Legislature(1997 - 1998)
04/28/1997 09:09 AM Senate HES
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SB 154 CHILD SUPPORT & PATERNITY
CHAIRMAN WILKEN announced SB 154 to be up for consideration.
GLENDA STRAUBE , Director of Child Support Enforcement, said there
were several proposed amendments which resulted from a meeting with
the Alaska Banker's Association. They agreed to further define
financial institutions on page 30, line 23 adding "brokerage
houses, insurance companies, and any other companies providing
individual investment transactions or deposit accounts."
Number 222
MARILYN MAY, Assistant Attorney General, said she was available to
answer questions.
KENNETH KIRK , Anchorage Attorney, said that he has some serious
problems with SB 154. Mr. Kirk stated that sometimes CSED does not
want to answer a question about why the division wants a law in a
particular way. At times there is a law that does not specify that
the division has to take action in a certain way, and at other
times there is a provision for waiver that the division does not
want to try. He suspected that a lot of things in this bill fall
into those categories.
Mr. Kirk identified a major problem as the hardship created for
employers because, even if an employer only has one employee, the
employer must report all hires and rehires. A lot of employers are
not going to realize their responsibility. Under this legislation,
there are major penalties for non-compliance with administrative
subpoenas. Often CSED asks for years of business and bank records
which means a small business owner has to either shut down and let
CSED come in and look at them or ship the information to CSED.
Usually it is too much information to effectively copy.
Mr. Kirk expressed concern with the license revocation provision
which takes out the allowance for temporary recreational licenses
while the matter is being disputed. If an individual with a
hunting license is determined by CSED to owe child support that
individual can not hunt while the matter is being disputed. The
same scenario can occur with recreational fishing. Such a
situation is a denial of due process and should be eliminated.
Allowing crew license revocation typically results in that crew
member not being able to work, to make money. to pay the child
support. CSED has said that it does not want the licenses, but
wants to set up a payment schedule; however, if you can not meet
that formula, you are out of luck. Furthermore, it is very hard to
meet that formula unless you are very close to being current
anyway.
Mr. Kirk said that allowing service of original documents by first
class mail is problematic because the address CSED has is often
years old. CSED should make an effort to ensure that the right
person is found and not just use certified first class mail. The
default provisions are of concern because if CSED serves a document
on the wrong address, the person does not receive the document, but
will find out a few years later when CSED garnishes the obligor's
pay.
Number 295
SENATOR LEMAN asked if it would be an improvement if CSED were to
cross check the address with the most recent address the Permanent
Fund Division has on file for those who are Alaskan residents.
KENNETH KIRK replied yes. In most cases, CSED has not done much t
look for the most recent address.
CHAIRMAN WILKEN asked if he dealt professionally with CSED issues.
KENNETH KIRK replied yes and informed the committee that he spends
approximately 30% of his time dealing with such cases, most of
which on behalf of obligors.
Number 376
GLENDA STRAUBE responded that he was correct in a sense about the
bill being tough. The federal government is asking the employer to
do more than in the past. Regarding the administrative subpoenas
and how long it would take an employer to respond, Ms. Straube
pointed out that most subpoenas go to banks. CSED occasionally
serves subpoenas on other people, but usually after the
investigation is further along.
With regard to license revocations, Ms. Straube believed that the
first license revocation was done several days ago. When someone
comes into CSED now, CSED determines if there is a default order
not based on the obligor's actual income and that is fixed. If it
is owed to the state, CSED has the right to vacate and fix it. If
it is owed to the custodial parent, CSED can ask the parent if
he/she is willing to make a deal and CSED can send the file to a
modification team to determine if the income has changed. License
revocation is extremely important because this ability indicates
that CSED is serious about children. Ms. Straube said that CSED
has had a very good response to this law and many people have
worked out payment plans. CSED is receiving money from people who
have never made regular payments.
Ms. Straube informed the committee that all case workers have desk
top computers which have access to the Permanent Fund Division and
is used frequently for addresses. When something is returned to
CSED undelivered or not accepted, which is just as likely, CSED
sends it to another locate section which searches a much larger
group of locate data bases.
CHAIRMAN WILKEN said there were some concerns with the employer
hire/rehire section, although he did not think it was enough to
hold up the bill. KENNETH KIRK was not sure how small employers
would find out about this; while the larger employers have
personnel departments to keep track of such. Mr. Kirk thought
employers may avoid hiring someone with child support obligations.
GLENDA STRAUBE informed everyone that the IRS has already sent out
a letter to employers, but it is the same as the new hire reporting
law that has been in effect for a number of years. The difference
was the limit of 20 or more employees. This is not a new law; CSED
worked very close with employers at that time with notices and
groups as will be the case now.
CHAIRMAN WILKEN was amazed that people would suggest tracking every
hire and rehire in the United States. Chairman Wilken inquired as
to the history of the subpoena requirements. GLENDA STRAUBE
mentioned that administrative subpoenas are usually served on
financial institutions. There are other subpoenas that are not as
cumbersome that are used to obtain one piece of information. The
cumbersome subpoenas occur during the investigation of criminal
non-support.
CHAIRMAN WILKEN asked about the temporary license revocation
without due process. GLENDA STRAUBE reiterated that the federal
government requires including recreational licenses which CSED is
not excited about. CSED has narrowed the hunting license
revocation down to non-personal use and fishing license revocation
to non-subsistence.
Number 421
DAN BRANCH , Assistant Attorney General, pointed out that persons
who use subsistence and fishing licenses will not be affected.
Current law 25.27.244 (A) for occupational licenses ensures that
CSED will not be able to place a child support obligor on the
obligor list until notice is sent with 60 days to respond.
Therefore, concerns about due process are not well placed.
Recreational licenses are unique in that there is no temporary
license in place.
KENNETH KIRK noted that every other category of licenses which can
be revoked here has a certain appellate mechanism. After CSED
makes its initial determination, a review can be requested by the
Superior Court and a temporary license can be obtained while the
court reviews that. The grounds for that review are very limited;
one must demonstrate that he/she was in compliance, it was not
he/she, or there was not a valid order. In other words, CSED may
have made a serious mistake and taken a recreational licenses out
of the category in which the court could enter a temporary license
while the case is being reviewed. Mr. Kirk informed the committee
of a case in which CSED demanded so many records from a small
business that the owner closed the business and became a clerk at
Safeway.
Number 469
CHAIRMAN WILKEN asked if a waiver was available for some of SB 154.
GLENDA STRAUBE acknowledged that a waiver can be requested, but th
federal government has not been very good about waivers for child
support. In order to receive a waiver the division would have to
prove that it would be ineffective to implement the law or that the
cost would be so prohibitive it would not be economical to do it.
Licensing does not fall under either of those.
SENATOR GREEN asked if a sport fishing license implies that it is
not for personal use. DAN BRANCH understood that there are
specific personal use fisheries, for example the dip net fishery.
The difference is the gear; sports fishing is basically rod and
reel fishery only and personal use fishing is with nets. It is
possible to distinguish in the field whether a person is
participating in the personal use fishery easily. SENATOR GREEN
said that created a conflict with a hunting license, because those
are all considered to be personal use. DAN BRANCH commented that
legislation in place now does not define personal use hunting. So
SB 154 would exempt hunting which would otherwise be considered
sport hunting if it was being carried out for personal use.
Subsistence, by statute, is exempt.
SENATOR GREEN said this was a major stumbling block and wanted to
figure something out. Could a rod and reel fishermen ever be
granted a personal use license? DAN BRANCH was not sure what the
answer was, but it is set out in statute already.
SENATOR GREEN asked if there was any way to have a review process
or was the timing the problem with recreational licenses. GLENDA
STRAUBE said that it is the timing issue. If licensing were
centralized in one agency, then temporary and non temporary
licenses could be issued. Now store owners throughout the state
would have to track who is on the list from month to month. It
also takes a while for the information to go from CSED to the
Department of Fish and Game.
CHAIRMAN WILKEN asked Mr. Kirk to send the committee any
information he had that would improve the bill.
SENATOR GREEN related a story of a contractor who had employed an
obligor over three years ago, but had not seen him since. The
contractor repeatedly informed CSED that the obligor no longer
worked for him. The contractor continued to receive correspondence
from CSED threatening that he was in contempt of court. What could
be done to correct this? Senator Green was concerned about privacy
with so much information being requested.
GLENDA STRAUBE was not familiar with this case. DAN BRANCH was no
either. Perhaps he got an order of withhold and deliver which is
now required.
GLENDA STRAUBE reiterated that nationally employers are being aske
by the federal government to do more on this issue.
TAPE 97-45, SIDE B
This is a new law and Ms. Straube did not know how much the federal
government would be willing to waive.
SENATOR LEMAN expressed concern with interest rate reduction;
whatever CSED does should encourage collections.
SENATOR GREEN informed the committee that she asked Legislative
Legal Services to make sure everything contained in the language is
specifically required.
CHAIRMAN WILKEN referred the committee to Mr. Nordlund's letter
which emphasizes the need to do this now.
Number 547
SENATOR LEMAN moved Amendment 1 as requested by Mr. Roth. Senator
Leman stated objection to the wording of Amendment 1. Senator
Leman suggested the following language, "financial institutions
including banks, brokerage houses, insurance companies, and other
companies providing individual investment transaction or deposit
accounts." He offered that language as an amendment to Amendment
1 and withdrew his objection.
GARY ROTH understood the amendment and agreed with Senator Leman's
language.
Number 502
SENATOR GREEN stressed the need to ensure that access is confined
to only necessary information. GLENDA STRAUBE explained that CSED
wants to determine if the obligor has an account and the balance of
that account. The federal government requires the name, the record
address, social security number or other tax payer i.d. number, and
other identifying information for each non-custodial parent who
maintains an account at such an institution and whose child support
is past due. Language in the bill references the information in
the federal law. Ms. Straube explained that she provides financial
institutions with a list of people who are in arrears and those
names are matched with a list of the institution's accounts.
SENATOR GREEN asked if Ms. Straube had to have a reason to suspect
someone has an account at an institution. GLENDA STRAUBE replied
no; that is why CSED is requesting a quarterly automatic match.
Now they have the authority to do "bank sweeps" which are more
cumbersome than doing the data match on a regular basis.
SENATOR WARD indicated that there may be a problem with the sport
fishing licenses because he sport fishes and puts his catch in the
freezer for personal use. Senator Ward did not know that dip
netting was considered personal use.
CHAIRMAN WILKEN announced an at ease from 10:08 - 10:11 a.m.
Number 450
CHAIRMAN WILKEN asked if the committee had any further discussion
or objections. Hearing none, Amendment 1 was adopted.
SENATOR GREEN moved to adopt Amendment 2 which would add a new
subsection (e).
GARY ROTH, President of the Denali State Bank, informed the
committee that he represented the Alaska Bankers Association which
supported Amendment 1. He was also pleased that Ms. Straube
mentioned the Massachusetts Plan which has been in effect since
1994 and has worked very well between the Child Enforcement
Divisions and the bankers in Massachusetts.
The federal law basically requires that a match system be put in
place by the states and the agencies may pay a reasonable fee to a
financial institution for conducting a data match. The fee is not
to exceed the actual cost incurred by such financial institutions.
With regard to liability, the federal law states that a financial
institution shall not be liable under any federal or state law to
any person. Mr. Roth believed that the liability issue is mute
based on the federal statute. Mr. Roth recommended that the
reasonable fee amendment be included to make it coincide with
federal legislation.
GLENDA STRAUBE agreed that Massachusetts is the only state with a
similar law prior to the passage of the federal law. Ms. Straube
was uncomfortable with this because who is to define "a reasonable
fee" and determine the actual cost. Would this preclude CSED from
establishing a regulation for further clarification?
CHAIRMAN WILKEN was also concerned about what constituted a
reasonable fee as well as the bureaucracy involved. He asked if
there was objection to Amendment 2. Chairman Wilken objected.
Upon a vote Senator Wilken voted "Nay" and Senators Green and Ward
voted "Yea" therefore Amendment 2 failed.
Number 379
SENATOR GREEN moved to adopt Amendment 3.
CHAIRMAN WILKEN noted that on page 60, line 10 a new section is
inserted. GLENDA STRAUBE pointed out that this relates to state
personnel records. CSED thought it had the statutory authority to
access those records, but were recently informed by the Department
of Administration that CSED would need specific legislation to do
so.
DAN BRANCH said he supported Amendment 3.
CHAIRMAN WILKEN asked if there were any objections to Amendment 3.
Hearing none, Amendment 3 was adopted.
SENATOR GREEN indicated that federal law only requires that a
procedure to take away licenses be established; what is the time-
line for that process? GLENDA STRAUBE answered 150 days.
MARILYN MAY clarified that Mr. Kirk's concern that these issues are
not in federal law is incorrect. CSED drafted SB 154 as the
federal law required. The federal law requires that CSED has the
ability to issue subpoenas. The exact procedures and the penalty
CSED chooses are not specifically required by the federal law.
CHAIRMAN WILKEN asked Mr. Branch and Ms. Straube to develop some of
the committee's concerns to be forwarded to the Finance Committee.
Number 327
SENATOR GREEN moved to pass CSSB 154(HES) from committee. SENATOR
WARD objected, and inquired as to the next committee of referral.
CHAIRMAN WILKEN said the next committee of referral is Finance.
SENATOR WARD requested that Mr. Nordlund be available personally to
testify on the validity of some of his assumptions. Senator Ward
removed his objection. Without further objection, CSSB 154(HES)
passed from committee with individual recommendations and the
accompanying fiscal note.
CHAIRMAN WILKEN adjourned the meeting at 10:25 a.m.
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