Any 3rd party who fails to surrender any property or rights to property subject to levy, upon demand of the department, is subject to proceedings to enforce the levy. The 3rd party is not liable to the department under this subdivision for more than 25 percent of the debt. The department shall serve the levy as provided under par. (m) on any 3rd party who fails to surrender property under this subdivision. Proceedings may not be initiated by the department until 5 days after service of the demand.

When a 3rd party surrenders the property or rights to the property on demand of the department or discharges the obligation to the department for which the levy is made, the 3rd party is discharged from any obligation or liability to the debtor with respect to the property or rights to the property arising from the surrender or payment to the department.