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STATE OF OKLAHOMA
1st Session of the 59th Legislature (2023)
HOUSE BILL 1995 By: Dollens
AS INTRODUCED
An Act relating to medical debt; ordering a
legislative referendum pursuant to the Oklahoma
Constitution; creating the Oklahoma Protection from
Predatory Debt Collection Act; providing exemptions
from attachments for med ical debt; defining terms;
providing for rates of interest for loans or
indebtedness and interest on judgments ; providing for
conflicts with federal law ; providing for
severability; providing ballot title; and direc ting
filing.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. Pursuant to Section 3 of Article V of the Oklahoma
Constitution, there is hereby ordered the following legi slative
referendum which shall be filed with the Secretary of State and
addressed to the Governor of the state, who shall submit the same to
the people for their approval or rejection at the General Election,
to be held on November 5th, 2024.
SECTION 2. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 370 of Title 56, unless there is
created a duplication in number ing, reads as follows:
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This act shall be known and may be cited as "Oklahoma Protection
from Predatory Debt Collection Act ".
SECTION 3. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 371 of Title 56, unless there is
created a duplication in numbering, reads as follows:
A. Any person the eighteen (18) years of age or over, married
or single, who resides within the state may hold as a homes tead
exempt from attachment, execution and forced s ale, not exceeding
Four Hundred Thousand Dollars ($400,000.00) in value, any one of the
following:
1. The person's interest in real property in one compact body
upon which exists a dwelling house in which the person resides;
2. The person's interest in one condominium or cooperative in
which the person resides;
3. A mobile home in which the person resid es; or
4. A mobile home in which the person resides plus the land upon
which that mobile home is locat ed.
B. Only the homestead exemption may be held by a married couple
or a single person under this section. The value as specified in
this section refers to the equity of a single person or married
couple. If a married couple lived together in a dwelling house, a
condominium or cooperative , a mobile home or a mobile home plus land
on which the mobile home is located and are then divorced, the total
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exemption allowed for that residence to either or both persons shall
not exceed Four Hundred Thousand Dollar s ($400,000.00).
C. The homestead exemption, not exceeding the value provided
for in subsection A of this section, automatically attaches to the
person's interest in identifiable cash proceeds from the voluntary
or involuntary sale of the property. The homestead exemption in
identifiable cash proceeds continues for eightee n (18) months after
the date of the sale of the property or until the person establ ishes
a new homestead with the proceeds, whichever period is shorter.
Only one homestead exemption at a time may be held by a person under
this section.
D. The homestead exempti on provided by this section shall be
adjusted annually on January 1, 202 5, and on January 1 of each
successive year, by the increase in the cost of living. The
increase in the cost of living shall be measured by the percentage
increase as of August of the immediately preceding year over the
level as of August of the previous year of the Consumer Price Index
(all urban consumers, United States city average for all items) , or
its successor index as published by the United States Department of
Labor or its successor agency, with the amount of the exemption
rounded to the nearest One Hundred Dollars ($100.00).
SECTION 4. NEW LAW A new section of law to be codifie d
in the Oklahoma Statutes as Section 372 of Title 56, unless there is
created a duplication in numbering, reads as follows:
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A. Household furniture and furnishings, household goods,
including consumer electronic devices, and household appliances
personally used by the debtor or a dependent of the debtor and not
otherwise specifically prescribed in this chapter are exempt from
process provided their aggreg ate fair market value does not exceed
Fifteen Thousand Dollars ($15,000.00).
B. The exemption provided by this section shall be adjusted
annually on January 1, 2025, and on January 1 of each s uccessive
year, by the increase in the cost of living. The increase in the
cost of living shall be measured by the per centage increase as of
August of the immediately preceding year over the level as of Augus t
of the previous year of the Consumer Price Index (all urban
consumers, United States city average for all it ems), or its
successor index as published by the United States Department of
Labor or its successor agency, with the amount of the exemption
rounded to the nearest One Hundred Dollars ($100.00).
SECTION 5. NEW LAW A new section of l aw to be codified
in the Oklahoma Statutes as Section 373 of Title 56, unless there is
created a duplication in numbering, reads as follows:
A. The following property of a debtor used primarily for
personal, family or household purposes is exempt from pro cess:
1. All apparel of not more than a fair market value of Five
Hundred Dollars ($500.00) ;
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2. All musical instruments p rovided for the debtor 's individual
or family use of not more than an aggregate fair market value of
Four Hundred Dollars ($400.00) ;
3. Horses, milk cows, and poultry of not more than an aggregat e
fair market value of One Hundred Thous and Dollars ($100,000.00);
4. All engagement and w edding rings of not more than an
aggregate fair market value of Two Thousand Dollars ($2,00 0.00);
5. The library of a debtor including books, manuals, published
materials and personal documents of not mor e than an aggregate fair
market value of Two Hundred Fifty Dollars ($250.00).
6. One watch of not more than a n aggregate fair market value of
Two Hundred Fifty Dollars ($250.00).
7. One typewriter, one computer, one bicyc le, one sewing
machine, a family Bible or a lot in any burial ground of not more
than an aggregate fair market value o f Two Thousand Dollars
($2,000.00);
8. Equity in one motor vehicle of not more than Fifteen
Thousand Dollars ($15,000.00). If the debtor or debtor's dependent
has a physical disability, the equity in the motor vehicle shall not
exceed Twenty-five Thousand Dollars ($25,000. 00);
9. Professionally prescribed prostheses for the debtor or a
dependent of the debtor, including a wheelc hair or motorized
mobility device;
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10. All firearms of not more than an aggregate fair market
value of Two Thousand Dollars ($2,000.00) ; and
11. All domestic animals or household pets.
B. These exemptions shall be adjusted annually on January 1,
2025, and on January 1 of each s uccessive year, by the increase in
the cost of living. The increase in the cost of living shall be
measured by the percentage increase as of August of the immediately
preceding year over the level as of August of the previous year of
the Consumer Price Index (all urban consumers, United States city
average for all items), or its successor index as published by the
United States Department of Labor or its successor agency , with the
amount of the exemption r ounded to the nearest One Hundred Dollars
($100.00).
SECTION 6. NEW LAW A ne w section of law to be codified
in the Oklahoma Statutes as Section 374 of Title 56, unless there is
created a duplication in numbering, reads as follows:
A. The following property of a debtor is exempt from execution,
attachment or sale on any process is sued from any court:
1. All money received by or payable to a surviving spous e or
child on the life of a de ceased spouse, parent or legal guardian,
not exceeding Twenty Thou sand Dollars ($20,000.00);
2. The earnings of a minor child of a debtor o r the proceeds of
these earnings by reason of any liability of the debtor not
contracted for the special benefit of the minor chil d;
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3. All money received by or payable to a per son entitled to
receive child support or spousal mainte nance pursuant to a court
order;
4. All money, proceeds or benefits of any kind to be paid in a
lump sum or to be rendered on a periodic or installment basis to the
insured or any beneficiary under a ny policy of health, accident or
disability insurance or any similar plan or program of benefits in
use by any employer, except for premiums payable on the policy or
debt of the insured secured by a pledge, an d except for collection
of any debt or obligati on for which the insured or beneficiary has
been paid under the plan or policy; and except for payment of amount
ordered for support of a person from proceeds and benefits furnished
in lieu of earnings that would have been subject to that order and
subject to any exemption applicable to earnings so replaced ;
5. All money arising from any cl aim for the destruction of, or
damage to, exempt property and all proceeds or benefits of any kind
arising from fire or ot her insurance on any property exempt under
this article;
6. The cash surrender value of life insurance policies where
for a continuous unexpired period of two (2) years the policies have
been owned by a debtor. The policy shall have na med as beneficiary
the debtor's surviving spouse, child , parent, brother, or sister.
The policy may have named as beneficiary any other family member wh o
is a dependent, in the proportion that the policy names any such
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beneficiary, except that, subject to the statute of lim itations, the
amount of any premium that is recovera ble or avoidable by a creditor
pursuant to the Uniform Fraudulent Transfer Act of the Oklahoma
Statutes, with interest thereon, is not exempt. The exemption
provided by this paragraph does not apply to a claim for the payment
of a debt of the insured or beneficiary that is secured by a pledge
or assignment of the cash value of the insurance policy or the
proceeds of the policy. For the purposes of this paragraph,
"dependent" means a family member who is dependent on the insured
debtor for not less than half support ;
7. An annuity contract where for a con tinuous unexpired period
of two (2) years that contract has been owned by a debtor and has
named as beneficiary the debtor, the debtor's surviving spouse,
child, parent, brother, or sister, or any other dependent family
member, except that, subject to the statute of limitatio ns, the
amount of any premium, payment or deposit w ith respect to that
contract is recoverable or avoidable by a creditor pursuant to the
Uniform Fraudulent Transfer Act of the Oklahoma Statute s, is not
exempt. The exemption provided b y this paragraph does not apply to
a claim for the payment of a debt of the annuitant or beneficiary
that is secured by a pledge or assignment of the con tract or its
proceeds. For the purposes of this paragraph, "dependent" means a
family member who is de pendent on the debtor for not less than half
support;
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8. Any claim for damages recoverable by any person by any
reason of any levy on or sale under exec ution of that person 's
exempt personal property or by reason of the wrongful taking or
detention of that property by any person, and the judgment recovered
for damages;
9. A total of Five Thou sand Dollars ($5,000.00) held in a
single account in any one fi nancial institution as defined by
Section 102 of Title 6 of the Oklahoma Statutes . The property
declared exempt by this paragraph is n ot exempt from normal service
charges assessed against the account by the financial institution a t
which the account is carried. This exemption shall be adjusted
annually on January 1, 202 5, and on January 1 of each s uccessive
year, by the increase in the cost of living. The increase in the
cost of living shall be measured by the percentage increase as of
August of the immediately preceding year over the level as of August
of the previous year of the Consumer Price Index (all urban
consumers, United State s city average for all items), or its
successor index as publi shed by the United States Department of
Labor or its successor agency, with the amount of the exemption
rounded to the nearest one hundred dollars ;
10. An interest in a college savings plan und er Section 529 of
the United States Internal Revenue Code of 1986, either as the owner
or as the beneficiary. This does not include money contributed to
the plan within two (2) years before a debtor file s for bankruptcy.
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B. Any money or other assets payable to a participant in or
beneficiary of, or any interest of any pa rticipant or beneficiary
in, a retirement plan unde r Section 401(a), 403(a), 403(b), 408,
408A, or 409 or a deferred compensation plan under Section 457 of
the United States Internal Revenue Code of 1986, as amended, whether
the beneficiary's interest arises by inheritance, designation,
appointment, or otherwise, is exempt from all claims of creditors of
the beneficiary or participant. This subsection does n ot apply to
any of the following :
1. An alternate payee under a qualified domestic relations
order, as defined in Section 414(p) of the United States Internal
Revenue Code of 1986, as amended . The interest of any and all
alternate payees is exempt from an y and all claims of any creditor
of the alternate payee;
2. Amounts contributed within one hundred twenty days before
debtor files for bankruptcy ; and
3. The assets of bankruptcy proceedings f iled before July 1,
1987.
C. Any person eighteen (18) years o f age or over, married or
single, who resides within this state and who does not exercise the
homestead exemption may claim as a personal property homestead
exempt from all process prepaid rent, including security deposits as
provided in Section 115 of Title 41 of the Oklahoma S tatutes, for
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the claimant's residence, not exceeding Tw o Thousand Dollars
($2,000.00).
D. This section does not exempt property f rom orders that are
the result of a judgment for arrearages of child support or for a
child support debt.
SECTION 7. NEW LAW A new section of law to be codif ied
in the Oklahoma Stat utes as Section 375 of Title 56, unless there is
created a duplication in numbering, reads as follows:
A. For the purposes of this section, "disposable earnings"
means the remaining portion of a debtor's wages, salary or
compensation for his or her personal services, including bonuses and
commissions, or otherwise, and includ es payments pursuant to a
pension or retirement program or deferred compensation plan, after
deducting from such e arnings those amounts required b y law to be
withheld.
B. Except as provided in subsection C of this Section, the
maximum part of the disposable earnings of a debtor for any workweek
that is subject to process ma y not exceed ten percent (10%) of
disposable earnings for that week or the amount by which disposable
earnings for that week exceed sixt y (60) times the applicable
minimum hourly wage in effect at the time the earnings are pa yable,
whichever is less. The applicable minimum wage is the minimum wage
required by federal, state, or local law, whiche ver is highest.
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C. The exemptions provided i n subsection B of this Section do
not apply in the case of any order for the support of any person.
In such case, one-half (1/2) of the disposable earnings of a d ebtor
for any pay period is exempt from process.
D. The exemptions provided in this section do not apply in the
case of any order of any court of bankruptcy und er chapter XIII of
the Federal Bankruptcy Act or any debt due f or any state or federal
tax.
SECTION 8. NEW LAW A new section of law to b e codified
in the Oklahoma Statutes as Sectio n 376 of Title 56, unless there is
created a duplication in numbering, reads as follows:
A. Interest on any loan, indebtedness or other obligatio n shall
be as follows:
1. Interest on medical debt shall be limited to the rate of
interest equal to the weekly average 1-year constant maturity
treasury yield, as published by the Board of Governors of the
Federal Reserve System, for the calendar week pr eceding the date
when the consumer was firs t provided with a bill, but shall not be
more than three percent (3%) per annum. The maximum rate of
interest provided here shall also apply to any judgments on medical
debt; and
2. Interest on any loan, indebtedness or obligation other than
medical debt shall be at the rate of ten percent (10%) per annum,
unless a different rate is contracted for in writing, in which event
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any rate of interest may be agreed to. Interest on any judgment,
other than judgments on medical debt, that is based on a wr itten
agreement evidencing a loan, indebtedness or obli gation that bears a
rate of interest not in excess of the maximum permitted by law shall
be at the rate of inte rest provided in the ag reement and shall be
specified in the judgment.
B. Unless specifically provided for in statute or a different
rate is contracted for in wr iting, interest on any judgment other
than judgments on medical debt shall be at the lesser of ten per cent
(10%) per annum or at a rate per annum tha t is equal to one percent
(1%) plus the prime rate as published by the Board of Governors of
the Federal Reserve System in statistical release H.15 or any
publication that may supersede it on the date that the judgment is
entered. The judgment shall state the applicable interest rate and
it shall not change after it is entered.
C. Interest on a judgment on a condemna tion proceeding shall be
payable as follows:
1. If instituted by a city or town the rate shall be calculated
for each month or portion of a month that interest is owed and shall
be either:
a. the prime rate charged by banks on short -term business
loans as determined for publication in the bulletin of
the Board of Governors of the Federal Reserve System ,
as of the first day of that month ,
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b. in the absence of a determination by the Board of
Governors of the Federal Reserve System , calculated in
the same manner based on comparable data as determined
by the United States Department of Commerce, Bureau of
Economic Analysis, for publication in "Survey of
Current Business", or
c. if the prime rate can not be determined from
publication as provided in subparagraph b of this
paragraph, determined by a federal agency that is
annually designated by the governing body of the city
or town and that makes and publishes data sufficient
to determine the prime rate of interest.
2. If instituted by a county the rate shall be calcul ated for
each month or portion of a month that interest is owed and shall be
either:
a. the prime rate charged by banks on short -term business
loans as determined for publication in the bulletin of
the Board of Governors of the Federal Reserve System ,
as of the first day of that month,
b. in the absence of a d etermination by the Board of
Governors of the Federal Reserve System , calculated in
the same manner based on comparable data as determined
by the United States Department of Commerce, Bureau of
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Economic Analysis, for publication in "Survey of
Current Business", or
c. if the prime rate cannot be determin ed from
publication as provided in subparagraph b of this
paragraph, determined by a federal agency that is
annually designated by the board of superviso rs and
that makes and publish es data sufficient to determine
the prime rate of interest.
3. If instituted by the Department of Transportation the rate
shall be calculated for each month or portion of a month that
interest is owed and shall be either :
a. the prime rate charged by ban ks on short-term business
loans as determined for publication in the bullet in of
the Board of Governors of the Federal Reserve System,
as of the first day of that month ,
b. in the absence of a determination by the Board of
Governors of the Federal Reserve System , calculated in
the same manner based on comparable data as determine d
by the United States Department of Commerce, Bureau of
Economic Analysis, for publication in "Survey of
Current Business", or
c. if the prime rate cannot be determined from
publication as provided in subparagraph b of the
paragraph, determined by a feder al agency that is
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annually designated by the board and that makes and
publishes data sufficient to determine the prime rate
of interest.
4. If instituted by a county flood contr ol district, a power
district or an agricultural improvement dis trict the rate shall be
calculated for each mo nth or portion of a month that interest is
owed and shall be either:
a. the prime rate charged by banks on short -term business
loans as determined for publication in the bulletin of
the Board of Governors of the Federal Reserve System,
as of the first day of that month,
b. in the absence of a determination by the Board of
Governors of the Federal Reserve System , calculated in
the same manner based on comparable data a s determined
by the United States Department of Commerce, Bureau of
Economic Analysis, for publication in "Survey of
Current Business", or
c. if the prime rate cannot be determined from
publication as provided in subparagraph b of this
paragraph, determined by a federal agency that is
annually designated by the re spective district and
that makes and publishes data sufficient to determine
the prime rate of interest.
D. A court shall not award either of the followi ng:
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1. Prejudgment interest for any unliquid ated, future, punitive
or exemplary damages that are found by the trier of fact ; or
2. Interest for any future, punitive or exemplary damages that
are found by the trie r of fact.
E. For the purposes of subsect ion D of this section, "future
damages" means damages that will be incurred after the date of the
judgment and includes the costs of an y injunctive or equitable
relief that will be provided after the date of the judgment.
F. If awarded, prejudgment intere st shall be at the rate
described in subsection A or B of this section.
G. For the purposes of this se ction:
1. "Health care services" means services provided at or by any
of the following: health care institutions as defined in Section 22
of Title 36 of the Oklahoma Statutes ; private offices or clinics of
health care providers licenses under Title 59 of the Oklahoma
Statutes; and ambulances or ambulance services as d efined in Section
1-2503 of Title 63 of the Oklahoma Statutes ; and
2. "Medical Debt" means a loan, indebtedness or other
obligation arising directly from the receipt of health care serv ices
or of medical products or devices .
SECTION 9. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 377 of Title 56, unless there is
created a duplication in numbering, reads as follows:
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This act shall not be interpreted or applied so as t o create any
power or duty in conflict with federal law.
SECTION 10. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 378 of Title 56, unless there is
created a duplication in numbering, reads as follow s:
If a provision of this act or its application to any person or
circumstance is held invalid, the invalidity does not affect other
provisions or applications of the act that can be given effect
without the invalid provision or application, and to this e nd the
provisions of this act are severable.
SECTION 11. NEW LAW A new se ction of law to be codifie d
in the Oklahoma Statutes as Section 379 of Title 56, unless there is
created a duplication in numbering, reads as follows:
This act applies prospectively only. Accordingly, it does not
affect rights and duti es that matured before the effective date of
this act, contracts en tered into before the effective date of this
act, or the interest rate on judgments that are based on a written
agreement entered into before the effective date of this act.
SECTION 12. NEW LAW A new section of l aw to be codified
in the Oklahoma Statutes as Section 380 of Title 56, unless there is
created a duplication in numbering, reads as fol lows:
The People of Oklahoma desire that this initiative, if approved
by the voters, be defended if it is c hallenged in court. They
therefore declare that the political committee registered to
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circulate petitions and campaign in support of the adoption of the
initiative, or any one or more of its officers, has standing to
defend this initiative on behalf of and as the agent of the People
of Oklahoma in any legal action brought to challenge the valid ity of
this initiative.
SECTION 13. The Ballot Title for the proposed act shall be in
the following form:
BALLOT TITLE
Legislative Referendum No. ____ State Question No. ____
THE GIST OF THE PROPOSITION IS AS FOLLOWS:
This proposed law would reduce maximum interest rates on medical
debt from 10 percent to 3 percent annually, increase the amount
of certain assets exempt from debt collection, annually adjust
exemptions for inflation beginning in 2025, and allow courts to
reduce the amount of disposable earnings garnish ed in cases of
extreme hardship.
SHALL THE PROPOSAL BE APPROVED?
FOR THE PROPOSAL — YES _____________
AGAINST THE PROPOSAL — NO _____________
SECTION 14. The Chief Clerk of the House of Representatives,
immediately after the pas sage of this act, shall prepare and file
one copy thereof, including the Ballot Title set forth in SECTION 13
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hereof, with the Secre tary of State and one copy with the Attorney
General.
59-1-5492 TJ 01/12/23