TABLE OF CONTENTS
I. INTRODUCTION .............................................................................180
II. ISSUES PRESENTED .........................................................................180
A. State Exemption Issues ................................................................180
B. State and Federal Constitutional Law Issues ...........................................181
III. FACTS ....................................................................................182
A. Debtors' Farming/Ranching Background ..................................................182
B. Farmers Bank Debt .....................................................................183
C. FSA Debt ..............................................................................183
D. Debtors' Bankruptcy Case ..............................................................184
IV. DISCUSSION ...............................................................................186
A. Burdens of Proof ......................................................................186
1. FSA's and Farmers Bank's Objection to Debtors' Claimed Exemptions...................186
2. Debtors' Motions to Avoid Security Interests of FSA and Farmers'
Bank ...............................................................................186
B. Exemption Issues.......................................................................186
1. Debtors Are Engaged in Agriculture as Their Principal Occupation, so
as to Permit the Use of the Exemption Found in COLO.REV.STAT. § 13-54-102(1)(g)
....................................................................................186
2. Debtors' Equipment Does Qualify as "Stock in Trade, Supplies, Fixtures
Maps, Machines, Tools, Electronics, Equipment, Books, and
Business Materials "of the Debtors" Which Is "Used and Kept for
the Purpose of Carrying on Any Gainful Occupation" Pursuant to
COLO.REV.STAT. § 13-54-102(1)(i) ..............................................188
3. Farmers Bank's and the FSA's Liens in Remaining Livestock May be
Avoided in Accordance with 11 U.S.C. § 522(f) and COLO.REV.STAT
§ 13-54-102(1)(g) as "Tools of the Trade" .....................................189
4. Debtors Can "Stack" the Exemptions Provided for Under COLO.REV.STAT
§§ 13-54-102(1)(g) and 13-54-102(1)(i) .............................................193
5. Each Debtor Can Claim an Exemption Under Both COLO.REV.STAT
§§ 13-54-102(1)(g) and 13-54-102(1)(i)..............................................193
B. Constitutional Issues .................................................................194
1. Introduction to the State and Federal Constitutional Issues.........................194
2. Overview of the Amendments to the Colorado Exemption Statute .......................195
a. Amendment to COLO.REV.STAT. § 13-54-102(1)(g) ..............................195
b. Amendment to Colo.Rev.Stat. § 13-54-102(1)(i) ..............................195
3. Legislative Intent .................................................................196
4. Burdens and Presumptions in Analyzing the Amended Exemption
Statute ............................................................................197
5. Exemptions under 11 U.S.C. § 522 ..............................................197
6. Constitutionality of 11 U.S.C. § 522(f) .......................................198
7. Does the Amended Colorado Exemption Statute have Retroactive
Retrospective or Prospective Application? ..........................................199
a. Colorado Statutes are Presumed Prospective ......................................199
b. "Vested Rights" ........................................................200
c. Retroactive Application of the Statute to "Vested Rights" ..............200
8. The "Takings" Clauses of the United States Constitution and the
Colorado Constitution .....................................................201
9. Application of the May 23, 2000 Amendments Does Not Violate the
"Contracts" Clauses of the United States and Colorado Constitutions........202
C. Concluding Comments Regarding the State and Federal Constitutionality
Issues........................................................................203
V. CONCLUSION ......................................................................203
VI. ORDER ...........................................................................203
THIS MATTER comes before the Court on the following:
1. Objection to Debtors\' Claimed Exemptions filed by Farmers Bank of Ault, Colorado ("Farmers Bank") and the Farm Services Agency of the United States Department of Agriculture (the "FSA"), (collectively referred to herein as "Creditors").
2. Debtors\' Motion to Avoid Security Interest of Farm Services Agency in Exempt Property Under 11 U.S.C. § 522(f).
3. Debtors\' Motion to Avoid Security Interest of Farmers Bank in Exempt Property Under 11 U.S.C. § 522(f).
The Court conducted an evidentiary hearing regarding the above matters on December 29, 2000. At the conclusion of testimony, evidence and arguments by counsel, the Court took the matter under advisement. The Court, however, permitted the parties to provide supplemental briefing on the constitutional issues raised by the parties. These briefs have been submitted and the Court, having reviewed the file, the pleadings, evidence before the Court and being otherwise duly advised in the premises, enters the following findings of fact, conclusions of law and order.
In brief, this Opinion deals with (1) the nature and extent of exemptions claimed by the Debtors, but objected to by the Creditors, (2) avoidance of the Creditors' liens on certain property, and (3) constitutionality of new, increased exemptions effective May 23, 2000, which are claimed by Debtors.
With regard to those issues, the Court concludes that (1) the Debtors' are entitled to claim the full extent of exemptions claimed by them, (2) the avoidance of certain lien claims is permissible under 11 U.S.C. § 522(f), and (3) the new, increased exemptions are constitutional.
The facts of this case raise the following questions with regard to the Colorado exemption statute and the substantial revisions thereto, effective May 23, 2000.
A. State Exemption Issues
As a preliminary matter, the parties have asked that this Court determine if certain of the Colorado exemptions claimed by the Debtors are even available to the Debtors under the specific facts of the case. The state exemption issues are as follows:
1. Are the Debtors engaged in agriculture as their principal occupation, so as to permit them to use the exemption found in COLO.REV.STAT. § 13-54-102(1)(g)?1
2. Does certain of Debtors\' agricultural equipment qualify as "stock in trade, supplies, fixtures, maps, machines, tools, electronics, equipment, books, and business materials . . . used and kept for the purpose of carrying on any gainful occupation" pursuant to COLO.REV.STAT. § 13-54-102(1)(i)?
3. Does certain livestock of the Debtors qualify as "tools of the trade" under Colorado law and is, thus, exempt under COLO.REV.STAT. § 13-54-102(1)(g) and avoidable pursuant to 11 U.S.C. § 522(f)?
4. In the event that this Court determines that the Debtors are engaged in agriculture as their principal occupation, are the Debtors allowed to "stack" the exemptions provided for under COLO.REV.STAT. §§ 13-54-102(1)(g) and (i)?
5. In the event that this Court determines that (a) the Debtors are engaged in agriculture as their principal occupation, and (b) the Debtors are allowed to "stack" the exemptions provided for under COLO.REV. STAT. §§ 13-54-102(1)(g) and (i), then can each Debtor claim an exemption under both COLO.REV.STAT. §§ 13-54-102(1)(g) and 13-54-102(1)(i)?
The Court, as discussed below, finds that with regard to the state exemption issues:
B. State and Federal Constitutional Law Issues
In addition to issues regarding the applicability of the exemption statutes to these Debtors, the parties come to this Court for a determination as to whether the Colorado exemption statute, as amended effective May 23, 2000, as applied to the loans of the Creditors, violates the Colorado or United States Constitutions. The issues can be stated as follows:
Do the amended
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