recording of the

 

mortgage.

 

     (i) An equity of redemption as described in section 6060.

 

     (j) The homestead of a family, after the death of the owner of

 

the homestead, from the payment of his or her debts in all cases

 

during the minority of his or her children.

 

     (k) An individual retirement account or individual retirement

 

annuity as defined in section 408 or 408a of the internal revenue

 

code of 1986 and the payments or distributions from such an account

 

or annuity. This exemption applies to the operation of the federal

 

bankruptcy code as permitted by section 522(b)(2) of title 11 of

 

the United States Code, 11 U.S.C. 522. This exemption does not

 

apply to any amounts contributed to an individual retirement

 

account or individual retirement annuity if the contribution occurs

 

within 120 days before the debtor files for bankruptcy. This

 

exemption does not apply to an individual retirement account or

 

individual retirement annuity to the extent that any of the

 

following occur:

 

     (i) The individual retirement account or individual retirement

 

annuity is subject to an order of a court pursuant to a judgment of

 

divorce or separate maintenance.

 

     (ii) The individual retirement account or individual retirement

 

annuity is subject to an order of a court concerning child support.

 

     (iii) Contributions to the individual retirement account or

 

premiums on the individual retirement annuity, including the

 

earnings or benefits from those contributions or premiums, exceed,

 

in the tax year made or paid, the deductible amount allowed under

 

section 408 of the internal revenue code of 1986. This limitation

 

on contributions does not apply to a rollover of a pension, profit-

 

sharing, stock bonus plan or other plan that is qualified under

 

section 401 of the internal revenue code of 1986, or an annuity

 

contract under section 403(b) of the internal revenue code of 1986.

 

     (l) The right or interest of a person in a pension, profit-

 

sharing, stock bonus, or other plan that is qualified under section

 

401 of the internal revenue code of 1986, or an annuity contract

 

under section 403(b) of the internal revenue code of 1986, which

 

plan or annuity is subject to the employee retirement income

 

security act of 1974, Public Law 93-406, 88 Stat. 829. This

 

exemption applies to the operation of the federal bankruptcy code,

 

as permitted by section 522(b)(2) of title 11 of the United States

 

Code, 11 U.S.C. 522. This exemption does not apply to any amount

 

contributed to a pension, profit-sharing, stock bonus, or other

 

qualified plan or a 403(b) annuity if the contribution occurs

 

within 120 days before the debtor files for bankruptcy. This

 

exemption does not apply to the right or interest of a person in a

 

pension, profit-sharing, stock bonus, or other qualified plan or a

 

403(b) annuity to the extent that the right or interest in the plan

 

or annuity is subject to any of the following:

 

     (i) An order of a court pursuant to a judgment of divorce or

 

separate maintenance.

 

     (ii) An order of a court concerning child support.

 

     (2) The exemptions provided in this section shall not extend

 

to any lien thereon excluded from exemption by law.

 

     (3) If the owner of a homestead dies, leaving a surviving

 

spouse but no children, the homestead shall be exempt, and the

 

rents and profits of the homestead shall accrue to the benefit of

 

the surviving spouse before his or her remarriage, unless the

 

surviving spouse is the owner of a homestead in his or her own

 

right.

 

     (3) In determining whether retirement funds are exempt under

 

this section, a court shall apply the following rules:

 

     (a) If the retirement funds are in a fund that has received a

 

favorable determination under regulations promulgated under section

 

7805 of the internal revenue code of 1986, 26 USC 7805, and that

 

determination is in effect, the funds are presumed to be exempt.

 

     (b) If subdivision (a) does not apply, the funds are exempt if

 

the debtor demonstrates both of the following:

 

     (i) That a prior determination to the contrary has not been

 

made by a court or the internal revenue service.

 

     (ii) Either of the following applies:

 

     (A) The retirement fund is in substantial compliance with the

 

applicable requirements of the internal revenue code of 1986, 26

 

USC 1 to 9834.

 

     (B) The retirement fund has failed to be in substantial

 

compliance with the applicable requirements of the internal revenue

 

code of 1986, 26 USC 1 to 9834, but the debtor is not materially

 

responsible for that failure.

 

     (c) A direct transfer of retirement funds from 1 fund or

 

account that is exempt from taxation under section 401, 403, 408,

 

408A, 414, 457, or 501(a) of the internal revenue code of 1986, 26

 

USC 401, 403, 408, 408A, 414, 457, or 501, including under section

 

401(a)(31) of the internal revenue code of 1986, 26 USC 401, or

 

otherwise does not cease to qualify the funds for exemption by

 

reason of the direct transfer.

 

     (d) A distribution does not cease to qualify for exemption by

 

reason of the distribution if either of the following applies:

 

     (i) The distribution qualifies as an eligible rollover

 

distribution under section 402(c) of the internal revenue code of

 

1986, 26 USC 402.

 

     (ii) Both of the following apply:

 

     (A) The distribution was from a fund or account that is exempt

 

from taxation under section 401, 403, 408, 408A, 414, 457, or

 

501(a) of the internal revenue code of 1986, 26 USC 401, 403, 408,

 

408A, 414, 457, or 501.

 

     (B) To the extent allowed by law, not later than 60 days after

 

the distribution, the money distributed is deposited in a fund or

 

account that is exempt from taxation under section 401, 403, 408,

 

408A, 414, 457, or 501(a) of the internal revenue code of 1986, 26

 

USC 401, 403, 408, 408A, 414, 457, or 501.

 

     (4) If property that is exempt under this section is sold,

 

damaged, destroyed, or acquired for public use, the right to

 

receive proceeds or, if the owner receives proceeds and holds them

 

in a manner that makes them identifiable as proceeds, the proceeds

 

received are exempt in the same manner and amount as the exempt

 

property. An exemption under this subsection may be claimed up to 1

 

year after the receipt of the proceeds by the owner.

 

     (5) On March 1, 2012 and on March 1 of every third year after

 

March 1, 2012, the state treasurer shall adjust each dollar amount

 

in this section or, for each adjustment after March 1, 2012, each

 

adjusted amount, by an amount determined by the state treasurer to

 

reflect the cumulative change in the consumer price index for the

 

3-year period ending on the December 31 preceding the adjustment

 

date and rounded to the nearest $25.00. The state treasurer shall

 

publish the adjusted amounts. The adjusted amounts apply beginning

 

on April 1 following the adjustment date.

 

     (6) This section does not preempt or affect the validity of

 

any other exemption provided by law, including exemptions for any

 

of the following:

 

     (a) Crime victims' compensation, as provided in section 12 of

 

1976 PA 223, MCL 18.362.

 

     (b) Veterans' benefits, as provided under section 6 of the

 

veterans' military pay act, 1947 PA 12, MCL 35.926, section 7 of

 

the Korean veterans' military pay fund act of 1955, 1955 PA 8, MCL

 

35.977, or section 7 of the Vietnam veteran era bonus act, 1974 PA

 

370, MCL 35.1027.

 

     (c) Public employee retirement benefits, as provided under

 

section 3 of the public employee retirement benefit protection act,

 

2002 PA 100, MCL 38.1683, including judge's retirement benefits as

 

provided under section 308 of the judges retirement act of 1992,

 

1992 PA 234, MCL 38.2308.

 

     (d) Family support subsidy payments, as provided under section

 

158a of the mental health code, 1974 PA 258, MCL 330.1158a.

 

     (e) Public assistance, as provided under section 63 of the

 

social welfare act, 1939 PA 280, MCL 400.63.

 

     (f) Worker's disability compensation benefits, as provided

 

under section 821 of the worker's disability compensation act of

 

1969, 1969 PA 317, MCL 418.821.

 

     (g) Unemployment benefits, as provided under section 30 of the

 

Michigan employment security act, 1936 (Ex Sess) PA 1, MCL 421.30.

 

     (h) Fraternal benefit society benefits, as provided under

 

section 8181 of the insurance code of 1956, 1956 PA 218, MCL

 

500.8181.

 

     (i) Life insurance proceeds, as provided under section 2207 of

 

the insurance code of 1956, 1956 PA 218, MCL 500.2207.

 

     (7) This section shall not be construed so as to be

 

inconsistent with federal law.

 

     (8) As used in this section:

 

     (a) "Consumer price index" means the consumer price index for

 

all urban consumers in the area of Detroit-Ann Arbor-Flint,

 

Michigan, published by the United States department of labor or, if

 

the United States department of labor ceases publishing that index,

 

the most similar index available.

 

     (b) "Disabled" means unable to engage in substantial gainful

 

activity, as determined under criteria contained in regulations

 

promulgated under 42 USC 1382c(a)(3)(E), as a result of a physical

 

or mental impairment and receiving supplemental security income

 

under 42 USC 1381 to 1383f.

 

     (c) "Education savings account" means any of the following:

 

     (i) A trust, fund, or advance tuition payment contract

 

established under the Michigan education trust act, 1986 PA 316,

 

MCL 390.1421 to 390.1442.

 

     (ii) An account established under the Michigan education

 

savings program act, 2000 PA 161, MCL 390.1471 to 390.1486.

 

     (iii) Any other interest in a qualified tuition program or

 

Coverdell education savings account under section 529 or 530 of the

 

internal revenue code of 1986, 26 USC 529 and 530.

 

     (d) "Homestead" means 1 of the following owned or being

 

purchased under an executory contract by the debtor that the debtor

 

or a dependent of the debtor occupies as his or her principal

 

residence:

 

     (i) If the land is located outside of a recorded plat, city, or

 

village, a residential dwelling and appurtenances and the land on

 

which the dwelling and appurtenances are situated, not exceeding 40

 

acres.

 

     (ii) If the land is located within a recorded plat, city, or

 

village, a residential dwelling and appurtenances and the land on

 

which the dwelling and appurtenances are situated, not exceeding 1

 

lot or parcel.

 

     (iii) A residential dwelling situated on land not owned by the

 

debtor.

 

     (iv) A condominium unit.

 

     (v) A unit in a cooperative.

 

     (vi) A motor home.

 

     (vii) A boat or other watercraft.

 

     (viii) An equity of redemption as described in section 6060.

 

     (e) "Proceeds" means money payable or paid as a result of 1 or

 

more of the following:

 

     (i) Sale of the property.

 

     (ii) Insurance or other indemnification for damage or

 

destruction of the property.

 

     (iii) Compensation for the acquisition for public use of the

 

property.

 

     (f) "Residential dwelling" includes, but is not limited to, a

 

house or a manufactured or mobile home.

 

     (g) "Retirement funds" means an interest in a fund or account

 

that is exempt from taxation under section 401, 403, 408, 408A,

 

414, 457, or 501(a) of the internal revenue code of 1986, 26 USC

 

401, 403, 408, 408A, 414, 457, and 501. Retirement funds do not

 

include the portion of an individual retirement account or

 

individual retirement annuity that is attributable to contributions

 

to the individual retirement account or premiums on the individual

 

retirement annuity, including the earnings or benefits from those

 

contributions or premiums, that, in the tax year made or paid,

 

exceeded the deductible amount allowed under section 408 of the

 

internal revenue code of 1986, 26 USC 408. This limitation on

 

contributions does not apply to a Roth IRA or similar plan or

 

device to the extent that the contributions were permitted under

 

the internal revenue code, to a rollover of a pension, profit-

 

sharing, or stock bonus plan or other plan that is qualified under

 

section 401 of the internal revenue code of 1986, 26 USC 401, or to

 

an annuity contract under section 403(b) of the internal revenue

 

code of 1986, 26 USC 403.

 

     Enacting section 1. Sections 5451 and 6023a of the revised

 

judicature act of 1961, 1961 PA 236, MCL 600.5451 and 600.6023a,

 

are repealed.