CSSB 190(FIN): "An Act relating to income withholding and other methods of enforcement for orders of support; and providing for an effective date."
00CS FOR SENATE BILL NO. 190(FIN) 01 "An Act relating to income withholding and other methods of enforcement for 02 orders of support; and providing for an effective date." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. AS 25.27.062(a) is amended to read: 05 (a) A judgment, court order, or order of the agency under this chapter 06 providing for support must contain an income withholding order. Except as provided 07 in (m) of this section, the income withholding order must provide for immediate 08 income withholding if the support order is 09 (1) being enforced by the agency and was issued or modified on or 10 after the effective date of this Act; or 11 (2) not being enforced by the agency and was issued on or after the 12 effective date of this Act [AN INCOME WITHHOLDING ORDER UNDER THIS 13 SECTION MAY NOT BE ENFORCED UNLESS THE OBLIGOR HAD NOTICE OF 14 THE ORDER WHEN IT WAS MADE OR AN APPLICATION FOR THE ORDER
01 WAS SERVED ON THE OBLIGOR IN THE MANNER PROVIDED FOR SERVICE 02 OF A SUMMONS UNDER RULE 4, ALASKA RULES OF CIVIL PROCEDURE]. 03 * Sec. 2. AS 25.27.062(b) is amended to read: 04 (b) An income withholding order must direct the obligor, the obligor's 05 employer, future employer, and any person, political subdivision, or department of the 06 state to withhold money due or to be due the obligor and pay the money to the agency, 07 in an amount determined under (i) of this section. A court that issues a support 08 order on or after the effective date of this Act shall send a copy of the order to 09 the agency. 10 * Sec. 3. AS 25.27.062(c) is repealed and reenacted to read: 11 (c) Income withholding under a support order that does not require immediate 12 withholding may be initiated under AS 25.27.150 if the support order is being enforced 13 by the agency, or under (d) of this section if the support order is not being enforced 14 by the agency, if 15 (1) the obligor requests withholding; 16 (2) the payments that the obligor has failed to make within 30 days of 17 the monthly due date specified in the support order are equal to or greater than the 18 support payable for one month; or 19 (3) the obligee requests withholding and 20 (A) the agency approves the request because all or part of the 21 monthly payment of the obligor has been more than 10 days overdue more than 22 one time in the preceding 12 months or there is reason to believe that the 23 obligor might withdraw assets to avoid payment of support; in this paragraph, 24 "10 days overdue" means occurring 10 days after the monthly due date 25 specified in a support order; or 26 (B) the court approves the request for good cause. 27 * Sec. 4. AS 25.27.062(d) is repealed and reenacted to read: 28 (d) Income withholding under a support order that does not require immediate 29 income withholding and that is not being enforced by the agency may be initiated by 30 filing a motion with the court and complying with applicable court rules. The court 31 shall order the beginning of income withholding under this subsection if the court finds
01 that any of the grounds in (c)(1), (c)(2), or (c)(3)(B) of this section is satisfied. It is 02 not a defense to a motion based on (c)(2) of this section that less than one full month's 03 payment is past due by 30 days if at least one full month's payment was past due by 04 30 days on the date the motion was filed. Notice to the obligor of income withholding 05 ordered under this subsection must be given in a manner that complies with court 06 rules. In this subsection, "past due by 30 days" means unpaid 30 days after the 07 monthly due date specified in the support order. 08 * Sec. 5. AS 25.27.062(e) is amended to read: 09 (e) The [OBLIGEE OR PERSON OR PUBLIC] agency or the person who 10 obtains an [THAT REQUESTED THE] income withholding order under this chapter 11 shall immediately send a copy of the income withholding order, a copy of the relevant 12 provisions of AS 25.27.260 and this section, and an explanation of the effect of the 13 statutes [BY CERTIFIED MAIL] to persons who may owe money to an obligor. 14 These items may be sent by first class mail or certified mail, return receipt 15 requested, or they may be served personally by a process server. An income 16 withholding order made under this chapter [SECTION] is binding upon a person, 17 employer, political subdivision, or department of the state immediately upon receipt 18 of a copy of the income withholding order. An employer shall begin withholding the 19 specified amount from the employee's wages (1) 14 working days after the mailing 20 date on the order [NOTICE] of withholding or 14 working days after the date on 21 which the order was personally served, whichever is applicable, or (2) on the first 22 day of the next pay period, if earlier. The amount withheld shall be sent to the agency 23 within 10 working days after the date the employee is paid. An employer may, 24 for each payment made under an order, deduct $5 from other wages or salary 25 owed to the obligor. 26 * Sec. 6. AS 25.27.062(f) is amended to read: 27 (f) An employer may not discharge, discipline, or refuse to employ an obligor 28 on the basis of an income withholding order issued under this chapter [SECTION]. 29 If an employer discharges, disciplines, or refuses to employ an obligor because of an 30 income withholding obligation, the court, after notice and hearing, may order 31 reinstatement or restitution to the obligor, or both. A person who violates this
01 subsection or a regulation adopted to implement it, is liable for a civil penalty of not 02 more than $1,000. 03 * Sec. 7. AS 25.27.062(g) is amended to read: 04 (g) An income withholding order under this chapter [SECTION] has priority 05 over all other attachments, executions, garnishments, or other legal process brought 06 under state law against the same property unless otherwise ordered by the court. An 07 income withholding order is not limited to the wages of an obligor but may include 08 all money owed to the obligor not otherwise exempt by law. Exemptions under 09 AS 09.38 do not apply to income withholdings under this chapter [SECTION]. 10 * Sec. 8. AS 25.27.062(h) is amended to read: 11 (h) The court may order payment of all court costs that resulted from an 12 income withholding proceeding under this chapter [SECTION]. 13 * Sec. 9. AS 25.27.062(k) is repealed and reenacted to read: 14 (k) An employer who is withholding income of an employee under an order 15 that provides that the withheld income shall be paid to the agency shall notify the 16 agency promptly when the employee gives or receives notice of termination of 17 employment and provide to the agency the employee's last known home address and 18 the name and address of the employee's new employer, if known. 19 * Sec. 10. AS 25.27.062(l) is repealed and reenacted to read: 20 (l) Unless modified or terminated by the agency or the court, an order to 21 withhold income under this chapter remains in effect until the support order is 22 satisfied. The agency or court may not terminate or modify an income withholding 23 order solely on the ground that the obligor has paid all arrearages. Upon satisfaction 24 of a support order, if the order is 25 (1) being enforced by the agency, the agency shall, within 15 working 26 days, notify all persons served by the agency with the income withholding order that 27 withholding is no longer required; if the agency receives money from an obligor under 28 an income withholding order after the underlying support order has been satisfied and 29 the agency was enforcing the support order at the time it became satisfied, the agency 30 shall immediately return the overpayment to the obligor; if the agency fails to return 31 an overpayment as required under this paragraph, the state is liable to the obligor for
01 the amount of the overpayment, plus interest at the rate imposed under AS 43.05.225, 02 and a person to whom the agency erroneously disbursed the overpayment is liable to 03 the state for the amount disbursed, plus interest at the rate imposed under 04 AS 43.05.225; 05 (2) not being enforced by the agency, the obligor shall file a motion 06 in court requesting termination of the withholding order and serve the motion on the 07 obligee; the court shall enter an order terminating the withholding order if the court 08 determines that the support order has been satisfied; the obligor may deliver a copy 09 of the termination order to persons who were served with the income withholding 10 order; when a termination order is entered, the obligee shall, upon request of the 11 obligor, notify the obligor of all persons who have been served with the income 12 withholding order by the obligee. 13 * Sec. 11. AS 25.27.062 is amended by adding new subsections to read: 14 (m) An income withholding order described in (a)(1) - (2) of this section is 15 not subject to immediate withholding if the support order is 16 (1) being enforced by the agency and the obligor agrees to keep the 17 agency informed of the obligor's current employer and the availability of employment-related health insurance 18 coverage for the children covered by the support order until 19 the support order is satisfied and 20 (A) the agency has entered into its record a written agreement 21 between the obligor and the obligee that provides for an alternative 22 arrangement and income withholding has not been terminated previously and 23 subsequently initiated; the agency must also be a party to an agreement under 24 this paragraph if support has been assigned to the state; or 25 (B) the obligor or obligee demonstrates and the agency, in 26 compliance with applicable federal law, finds good cause not to require 27 immediate income withholding because it would not be in the best interests of 28 the child and, in a case involving the modification of a support order, the 29 obligor has made voluntary support payments under a court or agency order 30 and has not been in arrears in an amount equal to the support payable for one 31 month; in this paragraph, "in arrears" means failing to make a support payment
01 within 30 days of the monthly due date specified in the order; 02 (2) not being enforced by the agency and the obligor agrees to keep the 03 obligee informed of the obligor's current employer and the availability of employment- 04 related health insurance coverage for the children covered by the support order until 05 the support order is satisfied and 06 (A) the court finds that (i) a written agreement exists between 07 the obligor and the obligee that provides for an alternative arrangement and (ii) 08 income withholding has not been terminated previously and subsequently 09 initiated; the agency must also be a party to an agreement under this paragraph 10 if support has been assigned to the state; or 11 (B) the obligor or obligee demonstrates, and the court, in 12 compliance with applicable federal law, finds good cause not to require 13 immediate income withholding because it would not be in the best interests of 14 the child and, in a case involving the modification of a support order, the 15 obligor has made voluntary support payments under a court or agency order 16 and has not been in arrears in an amount equal to the support payable for one 17 month; in this paragraph, "in arrears" means failing to make a support payment 18 within 30 days of the monthly due date specified in the order; or 19 (3) an order that involves an obligor who is receiving social security 20 or other disability compensation that includes regular payments to the children who are 21 the subjects of the support order, except to the extent that the payments to the children 22 do not equal the child support due each month. 23 (n) In calculating the amount of child support to be withheld under an income 24 withholding order, the agency shall give credit to the obligor for the cost to the obligor 25 of medical and dental insurance for the children and educational payments for the 26 children to the extent that the insurance coverage and educational payments are 27 required in the applicable child support order and are actually paid for by the obligor. 28 * Sec. 12. AS 25.27.100 is amended to read: 29 Sec. 25.27.100. ALL PERSONS MAY USE AGENCY; FEES FOR 30 SERVICES. The agency shall provide aid to any person due child support under the 31 laws of this state upon application. Subject to (b) of this section, the [THE] agency
01 may, by regulation, impose a fee for services provided under this chapter. 02 * Sec. 13. AS 25.27.100 is amended by adding a new subsection to read: 03 (b) To the extent allowed under federal law, for each payment made by the 04 agency to a custodian from money sent to the agency under an income withholding 05 order issued under this chapter, the agency shall impose a fee of $5 on the custodian. 06 To the extent allowed under federal law, the agency shall subtract this fee from the 07 money it receives under the income withholding order before disbursing the balance 08 of the money to the custodian. 09 * Sec. 14. AS 25.27.140(b) is amended to read: 10 (b) If a support order has been entered, the agency may enforce the support 11 order utilizing the procedures prescribed in AS 25.27.062, 25.27.150, [AS 25.27.150] 12 and 25.27.230 - 25.27.270. 13 * Sec. 15. AS 25.27.150 is repealed and reenacted to read: 14 Sec. 25.27.150. INITIATED INCOME WITHHOLDING; REQUIRED 15 NOTICE AND HEARING. (a) In order to initiate income withholding for a support 16 order being enforced by the agency for which immediate income withholding is not 17 required under AS 25.27.062(a), the agency shall serve a notice of its intent to initiate 18 income withholding on the obligor. Notice under this subsection shall be served upon 19 the obligor by certified mail to the obligor's last known address, and service is 20 complete when the notice is properly addressed, certified, and mailed. 21 (b) The notice must state the amount of the overdue support that is owed, if 22 any, and the amount of income that will be withheld. 23 (c) The notice shall inform the obligor that the income withholding order will 24 take effect 15 days after the date on which the notice is served unless the obligor 25 requests a hearing within 15 days after the notice is served. If the obligor requests a 26 hearing, an income withholding order may not take effect until the conclusion of the 27 hearing. 28 (d) If the obligor requests a hearing, it shall be conducted under the 29 department's regulations for informal conferences and shall be held within 15 days of 30 the date of the request. The hearing may only be held to determine if there is a 31 mistake of fact that makes the income withholding order improper because the amount
01 of current or overdue support is incorrect, the identity of the obligor is inaccurate, or, 02 for initiated withholding based on AS 25.27.062(c)(3)(A), the alleged facts regarding 03 overdue payments or potential withdrawal of assets are incorrect. The order is not 04 subject to any other legal defenses. It is not a defense to an income withholding order 05 issued under AS 25.27.062(c)(2) that less than one full month's payment is past due 06 if at least one full month's payment was past due on the date notice was served under 07 this section. 08 (e) The appeals officer shall inform the obligor, either at the hearing or within 09 15 days after the hearing, whether or not the withholding will occur and of the date 10 on which it is to commence. 11 (f) If the appeals officer determines that withholding will occur, the obligor 12 may request a formal hearing, as provided in the department's regulations. The 13 income withholding order shall be issued and withholding shall begin under the 14 procedures in AS 25.27.062, whether or not the obligor requests a formal hearing, 15 unless the obligor posts security or a bond in the amount that would have been 16 withheld pending the outcome of a formal hearing. 17 * Sec. 16. AS 25.27.160(b) is amended to read: 18 (b) The notice and finding of financial responsibility served under (a) of this 19 section must state 20 (1) the sum or periodic payments for which the alleged obligor is found 21 to be responsible, calculated by taking into consideration the need of the alleged 22 obligee, the alleged obligor's liability to the state under AS 25.27.120 [AS 25.27.130] 23 if any, and the duty of support under the law; 24 (2) the name of the alleged obligee and the obligee's custodian; 25 (3) that the alleged obligor may appear and show cause in a hearing 26 held by the agency why the finding is incorrect, should not be finally ordered, and 27 should be modified or rescinded, because 28 (A) no duty of support is owed; or 29 (B) the amount of support found to be owed is incorrect; 30 (4) that if the person served with the notice and finding of financial 31 responsibility does not request a hearing within 30 days, the property and income of
01 the person will be subject to execution under AS 25.27.062 and 25.27.230 - 25.27.270 02 [IN ACCORDANCE WITH AS 25.27.230 - 25.27.270] in the amounts stated in the 03 finding without further notice or hearing. 04 * Sec. 17. AS 25.27.170(b) is amended to read: 05 (b) If a request for a formal hearing under (a) of this section is made, the 06 execution under AS 25.27.062 and 25.27.230 - 25.27.270 may not [AS 25.27.230 - 07 25.27.270 SHALL] be stayed unless the obligor posts security or a bond in the 08 amount of child support that would have been due under the finding of financial 09 responsibility pending the decision on the hearing [, OR THE DECISION OF A 10 COURT, IF APPEALED]. If no request for a hearing is made, the finding of 11 responsibility is final at the expiration of the 30-day period. 12 * Sec. 18. AS 25.27.170(d) is amended to read: 13 (d) The hearing officer shall determine the amount of periodic payments 14 necessary to satisfy the past, present, and future liability of the alleged obligor under 15 AS 25.27.120 [AS 25.27.130], if any, and under any duty of support imposable under 16 the law. The amount of periodic payments determined under this subsection is not 17 limited by the amount of any public assistance payment made to or for the benefit of 18 the child. 19 * Sec. 19. AS 25.27.170(f) is amended to read: 20 (f) If the alleged obligor requesting the hearing fails to appear at the hearing, 21 the hearing officer shall enter a decision declaring the property and income of the 22 alleged obligor subject to execution under AS 25.27.062 and 25.27.230 - 25.27.270 23 [IN ACCORDANCE WITH AS 25.27.230 - 25.27.270] in the amounts stated in the 24 notice and finding of financial responsibility. 25 * Sec. 20. AS 25.27.180(b) is amended to read: 26 (b) Liability to the state under AS 25.27.120 [AS 25.27.130] is limited to the 27 amount for which the obligor is found to be responsible under (a) of this section. 28 * Sec. 21. AS 25.27.230(a) is amended to read: 29 (a) At the expiration of 30 days from either (1) the date of distribution of an 30 income withholding order under AS 25.27.062 [SERVICE OF NOTICE UNDER 31 AS 25.27.150], or (2) the date of service of a notice and finding of financial
01 responsibility under AS 25.27.160, the agency may assert a lien upon the real or 02 personal property of the obligor, in the amount of the obligor's liability. 03 * Sec. 22. AS 25.27.230(c) is amended to read: 04 (c) The lien shall attach to all real and personal property of the obligor and be 05 effective on the date of recording of the lien with the recorder of the recording district 06 in which the property attached is located. A lien against earnings shall attach and be 07 effective upon filing with the recorder of the recording district in which the employer 08 does business or maintains an office or agent for the purpose of doing business. A 09 lien filed at the offices of the Commercial Fisheries Entry Commission in Juneau 10 against a limited entry permit issued under AS 16.43 is considered to have been 11 filed against the permit in all recording districts in which the permit holder uses 12 the permit. 13 * Sec. 23. AS 25.27.250(a) is amended to read: 14 (a) At the expiration of either (1) 15 [30] days from the date of service of an 15 income withholding order under AS 25.27.062 or notice under AS 25.27.150, or (2) 16 30 days from the date of service of a notice and finding of financial responsibility 17 under AS 25.27.160, the agency may issue to any person, political subdivision, or 18 department of the state an order to withhold and deliver property. 19 * Sec. 24. AS 25.27.250(b) is amended to read: 20 (b) All real or personal property belonging to the obligor is subject to an order 21 to withhold and deliver, including, but not limited to, earnings that are due, owing, or 22 belonging to the debtor. In calculating the amount to be withheld and delivered 23 under an order issued under this section, the agency shall give credit to the 24 obligor for the cost to the obligor of medical and dental insurance for the children 25 and educational payments for the children to the extent that the insurance 26 coverage and educational payments are required in the applicable child support 27 order and are actually paid for by the obligor. 28 * Sec. 25. AS 25.27.250(f) is amended to read: 29 (f) If a person, political subdivision, or department of the state upon whom 30 service of an order to withhold and deliver has been made possesses property due, 31 owing, or belonging to the obligor, that person, subdivision, or department shall
01 withhold the property immediately upon receipt of the order and shall deliver the 02 property to the agency [UPON DEMAND] after the expiration of the 14-day period 03 from the date of service of the order or expiration of the period specified in 04 AS 25.27.062(e), whichever is earlier. The agency shall hold property delivered 05 under this subsection in trust for application against the liability of the obligor under 06 AS 25.27.062, 25.27.120, or 25.27.160 [AS 25.27.130] or for return, without interest, 07 depending on final determination of liability or nonliability under this chapter. The 08 agency may accept a good and sufficient bond to secure payment of past, present, 09 and future support conditioned upon final determination of liability in lieu of 10 requiring delivery [DELIVERING] of property under this subsection. 11 * Sec. 26. AS 25.27.250 is amended by adding a new subsection to read: 12 (j) A person, political subdivision, or department that fails to comply with an 13 order to withhold and deliver served under this subsection is subject to penalties under 14 AS 25.27.260. A person, political subdivision, or department may, for each payment 15 made under an order to withhold and deliver, deduct $5 from other wages or salary 16 owed to the obligor. 17 * Sec. 27. AS 25.27.255(a) is amended to read: 18 (a) The agency shall pay to the obligee all money recovered by the agency 19 from the obligor under an income withholding order except for court costs and money 20 assigned to the agency under AS 25.27.120 - 25.27.130. However, if there is more 21 than one income withholding order under this chapter against an obligor, the 22 agency shall allocate amounts available for withholding in a manner that gives 23 priority to current support up to the limits imposed under 15 U.S.C. 1673(b) 24 (sec. 303(b), Consumer Credit Protection Act). Notwithstanding the priority given 25 to current support, the agency shall establish procedures for allocation of support 26 among obligees so that in no case will the allocation result in a withholding order 27 for one obligee not being implemented. 28 * Sec. 28. AS 25.27.260 is amended to read: 29 Sec. 25.27.260. CIVIL LIABILITY UPON FAILURE TO COMPLY WITH 30 AN ORDER OR LIEN. If a [ANY] person, political subdivision, or department of the 31 state (1) fails to make an answer to an order to withhold and deliver within the time
01 prescribed in AS 25.27.250; (2) fails or refuses to deliver property in accordance with 02 an order issued under AS 25.27.250; (3) pays over, releases, sells, transfers, or conveys 03 real property subject to a lien recorded under AS 25.27.230 to or for the benefit of the 04 obligor or any other person; (4) fails or refuses to surrender upon demand property 05 attached; or (5) fails or refuses to honor an assignment of wages or an income 06 withholding order under AS 25.27.062 that was served [PRESENTED] by the agency 07 through personal service by a process server or through certified mail, return 08 receipt requested, the person, political subdivision, or department of the state is liable 09 to the agency in an amount equal to 100 percent of the amount constituting the basis 10 of the lien, order to withhold and deliver, attachment, or withholding of wages or 11 income, together with costs, interest, and reasonable attorney fees. 12 * Sec. 29. AS 25.27.260 is amended by adding a new subsection to read: 13 (b) A person, political subdivision, or department of the state that intentionally 14 fails or refuses to honor a properly served income withholding order under 15 AS 25.27.062 that is not being enforced by the agency is liable to the obligee in an 16 amount equal to 100 percent of the amount ordered to be withheld together with costs, 17 interest, and reasonable attorney fees. 18 * Sec. 30. AS 33.30.131(b) is amended to read: 19 (b) Unless alternative arrangements are expressly approved by the 20 commissioner, when a prisoner is employed outside a correctional facility as part of 21 a prerelease or short-duration furlough program, or as part of serving time in a 22 correctional restitution center under AS 33.30.151 - 33.30.181, the earnings of the 23 prisoner shall be delivered to the commissioner. If an employer transmits the earnings 24 to the commissioner, the employer has no liability to the prisoner for the earnings. The 25 commissioner shall disburse the earnings of the prisoner, in an order determined 26 appropriate, under procedures adopted by the commissioner to 27 (1) pay for the room, board, and personal expenses of the prisoner in 28 an amount or at a rate determined by the commissioner; 29 (2) pay any restitution or fine ordered by the sentencing court; 30 (3) reimburse the state for an award made for violent crimes 31 compensation under AS 18.67 arising out of the criminal conduct of the prisoner;
01 (4) pay a civil judgment arising out of the criminal conduct of the 02 prisoner; and 03 (5) support the dependents of the prisoner, and to provide child support 04 payments as required by AS 25.27 [AS 25.27.062]. 05 * Sec. 31. AS 25.27.255(b), 25.27.255(c), and secs. 2 and 5, ch. 75, SLA 1991, are 06 repealed. 07 * Sec. 32. TRANSITIONAL PROVISION. (a) Notwithstanding other provisions of this 08 Act, in the case of a support order issued by a court on or after January 1, 1994, and before 09 the effective date of this Act, the court shall, upon filing of a motion by an obligee who is the 10 subject of the support order, issue an immediate income withholding order for support, 11 regardless of whether support payments are in arrears, unless 12 (1) a written agreement exists between the obligor and the obligee that 13 provides for an alternative arrangement; 14 (2) the obligor demonstrates, and the court finds, that there is good cause not 15 to require immediate income withholding; or 16 (3) the support order is being enforced by the child support enforcement 17 agency. 18 (b) An immediate income withholding order issued under this section is governed by 19 AS 25.27, as amended by this Act, and shall be treated as an immediate income withholding 20 order issued under AS 25.27.062(a). 21 * Sec. 33. This Act takes effect on the 10th day after the date it becomes law under 22 AS 01.10.070(a).