Bill Text: CA SB1477 | 2021-2022 | Regular Session | Amended
Bill Title: Enforcement of judgments: wage garnishment.
Spectrum: Partisan Bill (Democrat 3-0)
Status: (Passed) 2022-09-29 - Chaptered by Secretary of State. Chapter 849, Statutes of 2022. [SB1477 Detail]
Download: California-2021-SB1477-Amended.html
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Amended
IN
Assembly
August 18, 2022 |
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Amended
IN
Assembly
June 08, 2022 |
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Amended
IN
Senate
May 09, 2022 |
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Amended
IN
Senate
April 18, 2022 |
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Amended
IN
Senate
March 24, 2022 |
| Introduced by Senator Wieckowski (Coauthors: Senators Hertzberg and Skinner) |
February 18, 2022 |
LEGISLATIVE COUNSEL'S DIGEST
Digest Key
Vote: MAJORITY Appropriation: NO Fiscal Committee: NO Local Program: NOBill Text
The people of the State of California do enact as follows:
(a)As used in this section:
(1)“Earnings withholding order” means an earnings withholding order under Chapter 5 (commencing with Section 706.010) (Wage Garnishment Law).
(2)“Paid earnings” means earnings as defined in Section 706.011 that were paid to the employee during the 30-day period ending on the date of the levy. For the purposes of this paragraph, where earnings that have been paid to the employee are sought to be subjected to the enforcement of a money judgment other than by a levy, the date of levy is deemed to be the date the earnings were otherwise subjected to the enforcement of the judgment.
(3)“Earnings assignment order for support” means an earnings assignment order for support as defined in Section 706.011.
(b)Paid earnings that can be traced into deposit accounts or in the form of cash or its equivalent as provided in Section 703.080 are exempt in the following amounts:
(1)All of the paid earnings are exempt if prior to payment to the employee they were subject to an earnings withholding order or an earnings assignment order for support.
(2)Disposable earnings that would otherwise not be subject to levy under Section 706.050 or 706.053 that are levied upon or otherwise
sought to be subjected to the enforcement of a money judgment are exempt if prior to payment to the employee they were not subject to an earnings withholding order or an earnings assignment order for support.
SEC. 2.SECTION 1.
Section 706.050 of the Code of Civil Procedure is amended to read:706.050.
(a) Except as otherwise provided in this chapter, the maximum amount of disposable earnings of an individual judgment debtor for any workweek that is subject to levy under an earnings withholding order shall not exceed the lesser of the following:SEC. 3.SEC. 2.
Section 706.050 is added to the Code of Civil Procedure, to read:(a)This section applies to an individual judgment debtor whose gross earnings are less than the following amounts, as applicable:
(1)One thousand eight hundred dollars ($1,800) per weekly pay period.
(2)Three thousand six hundred dollars ($3,600) per biweekly pay period.
(3)Three thousand nine hundred dollars ($3,900) per semimonthly pay period.
(4)Seven thousand eight hundred dollars ($7,800) per monthly pay period.
(b)
706.050.
(a) Except as otherwise provided in this chapter, the maximum amount of disposable earnings of an individual judgment debtor for any workweek that is subject to levy under an earnings withholding order shall not exceed(1)Twenty-five percent of the individual’s disposable earnings for that week.
(c)
(d)
(a)This section applies to an individual judgment debtor whose gross earnings equal or exceed the following amounts, as applicable:
(1)One thousand eight hundred dollars ($1,800) per weekly pay period.
(2)Three thousand six hundred dollars ($3,600) per biweekly pay period.
(3)Three thousand nine hundred dollars ($3,900) per semimonthly pay period.
(4)Seven thousand eight hundred dollars ($7,800) per monthly pay period.
(b)Except as otherwise provided in this chapter, the maximum
amount of disposable earnings of an individual judgment debtor whose earnings are subject to levy under an earnings withholding order shall not exceed the lesser of the following:
(1)The amount of the individual’s disposable earnings for a given week that exceeds 80 times the state minimum hourly wage in effect at the time the earnings are payable. If a judgment debtor works in a location where the local minimum hourly wage is greater than the state minimum hourly wage, the local minimum hourly wage in effect at the time the earnings are payable shall be used for the calculation made pursuant to this paragraph.
(2)A specified percentage of the individual’s disposable earnings, based upon the individual’s gross earnings, as follows:
(A)For an individual whose gross earnings are within the following ranges, as applicable,
12 percent of the individual’s disposable earnings for the applicable period:
(i)One thousand eight hundred dollars ($1,800) to two thousand dollars ($2,000) per weekly pay period.
(ii)Three thousand six hundred dollars ($3,600) to four thousand
dollars ($4,000) per biweekly pay period.
(iii)Three thousand nine hundred dollars ($3,900) to four thousand three hundred thirty-three dollars and thirty-three cents ($4,333.33) per semimonthly pay period.
(iv)Seven thousand eight hundred dollars ($7,800) to eight thousand six hundred sixty-six dollars and sixty-seven cents ($8,666.67) per monthly pay period.
(B)For an individual whose gross earnings are within the following ranges, as applicable, 15 percent of the individual’s disposable earnings for the applicable period.
(i)Two thousand dollars and one cent ($2,000.01) to four thousand eight hundred and eight dollars ($4,808) per weekly
pay period.
(ii)Four thousand dollars and one cent ($4,000.01) to nine thousand six hundred sixteen dollars ($9,616) per biweekly pay period.
(iii)Four thousand three hundred thirty-three dollars and thirty-four cents ($4,333.34) to ten thousand four hundred seventeen dollars and thirty-three cents ($10,417.33) per semimonthly pay period.
(iv)Eight thousand six hundred sixty-six dollars and sixty-eight cents ($8,666.68) to twenty thousand eight hundred thirty-four dollars and sixty-seven cents ($20,834.67) per monthly pay period.
(C)For an individual whose gross earnings are within the following ranges, as applicable, 20 percent of the
individual’s disposable earnings for the applicable period.
(i)Four thousand eight hundred eight dollars and one cent
($4,808.01) to six thousand seven hundred thirty dollars ($6,730) per weekly pay period.
(ii)Nine thousand six hundred sixteen dollars and one cent ($9,616.01) to thirteen thousand four hundred sixty dollars ($13,460) per biweekly pay period.
(iii)Ten thousand four hundred seventeen dollars and thirty-four cents ($10,417.34) to fourteen thousand five hundred eighty-one dollars and sixty-seven cents ($14,581.67) per semimonthly pay period.
(iv)Twenty thousand eight hundred thirty-four dollars and sixty-eight cents ($20,834.68) per monthly pay period to twenty-nine thousand one hundred sixty-three dollars and thirty-three cents ($29,163.33) per monthly pay period.
(D)For an individual whose gross earnings exceed the following amounts, as applicable, 25 percent of the individual’s disposable earnings for the applicable period:
(i)Six thousand seven hundred thirty dollars ($6,730) per weekly pay period.
(ii)Thirteen thousand four hundred sixty dollars ($13,460) per biweekly pay period.
(iii)Fourteen thousand five hundred eighty-one dollars and sixty-seven cents ($14,581.67) per semimonthly pay period.
(iv)Twenty-nine thousand one hundred sixty-three dollars and thirty-three cents ($29,163.33) per monthly pay period.
(c)For any pay period other than weekly, the following multipliers shall be used to determine the maximum amount of disposable earnings subject to levy under an earnings withholding order that is proportional in effect to the calculation described in paragraph (1) of subdivision (b), except as specified in paragraph (1):
(1)For a daily pay period, the amounts shall be identical to the amounts described in subdivision (b).
(2)For a biweekly pay period, multiply the applicable hourly minimum wage by 160 work hours.
(3)For a semimonthly pay period, multiply the applicable hourly minimum wage by 173
(4)For a monthly pay period, multiply the applicable hourly minimum wage by 346
(d)This section shall become operative on September 1, 2023.
(a)A withholding order for taxes may be issued pursuant to this section requiring the employer of the taxpayer to withhold an amount in excess of the amount that may be required to be withheld pursuant to an order issued under Section 706.074.
(b)The state may, at any time, apply to a court of record in the county where the taxpayer was last known to reside for the issuance of a withholding order for taxes under this section to collect a state tax liability.
(c)The application for the order shall include a statement under oath that the state has served upon the taxpayer both of the following:
(1)A copy of the application.
(2)A notice informing the taxpayer of the purpose of the application and the right of the taxpayer to appear at the court hearing on the application.
(d)Upon the filing of the application, the court shall immediately set the matter for hearing and the court clerk shall send a notice of the time and place of the hearing by first-class mail, postage prepaid, to the state and the taxpayer. The notice shall be deposited in the mail at least 10 days before the day set for the hearing.
(e)After hearing, the court shall issue a withholding order for taxes which shall require the taxpayer’s employer to withhold and pay overall
earnings of the taxpayer other than that amount which the taxpayer proves is exempt under subdivision (b) of Section 706.051, but in no event shall the amount to be withheld be less than that permitted to be withheld under Section 706.050 or 706.053.
(f)The state may issue a temporary earnings holding order, which shall be denoted as such on its face, in any case where the state intends to apply for a withholding order for taxes under this section and has determined that the collection of the state tax liability will be jeopardized in whole or in part if the temporary earnings holding order is not issued. The temporary earnings holding order shall be directed to the taxpayer’s employer and shall require the employer to retain in the employer’s possession or under the employer’s control all or such portion of the earnings of the
taxpayer then or thereafter due as is specified in the order.
Together with the temporary earnings holding order, the state shall serve upon the employer an additional copy of the order and a notice informing the taxpayer of the effect of the order and of the right to the remedies provided in this chapter. Upon receipt of the order, the employer shall deliver to the taxpayer a copy of the order and notice. If the taxpayer is no longer employed by the employer and the employer does not owe the taxpayer any earnings, the employer is not required to make such delivery. The temporary earnings holding order expires 15 days from the date it is served on the employer unless it is extended by the court on ex parte application for good cause shown. If a temporary earnings holding order is served on an employer, the state may not thereafter, for a period of six months, serve on the same employer another temporary earnings holding order for the same employee
unless the court for good cause shown otherwise orders. Sections 706.153 and 706.154 apply to temporary earnings holding orders issued under this section.
The “notice to employee of earnings withholding order” shall contain a statement that informs the employee in simple terms of the nature of a wage garnishment, the right to an exemption, the procedure for claiming an exemption, and any other information the Judicial Council determines would be useful to the employee and appropriate for inclusion in the notice, including all of the following:
(a)The named employer has been ordered to withhold from the earnings of the judgment debtor the amounts required to be withheld under Article 3 (commencing with Section 706.050) or such other amounts as are specified in the earnings withholding order, and to pay these amounts over to the levying officer for transmittal
to the person specified in the order in payment of the judgment described in the order.
(b)The manner of computing the amounts required to be withheld pursuant to Section 706.050 or 706.053.
(c)The judgment debtor may be able to keep more or all of the judgment debtor’s earnings if the judgment debtor proves that the additional earnings are necessary for the support of the judgment debtor or the judgment debtor’s family supported in whole or in part by the judgment debtor.
(d)If the judgment debtor wishes a court hearing to prove that amounts should not be withheld from the judgment debtor’s earnings because they are necessary for the support of the judgment debtor or the judgment debtor’s family supported in whole or in part
by the judgment debtor, the judgment debtor shall file with the levying officer an original and one copy of the “judgment debtor’s claim of exemption” and an original and one copy of the “judgment debtor’s financial statement.”
The “earnings withholding order” shall include all of the following:
(a)The name, address, and, if known, the social security number of the judgment debtor.
(b)The name and address of the employer to whom the order is directed.
(c)The court where the judgment was entered, the date the judgment was entered, and the name of the judgment creditor.
(d)Whether the judgment is based in whole or in part on a claim for elder or dependent adult financial abuse and, if in part, how much of the judgment arises from the
claim.
(e)The date of issuance of the writ of execution to the county where the earnings withholding order is sought.
(f)The total amount required to satisfy the order on the date of issuance (which may not exceed the amount required to satisfy the writ of execution on the date of issuance of the order plus the levying officer’s statutory fee for service of the order).
(g)A description of the withholding period and an order to the employer to withhold from the earnings of the judgment debtor for each pay period the amount required to be withheld under Section 706.050 or 706.053 or the amount specified in the order subject to Section 706.024, as the case may be, for the pay periods ending during the withholding
period.
(h)An order to the employer to pay over to the levying officer at a specified address the amount required to be withheld and paid over pursuant to the order in the manner and within the times provided by law.
(i)An order that the employer fill out the “employer’s return” and return it by first-class mail, postage prepaid, to the levying officer at a specified address within 15 days after service of the earnings withholding order.
(j)An order that the employer deliver to the judgment debtor a copy of the earnings withholding order and the “notice to employee of earnings withholding order” within 10 days after service of the earnings withholding order; but, if the judgment debtor is no longer employed by
the employer and the employer does not owe the employee any earnings, the employer is not required to make the delivery.
(k)The name and address of the levying officer.
(a)Notwithstanding Sections 10877 and 10951, the responsibility and authority for the collection of the following delinquent amounts, and any interest, penalties, or service fees added thereto, shall be transferred from the department to the Franchise Tax Board:
(1)Registration fees.
(2)Transfer fees.
(3)License fees.
(4)Use taxes.
(5)Penalties for offenses relating to the standing or parking of a vehicle for which a notice of
parking violation has been served on the owner, and any administrative service fee added to the penalty.
(6)Unpaid tolls, toll evasion penalties as described in Section 40252 of the Vehicle Code, and any related administrative or service fees.
(7)Any court-imposed fine or penalty assessment, and any administrative service fee added thereto, that is subject to collection by the department.
(b)Any reference in this part to the department in connection with the duty to collect these amounts shall be deemed a reference to the Franchise Tax Board.
(c)(1)The amounts collected under subdivision (a) may be collected in any manner
authorized under the law as though they were a tax imposed under Part 10 (commencing with Section 17001) that is final, including, but not limited to, issuance of an order and levy under Article 4 (commencing with Section 706.070) of Chapter 5 of Division 2 of Title 9 of Part 2 of the Code of Civil Procedure in the manner provided for an earnings withholding order for taxes. Part 10 (commencing with Section 17001), 10.2 (commencing with Section 18401), or 10.7 (commencing with Section 21001), or any other applicable law shall apply for this purpose in the same manner and with the same force and effect as if the language of Part 10, 10.2, or 10.7, or the other applicable law is incorporated in full into this authority to collect these amounts, except to the extent that the provision is either inconsistent with the collection of these amounts or is not relevant to the collection of these
amounts.
(2)Both of the following shall apply to any levy or order issued on or after January 1, 2022:
(A)The maximum amount of disposable earnings of a debtor for any workweek that is subject to collection shall not exceed the applicable amount specified in Section 706.050 or 706.053 of the Code of Civil Procedure.
(B)The minimum basic standard of care amount specified in subdivision (a) of Section 704.220 of the Code of Civil Procedure shall not be subject to collection.
(d)Even though the amounts authorized by this section are collected as though they are taxes, amounts so received by the Franchise Tax Board shall be deposited into an appropriate fund or
account upon agreement between the Franchise Tax Board and the department. The amounts shall be distributed by the department from the appropriate fund or account in accordance with the laws providing for the deposits and distributions as though the moneys were received by the department.
(e)For any collection action under this section, the Franchise Tax Board may utilize the contract authorization, procedures, and mechanisms available either with respect to the collection of taxes, interest, additions to tax, and penalties pursuant to Section 19376, or with respect to the collection of the delinquencies by the department immediately prior to the time this section takes effect.
(f)The Legislature finds that it is essential for fiscal purposes that the program authorized by this
section be expeditiously implemented. Accordingly, Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code shall not apply to any standard, criteria, procedure, determination, rule, notice, or guideline established or issued by the Franchise Tax Board in implementing and administering the program required by this section.
(g)Any standard, criteria, procedure, determination, rule, notice, or guideline, that is not subject to the provisions of Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code pursuant to subdivision (f), shall be approved by the Franchise Tax Board, itself.
(h)The Franchise Tax Board may enter into any agreements or contracts necessary to implement and administer
the provisions of this section. The Franchise Tax Board in administering this section may delegate collection activities to the department. Any contracts may provide for payment of the contract on the basis of a percentage of the amount of revenue realized as a result of the contractor’s services under that contract. However, the Franchise Tax Board, in administering this part, may not enter into contracts with private collection agencies as authorized under Section 19377.
(i)The amendments made to this section by the act adding this subdivision shall apply commencing with the effective date of the act adding this subdivision.
(a)(1)(A)Fines, monetary sanctions, state or local penalties, bail, forfeitures, restitution fines, restitution orders, or any other amounts imposed by a juvenile or superior court of the State of California or the Supreme Court of the State of California upon a person or any other entity, or any payment from the State Bar of California’s Client Security Fund that is part of a final determination from the Client Security Fund, that are due and payable in an amount totaling no less than one hundred dollars ($100), in the aggregate, for criminal offenses, including all offenses involving a violation of the Vehicle Code, any amounts due pursuant to Section 903.1 of the Welfare and Institutions Code, and
any amounts due pursuant to Section 6086.10, 6086.13, or 6140.5 of the Business and Professions Code may, no sooner than 90 days after payment of that amount becomes delinquent, be referred by the juvenile or superior court, the county, the state, or the State Bar to the Franchise Tax Board for collection under guidelines prescribed by the Franchise Tax Board. Except as specified in subparagraph (B), the Department of Corrections and Rehabilitation or county may refer a restitution order to the Franchise Tax Board, in accordance with subparagraph (B) of paragraph (2), for any person subject to the restitution order who is or has been under the jurisdiction of the Department of Corrections and Rehabilitation or the county.
(B)The Department of Corrections and Rehabilitation or the county shall not refer a restitution order to the
Franchise Tax Board if a county agency has been designated by the county board of supervisors to collect restitution from individuals who (i) are serving a sentence in a county jail pursuant to subdivision (h) of Section 1170 of the Penal Code, (ii) are on mandatory supervision pursuant to paragraph (5) of subdivision (h) of Section 1170 of the Penal Code, or (iii) are on postrelease community supervision pursuant to Title 2.05 (commencing with Section 3450) of Part 3 of the Penal Code, the designated county agency has an existing collection system and objects to collection by the Franchise Tax Board, and the designated county agency informs the Department of Corrections and Rehabilitation or the county that it will collect the restitution order.
(C)If the crime victim entitled to restitution in the order notifies either the Department of
Corrections and Rehabilitation or the designated county agency with regard to their preference of a collecting agency, that preference shall be honored and the collection shall be performed in accordance with the preference of the victim.
(2)For purposes of this subdivision:
(A)The amounts referred by the juvenile or superior court, the county, the state, or the State Bar under this section may include an administrative fee and any amounts that a government entity may add to the court-imposed obligation as a result of the underlying offense, trial, or conviction. For purposes of this article, those amounts shall be deemed to be imposed by the court.
(B)Restitution orders may be referred to the Franchise Tax Board
only by a government entity, as agreed upon by the Franchise Tax Board, provided that all of the following apply:
(i)The government entity has the authority to collect on behalf of the state or the victim.
(ii)The government entity shall be responsible for distributing the restitution order collections, as appropriate.
(iii)The government entity shall ensure, in making the referrals and distributions, that it coordinates with any other related collection activities that may occur by superior courts, counties, or other state agencies.
(iv)The government entity shall ensure compliance with laws relating to the reimbursement of the Restitution Fund.
(C)The Franchise Tax Board shall establish criteria for referral that shall include setting forth a minimum dollar amount subject to referral and collection.
(b)The Franchise Tax Board, in conjunction with the Judicial Council, shall seek whatever additional resources are needed to accept referrals from all 58 counties or superior courts.
(c)Upon written notice to the debtor from the Franchise Tax Board, any amount referred to the Franchise Tax Board under subdivision (a) and any interest thereon, including any interest on the amount referred under subdivision (a) that accrued prior to the date of referral, shall be treated as final and due and payable to the State of California, and shall be collected from the debtor by
the Franchise Tax Board in any manner authorized under the law for collection of a delinquent personal income tax liability, including, but not limited to, issuance of an order and levy under Article 4 (commencing with Section 706.070) of Chapter 5 of Division 2 of Title 9 of Part 2 of the Code of Civil Procedure in the manner provided for earnings withholding orders for taxes.
(d)(1)Part 10 (commencing with Section 17001), this part, Part 10.7 (commencing with Section 21001), and Part 11 (commencing with Section 23001) shall apply to amounts referred under this article in the same manner and with the same force and effect and to the full extent as if the language of those laws had been incorporated in full into this article, except to the extent that any provision is either inconsistent with this article or is not relevant
to this article.
(2)Any information, information sources, or enforcement remedies and capabilities available to the court or the state referring to the amount due described in subdivision (a) shall be available to the Franchise Tax Board to be used in conjunction with, or independent of, the information, information sources, or remedies and capabilities available to the Franchise Tax Board for purposes of administering Part 10 (commencing with Section 17001), this part, Part 10.7 (commencing with Section 21001), or Part 11 (commencing with Section 23001).
(e)The activities required to implement and administer this part shall not interfere with the primary mission of the Franchise Tax Board to administer Part 10 (commencing with Section 17001) and Part 11 (commencing with
Section 23001).
(f)For amounts referred for collection under subdivision (a), interest shall accrue at the greater of the rate applicable to the amount due being collected or the rate provided under Section 19521. When notice of the amount due includes interest and is mailed to the debtor and the amount is paid within 15 days after the date of notice, interest shall not be imposed for the period after the date of notice.
(g)A collection under this article is not a payment of income taxes imposed under Part 10 (commencing with Section 17001) or Part 11 (commencing with Section 23001).
(h)(1)Both of the following shall apply to any levy or order issued on or after January 1, 2022, under subdivision
(c):
(A)The maximum amount of disposable earnings of a debtor for any workweek that is subject to collection shall not exceed the applicable amount specified in Section 706.050 or 706.053 of the Code of Civil Procedure.
(B)The minimum basic standard of care amount specified in subdivision (a) of Section 704.220 of the Code of Civil Procedure shall not be subject to collection.
(2)This subdivision shall not apply to restitution orders or restitution fines.
