ARIZONA HOUSE OF REPRESENTATIVES Fifty-seventh Legislature First Regular Session
	Senate: FIN DP 7-0-0-0 | 3^rd Read 29-0-1-0 House: COM DPA/SE 10-0-0-0

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SB 1540: personal property exemptions; vehicles

NOW: homestead; personal property; exemptions

Sponsor: Senator Carroll, LD 28

House Engrossed

Overview

Makes revisions to statutes relating to homestead and personal property exemptions.

History

A homestead exemption is a legal provision that protects a homeowner's primary residence from being seized by creditor to satisfy debts. A homestead is the primary residence of an owner that under the state's homestead exemption is protected from seizure or sale of debt up to $400,000 of a person's equity in their dwelling. Under current law, the homestead can be a house, condominium, cooperative apartment, or mobile home in which the person resides plus the land upon which the mobile home is located (A.R.S § 33-1101).

Statute outlines personal property exemptions from the bankruptcy process and other actions to collect from a debtor. The exemptions include specified amounts of money or proceeds. Laws 2022, Chapter 346 exempts the refundable portion of federal or state earned income tax credits (EITC) and federal or state child tax credits and sets the exemption amount at the lesser of either: 1) the total combined amount of any federal and state tax refunds; or 2) the total combined amount of any federal or state EITCs and any federal or state child tax credits claimed on the return (Title 33, Chapter 8, Art. 2, A.R.S.).

Provisions

1. Includes park model trailers, motor homes, travel trailers, fifth wheel trailers, houseboats, manufactured homes or other forms of shelter in which a person resides, plus the land, to the property types that qualify for the homestead exemption. (Sec. 1)

2. Specifies that the homestead exemption does not attach to a person's interest in identifiable cash proceeds from refinancing the homestead property. (Sec. 1)

3. Allows the parties to rely on the valuation of the property in the final closing document disclosure that is used for that transaction for determining the amount of equity in a homestead property that is sold or whether the property owner is receiving cash back from refinancing the property. (Sec. 1)

4. Requires, for bankruptcy cases, the debtor's homestead exemption amount to initially be determined as of the date the bankruptcy petition is filed. (Sec. 1)

5. Stipulates if a debtor's value in the homestead is less than or equal to the amount of the homestead exemption at the time of bankruptcy filing, the homestead property and any value increase during case pendency is 100% exempt from the bankruptcy proceeding regardless of whether the debtor's interest increases above the homestead exemption amount. (Sec. 1)

6. Exempts all federal or state personal income tax credits from any federal or state earned income tax credits or child tax credits from execution, attachment or sale on any process issued from any court and includes a calculation on determining the amount of the exemption. (Sec. 3)

7. Repeals statute relating to homestead exemptions as enacted by the Legislature. (Sec. 2)

8. Repeals statute relating to monies or proceeds exempt from execution, attachment or sale on any process issued from any court as enacted by the Legislature. (Sec. 4)

9. Applies the homestead value bankruptcy requirements to any petition for bankruptcy proceedings filed after the effective date. (Sec. 5)

10. Makes technical and conforming changes. (Sec. 1-3)

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14.                   SB 1540

15. Initials PB           Page 0 House Engrossed

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