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REFERENCE TITLE: exempt property; proceeds; tax credits |
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State of Arizona House of Representatives Fifty-fourth Legislature First Regular Session 2019
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HB 2737 |
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Introduced by Representative Toma
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AN ACT
amending section 33-1126, Arizona Revised Statutes; relating to personal property exemptions.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 33-1126, Arizona Revised Statutes, is amended to read:
33-1126. Money benefits or proceeds; exception
A. The following property of a debtor is exempt from execution, attachment or sale on any process issued from any court:
1. All money received by or payable to a surviving spouse or child on the life of a deceased spouse, parent or legal guardian, not exceeding twenty thousand dollars $20,000.
2. The earnings of the minor child of a debtor or the proceeds of these earnings by reason of any liability of the debtor not contracted for the special benefit of the minor child.
3. All monies received by or payable to a person entitled to receive child support or spousal maintenance pursuant to a court order.
4. All money, proceeds or benefits of any kind to be paid in a lump sum or to be rendered on a periodic or installment basis to the insured or any beneficiary under any policy of health, accident or disability insurance or any similar plan or program of benefits in use by any employer, except for premiums payable on the policy or debt of the insured secured by a pledge, and except for collection of any debt or obligation for which the insured or beneficiary has been paid under the plan or policy and except for payment of amounts ordered for support of a person from proceeds and benefits furnished in lieu of earnings that would have been subject to that order and subject to any exemption applicable to earnings so replaced.
5. All money arising from any claim for the destruction of, or damage to, exempt property and all proceeds or benefits of any kind arising from fire or other insurance on any property exempt under this article.
6. The cash surrender
value of life insurance policies where for a continuous unexpired period of two
years the policies have been owned by a debtor. The policy shall
have named as beneficiary the debtor's surviving spouse, child, parent, brother
or sister. The policy may have named as beneficiary any other family member who
is a dependent, in the proportion that the policy names any such beneficiary,
except that, subject to the statute of limitations, the amount of any premium
that is recoverable or avoidable by a creditor pursuant to title 44, chapter 8,
article 1, with interest thereon on that amount, is not
exempt. The exemption provided by this paragraph does not apply to a claim for
the payment of a debt of the insured or beneficiary that is secured by a pledge
or assignment of the cash value of the insurance policy or the proceeds of the
policy. For the purposes of this paragraph, "dependent"
means a family member who is dependent on the insured debtor for not less than
half support.
7. An annuity contract where for a continuous unexpired period of two years that contract has been owned by a debtor and has named as beneficiary the debtor, the debtor's surviving spouse, child, parent, brother or sister, or any other dependent family member, except that, subject to the statute of limitations, the amount of any premium, payment or deposit with respect to that contract is recoverable or avoidable by a creditor pursuant to title 44, chapter 8, article 1 is not exempt. The exemption provided by this paragraph does not apply to a claim for a payment of a debt of the annuitant or beneficiary that is secured by a pledge or assignment of the contract or its proceeds. For the purposes of this paragraph, "dependent" means a family member who is dependent on the debtor for not less than half support.
8. Any claim for damages recoverable by any person by reason of any levy on or sale under execution of that person's exempt personal property or by reason of the wrongful taking or detention of that property by any person, and the judgment recovered for damages.
9. A total of three hundred dollars $300 held in a single account in any one financial institution as defined by section 6‑101. The property declared exempt by this paragraph is not exempt from normal service charges assessed against the account by the financial institution at which the account is carried.
10. An interest in a college savings plan under section 529 of the internal revenue code of 1986, either as the owner or as the beneficiary. This does not include money contributed to the plan within two years before a debtor files for bankruptcy.
11. Not more than $1,000 from the refundable portion of any federal personal income tax credit from the federal earned income tax credit and not more than $1,000 from any additional refundable portion of the federal child tax credit. To calculate the amount of the exemption under this paragraph, income tax withholding, tax payments and deposits and any nonrefundable tax credit shall first be applied to the income tax obligation of the debtor.
B. Any money or other assets payable to a participant in or beneficiary of, or any interest of any participant or beneficiary in, a retirement plan under section 401(a), 403(a), 403(b), 408, 408A or 409 or a deferred compensation plan under section 457 of the United States internal revenue code of 1986, as amended, whether the beneficiary's interest arises by inheritance, designation, appointment or otherwise, is exempt from all claims of creditors of the beneficiary or participant. This subsection does not apply to any of the following:
1. An alternate payee under a qualified domestic relations order, as defined in section 414(p) of the United States internal revenue code of 1986, as amended. The interest of any and all alternate payees is exempt from any and all claims of any creditor of the alternate payee.
2. Amounts contributed within one hundred twenty days before a debtor files for bankruptcy.
3. The assets of bankruptcy proceedings filed before July 1, 1987.
C. Any person who is at least eighteen years of age or over, married or single, who resides within this state and who does not exercise the homestead exemption under article 1 of this chapter may claim as a personal property homestead exempt from all process prepaid rent, including security deposits as provided in section 33‑1321, subsection A, for the claimant's residence, not exceeding two thousand dollars $2,000.
D. This section does not exempt property from orders that are the result of a judgment for arrearages of child support or for a child support debt.