Senate Bill No. 434–Committee on Judiciary

 

(On Behalf of the State Treasurer)

 

March 24, 2003

____________

 

Referred to Committee on Judiciary

 

SUMMARY—Exempts from execution by creditors certain money held in trust forming part of qualified tuition program under certain circumstances. (BDR 2‑303)

 

FISCAL NOTE:    Effect on Local Government: No.

                             Effect on the State: No.

 

~

 

EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.

 

AN ACT relating to exempt property; exempting from execution by creditors certain money held in a trust forming part of a qualified tuition program under certain circumstances; and providing other matters properly relating thereto.

 

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN

SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

 

1-1  Section 1. NRS 21.075 is hereby amended to read as follows:

1-2  21.075  1.  Execution on the writ of execution by levying on

1-3  the property of the judgment debtor may occur only if the sheriff

1-4  serves the judgment debtor with a notice of the writ of execution

1-5  pursuant to NRS 21.076 and a copy of the writ. The notice must

1-6  describe the types of property exempt from execution and explain

1-7  the procedure for claiming those exemptions in the manner required

1-8  in subsection 2. The clerk of the court shall attach the notice to the

1-9  writ of execution at the time the writ is issued.

1-10      2.  The notice required pursuant to subsection 1 must be

1-11  substantially in the following form:

 

 

 

 

2-1  NOTICE OF EXECUTION

 

2-2  YOUR PROPERTY IS BEING ATTACHED OR

2-3  YOUR WAGES ARE BEING GARNISHED

 

2-4  A court has determined that you owe money to

2-5  ....................(name of person), the judgment creditor. He has

2-6  begun the procedure to collect that money by garnishing your

2-7  wages, bank account and other personal property held by

2-8  third persons or by taking money or other property in your

2-9  possession.

2-10      Certain benefits and property owned by you may be

2-11  exempt from execution and may not be taken from you. The

2-12  following is a partial list of exemptions:

2-13      1.  Payments received under the Social Security Act.

2-14      2.  Payments for benefits or the return of contributions

2-15  under the Public Employees’ Retirement System.

2-16      3.  Payments for public assistance granted through the

2-17  Welfare Division of the Department of Human Resources.

2-18      4.  Proceeds from a policy of life insurance.

2-19      5.  Payments of benefits under a program of industrial

2-20  insurance.

2-21      6.  Payments received as unemployment compensation.

2-22      7.  Veteran’s benefits.

2-23      8.  A homestead in a dwelling or a mobile home, not to

2-24  exceed $125,000, unless:

2-25      (a) The judgment is for a medical bill, in which case all of

2-26  the primary dwelling, including a mobile or manufactured

2-27  home, may be exempt.

2-28      (b) Allodial title has been established and not relinquished

2-29  for the dwelling or mobile home, in which case all of the

2-30  dwelling or mobile home and its appurtenances are exempt,

2-31  including the land on which they are located, unless a valid

2-32  waiver executed pursuant to NRS 115.010 is applicable to the

2-33  judgment.

2-34      9.  A vehicle, if your equity in the vehicle is less than

2-35  $4,500.

2-36      10.  Seventy-five percent of the take-home pay for any

2-37  pay period, unless the weekly take-home pay is less than 30

2-38  times the federal minimum wage, in which case the entire

2-39  amount may be exempt.

2-40      11.  Money, not to exceed $500,000 in present value,

2-41  held [for retirement pursuant to certain arrangements or plans

2-42  meeting the requirements for qualified arrangements or plans

3-1  of sections 401 et seq. of the Internal Revenue Code (26

3-2  U.S.C. §§ 401 et seq.).] in:

3-3  (a) An individual retirement arrangement which

3-4  conforms with the applicable limitations and requirements

3-5  of 26 U.S.C. § 408;

3-6  (b) A written simplified employee pension plan which

3-7  conforms with the applicable limitations and requirements

3-8  of 26 U.S.C. § 408;

3-9  (c) A cash or deferred arrangement that is a qualified

3-10  plan pursuant to the Internal Revenue Code;

3-11      (d) A trust forming part of a stock bonus, pension or

3-12  profit-sharing plan that is a qualified plan pursuant to

3-13  sections 401 et seq. of the Internal Revenue Code, 26 U.S.C.

3-14  §§ 401 et seq.; and

3-15      (e) A trust forming part of a qualified tuition program

3-16  pursuant to chapter 353B of NRS, any applicable

3-17  regulations adopted pursuant to chapter 353B of NRS and

3-18  section 529 of the Internal Revenue Code, 26 U.S.C. § 529,

3-19  unless the money is deposited after the entry of a judgment

3-20  against the purchaser or account owner or the money will

3-21  not be used by any beneficiary to attend a college or

3-22  university.

3-23      12.  All money and other benefits paid pursuant to the

3-24  order of a court of competent jurisdiction for the support,

3-25  education and maintenance of a child, whether collected by

3-26  the judgment debtor or the State.

3-27      13.  All money and other benefits paid pursuant to the

3-28  order of a court of competent jurisdiction for the support and

3-29  maintenance of a former spouse, including the amount of any

3-30  arrearages in the payment of such support and maintenance to

3-31  which the former spouse may be entitled.

3-32      14.  A vehicle for use by you or your dependent which is

3-33  specially equipped or modified to provide mobility for a

3-34  person with a permanent disability.

3-35      15.  A prosthesis or any equipment prescribed by a

3-36  physician or dentist for you or your dependent.

3-37  These exemptions may not apply in certain cases such as a

3-38  proceeding to enforce a judgment for support of a person or a

3-39  judgment of foreclosure on a mechanic’s lien. You should

3-40  consult an attorney immediately to assist you in determining

3-41  whether your property or money is exempt from execution. If

3-42  you cannot afford an attorney, you may be eligible for

3-43  assistance through ....................(name of organization in

3-44  county providing legal services to indigent or elderly

3-45  persons).

4-1  PROCEDURE FOR CLAIMING EXEMPT PROPERTY

 

4-2  If you believe that the money or property taken from you

4-3  is exempt, you must complete and file with the clerk of the

4-4  court a notarized affidavit claiming the exemption. A copy of

4-5  the affidavit must be served upon the sheriff and the judgment

4-6  creditor within 8 days after the notice of execution is mailed.

4-7  The property must be returned to you within 5 days after you

4-8  file the affidavit unless you or the judgment creditor files a

4-9  motion for a hearing to determine the issue of exemption. If

4-10  this happens, a hearing will be held to determine whether the

4-11  property or money is exempt. The motion for the hearing to

4-12  determine the issue of exemption must be filed within 10 days

4-13  after the affidavit claiming exemption is filed. The hearing to

4-14  determine whether the property or money is exempt must be

4-15  held within 10 days after the motion for the hearing is filed.

 

4-16      IF YOU DO NOT FILE THE AFFIDAVIT WITHIN THE

4-17  TIME SPECIFIED, YOUR PROPERTY MAY BE SOLD

4-18  AND THE MONEY GIVEN TO THE JUDGMENT

4-19  CREDITOR, EVEN IF THE PROPERTY OR MONEY IS

4-20  EXEMPT.

 

4-21      Sec. 2.  NRS 21.090 is hereby amended to read as follows:

4-22      21.090  1.  The following property is exempt from execution,

4-23  except as otherwise specifically provided in this section:

4-24      (a) Private libraries not to exceed $1,500 in value, and all family

4-25  pictures and keepsakes.

4-26      (b) Necessary household goods, as defined in 16 C.F.R. §

4-27  444.1(i) as that section existed on January 1, 1987, and yard

4-28  equipment, not to exceed $3,000 in value, belonging to the judgment

4-29  debtor to be selected by him.

4-30      (c) Farm trucks, farm stock, farm tools, farm equipment,

4-31  supplies and seed not to exceed $4,500 in value, belonging to the

4-32  judgment debtor to be selected by him.

4-33      (d) Professional libraries, office equipment, office supplies and

4-34  the tools, instruments and materials used to carry on the trade of the

4-35  judgment debtor for the support of himself and his family not to

4-36  exceed $4,500 in value.

4-37      (e) The cabin or dwelling of a miner or prospector, his cars,

4-38  implements and appliances necessary for carrying on any mining

4-39  operations and his mining claim actually worked by him, not

4-40  exceeding $4,500 in total value.

5-1  (f) Except as otherwise provided in paragraph (o), one vehicle if

5-2  the judgment debtor’s equity does not exceed $4,500 or the creditor

5-3  is paid an amount equal to any excess above that equity.

5-4  (g) For any pay period, 75 percent of the disposable earnings of

5-5  a judgment debtor during that period, or for each week of the period

5-6  30 times the minimum hourly wage prescribed by section 6(a)(1) of

5-7  the federal Fair Labor Standards Act of 1938 , 29 U.S.C. §

5-8  206(a)(1), and in effect at the time the earnings are payable,

5-9  whichever is greater. Except as otherwise provided in paragraphs

5-10  (n), (r) and (s), the exemption provided in this paragraph does not

5-11  apply in the case of any order of a court of competent jurisdiction

5-12  for the support of any person, any order of a court of bankruptcy or

5-13  of any debt due for any state or federal tax. As used in this

5-14  paragraph, “disposable earnings” means that part of the earnings of

5-15  a judgment debtor remaining after the deduction from those earnings

5-16  of any amounts required by law, to be withheld.

5-17      (h) All fire engines, hooks and ladders, with the carts, trucks and

5-18  carriages, hose, buckets, implements and apparatus thereunto

5-19  appertaining, and all furniture and uniforms of any fire company or

5-20  department organized under the laws of this state.

5-21      (i) All arms, uniforms and accouterments required by law to be

5-22  kept by any person, and also one gun, to be selected by the debtor.

5-23      (j) All courthouses, jails, public offices and buildings, lots,

5-24  grounds and personal property, the fixtures, furniture, books, papers

5-25  and appurtenances belonging and pertaining to the courthouse, jail

5-26  and public offices belonging to any county of this state, all

5-27  cemeteries, public squares, parks and places, public buildings, town

5-28  halls, markets, buildings for the use of fire departments and military

5-29  organizations, and the lots and grounds thereto belonging and

5-30  appertaining, owned or held by any town or incorporated city, or

5-31  dedicated by the town or city to health, ornament or public use, or

5-32  for the use of any fire or military company organized under the laws

5-33  of this state and all lots, buildings and other school property owned

5-34  by a school district and devoted to public school purposes.

5-35      (k) All money, benefits, privileges or immunities accruing or in

5-36  any manner growing out of any life insurance, if the annual

5-37  premium paid does not exceed $1,000. If the premium exceeds that

5-38  amount, a similar exemption exists which bears the same proportion

5-39  to the money, benefits, privileges and immunities so accruing or

5-40  growing out of the insurance that the $1,000 bears to the whole

5-41  annual premium paid.

5-42      (l) The homestead as provided for by law, including a

5-43  homestead for which allodial title has been established and not

5-44  relinquished and for which a waiver executed pursuant to NRS

5-45  115.010 is not applicable.

6-1  (m) The dwelling of the judgment debtor occupied as a home for

6-2  himself and family, where the amount of equity held by the

6-3  judgment debtor in the home does not exceed $125,000 in value and

6-4  the dwelling is [situate] situated upon lands not owned by him.

6-5  (n) All property in this state of the judgment debtor where the

6-6  judgment is in favor of any state for failure to pay that state’s

6-7  income tax on benefits received from a pension or other retirement

6-8  plan.

6-9  (o) Any vehicle owned by the judgment debtor for use by him or

6-10  his dependent that is equipped or modified to provide mobility for a

6-11  person with a permanent disability.

6-12      (p) Any prosthesis or equipment prescribed by a physician or

6-13  dentist for the judgment debtor or a dependent of the debtor.

6-14      (q) Money, not to exceed $500,000 in present value, held in:

6-15          (1) An individual retirement arrangement which conforms

6-16  with the applicable limitations and requirements of 26 U.S.C. § 408;

6-17          (2) A written simplified employee pension plan which

6-18  conforms with the applicable limitations and requirements of 26

6-19  U.S.C. § 408;

6-20          (3) A cash or deferred arrangement which is a qualified plan

6-21  pursuant to the Internal Revenue Code; [and]

6-22          (4) A trust forming part of a stock bonus, pension or profit-

6-23  sharing plan which is a qualified plan pursuant to sections 401 et

6-24  seq. of the Internal Revenue Code , [(]26 U.S.C. §§ 401 et seq.[).] ;

6-25  and

6-26          (5) A trust forming part of a qualified tuition program

6-27  pursuant to chapter 353B of NRS, any applicable regulations

6-28  adopted pursuant to chapter 353B of NRS and section 529 of the

6-29  Internal Revenue Code, 26 U.S.C. § 529, unless the money is

6-30  deposited after the entry of a judgment against the purchaser or

6-31  account owner or the money will not be used by any beneficiary to

6-32  attend a college or university.

6-33      (r) All money and other benefits paid pursuant to the order of a

6-34  court of competent jurisdiction for the support, education and

6-35  maintenance of a child, whether collected by the judgment debtor or

6-36  the State.

6-37      (s) All money and other benefits paid pursuant to the order of a

6-38  court of competent jurisdiction for the support and maintenance of a

6-39  former spouse, including the amount of any arrearages in the

6-40  payment of such support and maintenance to which the former

6-41  spouse may be entitled.

6-42      2.  Except as otherwise provided in NRS 115.010, no article or

6-43  species of property mentioned in this section is exempt from

6-44  execution issued upon a judgment to recover for its price, or upon a

6-45  judgment of foreclosure of a mortgage or other lien thereon.

7-1  3.  Any exemptions specified in subsection (d) of section 522 of

7-2  the Bankruptcy Act of 1978 [(92 Stat. 2586)] , 11 U.S.C. § 522(d),

7-3  do not apply to property owned by a resident of this state unless

7-4  conferred also by subsection 1, as limited by subsection 2 . [, of this

7-5  section.]

7-6  Sec. 3.  NRS 31.045 is hereby amended to read as follows:

7-7  31.045  1.  Execution on the writ of attachment by attaching

7-8  property of the defendant may occur only if:

7-9  (a) The judgment creditor serves the defendant with notice of

7-10  the execution when the notice of the hearing is served pursuant to

7-11  NRS 31.013; or

7-12      (b) Pursuant to an ex parte hearing, the sheriff serves upon the

7-13  judgment debtor notice of the execution and a copy of the writ at

7-14  the same time and in the same manner as set forth in

7-15  NRS 21.076.

7-16  If the attachment occurs pursuant to an ex parte hearing, the clerk of

7-17  the court shall attach the notice to the writ of attachment at the time

7-18  the writ is issued.

7-19      2.  The notice required pursuant to subsection 1 must be

7-20  substantially in the following form:

 

7-21  NOTICE OF EXECUTION

 

7-22  YOUR PROPERTY IS BEING ATTACHED OR

7-23  YOUR WAGES ARE BEING GARNISHED

 

7-24      Plaintiff, .................... (name of person), alleges that you

7-25  owe him money. He has begun the procedure to collect that

7-26  money. To secure satisfaction of judgment the court has

7-27  ordered the garnishment of your wages, bank account or other

7-28  personal property held by third persons or the taking of

7-29  money or other property in your possession.

7-30      Certain benefits and property owned by you may be

7-31  exempt from execution and may not be taken from you. The

7-32  following is a partial list of exemptions:

7-33      1.  Payments received under the Social Security Act.

7-34      2.  Payments for benefits or the return of contributions

7-35  under the Public Employees’ Retirement System.

7-36      3.  Payments for public assistance granted through the

7-37  Welfare Division of the Department of Human Resources.

7-38      4.  Proceeds from a policy of life insurance.

7-39      5.  Payments of benefits under a program of industrial

7-40  insurance.

7-41      6.  Payments received as unemployment compensation.

7-42      7.  Veteran’s benefits.

8-1  8.  A homestead in a dwelling or a mobile home, not to

8-2  exceed $125,000, unless:

8-3  (a) The judgment is for a medical bill, in which case all of

8-4  the primary dwelling, including a mobile or manufactured

8-5  home, may be exempt.

8-6  (b) Allodial title has been established and not relinquished

8-7  for the dwelling or mobile home, in which case all of the

8-8  dwelling or mobile home and its appurtenances are exempt,

8-9  including the land on which they are located, unless a valid

8-10  waiver executed pursuant to NRS 115.010 is applicable to the

8-11  judgment.

8-12      9.  A vehicle, if your equity in the vehicle is less than

8-13  $4,500.

8-14      10.  Seventy-five percent of the take-home pay for any

8-15  pay period, unless the weekly take-home pay is less than 30

8-16  times the federal minimum wage, in which case the entire

8-17  amount may be exempt.

8-18      11.  Money, not to exceed $500,000 in present value,

8-19  held [for retirement pursuant to certain arrangements or plans

8-20  meeting the requirements for qualified arrangements or plans

8-21  of sections 401 et seq. of the Internal Revenue Code (26

8-22  U.S.C. §§ 401 et seq.).] in:

8-23      (a) An individual retirement arrangement which

8-24  conforms with the applicable limitations and requirements

8-25  of 26 U.S.C. § 408;

8-26      (b) A written simplified employee pension plan which

8-27  conforms with the applicable limitations and requirements

8-28  of 26 U.S.C. § 408;

8-29      (c) A cash or deferred arrangement that is a qualified

8-30  plan pursuant to the Internal Revenue Code;

8-31      (d) A trust forming part of a stock bonus, pension or

8-32  profit-sharing plan that is a qualified plan pursuant to

8-33  sections 401 et seq. of the Internal Revenue Code, 26 U.S.C.

8-34  §§ 401 et seq.; and

8-35      (e) A trust forming part of a qualified tuition program

8-36  pursuant to chapter 353B of NRS, any applicable

8-37  regulations adopted pursuant to chapter 353B of NRS and

8-38  section 529 of the Internal Revenue Code, 26 U.S.C. § 529,

8-39  unless the money is deposited after the entry of a judgment

8-40  against the purchaser or account owner or the money will

8-41  not be used by any beneficiary to attend a college or

8-42  university.

8-43      12.  All money and other benefits paid pursuant to the

8-44  order of a court of competent jurisdiction for the support,

9-1  education and maintenance of a child, whether collected by

9-2  the judgment debtor or the State.

9-3  13.  All money and other benefits paid pursuant to the

9-4  order of a court of competent jurisdiction for the support and

9-5  maintenance of a former spouse, including the amount of any

9-6  arrearages in the payment of such support and maintenance to

9-7  which the former spouse may be entitled.

9-8  14.  A vehicle for use by you or your dependent which is

9-9  specially equipped or modified to provide mobility for a

9-10  person with a permanent disability.

9-11      15.  A prosthesis or any equipment prescribed by a

9-12  physician or dentist for you or your dependent.

9-13  These exemptions may not apply in certain cases such as

9-14  proceedings to enforce a judgment for support of a child or a

9-15  judgment of foreclosure on a mechanic’s lien. You should

9-16  consult an attorney immediately to assist you in determining

9-17  whether your property or money is exempt from execution. If

9-18  you cannot afford an attorney, you may be eligible for

9-19  assistance through .................... (name of organization in

9-20  county providing legal services to the indigent or elderly

9-21  persons).

 

9-22  PROCEDURE FOR CLAIMING EXEMPT PROPERTY

 

9-23      If you believe that the money or property taken from you

9-24  is exempt or necessary for the support of you or your family,

9-25  you must file with the clerk of the court on a form provided

9-26  by the clerk a notarized affidavit claiming the exemption. A

9-27  copy of the affidavit must be served upon the sheriff and the

9-28  judgment creditor within 8 days after the notice of execution

9-29  is mailed. The property must be returned to you within 5 days

9-30  after you file the affidavit unless the judgment creditor files a

9-31  motion for a hearing to determine the issue of exemption. If

9-32  this happens, a hearing will be held to determine whether the

9-33  property or money is exempt. The hearing must be held

9-34  within 10 days after the motion for a hearing is filed.

 

9-35      IF YOU DO NOT FILE THE AFFIDAVIT WITHIN THE

9-36  TIME SPECIFIED, YOUR PROPERTY MAY BE SOLD

9-37  AND THE MONEY GIVEN TO THE JUDGMENT

9-38  CREDITOR, EVEN IF THE PROPERTY OR MONEY IS

9-39  EXEMPT.

 

9-40      If you received this notice with a notice of a hearing for

9-41  attachment and you believe that the money or property which

10-1  would be taken from you by a writ of attachment is exempt or

10-2  necessary for the support of you or your family, you are

10-3  entitled to describe to the court at the hearing why you

10-4  believe your property is exempt. You may also file a motion

10-5  with the court for a discharge of the writ of attachment. You

10-6  may make that motion any time before trial. A hearing will be

10-7  held on that motion.

10-8      IF YOU DO NOT FILE THE MOTION BEFORE THE

10-9  TRIAL, YOUR PROPERTY MAY BE SOLD AND

10-10  THE MONEY GIVEN TO THE PLAINTIFF, EVEN IF THE

10-11  PROPERTY OR MONEY IS EXEMPT OR NECESSARY

10-12  FOR THE SUPPORT OF YOU OR YOUR FAMILY.

 

10-13     Sec. 4.  This act becomes effective upon passage and approval.

 

10-14  H