H. B. 2938
(By Delegates Jenkins, Staton and Hines)
[Introduced February 26, 1999; referred to the
Committee on the Judiciary.]
A BILL to amend article eight, chapter thirty-eight of the code
of West Virginia, one thousand nine hundred thirty-one, as
amended, by adding thereto a new section, designated section
fourteen-a; and to amend and reenact section four, article
ten, chapter thirty-eight of said code, all relating to
exempting a debtor's interest in certain retirement plans
from the claims of creditors.
Be it enacted by the Legislature of West Virginia:
That article eight, chapter thirty-eight of the code of West
Virginia, one thousand nine hundred thirty-one, as amended, be
amended by adding thereto a new section, designated section
fourteen-a; and that section four, article ten, chapter
thirty-eight be amended and reenacted, all to read as follows:
ARTICLE 8. EXEMPTIONS FROM LEVY.
§38-8-14a. Exemption for retirement plans.
(a) A debtor's interest in or right, whether vested or not,
to the assets held in or to receive pensions, annuities,
benefits, distributions, refunds of contributions, or other
payments under a retirement plan is exempt from judgment,
attachment, execution, distress for rent, and seizure for the
satisfaction of debts if the plan: (i) Is intended in good faith
to qualify as a retirement plan under applicable provisions of
the Internal Revenue Code of 1986, as now or hereafter
amended; or (ii) is a public employee pension plan created under
the West Virginia code, as now or hereafter amended.
(b) "Retirement plan" includes the following:
(1) A stock bonus, pension, profit sharing, annuity, or
similar plan or arrangement, including a retirement plan for
self-employed individuals or a simplified employee pension plan;
(2) A government or church retirement plan or contract;
(3) An individual retirement annuity or individual
retirement account; and
(4) A public employee pension plan created under the West
Virginia Code, as now or hereafter amended.
(c) A retirement plan that is: (i) Intended in good faith
to qualify as a retirement plan under the applicable provisions
of the Internal Revenue Code of 1986, as now or hereafter
amended; or ii) a government established public employee pension plan is conclusively presumed to be a spendthrift trust.
(d) This section shall not apply to a "qualified domestic
relations order" as defined in section 206 (d) of the Employment
Retirement Security Act of 1974, as now or hereafter amended or
in section 414 (p) of the Internal Revenue Code of 1986, as now
or hereafter amended.
ARTICLE 10. FEDERAL TAX LIENS; ORDERS AND DECREES IN BANKRUPTCY.
§38-10-4. Exemptions of property in bankruptcy proceedings.
Pursuant to the provisions of 11 U.S.C. 522(b)(1), this
state specifically does not authorize debtors who are domiciled
in this state to exempt the property specified under the
provisions of 11 U.S.C. 522(d).
Any person who files a petition under the federal bankruptcy
law may exempt from property of the estate in a bankruptcy
proceeding the following property:
(a) The debtor's interest, not to exceed fifteen thousand
dollars in value, in real property or personal property that the
debtor or a dependent of the debtor uses as a residence, in a
cooperative that owns property that the debtor or a dependent of
the debtor uses as a residence or in a burial plot for the debtor
or a dependent of the debtor.
(b) The debtor's interest, not to exceed two thousand four
hundred dollars in value, in one motor vehicle.
(c) The debtor's interest, not to exceed four hundred
dollars in value in any particular item, in household
furnishings, household goods, wearing apparel, appliances, books,
animals, crops or musical instruments, that are held primarily
for the personal, family or household use of the debtor or a
dependent of the debtor:
Provided, That the total amount of
personal property exempted under this subsection shall not exceed
eight thousand dollars.
(d) The debtor's interest, not to exceed one thousand
dollars in value, in jewelry held primarily for the personal,
family or household use of the debtor or a dependent of the
debtor.
(e) The debtor's interest, not to exceed in value eight
hundred dollars plus any unused amount of the exemption provided
under subsection (a) of this section in any property.
(f) The debtor's interest, not to exceed one thousand five
hundred dollars in value, in any implements, professional books
or tools of the trade of the debtor or the trade of a dependent
of the debtor.
(g) Any unmatured life insurance contract owned by the
debtor, other than a credit life insurance contract.
(h) The debtor's interest, not to exceed in value eight
thousand dollars less any amount of property of the estate
transferred in the manner specified in 11 U.S.C. 542(d), in any accrued dividend or interest under, or loan value of, any
unmatured life insurance contract owned by the debtor under which
the insured is the debtor or an individual of whom the debtor is
a dependent.
(i) Professionally prescribed health aids for the debtor or
a dependent of the debtor.
(j) The debtor's right to receive:
(1) A social security benefit, unemployment compensation or
a local public assistance benefit;
(2) A veterans' benefit;
(3) A disability, illness or unemployment benefit;
(4) Alimony, support or separate maintenance, to the extent
reasonably necessary for the support of the debtor and any
dependent of the debtor;
(5) A payment under a stock bonus, pension, profit sharing,
annuity or similar plan or contract on account of illness,
disability, death, age or length of service, to the extent
reasonably necessary for the support of the debtor and any
dependent of the debtor, unless:
(A) Such plan or contract was established by or under the
auspices of an insider that employed the debtor at the time the
debtor's rights under such plan or contract arose;
(B) Such payment is on account of age or length of service;
and
(C) Such plan or contract does not qualify under Section
401(a), 403(a), 403(b), 408 or 409 of the Internal Revenue Code
of 1954.
(5) A payment or distribution under a retirement plan as
defined in West Virginia code section fourteen-a, article eight,
chapter thirty-eight.
(k) The debtor's right to receive, or property that is
traceable to:
(1) An award under a crime victim's reparation law;
(2) A payment on account of the wrongful death of an
individual of whom the debtor was a dependent, to the extent
reasonably necessary for the support of the debtor and any
dependent of the debtor;
(3) A payment under a life insurance contract that insured
the life of an individual of whom the debtor was a dependent on
the date of such individual's death, to the extent reasonably
necessary for the support of the debtor and any dependent of the
debtor;
(4) A payment, not to exceed fifteen thousand dollars on
account of personal bodily injury, not including pain and
suffering or compensation for actual pecuniary loss, of the
debtor or an individual of whom the debtor is a dependent;
(5) 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;
(6) Payments made to the prepaid tuition trust fund on
behalf of any beneficiary.
This section shall not be construed to affect the
applicability of any provision of the federal bankruptcy law
other than 11 U.S.C. 552(d).
(l) A debtor's interest in a right, whether vested or not,
to the assets held in or to receive pensions, annuities,
benefits, distributions, or other payments under a retirement
plan as defined in West Virginia code section fourteen-a, article
eight, chapter thirty-eight.
Strike-throughs indicate language which would be stricken
from the present law, and underscoring indicates new language
that would be added.