Legislature(1997 - 1998)
02/10/1998 03:04 PM House HES
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* first hearing in first committee of referral
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HB 344 - PATERNITY/CHILD SUPPORT/NONSUPPORT CRIMES Number 899 CHAIRMAN BUNDE announced the next bill to be heard was HB 344, "An Act relating to paternity establishment and child support; relating to the crimes of criminal nonsupport and aiding the nonpayment of child support; and amending Rule 37(b)(2)(D), Alaska Rules of Civil Procedure; and providing for an effective date." He asked Barbara Miklos to come forward to discuss HB 344. Number 0934 BARBARA J. MIKLOS, Director, Child Support Enforcement Division (CSED), Department of Revenue, testified the Governor requested that HB 344 be introduced on behalf of the Child Support Enforcement Division. She explained that in 1996, Congress passed the Personal Responsibility and Work Opportunity Reconciliation Act, which from here on she would refer to as welfare reform legislation. This legislation changed welfare as it was known, from an ongoing, long-term potential for the rest of someone's life to a temporary program. In making these sweeping changes, Congress realized that in order for this to happen in people's lives, additional tools and resources were necessary in order to survive without public assistance payments. Congress changed many programs, but one program that was changed dramatically was the child support program. The intent was to give child support agencies more tools, more opportunities, and more ways to work efficiently in collecting support; therefore, help people who are on welfare get off of welfare, and to help people who are not on welfare, stay off of welfare. Number 1000 MS. MIKLOS said that some of these major changes were passed in legislation last year, Senate Bill 154. There were major provisions in that legislation, some of which the legislature felt, and rightfully so, could be postponed to this year. House Bill 344 takes care of those provisions that were left out last year as well as things that have been amended by Congress. While the legislation is complex, it contains nothing that isn't required in welfare reform legislation. According to Congress, if these provisions are not passed, the state of Alaska is at risk of losing nearly $70 million. Number 1061 MS. MIKLOS highlighted some of items contained in HB 344. Currently, there is existing legislation for large employers to report new hires to the Child Support Enforcement Division. Welfare reform requires that all employers report all new hires within 20 days to the division. Along with that, the sanctions have been reduced dramatically and it is the intent of Congress and CSED to work with employers as much as possible and to make the process as easy as possible. Number 1089 MS. MIKLOS continued that another provision is the requirement of some type of sanction that involves recreational licenses, which was a controversial issue last year. The division compromised so that it would only be used as a sanction in the case where someone has been criminally charged with a crime involving child support or is in contempt of court. Number 1124 MS. MIKLOS said another provision is that social security numbers are mandated for child support purposes on applications for driver's licenses and hunting licenses. These were both technical amendments to welfare reform that weren't in existence last year. Other provisions are to give child support liens from other states the same standing as Alaskan liens; give courts authority to hold a person in contempt for failing to honor an administrative child support subpoena; amend the definition of support order; allow the entry of default judgments in administrative paternity cases; permit child support agencies of other states to make electronic requests for high volume enforcement assistance; clarify which state law an employer must follow when served with an interstate income withholding order; provide a method for Alaska's Child Support Enforcement Division to help a child support obligor's children receive health care coverage; repeal the sunset provision; and two technical changes required in order to be consistent with the Uniform Interstate Family Support Act. Number 1241 CHAIRMAN BUNDE commented the committee heard a bill last week dealing with uniform child custody interstate. He asked if these bills are interrelated or redundant in any case. MS. MIKLOS responded the two bills are similar, but deal with different topics. Some of the provisions have the same intent which is to make things uniform throughout the states. REPRESENTATIVE DYSON said Ms. Miklos had indicated that some of the provisions kick in if a person is guilty of a criminal child support case separate from contempt of court. MS. MIKLOS replied it could be either. REPRESENTATIVE DYSON said he understood the contempt of court, but inquired what the other crime would be. MS. MIKLOS responded there are two crimes related directly to child support; one is criminal nonsupport, and the second is aiding and abetting in the nonpayment of child support. REPRESENTATIVE KEMPLEN referred to page 2, lines 25-26 and asked if this had been examined to determine how it relates to the right to privacy clause in the Alaska Constitution. MS. MIKLOS said it was a controversial issue that was researched last year, and research is continuing. She commented that Dan Branch from the Department of Law was present and could speak to the research done last year with respect to social security numbers being required for occupational licenses and other items already passed. It is the division's position that it doesn't affect the privacy right. Number 1391 CHAIRMAN BUNDE noted that would be useful information for the committee. MS. MIKLOS indicated the division would furnish something in writing to the committee. Number 1421 REPRESENTATIVE VEZEY recalled that a few years ago there were reporting requirements placed on hiring halls and he inquired if that was being amended. PHIL PETRIE, Operations Manager, Child Support Enforcement Division, confirmed that about five years ago, Alaska was one of the test states that implemented a grant program paid for by the federal government, which implemented the current statute. He said this is the same statute, but it's being repealed and re-enacted with additional provisions. That program was in operation for three years, and on the basis of that program in the other states, the federal government concluded it was a valuable tool, as did Alaska. Number 1475 REPRESENTATIVE VEZEY asked Mr. Petrie to explain those requirements. MR. PETRIE explained the original bill passed by the legislature required that any employer designated by the division was required to report. Not all employers were required, but the division chose employers in a graduated fashion. First were employers that had the most employees with the largest number of child support cases, and then over a three year period, additional employers were added until there were approximately 300 employers. There had to be 20 or more employees or the individual had to work more than 360 hours during the year, so temporary and fast turnover employees were not covered in the original bill. There was a provision that employers could withhold $1 for each person reported. The division worked with employers and allowed employers as much freedom as possible on how to report; e.g., fax, tapes or diskettes. The division used a standard computer protocol to input the information into the system. A child support enforcement employee matched the information against cases, and if there was a match, the employer was entered into the system and a withholding order was issued. If there was no match, the information was immediately destroyed and dropped from the system until reported by a new employer. MR. PETRIE said all of those provisions are contained in HB 344, but expanded to include every employer and it eliminates the temporary nature. Another key piece is that it requires CSED to forward everyone reported to a national new hire database, which the federal government will link up to a national case registry. An example of how that works is if an individual leaves Alaska and goes to work in Louisiana, Louisiana will report to the national level, the national level will compare that to the case registry, discover there's a case in Alaska, and send that information back to Alaska. Within about 10-14 days, Alaska will know who the employer is in Louisiana and be able to issue a withholding order. Number 1615 REPRESENTATIVE VEZEY inquired if HB 344 becomes law, would every employer be required to report every new hire to CSED. MS. MIKLOS confirmed that. REPRESENTATIVE VEZEY asked how frequently the employer would need to report. MS. MIKLOS replied within 20 days of hire or rehire. Number 1638 REPRESENTATIVE VEZEY referred to the situation where an employer rehires the same individual within 2 weeks, 6 months or 1 year and asked if that person would be considered a new hire. MR. PETRIE responded that technically a 2-week lapse would require a rehire report, but he was more comfortable deferring that question to legal counsel. Number 1682 REPRESENTATIVE VEZEY asked for an explanation on how the process works in hiring halls. MR. PETRIE commented there hadn't been a lot of reports from hiring halls under the previous program because the union hiring halls were primarily dispatch locations. Of those hiring halls designated by CSED, only permanent employees were targeted because those employees fell under the 360-hour provision. Under HB 344, hiring halls will be required to report information for permanent employees through any of the methods available; e.g., fax, electronic filing, telephone, or just sending a copy of the W-4 form; however, for dispatch employees, hiring halls will be required to provide the name of the person and to whom they are being dispatched. CHAIRMAN BUNDE observed that CSED had submitted a zero fiscal note, and yet it appeared the division's workload would significantly increase. MS. MIKLOS indicated that much of the work would be done electronically. In addition to the one designated staff person, the division has requested additional staff in the Governor's budget; however, if the request is not granted, existing staff will be used. Number 1808 REPRESENTATIVE VEZEY inquired if Ms. Miklos was inferring the division's efficiency in handling data is such that the amount of data could double, triple, or quadruple without any additional cost. MS. MIKLOS noted that a Request for Proposal (RFP) will be issued shortly using a capital appropriation received from the legislature last year. It is anticipated the majority of this workload, which is expected to increase especially with small employers sending in W-4s, will be handled electronically and through the computers. REPRESENTATIVE VEZEY assumed the capital appropriation was for additional hardware and software, not additional staff. MS. MIKLOS responded there is no additional staff tied to this legislation. REPRESENTATIVE VEZEY inquired if the division had pursued the possibility of outsourcing the handling of the data. He was aware of a number of major data processing firms performing this function. MS. MIKLOS replied that with the RFP, the division is hoping to work with a data processing firm in setting up the system. The expectation, however, is that most of it will be automatic. Number 1901 CHAIRMAN BUNDE noted that failure to comply with federal child support mandates may result in a significant reduction in federal financial participation. He asked if Ms. Miklos could estimate what the financial reduction would be. MS. MIKLOS responded it was almost $70 million, with the bulk of it from the Division of Public Assistance budget, and all the federal money that goes into the Child Support Enforcement Division budget. TAPE 98-6, SIDE A Number 0001 JIM NORDLUND, Director, Division of Public Assistance, Department of Health & Social Services, testified in support of HB 344. The Division of Public Assistance will be a great beneficiary if this legislation passes; or a victim of the federal government, if it does not pass. The Division of Public Assistance is the primary agency that has been charged with implementing the welfare reform plan in Alaska. He explained that welfare reform is really about helping families move off public assistance and being able to support their families on their own. In this endeavor, there has been much focus on helping people go to work. It is important, however, not to lose sight of an equally important way of helping families become self-sufficient, and that is making sure that both parents responsible for bringing children into the world are also responsible for supporting those children. House Bill 344 provides additional tools for the Child Support Enforcement Division to collect support payments that are owed on behalf of those children. It also would help the Division of Public Assistance in that almost dollar for dollar to the extent that child support payments can be collected from the responsible parents, it will reduce the amount of money being paid out in public assistance benefits. It's a good thing from a budget standpoint, as well as from a public policy standpoint, and the federal government is basically mandating the state of Alaska to do this. Number 0167 MR. NORDLUND referred to the penalties, and said the Division of Public Assistance faces a potential 5 percent penalty to the federal block grant. He explained the block grant is basically the amount of money the state receives from the federal government, which is the federal share of participation of paying benefits to recipients, as well as administration of the program. In the upcoming year, the amount of that grant will be about $65 million, so a 5 percent penalty amounts to approximately $3 million. He noted that any state facing that penalty is required to make up the difference from the state general fund. Number 0239 MR. NORDLUND concluded that if this conforming legislation is not passed by the time Alaska resubmits the plan which allows the state to draw down federal money, Alaska could potentially face the loss of the entire federal block grant, or approximately $65 million. Number 0293 REPRESENTATIVE KEMPLEN understood that Alaska's Constitution is one of the most powerful of all the states in terms of an individual right to privacy. He speculated that the requirement of having to furnish a social security number when applying for a driver's license or hunting license could be in direct conflict with the strong right to privacy clause. He asked if the nature of the Alaska Constitution and how this requirement comes into conflict with the right to privacy clause had been pointed out to the federal government, and if not, were there any plans to do so. MR. NORDLUND deferred that question to Ms. Miklos. Number 0474 REPRESENTATIVE KEMPLEN asked if Mr. Nordlund was aware of any state that had not complied with these requirements and faced the penalties. MR. NORDLUND responded that Ms. Miklos would be the appropriate person to answer that question. MS. MIKLOS responded the state of Idaho has been put on notice. CHAIRMAN BUNDE asked if there was further public testimony. Hearing none, he asked Representative Porter to explain Amendment 1. REPRESENTATIVE PORTER made a motion to adopt Amendment 1, 0- GH2007/A.1, Lauterbach, 1/29/98, which read: Page 1, following line 10: Insert a new bill section to read: *Sec. 2. AS 09.10.040(a) is amended to read: (a) A [EXCEPT AS PROVIDED IN (b) OF THIS SECTION, A] person may not bring an action upon a judgment or decree of a court of the United States, or of a state or territory within the United States, and an action may not be brought upon a sealed instrument, unless the action is commenced within 10 years." Renumber of following bill sections accordingly. Page 11, following line 20: Insert a new bill section to read: *Sec. 30. AS 09.10.040(b) is repealed." Renumber the following bill sections accordingly. Renumber internal references to bill sections in accordance with this amendment. Internal bill section references occur in the following places: Page 11, line 22 Page 11, line 23 Page 11, line 26 Page 11, line 27 Number 0551 CHAIRMAN BUNDE objected for discussion purposes. REPRESENTATIVE PORTER explained the amendment fits within the title and has basically nothing to do with the intent of the bill. He had discussed the amendment with Ms. Miklos, and while not pleased about it, she has no problem with the adoption of the amendment. He explained he is offering the amendment because of a constituent, who after paying child support for 20+ years, was sued by his ex- spouse claiming that no payments had been paid through the entire span of child support period. He was able to come up with documented evidence through receipts and checks, and prove this claim false for about 95 percent of the time involved. However, he was not able to do so for the first few years. Representative Porter recalled there is a presumption within the law that if payment can't be verified, payment wasn't made. Even though the complaint alleged that no payments had been made, which was obviously false, one particular provision of law allows the Child Support Enforcement Division an exception to the statute of limitations. He explained that by deleting that provision, it allows CSED the ability to go back probably 5 years, and maybe more for good cause shown. He noted these kinds of cases will drop off in terms of having any relevance because now all the payments go through the Child Support Enforcement Division. In any case, this will have some effect for the next 2 or 3 years. Number 0715 CHAIRMAN BUNDE clarified that previously, child support payments were paid directly to the recipient rather than through CSED, and the individual making those payments was required to maintain records for protection. CHAIRMAN BUNDE asked if there was further discussion about Amendment 1. Chairman Bunde withdrew his objection and Amendment 1 was adopted. CHAIRMAN BUNDE noted this was the first hearing on HB 344 and a number of questions had been raised, so HB 344 would be held in committee.
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