Changes in Statutory Provisions for Garnishment Beginning July 1, 1998
The 1998 Legislature made several changes affecting garnishment actions by the Department of Revenue and certain counties. These changes became effective July 1, 1998.
Custodian of assets may be liable for any transfer or disposition of property
A "custodian" is any person who possesses or controls any credits or personal property of another person or who owes debts to that person. A custodian who has received a Notice of Freeze (Form DR-44) from the Department of Revenue may not transfer or make any disposition of such credits, personal property, or debts without consent from the Department, or until 60 days after receipt of the Notice of Freeze.
The new legislation provides that if the Department is unable to recover an indebtedness as a result of a transfer or disposition, the custodian is liable to the state for any indebtedness owed to the extent of the value of the property or debt transferred or paid.
60-day renewal notice not required for contested levy
The new legislation also provides that if an intended levy is contested in circuit court or through the appropriate statutory procedures the Notice of Freeze remains in effect until the final resolution of the contest.
Financial institutions provided right of set-off
Any financial institution receiving a Notice of Freeze will maintain a right of set-off for any transaction involving a debit card occurring on or before the date of receipt of the Notice of Freeze.
Subsequent possession or control of assets must be reported
Custodians must advise the Department within 5 days after coming into possession or control of any subsequent credits, personal property, or debts owed during the time prescribed by the Notice of Freeze.
Subsequent credits, personal property, or debts owed may not be transferred or disposed of without consent from the Department or until 60 days after receiving the Notice of Freeze.
Counties that self-administer tourist development taxes may also garnish
Counties that self-administer the collection of tourist development taxes are granted the same authority as the Department regarding garnishment, provided they follow the appropriate statutory procedures.