OLR Bill Analysis

sSB 1151 (File 575, as amended by Senate “A”)*

AN ACT CONCERNING ALIAS TAX WARRANTS AND EXECUTIONS AGAINST DEBTS DUE TO JUDGMENT DEBTORS SERVED UPON FINANCIAL INSTITUTIONS.

SUMMARY:

The bill prohibits tax collectors or officers from serving alias tax warrants or executions relating to a single person or business on more than one financial institution at a time. The bill also prevents a collector from serving, or directing others to serve, more than 15 alias tax warrants on one financial institution in the same day without first confirming that the taxpayers have funds held with that institution and sets out the procedures for obtaining this confirmation.

*Senate Amendment “A” raises the number of alias tax warrants that triggers the mandatory “request for information” procedure from three to 15, allows permissive use of the request, requires financial institutions to make designations for service of the requests, changes some of the delivery requirements, and makes provisions for when a response is not received. It also allows institutions to ask for more information about a taxpayer listed in a request, generally prohibits financial institutions from disclosing receipt of a request to taxpayers, expands liability protection relating to the warrants, and eliminates the alias tax warrant task force.

EFFECTIVE DATE: October 1, 2007

SEQUENTIAL SERVICE OF ALIAS TAX WARRANTS AND OTHER BANK EXECUTIONS

The bill specifies that a tax collector or officer cannot serve alias tax warrants relating to one taxpayer on more than one financial institution at a time, including copies. The bill specifies that the officer or collector can serve the same warrant on another institution only when the taxpayer has no funds available.

For executions in general, the bill prevents officers from serving more than one financial institution execution per judgment debtor (natural persons and businesses) at a time. It prohibits officers from serving the same execution on another institution until they receive confirmation from the first institution that there are insufficient funds available to satisfy the judgment. Under the law, officers must serve executions relating to natural persons within seven days of receiving them. Under current law, which the bill deletes, officers can make subsequent demands on other institutions once they make this initial demand. However, the law does not specify that they have to wait for a response before making those demands. Current law does not address sequence of service when the debtor is a business.

If the tax collector or serving officer does not receive, within 20 days of service of an alias tax warrant or request for information, a response from the financial institution that was served indicating whether or not the taxpayer has funds at the financial institution, the collector or officer can assume that the taxpayer has no funds at that institution available for collection and may serve another financial institution. For executions in general, serving officers can take such an action if a response is not received within 25 days.

REQUESTS FOR INFORMATION

Content and Delivery

The bill requires a collector or officer who wants to serve more than 15 alias tax warrants on one financial institution in the same day to first confirm that the institution has funds for the taxpayers. The collector must do so by serving the institution with a request for information on the taxpayers in question. The bill prevents collectors and officers from serving these alias tax warrants on an institution unless they have received a response to a request for information no more than six months before the date of service. A tax collector or serving officer can use a request for information even if it is not required. The content, delivery, and financial institution response must be the same as if it were mandatory.

The request must be in writing and include (1) the taxpayers' names and last-known addresses; (2) the address or fax number to which the response can be sent; (3) if an officer submits the request by fax, the officer's name, address, judicial district, badge number, and phone number; and (4) a form notice directing the institution to report the information. The request for information can include a maximum of 250 taxpayers.

It must be (1) delivered or mailed, first class postage prepaid, to an office designated and made available by the financial institution or (2) faxed, as long as it is sent using the number and to the department or recipient designated by the institution.

The bill requires financial institutions with offices in the state to designate an office, fax number, and recipient or department for these purposes and make this information available to tax collectors and serving officers (1) upon request and (2) by mailing or delivering it to the State Marshal Commission and to the tax collector in each municipality in which the financial institution has an office. An institution can change this information as long as it mails updates to the tax collectors and the State Marshal Commission at least 15 days before the changes are effective. The bill allows tax collectors or serving officers to serve the request for information on any office of the financial institution located in this state if the institution fails to (1) make the designations or (2) make them available as required.

Response to Request for Information

The bill specifically authorizes financial institutions to disclose otherwise confidential financial information in response to a request for information. When the institution receives the request it must respond either that it does not hold any of the taxpayers' money or with a list of the taxpayers' names for which it holds funds. It may also respond that additional information is necessary to make a determination with respect to a particular taxpayer if it is unable to do so based on the information supplied with the request.

If the request for information covers fewer than 100 taxpayers, the institution has five business days after the date it receives the request to mail, deliver, or transmit the response; if the request includes between 100 and 250 names, it has 10 days to do so. A request that is received after 5 p. m. on any day is considered to be received on the next business day. The bill allows the institution to choose, for each name in the request, a specific day within the five or 10-day limit on which to determine its holdings for that person. It is not responsible for reporting on the presence or absence of such holdings on any other day.

The bill prohibits financial institutions from disclosing to a taxpayer listed in a request that the request has been received unless it is otherwise required by law. However, the bill does not prevent the disclosure of information that is known to the public or the taxpayer or as otherwise necessary to protect the financial institution's interests.

After a request for information has been served by or on behalf of a particular town, the bill prohibits collectors or officers from serving additional requests on behalf of the same municipality until the institution has had the opportunity to respond to the first one.

Liability for Disclosure

As under existing laws for executions in general, the bill specifies that financial institutions and their officers, directors, and employees are not liable for errors that occurred despite the existence of reasonable procedures to prevent such errors or for any good faith act or omission in relation to complying with these provisions. It also limits the liability of municipalities and their officers, employees and agents, and serving officers on the same grounds.

COMMITTEE ACTION

Banks Committee

Joint Favorable Change of Reference

Yea

17

Nay

1

(03/06/2007)

Judiciary Committee

Joint Favorable Substitute

Yea

42

Nay

0

(04/10/2007)

Planning and Development Committee

Joint Favorable

Yea

13

Nay

0

(05/07/2007)