SEC. 466. [42 U.S.C. 666] (a) In order to satisfy section 454(20)(A), each State must have in effect laws requiring the use of the following procedures, consistent with this section and with regulations of the Secretary, to increase the effectiveness of the program which the State administers under this part...

(17) Financial institution data matches.—

(A) In general.—Procedures under which the State agency shall enter into agreements with financial institutions doing business in the State—

(i) to develop and operate, in coordination with such financial institutions, and the Federal Parent Locator Service in the case of financial institutions doing business in two or more States, a data match system, using automated data exchanges to the maximum extent feasible, in which each such financial institution is required to provide for each calendar quarter the name, record address, social security number or other taxpayer identification number, and other identifying information for each noncustodial parent who maintains an account at such institution and who owes past-due support, as identified by the State by name and social security number or other taxpayer identification number; and

(ii) in response to a notice of lien or levy, encumber or surrender, as the case may be, assets held by such institution on behalf of any noncustodial parent who is subject to a child support lien pursuant to paragraph (4).

(B) Reasonable fees.—The State agency may pay a reasonable fee to a financial institution for conducting the data match provided for in subparagraph (A)(i), not to exceed the actual costs incurred by such financial institution.

(C) Liability.—A financial institution shall not be liable under any Federal or State law to any person—

(i) for any disclosure of information to the State agency under subparagraph (A)(i);

(ii) for encumbering or surrendering any assets held by such financial institution in response to a notice of lien or levy issued by the State agency as provided for in subparagraph (A)(ii); or

(iii) for any other action taken in good faith to comply with the requirements of subparagraph (A).

(D) Definitions.—For purposes of this paragraph—

(i) Financial institution.—The term "financial institution" has the meaning given to such term by section 469A(d)(1).

(ii) Account.—The term "account" means a demand deposit account, checking or negotiable withdrawal order account, savings account, time deposit account, or money-market mutual fund account.

• (a)
• (1) In any case of child or spousal support enforced by the department of human services or its contractors under Title IV-D of the Social Security Act (42 U.S.C. § 651 et seq.), in which overdue support is owed by an obligor who resides or owns property in this state, a lien shall arise by operation of law against all real and personal property, tangible or intangible, then owned or subsequently acquired by the obligor against whom the lien arises for the amounts of overdue support owed or the amount of penalties, costs or fees as provided in this chapter. The personal or real property, tangible or intangible, of the obligor that is subjected to the lien required by this part shall include all existing property at the time of the lien's perfection, or acquired thereafter, even if a prior order for overdue support or arrears only specifies a certain amount of overdue support or arrears that was owed by the obligor at the time of such order.
• (2) "Overdue support" is defined, for purposes of this part, as any occasion on which the full amount of ordered support for or on behalf of a minor child, or for a spouse or former spouse of the obligor with whom the child is living to the extent spousal support would be included for the purposes of 42 U.S.C. § 654(4), is not paid by the due date for arrears as defined in § 36-5-101(f)(1) unless an income assignment is in effect and the payer of income is paying pursuant to § 36-5-101(g). "Overdue support" shall include all amounts of support that are in arrears as defined in § 36-5-101(f)(1) and that remain unpaid by the obligor at the time the lien is perfected or that become due as arrears subsequent to the perfection of the lien.
• (3) For the purposes of this part, "personal property" includes:
• (A) A commissary account or any other account or fund established by or for the benefit of the inmate in a correctional institution or private prison operated by or under contract with the department of correction while the inmate is incarcerated; and
• (B) Any account containing wages received for work performed while an inmate is in a correctional institution or private prison operated by or under contract with the department of correction, but does not include any portion of the account that is used to pay litigation taxes, court costs, sexual offender surcharges, fines, restitution, or other moneys related to the criminal offense for which the inmate is confined.
• (b)
• (1)
• (A) The commissioner may cause a notice of such lien on real property or upon any personal property to be recorded or filed, as appropriate in the appropriate place for the filing of a judgment lien or security interest in the property. This notice may be filed by automated means where feasible. The department shall not be required to pay the fee for filing the notice of lien at the time the notice is filed, but shall be given credit and billed once each month for the notices that it files pursuant to this subsection (b).
• (B) In addition to the notice perfected pursuant to subdivision (b)(1)(A), a notice of lien may be sent by any appropriate means, including by any automated means, by the commissioner or any authorized representative of the department, to any person or entity that holds or that may hold any assets payable or due to be paid or transferred to an obligor of overdue support to notify the person or entity of the existence of a lien for overdue support. The receipt of such notice by that person or entity shall be adequate notice of the department's lien upon the obligor's assets of any kind that are held by the person or entity or that may come into that person's or entity's possession or control. Subject to the priorities of subsections (c) and (d), or the subordination of these liens to orders or judgments pursuant to § 36-5-905(c)(1)(A) and (c)(1)(B), and subject to any exemptions allowed by § 36-5-906, payment or transfer to the obligor or other persons or entities of the funds, property, or other assets of any kind that are encumbered by the lien subsequent to the receipt of such notice, shall make the person or entity liable to the department to the extent of the overdue support, up to the value of the transferred assets, in an action in the circuit or chancery court of the county in which the order of support is being enforced.
• (2) Upon request, the department shall disclose the specific amount of liability at a given date to any interested party.
• (3)
• (A) The department may cause a notice of lien to be filed or recorded and to be effective in any county in this state against all real or personal property of the obligor by provision by the state of a computer terminal arrangement in the office of the register of deeds or other state or local agency where the information regarding the existence, amount and date of the lien or security interest involving an obligor is made available to anyone who may be researching a title to real property or who may be seeking the status of any security interests or liens affecting any real or personal property held by an obligor. The cost for provision of the computer terminal arrangement, if used pursuant to this subdivision (b)(3)(A), shall be paid by the department of human services.
• (B) In the alternative, the department may, upon agreement by the secretary of state, develop a central site for recordation of all notices of liens on all property, real or personal, that would be subject to the lien provisions of this part and the department and the secretary of state shall have authority to promulgate any rules necessary pursuant to the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, to implement such central recordation site.
• (C) In addition, or in conjunction with or as an alternative to the methods described in subdivision (b)(3)(A) or (b)(3)(B), the department may cause the filing or recordation of liens against all real or personal property of the obligor by placing such notice on a site accessible on the internet. If the methods described in subdivision (b)(3)(A) or (b)(3)(B) are used, and if the internet process authorized pursuant to this subdivision (b)(3)(C) is also made available, the dates shown on the department's computer record and displayed in the appropriate office of recordation as provided in subdivision (b)(3), (b)(3)(A) or (b)(3)(B) and those displayed on the internet site shall be the same.
• (D) The date noted in the department's computer record and that is displayed in the appropriate office of recordation as provided in subdivision (b)(3)(A) or (b)(3)(B), or that is displayed on the internet site as provided in subdivision (b)(3)(C), will serve for purposes of perfection as the recording or filing date of the lien. The recording or filing provided by this subdivision (b)(3) shall serve as notice to anyone who may be researching a title to real property or who may be seeking the status of any security interests or liens affecting any real or personal property held by an obligor and shall become the date of recordation of the notice of lien for all purposes of this part.
• (E) If any of the systems or procedures described in this subdivision (b)(3) is provided by the department, the automated lien shall be effective for all purposes to give notice to persons who may be affected by the existence of such lien in the same manner as the recordation of notice in the lien book maintained by the register of deeds or in the records of any state or local agency maintaining such records.
• (F) Prior to the implementation of this subdivision (b)(3), the department shall promulgate rules establishing procedures for the use of the automated system and shall, in addition to the other requirements of the Uniform Administrative Procedures Act, for notice, provide specific notice to the state clerks of court conference, registers of deeds, and the Tennessee Bar Association.
• (4) Nothing herein shall require the department to file a notice of lien for the seizure of an obligor's assets held by a state or local agency, by a court or administrative tribunal, by a lottery, by a financial institution or by a public or private retirement fund pursuant to § 36-5-904(1)-(3) or to obtain any income withholding from any employer or other payor of income as otherwise permitted under part 5 of this chapter.
• (c) The lien of the department for child support arrearages shall be superior to all liens and security interests created under Tennessee law except:
• (1) County and municipal ad valorem taxes and special assessments upon real estate by county and municipal governments;
• (2) Deeds of trust that are recorded prior to the recordation of notice of the department's lien;
• (3) Security interests created pursuant to Article 9 of the Uniform Commercial Code, compiled in title 47, chapter 9, that require filing for perfection and that are properly filed prior to recordation of the notice of the department's lien;
• (4) Security interests perfected under the Uniform Commercial Code without filing, as provided in title 47, chapter 9, that are properly perfected prior to recordation of the notice of the department's lien;
• (5) The lien or security interest of a financial institution against an obligor's interest in a deposit account at that institution for any indebtedness to the institution, including but not limited to, that institution's security interest in accounts pledged for loans, its rights under the Uniform Commercial Code or by contract to charge back uncollected deposits, revoke settlements or take other action against the account, its right to recover overdrafts and fees, and its right of offset for mature indebtedness;
• (6) Other security interests in deposit accounts at a financial institution when such interests are reflected in the records of that financial institution prior to the receipt of an administrative order of seizure;
• (7) Other liens recorded prior to the recordation of the department's lien, or concerning which a judicial proceeding was initiated prior to recordation of the department's lien;
• (8) Vendors' liens on real estate provided for in title 66, chapter 10 that are recorded prior to the recordation of notice of the department's lien; and
• (9) The tax liens of the department of revenue filed pursuant to title 67 prior to the department's child support lien.
• (d)
• (1)
• (A) Nothing in this section shall be interpreted to give the department priority over any deed of trust or any security interest perfected under the Uniform Commercial Code prior to the filing of the notice of the department's child support lien, irrespective of when such child support lien arises.
• (B) "Filing" for purposes of this subsection (d) means that the department has recorded its notice of lien pursuant to subsection (b) by filing a document to record its notice of lien in the appropriate office for such recordation or that it has effectively recorded its lien pursuant to the automated recordation method permitted by subdivision (b)(3).
• (2) No lien for child support arrearages shall be perfected against a motor vehicle unless such lien is physically noted on the certificate of title of such motor vehicle.
• (3) Nothing in this part shall be deemed to give the department any priority over any possessory lien including, but not limited to, mechanics' and materialmen's liens pursuant to title 66, chapter 11, part 1; artisans liens pursuant to title 66, chapter 14; or garagekeepers' and towing firm liens pursuant to title 66, chapter 19, part 1.
• (e) The notice of lien required to be filed or recorded under subsection (b), or any renewal thereof, shall be effective until the obligation is paid.

Amended by 2017 Tenn. Acts, ch. 300, s 1, eff. 5/5/2017.
Acts 1997 , ch. 551, § 12; 1998, ch. 1098, § 36; 2000, ch. 846, § 32; 2000, ch. 922, § 23; 2001, ch. 447, §§ 16, 17.

• (a) Full faith and credit shall be accorded to liens arising in any other state or territory for cases of child or spousal support enforced by the Title IV-D child support enforcement agency of the other state or territory as a result of the circumstances of § 36-5-901(a) for all overdue support, as defined in the other state or territory, when that other state or territory agency or other entity complies with the procedural rules relative to the recording, filing or serving of liens that arise within this state.
• (b) The department of human services may enforce the liens arising pursuant to this section by any means available for enforcement of its liens.

Acts 1997, ch. 551, § 12.

• (a) There shall be a rebuttable presumption concerning property that is subject to this part, except where otherwise clearly noted by the evidence of title or otherwise, or where by law ownership of property is otherwise clearly stated, that at least one-half of all real or tangible personal property that is titled to or in the possession of the obligor is owned by the obligor who is subject to the lien provisions of this part.
• (b) All jointly held accounts in any financial institution shall be rebuttably presumed to be available in whole to the obligor.

Acts 1997, ch. 551, § 12.

In cases where there is an arrearage of child or spousal support in a Title IV-D child support case or in which a lien arises pursuant to § 36-5-901, the department is authorized, without further order of a court, to secure the assets of the obligor to satisfy the current obligation and the arrearage by:

• (1) Intercepting or seizing periodic or lump-sum payments or benefits due the obligor:
• (A) From a state or local agency;
• (B) From judgments of any judicial or administrative tribunal, settlements approved by any judicial or administrative tribunal, and lottery winnings;
• (2) By attaching or seizing assets of the obligor or other person or entity held in financial institutions as defined in § 36-5-910;
• (3) By attaching public and private retirement funds; and
• (4) By imposing liens in accordance with § 36-5-901, and, in appropriate cases, by forcing the sale of the obligor's legal or equitable interest in property and by distribution of the proceeds of such sale.

Acts 1997, ch. 551, § 12; 1998, ch. 1098, § 37.

• (a) The department may enforce the lien provided by this part by issuance of an administrative order to any person or entity directing the seizure or sale of any assets of an obligor. The order shall direct the person or entity to hold, subject to any due process procedures provided the obligor, all assets of any kind of the obligor who is subject to the order pending the outcome of the administrative due process procedures. The order shall be based upon and issued pursuant to an existing judicial or administrative order that has previously established support under which an arrearage, due to overdue support, as defined in § 36-5-901, has occurred.
• (b) Upon receipt of the administrative order, whether electronically or otherwise, the person or entity that has or may have the assets of the obligor shall immediately seize, hold, and encumber such assets, as directed by the department, pending further direction from the department as to the disposition of the assets or pending any further orders of any court of competent jurisdiction. The person or entity may place such funds as it has that belong to the obligor in an escrow account for such purpose and may take any other steps deemed reasonable to preserve any real or personal property.
• (c)
• (1) All administrative orders for seizure or sale shall be subject to and subordinate to:
• (A) Any order of a United States Bankruptcy Court;
• (B) An attachment or execution under any judicial process in effect at the time of the administrative seizure order, pending modification of such court's orders; or
• (C) A priority under § 36-5-901(c).
• (2) If the assets of the obligor are known by the person or entity that received such administrative order to be subject to any orders of the United States Bankruptcy Court, or to any attachment, execution or existing lien, the person or entity shall, within ten (10) days after receipt of the administrative order, notify the department at the address contained in the order. With respect to deposit accounts of the obligor, the depository financial institution shall inform the department of the unencumbered balances of such accounts.
• (d) Upon receipt of direction from the department that all due process procedures have been completed or were waived in any manner, and subject to subsection (c) and subject to the priority for the department's liens as described in § 36-5-901(c), the person or entity shall pay or deliver to the department, pursuant to its direction, the assets of the obligor that are held or that come into the possession or control of the person or entity and that are necessary to comply with the terms of the department's administrative order.
• (e)
• (1) There shall be no requirement of advance judicial notice or hearing prior to the seizure of the obligor's property by administrative order, but the department of human services shall promulgate rules to provide procedures for the seizure of any property subject to the lien arising under this part and to provide post-enforcement procedures to permit the obligor to contest the seizure of any property pursuant to this part and part 10 of this chapter.
• (2) Such rules shall not permit the final disposition of any property seized under the lien enforcement procedures until the exhaustion of administrative and judicial remedies as provided in this part and shall make the disposition subject to the lien priorities of § 36-5-901.
• (3)
• (A) A notice shall be sent to the obligor against whom the administrative order for seizure or sale of assets is directed by mail within five (5) days of the issuance of such administrative seizure order of the fact that such assets have been the subject of an administrative order and that they have been seized or are subject to sale and are being held, may be conveyed to the department or may be sold, subject to the right to an administrative hearing to contest the seizure or sale of such assets.
• (B) The notice shall specify the sum demanded and shall contain, in the case of personal property, an account of the property actually seized and, in the case of real property, a description with reasonable certainty of the property seized. In the case of assets in a financial institution, it shall be sufficient to notify the obligor of the seizure of any assets of the obligor that may be held by any institution to which the order is directed.
• (f) A final order of seizure or sale of the obligor's property pursuant to this part shall be effective to convey and vest title in the department or in the purchaser and shall be evidence of title for all purposes. The commissioner or the commissioner's agent may convey title to personal property by certificate of title or may execute a deed conveying title to real property to the purchaser in accordance with regulations as may be prescribed by the commissioner.
• (g) All persons or entities complying with any administrative order issued pursuant to this section shall be absolutely immune from any liability, civil or criminal, for compliance with the terms of such order or attempted compliance in good faith with such order.
• (h) No more than fifty percent (50%) of the total amount in a commissary account or any other account or fund established by or for the benefit of an inmate in a correctional institution or private prison operated by or under contract with the department of correction while the inmate is incarcerated or any account containing wages received for work performed while an inmate is incarcerated shall be subject to seizure by the department. Any portion of the account that is used to pay litigation taxes, court costs, sexual offender surcharges, fines, restitution, or other moneys related to the criminal offense for which the inmate is confined shall be deducted from the account before the seizure authorized by this subsection (h) is calculated.

Amended by 2017 Tenn. Acts, ch. 300,s 2, eff. 5/5/2017.
Acts 1997, ch. 551, § 12; 1998, ch. 1098, § 38.

• (a) All financial institutions conducting business in this state shall enter agreements with the department of human services to develop and operate, in coordination with the department of human services, and the federal parent locator service in the case of financial institutions doing business in two (2) or more states, a data match system using automated data exchanges to the maximum extent feasible, to locate, encumber, escrow, seize or surrender the assets of any obligor who owes past-due child support. Each financial institution each calendar quarter will provide the name, record address, social security or other taxpayer identification number, and other identifying information for each obligor maintaining an account at the institution who owes past-due child support as identified by the department of human services or its agents or contractors by that person's name and social security or other taxpayer identification number. In drafting the agreements, the department of human services shall consult with a representative number of financial institutions and shall avoid the imposition of requirements that are not reasonably compatible with the data processing and recordkeeping systems generally utilized by financial institutions.
• (b) All financial institutions conducting business in this state shall enter agreements with the department of human services to encumber, escrow, seize or surrender, as the case may be, in response to a notice of lien or levy by any agency enforcing child support, the assets of any obligor whose assets held by the financial institution are subject to a child support lien pursuant to 42 U.S.C. § 666(a)(4). The agreements shall provide, wherever feasible by automated data exchange, for the automated notice to the financial institution of any liens on the assets of the obligor and shall provide for the automated escrow, seizure or surrender of the assets pending any adjudication by the department of any encumbrance, escrow, seizure or surrender and for the automated transfer of assets to the department or its contractors or agents after completion of the adjudication, or, at the option of the financial institution and with the agreement of the department, the financial institution may furnish information for all account holders at the financial institution from which the department may determine the delinquent child support obligors.
• (c) When an administrative order is issued by the department of human services pursuant to any provisions of law or regulations or pursuant to agreements entered pursuant to subsection (a) or (b) directing the encumbrance, escrow, seizure or surrender of assets of an obligor consisting of a demand deposit account, or an account accessible by a checking or negotiable order of withdrawal for the purpose of satisfying a lien for past-due child support, the department may direct that only a portion of the accounts, up to the amount necessary to satisfy the existing lien for past-due child support, be encumbered, escrowed, seized or surrendered. If less than the whole amount of the account is sought, the department's order shall direct the financial institution to withhold a specific percentage or a specific dollar amount of those types of accounts.
• (d) The agreements shall provide for the department of human services to pay a reasonable fee to the financial institution for providing account information and for conducting the data match provided in subsection (a), not to exceed the actual costs incurred by the financial institution.
• (e) As used in this part, unless the context otherwise requires:
• (1) "Account" means a demand deposit account, account accessible by checking or negotiable orders of withdrawal, savings account, time deposit account, or money-market mutual fund account; and
• (2) "Financial institution" means:
• (A) A depository institution, as defined in § 3(c) of the Federal Deposit Insurance Act (12 U.S.C. § 1813(c));
• (B) An institution-affiliated party, as defined in § 3(u) of the act (12 U.S.C. § 1813(u));
• (C) Any federal credit union or state credit union as defined in § 101 of the Federal Credit Union Act (12 U.S.C. § 1752), including, for the purposes of title 36, chapter 5, parts 8 and 9, an institution-affiliated party of the credit union, as defined in § 206 of the act (12 U.S.C. § 1786); and
• (D) Any benefit association, insurance company, safe deposit company, money market mutual fund, securities broker/dealer or similar entity authorized to conduct business in this state.



Acts 1997 , ch. 551, § 14; 1998, ch. 1098, § 60; 2001, ch. 447, § 12.