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A06617 Summary:

BILL NOA06617A
 
SAME ASSAME AS S05923-A
 
SPONSORWeinstein
 
COSPNSRJoyner, Cahill, Galef, Gottfried, Magnarelli, Jackson, Mitaynes
 
MLTSPNSRAbinanti, Aubry, Benedetto, Bichotte Hermelyn, Bronson, Burdick, Burgos, Clark, Cymbrowitz, Dickens, Dilan, Dinowitz, Englebright, Epstein, Fahy, Forrest, Frontus, Hyndman, Kelles, Lavine, Mamdani, McDonald, McMahon, O'Donnell, Paulin, Peoples-Stokes, Perry, Pichardo, Rajkumar, Rivera J, Rosenthal D, Rosenthal L, Septimo, Sillitti, Simon, Steck, Taylor, Zebrowski, Zinerman
 
Amd §§5205, 5222 & 5222-a, CPLR; amd §9-g, Bank L; amd §3, D & C L
 
Exempts COVID-19 stimulus relief for individuals and families with children from money judgments; provides that in services of notices, forms, and procedures for claims of exemptions that a restraining notice or notice of levy by execution issued against a bank account shall have language to inform the holder of such account that funds for COVID-19 stimulus relief for individuals and families with children are exempt and cannot be taken.
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A06617 Actions:

BILL NOA06617A
 
03/22/2021referred to codes
03/27/2021amend and recommit to codes
03/27/2021print number 6617a
03/30/2021reported referred to rules
03/30/2021reported
03/30/2021rules report cal.48
03/30/2021ordered to third reading rules cal.48
04/19/2021passed assembly
04/19/2021delivered to senate
04/19/2021REFERRED TO JUDICIARY
04/28/2021SUBSTITUTED FOR S5923A
04/28/20213RD READING CAL.695
04/28/2021PASSED SENATE
04/28/2021RETURNED TO ASSEMBLY
05/11/2021delivered to governor
05/13/2021signed chap.107
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A06617 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A6617A     Revised 3/26/2021
 
SPONSOR: Weinstein
  TITLE OF BILL: An act to amend the civil practice law and rules, the banking law and the debtor and creditor law, in relation to exempting COVID-19 stimulus relief for individuals and families with children from money judgments   PURPOSE OF BILL: To protect payments made to individuals under prescribed emergency relief statutes, which are intended to help New Yorkers during unprecedented loss of employment and other detrimental economic impacts, from collection to satisfy money judgments, from set off, and from transfer or assignment.   SUMMARY OF PROVISIONS: OF BILL: Section 1 of the bill amends section 5205 of the civil practice law and rules to make all payments made to individuals under prescribed federal emergency relief statutes exempt from application to the satisfaction of a money judgment. Section 2 amends section 5222 of the civil practice law and rules to list COVID-19 stimulus relief on a restraining notice as money or prop- erty that is exempt from judgment creditors. Section 3 amends section 5222-a of the civil practice law and rules to list COVID-19 stimulus relief as a claimed exemption on the exemption claim form that a debtor must complete to release restrained funds. Section 4 amends section 9-g of the banking law to prohibit set off against emergency relief and stimulus payments as defined in Section 1 of the bill. Section 5 amends section 3 of the debtor and creditor law to prohibit transfer or assignment of the right to payments under prescribed federal emergency relief statutes. Section 6 is the effective date.   JUSTIFICATION: The federal Families First Coronavirus Response Act (FFCRA), Coronavirus Aid, Relief, and Economic Security Act of 2020 (CARES Act), Consolidated Appropriations Act 2021, and American Rescue Plan Act of 2021 (ARPA) provided relief payments to individuals and families with children to ameliorate the unprecedented economic and health consequences of the COVID-19 pandemic, which has disproportionately harmed communities of color. These relief payments include payments in the form of tax refunds, recovery rebates, tax credits, and advanced payment of tax credits. The legislature finds that New Yorkers should have the opportu- nity to use the full benefit of the financial assistance provided by these federal acts. The funds are intended to help people meet their financial needs, including to pay for food, rent, utilities, medicine, and other basic necessities. Any execution, levy, attachment, garnish- ment, or other legal process to seize these funds deprives recipients of the ability to support themselves and their families--including the ability to provide for children who have suffered significant food inse- curity as a result of the pandemic--and increases racial inequity. The federal laws that authorized these payments did not consistently include explicit language designating the relief payments as protected from seizure to satisfy judgments, from set off, or from transfer or assignment. It would be folly and against public policy for these relief payments to be subject to seizure, set off, transfer or assignment as described above, and the legislature intends to rectify the situation through this legislation, including by codifying the protections for stimulus payments set forth in guidance issued by the office of the attorney general. This legislation puts to bed any potential arguments that relief payments originating from these federal laws (except those improperly claimed as property) are subject to garnishment and clarifies that all relief payments to New Yorkers under these federal acts, including all funds related to children, all funds New Yorkers qualified for or received prior to the effective date, are protected. This legis- lation creates a carve out for claims brought by individuals who have an interest in the relief payments based on their status as spouses or dependents, or in situations involving fraud. Such claims include but are not limited to, actions brought in Family Court for child support, spousal support, or orders of protection, matrimonial actions, and civil claims. Legal and domestic violence advocates have raised the pervasive issue that relief payments intended to benefit families are often directly deposited in the accounts of abusers who deny their partners and children any access or benefits stemming from the payments.   LEGISLATIVE HISTORY: New Bill.   FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS: None.   EFFECTIVE DATE: Immediately.
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A06617 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         6617--A
 
                               2021-2022 Regular Sessions
 
                   IN ASSEMBLY
 
                                     March 22, 2021
                                       ___________
 
        Introduced  by  M.  of  A.  WEINSTEIN, JOYNER, CAHILL, GALEF, GOTTFRIED,
          MAGNARELLI, JACKSON, MITAYNES  --  Multi-Sponsored  by  --  M.  of  A.
          ABINANTI,   AUBRY,  BENEDETTO,  BICHOTTE HERMELYN,  BRONSON,  BURDICK,
          BURGOS, CLARK,  CYMBROWITZ,  DICKENS,  DILAN,  DINOWITZ,  ENGLEBRIGHT,
          EPSTEIN,  FAHY,  FORREST, FRONTUS, HYNDMAN, LAVINE, MAMDANI, McDONALD,
          McMAHON, O'DONNELL, PAULIN, PEOPLES-STOKES, PERRY, PICHARDO, RAJKUMAR,
          J. RIVERA,  D. ROSENTHAL,  L. ROSENTHAL,  SEPTIMO,  SILLITTI,   SIMON,
          STECK,  TAYLOR,  ZEBROWSKI,  ZINERMAN -- read once and referred to the
          Committee on Codes --  committee  discharged,  bill  amended,  ordered
          reprinted as amended and recommitted to said committee
 
        AN  ACT  to  amend the civil practice law and rules, the banking law and
          the debtor and creditor law, in relation to exempting COVID-19  stimu-
          lus relief for individuals and families with children from money judg-
          ments
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
 
     1    Section 1. Paragraph 2 of subdivision (l) of section 5205 of the civil
     2  practice law and rules, as amended by chapter 24 of the laws of 2009, is
     3  amended and a new subdivision (p) is added to read as follows:
     4    2. For purposes of this article, "statutorily exempt  payments"  means
     5  any  personal  property exempt from application to the satisfaction of a
     6  money judgment under any provision of state or federal  law.  Such  term
     7  shall include, but not be limited to, payments from any of the following
     8  sources: social security, including retirement, survivors' and disabili-
     9  ty  benefits,  supplemental  security  income or child support payments;
    10  veterans administration benefits; public  assistance;  workers'  compen-
    11  sation;  unemployment  insurance;  public  or private pensions; railroad
    12  retirement; [and] black lung benefits; and emergency relief funds.
    13    (p) Exemption for emergency relief funds. Any payments to individuals,
    14  including tax refunds, recovery rebates, refundable tax credits, and any
    15  advances of any tax credits, under the federal Families First  Coronavi-
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD10569-03-1

        A. 6617--A                          2
 
     1  rus Response Act (FFCRA), Coronavirus Aid, Relief, and Economic Security
     2  Act  of  2020  (CARES Act), Consolidated Appropriations Act of 2021, and
     3  American Rescue Plan Act of 2021 (ARPA) are exempt from  application  to
     4  the  satisfaction  of  a money judgment.  This exemption shall not apply
     5  (i) if the debt enforced is for child support, spousal support,  mainte-
     6  nance,  alimony, a distributive award in a matrimonial action, or resti-
     7  tution in a family offense proceeding, or (ii) to that  portion  of  any
     8  money judgment awarded on a claim that the emergency relief funds refer-
     9  enced herein are the rightful property of the judgment creditor.
    10    §  2.  Subdivision  (e)  of section 5222 of the civil practice law and
    11  rules, as amended by chapter 575 of the laws of 2008, is amended to read
    12  as follows:
    13    (e) Content of notice. The notice required by subdivision (d) of  this
    14  section shall be in substantially the following form and may be included
    15  in the restraining notice:
    16                    NOTICE TO JUDGMENT DEBTOR OR OBLIGOR
    17    Money  or  property  belonging  to  you may have been taken or held in
    18  order to satisfy a judgment or order which has been entered against you.
    19  Read this carefully.
    20                   YOU MAY BE ABLE TO GET YOUR MONEY BACK
    21    State and federal laws prevent certain money or  property  from  being
    22  taken  to satisfy judgments or orders. Such money or property is said to
    23  be "exempt". The following is a partial  list  of  money  which  may  be
    24  exempt:
    25    1. Supplemental security income, (SSI);
    26    2. Social security;
    27    3. Public assistance (welfare);
    28    4. Spousal support, maintenance (alimony) or child support;
    29    5. Unemployment benefits;
    30    6. Disability benefits;
    31    7. Workers' compensation benefits;
    32    8. Public or private pensions;
    33    9. Veterans benefits;
    34    10.  Ninety  percent  of your wages or salary earned in the last sixty
    35  days;
    36    11. Twenty-five hundred dollars of any bank account containing  statu-
    37  torily  exempt  payments that were deposited electronically or by direct
    38  deposit within the last forty-five days, including, but not limited  to,
    39  your  social  security, supplemental security income, veterans benefits,
    40  public assistance, workers' compensation, unemployment insurance, public
    41  or private pensions, railroad retirement benefits, black lung  benefits,
    42  or child support payments;
    43    12. Railroad retirement; [and]
    44    13. Black lung benefits; and
    45    14.  COVID-19  stimulus relief for individuals and families with chil-
    46  dren.
    47    If you think that any of your money that has been  taken  or  held  is
    48  exempt,  you  must  act promptly because the money may be applied to the
    49  judgment or order. If you claim that any of your  money  that  has  been
    50  taken or held is exempt, you may contact the person sending this notice.
    51    Also,  YOU  MAY CONSULT AN ATTORNEY, INCLUDING ANY FREE LEGAL SERVICES
    52  ORGANIZATION IF YOU QUALIFY. You can also go to court without an  attor-
    53  ney to get your money back. Bring this notice with you when you go.  You
    54  are  allowed  to  try to prove to a judge that your money is exempt from
    55  collection under New York civil practice law and rules, sections  fifty-
    56  two  hundred  twenty-two-a,  fifty-two hundred thirty-nine and fifty-two

        A. 6617--A                          3
 
     1  hundred forty. If you do not have a lawyer, the clerk of the  court  may
     2  give you forms to help you prove your account contains exempt money that
     3  the  creditor  cannot  collect. The law (New York civil practice law and
     4  rules,  article  four  and  sections  fifty-two  hundred thirty-nine and
     5  fifty-two hundred forty) provides a procedure  for  determination  of  a
     6  claim to an exemption.
     7    §  3.  Paragraph  4  of subdivision (b) of section 5222-a of the civil
     8  practice law and rules, as added by chapter 575 of the laws of 2008,  is
     9  amended to read as follows:
    10    4.  Content  of  exemption  notice  and  exemption  claim form. a. The
    11  exemption notice shall be in the following form:
 
    12                              "EXEMPTION NOTICE
    13                         as required by New York Law
 
    14                 YOUR BANK ACCOUNT IS RESTRAINED OR "FROZEN"
    15    The attached Restraining Notice or notice of  Levy  by  Execution  has
    16  been  issued  against  your  bank account. You are receiving this notice
    17  because a creditor has obtained a money judgment against you, and one or
    18  more of your bank accounts has been restrained to pay  the  judgment.  A
    19  money  judgment  is a court's decision that you owe money to a creditor.
    20  You should be aware that FUTURE DEPOSITS into your account(s) might also
    21  be restrained if you do not respond to this notice.
    22    You may be able to "vacate" (remove) the judgment. If the judgment  is
    23  vacated,  your  bank  account  will  be  released.  Consult  an attorney
    24  (including free legal services) or visit the court clerk for more infor-
    25  mation about how to do this.
    26    Under state and federal law, certain types of funds  cannot  be  taken
    27  from  your  bank  account  to  pay  a judgment. Such money is said to be
    28  "exempt."
    29    DOES YOUR BANK ACCOUNT CONTAIN ANY OF THE FOLLOWING TYPES OF FUNDS?
    30    1. Social security;
    31    2. Social security disability (SSD);
    32    3. Supplemental security income (SSI);
    33    4. Public assistance (welfare);
    34    5. Income earned while receiving SSI or public assistance;
    35    6. Veterans benefits;
    36    7. Unemployment insurance;
    37    8. Payments from pensions and retirement accounts;
    38    9. Disability benefits;
    39    10. Income earned in the last 60 days (90% of which is exempt);
    40    11. Workers' compensation benefits;
    41    12. Child support;
    42    13. Spousal support or maintenance (alimony);
    43    14. Railroad retirement; [and/or]
    44    15. Black lung benefits; and/or
    45    16. COVID-19 stimulus relief for individuals and families with
    46         children.
    47    If YES, you can claim that your money is exempt and cannot  be  taken.
    48  To make the claim, you must
    49    (a) complete the EXEMPTION CLAIM FORM attached;
    50    (b)  deliver  or  mail  the  form  to  the bank with the restrained or
    51  "frozen" account; and
    52    (c) deliver or mail the form to the creditor or its  attorney  at  the
    53  address listed on the form.

        A. 6617--A                          4
 
     1    You  must  send the forms within 20 DAYS of the postmarked date on the
     2  envelope holding this notice. You  may  be  able  to  get  your  account
     3  released  faster  if  you  send  to the creditor or its attorney written
     4  proof that your money is exempt. Proof can include an award letter  from
     5  the government, an annual statement from your pension, pay stubs, copies
     6  of checks, bank records showing the last two months of account activity,
     7  or  other  papers showing that the money in your bank account is exempt.
     8  If you send the creditor's attorney proof that the money in your account
     9  is exempt, the attorney must release that money within seven  days.  You
    10  do not need an attorney to make an exemption claim using the form."
    11    b. The exemption claim form shall be in the following form:
 
    12  NAME OF COURT, NAME OF COUNTY

    13  -------------------------------------x
 
    14  PLAINTIFF/PETITIONER/CLAIMANT               INDEX NO.
    15  V.
    16  DEFENDANT/RESPONDENT                        EXEMPTION CLAIM FORM
 
    17  -------------------------------------x
 
    18  NAME AND ADDRESS OF JUDGMENT                NAME AND ADDRESS OF FINANCIAL
    19  CREDITOR OR ATTORNEY                        INSTITUTION
    20  (To be completed by judgment                (To be completed by judgment
    21  creditor or attorney)                       creditor or attorney)
    22  ADDRESS                                     ADDRESS
    23  A_____________________                      B______________________
    24    ____________________                        _____________________
    25  Directions:  To  claim that some or all of the funds in your account are
    26  exempt, complete both copies of this form, and make one copy  for  your-
    27  self.  Mail  or  deliver one form to ADDRESS A and one form to ADDRESS B
    28  within twenty days of the date on  the  envelope  holding  this  notice.
    29  **If  you  have any documents, such as an award letter, an annual state-
    30  ment from your pension, paystubs, copies of checks or bank records show-
    31  ing the last two months of account activity, include copies of the docu-
    32  ments with this form. Your account may be released more quickly.
 
    33  _________________________________________________________________________
 
    34  I state that my account contains the following type(s) of  funds  (check
    35  all that apply):
 
    36  ____Social security
    37  ____Social security disability (SSD)
    38  ____Supplemental security income (SSI)
    39  ____Public assistance
    40  ____Wages while receiving SSI or public assistance
    41  ____Veterans benefits
    42  ____Unemployment insurance
    43  ____Payments from pensions and retirement accounts
    44  ____Income earned in the last 60 days (90% of which is exempt)
    45  ____Child support
    46  ____Spousal support or maintenance (alimony)
    47  ____Workers' compensation
    48  ____Railroad retirement or black lung benefits

        A. 6617--A                          5
 
     1  _____COVID-19 stimulus relief for individuals and families with children
     2  ____Other (describe exemption):_________________________________
 
     3  I  request  that  any correspondence to me regarding my claim be sent to
     4  the following address:
 
     5  _____________________________________________________________________
     6                       (FILL IN YOUR COMPLETE ADDRESS)
 
     7  I certify under penalty of perjury that the statement above is  true  to
     8  the best of my knowledge and belief.

     9  _________________________________________________________________________
    10  DATE                                  SIGNATURE OF JUDGMENT DEBTOR
 
    11    §  4.    Subdivision  1 of section 9-g of the banking law, as added by
    12  chapter 10 of the laws of 1980, is amended to read as follows:
    13    1. (a) No banking institution shall  assert,  claim  or  exercise  any
    14  right  of set off against any deposit account into which social security
    15  or supplemental security income payments are deposited  pursuant  to  an
    16  agreement  with  such  banking  institution  which  provides  that  such
    17  payments be deposited directly into such deposit account without presen-
    18  tation to the depositor at the time of deposit.
    19    (b) No banking institution shall assert, claim or exercise  any  right
    20  of  set  off  against  any  payments  referred  to in subdivision (p) of
    21  section fifty-two hundred five of the civil practice law and rules.
    22    § 5. Section 3 of the debtor and creditor law is amended by  adding  a
    23  new fifth undesignated paragraph to read as follows:
    24    The  right  of any person to payments, including tax refunds, recovery
    25  rebates, refundable tax credits, and any advances of  any  tax  credits,
    26  under the federal Families First Coronavirus Response Act (FFCRA), Coro-
    27  navirus  Aid,  Relief,  and  Economic  Security Act of 2020 (CARES Act),
    28  Consolidated Appropriations Act of 2021, and American Rescue Plan Act of
    29  2021 (ARPA) shall not be transferable or assignable, at law or in  equi-
    30  ty.
    31    § 6. This act shall take effect immediately.
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