Appellant State Treasurer presents two questions of first impression for this Court. First, whether the Public School Employees Retirement Act, M.C.L. § 38.1301 et seq.; M.S.A. § 15.893(111) et seq., nonassignment provision, which protects a public employee's pension from legal process, has priority over the State Correctional Facility Reimbursement Act, M.C.L. § 800.401 et seq.; M.S.A. § 28.1701 et seq., reimbursement provision that specifically includes "pension benefits" as "assets" that may be subject to a prisoner's statutory obligation to reimburse the state for his incarceration costs.
The Court of Appeals found that the pension act's nonassignment provision prevailed over the reimbursement act's reimbursement provision and that the pension funds at issue were insulated from creditors even after dispensation to the fund recipient.
We reverse the Court of Appeals and hold that the reimbursement act has priority over the pension act in that the nonassignment provision does not insulate a public school employee's pension from the reimbursement provision.
On April 10, 1991, codefendant Jon Schuster was sentenced to two and one-half to fifteen years in prison, following his February 14, 1991, conviction of criminal sexual conduct.
The state claimed the only potential source of reimbursement, or "asset" as defined by the reimbursement act,
Pursuant to the reimbursement act, the state sought to obtain ninety percent of the deposited pension.
The circuit court judge held that Schuster's pension was an asset subject to the reimbursement scheme and could, therefore, be considered in evaluating Schuster's ability to reimburse the state for the costs of his incarceration, even though Schuster's pension was, in fact, his only asset. The circuit court further found that the state could attach these pension payments after they were paid to Schuster. Upon motion, the circuit court conducted two days of hearings
The Court of Appeals reversed the circuit court's order and opinion, and held that the nonassignment provisions of the pension act had priority over the reimbursement act. The Court of Appeals further held that the pension funds continued to be shielded from creditors even after payments were made to the fund beneficiary, in this case Schuster's wife.
We granted leave to appeal to decide whether the reimbursement act subjects Schuster's pension to reimbursement for the costs of his incarceration despite the pension act's nonassignment provision.
Resolution of this matter requires this Court to examine an apparent conflict between two legislative enactments.
The State Correctional Facility Reimbursement Act provision at issue was originally enacted in 1935 as part of the Prison Reimbursement Act. The basic purpose of the act was to ensure that prisoners shoulder the burdensome cost of their incarceration, to the extent possible, rather than law-abiding taxpayers. In 1984, the act was amended and renamed the State Correctional Facility Reimbursement Act, with the same intent to "provide procedures for securing reimbursement to the state of the expenses incurred by the state for the cost of care of certain prisoners in state correctional facilities...."
(a) "Assets" means property, tangible or intangible, real or personal, belonging to or due a prisoner or former prisoner including income or payments to such prisoner
According to the plain language above, the Legislature, in 1984, decided to subject all pension payments to the reimbursement scheme specifically, and without exception. Moreover, the Legislature declined to include pension payments in the list of express statutory exceptions to the reimbursement act, which was revised by 1996 P.A. 286. M.C.L. § 800.401a(a)(i), (ii); M.S.A. § 28.1701(1)(a)(i),(ii).
Nonetheless, Schuster claims that his pension payments are not subject to the reimbursement act. Indeed, he maintains that the nonassignment provision of the pension act has priority.
The Public School Employees Retirement Act was created in 1945 to establish and govern the pensions of public school employees.
In 1991, the Legislature amended this provision to specifically subject pension payments to alimony, child support orders, and eligible domestic relations orders.
Given this apparent conflict between the State Correctional Facility Reimbursement Act and the Public School Employees Retirement Act, this Court is asked to resolve the relative priority of the two enactments and whether the reimbursement act subjects Schuster's pension payments to reimbursement for incarceration costs, regardless of their source.
The Court of Appeals resolved this conflict in favor of the pension act, finding Schuster's pension payments were entirely insulated from creditors and the reimbursement provision.
We also reject their cursory conclusion that the pension act controls because it is more specific. Such reasoning effectively nullifies the reimbursement language in the reimbursement act, which specifically includes all pensions, without exception, as assets. This Court has stated:
We find that the pension act's nonassignment provision and the State Correctional Facility Reimbursement Act are in pari materia because both enactments address pensions. However, this Court has refused to apply rules that the more specific statute controls where such "strict construction ... would defeat the main purpose of other statutes relating to the same subject." Id. at 560, 132 N.W.2d 660, citing Rathbun v. Michigan, 284 Mich. 521, 280 N.W. 35 (1938). In this case, we refuse to adopt the Court of Appeals construction of the statutory provisions at issue because it effectively nullifies the express language in the reimbursement act and, consequently, defeats the main purpose of that statute.
The reimbursement act specifically, and without exception as to source, includes pension payments in the definition of "assets," and, therefore, subjects all pension payments to its reimbursement scheme. The Legislature did not add pension payments to the amended list of exceptions to the act's otherwise sweeping reimbursement provisions. Moreover, the plain and broad language of the reimbursement provisions at issue indicates a legislative intent to shift the burden of incarceration expenses to prisoners and from the taxpayers whenever possible. This primary intent is effectively ignored, and certainly frustrated, by the Court of Appeals holding that the pension act's general protection of pension payments from "legal process" has priority over the reimbursement act.
For these reasons, we find the reasoning employed by the Court of Appeals to be flawed. Moreover, we are unprepared, absent clear language evidencing such legislative intent, to allow Schuster to avoid his statutory obligations under the reimbursement act when all other non-pension act pension payments are subject to the reimbursement act. A contrary conclusion, without clear legislative intent, would nullify the plain
We note that this holding does not hinder the primary legislative purpose behind the pension provisions. The nonassignment provisions were designed to insulate retirement benefits from creditors. However, the state, when considering pension payments according to the reimbursement act, is not a "creditor," nor is the relationship between a prisoner and the state a typical debtor-creditor relationship. State Treasurer v. Sheko, 218 Mich.App. 185, 189, 553 N.W.2d 654 (1996), citing Auditor General v. Hall, 300 Mich. 215, 221, 1 N.W.2d 516 (1942), and Auditor General v. Olezniczak, 302 Mich. 336, 350, 4 N.W.2d 679 (1942). Rather, a prisoner is an obligor because of his statutory, not voluntary or personal, obligation to reimburse the state under the reimbursement act for his incarceration expenses. Because of the unique relationship between prisoner and state, as obligor and obligee, respectively, a reimbursement action is not clearly the type of "other legal process" from which the pension act shields its pension payments. Therefore, our determination regarding relative priority gives greater effect to the language employed in both statutory provisions at issue without rendering any relevant provision surplusage or nugatory. See Baker v. General Motors Corp., 409 Mich. 639, 665, 297 N.W.2d 387 (1980).
Accordingly, we reverse the decision of the Court of Appeals on the issue of relative priority between the statutes at issue. We hold that the State Correctional Facility Reimbursement Act's provisions prevail because of its plain language, which squarely addresses the very question before this Court—the relationship between an prisoner's statutory duty to reimburse the state for his incarceration expenses, and pension payments.
Accordingly, we reverse the Court of Appeals reversal of the circuit court and reinstate the final circuit court order in this case.
MALLETT, C.J., and BRICKLEY, BOYLE, and TAYLOR, JJ., concurred with WEAVER, J.
MARILYN J. KELLY, Justice (dissenting).
The issue in this case is whether Jon Schuster's public school retirement allowance is subject to legal process under the State Correctional Facility Reimbursement Act.
The State Correctional Facility Reimbursement Act was enacted to allow the government to seek reimbursement from certain prisoners for the cost of their incarceration. 1984 P.A. 282. Under it, reports are compiled regarding prisoner assets and the cost of prisoner care. M.C.L. § 800.402; M.S.A. § 28.1702. The Attorney General must seek reimbursement from a prisoner who has sufficient assets to permit recovery of the statutorily prescribed portion of the prisoner's cost of care.
In the instant case, the Attorney General discovered that Jon Schuster, who was serving a prison term for criminal sexual conduct, was receiving approximately $2,000 a month from his public school pension. Consequently, applying the reimbursement act, in 1992 the state sought part of Schuster's pension to reimburse it for his care. M.C.L. § 800.403; M.S.A. § 28.1703.
The trial court concluded that, despite the pension act, the pension could be considered in evaluating Jon Schuster's ability to pay the cost of his incarceration. The court did not allow the state to attach or garnish the pension directly. Rather, it permitted the state to obtain the funds after they had been paid to Schuster. Then, having considered Schuster's legal and moral obligations to his wife and dependents, the court ordered Schuster to pay the state $1,000 a month, approximately half his retirement allowance.
The Court of Appeals reversed. 215 Mich.App. 347, 547 N.W.2d 332 (1996). Applying the rules of statutory construction, it held that the retirement allowance payments were protected by the pension act from legal process under the reimbursement act. It reasoned that the pension act was the more specific statute and controlling. Id. at 351-353, 547 N.W.2d 332. It also held that the payments were not subject to attachment once Jon Schuster received them. Id. at 354, 547 N.W.2d 332. We granted plaintiff's application for leave to resolve the apparent conflict between the pension act and the reimbursement act. 454 Mich. 892, 562 N.W.2d 205 (1997).
As noted above, the reimbursement act provides that not more than ninety percent of a prisoner's "assets" may be recovered in an action by the state for prison reimbursement. M.C.L. § 800.403; M.S.A. § 28.1703. In 1992, assets were defined by the reimbursement act as:
Looking at the reimbursement act in isolation, one would have to conclude that public school retirement allowances are subject to attachment. Pensions are specifically mentioned as a type of asset recoverable by the state. However, the pension act expressly provides the contrary. It states, in pertinent part:
Except as otherwise provided in this section, a retirement allowance, an optional benefit, or any other benefit accrued or accruing to a person under this act, the reserves created by this act, and the money, investments, or income of those reserves are exempt from state, county, municipal, or other local tax and are not subject to execution, garnishment, attachment, the operation of bankruptcy or insolvency laws, or other process of law. The right to a retirement allowance, an
Therefore, according to the express provisions of the two statutes, a conflict exists. The pension act declares that retirement allowance payments are not subject to legal process.
When two statutes conflict, we must interpret them to resolve the conflict. The primary goal of judicial interpretation of statutes is to give effect to the intent of the Legislature. Farrington v. Total Petroleum, Inc., 442 Mich. 201, 212, 501 N.W.2d 76 (1993). Rules of statutory construction have been developed to assist in determining intent. The Legislature is presumed to be familiar with the rules. Ballog v. Knight Newspapers, Inc., 381 Mich. 527, 538, 164 N.W.2d 19 (1969).
Whenever possible, conflicting statutes should be interpreted to give each full force and effect. In re Midland Publishing Co., Inc., 420 Mich. 148, 163, 362 N.W.2d 580 (1984). However, if it is not possible, and one is specific to the subject matter and the other only generally applicable, the specific statute prevails. Id.
The state argues that the reimbursement act addresses the subject matter involved in the case sub judice, reimbursement for prison expenses, whereas the pension act is silent on the subject. Hence, the reimbursement act must be found to be the more specific statute. I reject that reasoning. The conflict in the statutes is over the attachability of pension benefits, not over reimbursement for prison expenses.
The majority rejects the application of this rule, finding that such a construction would defeat the main purpose of the reimbursement act. I agree that, in this case, the goal of the reimbursement act would be frustrated. The retirement allowance is the only asset belonging to Jon Schuster that the state can attach to reimburse his prison expenses. Unless the state can attach a portion of those payments, it will lose any chance of reimbursement.
However, if we gave priority to the reimbursement act, the primary purpose of the pension act would be nullified. I agree with the majority that one of the purposes of M.C.L. § 38.1346(1); M.S.A. § 15.893(156), is to protect retirement allowance benefits from creditors and that the state is, technically, not a creditor. Nevertheless, the clear language of the statute protects retirement allowance benefits from "execution, garnishment, attachment, the operation of bankruptcy or insolvency laws, or other process of law." M.C.L. § 38.1346(1); M.S.A. § 15.893(156)(1). (Emphasis supplied.) An action by the state seeking reimbursement under the reimbursement act must be regarded as a process of law. The provision is clear and unambiguous. It was intended to be all-encompassing. The Legislature has written specific exceptions for those situations where the protections are inapplicable.
Moreover, where two statutes conflict and one statute protects private property, the
In conclusion, the Legislature may not have anticipated a conflict between the pension act and the reimbursement act. However, it is presumed to know the rules of statutory construction when drafting statutes. Because the pension act is the more specific statute, it should be given priority.
Next, the state argues that, even if the retirement allowance cannot be directly attached, the money can be taken once it is in Schuster's hands. Such an interpretation is contrary to the language in the pension act as well as to the statute's purpose. The pension act states that "retirement allowances" are protected. Retirement allowance is defined as "a payment for life or a temporary period provided for in this act to which a retirant, retirement allowance beneficiary, or refund beneficiary is entitled." M.C.L. § 38.1307(5); M.S.A. § 15.893(117)(5). Because the pension act protects payments to retirees, it must be interpreted to protect the payments immediately upon reaching the retiree's hands. The limitation of entitlement does not change this conclusion. I interpret that to mean that, if a retiree is mistakenly given a retirement allowance or is given an excessive amount, the state can file an action to recover the improper payment. It is not a limitation of protection.
Moreover, allowing the state to reach the payments after the retiree receives then would run counter to the purpose of the statute, which is to protect such payments from process. It is logical that public servants, who may earn less than employees in the private sector and who serve the community, would have special protection for their retirement benefits. The protection would be frustrated if the state were to circumvent the clear language of the statute. Therefore, I would also hold that, under the facts of this case, the pension act protects the payments after they are received by the Schusters.
MICHAEL F. CAVANAGH, J., concurred with MARILYN J. KELLY, J.