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.
Summary
HB1676 amends Arkansas law governing post-judgment garnishment of property held by the state or a state subdivision. Under current law, certain debts, goods, money, credits, and effects in the hands of the state or its instrumentalities may be garnished after judgment; this bill creates an express exception for refunds of overpaid Arkansas state income tax, making those refunds unavailable for garnishment under this section.
The bill also clarifies that this change does not affect the state’s existing debt set-off program under Arkansas Code § 26-36-301 et seq. In practical terms, the measure narrows the pool of state-held assets that judgment creditors can reach by excluding state income tax refunds from garnishment, while preserving the state’s separate authority to offset refunds against debts owed to state programs.
Impact
HB1676 would amend Arkansas Code § 16-110-413 to exempt Arkansas state income tax refunds from garnishment by judgment creditors when those refunds are in the possession of the state or a state-related entity. It would not alter the state’s debt set-off statutes, so tax refunds could still be intercepted under existing offset procedures for debts owed to the state. The bill therefore affects judgment creditors, debtors with state tax refunds, and state agencies that process refunds and garnishment orders.
Sentiment
There is limited recorded discussion or voting history available for HB1676, so no clear committee or floor sentiment can be measured from the provided materials. Based on the bill text, the measure appears to favor protecting state income tax refunds from private creditor garnishment while preserving state debt collection tools. The absence of transcripts or votes means support and opposition cannot be reliably characterized from the available record.
Contention
The main policy tension is between judgment creditors seeking access to assets held by the state and debtors who may rely on tax refunds for basic financial relief. Supporters would likely view the bill as protecting tax refunds from private garnishment, while opponents may argue it reduces creditor recovery options and creates a special exemption from collection. The bill explicitly preserves state set-off authority, which may reduce controversy by ensuring the state can still apply refunds to debts owed to public programs.