Senate Commerce Committee Statement - Senate Bill No. 2423, State of New Jersey (June 24, 2020)

Summary

Senate Commerce Committee Statement to Senate, No. 2423 with committee amendments, State of New Jersey, dated June 24, 2020, reporting Senate Bill No. 2423 favorably. The statement says the bill expands the list of property that may be exempt from property of a bankruptcy estate, including a homestead exemption not exceeding $340,000 in value that continues in identifiable cash proceeds for 18 months after a sale or until a new homestead is established, whichever period is shorter. It also describes exemptions for personal property not exceeding $10,000, bank accounts valued at less than $5,000, and payments under federal law relating to the coronavirus disease 2019 national emergency. Its committee amendments include applying the bill only to individual debtors and making it effective immediately.

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     SENATE COMMERCE COMMITTEE

                    STATEMENT TO

                  SENATE, No. 2423
                   with committee amendments



 STATE OF NEW JERSEY
                      DATED: JUNE 24, 2020

   The Senate Commerce Committee reports favorably and with
committee amendments Senate Bill No. 2423.
   This bill expands the list of property that may be held exempt
from property of a bankruptcy estate.
   The bill provides that any resident of this State who is an
individual debtor in a bankruptcy proceeding may hold exempt from
property of the bankruptcy estate a homestead exemption not
exceeding $340,000 in value.
   Pursuant to the bill, the homestead exemption attaches to the
owner's interest in identifiable cash proceeds from the voluntary or
involuntary sale of the homestead. The homestead exemption in
identifiable cash proceeds continues for 18 months after the date of
the sale of the homestead or until the person establishes a new
homestead with the proceeds, whichever period is shorter. Only
one homestead exemption at a time may be held by an owner under
the bill.
   A person who is entitled to a homestead exemption holds that
exemption by operation of law and no written claim or recording is
required.
    If the owner is married, in a civil union, or domestic partnership,
the homestead may consist of the jointly owned property of the
spouses or partners or the separate property of the spouses or partners.
   The bill provides that a homestead exemption may be abandoned
under certain circumstances.
   The homestead exemption provided under the bill does not affect
or apply to attachments, executions and sales in connection with:
   (1) government liens, including, but not limited to, taxes, special
assessments or charges for other government services that, under
State law, are senior liens;
   (2) voluntarily created liens, including, but not limited to,
mortgages and liens secured by real property;
   (3) liens created pursuant to the "Construction Lien Law,"
P.L.1993, c.318 (C.2A:44A-1 et al.); and
   (4) certain court judgments.
    The bill provides that any resident of this State who is an
individual debtor in a bankruptcy proceeding may hold exempt from
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property of the bankruptcy estate goods and chattels, shares of stock or
interests in any corporation and personal property of every kind, not
exceeding in value, exclusive of wearing apparel, $10,000; all essential
and ordinary household goods; any bank account valued at an amount
less than $5,000; and all wearing apparel.
    The bill provides that any resident of this State who is an
individual debtor in a bankruptcy proceeding may hold exempt from
property of the bankruptcy estate payments made to the individual
under federal law relating to the national emergency declared by the
President of the United States under the National Emergencies Act (50
U.S.C. 1601 et seq.) with respect to the coronavirus disease 2019.
    The bill provides that on the September 30 of the third year next
following the effective date of the bill, and on September 30 of each
third year thereafter, the dollar amounts in the bill are to be increased,
effective the following January 1, by any increase during the three
years prior to that September 30 in the consumer price index for all
urban wage earners and clerical workers as calculated by the federal
government.
    Nothing in the bill may be construed to violate any provision of
federal law.

COMMITTEE AMENDMENTS:

    The committee amended the bill to:
    1. Revise the provisions of the bill to provide that the bill applies
only to individual debtors in bankruptcy proceedings.
    2. Clarify that the homestead exemption provisions of the bill
apply to individuals in civil unions and domestic partnerships.
    3. Remove a provision of the bill that allows spouses or partners
to each claim a homestead exemption.
    4. Provide that individuals may hold exempt from property of the
bankruptcy estate goods and chattels, shares of stock or interests in any
corporation and personal property of every kind, not exceeding in
value, exclusive of wearing apparel, $10,000; all essential and ordinary
household goods; any bank account valued at an amount less than
$5,000; and all wearing apparel.
    5. Provide that individuals may hold exempt from property of the
bankruptcy estate payments made to the individual under federal law
relating to the national emergency declared by the President of the
United States under the National Emergencies Act (50 U.S.C. 1601 et
seq.) with respect to the coronavirus disease 2019.
    6. Remove provisions that allowed individuals to waive the
exemptions provided by the bill under certain circumstances.
    7. Provide that the dollar amounts of the exemptions in the bill
will be increased, effective the following January 1, by any increase
during the three years prior to that September 30 in the consumer price
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index for all urban wage earners and clerical workers as calculated by
the federal government, every three years.
    8. Provide that the bill is effective immediately and applies
prospectively to proceedings commenced on or after the bill’s
effective date.


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