Senate Bill 2344

AN ACT TO AMEND SECTION 11-35-23, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT IF A GARNISHEE IS A BANK OR OTHER FINANCIAL INSTITUTION, AND ITS INDEBTEDNESS TO THE DEFENDANT CONSISTS OF FUNDS THAT THE DEFENDANT HAS ON DEPOSIT WITH THE BANK OR OTHER FINANCIAL INSTITUTION AT THE TIME OF SERVICE OF THE WRIT OF GARNISHMENT, THEN THE GARNISHEE SHALL BE HELD TO ACCOUNT FOR ONLY THE FUNDS ON DEPOSIT BETWEEN THE TIME OF SERVICE OF THE WRIT OF GARNISHMENT AND THE TIME OF SERVICE OF ITS ANSWER TO THE WRIT, AND THE GARNISHEE SHALL HAVE NO OBLIGATION TO ACCOUNT FOR ADDITIONAL DEPOSITS ACCRUING AFTER THE TIME OF SERVICE OF ITS ANSWER; TO PROVIDE THAT IF THE BANK OR OTHER FINANCIAL INSTITUTION IS NOT INDEBTED TO THE DEFENDANT AT THE TIME OF THE SERVICE OF THE WRIT OF GARNISHMENT OR DOES NOT HAVE POSSESSION OF PROPERTY OF THE DEFENDANT AT THE TIME OF SERVICE OF THE WRIT, THE GARNISHEE SHALL NOT BE HELD TO ACCOUNT FOR ANY INDEBTEDNESS THAT ARISES SUBSEQUENT TO SERVICE OF THE ANSWER OR PROPERTY THAT MAY COME INTO ITS HANDS SUBSEQUENT TO THE SERVICE OF THE WRIT OF GARNISHMENT; TO AMEND SECTION 27-3-33, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT THE DEPARTMENT OF REVENUE SHALL NOT SERVE MORE THAN 25 DISTRESS WARRANTS ON THE SAME FINANCIAL INSTITUTION IN A SINGLE DAY; TO PROVIDE THAT A FINANCIAL INSTITUTION SERVED WITH A DISTRESS WARRANT MAY CHARGE A FEE TO THE CUSTOMER OF THE FINANCIAL INSTITUTION; TO PROVIDE THAT ONCE THE DEPARTMENT OF REVENUE RECEIVES AN ANSWER TO A DISTRESS WARRANT FROM A FINANCIAL INSTITUTION INDICATING THAT THE TAXPAYER NAMED IN THE DISTRESS WARRANT HAS NO ACCOUNTS WITH THE FINANCIAL INSTITUTION, THE DEPARTMENT OF REVENUE MAY NOT SERVE ANY ADDITIONAL DISTRESS WARRANTS ON THE SAME FINANCIAL INSTITUTION FOR A PERIOD OF AT LEAST ONE YEAR; TO AMEND SECTIONS 27-7-57, 27-13-31 AND 27-65-59, MISSISSIPPI CODE OF 1972, IN CONFORMITY THERETO; AND FOR RELATED PURPOSES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. Section 11-35-23, Mississippi Code of 1972, is amended as follows:

11-35-23. (1) (a) Except for wages, salary or other compensation, all property in the hands of the garnishee belonging to the defendant at the time of the service of the writ of garnishment shall be bound by and subject to the lien of the judgment, decree or attachment on which the writ * * *~~shall have~~ has been issued. If the garnishee * * * ~~shall surrender such~~ surrenders the property to the sheriff or other officer serving the writ, the officer shall receive the * * *~~same~~ property and, in case the garnishment issued on a judgment or decree, shall make sale * * *~~thereof~~ of the property as if levied on by virtue of an execution, and return the money arising * * *~~therefrom~~ from the sale to satisfy the judgment; and if the garnishment issued on an attachment, the officer shall dispose of the property as if it were levied upon by a writ of attachment. * * *~~And a~~ Any indebtedness of the garnishee to the defendant, except for wages, salary or other compensation, shall be bound from the time of the service of the writ of garnishment, and be appropriable to the satisfaction of the judgment or decree, or liable to be condemned in the attachment.

(b) If the garnishee is a bank or other financial institution, and its indebtedness to the defendant consists of funds that the defendant has on deposit with the bank or other financial institution at the time of service of the writ of garnishment, then the garnishee shall be held to account for only the funds on deposit between the time of service of the writ of garnishment and the time of service of its answer to the writ, and the garnishee shall have no obligation to account for additional deposits accruing after the time of service of its answer. If the bank or other financial institution is not indebted to the defendant at the time of the service of the writ of garnishment or does not have possession of property of the defendant at the time of service of the writ, the garnishee may serve its answer and shall not be held to account for any indebtedness that arises subsequent to service of its answer or property that may come into its hands subsequent to the service of the writ of garnishment.

(2) The court issuing any writ of garnishment shall show * * *~~thereon~~ on the writ the amount of the claim of the plaintiff and the court costs in the proceedings and should at any time during the pendency of * * *~~said~~ the proceedings in the court a judgment be rendered for a different amount, then the court shall notify the garnishee of the correct amount due by the defendant under * * * ~~said~~ the writ.

(3) (a) Except for judgments, liens, attachments, fees or charges owed to the state or its political subdivisions; wages, salary or other compensation in the hands of the garnishee belonging to the defendant at the time of the service of the writ of garnishment shall not be bound by nor subject to the lien of the judgment, decree or attachment on which the writ shall have been issued when the writ of garnishment is issued on a judgment based upon a claim or debt that is less than One Hundred Dollars ($100.00), excluding court costs.

(b) If the garnishee * * *be is indebted or shall become indebted to the defendant for wages, salary or other compensation during the first thirty (30) days after service of a proper writ of garnishment, the garnishee shall pay over to the employee all of such indebtedness, and thereafter, the garnishee shall retain and the writ shall bind the nonexempt percentage of disposable earnings, as provided by Section 85-3-4, for * * * ~~such~~ the period of time as is necessary to accumulate a sum equal to the amount shown on the writ as due, even if * * *~~such~~ the period of time extends beyond the return day of the writ. Unless the court otherwise authorizes the garnishee to make earlier payments or releases and except as otherwise provided in this section, the garnishee shall retain all sums collected pursuant to the writ and make only one (1) payment into court at such time as the total amount shown due on the writ has been accumulated * * *~~, provided that~~, however, at least one (1) payment per year shall be made to the court of the amount that has been withheld during the preceding year. Should the employment of the defendant for any reason be terminated with the garnishee, then the garnishee shall not later than fifteen (15) days after the termination of * * *~~such~~ the employment, report * * *~~such~~ the termination to the court and pay into the court all sums as have been withheld from the defendant's disposable earnings. If the plaintiff in garnishment contest the answer of the garnishee, as now provided by law in such cases, and proves to the court the deficiency or untruth of the garnishee's answer, then the court shall render judgment against the garnishee for such amount as would have been subject to the writ had the * * *~~said~~ sum not been released to the defendant; * * *~~provided,~~ however, any garnishee who files a timely and complete answer shall not be liable for any error made in good faith in determining or withholding the amount of wages, salary or other compensation of a defendant which are subject to the writ.

(4) Wages, salaries or other compensation as used in this section shall mean wages, salaries, commissions, bonuses or other compensation paid for employment purposes only.

(5) The circuit clerk may, in his or her discretion, spread on the minutes of the county or circuit court, as the case may be, an instruction that all garnishment defendants shall send all garnishment monies to the attorney of record or in the case where there is more than one (1) attorney of record, then to the first-named attorney of record, and not to the clerk. The payment schedule shall be the same as subsection (3)(b) of this section.

(6) All payments made pursuant to a garnishment issued out of the justice court shall be made directly to the plaintiff or to the plaintiff's attorney as indicated by the plaintiff in his or her suggestion for writ of garnishment. The employer shall notify the court and the plaintiff or the plaintiff's attorney when a judgment is satisfied or when the employee is no longer employed by the employer.

(7) If the plaintiff in a garnishment is the Department of Employment Security, the garnishee shall make monthly payments to the department until such time as the total amount shown due on the writ has been accumulated.

SECTION 2. Section 27-3-33, Mississippi Code of 1972, is amended as follows:

27-3-33. (1) The Commissioner of Revenue shall have the power, authority and duty to direct that proceedings, actions and prosecutions be instituted to enforce the laws relating to the penalties, liabilities, and punishment of all persons, officers or agents or corporations, or others required by law to make returns of taxable property, for failure or neglect to comply with such provisions of the tax law; and to cause complaints to be made against assessors, boards of supervisors, and other officers, whose duties concern assessments, in any court of competent jurisdiction for their removal for official misconduct or neglect of such duty, as provided by law in such cases.

(2) The Commissioner of Revenue shall have the power, authority and duty to proceed by suit in the chancery court of the residence of the taxpayer or, in the case of a nonresident, in the Chancery Court of the First Judicial District of Hinds County, against all persons, corporations, companies and associations of persons for all past due and unpaid taxes, together with any penalties, damages and interest due thereon, of any kind whatever, either of the state or any county, municipality, drainage, levee, or other taxing district, or any subdivision thereof, and for all past due obligations and indebtedness of any character due and owing to them or any of them; but not, however, including penalties for the violation of the antitrust laws; and, provided that the duty and obligation of the Commissioner of Revenue hereunder accrues only at such time as the tax collector of the county, municipality, drainage, levee, or other taxing district, or any subdivision thereof, primarily responsible for the collection of taxes for the district has exhausted all legal remedies provided by the laws of this state.

(3) All suits by the Commissioner of Revenue under the provisions of this section, or under the provisions of Section 27-3-37 or Section 27-3-39, shall be in his official capacity for the use of the state, county, municipality, levee board or other taxing district interested; and he shall not be liable for costs, and may appeal without bond. * * *~~Such~~ The suits may be tried at the return term and shall take precedence over other suits.

(4) All warrants issued by the Commissioner of Revenue for the collection of any taxes imposed by statute and collected by the Department of Revenue shall be used to levy on salaries, compensation or other monies due the delinquent taxpayer. Subject to the provisions of subsection (5) of this section, the warrants shall be served by mail or by delivery by an agent of the Department of Revenue on the person or entity responsible or liable for the payment of the monies to the delinquent taxpayer. Once served, the employer or other person owing compensation due the delinquent taxpayer shall pay the monies over to the Department of Revenue in complete or partial satisfaction of the tax liability. An answer shall be made within thirty (30) days after service of the warrant in the form and manner determined satisfactory by the commissioner. Failure to pay the money over to the Department of Revenue as required by this section shall result in the served party being personally liable for the full amount of the monies owed and the levy and collection process may be issued against the party in the same manner as other taxes. Except as otherwise provided by this section, the answer, the amount payable under the warrant and the obligation of the payor to continue payment shall be governed by the garnishment laws of this state but shall be payable to the Department of Revenue.

(5) (a) As used in this subsection, "financial institution" means a bank, trust company, mutual savings bank, savings and loan association or credit union authorized to do business and accept deposits in this state under state or federal law.

(b) Not more than twenty-five (25) distress warrants may be served on the same financial institution in a single day.

(c) A financial institution served with a distress warrant may charge a fee of not more than One Hundred Dollars ($100.00) per distress warrant received to the customer of the financial institution. The fee may be deducted from the customer's account at the financial institution prior to payment of any funds to the Department of Revenue.

(d) Once the Department of Revenue receives an answer to a distress warrant from a financial institution indicating that the taxpayer named in the distress warrant has no accounts with the financial institution, the Department of Revenue may not serve any additional distress warrants on the same financial institution for a period of at least one (1) year. If a financial institution has answered a distress warrant served on the financial institution in the previous six (6) months that it has no accounts for the named taxpayer, the financial institution may disregard the distress warrant and shall not be obligated to file an answer to the subsequent distress warrant nor be liable for its failure to respond.

SECTION 3. Section 27-7-57, Mississippi Code of 1972, is amended as follows:

27-7-57. Subject to the provision of Section 27-3-33(5), the commissioner may issue a warrant under official seal directed to the sheriff of any county of the state, or to a special agent of the * * *~~commission~~ department, commanding him to immediately seize and sell the real and personal property of the person owning the * * *~~same~~ property found within the county in which the judgment is enrolled for the payment of the amount of tax, penalties, and interest, if any, as set forth in the warrant, and the cost of executing the warrant.

SECTION 4. Section 27-13-31, Mississippi Code of 1972, is amended as follows:

27-13-31. Subject to the provision of Section 27-3-33(5), the commissioner may issue a warrant under official seal directed to the sheriff of any county of the state, or to a special agent of the * * *~~commission~~ department, commanding him to immediately seize and sell the real and personal property of the person owning the * * *~~same~~ property found within the county in which the judgment is enrolled for the payment of the amount of tax, penalties, and interest, if any, as set forth in the warrant, and the cost of executing the warrant.

SECTION 5. Section 27-65-59, Mississippi Code of 1972, is amended as follows:

27-65-59. Subject to the provision of Section 27-3-33(5), the commissioner may issue a warrant under official seal directed to the sheriff of any county of the state, or to a special agent of the * * *~~commission~~ department, commanding him to immediately seize and sell the real and personal property of the person owning the * * *~~same~~ property found within the county in which the judgment is enrolled for the payment of the amount of tax, damages and interest, if any, as set forth in the warrant, and the cost of executing the warrant.

SECTION 6. The Department of Revenue shall, within sixty (60) days after the effective day of this act, adopt administrative procedures consistent with this act to assist financial institutions facing significant challenges with meeting requirements to respond to Department of Revenue distress warrants for money owed to taxpayers and minimize the impact on financial institutions for the increased administrative burdens in responding to Department of Revenue distress warrants.

SECTION 7. This act shall take effect and be in force from and after July 1, 2016.