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.
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.
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.