[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 3841 Introduced in Senate (IS)]

<DOC>






116th CONGRESS
  2d Session
                                S. 3841

  To protect 2020 recovery rebates for individuals from assignment or 
                  garnishment, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              May 21, 2020

Mr. Grassley (for himself, Mr. Brown, Mr. Wyden, and Mr. Scott of South 
   Carolina) introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
  To protect 2020 recovery rebates for individuals from assignment or 
                  garnishment, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. PROTECTION OF 2020 RECOVERY REBATES.

    (a) In General.--Subsection (d) of section 2201 of the CARES Act 
(Public Law 116-136) is amended--
            (1) by redesignating paragraphs (1), (2), and (3) as 
        subparagraphs (A), (B), and (C), and by moving such 
        subparagraphs 2 ems to the right,
            (2) by striking ``Reduction or Offset.--Any credit'' and 
        inserting ``Reduction, Offset, Garnishment, etc.--
            ``(1) In general.--Any credit'', and
            (3) by adding at the end the following new paragraphs:
            ``(2) Assignment of benefits.--
                    ``(A) In general.--The right of any person to any 
                applicable payment shall not be transferable or 
                assignable, at law or in equity, and no applicable 
                payment shall be subject to, execution, levy, 
                attachment, garnishment, or other legal process, or the 
                operation of any bankruptcy or insolvency law.
                    ``(B) Encoding of payments.--As soon as 
                practicable, but not earlier than 10 days after the 
                date of the enactment of this paragraph, in the case of 
                an applicable payment that is paid electronically by 
                direct deposit through the Automated Clearing House 
                (ACH) network, the Secretary of the Treasury (or the 
                Secretary's delegate) shall--
                            ``(i) issue the payment using a unique 
                        identifier that is reasonably sufficient to 
                        allow a financial institution to identify the 
                        payment as an applicable payment, and
                            ``(ii) further encode the payment pursuant 
                        to the same specifications as required for a 
                        benefit payment defined in section 212.3 of 
                        title 31, Code of Federal Regulations.
                    ``(C) Garnishment.--
                            ``(i) Encoded payments.--In the case of a 
                        garnishment order received after the date that 
                        is 10 days after the date of the enactment of 
                        this paragraph and that applies to an account 
                        that has received an applicable payment that is 
                        encoded as provided in subparagraph (B), a 
                        financial institution shall follow the 
                        requirements and procedures set forth in part 
                        212 of title 31, Code of Federal Regulations, 
                        except a financial institution shall not, with 
                        regard to any applicable payment, be required 
                        to provide the notice referenced in sections 
                        212.6 and 212.7 of title 31, Code of Federal 
                        Regulations. This paragraph shall not alter the 
                        status of applicable payments as tax refunds or 
                        other nonbenefit payments for purpose of any 
                        reclamation rights of the Department of 
                        Treasury or the Internal Revenue Service as per 
                        part 210 of title 31 of the Code of Federal 
                        Regulations.
                            ``(ii) Other payments.--If a financial 
                        institution receives a garnishment order, other 
                        than an order that has been served by the 
                        United States or an order that has been served 
                        by a Federal, State, or local child support 
                        enforcement agency, that has been received by a 
                        financial institution after the date that is 10 
                        days after the date of the enactment of this 
                        paragraph and that applies to an account into 
                        which an applicable payment that has not been 
                        encoded as provided in subparagraph (B) has 
                        been deposited electronically or by an 
                        applicable payment that has been deposited by 
                        check on any date in the lookback period, the 
                        financial institution, upon the request of the 
                        account holder, shall treat the amount of the 
                        funds in the account at the time of the 
                        request, up to the amount of the applicable 
                        payment (in addition to any amounts otherwise 
                        protected under part 212 of title 31, Code of 
                        Federal Regulations), as exempt from a 
                        garnishment order without requiring the consent 
                        of the party serving the garnishment order or 
                        the judgment creditor.
                            ``(iii) Liability.--A financial institution 
                        that acts in good faith in reliance on clauses 
                        (i) or (ii) shall not be subject to liability 
                        or regulatory action under any Federal or State 
                        law, regulation, court or other order, or 
                        regulatory interpretation for actions 
                        concerning any applicable payments.
                    ``(D) Definitions.--For purposes of this 
                paragraph--
                            ``(i) Account holder.--The term `account 
                        holder' means a natural person whose name 
                        appears in a financial institution's records as 
                        the direct or beneficial owner of an account.
                            ``(ii) Account review.--The term `account 
                        review' means the process of examining deposits 
                        in an account to determine if an applicable 
                        payment has been deposited into the account 
                        during the lookback period. The financial 
                        institution shall perform the account review 
                        following the procedures outlined in section 
                        212.5 of title 31, Code of Federal Regulations 
                        and in accordance with the requirements of 
                        section 212.6 of title 31, Code of Federal 
                        Regulations.
                            ``(iii) Applicable payment.--The term 
                        `applicable payment' means any payment of 
                        credit or refund by reason of section 6428 of 
                        the Internal Revenue Code of 1986 (as so added) 
                        or by reason of subsection (c) of this section.
                            ``(iv) Garnishment.--The term `garnishment' 
                        means execution, levy, attachment, garnishment, 
                        or other legal process.
                            ``(v) Garnishment order.--The term 
                        `garnishment order' means a writ, order, 
                        notice, summons, judgment, levy, or similar 
                        written instruction issued by a court, a State 
                        or State agency, a municipality or municipal 
                        corporation, or a State child support 
                        enforcement agency, including a lien arising by 
                        operation of law for overdue child support or 
                        an order to freeze the assets in an account, to 
                        effect a garnishment against a debtor.
                            ``(vi) Lookback period.--The term `lookback 
                        period' means the two month period that begins 
                        on the date preceding the date of account 
                        review and ends on the corresponding date of 
                        the month two months earlier, or on the last 
                        date of the month two months earlier if the 
                        corresponding date does not exist.''.
    (b) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.
                                 <all>