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.