77th OREGON LEGISLATIVE ASSEMBLY--2013 Regular Session

NOTE:  Matter within  { +  braces and plus signs + } in an
amended section is new. Matter within  { -  braces and minus
signs - } is existing law to be omitted. New sections are within
 { +  braces and plus signs + } .

LC 1519

                           A-Engrossed

                         Senate Bill 396
                   Ordered by the House June 4
             Including House Amendments dated June 4

Sponsored by Senator SHIELDS (Presession filed.)

                             SUMMARY

The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure.

  Exempts from execution debtor's right to assets held in, or
right to receive payments under, medical savings account or
health savings account.
   { +  Allows Oregon resident filing for bankruptcy to claim
either exemptions established by federal law or exemptions
established by state law. + }
  Declares emergency, effective on passage.

                        A BILL FOR AN ACT
Relating to execution of property; creating new provisions;
  amending ORS 18.300, 18.345, 18.845 and 18.896; and declaring
  an emergency.
Be It Enacted by the People of the State of Oregon:
  SECTION 1. ORS 18.345 is amended to read:
  18.345. (1) All property, including franchises, or rights or
interest therein, of the judgment debtor, shall be liable to an
execution, except as provided in this section and in other
statutes granting exemptions from execution. The following
property, or rights or interest therein of the judgment debtor,
except as provided in ORS 18.305, shall be exempt from execution:
  (a) Books, pictures and musical instruments to the value of
$600.
  (b) Wearing apparel, jewelry and other personal items to the
value of $1,800.
  (c) The tools, implements, apparatus, team, harness or library,
necessary to enable the judgment debtor to carry on the trade,
occupation or profession by which the judgment debtor habitually
earns a living, to the value of $5,000.
  (d) A vehicle to the value of $3,000. As used in this paragraph
'vehicle' includes an automobile, truck, trailer, truck and
trailer or other motor vehicle.
  (e) Domestic animals and poultry kept for family use, to the
total value of $1,000 and food sufficient to support such animals
and poultry for 60 days.
  (f) Household goods, furniture, radios, a television set and
utensils all to the total value of $3,000, if the judgment debtor
holds the property primarily for the personal, family or
household use of the judgment debtor; provisions actually
provided for family use and necessary for the support of a
householder and family for 60 days and also 60 days' supply of
fuel.
  (g) All property of the state or any county or incorporated
city therein, or of any other public or municipal corporation of
like character.
  (h) All professionally prescribed health aids for the debtor or
a dependent of the debtor.
  (i) Spousal support, child support, or separate maintenance to
the extent reasonably necessary for the support of the debtor and
any dependent of the debtor.
  (j) The debtor's right to receive, or property that is
traceable to, an award under any crime victim reparation law.
  (k) The debtor's right to receive, or property that is
traceable to, a payment or payments, not to exceed a total of
$10,000, on account of personal bodily injury of the debtor or an
individual of whom the debtor is a dependent.
  (L) The debtor's right to receive, or property that is
traceable to, a payment in compensation of loss of future
earnings of the debtor or an individual of whom the debtor is or
was a dependent, to the extent reasonably necessary for the
support of the debtor and any dependent of the debtor.
  (m) Veterans' benefits and loans.
  (n) The debtor's right to receive an earned income tax credit
under the federal tax laws and any moneys that are traceable to a
payment of an earned income tax credit under the federal tax
laws.
   { +  (o) The debtor's right to the assets held in, or right to
receive payments under, a medical savings account or health
savings account authorized under section 220 or 223 of the
Internal Revenue Code. + }
    { - (o) - }   { + (p) + } The debtor's interest, not to
exceed $400 in value, in any personal property. However, this
exemption may not be used to increase the amount of any other
exemption.
  (2) If the property claimed by the judgment debtor as exempt is
adjudicated by the court out of which the execution issued to be
of a value in excess of that allowed by the appropriate paragraph
of subsection (1) of this section, the officer seizing the
property shall proceed to sell such property. Out of the proceeds
of such sale, the officer shall deduct costs of sale and shall
pay to the judgment debtor an amount equivalent to the value
declared to be exempt by any of the paragraphs of subsection (1)
of this section and shall apply the balance of the proceeds of
sale on the execution. A sale may not be made under such
execution unless the highest bid made exceeds the appropriate
exemption claimed and allowed plus costs of sale. If no bid is
received in excess of the value allowed by the appropriate
paragraph of subsection (1) of this section, the costs of sale
shall be borne by the judgment creditor.
  (3) If two or more members of a household are joint judgment
debtors, each judgment debtor shall be entitled to claim the
exemptions in subsection (1)(a), (b), (c), (d) and   { - (o) - }
 { +  (p) + } of this section in the same or different
properties. The exemptions provided by subsection (1)(a), (b),
(c), (d), (j), (k) and   { - (o) - }  { +  (p) + } of this
section, when claimed for jointly owned property, may be combined
at the option of the debtors.
  (4) Notwithstanding any other provision of law except ORS
657.855, if a writ of garnishment or other execution is issued to
collect past due support as defined in ORS 18.600, 50 percent of
unemployment compensation benefits, workers' compensation
benefits and other benefits paid to the debtor by the United
States, by the state or by a political subdivision of the state
are exempt. The exemption related to unemployment compensation
benefits provided by this subsection is subject to ORS 657.855.
The exemption provided by this subsection applies without regard
to whether the payment is made on a periodic basis or in a lump
sum, including any lump sum payable pursuant to a settlement or
judgment.  Notwithstanding subsection (1)(k) of this section, if
a payment is made under a settlement or judgment on account of
personal bodily injury and the garnishment or other execution is
issued to collect past due support as defined in ORS 18.600, the
lesser of 50 percent of the payment or $7,500 is exempt.
  SECTION 2. ORS 18.845 is amended to read:
  18.845. A notice of exemptions form must be in substantially
the form set forth in this section. Nothing in the notice form
described in this section is intended to expand or restrict the
law relating to exempt property. A determination as to whether
property is exempt from execution, attachment and garnishment
must be made by reference to other law. The form provided in this
section may be modified to provide more information or to update
the notice based on subsequent changes in exemption laws.
_________________________________________________________________

                    NOTICE OF EXEMPT PROPERTY
                      AND INSTRUCTIONS FOR
                    CHALLENGE TO GARNISHMENT

Property belonging to you may have been taken or held in order to
satisfy a debt. The debt may be reflected in a judgment or in a
warrant or order issued by a state agency. Important legal papers
are enclosed.
  YOU MAY BE ABLE TO GET YOUR PROPERTY BACK, SO READ THIS NOTICE
CAREFULLY.
  State and federal law specify that certain property may not be
taken. Some of the property that you may be able to get back is
listed below.
  (1) Wages or a salary as described in ORS 18.375 and 18.385.
Whichever of the following amounts is greater:
  (a) 75 percent of your take-home wages; or
  (b) $218 per workweek.
  (2) Social Security benefits.
  (3) Supplemental Security Income (SSI).
  (4) Public assistance (welfare).
  (5) Unemployment benefits.
  (6) Disability benefits (other than SSI benefits).
  (7) Workers' compensation benefits.
  (8) All Social Security benefits and Supplemental Security
Income benefits, and up to $7,500 in exempt wages, retirement
benefits, welfare, unemployment benefits and disability benefits,
that are held in a bank account. You may attach copies of bank
statements to the Challenge to Garnishment form if you claim this
exemption.
  (9) Spousal support, child support or separate maintenance to
the extent reasonably necessary for your support or the support
of any of your dependents.
  (10) A homestead (house, manufactured dwelling or floating
home) occupied by you, or occupied by your spouse, parent or
child. Up to $40,000 of the value of the homestead is exempt. If
you jointly own the homestead with another person who is also
liable on the debt, up to $50,000 of the value of the homestead
is exempt.
  (11) Proceeds from the sale of a homestead described in item
10, up to the limits described in item 10, if you hold the
proceeds for less than one year and intend to use those proceeds
to procure another homestead.
  (12) Household goods, furniture, radios, a television set and
utensils with a combined value not to exceed $3,000.
  *(13) An automobile, truck, trailer or other vehicle with a
value not to exceed $3,000.

  *(14) Tools, implements, apparatus, team, harness or library
that are necessary to carry on your occupation, with a combined
value not to exceed $5,000.
  *(15) Books, pictures and musical instruments with a combined
value not to exceed $600.
  *(16) Wearing apparel, jewelry and other personal items with a
combined value not to exceed $1,800.
  (17) Domestic animals and poultry for family use with a
combined value not to exceed $1,000 and their food for 60 days.
  (18) Provisions and fuel for your family for 60 days.
  (19) One rifle or shotgun and one pistol. The combined value of
all firearms claimed as exempt may not exceed $1,000.
  (20) Public or private pensions.
  (21) Veterans' benefits and loans.
  (22) Medical assistance benefits.
  (23) Health insurance proceeds and disability proceeds of life
insurance policies.
  (24) Cash surrender value of life insurance policies not
payable to your estate.
  (25) Federal annuities.
  (26) Other annuities to $250 per month (excess over $250 per
month is subject to the same exemption as wages).
  (27) Professionally prescribed health aids for you or any of
your dependents.
  *(28) Elderly rental assistance allowed pursuant to ORS
310.635.
  (29) Your right to receive, or property traceable to:
  (a) An award under any crime victim reparation law.
  (b) A payment or payments, not exceeding a total of $10,000, on
account of personal bodily injury suffered by you or an
individual of whom you are a dependent.
  (c) A payment in compensation of loss of future earnings of you
or an individual of whom you are or were a dependent, to the
extent reasonably necessary for your support and the support of
any of your dependents.
  (30) Amounts paid to you as an earned income tax credit under
federal tax law.
   { +  (31) Your right to the assets held in, or right to
receive payments under, a medical savings account or health
savings account authorized under section 220 or 223 of the
Internal Revenue Code. + }
  *  { - (31) - }   { + (32) + } Interest in personal property to
the value of $400, but this cannot be used to increase the amount
of any other exemption.
    { - (32) - }   { + (33) + } Equitable interests in property.
    { - (33) - }   { + (34) + } Security deposits or prepaid rent
held by a residential landlord under ORS 90.300.
    { - (34) - }   { + (35) + } If the amount shown as owing on
the Debt Calculation form exceeds the amount you actually owe to
the creditor, the difference between the amount owed and the
amount shown on the Debt Calculation form.

  Note: If two or more people in your household owe the claim or
judgment, each of them may claim the exemptions marked by an
asterisk (*).
_________________________________________________________________

  SPECIAL RULES APPLY FOR DEBTS THAT ARE OWED FOR CHILD SUPPORT
AND SPOUSAL SUPPORT. Some property that may not otherwise be
taken for payment against the debt may be taken to pay for
overdue support. For instance, Social Security benefits, workers'
compensation benefits, unemployment benefits, veterans' benefits
and pensions are normally exempt, but only 50 percent of a lump
sum payment of these benefits is exempt if the debt is owed for a
support obligation.

  YOU MUST ACT PROMPTLY IF YOU WANT TO GET YOUR MONEY OR PROPERTY
BACK. You may seek to reclaim your exempt property by doing the
following:
  (1) Fill out the Challenge to Garnishment form that you
received with this notice.
  (2) Mail or deliver the Challenge to Garnishment form to the
court administrator at the address shown on the writ of
garnishment, and mail or deliver a copy of the form to the
Garnishor at the address shown on the writ of garnishment. If you
wish to claim wages or salary as exempt, you must mail or deliver
the form within 120 days after you receive this notice. If you
wish to claim that any other money or property is exempt, or
claim that the property is not subject to garnishment, you must
mail or deliver the form within 30 days after you receive this
notice. You have the burden of showing that your challenge is
made on time, so you should keep records showing when the
challenge was mailed or delivered.
  (3) The law only requires that the Garnishor hold the garnished
money or property for 10 days before applying it to the
Creditor's use. You may be able to keep the property from being
used by the Creditor by promptly following (1) and (2) above.

  You should be prepared to explain your exemption in court. If
you have any questions about the garnishment or the debt, you
should see an attorney.
  YOU MAY USE THE CHALLENGE TO GARNISHMENT FORM ONLY FOR THE
FOLLOWING PURPOSES:
  (1) To claim such exemptions from garnishment as are permitted
by law.
  (2) To assert that property is not garnishable property under
ORS 18.618.
  (3) To assert that the amount specified in the writ of
garnishment as being subject to garnishment is greater than the
total amount owed.

  YOU MAY NOT USE THE CHALLENGE TO GARNISHMENT FORM TO CHALLENGE
THE VALIDITY OF THE DEBT.
  IF YOU FILE A CHALLENGE TO A GARNISHMENT IN BAD FAITH, YOU MAY
BE SUBJECT TO PENALTIES IMPOSED BY THE COURT THAT COULD INCLUDE A
FINE. Penalties that you could be subject to are listed in ORS
18.715.
  When you file a Challenge to Garnishment form, the Garnishee
may be required to make all payments under the garnishment to the
court, and the Garnishor may be required to pay to the court all
amounts received by the Garnishor that are subject to the
challenge to the garnishment. The Garnishee and Garnishor are
subject to penalties if they do not. For a complete explanation
of their responsibilities, see ORS 18.705 and 18.708.
_________________________________________________________________

  SECTION 3. ORS 18.896 is amended to read:
  18.896. (1) The challenge to execution form described in this
section does not expand or restrict the law relating to exempt
property. A determination as to whether property is exempt from
attachment or execution must be made by reference to other law.
The form provided in this section may be modified to provide more
information or to update the notice based on subsequent changes
in exemption laws.
  (2) A challenge to execution form must be in substantially the
following form:
_________________________________________________________________

                              _____
 COURT
                         COUNTY OF _____

____NOTE_TO_WEB_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________

____
                 )CHALLENGE TO
Plaintiff,       )EXECUTION
                 )
           vs.   )Case No. ___
                 )
____
                 )
Defendant.       )
____________________________________________________________
END OF POSSIBLE IRREGULAR TABULAR TEXT
____________________________________________________________

  THIS FORM MAY BE USED BY THE DEBTOR ONLY FOR THE FOLLOWING
PURPOSES:
  (1) To claim such exemptions from execution as are permitted by
law.
  (2) To assert that the amount specified in the writ of
execution as being subject to execution is greater than the total
amount owed.

  THIS FORM MAY BE USED BY PERSONS OTHER THAN THE DEBTOR ONLY TO
CLAIM AN INTEREST IN THE PROPERTY THAT IS TO BE SOLD ON
EXECUTION.

  THIS FORM MAY NOT BE USED TO CHALLENGE THE VALIDITY OF THE
DEBT.

  I/We claim that the following described property or money is
exempt from execution:
_________________________________________________________________

_________________________________________________________________

  I/We believe this property is exempt from execution because
(the Notice of Exempt Property at the end of this form describes
most types of property that you can claim as exempt from
execution):
_________________________________________________________________

_________________________________________________________________

  I am a person other than the Debtor and I have the following
interest in the property:
_________________________________________________________________

_________________________________________________________________

____NOTE_TO_WEB_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________

Name _____
               Name _____
Signature ____
               Signature ____
Address ____
               Address ____
________
               ________
Telephone      Telephone
Number ____
               Number ____
(Required)     (Required)
____________________________________________________________
END OF POSSIBLE IRREGULAR TABULAR TEXT
____________________________________________________________

YOU MUST ACT PROMPTLY IF YOU WANT TO GET YOUR MONEY OR PROPERTY
BACK. You may seek to reclaim your exempt property by doing the
following:
  (1) Fill out the Challenge to Execution form that you received
with this notice.
  (2) Mail or deliver the Challenge to Execution form to the
court administrator at the address shown on the writ of
execution.
  (3) Mail or deliver a copy of the Challenge to Execution form
to the judgment creditor at the address shown on the writ of
execution.
  You should be prepared to explain your exemption in court. If
you have any questions about the execution or the debt, you
should see an attorney.

  YOU MAY USE THE CHALLENGE TO EXECUTION FORM ONLY FOR THE
FOLLOWING PURPOSES:
  (1) To claim such exemptions from execution as are permitted by
law.
  (2) To assert that the amount specified in the writ of
execution as being subject to execution is greater than the total
amount owed.

  YOU MAY NOT USE THE CHALLENGE TO EXECUTION FORM TO CHALLENGE
THE VALIDITY OF THE DEBT.

  IF YOU CLAIM AN EXEMPTION IN BAD FAITH, YOU MAY BE SUBJECT TO
PENALTIES IMPOSED BY THE COURT THAT COULD INCLUDE A FINE.
Penalties that you could be subject to are listed in ORS 18.899.

                    NOTICE OF EXEMPT PROPERTY

  Property belonging to you may have been taken or held in order
to satisfy a debt. The debt may be reflected in a judgment or in
a warrant or order issued by a state agency. Important legal
papers are enclosed.
  YOU MAY BE ABLE TO GET YOUR PROPERTY BACK, SO READ THIS NOTICE
CAREFULLY.
  State and federal law specify that certain property may not be
taken. Some of the property that you may be able to get back is
listed below.
  (1) Wages or a salary as described in ORS 18.375 and 18.385.
Whichever of the following amounts is greater:
  (a) 75 percent of your take-home wages; or
  (b) $218 per workweek.
  (2) Social Security benefits.
  (3) Supplemental Security Income (SSI).
  (4) Public assistance (welfare).
  (5) Unemployment benefits.
  (6) Disability benefits (other than SSI benefits).
  (7) Workers' compensation benefits.
  (8) All Social Security benefits and Supplemental Security
Income benefits, and up to $7,500 in exempt wages, retirement
benefits, welfare, unemployment benefits and disability benefits,
that are held in a bank account.
  (9) Spousal support, child support or separate maintenance to
the extent reasonably necessary for your support or the support
of any of your dependents.
  (10) A homestead (house, manufactured dwelling or floating
home) occupied by you, or occupied by your spouse, parent or
child. Up to $40,000 of the value of the homestead is exempt. If
you jointly own the homestead with another person who is also
liable on the debt, up to $50,000 of the value of the homestead
is exempt.
  (11) Proceeds from the sale of a homestead described in item
10, up to the limits described in item 10, if you hold the
proceeds for less than one year and intend to use those proceeds
to procure another homestead.
  (12) Household goods, furniture, radios, a television set and
utensils with a combined value not to exceed $3,000.
  *(13) An automobile, truck, trailer or other vehicle with a
value not to exceed $3,000.
  *(14) Tools, implements, apparatus, team, harness or library
that are necessary to carry on your occupation, with a combined
value not to exceed $5,000.
  *(15) Books, pictures and musical instruments with a combined
value not to exceed $600.
  *(16) Wearing apparel, jewelry and other personal items with a
combined value not to exceed $1,800.
  (17) Domestic animals and poultry for family use with a
combined value not to exceed $1,000 and their food for 60 days.
  (18) Provisions and fuel for your family for 60 days.
  (19) One rifle or shotgun and one pistol. The combined value of
all firearms claimed as exempt may not exceed $1,000.
  (20) Public or private pensions.
  (21) Veterans' benefits and loans.
  (22) Medical assistance benefits.
  (23) Health insurance proceeds and disability proceeds of life
insurance policies.
  (24) Cash surrender value of life insurance policies not
payable to your estate.
  (25) Federal annuities.
  (26) Other annuities to $250 per month (excess over $250 per
month is subject to the same exemption as wages).
  (27) Professionally prescribed health aids for you or any of
your dependents.
  *(28) Elderly rental assistance allowed pursuant to ORS
310.635.
  *(29) Your right to receive, or property traceable to:
  *(a) An award under any crime victim reparation law.
  *(b) A payment or payments, not exceeding a total of $10,000,
on account of personal bodily injury suffered by you or an
individual of whom you are a dependent.
  *(c) A payment in compensation of loss of future earnings of
you or an individual of whom you are or were a dependent, to the
extent reasonably necessary for your support and the support of
any of your dependents.
  (30) Amounts paid to you as an earned income tax credit under
federal tax law.
   { +  (31) Your right to the assets held in, or right to
receive payments under, a medical savings account or health
savings account authorized under section 220 or 223 of the
Internal Revenue Code. + }
    { - (31) - }   { + (32) + } Interest in personal property to
the value of $400, but this cannot be used to increase the amount
of any other exemption.
    { - (32) - }   { + (33) + } Equitable interests in property.
  Note: If two or more people in your household owe the claim or
judgment, each of them may claim the exemptions marked by an
asterisk (*).
_________________________________________________________________

  SPECIAL RULES APPLY FOR DEBTS THAT ARE OWED FOR CHILD SUPPORT
AND SPOUSAL SUPPORT. Some property that may not otherwise be
taken for payment against the debt may be taken to pay for
overdue support. For instance, Social Security benefits, workers'
compensation benefits, unemployment benefits, veterans' benefits
and pensions are normally exempt, but only 50 percent of a lump
sum payment of these benefits is exempt if the debt is owed for a
support obligation.
_________________________________________________________________

  SECTION 4. ORS 18.300 is amended to read:
  18.300.   { - In accordance with section 522(b) of the
Bankruptcy Code of 1978 (11 U.S.C. 522(b)), residents of this
state shall not be entitled to the federal exemptions provided in
section 522(d) of the Bankruptcy Code of 1978 (11 U.S.C. 522(d)).
Nothing in this section shall affect the exemptions given to
residents of this state by the Constitution of the State of
Oregon and the Oregon Revised Statutes. - }
   { +  (1) For purposes of a bankruptcy petition, a resident of
this state may use the federal exemptions provided in section
522(d) of the Bankruptcy Code of 1978 (11 U.S.C. 522(d)) or the
exemptions given to residents of this state under state law, but
may not use both.
  (2)(a) If a resident of this state uses any of the federal
exemptions provided in section 522(d) of the Bankruptcy Code of
1978 (11 U.S.C. 522(d)) for purposes of a bankruptcy petition,
the resident may not use any of the exemptions given to residents
of this state under state law.
  (b) If a resident of this state uses any of the exemptions
given to residents of this state under state law for purposes of
a bankruptcy petition, the resident may not use any of the
federal exemptions provided in section 522(d) of the Bankruptcy
Code of 1978 (11 U.S.C. 522(d)).
  (3) This section does not apply to executions. + }
  SECTION 5.  { + (1) The amendments to ORS 18.345, 18.845 and
18.896 by sections 1 to 3 of this 2013 Act apply only to
executions as defined in ORS 18.005 issued on or after the
effective date of this 2013 Act.
  (2) The amendments to ORS 18.300 by section 4 of this 2013 Act
apply only to bankruptcy petitions first filed on or after the
effective date of this 2013 Act. + }
  SECTION 6.  { + This 2013 Act being necessary for the immediate
preservation of the public peace, health and safety, an emergency
is declared to exist, and this 2013 Act takes effect on its
passage. + }
                         ----------