Legislature(2011 - 2012)BELTZ 105 (TSBldg)

03/07/2012 01:30 PM JUDICIARY

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Heard & Held
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
                  SB 134-CHILD SUPPORT AWARDS                                                                               
2:02:59 PM                                                                                                                    
CHAIR  FRENCH announced  the  consideration of  SB  134, "An  Act                                                               
relating  to  child  support awards;  and  repealing  Rule  90.3,                                                               
Alaska Rules of Civil Procedure."                                                                                               
2:03:19 PM                                                                                                                    
DOROTHY SHOCKLEY, staff to Senator  Kookesh, introduced SB 134 by                                                               
explaining  that  it  puts  Court Rule  90.3  into  statute,  and                                                               
changes how child support is allocated. The current percentage-                                                                 
of-income  model  that considers  just  the  income of  the  non-                                                               
custodial parent will change to  an income share model where both                                                               
parents' income  is used  to calculate  child support.  She noted                                                               
that  a section  was removed  that ordered  a grandparent  to pay                                                               
child support. Sections  dealing with the support  order form and                                                               
the commentary were also removed.                                                                                               
She explained  that the bill  came about due to  frustration with                                                               
the child support  review process under Court  Rule 90.3, because                                                               
it appeared  that people did  not have a  voice. In 2008  she was                                                               
told that the best way to change  the process was to put the rule                                                               
into statute.                                                                                                                   
MS. SHOCKELY relayed that the  sponsor's office receives a number                                                               
of calls  from people who do  not mind paying child  support, but                                                               
feel there are  problems with the system.  This legislation seeks                                                               
to give people  a voice, be fair, and provide  for a child's best                                                               
2:05:42 PM                                                                                                                    
SENATOR  COGHILL  asked  for an  expanded  discussion  about  the                                                               
income share model for determining  child support. He said he was                                                               
also  interested  in  looking at  ways  to  include  non-monetary                                                               
things in  child support orders.  For example, there should  be a                                                               
way to  place a  value on  a contribution  of hunting  or fishing                                                               
2:07:27 PM                                                                                                                    
DAISY  STEVENS, representing  herself,  Fairbanks,  AK, said  she                                                               
always felt  that it was unfair  for child support to  be paid by                                                               
just one parent.  She cited the cases of her  two sons and stated                                                               
full  support for  changing the  standard  for calculating  child                                                               
support to include the income of both parents.                                                                                  
2:11:19 PM                                                                                                                    
DIXIE  BANNER, representing  herself, Wasilla,  AK, testified  in                                                               
support of  SB 134.  She described being  penalized in  the child                                                               
support  calculation   for  being  a  noncustodial   parent,  and                                                               
expressed pleasure at not being in the system any longer.                                                                       
2:14:38 PM                                                                                                                    
MICHELLE  BAYLESS,  representing   herself,  Copper  Center,  AK,                                                               
expressed  sympathy  with the  previous  testimony  and said  she                                                               
supports  SB  134   if  it  helps  kids.   She  discussed  single                                                               
parenthood  and that  noncustodial parents  were not  required to                                                               
share the burden.                                                                                                               
2:19:28 PM                                                                                                                    
CHAIR  FRENCH asked  Ms. Shockley  if  she consulted  Legislative                                                               
Legal about Sections  4 and 5. Section 4 repeals  Court Rule 90.3                                                               
putting   it   in   statute,  and   Section   5   addresses   the                                                               
nonapplicability of a two-thirds vote requirement.                                                                              
MS.  SHOCKLEY replied  Legislative Legal  indicated the  sections                                                               
were correct and that they  discussed the questions with both the                                                               
court and the Department of Law.                                                                                                
CHAIR  FRENCH asked  Ms. Meade  to explain  how changes  to Court                                                               
Rule 90.3  are crafted and how  an affected member of  the public                                                               
can get his or her concerns heard.                                                                                              
2:20:34 PM                                                                                                                    
NANCY  MEADE, General  Counsel, Alaska  Court System,  Anchorage,                                                               
AK, explained  that in compliance  with federal  regulations, the                                                               
state reviews its child support  guidelines every four years. The                                                               
Alaska  Supreme Court  appoints  an eight  member committee  that                                                               
meets  for about  18 months  prior to  the four-year  deadline to                                                               
consider  whether the  Court  Rule still  results  in fair  child                                                               
support  awards.  She  described  two  ways  for  the  public  to                                                               
comment. At the  beginning of the process the  meeting is noticed                                                               
in 32 newspapers statewide and  in every courthouse. Comments are                                                               
submitted  and  the  review  committee   reads  them  all  before                                                               
recommending any changes. At that  point the proposed changes are                                                               
noticed and  comment is again solicited  and thoroughly reviewed.                                                               
The committee then makes a  final decision about any changes. She                                                               
noted  that the  process  also provides  an  opportunity for  the                                                               
public to  testify telephonically.  In addition to  the scheduled                                                               
review, the court  rules attorney will consider  written and oral                                                               
suggestions  about   court  rule  changes  at   any  time.  Those                                                               
suggestions  go to  the standing  committee on  family rules  and                                                               
could eventually go to the Alaska Supreme Court.                                                                                
2:25:28 PM                                                                                                                    
CHAIR  FRENCH  asked if  the  Alaska  Supreme Court  reviews  the                                                               
proposals  or  if  the  review committee  has  the  authority  to                                                               
promulgate the rule change.                                                                                                     
MS. MEADE replied rule changes  absolutely must be promulgated by                                                               
the court. The review committee  prepares a report of recommended                                                               
changes  and  the rules  attorney,  acting  as the  intermediary,                                                               
presents the  report to  the five members  of the  Alaska Supreme                                                               
Court  along with  background information  that includes  all the                                                               
public comments. The court then  decides whether or not to accept                                                               
the  recommendations. She  noted that  the last  review committee                                                               
asked the court  for interim guidance as to the  idea of adopting                                                               
the income share  model, and the court's suggestion  was to stick                                                               
with  the percentage  of income  approach  and avoid  unnecessary                                                               
CHAIR FRENCH summarized that the  idea was dropped when the court                                                               
expressed little interest in switching to an income share model.                                                                
MR. MEADE added that the  request for guidance was accompanied by                                                               
a notebook  of thoughts  on the two  approaches and  the relative                                                               
fairness of  each one.  She discussed the  issue of  fairness and                                                               
that it  was a matter  of perspective unless there  was empirical                                                               
evidence that one model was more fair.                                                                                          
CHAIR  FRENCH asked  what model  the court  uses when  custody is                                                               
shared equally between the parents.                                                                                             
MS.  MEADE  explained that  when  custody  is shared  50:50,  the                                                               
current  rule calls  for a  calculation of  each parent's  income                                                               
with  an offset  payment  that accounts  for  the difference.  In                                                               
cases where  a parent has  less than  30 percent custody  for one                                                               
child, the current  rule calls for that parent to  pay 20 percent                                                               
of their net income to the custodial parent.                                                                                    
2:31:50 PM                                                                                                                    
CHAIR  FRENCH observed  that  there appears  to  be ample  public                                                               
SENATOR COGHILL asked her to  elaborate on the court's discussion                                                               
and  suggestion to  stick  with the  percentage  of income  model                                                               
because of fairness.                                                                                                            
MS. MEADE clarified that the  court concluded that the percentage                                                               
of income  approach resulted  in child  support awards  that were                                                               
2:33:45 PM                                                                                                                    
JOHN MALLONEE, Director, Child  Support Services Division (CSSD),                                                               
Department of Revenue (DOR), offered to answer questions.                                                                       
CHAIR FRENCH asked how many child support orders CSSD monitors.                                                                 
MR.  MALLONEE  replied  the division  was  actively  involved  in                                                               
approximately  48,000  child  support  cases, but  that  did  not                                                               
represent the  full universe because some  do not go to  CSSD for                                                               
CHAIR FRENCH asked  why a child support order would  or would not                                                               
fall under the jurisdiction of CSSD.                                                                                            
MR. MALLONEE explained that one of  the parties can ask the court                                                               
to give the case to CSSD  for enforcement or a party can approach                                                               
CSSD directly asking  it do anything from  establish paternity to                                                               
establish a court  order to enforce a court order.  The agency is                                                               
able to do all these things administratively.                                                                                   
CHAIR FRENCH asked if he had reviewed SB 134.                                                                                   
MR. MALLONEE  said yes, and  their calculations showed  that when                                                               
the  combined   income  is   up  to   $31,000  or   $32,000,  the                                                               
noncustodial parent  tends to  pay more under  SB 134  than under                                                               
the  current Rule  90.3. The  reverse is  true when  the combined                                                               
income  is  above $31,000  or  $32,000;  the noncustodial  parent                                                               
tends to  pay less under  SB 134 than  the current Rule  90.3. He                                                               
clarified that would not apply in every situation.                                                                              
CHAIR  FRENCH asked  if  he  had analyzed  what  would happen  to                                                               
current awards if SB 134 were to pass.                                                                                          
MR.  MALLONEE  explained that  because  it  would be  a  material                                                               
change of circumstances, CSSD estimates  that more than 20,000 of                                                               
the current orders would be subject to modification.                                                                            
CHAIR FRENCH asked what the workload is per month.                                                                              
2:39:26 PM                                                                                                                    
MR. MALLONEE  replied the  current staff of  14 does  about 3,000                                                               
modifications in a year.                                                                                                        
CHAIR FRENCH  asked if  the bill  would potentially  create seven                                                               
years of work.                                                                                                                  
MR. MALLONEE said yes; the fiscal  note asks for 24 temporary and                                                               
5 permanent  positions to accommodate  the modifications  and the                                                               
added work to get information from two parties rather than one.                                                                 
CHAIR FRENCH  asked if this  would affect how the  division meets                                                               
the federal guidelines for child support.                                                                                       
MR. MALLONEE  answered no; it actually  provides more opportunity                                                               
to meet the federal requirements  because each case is subject to                                                               
SENATOR  COGHILL  asked  how  CSSD makes  things  fair  when  the                                                               
noncustodial parent is actually the one caring for the child.                                                                   
MR. MALLONEE explained  that the agency can change  an order that                                                               
was  established administratively,  but  cannot  make changes  to                                                               
orders produced by the court. Those  cases have to go back to the                                                               
SENATOR COGHILL asked how long it takes to change custody.                                                                      
MR.  MALLONEE replied  it should  not take  no longer  than 30-45                                                               
days to change an administrative  order, but it takes longer than                                                               
that to get a new custody order from the court.                                                                                 
2:43:46 PM                                                                                                                    
STACY  STEINBERG, Chief  Assistant Attorney  General, Collections                                                               
and  Support   Section,  Civil   Division,  Department   of  Law,                                                               
Anchorage,  AK,  said she  was  in  charge  of the  section  that                                                               
advises CSSD and represents it in any court actions.                                                                            
CHAIR FRENCH  asked if she had  any general comments on  the bill                                                               
or the previous testimony.                                                                                                      
MS. STEINBERG discussed the three  formulas for calculating child                                                               
support  under Rule  90.3  in cases  of  primary custody,  shared                                                               
custody,  and  divided  custody.  The  primary  formula  takes  a                                                               
percentage of  the noncustodial parent's  net income.  The shared                                                               
formula is  a more  income share  approach because  both parents'                                                               
income and  the percentage of time  each parent has the  child is                                                               
considered.  The   divided  formula  is  almost   a  pure  offset                                                               
approach. It applies  when each parent has primary  custody of at                                                               
least one child.                                                                                                                
CHAIR  FRENCH asked  if  she  had any  comments  on the  relative                                                               
fairness of one system compared to the other.                                                                                   
MS. STEINBERG  said no, but  DOL did  review the bill  looking at                                                               
the  legal requirements  under federal  law to  ensure that  CSSD                                                               
continues to receive federal funds.                                                                                             
2:47:31 PM                                                                                                                    
SENATOR  COGHILL   asked  if  the  formulas   easily  accommodate                                                               
changing family dynamics.                                                                                                       
MS.  STEINBERG  confirmed  that   administrative  orders  can  be                                                               
changed more quickly than court  orders, but that it is incumbent                                                               
on one or both parents to notify  CSSD of a change in custody and                                                               
ask for the  appropriate adjustment. If the order  is produced by                                                               
the court, one  or both parents have  to go back to  the court to                                                               
get  a change  of  custody.  As part  of  the  process the  court                                                               
matches  the support  amount to  the  custody arrangement.  Court                                                               
cases move more or less quickly depending on the situation.                                                                     
SENATOR  COGHILL said  he assumes  that would  not change  if the                                                               
bill were to become law.                                                                                                        
MS. STEINBERG said  that's correct; the parents  would still have                                                               
to advise  the court of  the custody  change and the  court would                                                               
have to issue a new custody  and support orders. Returning to the                                                               
fairness issue, she suggested that  it would be necessary to look                                                               
at the calculations  to see if it  was more fair to  look at both                                                               
parents' income.                                                                                                                
2:50:53 PM                                                                                                                    
CHAIR FRENCH asked if she had any  views on Sections 4 and 5. The                                                               
repeal of Rule  90.3 and the non-applicability  of the two-thirds                                                               
vote requirement.                                                                                                               
MS.  STEINBERG   replied  she  had   not  looked  at   the  issue                                                               
specifically, but  her understanding was that  those two sections                                                               
were correct.                                                                                                                   
CHAIR FRENCH said he would check on that a bit more.                                                                            
SENATOR  COGHILL   said  he  looked   forward  to   getting  more                                                               
information   on  the   non-applicability  section   because  the                                                               
constitution   says  two-thirds   vote  is   necessary  for   the                                                               
Legislature to make changes.                                                                                                    
CHAIR  FRENCH said  he'd  focus on  that as  well.  He asked  Ms.                                                               
Shockley if she had any concluding remarks.                                                                                     
2:51:52 PM                                                                                                                    
MS. SHOCKLEY  commented on  the 2008  review process  and relayed                                                               
her dismay that  just four or five people  attended the statewide                                                               
hearing that lasted just 30 minutes.                                                                                            
SENATOR COGHILL  discussed the fiscal impact,  the possibility of                                                               
putting the  Rule 90.3  in statute  without changing  the current                                                               
methodology,  and the  idea of  adding  enforcement resources  to                                                               
help people who feel they've been treated unfairly.                                                                             
MS.  SHOCKLEY  said the  legislation  that  was introduced  three                                                               
years  ago put  the  rule into  statute and  did  not change  the                                                               
model.  At that  time 35  states  used the  shared income  model.                                                               
Although every situation  is different, there are  cases where it                                                               
is more fair. She cited an example.                                                                                             
CHAIR FRENCH held SB 134 in committee.                                                                                          

Document Name Date/Time Subjects
Sponsor Statement SB 134.doc SJUD 3/7/2012 1:30:00 PM
SB 134
HB 80 Sponosr Statement.pdf SJUD 3/7/2012 1:30:00 PM
HB 80
SB134 Memo from Leg Legal.pdf SHSS 2/6/2012 1:30:00 PM
SJUD 3/7/2012 1:30:00 PM
SB 134
SB134 11-076 Leg SB134 Research Report Child Support in other states.pdf SHSS 2/6/2012 1:30:00 PM
SJUD 3/7/2012 1:30:00 PM
SB 134