A bill to amend the American Rescue Plan Act of 2021 to provide for protection of recovery rebates.

II 117TH CONGRESS 1ST SESSION S. 823 To amend the American Rescue Plan Act of 2021 to provide for protection of recovery rebates. IN THE SENATE OF THE UNITED STATES MARCH 18, 2021 Mr. BROWN (for himself, Mr. WYDEN, Mr. MENENDEZ, and Mr. VAN HOL- LEN) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend the American Rescue Plan Act of 2021 to provide for protection of recovery rebates. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. PROTECTION OF 2021 RECOVERY REBATES. 3 (a) IN GENERAL.—Subsection (c) of section 9601 of 4 the American Rescue Plan Act of 2021 (Public Law 117– 5 2) is amended— 6 (1) in paragraph (2), by striking subparagraphs 7 (A) and (B) and inserting the following: 8 ‘‘(A) subject to reduction or offset pursu- 9 ant to section 3716 or 3720A of title 31, 10 VerDate Sep 11 2014 15:44 Apr 10, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S823.IS S823 pamtmann on DSKBC07HB2PROD with BILLS 2 •S 823 IS United States Code, or similar authority per- 1 mitting offset, 2 ‘‘(B) subject to reduction or offset pursu- 3 ant to subsection (c), (d), (e), or (f) of section 4 6402 of the Internal Revenue Code of 1986, or 5 ‘‘(C) reduced or offset by other assessed 6 Federal taxes that would otherwise be subject 7 to levy or collection.’’, and 8 (2) by adding at the end the following new 9 paragraph: 10 ‘‘(4) ASSIGNMENT OF BENEFITS.— 11 ‘‘(A) IN GENERAL.—The right of any per- 12 son to any applicable payment shall not be 13 transferable or assignable, at law or in equity, 14 and no applicable payment shall be subject to, 15 execution, levy, attachment, garnishment, or 16 other legal process, or the operation of any 17 bankruptcy or insolvency law. 18 ‘‘(B) ENCODING OF PAYMENTS.—In the 19 case of an applicable payment described in sub- 20 paragraph (E)(iii)(I) that is certified for pay- 21 ment after the date of the enactment of this 22 paragraph under section 3528 of title 31, 23 United States Code, and that is paid electroni- 24 cally by direct deposit through the Automated 25 VerDate Sep 11 2014 15:44 Apr 10, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S823.IS S823 pamtmann on DSKBC07HB2PROD with BILLS 3 •S 823 IS Clearing House (ACH) network, the Secretary 1 of the Treasury (or the Secretary’s delegate) 2 shall— 3 ‘‘(i) issue the payment using a unique 4 identifier that is reasonably sufficient to 5 allow a financial institution to identify the 6 payment as an applicable payment, and 7 ‘‘(ii) further encode the payment pur- 8 suant to the same specifications as re- 9 quired for a benefit payment defined in 10 section 212.3 of title 31, Code of Federal 11 Regulations. 12 ‘‘(C) GARNISHMENT.— 13 ‘‘(i) ENCODED PAYMENTS.—In the 14 case of a garnishment order that applies to 15 an account that has received an applicable 16 payment that is encoded as provided in 17 subparagraph (B), a financial institution 18 shall follow the requirements and proce- 19 dures set forth in part 212 of title 31, 20 Code of Federal Regulations, except— 21 ‘‘(I) notwithstanding section 22 212.4 of title 31, Code of Federal 23 Regulations (and except as provided 24 in subclause (II)), a financial institu- 25 VerDate Sep 11 2014 15:44 Apr 10, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S823.IS S823 pamtmann on DSKBC07HB2PROD with BILLS 4 •S 823 IS tion shall not fail to follow the proce- 1 dures of sections 212.5 and 212.6 of 2 such title with respect to a garnish- 3 ment order merely because such order 4 has attached, or includes, a notice of 5 right to garnish Federal benefits 6 issued by a State child support en- 7 forcement agency, and 8 ‘‘(II) a financial institution shall 9 not, with regard to any applicable 10 payment, be required to provide the 11 notice referenced in sections 212.6 12 and 212.7 of title 31, Code of Federal 13 Regulations. 14 ‘‘(ii) OTHER PAYMENTS.—In the case 15 of a garnishment order (other than an 16 order that has been served by the United 17 States) that has been received by a finan- 18 cial institution and that applies to an ac- 19 count into which an applicable payment 20 that has not been encoded as provided in 21 subparagraph (B) has been deposited elec- 22 tronically on any date during the lookback 23 period or into which an applicable payment 24 that has been deposited by check on any 25 VerDate Sep 11 2014 15:44 Apr 10, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S823.IS S823 pamtmann on DSKBC07HB2PROD with BILLS 5 •S 823 IS date in the lookback period, the financial 1 institution, upon the request of the account 2 holder, shall treat the amount of the funds 3 in the account at the time of the request, 4 up to the amount of the applicable pay- 5 ment (in addition to any amounts other- 6 wise protected under part 212 of title 31, 7 Code of Federal Regulations), as exempt 8 from a garnishment order without requir- 9 ing the consent of the party serving the 10 garnishment order or the judgment cred- 11 itor. 12 ‘‘(iii) LIABILITY.—A financial institu- 13 tion that acts in good faith in reliance on 14 clauses (i) or (ii) shall not be subject to li- 15 ability or regulatory action under any Fed- 16 eral or State law, regulation, court or other 17 order, or regulatory interpretation for ac- 18 tions concerning any applicable payments. 19 ‘‘(D) NO RECLAMATION RIGHTS.—This 20 paragraph shall not alter the status of applica- 21 ble payments as tax refunds or other nonbenefit 22 payments for purpose of any reclamation rights 23 of the Department of the Treasury or the Inter- 24 VerDate Sep 11 2014 15:44 Apr 10, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S823.IS S823 pamtmann on DSKBC07HB2PROD with BILLS 6 •S 823 IS nal Revenue Service as per part 210 of title 31, 1 Code of Federal Regulations. 2 ‘‘(E) DEFINITIONS.—For purposes of this 3 paragraph— 4 ‘‘(i) ACCOUNT HOLDER.—The term 5 ‘account holder’ means a natural person 6 whose name appears in a financial institu- 7 tion’s records as the direct or beneficial 8 owner of an account. 9 ‘‘(ii) ACCOUNT REVIEW.—The term 10 ‘account review’ means the process of ex- 11 amining deposits in an account to deter- 12 mine if an applicable payment has been de- 13 posited into the account during the 14 lookback period. The financial institution 15 shall perform the account review following 16 the procedures outlined in section 212.5 of 17 title 31, Code of Federal Regulations and 18 in accordance with the requirements of sec- 19 tion 212.6 of title 31, Code of Federal 20 Regulations. 21 ‘‘(iii) APPLICABLE PAYMENT.—The 22 term ‘applicable payment’ means— 23 VerDate Sep 11 2014 15:44 Apr 10, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S823.IS S823 pamtmann on DSKBC07HB2PROD with BILLS 7 •S 823 IS ‘‘(I) any advance refund amount 1 paid pursuant to section 6428B(g) of 2 the Internal Revenue Code of 1986, 3 ‘‘(II) any payment made by a 4 possession of the United States with a 5 mirror code tax system (as defined in 6 subsection (b) of this section) pursu- 7 ant to such subsection which cor- 8 responds to a payment described in 9 subclause (I), and 10 ‘‘(III) any payment made by a 11 possession of the United States with- 12 out a mirror code tax system (as so 13 defined) pursuant to subsection (b) of 14 this section. 15 ‘‘(iv) GARNISHMENT.—The term ‘gar- 16 nishment’ means execution, levy, attach- 17 ment, garnishment, or other legal process. 18 ‘‘(v) GARNISHMENT ORDER.—The 19 term ‘garnishment order’ means a writ, 20 order, notice, summons, judgment, levy, or 21 similar written instruction issued by a 22 court, a State or State agency, a munici- 23 pality or municipal corporation, or a State 24 child support enforcement agency, includ- 25 VerDate Sep 11 2014 15:44 Apr 10, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S823.IS S823 pamtmann on DSKBC07HB2PROD with BILLS 8 •S 823 IS ing a lien arising by operation of law for 1 overdue child support or an order to freeze 2 the assets in an account, to effect a gar- 3 nishment against a debtor. 4 ‘‘(vi) LOOKBACK PERIOD.—The term 5 ‘lookback period’ means the two-month pe- 6 riod that begins on the date preceding the 7 date of account review and ends on the 8 corresponding date of the month two 9 months earlier, or on the last date of the 10 month two months earlier if the cor- 11 responding date does not exist.’’. 12 (b) EFFECTIVE DATE.—The amendment made by 13 this section shall take effect on the date of the enactment 14 of this Act. 15 Æ VerDate Sep 11 2014 15:44 Apr 10, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6301 E:\BILLS\S823.IS S823 pamtmann on DSKBC07HB2PROD with BILLS