Connecticut Seal

General Assembly

 

Raised Bill No. 1151

January Session, 2007

 

LCO No. 3972

 

*_____SB01151BA_JUD030607____*

Referred to Committee on Banks

 

Introduced by:

 

(BA )

 

AN ACT CONCERNING ALIAS TAX WARRANTS AND SERVICE OF PROCESS.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. Section 12-162 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2007):

(a) Any collector of taxes, in the execution of tax warrants, shall have the same authority as state marshals have in executing the duties of their office, and any constable or other officer authorized to serve any civil process may serve a warrant for the collection of any tax assessed, and the officer shall have the same authority as the collector concerning taxes committed to such officer for collection.

(b) Upon the nonpayment of any property tax when due, demand having been made therefor as prescribed by law for the collection of such tax, an alias tax warrant may be issued by the tax collector, which may be in the following form:

"To a state marshal of the County of ...., or any constable of the Town of .... Greeting: By authority of the state of Connecticut you are hereby commanded to collect forthwith from .... of .... the sum of .... dollars, the same being the amount of a tax with interest or penalty and charges which have accumulated thereon, which tax was levied by (insert name of town, city or municipality laying the tax) upon (insert the real estate, personal property, or both, as the case may be,) of said .... as of the .... day of ..... (In like manner insert the amount of any other property tax which may have been levied in any other year, including interest or penalty and charges which have accumulated thereon). In default of payment of said amount you are hereby commanded to levy for said tax or taxes, including interest, penalty and charges, hereinafter referred to as the amount due on such execution, upon any goods and chattels of such person and dispose of the same as the law directs, notwithstanding the provisions of subsection (j) of section 52-352b, and, after having satisfied the amount due on such execution, return the surplus, if any, to him; or you are to levy upon the real estate of such person and sell such real property pursuant to the provisions of section 12-157, to pay the amount due on such execution; or you shall, in accordance with subsection (f) of section 12-162, make demand upon the main office of any banking institution indebted to such person, subject to the provisions of section 52-367a or 52-367b, as if judgment for the amount due on such execution had been entered, for that portion of any type of deposit to the credit of or property held for such person, not exceeding in total value the amount due on such execution; or you are to garnishee the wages due such person from any employer, in the same manner as if a wage execution therefor had been entered, in accordance with section 52-361a.

Dated at .... this .... day of .... A.D. 20.., Tax Collector."

(c) Any officer serving an alias tax warrant pursuant to this section shall make return to the collector of such officer's actions thereon within ten days of the completion of such service and shall be entitled to collect from such person the fees allowed by law for serving executions issued by any court. Any state marshal or constable, authorized as provided in this section, who executes such warrant and collects any delinquent municipal taxes as a result thereof shall receive, in addition to expenses otherwise allowed, a percentage of the taxes collected pursuant to such warrant, calculated at the rate applicable for the levy of an execution as provided in section 52-261. The minimum fee for such service shall be thirty dollars. Any officer unable to serve such warrant shall, within sixty days after the date of issuance, return such warrant to the collector and in writing state the reason it was not served.

(d) A financial institution shall be paid a processing fee of eight dollars for each warrant served upon the financial institution, which fee shall be tendered to the financial institution by the collector of taxes or the officer serving the warrant at the time of service and may be included within the warrant as a charge recoverable from the taxpayer by the municipality.

(e) With regard to warrants served upon financial institutions, a collector of taxes or officer shall not serve more than one alias tax warrant per taxpayer at a time, including copies thereof, and after service on one financial institution, shall not serve the same alias tax warrant or copy thereof upon another financial institution until having received confirmation from the preceding financial institution that the taxpayer had no funds at the preceding financial institution available for collection. In the event that an alias tax warrant is returned by a financial institution to the collector of taxes or officer partially satisfied, such collector or officer shall not serve the alias tax warrant or copy thereof on another financial institution, but such collector instead may issue a replacement alias tax warrant seeking to collect the balance due.

(f) With regard to warrants served on financial institutions, in order to ensure that the number of warrants served do not exceed the reasonable processing capabilities of the financial institution being served, whenever a collector of taxes expects to serve, or have an officer serve, on a particular financial institution, more than one warrant on the same day, such collector or officer shall submit to the financial institution, in writing and in advance of the service, a notice that complies with subsection (g) of this section. Such notice shall state the number of warrants the collector desires to serve on the financial institution and the date or dates on which the warrants will be ready for service. Upon receipt of the notice, the financial institution shall, by the next business day, mail or otherwise deliver a written response to the collector or officer. Such response shall designate a reasonable schedule pursuant to which the collector, or officer serving on behalf of the town, may serve the warrants. When determining what is a reasonable schedule, the financial institution shall endeavor, within its normal processing capabilities, to set a schedule that would satisfy the town's need for reasonably prompt completion, if such need is expressed in the written notice, provided, the financial institution is permitted to take into account, among other things (1) the number of warrants proposed to be served, (2) the normal processing capabilities of the particular institution, including human resource scheduling, (3) the volume of service being processed or reasonably expected to be processed, on behalf of others, including warrants from other towns and further including the service by others of subpoenas, executions, garnishments, levies and other forms of process, and (4) any statutory or common law deadlines to which the financial institution shall adhere. Upon receipt of the response, the collector or officer serving on behalf of the town may proceed to serve the warrants on the financial institution, provided the service complies with the schedule set forth in the response.

(g) The notice prescribed in subsection (f) of this section shall be in writing and shall be (1) mailed or delivered to the main office of any financial institution having its main office within this state, (2) mailed or delivered to a branch office of any financial institution which does not have its main office in this state, provided the branch has been designated by the financial institution for such purposes in accordance with regulations adopted by the Banking Commissioner, in accordance with chapter 54, or (3) transmitted by facsimile, email or other electronic communication, provided the town has received written instructions from the financial institution expressly authorizing such method of communication and specifying the required format and any limitations and conditions concerning such communications and further specifying the applicable facsimile number, email address or other identifying address information. The notice shall also state the address to which the response may be mailed or delivered.

Sec. 2. Section 52-367a of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2007):

(a) As used in this section and section 52-367b, "financial institution" means any bank, savings bank, savings and loan association or credit union organized, chartered or licensed under the laws of this state or the United States and having its main office in this state, or any similar out-of-state institution having a branch office in this state.

(b) Execution may be granted pursuant to this section against any debts due from any financial institution to a judgment debtor which is not a natural person. If execution is desired against any such debt, the plaintiff requesting the execution shall make application to the clerk of the court. The application shall be accompanied by a fee of thirty-five dollars payable to the clerk of the court for the administrative costs of complying with the provisions of this section which fee may be recoverable by the judgment creditor as a taxable cost of the action. The clerk shall issue such execution containing a direction that the officer serving such execution shall make demand (1) upon the main office of any financial institution having its main office within the county of the serving officer, or (2) if such main office is not within the serving officer's county and such financial institution has one or more branch offices within such county, upon an employee of such a branch office, such employee and branch office having been designated by the financial institution in accordance with regulations adopted by the Banking Commissioner, in accordance with chapter 54, for the payment of any debt due to the judgment debtor, and, after having made such demand, shall serve a true and attested copy thereof, with the serving officer's actions thereon endorsed, with the financial institution officer upon whom such demand is made. The serving officer shall not serve more than one financial institution execution per judgment debtor at a time, including copies thereof. After service of an execution on one financial institution, the serving officer shall not serve the same execution or a copy thereof on another financial institution until after receiving confirmation from the preceding financial institution that the judgment debtor had insufficient funds at the preceding financial institution available for collection to satisfy the execution.

(c) If any such financial institution upon which such execution is served and upon which such demand is made is indebted to the judgment debtor, the financial institution shall remove from the judgment debtor's account the amount of such indebtedness not exceeding the amount due on such execution. Except as provided in subsection (d) of this section, the financial institution shall immediately pay to such serving officer the amount removed from the judgment debtor's account, which amount shall be received and applied on such execution by such serving officer. Such financial institution shall act upon such execution according to section 42a-4-303 before its midnight deadline, as defined in section 42a-4-104. Nothing in this subsection shall be construed to affect any other rights or obligations of the financial institution with regard to funds in the judgment debtor's account.

(d) If the deposit account is subject to a security interest of a secured party, other than the financial institution upon which such execution is served and upon which such demand is made, pursuant to a control agreement between the financial institution and such secured party under article 9 of title 42a, and if any funds are removed from the judgment debtor's account pursuant to subsection (c) of this section, the financial institution shall forthwith mail a copy of the execution when received from the serving officer, postage prepaid, to the judgment debtor and to such other secured party at the last known address of such parties with respect to the affected accounts on the records of the financial institution. The financial institution shall hold the amount removed from the judgment debtor's account pursuant to subsection (c) of this section for twenty days from the date of the mailing to the judgment debtor and such other secured party, and during such period shall not pay the serving officer.

(e) To prevent the financial institution from paying the serving officer, as provided in subsection (h) of this section, such other secured party shall give notice of its prior perfected security interest in such deposit account, by delivering to the clerk of the court that issued the execution a written claim for determination of interests in property pursuant to section 52-356c and by delivering a copy of such claim to the financial institution upon which such execution is served.

(f) Upon receipt of a written claim for determination of interests in property made pursuant to subsection (e) of this section, the clerk of the court shall enter the appearance of the secured party with the address set forth in the written claim. The clerk shall forthwith send file-stamped copies of the written claim to the judgment creditor, the judgment debtor and the financial institution upon which such execution was served with a notice stating that the disputed funds are being held until a court order is entered regarding the disposition of the funds.

(g) If a written claim for determination of interests in property is made pursuant to subsection (e) of this section, the financial institution shall continue to hold the amount removed from the judgment debtor's account until a court order is received regarding disposition of the funds.

(h) If no written claim for determination of interests in property is made pursuant to subsection (e) of this section, the financial institution shall, upon demand, forthwith pay the serving officer the amount removed from the judgment debtor's account, and the serving officer shall thereupon pay such sum, less such serving officer's fees, to the judgment creditor, except to the extent otherwise ordered by a court.

(i) If a written claim for determination of interests in property is made pursuant to subsection (e) of this section, the clerk of the court, after a judgment or order is entered pursuant to section 52-356c, shall forthwith send a copy of such judgment or order to the financial institution. Such judgment or order shall be deemed to be a final judgment for the purposes of appeal. No appeal shall be taken except within seven days of the rendering of the judgment or order. The judgment or order of the court may be implemented during such seven-day period, unless stayed by the court.

(j) If records or testimony are subpoenaed from a financial institution in connection with a hearing conducted pursuant to section 52-356c on a written claim for determination of interests in property made pursuant to subsection (e) of this section, the reasonable costs and expenses of the financial institution in complying with the subpoena shall be recoverable by the financial institution from the party requiring such records or testimony, provided the financial institution shall be under no obligation to attempt to obtain records or documentation relating to the account executed against that are held by any other financial institution. The records of a financial institution as to the dates and amounts of deposits into an account in the financial institution shall, if certified as true and accurate by an officer of the financial institution, be admissible as evidence without the presence of the officer in any hearing conducted pursuant to section 52-356c to determine the legitimacy of a claim of an interest in property made under subsection (e) of this section.

(k) If such financial institution fails or refuses to pay over to such serving officer the amount of such debt, not exceeding the amount due on such execution, such financial institution shall be liable in an action therefor to the judgment creditor named in such execution, and the amount so recovered by such judgment creditor shall be applied toward the payment of the amount due on such execution.

(l) Except as provided in subsection (k) of this section, no financial institution or any officer, director or employee of such financial institution shall be liable to any person with respect to any act done or omitted in good faith or through the commission of a bona fide error that occurred despite reasonable procedures maintained by the financial institution to prevent such errors in complying with the provisions of this section.

(m) The financial institution shall receive from the serving officer as representative of the judgment creditor a fee of eight dollars for the financial institution’s costs in complying with the provisions of this section which fee (1) may be recoverable by the judgment creditor as a taxable cost of the action, and (2) shall be tendered to the financial institution at the time of service.

[(m)] (n) Nothing in this section shall in any way restrict the rights and remedies otherwise available to a judgment debtor or to any such secured party at law or in equity.

Sec. 3. Section 52-367b of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2007):

(a) Execution may be granted pursuant to this section against any debts due from any financial institution to a judgment debtor who is a natural person, except to the extent such debts are protected from execution by sections 52-352a, 52-352b, 52-352c of the general statutes, revision of 1958, revised to 1983, 52-354 of the general statutes, revision of 1958, revised to 1983, 52-361 of the general statutes, revision of 1958, revised to 1983 and section 52-361a, as well as by any other laws or regulations of this state or of the United States which exempt such debts from execution.

(b) If execution is desired against any such debt, the plaintiff requesting the execution shall make application to the clerk of the court. The application shall be accompanied by a fee of thirty-five dollars payable to the clerk of the court for the administrative costs of complying with the provisions of this section which fee may be recoverable by the judgment creditor as a taxable cost of the action. In a IV-D case, the request for execution shall be accompanied by an affidavit signed by the serving officer attesting to an overdue support amount of five hundred dollars or more which accrued after the entry of an initial family support judgment. If the papers are in order, the clerk shall issue such execution containing a direction that the officer serving such execution shall, within seven days from the receipt by the serving officer of such execution, make demand (1) upon the main office of any financial institution having its main office within the county of the serving officer, or (2) if such main office is not within the serving officer's county and such financial institution has one or more branch offices within such county, upon an employee of such a branch office, such employee and branch office having been designated by the financial institution in accordance with regulations adopted by the Banking Commissioner, in accordance with chapter 54, for payment of any such nonexempt debt due to the judgment debtor and, after having made such demand, shall serve a true and attested copy of the execution, together with the affidavit and exemption claim form prescribed by subsection (k) of this section, with the serving officer's actions endorsed thereon, with the financial institution officer upon whom such demand is made. [If the officer serving such execution has made an initial demand pursuant to this subsection within such seven-day period, the serving officer may make additional demands upon the main office of other financial institutions or employees of other branch offices pursuant to subdivision (1) or (2) of this subsection] The serving officer shall not serve more than one financial institution execution per judgment debtor at a time, including copies thereof. After service of an execution on one financial institution, the serving officer shall not serve the same execution or a copy thereof on another financial institution until after receiving confirmation from the preceding financial institution that the judgment debtor had insufficient funds at the preceding financial institution available for collection to satisfy the execution, provided any such additional [demand] service is made not later than forty-five days from the receipt by the serving officer of such execution.

(c) If any such financial institution upon which such execution is served and upon which such demand is made is indebted to the judgment debtor, the financial institution shall remove from the judgment debtor's account the amount of such indebtedness not exceeding the amount due on such execution before its midnight deadline, as defined in section 42a-4-104. Notwithstanding the provisions of this subsection, if electronic direct deposits that are readily identifiable as exempt federal veterans' benefits, Social Security benefits, including, but not limited to, retirement, survivors' and disability benefits, supplemental security income benefits or child support payments processed and received pursuant to Title IV-D of the Social Security Act were made to the judgment debtor's account during the thirty-day period preceding the date that the execution was served on the financial institution, then the financial institution shall leave the lesser of the account balance or one thousand dollars in the judgment debtor's account, provided nothing in this subsection shall be construed to limit a financial institution's right or obligation to remove such funds from the judgment debtor's account if required by any other provision of law or by a court order. The judgment debtor shall have access to such funds left in the judgment debtor's account pursuant to this subsection. The financial institution may notify the judgment creditor that funds have been left in the judgment debtor's account pursuant to this subsection. Nothing in this subsection shall alter the exempt status of funds which are exempt from execution under subsection (a) of this section or under any other provision of state or federal law, or the right of a judgment debtor to claim such exemption. Nothing in this subsection shall be construed to affect any other rights or obligations of the financial institution with regard to the funds in the judgment debtor's account.

(d) If any funds are removed from the judgment debtor's account pursuant to subsection (c) of this section, upon receipt of the execution and exemption claim form from the serving officer, the financial institution shall forthwith mail copies thereof, postage prepaid, to the judgment debtor and to any secured party that is party to a control agreement between the financial institution and such secured party under article 9 of title 42a at the last known address of the judgment debtor and of any such secured party with respect to the affected accounts on the records of the financial institution. The financial institution shall hold the amount removed from the judgment debtor's account pursuant to subsection (c) of this section for fifteen days from the date of the mailing to the judgment debtor and any such secured party, and during such period shall not pay the serving officer.

(e) To prevent the financial institution from paying the serving officer, as provided in subsection (h) of this section, the judgment debtor shall give notice of a claim of exemption by delivering to the financial institution, by mail or other means, the exemption claim form or other written notice that an exemption is being claimed and any such secured party shall give notice of its claim of a prior perfected security interest in such deposit account by delivering to the financial institution, by mail or other means, written notice thereof. The financial institution may designate an address to which the notice of a claim of exemption, or a secured party claim notice, shall be delivered. Upon receipt of such notice, the financial institution shall, within two business days, send a copy of such notice to the clerk of the court which issued the execution.

(f) (1) Upon receipt of an exemption claim form or a secured party claim notice, the clerk of the court shall enter the appearance of the judgment debtor or such secured party with the address set forth in the exemption claim form or secured party claim notice. The clerk shall forthwith send file-stamped copies of the exemption claim form or secured party claim notice to the judgment creditor and judgment debtor with a notice stating that the disputed funds are being held for forty-five days from the date the exemption claim form or secured party claim notice was received by the financial institution or until a court order is entered regarding the disposition of the funds, whichever occurs earlier, and the clerk shall automatically schedule the matter for a short calendar hearing. The claim of exemption filed by such judgment debtor shall be prima facie evidence at such hearing of the existence of the exemption.

(2) Upon receipt of notice from the financial institution pursuant to subsection (c) of this section, a judgment creditor may, on an ex parte basis, present to a judge of the Superior Court an affidavit sworn under oath by a competent party demonstrating a reasonable belief that such judgment debtor's account contains funds which are not exempt from execution and the amount of such nonexempt funds. Such affidavit shall not be conclusory but is required to show the factual basis upon which the reasonable belief is based. If such judge finds that the judgment creditor has demonstrated a reasonable belief that such judgment debtor's account contains funds which are not exempt from execution, such judge shall authorize the judgment creditor to submit a written application to the clerk of the court for a hearing on the exempt status of funds left in the judgment debtor's account pursuant to subsection (c) of this section. The judgment creditor shall promptly send a copy of the application and the supporting affidavit to the judgment debtor and to any secured party shown on a secured party claim notice sent to the judgment creditor pursuant to subdivision (1) of this subsection. Upon receipt of such application, the clerk of the court shall automatically schedule the matter for a short calendar hearing and shall give written notice to the judgment creditor, the judgment debtor and any secured party shown on a secured party claim notice received by the clerk of the court. The notice to the judgment creditor pursuant to subsection (c) of this section shall be prima facie evidence at such hearing that the funds in the account are exempt funds. The burden of proof shall be upon the judgment creditor to establish the amount of funds which are not exempt.

(g) If an exemption claim is made or a secured party claim notice is given pursuant to subsection (e) of this section, the financial institution shall continue to hold the amount removed from the judgment debtor's account for forty-five days or until a court order is received regarding disposition of the funds, whichever occurs earlier. If no such order is received within forty-five days of the date the financial institution sends a copy of the exemption claim form or notice of exemption or a secured party claim notice to the clerk of the court, the financial institution shall return the funds to the judgment debtor's account.

(h) If no claim of exemption or secured party claim notice is received by the financial institution within fifteen days of the mailing to the judgment debtor and any secured party of the execution and exemption claim form pursuant to subsection (d) of this section, the financial institution shall, upon demand, forthwith pay the serving officer the amount removed from the judgment debtor's account, and the serving officer shall thereupon pay such sum, less such serving officer's fees, to the judgment creditor, except to the extent otherwise ordered by a court.

(i) The court, after a hearing conducted pursuant to subsection (f) of this section, shall enter an order determining the issues raised by the claim of exemption and claim by a secured party of a prior perfected security interest in such deposit account. The clerk of the court shall forthwith send a copy of such order to the financial institution. Such order shall be deemed to be a final judgment for the purposes of appeal. No appeal shall be taken except within seven days of the rendering of the order. The order of the court may be implemented during such seven-day period, unless stayed by the court.

(j) If both exempt and nonexempt moneys have been deposited into an account, for the purposes of determining which moneys are exempt under this section, the moneys most recently deposited as of the time the execution is served shall be deemed to be the moneys remaining in the account.

(k) The execution, exemption claim form and clerk's notice regarding the filing of a claim of exemption shall be in such form as prescribed by the judges of the Superior Court or their designee. The exemption claim form shall be dated and include a checklist and description of the most common exemptions, instructions on the manner of claiming the exemptions and a space for the judgment debtor to certify those exemptions claimed under penalty of false statement.

(l) If records or testimony are subpoenaed from a financial institution in connection with a hearing conducted pursuant to subsection (f) of this section, the reasonable costs and expenses of the financial institution in complying with the subpoena shall be recoverable by the financial institution from the party requiring such records or testimony, provided, the financial institution shall be under no obligation to attempt to obtain records or documentation relating to the account executed against which are held by any other financial institution. The records of a financial institution as to the dates and amounts of deposits into an account in the financial institution shall, if certified as true and accurate by an officer of the financial institution, be admissible as evidence without the presence of the officer in any hearing conducted pursuant to subsection (f) of this section to determine the legitimacy of a claim of exemption made under this section.

(m) [If there are moneys to be removed from the judgment debtor's account, prior to the removal of such moneys pursuant to subsection (c) of this section, the] The financial institution shall receive from the serving officer as representative of the judgment creditor a fee of eight dollars for the financial institution's costs in complying with the provisions of this section which fee (1) may be recoverable by the judgment creditor as a taxable cost of the action, and (2) shall be tendered to the financial institution at the time of service.

(n) If the financial institution fails or refuses to pay over to the serving officer the amount of such debt, not exceeding the amount due on such execution, such financial institution shall be liable in an action therefor to the judgment creditor named in such execution for the amount of nonexempt moneys which the financial institution failed or refused to pay over, excluding funds of up to one thousand dollars which the financial institution in good faith allowed the judgment debtor to access pursuant to subsection (c) of this section. The amount so recovered by such judgment creditor shall be applied toward the payment of the amount due on such execution. Thereupon, the rights of the financial institution shall be subrogated to the rights of the judgment creditor. If such financial institution pays exempt moneys from the account of the judgment debtor over to the serving officer contrary to the provisions of this section, such financial institution shall be liable in an action therefor to the judgment debtor for any exempt moneys so paid and such financial institution shall refund or waive any charges or fees by the financial institution, including, but not limited to, dishonored check fees, overdraft fees or minimum balance service charges and legal process fees, which were assessed as a result of such payment of exempt moneys. Thereupon, the rights of the financial institution shall be subrogated to the rights of the judgment debtor.

(o) Except as provided in subsection (n) of this section, no financial institution or any officer, director or employee of such financial institution shall be liable to any person with respect to any act done or omitted in good faith or through the commission of a bona fide error that occurred despite reasonable procedures maintained by the financial institution to prevent such errors in complying with the provisions of this section.

(p) Nothing in this section shall in any way restrict the rights and remedies otherwise available to a judgment debtor or any such secured party at law or in equity.

(q) Nothing in this section shall in any way affect any rights of the financial institution with respect to uncollected funds credited to the account of the judgment debtor, which rights shall be superior to those of the judgment creditor.

(r) For the purposes of this subsection, "exempt" shall have the same meaning as provided in subsection (c) of section 52-352a. Funds deposited in an account that has been established for the express purpose of receiving electronic direct deposits of public assistance or of Title IV-D child support payments from the Department of Social Services shall be exempt.

Sec. 4. (Effective from passage) Not later than July 1, 2007, the Law Revision Commission shall commission a task force to study the feasibility of permitting the service of alias tax warrants and other forms of execution on financial institutions by electronic means. The task force shall be comprised of representatives from the banking industry, municipal governments, persons representing the interests of debtors and other interested parties.

This act shall take effect as follows and shall amend the following sections:

Section 1

October 1, 2007

12-162

Sec. 2

October 1, 2007

52-367a

Sec. 3

October 1, 2007

52-367b

Sec. 4

from passage

New section

BA

Joint Favorable C/R

JUD