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NYS Exception to Car Exemption for Judgment Debtors Introduced in Legislature

As has been extensively reported in previous blogs, Governor Patterson signed the Exemption Update law despite the misgivings of New York City, which was concerned that the new motor vehicle exemption for non-bankruptcy debtors would impact their collections of parking violations.  Parking Violations Bureaus in New York has statutory authority to enforce unpaid parking tickets just like money judgment (New York Vehicle & Traffic Law sect. 237(5)). In New York City, and perhaps some other municipalities, the PVB use this power to tow cars of owners with unpaid parking tickets, even if the car is legally parked (call it the 'New York yank' as opposed to the 'Denver boot.')

Supporters of the new exemption law told Governor Patterson's office in a conference call on December 22 that, if the Governor signed the bill, they (the supporters) would support a 'chapter amendment' that would exclude New York State and its municipalities from the judgment debtor car exemption.  I was in on that call and stated I would support the exclusion.  Governor Patterson's approval memo (posted earlier) specifically referenced this pledge of support for a chapter amendment and urged the state legislature to pass the amendment early in the new 2011 session.

The legislature has started the process, with Democratic Assembly Member Helene Weinstein having introduced A851 on January 5, and Republican Senator Martin Golden of Brooklyn introduced an identical measure, S1198, in the New York Senate the same day.  If passed, the chapter amendment would go into effect the same date as the Exemption Update Law (Chap. 566 of the Laws of 2010), January 21.

Besides parking ticket enforcement, I would anticipate that there may be a slight effect on the collection of NYS taxes.  I understand that the exemptions in CPLR 5205 apply in tax collection, and that the Department of Taxation and Finance does occasionally seize a delinquint taxpayer's car, if it is unencumbered with a car loan.  I am told that the department usually does this to get the taxpayer's attention.  Without the chapter amendment, this practice would be curtailed.

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