HB1774

SECTION 1. Chapter 706, Hawaii Revised Statutes, is amended by adding a new section to part III to be appropriately designated and to read as follows:

"§706- Income withholding for payment of restitution. (1) Whenever a person is sentenced and a judgment or order is entered establishing, modifying, or enforcing restitution, the court shall allow ninety days for a defendant to make payment in full. If the judgment or order is not satisfied after ninety days, the court shall issue an income withholding order that shall operate as an assignment to the department of the attorney general for the benefit of the victim, of amounts that are due at times that may be specified in the judgment or order, but no less than $30 per month, from the defendant's income due or to become due in the future from the defendant's employer or successor employers. A copy of the income withholding order shall be filed in the office of the clerk of the court in which the income withholding order was issued.

(2) The income withholding order issued pursuant to subsection (1) shall be effective immediately after service upon an employer of a copy of the order, which service may be effected by the department of the attorney general by regular mail, by personal delivery, or by transmission through electronic means. Thereafter, the employer, for each pay

period, shall withhold from the income due to the defendant from the employer, and not required to be withheld by any other provision of federal or state law, and transmit to the department of the attorney general as much as may remain payable to the defendant for the pay period up to the amount specified in the order as being payable during the same pay period. The employer shall immediately inform the department of the attorney general of any change that would affect the income withholding order.

(3) Compliance by an employer with an income withholding order issued pursuant to subsection (1) shall operate as a discharge of the employer's liability to the defendant for that

portion of the defendant's earnings withheld and transmitted to the department of the attorney general, regardless of whether the employer has withheld the correct amount. For each payment made pursuant to an income withholding order, the employer may deduct and retain as an administrative fee an additional amount of $2 from the income owed to the defendant. The total amount withheld from the defendant's income, including the administrative fee, shall not exceed the maximum amounts permitted under section 303(b) of the Consumer Credit

Protection Act, (15 U.S.C. 1673(b)).

(4) Any income withholding order issued pursuant to this section shall:

(a) Have priority as against any garnishment, attachment, execution, or other income withholding order, or any other order, except for any order made pursuant to chapters 571, 576B, 576D, 576E, 580, and 584; and

(b) Not be subject to the exemptions or restrictions contained in part III of chapter 651 and in chapters 652 and 653.

(5) An employer who fails to comply with an income withholding order under this section shall be liable to the victim or the department of the attorney general for the full amount of all sums ordered to be withheld and transmitted. An employer receiving an income withholding order shall:

(a) Transmit withheld amounts to the department of the attorney general within five business days after the defendant is paid; and

(b) Begin withholding no later than the first pay period commencing within seven business days following the date a copy of the order is served upon the employer by regular mail, personal delivery, or electronic means.

(6) An employer who:

(a) Complies with an income withholding order that is valid on its face shall not be subject to civil liability to any person or agency for conduct in compliance with the order; and

(b) Is required to withhold amounts from the income of more than one employee may remit to the department of the attorney general a sum total of all amounts in one lump check with a listing of the amounts applicable to each employee. Within five business days after receipt of the amounts withheld by the employer, the department of the attorney general shall disburse the amounts to the victim.

(7) An income withholding order shall be terminated when appropriate by court order. The department of the attorney general shall promptly refund any amount withheld in error to the defendant.

(8) If there is more than one restitution judgment or order, the amounts withheld from the income of a defendant shall be allocated among the different restitution judgments or orders. If the concurrent income withholding orders would cause the amounts withheld from the defendant's income to exceed applicable wage withholding limitations established under this section, the amount withheld shall be allocated so that in no case shall the allocation result in a withholding for any of the restitution obligations not being implemented.

(9) If a defendant changes employment when an income withholding order is in effect, the department of the attorney general shall notify the defendant's new employer of the defendant's and the new employer's respective obligations under this section. The new employer shall be bound by the income withholding order until further court order.

(10) As used in this section, and notwithstanding any other provision of law:

"Business day" means a day on which an employer's office is open for regular business.

"Employer" means any person, including the United States government, the State, and any political subdivision thereof, who uses or engages the services of any person in exchange for the payment of wages or other means of exchange, or who is or shall become obligated for payment of income, except that this meaning shall not apply if the employed individual is incarcerated in a correctional facility or engaged in an inmate work furlough program within the State.

"Income" includes without limitation salaries, wages, earnings, workers' compensation, commissions, fees, bonuses, independent contractor income, and any other entitlement to money, including moneys payable as a disability, death, or other benefit, or moneys from the State or a political subdivision thereof, or from any disability system established by the State or any political subdivision thereof under law."

SECTION 2. There is appropriated out of the general revenues of the State of Hawaii the sum of $ or so much thereof as may be necessary for fiscal year 2018-2019 to the department of the attorney general for the purpose of enhancing restitution collection pursuant to section 1 of this Act, including the hiring of any necessary staff.

The sum appropriated shall be expended by the department of the attorney general for the purposes of this Act.

SECTION 3. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

SECTION 4. If any provision of this Act, or the application thereof to any person or circumstance, is held invalid, the invalidity does not affect other provisions or applications of the Act that can be given effect without the invalid provision or application, and to this end the provisions of this Act are severable.

SECTION 5. New statutory material is underscored.

SECTION 6. This Act shall take effect upon its approval; provided that section 2 shall take effect on July 1, 2018.

INTRODUCED BY:	_____________________________
	By Request

HOUSE OF REPRESENTATIVES	H.B. NO.	1774
TWENTY-NINTH LEGISLATURE, 2018
STATE OF HAWAII