SB 1540: personal property exemptions; vehicles - Arizona

Senate Engrossed Version → Chaptered Version · 5 edits

MODERATE

This bill amends Arizona's homestead and personal property exemption laws to modernize protections for debtors, particularly in bankruptcy cases. It adds new bankruptcy-specific language to Section 33-1101 to clarify how homestead exemptions are calculated during bankruptcy proceedings, and expands Section 33-1126 to include additional personal property exemptions like college savings plans and federal/state tax credits. The changes aim to better protect vulnerable individuals' assets from creditors while maintaining consistency with federal bankruptcy standards.

Scope change

The bill expands the scope of exemptions to include college savings plans, federal and state tax credits, and clarifies bankruptcy exemption calculations. It also adds a new applicability provision stating the amended Section 33-1101 applies to bankruptcy petitions filed after the act's effective date.

ELIGIBILITY

Added new Section 33-1101, Subsection F to explicitly address bankruptcy cases, stating that homestead exemption amounts are determined as of the bankruptcy petition filing date and that homestead property remains 100% exempt during bankruptcy proceedings even if its value exceeds the standard exemption limit.

EXEMPTIONS

Added Section 33-1126, Subsection A, Paragraph 10 to exempt interests in college savings plans under Section 529 of the Internal Revenue Code, except for contributions made within two years before bankruptcy filing.

Added Section 33-1126, Subsection A, Paragraph 11 to exempt federal or state personal income tax credits, including earned income tax credits and child tax credits.

REQUIREMENT

Repealed the previous version of Section 33-1126 and replaced it with an updated version that includes the new exemptions and clarifies the definition of 'dependent' for insurance and annuity exemptions.

TIMELINE

Added Section 5 to specify that the amended Section 33-1101 applies to bankruptcy petitions filed after the effective date of this act.

House Engrossed Version → Senate Engrossed Version · 4 edits · Apr 29, 2025

MODERATE

This bill modifies Arizona's homestead and personal property exemption laws by removing the separate section (33-1126) that listed specific personal property exemptions, consolidating exemptions under a single section (33-1101). The changes clarify homestead exemption rules for cash proceeds from property sales and refinancing, adjust the bankruptcy exemption calculation timing, and eliminate the detailed list of personal property exemptions that previously existed in a separate statute.

Scope change

The bill's scope changed by repealing section 33-1126, which contained specific personal property exemptions, and consolidating all exemption rules into section 33-1101. This reduces the number of separate statutes governing exemptions while maintaining the core exemption amounts.

SCOPE

Removed section 33-1126, which previously listed specific personal property exemptions including life insurance cash values, annuities, college savings plans, and tax refunds.

REQUIREMENT

Modified homestead exemption rules to clarify that exemptions apply to cash proceeds from property sales and refinancing, with an 18-month limit on proceeds before establishing a new homestead.

TIMELINE

Changed bankruptcy exemption timing to determine exemption amounts as of the petition filing date rather than a different calculation method.

DEFINITION

Updated the list of shelter types in the homestead exemption to remove 'manufactured home' from the general list while keeping it in a separate subsection.

Introduced Version → House Engrossed Version · 4 edits · Apr 29, 2025

MODERATE

This bill amends Arizona's homestead and personal property exemption laws to add bankruptcy-specific protections and update the statute's title. The changes expand exemptions for bankruptcy cases and clarify how homestead values are calculated during bankruptcy proceedings.

Scope change

The bill now explicitly addresses bankruptcy cases under Title 11 of the United States Code, which was not previously covered in the homestead exemption statute.

ELIGIBILITY

Added new subsection F to Section 33-1101 providing that in bankruptcy cases, the homestead exemption amount is determined as of the bankruptcy filing date, and any increase in value during the bankruptcy case is fully exempt.

SCOPE

Added Section 3 to amend Section 33-1126 regarding personal property exemptions, including provisions for prepaid rent and security deposits.

REQUIREMENT

Updated the bill title and description to reflect amendments to both Section 33-1101 and Section 33-1126, expanding the legislative scope beyond just homestead exemptions.

TIMELINE

Added Section 5 specifying that the amended Section 33-1101 applies to bankruptcy petitions filed after the act's effective date.

personal property exemptions; vehicles

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