HB1676
To Amend The Law Concerning Garnishment Against The State Or A Subdivision Of The State; And To Allow For Income Tax Refunds To Be Subject To Garnishment By Judgment Creditors.
Last Action (May 5, 2025): Died in House Committee at Sine Die adjournment.
Sponsors
AI-Generated Summary
House Bill 1676 amends existing Arkansas law regarding the garnishment of funds held by the state or its subdivisions. The bill removes the previous exemption that protected Arkansas state income tax refunds from being subject to garnishment by judgment creditors. Under current law, such refunds are generally exempt from this process, but the amendment subjects these refunds to garnishment when held by the state or its instrumentalities. The bill maintains existing protections and priorities regarding the set-off of debts owed to state programs, ensuring that the new provision does not supersede established debt collection processes for state agencies. Ultimately, the legislation expands the pool of assets available to creditors who have obtained a civil judgment against a debtor.
Potential Impact Analysis
Who Might Benefit?
The primary beneficiaries of this bill are judgment creditors, including individuals, businesses, or entities who have successfully sued a debtor and obtained a court judgment. By allowing income tax refunds to be garnished, these creditors gain an additional avenue to recover debts owed to them that were previously shielded by the state's immunity from this specific type of garnishment.
Who Might Suffer?
The primary group negatively impacted by this bill is Arkansas residents who have outstanding civil court judgments against them and are entitled to state income tax refunds. These individuals will lose the previous legal protection that shielded their tax refunds from seizure, potentially reducing their financial resources if they are currently facing collection efforts for civil debts.
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