A BILL TO BE ENTITLED
AN ACT authorizing counties and cities to withhold compensation of a member of the governing body if the county or city has been granted a money judgment against the member and the judgment has not been paid.
The General Assembly of North Carolina enacts:
SECTION 1.  Part 1 of Article 5 of Chapter 160A of the General Statutes is amended by adding a new section to read as follows:
"§ 160A‑64.1.  Withholding compensation; money judgment against council member.
(a)	A city that obtains a final judgment awarding monetary damages against an elected or appointed member of the city council, either individually or jointly, may enforce the judgment by withholding nonexempt earnings from the member's compensation set under G.S. 160A‑64. For purposes of this section, the following definitions apply:
(1)	Disposable income. – The part of the compensation paid or payable for personal services, whether denominated as wages, salary, commission, bonus, or otherwise which remains after the deduction of any amounts required by law to be withheld.
(2)	Nonexempt earnings. – That portion of the disposable earnings owed to a city judgment creditor that are not exempt under G.S. 1‑362.
(b)	At any time following entry of the final judgment, the city's finance officer shall give notice to the member that his or her nonexempt earnings will be withheld and that the member has the right to submit an objection as provided in subsection (c) of this section. The notice shall be served upon the member either personally or by registered or certified mail. When service is made by registered or certified mail, a copy of the notice may also be sent by regular mail. Service shall be deemed sufficient if the registered or certified mail is unclaimed or refused, but the regular mail is not returned by the post office within 10 days after the mailing.
(c)	Not later than five days after the notice is served, the member shall submit, in writing, to the finance officer the member's objection to the withholding of compensation. Not later than 10 days after the notice of objection is submitted, the finance officer shall hold a hearing to determine the validity of the member's objection. The member may be represented by counsel at the hearing. The finance officer shall make a determination as to the validity of the member's objection not later than five days after the hearing. If the finance officer determines that the objection is with merit, the finance officer shall notify the city council, which shall at its next regular meeting, in open session, consider the matter and decide how to proceed with the withholding. If the finance officer determines that the objection is without merit, the finance officer shall, in writing, do the following: (i) notify the member that his or her compensation will be withheld as authorized in this section; and (ii) direct the officer charged with making up the payrolls of the city to withhold nonexempt earnings from the member's compensation. The withholding of compensation shall begin, on a pro rata basis, the pay period immediately following the notice to the payroll officer, but in no event shall it begin later than 30 days after the finance officer gives notice to the member under subsection (b) of this section. The withholding shall continue until either the underlying judgment has been satisfied in full or the member is no longer a member of the city council. Compensation shall resume on a pro rata basis when the judgment has been paid in full. The finance officer shall not be liable to any person for any actions taken pursuant to the provisions of this section.
(d)	The member may appeal the decision of the finance director to withhold compensation to the city council. The request for a hearing before the city council shall be in writing, and shall be submitted to the city clerk not later than five days after the finance officer notifies the member that his or her compensation will be withheld. The city council shall schedule the hearing, which shall be held in open session, at the next regular meeting of the council immediately following the member's request for an appeal.(e)	The provisions of this section do not preclude the city from collecting the unpaid money judgment using any other means authorized by law. The provisions of this section do not apply to ad valorem taxes."
SECTION 2.  Part 1 of Article 4 of Chapter 153A of the General Statutes is amended by adding a new section to read as follows:
"§ 153A‑30.  Withholding compensation; money judgment against board member.
(a)	A county that obtains a final judgment awarding monetary damages against an elected or appointed member of the board of commissioners, either individually or jointly, may enforce the judgment by withholding nonexempt earnings from the member's compensation set under G.S. 153‑28. For purposes of this section, the following definitions apply:
(1)	Disposable income. – The part of the compensation paid or payable for personal services, whether denominated as wages, salary, commission, bonus, or otherwise which remains after the deduction of any amounts required by law to be withheld.
(2)	Nonexempt earnings. – That portion of the disposable earnings owed to a city judgment creditor that are not exempt under G.S. 1‑362.
(b)	At any time following entry of the final judgment, the county's finance officer shall give notice to the member that his or her nonexempt earnings will be withheld and that the member has the right to submit an objection as provided in subsection (c) of this section. The notice shall be served upon the member either personally or by registered or certified mail. When service is made by registered or certified mail, a copy of the notice may also be sent by regular mail. Service shall be deemed sufficient if the registered or certified mail is unclaimed or refused, but the regular mail is not returned by the post office within 10 days after the mailing. 
(c)	Not later than five days after the notice is served, the member shall submit, in writing, to the finance officer the member's objection to the withholding of compensation. Not later than 10 days after the notice of objection is submitted, the finance officer shall hold a hearing to determine the validity of the member's objection. The member may be represented by counsel at the hearing. The finance officer shall make a determination as to the validity of the member's objection not later than five days after the hearing. If the finance officer determines that the objection is with merit, the finance officer shall notify the board of commissioners which shall, at its next regular meeting, in open session, consider the matter and decide how to proceed with the withholding. If the finance officer determines that the objection is without merit, the finance officer shall, in writing, do the following: (i) notify the member that his or her compensation will be withheld as authorized in this section; and (ii) direct the officer charged with making up the payrolls of the county to withhold nonexempt earnings from the member's compensation. The withholding of compensation shall begin, on a pro rata basis, the pay period immediately following the notice to the payroll officer, but in no event shall it begin later than 30 days after the finance officer gives notice to the member under subsection (b) of this section. The withholding shall continue until either the underlying judgment has been satisfied in full or the member is no longer a member of the board of commissioners. Compensation shall resume on a pro rata basis when the judgment has been paid in full. The finance officer shall not be liable to any person for any actions taken pursuant to the provisions of this section. 
(d)	The member may appeal the decision of the finance director to withhold compensation to the board of commissioners. The request for a hearing before the board shall be in writing, and shall be submitted to the clerk to the board not later than five days after the finance officer notifies the member that his or her compensation will be withheld. The board of commissioners shall schedule the hearing, which shall be held in open session, at the next regular meeting of the council immediately following the member's request for an appeal.
(e)	The provisions of this section do not preclude the county from collecting the unpaid money judgment using any other means authorized by law. The provisions of this section do not apply to ad valorem taxes."
SECTION 3.  This act becomes effective January 1, 2014, and applies to money judgments that are unsatisfied or entered on or after that date.